20 Changes In The Final Version Of The London Mayor’s Affordable Housing & Viability SPG

The final version of Sadiq Khan’s supplementary planning guidance on affordable housing and viability was published on 16 August 2017. I had previously blogged on the November 2016 draft. 

For internal purposes at Town we have prepared a tracked version, showing the differences. There are many, mostly tightening up the language, but also with some material additions and changes of emphasis.

This blog post focuses on 20 of what appear to me to be material changes from the position I summarised last year: 
1. 50% affordable threshold for public land

The threshold for the ‘fast track route’, where viability information is not required, nor review mechanisms as long as an agreed level of progress is made following the grant of permission, remains at 35% for schemes on private sector owned land. However a higher threshold of 50% has been introduced for land “in public ownership or public use” where grants are not available.

“2.33  It is widely recognised that land in public ownership should make a significant contribution towards the supply of new affordable housing. Land that is surplus to public sector requirements typically has a low value in its current use, allowing higher levels of affordable housing to be delivered. For these reasons the Mayor has an expectation that residential proposals on public land should deliver at least 50 per cent affordable housing to benefit from the Fast Track Route. 


2.34  Where a public landowner has an agreement in place with the Mayor to provide 50 per cent affordable homes across a portfolio of sites, individual sites which meet or exceed the 35 per cent affordable housing threshold and required tenure split may be considered under the Fast Track Route. Where such an agreement is not in place, schemes that do not provide 50 per cent affordable housing will be considered under the Viability Tested Route. 


2.35  Where 50 per cent affordable housing is delivered on public land, the tenure of additional affordable homes above the 35 per cent is flexible and should take in to account the need to maximise affordable housing provision. 


2.36  This will apply to land that is owned or in use by a public sector organisation, or a company or organisation in public ownership, or land that has been released from public ownership and on which housing development is proposed.

Is the definition in paragraph 2.36 specific enough? What are companies or organisations in public ownership? What if the land was released from public ownership long ago?

2. Specific advice in relation to section 73 applications

2.14  For schemes that were approved under the Fast Track Route, any subsequent applications to vary the consent will not be required to submit viability information, provided that the resulting development continues to meet the 35 per cent threshold and required tenure split, and does not otherwise result in a reduction in affordable housing or housing affordability. 


2.15  For schemes where the original permission did not meet the 35 per cent threshold or required tenure split, or where a proposed amendment would cause it to no longer meet these criteria, viability information will be required where an application is submitted to vary the consent and this would alter the economic circumstances of the scheme (for example resulting in a higher development value or lower costs). Such schemes will be assessed under the Viability Tested Route to determine whether additional affordable housing can be provided.

2.16  Proposed amendments that result in a reduction in affordable housing, affordability or other obligations or requirements of the original permission should be rigorously assessed under the Viability Tested Route. In such instances a full viability review should be undertaken that reconsiders the value, costs, profit requirements and land value of the scheme. The Mayor should be consulted where a scheme amendment is proposed that changes the level of affordable housing from that which was secured through the original planning permission.”


There is a risk that the inevitable minor amendments that come forward after grant of planning permission, with less than a material effect on the economic circumstances of a scheme, will lead to the need for updated viability information if paragraph 2.15 is to be applied strictly. This could lead to delays, or to scheme amendments not being pursued if the borough is not prepared to accept that they are non material amendments that can be secured under section 96A.

3. Greater emphasis on viability transparency

The draft guidance already indicated that viability information “should be available for public scrutiny and comment like all other elements of a planning application“. The new guidance ratchets this up a further level:

– “boroughs should implement procedures which promote greater transparency where not already in place”. 

– in submitting viability information, applicants “should also provide a summary of the financial viability assessment which outlines key findings, inputs, and conclusions to assist review by the LPA, Mayor, and members of the public.”

Applicants will still have the opportunity to “argue that limited elements should be confidential, but the onus is on the applicant to make this case“.

4. Habitable floorspace cross-check
Whilst the percentage of affordable housing should be measured in habitable rooms, there is this additional advice:

“Habitable rooms in affordable and market elements of the scheme should be of comparable size when averaged across the whole development. If this is not the case, then it may be more appropriate to measure the provision of affordable housing using habitable floorspace. Applicants should present affordable housing figures as a percentage of total residential provision by habitable rooms, by units, and by floorspace to enable comparison.”

5. Sensible flexibility regarding fast track approach

The draft guidance indicated that in order to follow the fast track approach, even if a scheme offered the threshold level of affordable housing, it was required to “meet all of the other relevant policy requirements and obligations”. The relevant passage now refers to meeting “other obligations and requirements to the satisfaction of the LPA and the Mayor where relevant”.  

6. Greater emphasis on exploring the opportunity for public subsidies

“All schemes are expected to determine whether grant and other forms of subsidy are available and to make the most efficient use of this to increase the level of affordable housing delivered. All applicants are expected to work with the LPA, the Mayor, and Registered Providers (RPs) to ensure affordable housing from all sources is maximised.”

The guidance is intended to be “integrated with the approach to funding set out in the Mayor’s guidance to his Affordable Homes Programme 2016-2021 .

Funding is said to be available on a fixed grant-per-unit basis:

2.24  Where developer-led schemes can provide or exceed 40 per cent affordable housing (with grant) then the fixed grant per unit will be available on all affordable housing units in the scheme. 


2.25  Where developer-led schemes are delivering less than 40 per cent, grant will only be available for the additional affordable homes over and above
the baseline level of affordable housing shown as being viable on a nil-grant basis.”

“2.28  Where public subsidy is available to increase the level of affordable housing on a scheme the tenure of additional affordable homes above the 35 per cent is flexible but should take into account the need to maximise affordable housing provision through the available public subsidy.”


