This report shows the findings of the analysis, undertaken by KPMG to assess the impact that digital planning could have on Scottish Government aspirations on its net zero carbon targets, in tackling health inequalities and as part of post Covid-19 recovery. You can view the report below or download here.
We are very grateful to Diane Rennie, Martyn Milne and Samantha Stewart at Scottish Government for their guidance and advice in taking forward this work.
Thanks also go to the individuals and organisations who gave up their time to provide views which have helped to frame this work, across the series of documents. In particular we would like to express our gratitude to the members of our advisory group, whose input was very helpful.
We would also like to thank David Pendlebury and Adam Mason at KPMG who undertook discreet pieces of work during the project which resulted in the economic impact analysis and the case study reports.
The Benefits of Investing in a Digital Planning Service research series is funded by Scottish Government. In commissioning RTPI to undertake this work Scottish Government aimed to explore the evidence base in implementing a Digital Planning Strategy through examining:
- the economic and societal benefits arising from digital transformation
- efficiencies that accrue within the planning system from investment in new technology and validation of the estimated cost and time savings
- the costs (financial and other) of not taking forward digital approaches across the planning service.
For this research RTPI Scotland has coordinated a programme of work analysing the need, demand and possible impacts of supporting a digital planning strategy. This comprises:
- An economic impact analysis, which was undertaken by KPMG, to assess the potential efficiencies that could be provided from a digital planning service
- A user and customer impact analysis setting out the benefits for planning authorities, planning applicants and communities
- A policy impact analysis setting out the range of policy ambitions that rely upon a digital planning service
- Case studies, which have been written by KPMG, analysing the impact that digital planning could have on Scottish Government aspirations on its net zero carbon targets, in tackling health inequalities and as part of post Covid-19 recovery.
- A summary document setting out the key findings across the papers
- An infographic
This paper provides the case studies and was written by KPMG.
This analysis, undertaken by KPMG to assess the impact that digital planning could have on Scottish Government aspirations on its net zero carbon targets, in tackling health inequalities and as part of post Covid-19 recovery, has found that:
A digital planning system could have the following outcomes:
- Increased output / higher growth (recovery) rates from incentivised additional economic activity via improvements in planning efficiency, as outlined in the quantitative analysis. And ensuring planners have the capacity to deal with additionally incentivised case load.
More productive land use from better capture and application of spatial data (e.g. in relation to transport connectivity) to determine the most economically efficient locations for new development.
Increased land values from the range of effects – i.e. via data analytics, community engagement, and value capture from benefits to developers – that will help support quality place-making and amenity value at new and existing sites.
Welfare benefits for households and residents for increased ‘utility of place’ through new digital platforms that better facilitate informed engagement with communities in both place-making and development management, ensuring planning decisions are better informed from a welfare perspective.
A digital planning system could have the following outcomes:
- Lower energy demand from the ability to use better data and engagement to plan for efficient accessibility (e.g. between homes and jobs) and density.
Better integrated (and local) energy supply from the ability to use better spatial data and engagement with the private sector, communities and statutory consultees to inform the efficient development of generation and supply in relation to new and existing communities.
Lower transport demand and emissions from placemaking that encourages modal shift; and from planning for improved accessibility that lowers non-active transport requirements.
Ability to support the achievement of incoming building regulations through smart applications and the planning gateway that better informs and educates applicants.
Reducing emissions of individuals and communities via behavioural changes through placemaking and planning that encourages sustainable ways of living, working and socially engaging within communities.
A digital planning system could have the following outcomes:
- Supporting physical and mental health in communities, reducing NHS costs and economic-days-lost through utilising spatial data on existing area land-use to ensure that plan-making and masterplanning account for sufficient provision of active transport and green space (and biodiversity), and social infrastructure, and provide the necessary connections to ensure sustainable accessibility between homes, jobs and recreation. Additionally, improved NPV for developers at a site level from system efficiency improvements, as set out in the quantitative analysis, will enable developer contribution negotiations to support greater provision of amenity.
