ASSC Comments on the Scottish Government’s Island Communities Impact Assessment on Proposals for a Licensing Scheme and Planning Control Areas for Short-Term Lets:
The Scottish Government undertook an Island Communities Impact Assessment on its licensing order as highlighted by the following recent parliamentary question.
S6W-02556: Donald Cameron, Highlands and Islands, Scottish Conservative and Unionist Party, Date Lodged: 30/08/2021 R
To ask the Scottish Government whether it has prepared an Island Communities Impact Assessment in relation to its proposed short-term lets Licensing Order, and, if so, whether it will publish it.
Answered by Shona Robison: An Island Communities Impact Assessment (ICIA) was published on 10 December 2020 in our 2020 consultation report on proposals for a licensing scheme and planning control areas for short-term lets in Scotland. The ICIA can be found at: Short-term lets – licensing scheme and planning control areas: consultation analysis – gov.scot (www.gov.scot)
- The ASSC believe this to be a tokenistic piece of work in order to tick the box to say it was completed as required and was not a thorough and robust analysis. As is regularly the case with island impact assessments, despite the identified negative impacts, these are not given due consideration and the conclusion is that the legislation should proceed regardless.
- While the Scottish Government’s proposals are likely to have an impact on island areas, the Scottish Government have not updated the ICIA to reflect its revised Licensing Order and is instead relying on the paper published in December 2020.
- It is relevant to note that the footnotes to the ‘Short-Term Lets – licensing scheme and planning control areas: consultation analysis’ states that: “housing shortages in island locations could be down to a number of factors beyond short-term lets, including: second homes, a smaller private rented sector than in urban areas and the challenge of trying to match need and demand in smaller communities.” If the Scottish Government recognises this in their analysis of the consultation responses, why is this not reflected in the ICIA and why does the Scottish Government continue to suggest that housing shortages are the basis for the rationale of implementing short-term let licensing when it was meant to be ensuring health and safety?
- There is no evidence to indicate that shrinking the short-term let sector will release properties for local people onto either the long-term let rental market or the property market on the islands. A far more holistic approach is required for island economic growth, to rebalance and diversify the island economies, to provide increased connectivity, increased job opportunities and wealth generation.
- The Private Residential Tenancy and the security of tenure that it gives tenants is a huge disincentive to landlords, so too ever stricter building regulation requirements for long-term let properties. Affordable housing is also largely out of the reach of single people and families. Affordable housing requires mortgages of between £130k and £200k meaning in reality it is not affordable. Thresholds for the Scottish Government’s shared equity ownership schemes are now set too low, meaning that this scheme does not function to move lower priced properties into the realm of possible ownership for any individuals or families, particularly in areas such as Skye which has seen a very significant post COVID property boom and marked inflation in house prices. Furthermore, those looking to access the shared ownership equity scheme are required to consider homes across the whole of the local authority area. The Highland Council area is huge, making the latter an impracticable proposition, particularly for those with children.
- Progress on housebuilding is not fast enough. For instance, the Scottish Government have only spent half of their £25m Rural Housing Fund which aims to build affordable homes in rural areas. A real island impact assessment must consider prima facie failed island housing policy and the woefully slow build of so-called affordable homes.
- The ICIA has made no attempt to properly assess the financial and commercial impact of licensing on short term let operators in Island communities. Scant regard is given to the real challenges and substantial additional costs of operating successfully in remote areas of the Highlands and particularly Islands. No meaningful or accurate attempt has been made to quantify the additional costs faced in the Islands. The only suggestion that the Scottish Government seems able to offer is that small short-term let businesses can pass on increased operational costs from licensing to the consumer, thereby adding to the considerable inflationary pressures arising from Brexit and emergence from the pandemic.
Points in the ICIA to note:
The ICIA states:
13.13. Positive impacts include:
a) Short-term lets support the tourism and visitor economy, which can be vital to island communities through:
(i) income received by hosts,
(ii) support for local businesses such as restaurants and shops by short-term let guests, and
(iii) employment opportunities, such as cleaning and maintenance.
b) Short-term lets support the wider rural economy through providing accommodation for seasonal workers.
c) A number of hosts in rural and island areas noted that running a second property (or properties) as a short-term let provided them with full-time employment and allowed them to sustain their position in the community. They noted that alternative employment opportunities were often limited.
- This point is critical given that a large number of islanders are resident ‘portfolio workers’ and the reduction in short-term let capacity via overprovision places one of the sources of income at risk.
13.14. Tourism-related enterprises are over-represented relative to the national average in many rural areas: for instance, Argyll & Bute, and Highland, have the highest proportion of tourism businesses in Scotland as a share of their business sector overall.
13.15. Negative impacts included:
a) Reduced availability of residential housing – particularly in areas where there are high concentrations of short-term lets and/or second homes. We have heard concerns about people being unable to take up jobs in certain locations, including Skye and the Western Isles, due to lack of available housing.
- Policymakers should not use holiday accommodation as a means to solve housing challenges in Scotland, instead focusing on building more affordable homes and tackling the scourge of empty properties. In terms of the latter, there are 2595 empty homes in the Highlands.
- Any short-term let regulations taken forward, either at a national or local level, need to be informed by robust empirical data. Scraped data from online platforms can lead to misleading conclusions about the nature of the short-term letting market. The ICIA repeats some of the research that utilises unreliable scraped data which will give an inaccurate picture of the current situation in island communities.
- Any housing issues in relation to short-term lets should be addressed by the Planning Act 2019 – through the introduction of control zones underpinned by robust quantitative data – and should not play a part in the licensing proposals which are meant to focus on health and safety.