7. Build To Rent

The final version of the guidance retains the Mayor’s support for build to rent. Some additional elements have been spelt out in his “build to rent” definition. As well as being a development of at least 50 units, with a build to rent covenant of at least 15 years, with self-contained units, operated under unified ownership and management, the development must:

” • offer longer tenancies (three years or more) to all tenants, with break clauses that allow the tenant to end the tenancy with a month’s notice any time after the first six months; 


* offer rent certainty for the period of the tenancy, the basis of which should be made clear to the tenant before a tenancy agreement is signed, including any annual increases which should always be formula-linked; 


* include on-site management, which does not necessarily mean full-time dedicated on-site staff, but must offer systems for prompt resolution of issues and some daily on-site presence; 


* be operated by providers who have a complaints procedure in place and are a member of a recognised ombudsman scheme; and 


* not charge up-front fees of any kind to tenants or prospective tenants, other than deposits and rent-in-advance.

There is more detailed guidance about the clawback arrangement if units in the scheme cease to be available as BTR:

“4.14  In line with the Mayor’s approach to affordable housing on Build to Rent schemes, and to ensure that there is no financial incentive to break a covenant, planning permission should only be granted where the scheme is subject to a clawback agreement. The appropriate clawback amount will be the difference between the total value of the market rent units based on the viability assessment at application stage, and those units valued on a ‘for sale’ basis at the point of sale. The LPA should be notified of the sale price of units that are sold and this should inform the market value of remaining units to determine the clawback. The clawback amount must demonstrate a sufficient difference in the value of units between rented and for sale tenures, consistent with the ‘distinct economics’ of build to rent, for the scheme to qualify for the Build to Rent pathway.

4.15  The clawback amount will be payable to the LPA for the provision of affordable housing in the event that market rented units are sold within
the covenant period, which would break the covenant. For larger phased schemes the LPA should consider whether the clawback amount should be disaggregated to the relevant block in which units are sold. The clawback amount should not reduce over time to ensure that the covenant remains effective for the full period. 


4.16  In the event that a share of rented units are sold, and the remaining units are retained within the rental market, an LPA may determine that the clawback 
is calculated based on the units sold. The other units will remain under covenant and the clawback will apply at the point of sale if disposed of within the covenant period. 


4.17  The clawback does not relate to any affordable units provided as part of the scheme. Affordable units are not subject to a minimum covenant period and must always be secured in perpetuity. Additionally, overall ownership of the building(s) in which the units are located may change during the covenanted period without triggering ‘clawback’ if the units remain in single ownership and management as Build to Rent.

Encouragingly, the guidance indicates that, as the sector develops, “the Mayor will keep under review whether it may be possible to set out a Fast Track Route specifically for developments following a Build to Rent pathway through the planning system.”


8. The “early review”

This is the review that the draft guidance stated was to be carried out when an agreed level of progress on implementing the scheme has not been achieved within two years of the permission being granted. The early review is also in the final version of the guidance, although with a little more flexibility: “within two years of the permission being granted or as agreed with the LPA”. 

Plans in the section 106 agreement “should identify which homes would switch to affordable accommodation in the event of an improvement in viability at this early stage”. 

All review mechanisms should generally set a cap on the amount of additional provision to be sought, which should be 50% affordable housing. Suggested formulae are set out in the guidance. 

9. Mid-term review

For applications that do not meet the 35%/50% threshold, as well as the early stage review there is the late stage review at the point at which 75% of units are sold or let (the review generating payments in lieu rather than an additional requirement for affordable housing in the scheme, and with the surplus split 60/40 between the borough and the developer). However, the final version of the guidance introduces the possibility of mid-term reviews for some schemes:

“For longer-term phased schemes it may also be appropriate to secure mid-term reviews prior to implementation of later phases and an updated Early Stage Review in the event that a scheme stalls for a period of 12 or more months following an Early Stage Review.”

10. Targets for registered providers

2.30  Generally the Mayor expects RP-led schemes to seek to deliver as much affordable housing as possible within the context of the requirements of London Plan policy 3.12. RPs with agreements with the Mayor have to deliver at least 50 per cent affordable housing across their programmes, and in the case of strategic partners 60 per cent. 


2.31  The approach to grant funding for approved provider-led schemes is set out in Mayor’s Homes for Londoners: Affordable Homes Programme 2016-21. 


2.32  RP-led schemes are likely to benefit from programme grant as set out in 2.30. Individual schemes which are led by RPs with an agreed programme with the Mayor can follow the Fast Track Route if they can commit to delivering a minimum of 35 per cent without grant. This should be set out in the Section 106 agreement along with the proportion of affordable housing which can be delivered with grant.”


11. Density opportunities

“2.37  Where a scheme meets the 35 per cent affordable housing threshold it may also be appropriate to explore the potential to increase densities on a case- by-case basis to enable the delivery of additional affordable homes where this meets exemplary design standards. It is for LPAs, and the Mayor where relevant, to consider the weight to be given to the benefit of additional affordable housing above the threshold, where this arises through increased densities or scale.”

12. Incentivising largely or entirely affordable housing schemes


2.42  To incentivise schemes that are largely or entirely affordable, those that propose 75 per cent affordable housing or more as defined by the NPPF may be considered under the Fast Track Route whatever their tenure mix, as long as the tenure and other relevant standards are supported by the LPA.”

13. Affordable housing requirements for co-living and student accommodation

As did the draft, the final version of the guidance sets out that”new types of non-self contained accommodation [the final version adds: “such as purpose-built shared accommodation“] can play a role in meeting housing need where they are of high quality and well designed.” These should not be classed as affordable provision (and nor should hostels). The final version of the guidance states:

“2.51…Affordable housing contributions on these schemes will be assessed through the Viability Tested Route, and should be provided as separate or off-site self- contained provision, or cash in lieu payments. 