Supporting more inclusive engagement, encouraging individuals to take a stake in their communities through facilitated and improved digital engagement (via the planning gateway), that encourages and incentivises engagement (through ease of use). Freeing up planners time through more efficient systems and processes to undertake more effective community engagement if required.
Supporting economic opportunity and economic activity rates through the incorporation of spatial data that allows for economic inclusion (such as defined by connectivity to jobs) to be incorporated into planning considerations.
Supporting community safety, reducing crime and increasing community engagement through a smart application system that can help better enforce and explain planning guidelines, standards and regulations.
The below case studies qualitatively analyse specific expected benefits across three specific strategic policy focus areas:
- Economic recovery post Covid-19
- Environment and climate change
- Improving well-being and reducing health inequalities
As an analytical approach, these case studied follow an ABCDE method for assessing how digital planning transformation might impact outcomes in the policy-focus areas:
Accessibility – The ability of planning to help inform how individuals access jobs and social infrastructure from their place of residence, and to do so without prohibitive cost or risk to themselves and the environment
Behaviours – The relationship between the form of the built environment and the habits and patterns that individuals develop for how they interact with places
Communities – How the form of the built environment influences within-community engagement and interaction and the function of communities as they support a range of wellbeing outcomes
Density – As a partial factor underpinning both communities and accessibility, but depending on wider quality factors, planning has a key role in helping inform how individuals consume (e.g. energy) and interact (travel) within places.
Environment – The place-quality indicators which are a key determinant for a range of quality of life and wellbeing indicators, including physical and mental health
Planning clearly has a significant role and influence across each of these areas, and the focus areas below set out how digital transformation can support and provide a net-improvement in the ability of planning to have a positive impact across these areas.
Prior to the pandemic, Scottish Government’s economic strategy highlighted investment and innovation as the two key pillars to support sustainable economic growth.
Considerations from stakeholder engagement: Planning and FDI
FDI added 10,000 jobs to the Scottish economy in 2019, but Scotland is in global competition to attract investment.
Planning in its broadest sense plays a key role in influencing the attractiveness of an area from an FDI perspective. Investment by global firms in production, service centres or regional headquarters bring the potential for significant increases in both the quantity and quality of jobs within in an area.
Planning can influence a firm’s location-based investment decision in two key ways:
More easily accessible and useable data will clearly support planners to provide more compelling and informative pictures of investment considerations in a local area. Whilst systemic improvements that reduce transaction costs will further increase comparative attractiveness of investment.
Within this framework, place-based investment in physical and digital connectivity is seen as a key foundation to encouraging business. The planning system in particular was highlighted as a key focus for the ‘better regulation’ agenda, to ensure that the benefits achieved through creating the ‘supportive environment or business to invest and grow’ are supported by ‘clearer guidance, simpler prices and reduced administration’.
Proactive planning to catalyse local regeneration and support the delivery of local and regional economic strategies is also seen as essential to ensure the diverse geographies and demographics of Scotland are best able to harness regional and local opportunities based on the strengths and opportunities within their local economies.
Since the onset of the pandemic, Scottish Government has convened the Advisory Group on Economic Recovery (AGER) to develop an immediate economic response that updates and adjusts the economic strategy where relevant.
In particular, noting the need to maintain the quality of existing planning regulation but also to be able to accelerate projects in the planning system it states, ‘a focus on improving regulation is a call for accelerating good processes, not for lowering standards’, and highlights the importance of capacity in planning departments as key service to business success.
Like the Economic Strategy, it emphasises the importance of supporting ‘place-based initiatives’ that enable effective identification of the investments local areas need to support inclusive economic recovery. Additionally, and as also highlighted by COSLA in its submission to the AGER it highlights the importance of connectivity as a vital component in recovery – in supporting the delivery of homes with easy access to employment opportunities via sustainable transport infrastructure.