- Small businesses like self-catering, present in communities for decades, should not be used as a convenient scapegoat for wider failures in housing policy.
- Operators have stated that if their licence is refused or revoked, they will simply remove their property from the market, resulting in fewer guests, lower income for the onward supply chain and other tourism businesses.
b) Increased strain on local public services.
c) Negative impacts on communities’ quality of life, for example due to noise and anti-social behaviour. The majority of noise and anti-social behaviour concerns related to urban areas, and tenement or flatted dwellings where neighbours live in close proximity. We are also aware that noise and anti-social behaviour can be an issue in rural and island areas, particularly from larger ‘party mansion’ type properties.
- There is no empirical to suggest that this is a fact. In 2021, the ASSC conducted FOI requests of each local authority in Scotland about the reported incidences of anti-social behaviour attributed to holiday lets from 2018 to 2021, as well as making a comparison with ASB in other types of housing tenure. This demonstrated that complaints against holiday lets remain extremely rare in many parts of Scotland, especially in rural areas, and these figures are a drop in the ocean compared to ASB complaints against other housing tenures.
- The FOIs also showed that local councils are not using the Antisocial Behaviour Notices (Houses Used for Holiday Purposes) (Scotland) Order 2011 in response to the limited number of complaints against holiday lets, a power which the former Minister for Housing Kevin Stewart described as “quite comprehensive powers to deal with antisocial behaviour and noise nuisance”, before noting that “I expect them to use those powers effectively…I challenge local authorities to consider using it [Order 2011] and other antisocial behaviour powers, as well as the powers in relation to noise and environmental health that are currently at their disposal.”
- There is no data on the number of ‘party houses’ on the islands, nor a definition of such a premises.
- Tourism is one of the main segments of island economy and one of the few growing segments. If tourism accommodation capacity is reduced, where will the guests be displaced to, given a lack of hotels or hostels. There is a concern that they will be forced to stay elsewhere, or islands will become inundated by motorhomes and campervans.
- It is a leap of faith to believe that these houses, if withdrawn from the short-term let market, will be filled up with people flocking back to the islands, or that they will be affordable to either rent or purchase.
- There is a population crisis on many of the islands. This will not be helped by constricting one of the economic growth engines. In general terms, around the world, an increase in economic activity drives an increased population, whilst and the reverse drives the reverse.
13.27. Our proposals for regulation are likely to have an effect on island communities which are significantly different from its effect on other communities (including other island communities).
- We commend an understanding that each island is different and subsequently has different needs and issues.
13.30. Island communities may face increased costs in order to comply with the requirements of our licensing proposals. This may be through higher licence fees than urban areas due to rurality and less opportunity for economies of scale in many areas;
- This is a significant concern. The cost of complying with the mandatory conditions is already considerably higher than central belt / urban areas, and operators often struggle to secure providers to check compliance (private water supplies, Food Safety, EPCs etc). This is before any licence fee.
13.32. The cost of licence fees will be set by local authorities at a level to cover the costs they incur in setting up and running the licensing scheme. This is already the case for existing civic licence schemes, as well as HMO licensing.
- Giving local authorities carte blanche to set fees is a real concern. Costs to island based local authorities are higher than the mainland, and this will have to be passed on to the licence holder to reflect the added administration. Local authorities are under extreme financial and capacity pressures as a result of austerity compounded by the Covid-19 pandemic. Concerns raised by local authorities including Highland and Argyll & Bute have been dismissed or disregarded.
13.41. A number of stakeholders have asked how we will ensure our legislation accounts for the distinct needs of different islands. For example, they noted that Arran and Skye have housing pressures for workers due to high concentrations of short-term lets and second homes, whereas other islands do not.
- There is no empirical evidence to back this up and no identification of the stakeholders who have made this assumption. While there are undeniable issues with housing, there is no evidence that this is driven by short-term lets. There are many second homes across all the islands, which are not let out and provide no benefit to the local economy. There are also many more empty homes than short-term lets.
13.51. The process of developing our regulatory proposals for short-term lets involved extensive engagement with individuals and organisations from communities across Scotland, including island communities.
- The ASSC’s CEO Fiona Campbell attended almost every consultation meeting in 2020, across the length and breadth of Scotland. The meetings on Arran and Skye were attended by a mere handful of people, which does not constitute ‘extensive engagement’. The 2019 research was carried out by a company focused on affordable housing. It was heavily weighted and only involved consulting with 5 professional self-caterers. This was only carried out under duress. The results were a foregone conclusion.
13.56. We consider that the legislation is appropriate for the whole of Scotland, including island communities, and offers considerable flexibility to local authorities on how it is implemented. We intend to work with local authorities, not least in the preparation of guidance, as they work towards implementation so that we can facilitate the sharing of ideas and best practice. We hope this will be of particular value to island local authorities and local authorities with island communities.
- Representatives from SOLAR and local authorities have been ignored on the Scottish Government’s Stakeholder Working Group in terms of their concerns regarding the draft legislation, but also the guidance. This statement is meaningless, deceptive and duplicitous.
 Scottish Government, Consultation report on proposals for a licensing scheme and planning control areas for short-term lets in Scotland, p78. Url: https://www.gov.scot/binaries/content/documents/govscot/publications/consultation-analysis/2020/12/short-term-lets-licensing-scheme-planning-control-areas-consultation-analysis/documents/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland/govscot%3Adocument/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland.pdf
 More details about the FOIs from the local authorities in Scotland is available on request from the ASSC.
 See: https://www.parliament.scot/api/sitecore/CustomMedia/OfficialReport?meetingId=11177