2.52  Student accommodation developments will also be assessed under the Viability Tested Route. Affordable student accommodation should be provided onsite in line with the Mayor’s Housing SPG.”


14. More detailed guidance on off-site affordable housing and cash-in lieu contributions

The guidance stresses that “[v]iability alone is insufficient justification for off-site affordable housing provision or a cash in lieu payment” and goes on to set out in more detail than previously how off-site provision and cash-in-lieu payments are to be calculated:

2.61  Off-site affordable housing requirements will be calculated by reference to the total housing provision on the main development site and any linked sites providing off-site affordable housing. For the purposes of the initial assessment and viability reviews the policy target would equate to 50 per cent affordable housing provided across the main site and any linked sites providing affordable housing when considered as a whole. 


2.62  The starting point for determining in-lieu contributions should be the maximum reasonable amount of affordable housing that could be provided on-site as assessed through the Viability Tested Route. The value of the in- lieu contribution should be based on the difference in Gross Development Value arising when the affordable units are changed to market units within the appraisal. This is to ensure that where the on-site component of
market housing is increased as a result of the affordable contribution being provided as a cash in-lieu payment, this does not result in a higher assumed profit level for the market homes within the assessment which would have the effect of reducing the affordable housing contribution. 


2.63  The maximum value of any in-lieu contribution, for the purposes of the
initial assessment and viability reviews (the policy cap), will be based on
the equivalent of 50 per cent affordable housing provision. As with off-site affordable housing provision (see above), the target will be a percentage of the on-site market housing taken together with additional affordable housing provided off-site. 


2.64  Where an LPA has established a locally based approach for determining in-lieu contributions, such as a tariff based approach, this may be applied where this would result in a higher level of affordable housing provision (or higher policy cap).”

15. More detailed advice on estate regeneration schemes

Existing affordable housing that would be lost in an estate regeneration scheme should be replaced on a like-for-like basis. The guidance clarifies that this means “that, for example, homes at social rent levels should be replaced with homes at the same or similar rent levels, or that specialist types of affordable housing should be replaced with the same type of housing. The Fast Track Route does not apply in these circumstances, and all estate regeneration schemes should follow the Viability Tested Route to deliver the re-provision of the existing affordable floorspace on a like-for-like basis and maximise additional affordable housing.”


There is also this new passage

“2.67  Where a borough is redeveloping an estate as part of a wider programme then it may be possible to re-provide a different mix of affordable housing
on the estate, taking account of the wishes of people who want to return to the estate, if the affordable housing is re-provided like-for-like or increased across the programme as a whole. This must also take account of the affordable housing requirements on the linked sites (i.e. it must be in addition to what the linked site would have delivered on its own). Further information on Estate Regeneration can be found in the Mayor’s Good Practice Guide.

16. Scheme delivery


There are these new passages:

3.10  Applicants should demonstrate that their proposal is deliverable and that their approach to viability is realistic. As such appraisals would normally be expected to indicate that the scheme does not generate a deficit, and that the target profit and benchmark land value can be achieved with the level of planning obligations provided. If an appraisal shows a deficit position the applicant should demonstrate how the scheme is deliverable. 


3.11  Where an applicant is seeking to rely on assumptions of growth in values these should be provided. For shorter-term non-phased schemes which are based on current day values and costs, growth assumptions should be included as a scenario test. 


3.12  For phased or longer-term schemes, it may be appropriate to include growth assumptions within the appraisal to ensure that this is realistic and that affordable housing is maximised. These should be informed by recognised market sources for the relevant area. Where this is the case viability review mechanisms will be required as set out in this guidance given the uncertainty in determining viability at the application stage. Higher profit targets should not be assumed which offset the benefits of this approach.”

17. Greater examination of costs information

Appraisals should set out the gross to net floorspace ratio of the proposed development. 

There are these additional passages as well:

3.23… Applicants should submit elemental cost plans that are consistent with the level of detail provided in the drawings in support of planning applications (i.e. RIBA Plan of Works Stage C). Wherever possible such assessments should be benchmarked against other similar projects. Where an appraisal is based on current day values, costs should not include build cost inflation. 

3.24  LPAs are strongly encouraged to use cost consultants to rigorously assess scheme proposals and verify whether costs are appropriate taking into account pricing, quantities, specification, and assumed development values. Consideration should also be given to scheme design and whether development costs could be reduced as part of a cost/ value assessment.”

“3.26  Professional and marketing fees should be justified taking account of the complexity of the development and development values. Costs applied on a percentage basis should be realistic when considering the monetary value of the assumed cost.”
17. Additional passages in relation to developer profit

“3.32 In line with PPG a rigid approach to assumed profit levels should be avoided and applicants cannot rely on typically quoted levels. 


3.33  Factors that may be relevant when assessing scheme-specific target profit levels include the scheme’s development programme, and whether it is speculative or provides pre-sold/ pre-let accommodation. Market forecasts and stock market trends may also provide an indication of perceived market-wide risk”. 

18. Greater flexibility as to the use of internal rate of return

The draft guidance set out an expectation that the IRR measure of return would not be used for schemes providing fewer than 1,000 units. This is gone, although where IRR is used, profit must also now be considered as a factor of gross development costs or gross development value.

19. Defining EUV and any premium 

The guidance clarifies that where “a proposed EUV is based on a refurbishment scenario, or a redevelopment of the current use, this is an alternative development scenario and the guidance relating to Alternative Use Value (AUV) will apply.”


