The Latest on Viability Disclosure

Each September LD Events’ annual Viability and Planning conference comes around. My regular slot at the event covers ”transparency in the viability process – access to information” and it’s always interesting how the climate has changed over the previous 12 months. This blog post provides links to some of the key decisions and policy developments, supplementing my 27 September 2016 presentation. 

Information Tribunal

In the same way that previous years have been dominated by the Information Tribunal’s decisions in London Borough of Southwark v Information Commissioner, Lend Lease and Glasspool  (9 May 2014, Heygate Estate) and Royal Borough of Greenwich v Information Commissioner and Brownie  (30 January 2015, Greenwich Peninsula), this year there has been another big Information Tribunal decision: Clyne v Information Commissioner and London Borough of Lambeth  (14 June 2016, Streatham Megabowl).


Clyne is important because the Tribunal go in detail through all of the following elements of the viability appraisal, justifying item by item, their decision to order disclosure:

 • Private residential values broken down by individual unit size/location within the development?

• Affordable housing average values per square foot?

• Gross development value?

• Marketing budget?

• Construction costs?

• Professional fees?

• Projected costs : contingency percentage?

• Projected costs : letting/sale agent and legal fees?

• Benchmark land value?

• Surplus/deficit figure?

• Other : performance measures?

 This was a case where the figure allowed for developer’s profit had already been disclosed.

 Information Commissioner

 There has also this year been a plethora of decisions by the Information Commissioner. Each very much turns on its facts. However, the following basic principles are commonly set out:

 – The four necessary criteria set out in Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association  (24 May 2010) to get to first base ie establishing that the information is commercially confidential for the purposes of Regulation 12(5)(e) of the Environmental Information Regulations 2004:

(i) Is the information commercial or industrial in nature?

(ii) Is confidentiality provided by law? This will include confidentiality imposed on any person by the common law of confidence, contractual obligation, or statute.

(iii) Does the confidentiality protect a legitimate economic interest? Where the arguments refer to the economic interests of a third party, it will not be sufficient for a public authority to speculate on the potential harm attached to disclosure. Instead, the public authority must have evidence that demonstrates the arguments genuinely reflect the concerns of the third party.

(iv) The confidentiality would be adversely affected by disclosure. Although this is a necessary condition, the Information Tribunal in the Bristol City Council case considered that the disclosure of truly confidential information into the public domain would invariably harm the confidential nature of that information. As such, if the preceding three stages of the test are fulfilled, it will follow that the exception is engaged. Where this is found to be the case, a public authority must next go on to assess whether the balance of the public interest required disclosure

– It is not sufficient that harm “might” be caused by disclosure. It is necessary to show that on the balance of probabilities it would be caused.

– Those resisting disclosure on the basis of the harm that would be caused need to show a specific link between precise categories of withheld information and the stated harm.

– Detailed consideration as to whether the public interest in maintaining the exemption is outweighed by the public interest in disclosure.

 These are some of the decisions from the last 12 months:

Sweets Way Estate  (Barnet, 9 August 2016) – disclosure.

Doone  (East Hampshire, 16 June 2016) – disclosure.

Aylesbury Estate  (Southwark, 25 April 2016) – disclosure. 

Bishopsgate Goodsyard  (Tower Hamlets, 22 March 2016) – disclosure.

Heygate Estate  (Southwark, 15 February 2016) – redactions of DVS reports upheld equivalent to what was withheld in Glasspool, ie proposed commercial values, financial gearing rates, base inflation percentages for the delivery period set against assumed regeneration inflation figures, cost analysis summaries and construction costs. 

Tuke School, Peckham  (Southwark, 13 January 2016) – overage provisions in sale contract withheld.

 Chase Farm Hospital site  (Enfield: 9 December 2015) – withheld: forecasted residential land sale receipts and assumed value of land associated with a new school. Sensitive negotiation position of NHS Trust.

Brentford FC new stadium  (Hounslow: 22 October 2015) – all disclosed except specific appraisal information relevant to subsequent negotiations.

 Silver Hill  (Winchester, 17 September 2015) – withheld: development value of individual elements of the scheme, breakdown of individual costs and resultant net development value and profit, estimated rental value of commercial property, percentage of estimated rental values which the proposed ground rents would represent, budget for acquiring third party land, estimated construction costs for individual blocks, letting and marketing costs, interest rate on financing.

