Minister for Local Government and Planning Ministear airson Riaghaltas lonadail agus Dealbhadh

Derek Mackay MSP Derek MacAoidh SPA

The Scottish Government

Riaghaltas na h-Alba

FIT: 0845 7741741

E: scottish.ministers@scotland.gsLgov.uk

Ms Kezia Dugdale MSP The Scottish Parliament EDINBURGH EH991SP

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LEGACY 2014
XX COMMONWEALTH SCOTLAND GAMES

Your ref/Ur faidhle: KS-10/05/13 Our ref/Ar faidhle: 2013/0013618 20 June 2013

Thank you for your letter of May 10 2013, which was received on May 21, about payday loans and planning and our meeting in that regard. As we discussed, the planning system does not generally regulate the particular goods and services which are sold from premises. It is concerned with broader definitions of the use of premises, be that, for example, selling goods or selling financial, professional and other services or use as administrative offices and any different impacts on amenity for changes between such uses. That is why, as indicated in your enclosed paper, significant freedoms exist for occupiers of shops and offices to change use without requiring planning permission. Other legislation exists to deal with the implications of the nature of goods and services sold to the public, for example the licensing of the sale of alcohol or gambling activities and the regulation of financial services. Such legislation has appropriately designed enforcement measures to deal with breaches of control. One issue which your enclosed paper does not explore is the uses to which additional control should apply or how these uses are to be defined. Targeting "money-lenders", as mentioned in the paper, could include banks, credit unions and other lenders as well as what is referred to as "payday loans", for which there is no existing definition in UK legislation. That could limit flexibility around changes of use beyond the uses of concern. This definition question also highlights the potential difficulty in trying to distinguish between uses which are generally regarded as similar in planning terms, and using planning to enforce distinctions based on, for example, the terms on which financial services are provided. The paper also seems a bit unclear as to the changes required and their effect. I enclose a note by officials on the planning mechanisms relating to changes of use of premises.

Victoria Quay, Edinburgh EH66QQ Cidhe Shictoria, Dun Eideann, EH6 6QQ www.scotland.gov.uk

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As you mentioned in your letter, I asked officials to explore further the possibilities around controlling payday loan facilities. I intend to respond to you further in that.regard in the near future. I hope this information is of assistance in the meantime.

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Victoria Quay. Edinburgh EH6 6QQ Cidhe Bhictoria. Dun Eideann. EH6 6QQ www.scotland.gov.uk

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NOTE ON PLANNING REQUIREMENTS "Development"

FOR CHANGE OF USE

Requiring Planning Permission

The planning system requires planning permission to be obtained for "development" a~d this includes a "material" change in the use of land or buildings. Whether a change of use IS "material" will depend on the circumstances of the specific case and is matter for the decision maker, normally the planning authority in the first instance. In the absence of the mechanisms such as the Use Classes Order or the General Permitted Development Order, this test of a change of use being "material" would have to be met before planning permission were needed, never mind granted or refused. Use Classes Order The Town and Country Planning (Use Classes) (Scotland) Order 1997 (the UCO) groups uses regarded as having similar planning implications into classes. The UCO specifies that changes of use within a class are not "development", and do not, therefore, require p\Ci~!:,ing ,~ permission. Removing'usesfrom the dasses, making them suigeneris, does not mean technically they require planning permission. It means they are subject to planning permission if the change of use is considered "material". Class 2 of the UCO covers financial, professional and other services which it is appropriate to provide in a shopping area and where services are provided principally to visiting members of the public. Payday loan shops and cheque cashing facilities would fall into this same class, along with credit unions, banks, insurance offices, in so far as the shops/ offices in question met the criteria regarding shopping area and visiting members of the public. Where a planning permission was granted for a use within Class 2, it would be possible to attach a condition restricting certain changes of use of the premises within that class. Scottish Government guidance has a presumption against the use of conditions restricting uses allowed by the UCO. If the UCO were amended to remove a use from a class, the need for an application for planning permission would depend on whether the change to that use was material in the circumstances of the case. One might expect such a change in legislation and any policy statement in that regard to guide decision makers on the need for planning permission, but these would not be definitive. Where a change of use related to a very small part of the overall activities at the premises, the question of whether it is a material change of use may be more of an issue. General Permitted Development Order and Article 4 Directions The Town and Country Planning (General Permitted Development) (Scotland) Order 1992, grants a general planning permission across Scotland for specified developments, subject to certain restrictions and conditions. This general permission (also known as permitted development rights) removes the need for an application for planning permission. Amongst other things the GPDO grants planning permission for certain changes of use. The GPDO includes permitted development rights to change form a Class 3 use (food and drink - e.g. restaurants and cafes) and hot food takeaways to Class 2 use.

Victoria Quay. Edinburgh EH6 6QQ Cidhe Bhictoria, Dun Eideann. EH6 6QQ www.scotland.gov.uk

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The GPDO does not grant planning permission for changes of use within Class 2 of the UCO. The UCO specifies changes of use within a class are not "development", and, therefore, do not require planning permission. . An article 4 direction under the GPDO could be pursued to remove locally permitted development rights granted by the GPDO, such as those granting permission to change from Class 3 use of a hot food takeaway to Class 2 use. Thereafter, planning permission would be required if the change of use were considered material. Such directions cannot remove the freedoms '8 IIowed under the UCO - e.g. an article 4 direction could not remove the freedom to changes use within Class 2 from banks and other offices providing financial, professional and otheT services to a payday loan facility.

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Victoria Quay, Edinburgh EH6 6QQ Cidhe Bhictoria, Dun Eideann, EH6 6QQ . www.scotland.gov.uk

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