There is this additional passage in relation to the quantification of any premium:

“The level of premium can be informed by benchmark land values that have been accepted for planning purposes on other comparable sites where determined on a basis that is consistent with this guidance.”
20. Advice on the use of market value

In the limited circumstances where a non EUV+ approach is acceptable, there is more detailed guidance on the use of transactional evidence to establish market value:

3.49  In the very limited circumstances where this approach may be justified,
an applicant must demonstrate that the site value fully reflects policy requirements, planning obligations, and CIL charges, and takes account of site-specific circumstances. Market land transactions used must be fully evidenced and justified as being genuinely comparable and consistent with the methodology applied in the viability assessment. These should also be used to determine whether the residual value of the scheme and cost and value inputs are realistic. The applicant should also consider the: 


- EUV; 

– the Residual Land Value assuming a policy compliant affordable housing offer; 

– the Residual Land Value based on an assumption of no affordable housing; and

– the Residual Land Value based on evidence from recent comparable market transactions. 


3.50  Land is valued on a current day basis; changes in circumstances since a site has been purchased are a factor of development risk. Land transactions may also be based on unrealistic assumptions regarding development density, changes of use, or planning obligations. Where site value does not take full account of the Development Plan or CIL charges, where market land transactions are not fully evidenced and genuinely comparable, or where transactions are based on a different methodology and have not been appropriately adjusted, reliance on market transactions will not be supported. 


3.51  If an applicant seeks to use an ‘alternative use value’ (AUV) approach it must fully reflect policy requirements. Generally the Mayor will only accept the use of AUV where there is an existing implementable permission for that use. Where there is no existing implementable permission, the approach should only be used if the alternative use would fully comply with development 
plan polices, and if it can be demonstrated that the alternative use could be implemented on the site in question and there is market demand for that use. 


3.52  In order to demonstrate the value of a policy compliant alternative that does not benefit from an implementable permission but does have a realistic prospect of achieving planning permission, the applicant should provide a detailed alternative proposal, incorporating current day costs and values. The applicant should also explain why the alternative use has not been pursued.”


In short, there’s a lot for us all to get our heads around. If I have missed anything, no doubt you will let me know…

Simon Ricketts, 20 August 2017

Personal views, et cetera

[Thank you, Rebecca Craig at Town Legal for rising to my initial “spot the difference” challenge].

New Cases, Old Law: Verdin, Cumberlege

There have been two interesting judgments already this August, both by well-respected members of the planning bar sitting as deputies. Not everyone is away. Both cases illustrate the political and unpredictable nature of decision-making where neighbourhood plan issues arise. Between them they include a range of traditional, but still interesting and difficult, planning principles:
– When is the decision maker taken to have a closed mind or for his or her decision to be improperly infected by lobbying?
– How should the decision maker determine whether proposed planning conditions may or may not be relevant to the decision?
– The test to be applied when determining when a decision may be invalid when a consideration, that is capable of being material, is not taken into account.
– the extent of the requirement for consistency in decision making. 
– the effect on a decision of a material error of fact in its reasoning
The first two issues are addressed (as well as others) in Verdin and the last three issues are addressed in Cumberlege.
Verdin (t/a the Darnhall Estate) v Secretary of State & Cheshire West and Chester Borough Council  (Robin Purchas QC sitting as a deputy High Court judge, 10 August 2017). 
This proposal for 184 dwellings on the edge of Winsford, Cheshire, had been recovered on appeal for the Secretary of State’s own decision, rather than being left for an inspector to determine, due to the then emerging Winsford neighbourhood plan. (It will be remembered that the Secretary of State’s policy, most recently stated on 12 December 2016, for a further period of six months which ended on 12 June 2017, has been to recover for his own decision making all appeals in relation to “proposals for residential development over 25 dwellings in areas where a qualifying body has submitted a neighbourhood plan proposal to the local planning authority but the relevant plan has not been made“. This has slowed down and added uncertainty in relation to many appeals that frankly should have been left for capable inspectors to determine.)

After a very slow application and appeal process (application July 2013, refusal November 2013, inquiry June 2014, reopened inquiry following representations that material considerations had changed September 2015, decision letter July 2016), the Secretary of State had dismissed the appeal, against his inspector’s recommendations. In so doing he partly relied on a finding that the scheme was in conflict with the Winsford neighbourhood plan. Unlike his inspector, who found that there were “very substantial social benefits from the proposal“, the Secretary of State found that any benefits of the proposal not outweighing a combination of that conflict and “moderate harm to the environmental dimension of sustainable development from the adverse impact of the loss of open fields”. As part of his downgrading of the benefits that the inspector saw as arising from the scheme, the Secretary of State took the view that four proposed conditions put forward by the appellant (requiring self-build housing as part of the development; requiring training and employment measures; requiring local building firms to be used, and requiring local procurement) did not meet the six tests in the NPPF (necessary; relevant to planning and to the development to be permitted; enforceable; precise; reasonable in all other respects) and therefore he did not take them into account.

The deputy judge’s judgment is interesting for the factual references in passing to the lobbying and internal deliberation that is going on behind the scenes. See for instance paragraph 129, referring to lobbying from the local MP seeking to delay the decision until after an inspector had reported on the local plan (presumably with the hope that the report would assist objectors’ case on the five year housing land position) and referring to civil servants’ internal email correspondence which was said by the appellant to demonstrate that the decision was being delayed to give time for the neighbourhood plan to be made. Paragraph 144 also refers to “the existence of a draft submission from one officer in the planning casework division which proposed a recommendation that the appeal be allowed but which was subsequently changed in the submission that was made to ministers”. 