 London boroughs turning up the heat

Ahead of any updated London-wide guidance from Sadiq Khan (and his promised team of viability specialists), different boroughs are taking different approaches. For example the Hounslow local validation list  October 2015 and Greenwich local validation list  January 2016 both now require unredacted viability appraisals, which will be publically available. Other boroughs have been adopting development viability SPDs, for example Islington’s January 2016 SPD  and Southwark’s March 2016 SPD  , both of which require justification for exempting any elements of an appraisal from disclosure. Other boroughs take a more traditional approach to treatment of commercially sensitive material – who knows, perhaps even heeding the advice at paragraph 4.3 of the RICS guidance on financial viability in planning  :

 “Pre-application discussions usually proceed on the basis of treating commercial information provided by a developer (applicant) or their consultant as confidential. In order to encourage openness and transparency in the viability process both at pre- and post- application, it is also often the case that the viability reports submitted to a local planning authority are required to be classified as confidential in part or as a whole. This is to encourage the applicant to disclose the maximum amount of information, which can then be reviewed and reported upon. LPAs should therefore be asked to treat and hold this information on a similarly reciprocal basis and respect that disclosure of confidential information could be prejudicial to the developer (applicant) if it were to enter the public domain. Information will usually be disclosed to the LPA adviser but not to the general public as it may be commercially sensitive.

 Simon Ricketts 26.9.16

Personal views, et cetera

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Regeneration X: Failed CPOs

The Secretary of State’s decision letter  dated 16 September 2016 in relation to the Aylesbury Estate CPO has major implications for all regeneration schemes, including the approach that LPAs should take to planning applications. However, in my view it was not unsurprising in the light of other recent decisions. 

The whole of the decision letter is worth reading but I quote the most relevant passages below. It will be seen that the critical failings of the proposals in the eyes of the Secretary of State were (1) the impacts on displaced leaseholders who might not be able to remain in the area and (2) the potentially disproportionate or at least unassessed effects of the proposals on specific protected groups under the Equality Act 2010. 
 “20. the options for most leaseholders are either to leave the area, or to invest the majority of their savings in a new property. Article 8(1) [of the European Convention on Human Rights – right to respect for private and family life] is therefore clearly engaged. In relation to Article 8(2) (which permits interference which is proportionate when balanced against the protection of the rights and freedoms of others), the Secretary of State finds that the interference with residents’ (in particular leaseholders’) Article 8 rights is not demonstrably necessary or proportionate, taking into account the likelihood that if the scheme is approved, it will probably force many of those concerned to move from this area.

21. For elderly residents, who are of an age where they would probably be unable to obtain a mortgage to make up any shortfall and their future earning potential is likely to be limited, using their savings and other investments would severely limit their ability to choose how they spend their retirement and the use to which they put their savings and investments. The leaseholders are not obliged to accept either of the options to them (shared ownership or shared equity) to stay on the Estate, and could potentially purchase a property on the open market. However, many of the leaseholders will probably be unable to afford these options and will have to move away from the area. The likelihood that leaseholders will have to move away from the area will result in consequential impacts to family life and, for example, the dislocation from local family, the education of affected children and, potentially, dislocation from their cultural heritage for some residents.

22. Article 1 of the First Protocol of the ECHR entitles a person to peaceful enjoyment of their property, but also stipulates that this provision does not impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest. As mentioned below, the Inspector in this case found that the interference with residents’ peaceful enjoyment of their property was not necessary to control the use of property in accordance with the general interest, and accordingly that the interference with Article 1 of the First Protocol was not proportionate (IR422). The Secretary of State agrees that interference with the residents’ human rights is not proportionate in all the circumstances.

23. In making this decision, the Secretary of State must give due regard to the need to (a) eliminate unlawful discrimination, harassment, victimisation; (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. Protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. This arises from the Public Sector Equality Duty, under section 149 of the Equality Act 2010.

