Part III: Partial Business and Regulatory Impact Assessment Town and Country Planning (Fees for Monitoring Surface Coal Mining Sites) (Scotland) Regulations 2016
Question BR1: Do you have any comments on the Partial Business and Regulatory Impact Assessment?
1. TITLE OF PROPOSAL
1.1 This is a Partial Business and Regulatory Impact Assessment of proposals to introduce the Town and Country Planning (Fees for Monitoring Surface Coal Mining Sites) (Scotland) Regulations 2017 ("the Regulations").
1.2 This partial BRIA assesses the likely impacts of the proposals in the 2016 consultation paper. The proposals in the Regulations and this assessment may be revised to take account of comments received as a result of this consultation.
2. PURPOSE AND INTENDED EFFECT
2.1 The new Regulations would enable planning authorities to recover the costs of carrying out their functions relating to the monitoring of surface coal mine permissions. The absence of charging powers contrasts with other regimes (Building Regulation, Scottish Environment Protection Agency) where a separate monitoring fee is paid. Monitoring functions, if undertaken, are currently funded from local authorities' general revenue budgets and, in most instances, insufficient resources are committed to enable these duties to be undertaken to an appropriate standard.
2.2 The powers within the new Regulations are intended to provide a higher standard of monitoring at surface coal mines, in the most efficient way possible, without any unnecessary complexity or imposing significant burdens on planning authorities and site operators.
2.3 The Regulations affect operators of surface coal mines since they will be paying for a regulatory activity which may currently costs them nothing, unless provision has been secured through a Section 75 Agreement associated with the planning permission.
2.4 The Scottish Government is committed to ensuring that planning performance is reflected through the level and frequency of monitoring fees. Planning authorities are currently not empowered to recover the costs of post-consent monitoring and enforcement of planning conditions. It is unclear whether this may have been the main reason in those cases where monitoring has not been conducted as effectively as it might have been in the past, but it is likely to have contributed.
Rationale for Government Intervention
2.5 Surface coal mine sites are unlike other forms of development since their impacts on local communities and the environment can take place over many years. Whilst the past experience of shortcomings in the monitoring of surface coal mining sites, as evidenced following the demise of the two largest surface coal mine operators in 2013 is behind us, non-compliance with existing permissions or default on restoration obligations is an on-going risk of potential national importance. Planning permission for such sites is subject to a substantial number of complex and technical planning conditions which seek to address these impacts.
2.6 Monitoring of surface coal mine permissions (and, where necessary, enforcement) is crucial if local communities are to be provided with reassurances that their interests have been properly factored into decisions and that on-going impacts on both communities and the environment are carefully considered and addressed. However, planning authorities are not funded for these costs. The Scottish Government's view is that such costs should be borne by operators and not by the public and that any charging regime must provide a clear indication of the standard of performance of individual sites.
3.1 Within Government, the proposals have been subject to consultation with the Directorate of Planning and Environmental Appeals, and the Energy and Finance Directorates. Public consultation took place in 2003 on the principles of a fees regime and comments are reflected in the new Regulations. The Regulations were subject to further consultation in 2008 and have been discussed with representatives from the minerals industry and Scottish planning authorities during 2014 and 2015 through the Scottish Opencast Coal Task Force.
3.2 Prior to undertaking this consultation we have sought the views of several stakeholders through informal discussions. The parties approached represented a variety of stakeholders including Heads of Planning Scotland, the Scottish Mines Restoration Trust and several surface mine operators. The views expressed during these informal consultations have been used to influence the final version of this consultation document.
3.3 After the consultation we will aim to develop a full BRIA to assess the costs and benefits of the proposed monitoring fees regime.
4.1 This BRIA reflects on consultation that took place in 2003 which highlighted a range of possible options on how fees could be calculated. Those options raised concerns in relation to fairness, complexity and outputs. It is considered that those matters, whilst raised some 13 years ago remain relevant today. It is therefore considered that, for the purpose of this assessment, the following 3 options represent the most appropriate way forward:
Option 1: Do nothing. Under this option, planning authorities would continue monitoring at the same level as at present and without making a charge although, in some instances, arrangements may be in place whereby operators have agreed to fund independent monitoring of sites.