A number of the appellant’s grounds of challenge were rejected, including that the then planning minister Brandon Lewis had a closed mind in deciding not to permit residential schemes on sites not allocated in the neighbourhood plan by virtue of the letter that he had sent in 2016 to the Planning Inspectorate in relation to appeals involving neighbourhood plan issues (“wholly unarguable”); that the Secretary of State had unlawfully delayed his decision (which the deputy judge did not infer into the internal email correspondence) and that he acted unlawfully in allowing himself to be lobbied by local members of Parliament (no basis for that because the letters were made available allowing representations to be made).
However, the deputy judge went on to quash the decision on the basis that the Secretary of State had no basis for rejecting the proposed conditions requiring training and employment measures; requiring local building firms to be used, and requiring local procurement. Whilst the Secretary of State was justified in rejecting the self-build housing as going beyond the advice in the NPPF because it sought to control the values at the plots would be made available, there was no basis for his criticisms of the other conditions. The judgment includes a useful analysis of the legal tests and an examination of the conditions against those tests. 
Whilst no doubt the appellant will be pleased to have another shot at persuading the Secretary of State to arrive at a different conclusion this time round, it is disappointing to be left with the sense that timing is all and the Secretary of State and his civil servants, as well as of course objectors, know it. Who hasn’t sensed from time to time that decisions have been subject to delay whilst at the same time, conveniently for objectors, the housing land supply position has changed or an emerging neighbourhood or local plan has gained traction? And who doesn’t sense that appeals such as this are as much about the politics as the about the evidence?
Baroness Cumberlege of Newick v Secretary of State & DLA Delivery Limited (John Howell QC sitting as a deputy High Court judge, 4 August 2017). 
This related to an appeal against refusal of planning permission for an even smaller scheme, for up to 50 dwellings in Newick, Sussex. Here the appeal had been allowed by the Secretary of State who had recovered it due to the then emerging Newick neighbourhood plan. However the decision was challenged by Baroness Cumberlege and her husband, both local residents and members of the Newick Village Society. The baroness, aside from being a Conservative peer, has, according the judgment “been a parish, district and county councillor representing the village“. She argued that:
– the Secretary of State had wrongly determined that a key policy of the local plan was out of date, without explaining the inconsistency of that conclusion with the reverse conclusion reached by him in another recovered appeal decision. 

– the Secretary of State had made a material error of fact in treating the appeal site as falling outside an area of 7km designated for the purpose of protecting the Ashford Forest SPA and SAC (yes, this is a case to add to those covered in my 8.4.17 blog post, Heffalump Traps: The Ashdown Forest Cases).

Having allowed the appeal, when faced with the challenge the Secretary of State submitted to judgment on the first ground of challenge and did not participate in the hearing in front of John Howell QC – never a good moment for the developer to be left to justify as lawful that which the decision maker himself is now prepared to disown. 
For what would seem to be a limited series of issues, the judgment is a long one at over 50 pages. Helpfully, the deputy judge’s conclusions are summarised from paragraph 148 onwards. To summarise the summary (rarely a good idea):
– Where a matter is not required by legislation to be taken into account, “a decision may be invalid when no reasonable decision maker in the circumstances would have failed to take that matter into account”. 

– “There is a public interest in securing reasonable consistency in the exercise of administrative discretions, which may mean that it is unreasonable for a decision maker not to take into account other decisions that may bear in some respect on the decision to be made

– “Given that one reason why the Secretary of State may “recover” planning appeals in order to determine them himself is to introduce coherence and consistency in development control, however, avoiding apparent and unexplained inconsistencies in the Secretary of State’s own decisions on matters that may have ramifications for decision making in other cases is an important consideration in determining what may be required of him if he is not to act unreasonably”. 

– No reasonable decision maker would have failed to take reasonable steps to ensure that he had not issued any decisions relating to the question as to whether the relevant local plan policy was out of date. “It can only undermine public confidence in the operation of the development control system for there to be two decisions of the Secretary of State himself, issued from the same unit of his department on the same floor of the same building within 10 weeks of each other, reaching an apparently different conclusion on whether a development plan policy is up to date without any reference to, or sufficient explanation in the later one for, the difference”. 

– The Secretary of State made a material error of fact in relation to whether any part of the site was within the Ashdown Forest 7km radius, which led to no consideration as to whether a condition should be imposed to prevent any dwellings from being constructed in that part of the site in breach of the Habitats Regulations. 

The planning permission was quashed, although the deputy judge granted permission to appeal on both grounds.
It is indeed concerning that the DCLG would appear to have no adequate system to prevent the Secretary of State from issuing obviously inconsistent decisions – and indeed concerning that the conflicting conclusions could be reached in the first place, calling into question the extent to which objective determinations, shorn of context and politics, can be reached. Perhaps if the Secretary of State had not recovered so many appeals the problem wouldn’t have arisen. (It is even more difficult for the rest of us to keep track without a public-access searchable database). 
The political obsession with seeking to give neighbourhood plan making a strong role in decision making is coming at great cost: delay, expense, a reduction in the objectivity of decision making (in my personal view) and, most worryingly, is continuing to be a drag on the delivery of new homes. 
Simon Ricketts, 12 August 2017
Personal views, et cetera

First World Problems 2: Amalgamations And Deconversions

Securing planning permission for your proposed super-basement is definitely a first world problem (see my previous 5 December 2016 blog post). 
As is seeking to knock two or more flats or houses into one.
There’s that scene in Help! where John, Paul, George and Ringo each open their separate front doors in a terraced street, which all open into one enormous Beatle mansion. (Illusions shattered: in reality Ailsa Road, St Margarets followed by a set at Twickenham Film Studios.).