26. The negative impacts on protected groups would include the effect of the impact on elderly leaseholders currently resident on the Estate, as identified at IR 372 to 373 and IR 401 and 402, namely the fact that many of the leaseholders (who will have no right to be accommodated in the scheme) are of an age where they would probably be unable to obtain a mortgage to make up any shortfall and their future earning potential is likely to be limited. Using their savings and other investments would severely limit their ability to choose how they spend their retirement and the use to which they put their savings and investments. The leaseholders are not obliged to accept either of the options open to them (shared ownership or shared equity) to stay on the Estate, and could potentially purchase a property on the open market. However, many of the leaseholders will probably be unable to afford these options and have to move away from the area. This is likely to impact particularly on those with the protected characteristic of age, including in relation to the care of older relatives and children’s education (as people have to move out of the area, this will mean that the elderly are deprived of having a local family to care for them, and the children of those parents affected are likely to have to move schools when their family moves to a different area).

27. This impact on the care of older relatives may adversely affect their ability to see and be cared for by their family and potentially to integrate with the rest of society (for instance, without a family member to accompany them in a car or on public transport it may be harder for them to access the shops and public facilities like the GP surgery or local library as they will lack the freely offered assistance to do so) and therefore breaches the PSED requirement to have due regard to the need to foster good relations between persons who share a relevant protected characteristic (the elderly) and persons who do not share it (the rest of the population).

28. The impact on children’s schooling may result in adverse impact on the child’s exam performance and their school reports. This is in turn likely to result in a lower level of achievement than otherwise might have been the case, which is likely to result in a lower level of opportunity for the affected child in terms of their ability to apply successfully for jobs (thus adversely affecting equality of opportunity) and – in terms of uprooting them at a vulnerable stage in their development – a negative impact on the affected child’s good relations with their family and extended social contacts (they are likely to go through a period of isolation as a result of being uprooted from the social networks they had established at their previous home).

29. Given the lack of clear evidence regarding the ethnic and/or age make-up of those who now remain resident at the Estate and who are therefore actually affected by any decision to reject or confirm the Order, it is not possible to clearly identify BME groups (either of the elderly or children) as disproportionately impacted by the proposal. However, given that 67% of the population living on the Estate were of BME origin (see IR 394), it is highly likely that there is a potential disproportionate impact on the elderly and children from these groups, who are likely to dominate the profile of those remaining on the Estate and who are therefore likely to have to move out of the area if the Order is confirmed.

32..there is a shortage of evidence concerning the precise ethnic make-up of those remaining resident at the Estate, who would be affected by a decision to confirm the Order (see above). If, in practice, the cultural and/or ethnic make-up of those resident at the Estate, who are unlikely to be able to remain there, is pre-dominantly those of one or more particular ethnic/ cultural origins, then their cultural life is likely to be disproportionately affected by a decision to confirm the Order. There is also likely to be a negative impact on their ability to retain their cultural ties, undermining their equality of opportunity with other ethnic groups (such as white British) who may not be so disproportionately affected. This is particularly so, in that white British culture is more widely-established across the UK, including at housing sites to which residents may be moved, whereas minority cultural centres are often less widespread, which is likely to make cultural integration harder for those of BME origin who are forced to move than those of a white British origin.” 
For more detailed background London Borough of Southwark’s statement of case  and the leaseholders group’s statement of case  may be of interest. 

In my view, the decision by the Secretary of State, whether justified on the evidence or not (Southwark are reportedly challenging it) is not unexpected following Horada (on behalf of the Shepherds Bush Market Tenants Association) and others v Secretary of State  (Court of Appeal, 18 March 2016) where the Secretary of State’s approach to the Shepherds Bush market CPO was struck down on similar issues. 

The Inspector hearing the Shepherds Bush market CPO inquiry concluded: “the current Orion proposal [which was the basis for the CPO] lacks the mechanisms to be assured of retaining the number, mix and diversity of traders in the way explained above. They are vital to the distinctiveness of the market and the Goldhawk Road shops. Therefore, insofar as it would facilitate delivery of the redevelopment scheme promoted, the CPO would not fully achieve the social, economical and environmental well-being sought”.
The Secretary of State disagreed and confirmed the CPO. The Court of Appeal held that the Secretary of State had acted unlawfully as his reasoning for reaching a different conclusion had been inadequate (shades of the Dover reasoning flaws covered in my last blog post  ):
“In short, although it is clear that the Secretary of State disagreed with the inspector’s view that the guarantees and safeguards were inadequate he does not explain why he came to that conclusion. I do not consider that requiring a fuller explanation of his reasoning either amounts to requiring reasons for reasons, or that it requires a paragraph by paragraph rebuttal of the inspector’s views. But it does require the Secretary of State to explain why he disagreed with the inspector, beyond merely stating his conclusion that he did. The two critical sentences in the decision letter are, in my judgment, little more than “bald assertions”. The Secretary of State may have had perfectly good reasons for concluding that the guarantees and safeguards were adequate. The problem is that we do not know what they were. In those circumstances I consider that the traders have been substantially prejudiced by a failure to comply with a relevant requirement.”