Clearly therefore, any outcomes from Digital Transformation which achieve the two broad effects of:
- Improving efficiency without lowering standards in the planning system, and
- Enabling decision making to support local and regional place-based economic recovery will help support the economic recovery in Scotland
Proactive, strategic spatial planning helps determine the locational quality of places, which influence the locational decisions of firms. Firms will consider a range of factors when deciding where to invest, including land costs, costs of trade (including transport costs), and quality of labour supply. Quality of labour supply in turn is influenced by a secondary set of place characteristics, such as cultural, environmental and social amenities (also partly influenced by transport costs and land costs).
Additionally, as a regulatory function, planning (via development management) determines the ease of undertaking development once place-base qualities are known. At the margin, a firm may invest in a sub-optimal place on a quality basis, if it is deemed easier to undertake development in a marginally lower ‘quality’ place.
Scottish Planning Policy (SPP) sets out that one of the core values of the planning system is to play a role in ‘facilitating sustainable economic growth, particularly the creation of new jobs and the strengthening of economic capacity and resilience within communities’.  Importantly, it recognises the role of planning as being to help ‘achieve the right development in the right place’
Much of the focus of how to ensure the economy bounces back (to previous trend growth) if and when a period of pandemic stability is reached – and predicated on the lifting of lockdown restrictions, is related to trying to deliver a ‘v-shaped’ recovery, i.e. that economic activity, and particularly private consumption and investment, bounce back as quickly as possible.
Additionally, the economic-fallout from Covid-19 has added significant momentum to an existing debate around the nature of economic growth and systems, and discussions of economic resilience, sustainability and inclusivity which were already on the rise.
On the surface therefore exists a potential inconsistency, of an objective to see economic activity bounce-back (at any cost), and an objective to ensure that future economic growth is conditional on wider societal welfare (i.e. not at the cost of, for example: wellbeing, equality, the climate).
Planning has a unique role to play in framing the vision of this debate as the regulating function determining the investment in fixed capital assets in the built environment – whether that is private investment in industrial and service activities, individual investment in household infrastructure, or public investment in transport infrastructure and place-making.
Also significant is that planning can clearly be seen to provide a way to impact both of these objectives, and broadly split across the development management and spatial planning divides.
In the objective to see a rebound in economic activity, particularly private investment, digital transformation of the planning system which facilitates investment will clearly be a key supporting factor – through the reduction in transaction costs mechanisms discussed in the quantitative analysis above (plus facilitation of site searching, derelict land etc.). Any enhancements to the planning system which facilitate ease of doing business, and incentivise investment – such as a more efficient experience of the planning system - will clearly be seen to facilitate the return of economic activity. In the context of inward investment, the Scottish planning system also needs to be viewed as ‘in competition’ with planning systems in other countries which could be considered to have similar ‘ease of doing business’ attributes.
Additionally, spatial planning has a key role to play in shaping how future economic growth takes place in locations across Scotland. The discipline of spatial planning, operating in consideration of market forces and signals, determines the form of future development and will be a major influence in whether or not future growth is sustainable, inclusive, and considerate of wellbeing. Particularly in relation to the planning of homes and jobs, the transport infrastructure that connects them, and the provision of wider amenities within new and existing communities.
In reality there are a range of considerations which constrain how new developments can come forward in practice and with spatial planning activities need to take into consideration. Not least:
- National policy constraints – for example, the powers available to planners to take proactive measures to alter and improve land uses and efficiency of space (e.g. CPO powers, PDR)
- Technology constraints – the wider infrastructure (e.g. digital) considerations needed to ensure successful places that have a degree of private sector collaboration requirements
- Finance and funding constraints – for example, that limitations that local areas have for raising funding and finance (e.g. land value capture, development corporations) to enable genuinely strategic decisions to be made about the form of future growth. Or, the mechanisms that the Government uses to approve revenue and capital funding decisions that constrain the capacity and opportunity to deliver locally.