Until 2000, the general view was that amalgamations like this, as well as deconversions of flats back into single dwellinghouses, probably didn’t amount to development requiring planning permission. The statutory definition of development specifically includes sub-division of dwellings (“the use as two or more separate dwellinghouses of any building previously used as a single dwellinghouse involves a material change in the use of the building and of each part of it which is so used“, section 55(3)(a), Town and Country Planning Act 1990) but is silent as to amalgamation. 
The way in which that position has changed, without any change in legislation is an interesting example of the way in which the scope of planning law and of relevant planning considerations can change over time to reflect social priorities and concerns.
The judgment of Christopher Lockhart-Mummery QC sitting as a deputy High Court judge in London Borough of Richmond v Secretary of State (28 March 2000) was a significant turning point. “It is undoubtedly the law that material considerations are not confined to strict questions of amenity or environmental impact and that the need for housing in a particular area is a material consideration…” The case involved a conversion from seven flats to one dwelling. 
It was then thought that this case could often be distinguished in terms of the number of units that were to be lost in that case and that LPAs would face an uphill struggle where they did not have policies in place restricting amalgamations resulting in the loss of dwellings. 
For instance, Kensington and Chelsea’s consolidated local plan currently states that the council will “resist development which results in the net loss of five or more residential units”. Until August 2014, the council took the view that this constrained its ability to argue that amalgamations leading to the loss of less than five units did not amount to development requiring planning permission. In R (Royal Borough of Kensington and Chelsea) v Secretary of State (Holgate J, 15 June 2016), Christopher Lockhart-Mummery QC was representing the owners of two flats in Stanhope Gardens SW7 seeking to defend a certificate of lawfulness of proposed use which they had won on appeal. The inspector had considered that without a formal change in policy, the loss of a unit by way of amalgamation could not be relevant, even though the inspector accepted that “the scale of amalgamation in the Borough may be having a material effect on the number of dwellings in the Borough“. Holgate J held that this approach was wrong – whilst the nature of the policy would be relevant to whether planning permission should be granted, this did not mean that the housing need concerns raised by the council were not significant “for the threshold purpose of deciding whether planning permission even applied“. All was not however lost for the owners – the inspector had also granted planning permission for the amalgamation and the council’s challenge to that decision was rejected. 
RBKC’s local plan partial review, which is currently under examination, proposes a more restrictive policy that would only allow any amalgamation where the resulting dwelling is less than 170 sq m. Westminster City Council takes a different approach. Policy S14 of its city plan indicates that:
“Proposals that would result in a reduction in the number of residential units will not be acceptable, except where: 

* the council considers that reconfiguration or redevelopment of affordable housing would better meet affordable housing need; 


* a converted house is being returned to a family-sized dwelling or dwellings; or 


* 2 flats are being joined to create a family-sized dwelling.”

Amalgamations are a drag on net housing supply in both boroughs. Housing in London 2015: The evidence base for the Mayor’s Housing Strategy (Mayor of London, September 2015) reports:

“Between 2011/12 and 2013/14 a net 5,010 homes were created through conversions and a net 1,160 homes were lost through de-conversions.

Conversions were most common in accessible Inner London locations, and de-conversions in high price areas. The ward with the most conversions in this period was St. Leonard’s in Lambeth with 74 followed by Childs Hill in Barnet with 65. The three wards with the highest numbers of de- conversions were all in Westminster – Hyde Park (with 42), Knightsbridge and Belgravia (27) and Bayswater (26).


Planning Resource briefly reported (subscriber only content) a ruling by Lang J on 27 July 2017 in Royal Borough of Kensington and Chelsea v Secretary of State, where she apparently quashed the decision of a planning inspector, who had allowed an appeal against refusal of planning permission partly on the basis of a certificate of lawfulness of proposed use or development for a proposed amalgamation that had been issued before the council’s August 2014 change in stance. Presumably she considered that circumstances had materially changed such that the certificate could no longer be relied upon. 

The battle has moved now to whether planning permission should be granted, rather than whether it is necessary. On 13 July 2017, in Royal Borough of Kensington and Chelsea v Secretary of State and Noell and Royal Borough of Kensington and Chelsea v Secretary of State and Lahham Deputy High Court Judge Neil Cameron QC quashed two decisions where separate inspectors had granted permission on appeal. The inspector had made a mistake of fact in both decisions when calculating housing land supply as he deducted vacant units returning to use from the requirement whilst including those units in the supply and by stating that the housing land supply would be boosted further by recent deliverable planning permissions when those planning permissions were already accounted for in the calculated supply. The Secretary of State did not defend either claim. Christopher Lockhart-Mummery QC acted for the owners (if there’s a golden thread that runs through the case-law on amalgamation, it’s Christopher). 
Pending a tighter policy being in place, Inspectors have indeed still been allowing appeals in Kensington and Chelsea. For instance:
Warwick Gardens, Kensington, 17 May 2017:
“In regards to the development plan, whilst I find conflict with Local Plan Policy CH3 and London Plan Policy 3.14 in that a unit of residential accommodation would be lost, and saved UDP Policy H17, the appeal proposal would not prejudice the Council’s ability to meet its housing supply targets or give rise to unacceptable harm in regards to housing choice. Indeed, it would assist to address the imbalance in the housing stock in regards to 3 bedroom dwellings. Consequently, I do not consider that the appeal proposal conflicts with the development plan when taken as a whole.”

15 Cheyne Place, Kensington, 10 April 2017:

“The proposal would conflict with Policy CH3 of the CLP and 3.14 of the LP, which seek to ensure that that there is a sufficient supply and choice of housing. Notwithstanding this conflict, I do not find that, in this instance, the proposal would undermine the Council’s ability to achieve its housing targets. In addition, it would also make a contribution towards an identified need for three bedroomed units. Moreover, the emerging Local Plan Partial Review indicates that the Council intend to accept amalgamation development of this scale. Therefore, in culmination, I attribute significant weight to these matters which outweighs the moderate conflict the proposal has with the CLP and LP.”
28 Victoria Road, Kensington, 11 January 2017:
“I saw at the site visit that the garden arrangement as existing is not ideal. There are presently no separate areas that 2 individual units could use and, if shared, residents of the upper floors would be able to gain views into the bedroom window of the ground floor flat whilst using the garden. To restrict the use of the garden to the ground floor occupants would leave the larger unit with no outdoor amenity space apart from a small terrace at first floor level.