As regards Southwark’s failure to comply with the Public Sector Equality Duty, there are certainly echoes of the ruling by the Court of Appeal in one of the rounds of the Wards Corner saga in R (Harris) v London Borough of Haringey  (Court of Appeal, 5 May 2010) where the court held that the council, when granting permission, failed to discharge its duties under section 71(1) of the Race Relations Act 1976 (now replaced by the Equality Act 2020 Public Sector Equality Duty) in terms of the potential effects of the scheme on Latin American traders or loss of housing by ethnic minorities.

To add a further Court of Appeal ruling into the blog, Grafton Group (UK) plc v Secretary of State  (Court of Appeal, 21 June 2016) is another recent example of a CPO (in this case to seek to protect Orchard Wharf in London’s docklands for operational purposes) being struck down. In this instance, the Secretary of State’s reasoning for confirmation the CPO was held to be inadequate given that the basis for the CPO was a development proposal, planning permission for which had been refused. 
For any of these schemes to fall over at the last hurdle may be seen as a victory to some but is often a tragedy to others who have spent years seeking to secure outcomes that have previously been accepted as being in the public interest. The main lesson for all of us is surely that we need to go the extra mile (or more) to seek to ensure that the likely effects of the scheme and/or dispossession on all of those likely to be affected are properly analysed, that the analysis takes full account of the Public Sector Equality Duty and that any material effects are explained and justified. 
Simon Ricketts 22.9.16
Personal views, et cetera

Avoiding Dover-type reasons JRs

Planning committees that resolve to approve planning applications against officers’ recommendations need to be careful not to fall foul of a JR if their reasoning is inadequate. The risks are particularly high in EIA cases and where there are other sensitive elements. Although Laws LJ described it as an “unusual case”, R (CPRE Kent) v Dover District Council & China Gateway International Limited  (Court of Appeal, 14 September 2016) should be a watchword for caution. 
The Court of Appeal quashed an LPA’s decision, taken contrary to officers’ advice, to approve a scheme for major development in the Kent Downs AONB. It was said to be uncontentious between the parties that “the scale of the proposed development is unprecedented in an AONB”. Officers had recommended that the scheme would only be acceptable with changes to its layout, which the applicant claimed would make the scheme unviable. The officers’ report analysed the issues in detail and set out out the policy tests in paragraphs 115 and 116 of the NPPF:
“115. Great weight should be given to conserving landscape and scenic beauty in… Areas of Outstanding Natural Beauty, which have the highest status of protection in relation to landscape and scenic beauty…

116. Planning permission should be refused for major developments in these designated areas except in exceptional circumstances and where it can be demonstrated that they are in the public interest. Consideration of such applications should include an assessment of:

The need for the development, including in terms of any national considerations, and the impact of permitting it, or refusing it, upon the local economy;

The cost of, and scope for, developing elsewhere outside the designated area, or meeting the need for it in some other way;

Any detrimental effect on the environment, the landscape and recreational opportunities and the extent to which that could be moderated.”

The members’ reasoning for disagreeing with their officers’ recommendation was briefly summarised in the committee minutes, referring to the benefits flowing from the development, the belief that harm could be minimised with effective screening and concluding that the advantages outweighed the harmful impact on the AONB. 

The Court of Appeal summarised the relevant law on the standard of reasoning required of a decision maker, setting out the classic passage from South Bucks v Porter (No 2) (2004):

36. The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the ‘principal important controversial issues’, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”

The court referred to the recent judgment by Lang J in R (Hawksworth Securities plc) v Peterborough City Council  (Lang J, 26 July 2016) where she had taken a light-touch approach to scrutiny of LPA decisions partly on the perhaps weak basis that it would be “unduly onerous to impose a duty to give detailed reasons…given the volume of applications to be processed”. The court didn’t suggest that her reasoning was “wrong in principle” but that “Lang J’s approach needs to be treated with some care. Interested parties (and the public) are just as entitled to know why the decision is as it is when it is made by the authority as when it is made by the Secretary of State”. 

