Developer Contributions Supplementary Guidance

55. This SG provides the mechanism to continue to seek proportionate contributions towards Edinburgh Tram Line 1 (Airport to St Andrews Square) and 1a (Trams to Newhaven). 

56. It also proposes to agree in principle the contributions framework for the extension of Edinburgh trams to Granton and BioQuarter and beyond, once the route is confirmed. 

Background and Policy Context 

57. Tram line 1 in operation since 2014 and Trams to Newhaven in operation from June 2023 provide a key public transport service for the city. This is an enabling infrastructure in place that facilitates growth in West Edinburgh/Edinburgh Park, North Edinburgh urban sites along near route of Trams to Newhaven, and continued economic growth of the city centre.  

58. Extending the tramline network is a key component of the City Plan’s spatial strategy. It will help achieve the City’s net zero ambitions and City Mobility Plan’s aim to reduce car kilometres by 30%. To inform the Proposed Plan stage of City Plan, the Edinburgh Strategic Sustainable Transport Study (ESSTS) was commissioned. It recommended the case to extend the tramline on existing and revised safeguarded routes. A report on the Strategic Business Case (SBC) for Tram from Granton to BioQuarter and Beyond on 1 February 2024 sets out the preferred route and consultation process to progress to SBC stage. Until the project has reached that stage and confirms the route, City Plan includes all safeguarded options for future tram lines. This includes the continuing safeguard of tramline extension shown in LDP (2016) to Granton and South East Edinburgh.  

59. This guideline provides details on how to calculate developer contributions towards the operational tramlines as well as setting out the intention to take contributions towards the future tramline.  

60. An extended tramline is supported in national transport policy STPR2 (which recommends enhanced cross-boundary public transport comprising tram and bus-based transit) and NPF4 states plans to extend the tram network in Edinburgh offers the opportunity to reduce levels of car-based communing. 

61. Delivering the City Mobility Strategy – the draft Public Transport Action Plan (2023) contains policy PR5 Develop mass rapid transit plan (including tram and BRT for the city and region).  

62. The principle of seeking developer contributions for trams is well established and is summarised:  

• Guidance on tram contributions was first adopted in 2004 with iterations to refine it to the guidance in use today.  

• Principle of contributions has been based on the size and type of proposed development, its proximity to the tramline corridor and stops.   

• Established an infrastructure first approach – contributions continue to be sought for the operational tramline, where necessary infrastructure has been delivered by the Council in advance of proposed developments that will benefit from it and allows development to proceed by meeting the transport needs of future residents.  

• To enable the front-funding and delivery of the tram, the Council borrowed funds against future anticipated contributions from developers. The independent review of the tram funding noted that the Council had budgeted to receive £25.4m over a 20 year period to 2028 (or longer if the Council is still paying off the borrowing costs) in contributions from assumed development within 750m of the tram route. 

• Previous developer contributions guidance used £23m (taking into account contributions already taken) relied on this funding strategy and used it as a ‘cap’ for developer contributions. Contributions towards the tramline 1 would apply until the amount of borrowing, including costs, has been repaid. It is considered that this is still an appropriate mechanism for ‘front funding’ essential infrastructure. 

• To date, the ‘cap’ has not been reached, but there are some significant contributions in minded to grant decisions or unimplemented permissions which takes the total contributions near to £23m (IBG (Ref 15/05580/PPP) with a tram contribution requirement of £13,604,295 and Millburn Tower (Ref 15/04318/PPP) with a contribution of £1,432,205) 

Justification for increasing the cap on developer contributions towards Tramline 1 (operation tram). 

63. As only a small proportion of developer contributions had been collected by the time the line to York Place had been completed, the Council had to meet borrowing costs from its own revenue budgets. The Review of the Tram Funding Strategy (2007) states: ‘The legal advice has been to allow the council to go collecting contributions as long as the need can be justified by borrowing costs. This time period can be beyond completion of tram construction as long as the Council is still paying off the costs of the tram.’ 

64. This SG proposes to increase the £23m cap to reflect a better understanding of the borrowing costs. If we include interest costs of £16.9m based on 4% interest over 30 years (the rate achieved when borrowing was undertaken), this brings the total we can collect up to £39.9m. 

Principles for Tram Contributions 

65. Where the tram network will help to address the transport impacts of a development, an appropriate contribution will be sought towards its construction costs and associated public realm works.  