- Market constraints – Including market failures that deliver sub-optimal outcomes (e.g. in the housing market), or focus resources in hubs of existing high-demand.
Nonetheless, to the extent that these interact with each other and respond to the framework provided by spatial plans, planning has key a role as a ‘first-mover’ in influencing the economic development of places.
Therefore, digital innovations which support the planning of places that are better able to focus on economic development – especially with parameters for sustainable, inclusive and wellbeing-oriented development will be important in directing whether future economic growth in Scotland can be considered ‘good growth’.
Of particular relevance will be the engagement and data benefits which Digital Transformation will enable. Specifically:
- Intelligent and interactive applications – Will incentivise applications and investment by improving the perception of investment in the built environment as ‘manageable’ from a regulatory perspective.
- Improved efficiency in the planning system, represented by faster determination of applications – Will deliver a range of macroeconomic secondary effects beyond the quantitative impacts analysed in Section 3. In particular, in the development sector alone:
- Increased NPV will improve viability at the margin for site delivery. This effectively means that more sites in Scotland will become viable than at present which has the potential to increase overall housing supply, and the economic multipliers associated with this
- Lower cost outlays (reduced length of financing costs) for engaging in the planning system will also tilt the competitive balance of development away from major housebuilders and towards SMEs – for whom a key challenge to compete in the sector is the lack of capital reserves that determine the length of time investment funds can be outlayed before returns are realised.
- An Open-data and mapping service, and a uniform system and gateway across Scotland, will enable better understanding of the economic impact of spatial planning decisions – both at the plan-making and the development management stages, and will facilitate the sharing of best practice and learning amongst the Scottish planning community
- A searchable site database for investments in the built environment – Will also improve the ‘ease of doing business’ for firms looking to invest or expand activities in Scotland.
How these changes could translate into economic outcomes
The Scottish Government’s Climate Change Plan to 2032 sets out objectives to ensure renewables supply 50% of Scotland’s energy needs; to reduce emissions from residential and non-residential buildings by 23% and 53% respectively; and to ‘provide access to cleaner forms of travel and transport’ to reduce transport emissions by 37%.
The form of the built environment to the extent that it influences how energy can be supplied, the energy demand of users of the built environment, and the transportation behaviours of economic agents, clearly has a major role to play in meeting these objectives.
As noted in the Plan, the role of the planning system will be ‘to provide the framework in which decisions about “place” can support low carbon lifestyles and the transformative change needed to deliver emissions reduction targets’. The plan clearly sets out the role for: ‘placemaking’ and design principles in influencing behaviours that reduce energy demand and emissions; for data and information on climate change to be incorporated into planning decisions, and for community engagement to help planners understand how they can deliver more sustainable communities in a way that best suits local residents – and thus reducing the potential for positive ideas for change to be hindered by community objection.
Changes in the planning system delivered by digital transformation that support these planning functions will therefore help planning undertake the ‘crucial’ and ‘influential’ role that the Climate Change Plan outlines.
Beyond the 2032 plan, Scottish Government has committed Scotland to meet the broader, ambitious target of reaching net zero emissions (not just carbon dioxide) by 2045. For this plan, public estates and public land-use will be expected to lead the way to zero emissions generation from the built environment sector.
The impact of the built environment, both through new and existing communities, is one of the most significant impactors on place-based environmental quality and carbon emissions. Both through energy demand in the construction and ongoing operation of developments, and the transport patterns of people who live and work in new developments.
According to the University of Newcastle, planning decisions impact climate change by their impact on energy supply, energy demand, and adaptation. And academic studies show a negative correlation between density and climate emissions, largely driven by transport requirements.
The SPINE and MOLES initiatives by the OECD and the 2018 study from the RTPI Settlement Patterns, Urban Form and Sustainability: An Evidence Review all also show how the planning of urban form can reduce GHG emissions. And the SPACE tool of Scottish Government was an early example in Scotland of how digital data systems can be used to map the impact of development types on climate emissions.