The court drew attention to features of the Dover case which pointed away from her approach:
– the nature of the development proposed as against the AONB policy tests

– the fact that the committee was departing from the officers’ recommendation, meaning that it should, “if but briefly”, engage with the officers’ reasoning

– the fact that here there was a statutory duty to give reasons by virtue of Regulation 24(1) of the Town and Country Planning (Environmental Impact Assessment) Regulations 2011  .
On the facts it was held that the reasoning was not adequate to show whether the Committee had accepted the officers’ assessment of the harm that would be caused, whether the Committee had gone wrong in carrying out a balancing exercise of harm versus benefits (which would not be sufficient to meet the policy tests) or how any screening would make a substantial difference. End of permission. 
A few concluding comments: 
1. An applicant in the happy position of having persuaded a committee to approve an application in the face of an officers’ recommendation to refuse should make sure that the committee’s reasoning is sufficient to address the main elements of the officers’ recommendations. Often this will not necessarily be the case. For example, at its most basic, varying approaches are taken by authorities as to the brevity of their minutes. If in doubt, err on the side of a full record of what was said. It is odd that many authorities still do not record debates digitally or make them available for subsequent scrutiny as a matter of course.

2. No reference was made in the judgment to the statutory duty on decision makers in section 85 of the Countryside and Rights of Way Act 2000, in exercising or performing any functions in relation to, or so as to affect, land in an AONB, to “have regard to the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty”. It is a very broad test and I assume the court and the parties took the position that it was automatically met if the NPPF policy tests in paragraphs 115 and 116 were met. 
3. Regulation 24(1) of the EIA Regulations 2011 is one of many elephant traps in the planning system: 

“Where an EIA application is determined by a local planning authority, the authority shall—

(a)in writing, inform the Secretary of State of the decision;

(b)inform the public of the decision, by local advertisement, or by such other means as are reasonable in the circumstances; and

(c)make available for public inspection at the place where the appropriate register (or relevant section of that register) is kept a statement containing—

(i)the content of the decision and any conditions attached to it;

(ii)the main reasons and considerations on which the decision is based including, if relevant, information about the participation of the public;

(iii)a description, where necessary, of the main measures to avoid, reduce and, if possible, offset the major adverse effects of the development; and

(iv)information regarding the right to challenge the validity of the decision and the procedures for doing so.

These requirements are easy to overlook. 

4. Laws LJ concluded his judgment by remarking that the “scale of the proposed development is unprecedented in an AONB”. If I can be permitted a partizan remark, he would do well to see the implications of HS2 for the Chilterns AONB, in relation to which I would argue that the Commons Select Committee’s 22 February 2016 conclusions  were inadequate…
Simon Ricketts, 16.9.16

Personal views, et cetera

The Neighbourhood Planning Bill v Conditions

The Neighbourhood Planning Bill proposes some important changes to the planning conditions regime. DCLG published its Improving the Use of Conditions consultation paper  on 7 September 2016 alongside the Bill  (with a consultation deadline of 2 November 2016). 
There are two main elements to the proposals.
Restriction on pre-commencement conditions
I blogged  back in June when the proposal to clamp down further on pre-commencement conditions was first announced. 
As it happens, in my view what is proposed in clause 7 of the Bill, that pre-commencement conditions should not be imposed without the applicant’s written agreement, is pretty sensible as a cross-check that restrictions are not introduced without discussion. Of course, it is not a panacea and in some cases the applicant may be faced with a gun to the head – accept the condition or the application is will be refused – but in many more cases there will be the opportunity for consensus to be reached and the rigmarole avoided of subsequent 73 or 96A applications to morph conditions into a regime that does not unreasonably impede development. 
Indeed, why shouldn’t all conditions be agreed in draft with the applicant wherever possible?
Power for the Secretary of State to ban conditions of a prescribed description
This is more problematic. Clause 7(2) provides that such a ban must first be consulted upon and must only be for the purposes of ensuring that any condition meets the traditional tests of being
– necessary to make the development acceptable in planning terms;

– relevant to the development and to planning considerations generally;

– sufficiently precise to make it capable of being complied with and enforced; and

– reasonable in all other respects. 