77 Drayton Gardens, Kensington, 4 November 2016:

“As part of its Local Plan Partial Review, the Council is about to consult on a policy which would permit the amalgamation of two residential units to one, if the gross floorspace of the resulting unit would not exceed 170 sqm. Mr Burroughs’ unchallenged evidence is that the resulting unit in this case is 99 sqm. ”

“The amalgamation of two residential units (second and third floor flats) into a single residential unit conflicts with CLP Policy CH3, saved UDP Policy H17 and LP Policy 3.14B, which aim to ensure an adequate supply and choice of housing to meet identified needs. The Framework also requires Council to boost significantly the supply of housing. However, on the evidence before me, the amalgamation will not, on the balance of probability, affect the Council’s ability to meet its housing targets. Furthermore, it will contribute to meeting a current identified need for larger dwellings in the borough, whilst improving the quality of accommodation, in accordance with LP 3.14A. Furthermore, in the light of the terms of a policy now being proposed as part of the Local Plan Partial Review, the Council appears to consider that amalgamations of this kind could be acceptable. On balance, these are material considerations which indicate that I should allow the appeal on ground (a) and grant planning permission, notwithstanding the conflict with the development plan.”

Simon Ricketts, 6 August 2017
Personal views, et cetera

Money & Justice: Tribunal Fees, Licensing Fees, Court Costs

Topical issue: what are the legal constraints on the Government and local authorities in setting the fee rates and cost recovery regimes for administrative and court processes?
Claimant and applicant fee rates in particular are seen by the Government as a lever to seek to 
– ensure that users of procedures make a fair contribution to the costs of providing them

– reduce the burden on the public purse and

– winnow out those who are seen as misusing the system. 

This is however a dangerous game, if access to justice is to be maintained in accordance with domestic and international legal principles. How to get it right?
Dove J heard on 19 July the judicial review by RSPB, Friends of the Earth and ClientEarth of the Government’s changes to the cost capping regime regime that applies to JRs relating to environmental law matters. They take the position that the changes breach the Aarhus Convention’s requirement that access to environmental justice must be available, without prohibitive cost. I have previously blogged on the Government’s changes. ClientEarth issued this press release after the hearing but judgment has been reserved. 

I would not be surprised if that set of proceedings did not end up in the Supreme Court. If so, it could be a worthy sequel to two interesting rulings from the Supreme Court in the last couple of weeks in relation to different subject areas but that same underlying theme. 

R (Unison) v Lord Chancellor (Supreme Court, 26 July 2017) concerned a challenge by trade union Unison to the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013. The Supreme Court agreed with the claimant that the fee regime for claimants in employment tribunal proceedings and appellants in relation to appeals to the Employment Appeal Tribunal was unlawful because of its effects on access to justice. The full judgment handed down by Lord Reed and supplementary judgment by Lady Hale in relation to discrimination issues are well worth reading. Here are some quotes, which you may care to read with our planning system in mind:
There is a “constitutional right of access to justice: that is to say, access to the courts (and tribunals: R v Secretary of State for the Home Department, Ex p Saleem [2001] 1 WLR 443).” (paragraph 65)
At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.” (paragraph 68)
“People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations.” (paragraph 71)
“There is however no dispute that the purposes which underlay the making of the Fees Order are legitimate. Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice.” (paragraph 86)
“The Lord Chancellor cannot, however, lawfully impose whatever fees he chooses in order to achieve those purposes. It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice. That will be so because section 42 of the 2007 Act contains no words authorising the prevention of access to the relevant tribunals. That is indeed accepted by the Lord Chancellor. ” (paragraph 87)
“In order for the fees to be lawful, they have to be set at a level that everyone can afford, taking into account the availability of full or partial remission. The evidence now before the court, considered realistically and as a whole, leads to the conclusion that that requirement is not met. In the first place, as the Review Report concludes, “it is clear that there has been a sharp, substantial and sustained fall in the volume of case receipts as a result of the introduction of fees”. While the Review Report fairly states that there is no conclusive evidence that the fees have prevented people from bringing claims, the court does not require conclusive evidence: as the Hillingdon case indicates, it is sufficient in this context if a real risk is demonstrated. The fall in the number of claims has in any event been so sharp, so substantial, and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable.” (paragraph 91)
“The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.” (paragraph 93)
“Given the conclusion that the fees imposed by the Fees Order are in practice unaffordable by some people, and that they are so high as in practice to prevent even people who can afford them from pursuing claims for small amounts and non- monetary claims, it follows that the Fees Order imposes limitations on the exercise of EU rights which are disproportionate, and that it is therefore unlawful under EU law.” (paragraph 117)
The previous week the Supreme Court had returned to the difficult and long-running saga of challenges to Westminster City Council’s fees regime for the licensing of sex shops. The case has been an unholy mess for the Council. It had been setting licensing fees at a rate that included its costs of enforcing the licensing scheme against unlicensed third parties running sex shops. The fee was made up of two parts. One part was payable regarding the administration of the application and was non-refundable. Another part (which was considerably larger – £29,435 in 2011/12) was for the management of the licensing regime and was refundable if the application was refused. Licensed shops brought a challenge, arguing that the second element of the fee was in breach of the Provision of Services Regulations 2009 (SI 2009/2999) (which had been made to give effect domestically to EU Directive 2006/123/EC) and that the only fees that the Council could levy related to the administrative costs of processing the relevant applications and monitoring compliance with the terms of the licence by licence holder, rather than fund enforcement against those who didn’t seek or obtain licences. 
Regulation 18 of the 2009 Regulations provides that:
“(2) Authorisation procedures and formalities provided for by a competent authority under an authorisation scheme must not – 

(a) be dissuasive, or

(b) unduly complicate or delay the provision of the service”

“(4) Any charges provided for by a competent authority which applicants may incur under an authorisation scheme must be reasonable and proportionate to the cost of the procedures and formalities under the scheme and must not exceed the cost of those procedures and formalities.”