Whilst roadmaps to meeting zero carbon targets are not yet fully finalised, there will clearly be a range of areas outside of the planning system which will be essential to achieving targets and delivering truly sustainable (net zero) developments. These will include:
- Energy supply (and associated technological and infrastructure requirements)
- Habits and behaviours of individuals – often driven by the form and structure of the places in which they live and work (for example how they need to travel for work or for leisure)
- Construction materials and practices
- Building regulations
- Transport emissions
- Funding and finance requirements – to meet any cost requirements not met by technological progress, for example where environmental efficiencies to do not offer price signals for their adoption (such as with existing challenges around delivering zero carbon homes via the private sector)
6.4 The Role of Digital Transformations in Supporting Planners to Contribute Towards Environment and Emissions Objectives
Evidently, as new regulations are brought into place, development management will play an essential role in ensuring compliance with new standards and policies. It is expected that planners will need to take a wider range of factors into consideration when determining planning applications, and improvements brought about by digital transformation will support planners achieve those. However, it is within the field of spatial planning where a more proactive approach to supporting net zero carbon and environmental quality objectives will have the biggest potential for positive change. Through the influence of helping to determine transport connectivity – including by sustainable means; the location of homes and jobs - and thus how individuals are required to travel; and the density and land-use of communities – which is a key determinant in how efficient they are at consuming resources, will all play key roles in speeding or slowing the transition to a net zero economy, depending on how they are provided for.
Digital transformation, including cloud hosting which enables significantly more place-focused data, including engagement data, to be organised and analysed has the potential to significantly improve the evidence base available to planners to promote ‘good’ planning that supports sustainable development. Particular impacts could include:
- An easy-to-use system for providing comments, objections, consultations – enabling planners to harness local knowledge of solutions to deliver against climate objectives at the plan-making stage
- Open-data and mapping service, enabling integration and storing of data from multiple sources – enabling the incorporation of growing bodies of data on emissions to be incorporated into data sets readily available and useable for planners
- Automatic data back-up and failover system, and one stop shop for electronic planning input data for planners – reducing the overall impact of data storage by users and operators of the planning system.
- A searchable site database for investments in the built environment – enabling planners to proactively guide developers and businesses towards sites selected for avoidance of negative environmental outcomes
- An interactive and smart application system – helping applicants understand their obligations under incoming and expected changes to building and technical regulations
How these changes could translate into environmental benefits:
Scottish Government’s Wellbeing Report, set out in May 2019 builds on the National Outcomes for how Scotland should develop under the National Performance Framework. The Framework seeks to support future development in Scotland that is community focused, and supports health, the environment and a range of wider wellbeing outcomes.
The Wellbeing Report highlights the role of planning as supporting “Inclusive, empowered, resilient and safe communities” that function “well economically, physically and socially”.
Inequalities in health and wellbeing, for example as measured through IMD and other datasets vary widely across Scotland. In economic terms, GDV per head in Edinburgh is almost 400% that of East Ayrshire, In health terms, the most affluent areas of Scotland see average life expectancies of over 22 years higher than the lest affluent, and the wealthiest 10% of Scots hold an average £300,000 of debt-free housing wealth whilst 35% own no housing wealth at all. Although there are many factors which impact health and wellbeing for individuals, there are reinforcing place-based effects which compound negative health and wellbeing outcomes and are a key consideration in planning policy as far as it relates to its socio-economic objectives. As noted by the King’s Fund in their determinants of health and wellbeing (see figure above): places and communities; the environment around us (wider determinants of health); and behaviours and lifestyles (influenced by the way individuals negotiate the built environment in which they live and work) are three of the four key determinants of health outcome for individuals.
