Community benefit is a goodwill contribution voluntarily donated by a developer. It is for the benefit of communities affected by development where this will have a long-term impact on local resources and the local environment.
There is no legal requirement on a developer to offer a community benefit donation and Scottish Government planning guidance prevents this type of payment from becoming a condition of planning permission. We have no powers of enforcement if a developer is unwilling to make a contribution.
Our policy on community benefit
We want to make sure that local communities benefit directly from the use of their local resources and are compensated for the disruption and inconvenience associated with large scale development work.
Development that has an impact on the local environment and resources should be:
- Acceptable in land use planning terms
- Have clear and direct benefits for those who live and work in the area
It is our policy to seek funding or in-kind contribution from developers towards local community initiatives in respect of development, such as large renewable energy schemes, which have a long term impact on the environment, of not less than £5,000 per installed megawatt linked to the retail price index. This contribution is referred to as community benefit.
A key issue for communities is how the money is distributed at the local level. We have agreed to use 3 allocation factors to provide an objective and scientific model for sharing funds among communities. The 3 allocation factors are:
- Proximity to site
- Visual impact
- Number of residences
We have also agreed for a new concordat to be established which will set out the terms of a new relationship between ourselves and developers. As part of this agreement it will be our responsibility to provide the framework and infrastructure for receiving and then pay out community benefit. Through this, developers will agree to provide not less than £5,000 per installed megawatt annually. That will appreciate each year in line with the UK retail price index.
We have produced a guidance note on planning for and setting up a legal framework to manage community benefit funds. The guidance is targeted at community councils and community groups. It provides an overview of community engagement and legal issues and advises on how these should be approached. It also presents options in selecting a legal entity to receive and manage funds with specific reference to Companies Ltd by Guarantee, Community Trusts, charitable status, and trading subsidiaries.