Option 2: Self-regulation by operators. This option would remove, to some extent but not all, responsibility of planning authorities to carry out the monitoring function in respect of sites with operators that have a good record of compliance with planning conditions and are accredited to industry schemes. Planning authorities would need to continue to monitor unaccredited sites and those with poorer performance.
Option 3: A fee regime based on an average charge per visit, with planning authorities determining the frequency of visits. This option would enable planning authorities to tailor the number of monitoring visits to the monitoring requirements of individual sites.
Pros and Cons of the three options
5. The following benefits have been identified:
Option 1: The only benefit of this option would be to operators, who would continue to be regulated without having to pay the cost of site visits. The present inadequate resourcing of monitoring for certain sites would continue. This could lead to impacts on local communities and the environment that might otherwise could have been resolved and addressed through regular monitoring visits.
Option 2: Under this option operators with a proven track record of compliance with planning conditions and/or EMAS or ISO14001 accreditation would be entrusted with self-regulation. Planning authorities would need to carry out occasional quality control checks on these sites, and would need to respond to complaints, but the burden of the monitoring function and some of the associated costs would be lifted to some extent from planning authorities who could then devote more time and effort to monitoring and enforcement of unaccredited operations and poorer performers.
There would be financial implications for those operators entrusted with self-regulation, as they would need to establish transparent systems for monitoring their performance, which would need to be available to planning authorities for checking as required. Sites run by unaccredited operators would need to be monitored by planning authorities and those run by poorer performers would be subjected to a higher level of monitoring but the costs for this would continue to be borne by planning authorities.
The option would be of benefit to reliable and accredited operators, who would not need to arrange a schedule of visits with planning authorities and would not need to pay the proposed fees. In 2003 there was insufficient evidence that EMAS and ISO14001 accreditation on its own is a clear guide to operational effectiveness, expressed as conformity with planning conditions. However, more recently documentation provided by operators demonstrates that an open and transparent approach to self-regulation consistent with ISO 14001 could be undertaken. It is clear that this option could present some difficulties and be complex to administer on a part self-regulation, part planning authorities monitoring basis. Yet this could be resolved through the proposal in Option 3 which would enable accreditation to be one of the factors that planning authorities could take into consideration when determining the number of site visits.
Planning authorities could then concentrate their efforts on monitoring those unaccredited sites and those with poorer performing operators with the resources freed up by not having to frequently monitor accredited sites. But there is a risk that the quality of self-regulating operator performance could gradually decline without regular independent planning authority monitoring, which could result in unacceptable impacts in some cases.
Option 3: The benefits of this preferred option are that it would place the financial burden of this regulatory function on operators, supporting the 'polluter pays' principle. Although industry representatives have expressed the view that mineral and landfill waste operators are already paying for environmental improvements to their operations through, for example, the Landfill Tax and Aggregates Levy, these charges were not introduced to encourage environmental improvements at mineral and waste sites, which is the objective of monitoring. At Opencast Coal Task Force meetings, operators spoke about how statutory monitoring fees could be seen as a disincentive to invest any further in coal. The option would however ensure that planning authorities were able to recover some costs of a best practice level of monitoring in their areas and would bring about savings which could be used for other purposes. It would also support local community interests, ensuring potential future issues were identified earlier and addressed.
Poorer performing operators would require higher levels of monitoring visits to ensure full compliance with conditions. Consequently a system that charged for each site visit could encourage poorer performers to improve their performance, thus reducing the number of visits and total costs, and freeing up more planning authority time to devote to other issues. A regime based on a nationally-set fee for each visit has the merit of simplicity and equity.
Monitoring to a best practice level would lead to an improvement in compliance with planning permissions, particularly amongst any poorer performing operators. This should ensure that the unacceptable impact of surface coal mines could be minimised.