Table 1 in the consultation paper lists various very general categories of conditions that should not be used (as per current planning practice guidance) and seeks views on whether any of them should be expressly prohibited by legislation. One wonders what the point of this is. The list in table 1 is very general eg 
– “conditions which unreasonably impact on the deliverability of a development – eg disproportionate financial burden”

– “conditions which duplicate a requirement for compliance with other regulatory requirements – eg Building Regulations”

What will it add to have these general principles in legislation in addition to policy? Who is going to challenge the imposition of conditions by way of the courts, rather than apply to remove the offending condition by way of section 73, with the ability to appeal to the Planning Inspectorate?

Generally, as with section 106 agreements, the exercise of drafting and negotiating conditions is getting increasingly fraught. Some examples:
The Darnhall appeal
The Secretary of State dismissed an appeal for residential development at Darnhall School Lane, Winsford, Cheshire on 7 July 2016, against his inspector’s recommendations. The decision letter  contains some interesting conclusions on a series of draft conditions offered by the appellant:
– training and employment – “not sufficiently precise and would be difficult to enforce, partly because it would be difficult to detect a breach”

– self-build housing – “not necessary to make the scheme acceptable in planning terms. Moreover…there are still concerns raised by the Council as to the effect on affordability which leads the Secretary of State to find that this condition is not reasonable in all other respects”

– local builders – “not necessary to make the development acceptable in planning terms and would not be strictly relevant to planning policy. Dependent on the builders or companies available through the build-out of the development the condition would be difficult to enforce, neither would it be precise, pr reasonable in all other respects”. 

– local procurement – “would not be necessary to make the development acceptable in planning terms. Neither is it strictly related to planning. The condition would be difficult to enforce, in part because it could prove difficult to detect a breach. The Secretary of State also considers that it is unclear what the position is in relation to the availability of business within the specified area to meet the criteria and therefore whether this condition would be reasonable in all other respects”. 

How does this ultra-rigid, purist, approach, fit with the approach taken by many LPAs? It doesn’t at all, obviously. The decision is under challenge, with Chris Young of No 5 Chambers acting for the appellant/claimant. 
“Tailpiece” conditions

“Tailpiece” conditions, along the lines of “unless otherwise approved by the Council” are pretty irresistible to those drafting conditions, seemingly offering a way to sidestep the need for subsequent formal applications under section 73 or 96A where changes are required, as they often are. However their use has been successfully challenged in a series of cases, for instance R (Butler) v East Dorset District Council  (Deputy Judge Rhodri Price-Lewis QC, 28 June 2016), Hubert v Carmarthenshire County Council  (Cranston J, 5 August 2015) and R (Warley) v Wealden District Council  (Deputy Judge Rabinder Singh QC, 8 July 2011). They should only be used where their scope is is closely defined in terms of the criteria to be applied by the decision maker or in terms of only extending to minor changes. 

Sustainability
Eric Pickles’ ministerial statement  25 March 2015 announced the withdrawal of the Code for Sustainable Homes and that until amendments to the Planning and Energy Act 2008 are introduced (which are still awaited) the Secretary of State would “expect Local Planning Authorities to take this statement of the government’s intention into account in applying existing policies and not set conditions above a Code Level 4 equivalent”. 
The same announcement advised LPAs that they should only set additional standards to those contained in the Building Regulations if they are able to justify why this is required and provide evidence to that effect. 
The planning system’s flexibility can be a great asset in negotiating planning permissions that both protect the public interest and meet the applicant’s requirements. We need to be careful that by ad hoc measures this flexibility is not lost – or that the process of issuing a planning permission becomes more routinely a negotiation between respective legal teams and tiptoe around the elephant traps, as it often already is on large schemes. 
Simon Ricketts 9.9.16

Personal views, et cetera

Emerging Neighbourhood Plans (nudge, nudge)

Call me old-fashioned but in my view legislation should change, consolidate or codify law, not simply serve as a political nudge. I referred in my last blog post  to section 1 of the Localism Act. Clause 1 of the new Neighbourhood Planning Bill  is out of the same stable. 
Clause 1 of the Bill amends section 70 of the Town and Country Planning Act 1990 so that, in determining planning applications (in England), a decision maker must have regard to a “post-examination draft neighbourhood plan, so far as material to the application”. The Bill’s explanatory notes  explain that this is “intended to strengthen neighbourhood planning by ensuring that planning decision-makers take account of well-advanced neighbourhood development plans” and to give such plans “full legal effect at an earlier stage”. 

