Strategic Transport Fund: Court finds guidance unlawful

  • Insight

19 May 2016

The Court of Session has quashed the Supplementary Guidance – Strategic Transport Fund, adopted by Aberdeen City and Shire Strategic Development Planning Authority. This Supplementary Guidance required developers to contribute towards the cost of transport improvements in Aberdeenshire. 

Elsick Development Co Ltd v Aberdeen City and Shire Strategic Development Planning Authority

The Court found that the transport improvements did not (as required by National Policy) sufficiently relate to the proposed development and as such, the Supplementary Guidance requiring them to contribute to their cost was unlawful. This case has important implications for developers and planning authorities.

Background

The Aberdeen City and Shire Strategic Development Planning Authority is responsible for the production of the Strategic Development Plan and related guidance including related statutory Supplementary Guidance. The Strategic Development Plan was approved in March 2014 by the Scottish Ministers, and the following year in June 2015, the Supplementary Guidance was adopted which replaced the previous non-statutory planning guidance.   

The planning authority’s idea was, that all new housing, business, industrial, retail, commercial and leisure development in the Aberdeen Housing Market Area would be expected to pay into the Strategic Transport Fund, which would then be used to fund specified transport improvements. By spreading the cost across the region, no single development would be liable for the cost of a specific strategic project.

The funding mechanism within the Supplementary Guidance was based upon a Cumulative Transport Appraisal which calculated that all new developments in the Aberdeen Housing Market Area would impact on all of the required transport infrastructure, with the exception of only one development and one intervention.  

Elsick Development Company Ltd is the developer of a new settlement (‘Chapelton’) around Elsick near Stonehaven. In August 2013 it agreed a s75 agreement with Aberdeenshire Council. The agreement required the company to pay  sums into the Strategic Transport Fund. The agreement also provided that no sums need be paid if the Strategic Transport Fund guidance was found to be invalid.  In October 2013, Aberdeenshire Council granted planning approval for 802 houses and other facilities as the first phase of over 4,000 houses, commercial, retail and community facilities at Elsick.

Decision

The court decided that the requirement to pay into the Strategic Transport Fund was not lawful as it would result in developers paying for transport improvements unrelated to their development. It considered that the Cumulative Transport Assessment did not establish a sufficient relationship between each development and all transport improvements. However, the court did not offer any guidance as to what might have been a sufficiently clear and direct link. 

The court said that there is a distinction between sharing costs among developments which cumulatively required a transport improvement, and the funding of a variety of measures not all of which are relevant to the individual development. This was ‘the essential flaw in the concept of contributions to the STF as a lawful planning obligation’. 

The full judgement is available from Scottish Courts here.

Comments

This decision (which may be appealed to the UK Supreme Court) has important implications for planning authorities seeking cumulative financial contributions through supplementary guidance. Planning authorities must establish a clear-cut and direct link between new development and the improvements sought. Cumulative financial contributions will be lawful provided the policy tests in Circular 3/2012 are met. Planning authorities will need to pay close attention to establishing the required link between new development and the improvements. In this present case, the Cumulative Transport Assessment methodology was flawed because it based its assessment on the proportion of traffic from each new development using the transport improvements, and not the traffic from new developments as a proportion of the total traffic using the transport improvements.