6. For the purpose of costs, it is estimated that there are approximately 24  surface coal mining sites in Scotland that may be eligible for site visits attracting a monitoring fee under the new Regulations. The Regulations are likely to lead to an average cost, assuming a best practice approach in line with the Scottish Government's proposed guidance, of just over £2,000 per site per annum, making a total cost of around £48,000 to the various operators in the industry. Costs at individual sites may, however, vary to reflect the amount of monitoring that is considered necessary.
Option 1: This option would mean that the costs of the current, variable, level of monitoring would continue to be met through a planning authority's budget, thereby in theory saving individual operators £2,000 per annum, per site. As planning authorities can sometimes find themselves inadequately resourced to perform monitoring to a satisfactory level, it is likely that monitoring would remain below the level that would be reasonably expected. This could result in non-compliance with conditions with subsequent risk of negative impacts on communities and the environment. As there would be no regular liaison between authorities and operators there would be no incentive for operators to potentially raise their environmental standards.
Option 2: Under this option, planning authorities would still continue to fund the cost of monitoring. They would also need to carry out occasional quality control checks on accredited operators, and would need to respond to complaints concerning sites where operators are accredited, but the burden of the monitoring function would be lifted to some extent, resulting in some financial and time savings for local authorities, albeit unquantifiable for this purpose. This option would allow local authorities to devote more time and effort to the monitoring of unaccredited and poorer performing operators. Clearly there would be some costs implications for operators, arising from this approach and the carrying out of monitoring that had previously been performed by planning authorities. Greater self-regulation by accredited operators (if internalised) with less independent scrutiny by planning authorities run the risk of being accused of a lack of transparency/independent scrutiny.
Option 3: It is estimated that there are approximately 24 surface coal mining sites in Scotland in various stages of coaling, abandonment or restoration. It is estimated that the maximum cost of a best practice approach to monitoring these sites would be just over £4,000 per site per annum, making a total maximum cost of £96,000. There are a large number of inactive sites which are likely in practice to reduce the estimated business impact but as requirements can vary site to site this would be impossible to quantify. Basing a fee regime on a flat fee level would impact more on smaller sites although the expectation is that such sites would be visited less frequently. There would also be an incentive for operators to improve performance since this could lead to a reduction in monitoring visits and therefore costs.
Issues of equity and fairness
7.1 In this section, Option 1 has not been further explored, as it does not achieve the objective, but forms the baseline from which other impacts are measured.
7.2 Option 2 would allow operators, with a proven track record of compliance with planning conditions and/or EMAS or ISO14001 accreditation, to self-regulate, thus removing them from close planning authority monitoring, although there would be a residual requirement for quality control checks. Unaccredited operations would still need to be monitored to a best practice level and less compliant operators could be subjected to closer scrutiny by planning authorities, with the extra resources which would then be at their disposal. This option would only be acceptable and equitable if all parties, including planning authorities and local communities, had confidence that accreditation was an acceptable substitute for independent monitoring to a best practice level. Even with evidence of operators who conduct internal environmental audits this may not be the case.
7.3 The wider mineral and waste industry's view is that ISO14001 and EMAS accreditation are good measures of performance. Accreditation demonstrates the commitment of the operator to a high standard of performance and should be taken into account. Those with accreditation are audited both internally and externally and any non-compliance with planning conditions is flagged up. Planning authorities are more sceptical about the value of accreditation of management systems as a proxy for monitoring compliance with planning permissions. They feel that there is insufficient evidence that accreditation equates with operational effectiveness and compliance with planning conditions. There is clearly a relationship but one does not equal the other.
7.4 Under this option, the cost of quality checks at accredited sites and the cost of monitoring at unaccredited sites would remain with planning authorities, so in theory any polluter would not pay.