However, plainly, a draft development plan, particularly one that has gone through independent examination is a material consideration for the purposes of section 38(6) of the Planning and Compulsory Purchase Act 2004 (determination to be in accordance with the development plan unless material considerations indicate otherwise) and, as Richard Harwood QC points out in his excellent summary  of the current Bill, not only is it material but it is likely to have considerable weight, due to the stages that it has been through, given the advice in paragraph 216 of the NPPF:

From the day of publication, decision-takers may also give weight to relevant policies in emerging plans according to:

● the stage of preparation of the emerging plan (the more advanced the preparation, the greater the weight that may be given);

● the extent to which there are unresolved objections to relevant policies (the less significant the unresolved objections, the greater the weight that may be given); and

● the degree of consistency of the relevant policies in the emerging plan to the policies in this Framework (the closer the policies in the emerging plan to the policies in the Framework, the greater the weight that may be given). “

Specific advice in relation to emerging neighbourhood plans is in the PPG:

“Planning applications are decided in accordance with the development plan, unless material considerations indicate otherwise. An emerging neighbourhood plan may be a material consideration. Paragraph 216 of the National Planning Policy Framework sets out the weight that may be given to relevant policies in emerging plans in decision taking. Factors to consider include the stage of preparation of the plan and the extent to which there are unresolved objections to relevant policies. Whilst a referendum ensures that the community has the final say on whether the neighbourhood plan comes into force, decision makers should respect evidence of local support prior to the referendum when seeking to apply weight to an emerging neighbourhood plan. The consultation statement submitted with the draft neighbourhood plan should reveal the quality and effectiveness of the consultation that has informed the plan proposals. And all representations on the proposals should have been submitted to the local planning authority by the close of the local planning authority’s publicity period. It is for the decision maker in each case to determine what is a material consideration and what weight to give to it.
The provision in the Bill appears to be rather an after-thought, and perhaps simply a nudge to decision-makers, given that it wasn’t trailed in the Government’s February 2016 technical consultation on implementation of planning changes  , 2 September 2016 response to consultation  or indeed the 7 September 2016 technical consultation on the neighbourhood planning provisions of the Bill  published on the same day as the Bill!

What will make more of a difference in practice to the interplay between emerging neighbourhood plans and decision-making on planning applications will be the increased speed with which neighbourhood plans are likely to be reaching the post-examination stage, due to a timetable within which LPAs must undertake neighbourhood planning functions, prescribed by Regulations under section 140 of the Housing and Planning Act 2016 coming into force on 1 October 2016, meaning that a developer preparing a planning application needs to be increasingly aware that a draft neighbourhood plan may be on its way to being a material consideration before the application is determined. 

The previous planning minister on 7 July 2016 extended  for a further six months his policy to consider recovering for his own determination planning appeals made where a neighbourhood plan proposal has been submitted to an LPA (although increasing the threshold from ten to 25 units). 
The weight to be attached to emerging neighbourhood plans (not addressed by clause 1 as it is a matter for the decision maker as long as properly reasoned), including circumstances where the neighbourhood plan is ahead of the relevant local plan (again not addressed in the Bill), has of course frequently arisen in legal challenges (eg Woodcock Holdings Limited v Secretary of State  (Holgate J, 1 May 2015) and R(DLA Delivery Limited) v Lewes District Council  (Foskett J, 31 July 2015 – Court of Appeal hearing fixed for 15 and 16 November 2016) and in appeal decisions (eg Sunley Estates/Chichester decision letter  25 April 2016).
Equivalent conflicts will continue to arise, notwithstanding clause 1. Indeed it may be easier for third parties to challenge a decision where the LPA can be shown not to have expressly taken into account a post-examination draft neighbourhood plan. 
Simon Ricketts, 8.9.16
Personal views, et cetera

Section 123…Go!

