Building Safety Levy (Scotland) Bill: island communities impact assessment

Consultation

The Scottish Government ran a consultation^[6] on the SBSL for a period of eight weeks. The consultation received a total of 78 responses, predominantly from property developer organisations, but also from six local authorities (including two island local authorities).^[7] A partial Business and Regulatory Impact Assessment (BRIA)^[8] was published alongside this consultation. The consultation invited responses to a range of open and closed questions on several aspects relating to the SBSL, including the strategic context for the tax, scope, calculation, operational considerations, and impacts (including a question on potential impacts of the SBSL on islands).

The consultation was accompanied by a programme of engagement with stakeholders to facilitate further collaboration with the residential property sector. These engagement sessions provided further evidence in addition to views gathered through the Scottish Building Safety Levy Expert Advisory Group, comprised of representatives from the residential property development sector, as well as representatives from relevant professional bodies in connection with tax and local government building standards.

In addition to this strategic engagement, targeted engagement sessions were carried out on an ongoing basis throughout development of the policy. These included sessions to scope and identify potential impacts of the SBSL on rural and island communities, with the following stakeholders:

• Highlands and Islands Enterprise
• Orkney Islands Council
• Scottish Land and Estates
• Shetland Islands Council

Several respondents to the consultation and stakeholders in engagement sessions expressed that island communities face existing pressures on housing that would be exacerbated by the SBSL and create disproportionate impacts for these areas. It was raised that there are high construction costs associated with building on islands which make development viability already marginal, and therefore adding the additional cost of the SBSL onto residential development in these areas could worsen existing housing challenges in these areas.

Consultation respondents and stakeholders additionally emphasised the increased reliance of rural and island areas on smaller developers, self-builds, and community-led housing, noting that the impact of the SBSL could be felt more acutely in these cases compared to developments carried out by a larger housebuilder. It was raised during engagement sessions that some developments in rural and island areas are taken forward at a cost to the developer in order to boost the population of the area by providing housing, with market values below the cost required for acquisition of land and for construction.