As set out by the TCPA and Public Health England, the role of planning and the planning system has the ability to impact health and wellbeing outcomes through a number of key drivers that:
- Provide the strategic link to wider health and wellbeing strategies and policies
- Ensure the promotion of active transport that benefits health and accessibility
- Ensure the provision of housing diversity and housing standards
- Set design standards for safe and inclusive communities
- Ensure the provision of open and recreational space (including the natural environment) for physical and mental health
- Ensure the provision of social (healthcare) infrastructure
- Provide a framework for undertaking health impact assessments to test development outcomes
- Provide a framework for ongoing monitoring of health impacts at developments.
7.4 The Role of Digital Transformation in Supporting Planning to Improve Health and Wellbeing Outcomes
From a development management perspective, use-classes or infrastructure which cause blight to communities can directly impact the health and wellbeing of individuals. Better data and engagement, particularly engagement that enables marginalised communities to be reached could deliver a significant improvement in understanding how planning decisions impact health and wellbeing outcomes for those already suffering from the unequal distribution of these kinds of effects.
From a spatial planning perspective, this ability to engage with a more representative breadth of local communities has a potentially to dramatically improve the democratic quality of planning engagement in the plan-making process. Additionally, better data and the integration of data sources and data collection for the purposes of analysis for smarter planning has the opportunity to better plan places which minimise the negative impacts of development, and maximise the forms of development which are most likely to reduce health and wellbeing inequalities. For example, benefits mapping from new investment, such as connectivity improvement benefits from new transport infrastructure, enables weighting to be applied to connectivity benefits depending on how economically or socially excluded individuals and communities are at present. In terms of particular potential transmission effects:
- Uniform system and gateway platform, with transparent and collaborative plan-making and approval processes in which communities and individuals can clearly see, be informed about, and receive notifications on applications of relevance to them – Will support dissemination, learning and understanding of the planning system to a broader range of groups and demographics than are typically reached at present
- An easy-to-use system for providing comments, objections, - Will enable communities, particularly those typically underrepresented to have stronger voice in influencing the planning process to ensure that welfare impacts are more fully understood
- Open-data and mapping service, enabling integration and storing of data from multiple sources - Facilitating the better integration of wellbeing (e.g. IMD) data with spatial planning and development management activities
How these changes could translate into health and wellbeing benefits:
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 Scotland’s Economic Strategy, 2015, https://www.gov.scot/publications/scotlands-economic-strategy/
 Report of the Advisory Group on Economic Recovery, June 2020, https://www.gov.scot/binaries/content/documents/govscot/publications/strategy-plan/2020/06/towards-robust-resilient-wellbeing-economy-scotland-report-advisory-group-economic-recovery/documents/towards-robust-resilient-wellbeing-economy-scotland/towards-robust-resilient-wellbeing-economy-scotland/govscot:document/towards-robust-resilient-wellbeing-economy-scotland.pdf
 COSLA input to AGER report, June 2020, https://www.gov.scot/binaries/content/documents/govscot/publications/consultation-analysis/2020/06/initial-submissions-supporting-the-advisory-group-on-economic-recovery-report-june-2020/documents/cosla/cosla/govscot:document/COSLA.pdf
 Scottish Government, 2016, https://www.gov.scot/binaries/content/documents/govscot/publications/advice-and-guidance/2016/03/draft-advice-on-net-economic-benefit-and-planning/documents/draft-advice-net-economic-benefit-planning-pdf/draft-advice-net-economic-benefit-planning-pdf/govscot:document/Draft+Advice+on+Net+Economic+Benefit+and+Planning.pdf
 Climate Change Plan, Scottish Government, 2018, https://www.gov.scot/binaries/content/documents/govscot/publications/corporate-report/2018/02/scottish-governments-climate-change-plan-third-report-proposals-policies-2018/documents/00532096-pdf/00532096-pdf/govscot:document/00532096.pdf
 Framing the role of spatial planning in climate change, 2009, Davoudi.S, Newcastle University
 National Performance Framework, https://nationalperformance.gov.scot/national-outcomes
 ONS, 2018
King’s Fund, 2019
 Public Health England, 2017, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/729727/spatial_planning_for_health.pdf