7.5 Option 3 would transfer the cost of monitoring compliance with planning conditions, legal agreements and restoration financial guarantees from the planning authority to the operator. Where the operator could demonstrate, through continued satisfactory compliance, that it was discharging its responsibilities in a reasonable manner, the planning authority could visit the site less often than those of less reliable operators and associated monitoring costs would reduce as consequence.
7.6 All conditions attached to a surface coal mine permission and matters arising from legal agreements and restoration financial guarantees should be complied with in order to avoid unacceptable environmental or social impacts. Poorer performing operators would therefore receive more visits to ensure compliance and thereby incur more costs. A flat rate of charge, irrespective of the size of the operation and the level of turnover of the company, would impact more on smaller operators but would be deemed modest.
7.7 The proposed flat rate charge based on average costs, would be administratively easier to operate than a system based on actual costs, which would impact slightly differently on different types of operation. For example, smaller sites may take less time to monitor and require less frequent monitoring visits, whereas larger sites or more complexes operations are likely to take longer and required more frequently due to the fact that the pace of change is often more rapid. Under the proposal, both the rationale for a flat rate charge based on average costs and its level would be kept under review.
7.8 There are no issues of equity and fairness arising in respect of rural areas or race equality. However the option is likely to have an impact on health and well-being because best practice monitoring can help to ensure full compliance with planning conditions. This, in turn, should ensure that polluting emissions, such as dust and noise, are minimised and that restoration progresses are in line with mine progress plans and programmes to the benefit of local communities and the environment.
SMALL FIRMS IMPACT TEST
8. There are a number of sites that are relevant to this proposal in Scotland and it is likely that those with tighter margins and lower turnover could find the costs of monitoring fees heavier than larger operators. However, in certain instances, these sites are likely to be quicker and easier to monitor so can keep costs down. The intention is to accompany the new Regulations with guidance which would recommend that such sites, where possible, could be monitored in a proportionate manner in line with their performance. In most instances, planning authorities will have a discretionary power whether to visit a site or not so long as it is conducted at least annually: a minimum which would also apply to inactive sites.
LEGAL AID IMPACT TEST
9. This test is not considered relevant to these Regulations.
"TEST RUN" OF BUSINESS FORMS
10. The Regulations do not contain business forms. A draft "monitoring report" was included with the Regulations and this will be included in Scottish Government guidance being issued to accompany the Regulations. It will take account of comments made during the consultation process.
11. The surface coal extraction industry contains a limited range of operators of various sizes. Turnover can vary considerably, depending on the size of the site and the amount of winnable coal and associated minerals and the rate of extraction. The proposals subject all sites in Scotland to a flat-rate charge. Given the relatively small scale of the proposed charge per visit (£500) and the scope for minimising costs through a reduction in scheduled site visits as a result of compliance with the planning conditions, we would not expect the proposal to have a significantly adverse impact on the competitiveness of operators. Operators in England are already subject to a similar fees regime.
ENFORCEMENT SANCTIONS AND MONITORING
12. Each of the options would be dependent on planning authorities having a right of entry to land in order to carry out the monitoring function. They would be able to rely on the powers in primary legislation to do so. Enforcement of planning conditions would continue as at present, under planning legislation. A material divergence between the cost of restoration and the value of the financial guarantee is one of the most significant risks which robust monitoring can help alleviate. In the event of serious breaches of conditions, it would be possible for the planning authority to suspend operations. In the event of non-payment by the operator, recovery would be expected to be pursued by the planning authority as part of existing day-to-day debt recovery powers. Any disagreements between planning authorities and operators about the proposed number of monitoring visits each year could be resolved by the planning authority's internal complaints procedure.
MONITORING AND REVIEW
13. Charging for monitoring of surface coal mine permissions is a new concept within the planning system and the Scottish Government recognises that there would be a need to monitor the progress of the regime, to ensure that it operated effectively and to see if it needed to be improved in any way. Major indications of the effectiveness of any of the options are the level of compliance with planning permissions and the reduction in the number of complaints which prove to be justified. The appropriateness of the fee and whether it should be raised from time to time to take account of inflation will also need to be reviewed.
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