What are the real world implications?
Gordon Thomson
18 Aug 2021
This is the second blog of the series and sets out Lichfields’ comparison of the two 5 year land requirement/supply calculations across the majority of Scotland. Further blogs over the coming week will include case studies of certain authorities and how they perform again each method.
Methodology
To understand the implications of the Scottish Minister’s preferred approach, the average method as was set out in PAN 1/2020, Lichfields undertook a high level 5 year housing land supply assessment on the majority of mainland planning authorities in Scotland.
We have considered the 5 year land supply position set out by each Authority in their Housing Land Audit (HLA) against a compound or residual calculation as well as the Scottish Ministers’ preferred approach, the average method.
The methodology employed is set out below:
- Each calculation is based on the most recent approved housing land audit for each planning authority, the majority of which are for 2019.
- 5 year effective supply is calculated from past and projected completions programmed, in line with PAN 2/2010. Where HLAs identify a different, normally higher, 5 year effective supply from that which is programmed it has been disregarded, albeit some narrative may be included in the case studies. Only where future programming is not set out in the HLA is the stated 5 year supply from the HLA utilised.
- HLAs, development plans and Scottish Government completion statistics don’t always work to the same period. They may run 1 April – 31 March or may relate to the calendar year. We have not sought to reconcile this issue so some minor discrepancies may exist between land requirement, completions and programmed completions. These would broadly iron themselves out over a plan period.
- Past completions and programmed completion data have been taken as read without interrogation.
- Housing Land Requirement (HLR) is based on SDPs for the city regions. Where an LDP figure differs from that set out in an SDP it is disregarded for the purpose of this exercise.
Residual method
- The 5 year HLR is taken from the SDP or LDP and acknowledges variation in phases across the plan period.
- The HLR acknowledges under delivery from the beginning of the plan’s baseline, which is added to the HLR over time.
- Where the plan period expires within 5 years, the last year’s HLR is extrapolated forward.
Average method
- The 5 year HLR is taken from the SDP or LDP.
- The HLR across the entire plan period is divided by the number of years of the plan, with no allowance for phasing.
- Past performance including any under/over delivery is disregarded.
- Where the plan period expires within 5 years, the equalised annual HLR is extrapolated forward.
Exemptions
- The island authorities of Comhairle Nan Eilean Siar (Western Isles), Orkney and Shetland have been omitted due to availability of data.
- Fife has been excluded as the methodology employed doesn’t work on a Council-wide basis due to the area having two Strategic Development Plans and these being at such different stages in their cycles.
The results across Scotland
The results demonstrate that the majority of LPAs show an improved position in terms of their Housing Land Supply when using the average method approach to the calculation.
The exceptions are East Dunbartonshire, East Renfrewshire and South Lanarkshire, which would see their 5 year HLS reduced but still in surplus.
Ten authorities, approximately 36%, would have had a shortfall against the residual method and would continue to have one against the average method, albeit that shortfall would be significantly reduced
Five authorities, approximately 18%, would see their positive performance against the residual method being improved under the average method.
Ten authorities, 36%, move from a shortfall in 5 year supply using the residual method to a surplus when using the average method. In some cases this is a huge difference – a change of: + 8,000 for West Lothian, +6,900 for Glasgow, +5,400 for North Lanarkshire, +2,500 for East Lothian, and +2,300 for Midlothian.
Figure 1: 5 Year Housing Land Supply Performance versus Average Method
Source: Lichfields
Figure 2: 5 Year Housing Land Supply Performance versus Residual Method
Source: Lichfields
Next case study: Edinburgh
Previous section: What's the story
This is the second blog of the series and sets out Lichfields’ comparison of the two 5 year land requirement/supply calculations across the majority of Scotland. Further blogs over the coming week will include case studies of certain authorities and how they perform again each method.
Disclaimer: This publication has been written in general terms and cannot be relied on to cover specific situations. We recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Lichfields accepts no duty of care or liability for any loss occasioned to any person acting or refraining from acting as a result of any material in this publication. Lichfields is the trading name of Nathaniel Lichfield & Partners Limited. Registered in England, no.2778116