Scotland's planning authorities cannot force developers to contribute towards a strategic transport infrastructure fund without legislation, the Supreme Court has ruled.

The ruling was made on Wednesday following a case by Elsick Development Company against Aberdeen City and Shire Strategic Development Planning Authority.

The developer had applied for planning consent to build around 4,000 homes together with commercial, retail and community facilities at Elsick, near Stonehaven, Aberdeenshire.

However, attempts were made by the local authority to compel Elsick to make a financial contribution to a pooled fund to be spent on infrastructure as a condition of the planning approval.

The developer argued the council was acting contrary to the guidance of Scottish Ministers on planning obligations and that the contribution they were being asked to make to the pooled fund was out of all proportion to the demands its development would make on the local infrastructure.


Dismissing the local authority’s appeal against an earlier decision by the Inner House, Lord Hodge said: "If planning authorities in Scotland wish to establish a local development land levy in order to facilitate development, legislation is needed to empower them to do so."

Gary McGovern, planning expert at legal firm Pinsent Masons, said the case has the potential to affect the scale of contributions developers are liable to pay from a range of developments across the authority area, as well as curtailing the monies received by the authority to invest in strategic transport infrastructure interventions.

"In this case, the impact of the development on the infrastructure for which the contributions were sought was trivial and too remote to be a relevant to the development in question and form the basis of a planning obligation," he said.

"This echoes many previous UK court decisions on the scope of planning obligations. The outcome had to some extent been pre-empted by the Scottish Government's clear signal of intent to include a power on the face of the imminent Planning Bill enabling the introduction of an infrastructure levy in Scotland.

"In this regard, the Scottish Government will note the Supreme Court found that if there are seen to be merits to a "local land development levy" system, legislation is required to implement such a system, as we have seen already in England and Wales in the form of the Community Infrastructure Levy."

Mr McGovern concluded the Supreme Court's decision "essentially follows conventional planning wisdom" and, to that extent, was "largely predictable".

(LM)