66. This guidance applies to all new developments requiring planning permission within the defined proximity of the existing tram lines (Tram line 1 and Trams to Newhaven) as shown in the map in Appendix 6 with major developments elsewhere in the city on a case by case basis. 

67. This ensures that development contributes towards the necessary transport infrastructure that has been delivered in advance and allows developments’ impacts to be mitigated from the outset.  

Proportionate level of contributions 

68. The level of contribution required depends on the following factors: 

i. type of development, 

ii. distance from tram route, and 

iii. size of development 

69. The level of contribution will be calculated as follows: 

i. Firstly, from table in Appendix 6 establish scale-factor (1-15) by type of and size (GEA) of development proposed; 

ii. Secondly, choose appropriate zone within which the development lies. 

Determination of the zone will be based on the shortest walking distance between any part of the site and the nearest edge of the constructed tram corridor. If the development lies within different zones, the zone closest to the tram will be used. Sites within 250 metres are Zone 1 and sites lying between 250 metres and 500 metres are Zone 2. 

iii. Thirdly, those sites based on the shortest walking distance between any part of the site and the nearest part of a tram stop lying between 500 metres and 750 metres are Zone 3. 

iv. Fourthly, using the Zone appropriate to the particular development, move along Table 2 to the column numbered as the scale factor obtained from Table 1. The figure shown is the amount in £’000s to be contributed towards the tram project by that particular development. 

v. Fifthly, the contribution, once agreed, will be index-linked from Q3 2018 on the basis of the BCIS All-in Tender Price Index. 

70. If any part of the proposal’s red line boundary is within the zone, the whole site applies. Where development proposals are in excess of the tables in Appendix 6 i.e. very large developments and/or further than 750m from the tramline, and these tables will be applied on a pro rata basis to calculate the minimum level of contribution required. 

Proposals for change of use: 

71. In cases of a change of use within a premises where there is no proposed change to floorspace or demolition, calculation of the level of contribution will be calculated by: 

• Deducting the contribution based on the existing/last known use/lawful planning use from of the Proposed Use contribution (as calculated per table 1). Where, the resultant contribution is positive then that will be the contribution that is required to be paid for that development. 

73. Changes of use or subdivision falling below the thresholds shown in Table 1 will not normally be expected to provide a contribution. 

74. For the avoidance of doubt, proposals for the redevelopment of land with existing premises and uses, involving demolition and clearing to make way for new development and uses, will be calculated solely on the resulting proposed development floorspace(GEA) /uses in Table 1.  

Other Significant Developments 

74. Large developments, as defined within scale factor 15 in the table in Appendix 6, but on land outwith the defined zone 3 will also be considered in regards to their net impact on transport infrastructure. Where there is a net impact on infrastructure, specifically in relation to trip generation on public transport and this requires mitigation developments may be required to make a contribution to the tram system. In such cases, the Transport Assessment submitted with the application should address fully the potential role which could be played by tram in absorbing the transport impacts of the development. 

75. Policy Exemptions are as follows: 

1. Small developments falling below the thresholds shown in the table in Appendix 6 will not be expected to provide a contribution unless they are clearly part of a phased development of a larger site. In such cases the Council will seek to agree a pro-rata sum with the applicant. 

2. ii. In the event of a developer contributing land towards the development of the tram system, the amount of the contribution required under this mechanism may be reduced. Each application will be considered on its individual merits, taking into account factors such as the value of the land, its condition, and the location of existing and proposed services. 

City Plan 2030 – future tram lines /proposed new tram line safeguards. 

76. The strategic business case (SBC) for a tram extension for Edinburgh is in preparation, after consultation in 2024, the SBC will progress and a funding strategy can be prepared based on the preferred route. As with tramline 1, it is likely that part of the funding strategy will include assumptions based on potential development within 750m of the tramline ‘Granton to BioQuarter and Beyond’ and assumptions on potential developer contributions. 

77. Once the SBC has been approved by Council, and proceeding towards an Outline Business Case, it is proposed that Appendix 6 Tram can be amended to include a new contribution zone with a threshold of 750m from the confirmed alignment of the Granton to BioQuarter and Beyond tramline. This will allow the Council to take proportionate contributions from development applying a similar methodology as tramline 1 (Trams to Newhaven)

APPENDIX 6

ADDENDUM 6