Rightly, no-one ever believed section 1(1) of the Localism Act 2011: “A local authority has power to do anything that individuals generally may do”. Section 2 (“boundaries of the general power”) put paid to that. 
There are many good things which authorities might do, if they were allowed. In some circumstances, this would be to dispose of their interests in land at an undervalue, where this would unlock viable development, or would for example secure more affordable housing.  
In an excellent recent Property Law Journal article  Stephen Ashworth sets out the pitfalls of section 123 of the Local Government Act 1972, which prevents local authorities from disposing of land “for a consideration less than the best that can reasonably be obtained”. “Consideration” means financial consideration rather than any wider benefits that may be secured. There is an exemption from consent in cases where the undervalue is £2m or less and the purpose of the disposal would contribute to the promotion or improvement of economic, social or environmental well-being. Stephen rightly questions this:
Critically the £2m limit is risible in the present market. It is the value of less than five London starter homes. It is often less than the difference between competing bids for land. At the very least it needs updating. In a devolutionary world, maybe, if a limit is necessary, it should be set locally, perhaps by mayors or local enterprise partnerships.”

It is certainly disappointing that the £2m cap hasn’t been increased, or that the Secretary of State has not set out any guidelines that encourage deals at an undervalue above the threshold which promote well-being, particularly in the form of increased delivery of housing, especially affordable housing. 

By coincidence, since the article was written, on 26 August 2016 Holgate J delivered judgment in R (Faraday Development Ltd.) v. West Berkshire Council & Anor  where he rejected a claim by a competing developer that West Berkshire’s development agreement with St Modwen in relation to the comprehensive regeneration of the London Road Industrial Estate in Newbury was in breach of section 123. Landmark Chambers’ summary  sets out the judge’s distillation of the principles to be applied in determining when a court should intervene in relation to the application of section 123. After a detailed examination of the deal that had been negotiated he rejected the section 123 challenge. It was common ground between the parties that if that ground of challenge failed, so too would the allegation fail that the deal amounted to unlawful state aid (ie a distortion of competition by favouring any party by virtue of the support provided by the Council to that party). 

The case is also interesting and useful for its detailed examination as to whether the arrangement between St Modwen and the Council was caught by public procurement requirements as a public works contract, in which case the Council would have breached its obligation to follow the formal public notification and competitive procedures laid down in the Public Contracts Regulations. After an analysis of the European case-law, the judge rejected this ground too:
“In my judgment the DA is a contract to facilitate regeneration by the carrying out of works of redevelopment and to maximise WBDC’s financial receipts, particularly rent, from the LRIE. The provision of services under clauses 4 to 7 and land assembly do not represent a main purpose in themselves, but simply facilitate the Council’s regeneration and financial objectives, the “twin objectives” with which WBDC’s process began (see paragraph 29 above). WBDC lawfully decided that the DA itself should not impose upon the developer an enforceable obligation to carry out the redevelopment. It is therefore not a “public works contract.

 The case should give comfort to developers and authorities alike that the pitfalls of section 123 along with equivalent risks arising from EU state aid and public procurement legislation can be safely navigated. However, challenges on these grounds remain an ever-present threat, whether for instance the state aid complaint  that has been brought in relation to the London Borough of Hammersmith and Fulham’s arrangement with CapCo in relation to the Earls Court development and the successful challenge (Stephen Ashworth acting for the claimant…) of Winchester City Council’s revised development agreement with Thornfield for the now possibly defunct Silver Hill project in R (on the application of Gottlieb) v Winchester City Council (Lang J, 11 February 2015). 

The need for some common-sense over section 123 is illustrated by the interesting wrinkle in London in relation to section 123: it doesn’t apply to Transport for London, because it is not a “principal council” for the purposes of the section, even though Schedule 11 paragraph 29 of the Greater London Authority Act 1999 does require that when it engages in development, either directly or through a subsidiary, it must do so “as if it were a company engaged in a commercial enterprise”. So it can dispose of land at an undervalue (subject to avoiding state aid problems) but can’t take an equivalently enlightened position when developing in its own right or through a subsidiary! These complications will no doubt constrain how the London Mayor delivers on his promise of increased levels of affordable housing on Transport for London land, the subject of a 26 August 2016 EGi piece

It would of course be equally useful to see a lighter touch state aid and public procurement regime, but that relies on rather larger political cogs. 
A final note arising from Faraday:
Interesting to see that the case featured Landmark’s Batman and Robin, David Elvin QC and Charlie Banner, this time on opposing sides, with Robin being given a very hard time by Holgate J, if the judgment is anything to go by…


Batman and Robin in happier times. 

Simon Ricketts, 2.9.16
Personal views, et cetera