The Court of Appeal had upheld the claim in 2013 and as a result made repayments totalling £1,189,466 to the licence holders, together with a further £227,779.15 which it paid, it turned out, by mistake. 
However, the Supreme Court overturned that ruling in 2015, finding that the fees regime was basically lawful. There was one aspect which the court referred to the European Court of Justice, namely the way in which the part of the fee which covered wider enforcement costs was paid upfront when the application was made but only repaid if the application was unsuccessful. The European Court confirmed in November 2016 that this aspect of the regime was indeed unlawful. 
The case came back to the Supreme Court with the Council arguing that it was entitled to be paid or repaid the sums it repaid to licence holders in 2013 and the licence holders in turn contending that they are entitled to retain the repayment made to them in full, because it was charged in a way which in part at least had been unlawful. In its judgment dated 19 July 2017 the court basically agreed with the Council that it is entitled to be reimbursed to the extent that it has raised fees lawfully, but it has remitted the case to the Administrative Court to resolve a whole host of complexities that arise from the whole mess, including a number of accounting issues, complications arising where licensees have ceased to exist and the recovery of the monies that the Council had paid by mistake. 
Implications for planning
It may be thought that our planning system currently has the opposite problem: many applicants would be willing to pay higher application fees if the fees enabled authorities to staff up and offer a faster, better, service. The Government went less far than many would have wished when it announced in its February 2017 housing white paper that:
“We will increase nationally set planning fees. Local authorities will be able to increase fees by 20% from July 2017 if they commit to invest the additional fee income in their planning department. We are also minded to allow an increase of a further 20% for those authorities who are delivering the homes their communities need and we will consult further on the detail. Alongside we will keep the resourcing of local authority planning departments, and where fees can be charged, under review.” (para 2.15)
But even that relatively weak and overdue measure has not yet been brought into effect. 
More controversially the white paper indicated that the Government would consult on introducing a fee for applicants submitting planning appeals: “We are interested in views on this approach and in particular whether it is possible to design a fee in such a way that it does not discourage developers, particularly SMEs, from bringing forward legitimate appeals. One option would be for the fee to be capped, for example at a maximum of £2000 for the most expensive route (full inquiry). All fees could be refunded in certain circumstances, such as when an appeal is successful, and there could be lower fees for less complex cases.”

The white paper consultation sought views on: 
“a) how the fee could be designed in such a way that it did not discourage developers, particularly smaller and medium sized firms, from bringing forward legitimate appeals; 

b) the level of the fee and whether it could be refunded in certain circumstances, such as when an appeal is successful; and 

c) whether there could be lower fees for less complex cases.”

This is another area where we await an indication of whether the new ministerial team will take a different approach. Careful note will need to be taken of the Supreme Court’s rulings in Unison and in Heming. 
Finally, court fees continue to increase, most recently, from 26 July 2016, by way of the Civil Proceedings, Family Proceedings and Upper Tribunal Fees (Amendment) Order 2016 . The Order’s explanatory memorandum puts it like this:
“The majority of fees affected by this instrument will be increased by a rate which is above the level of inflation. The Government has decided, in view of the financial circumstances and given the reductions to public spending, that such an increase is necessary in order to make sure that the courts and tribunals are adequately funded and access to justice is protected, in the long term.
In relation to judicial review, the fee levels are still relatively modest compared to some other court procedures but are still significant sums for some claimants to find, particularly at short notice:
– application for permission to apply £154 (previously £140)

– request to reconsider at a renewal hearing £385 (previously £350)

– to proceed to a full hearing if permission is granted £770, or £385 if reconsideration fee already paid (previously £700 and £350)

There is that tired saying about justice in England being open to all, like the Ritz Hotel. It’s true, save that the Ritz doesn’t close its doors for months on end. The court term ends on Monday 31 July (with the next term starting on 1 October). 
The end of this term marks the end of an era for the Supreme Court: Lords Neuberger and Clarke are retiring (there is an amusing Legalcheek account of their 28 July valedictory speeches) and Lady Hale will become president (only of the Supreme Court unfortunately rather than of the western world). If only we were to see more blogging from the retired judiciary such as that of Sir Henry Brooke. Do read his recent blog post on a truly surreal Tribunal case. 
 Simon Ricketts, 29 July 2017
Personal views, et cetera

Not In My Neighbourhood

To my mind, the problems with neighbourhood plans that I listed in my 19.2.17 blog post haven’t gone away. 

In fact, two changes to the neighbourhood plan process that were switched on from 19 July 2017 by the Neighbourhood Planning Act 2017 (Commencement No. 1) Regulations 2017 will just bring the issues to the boil at an earlier stage:

– section 1 of the 2017 Act gives decision makers a duty to have regard to neighbourhood plans as a material consideration once they have been examined, prior to their having been approved in a neighbourhood referendum or finally made (ie ‘adopted’ in local plan language). 

– section 3 of the 2017 Act requires decision makers to treat a neighbourhood plan as part of the statutory development plan once they have been approved by a referendum (unless the local authority then decides not to make it). 

In the meantime, the last few weeks have seen various rulings from the High Court and decision letters from the Secretary of State that demonstrate the complexities, uncertainties and tensions that are arising. 

Farnham Neighbourhood Plan

Bewley Homes Limited v Waverley District Council (Lang J, 18 July 2017) 

The claimants, Bewley, Wates and Catesby, were three development companies unhappy that their respective development sites were not allocated for development in the draft Farnham neighbourhood development plan. 
The case illustrates the real difficulties that arise both with grappling with detailed issues during the examination process and seeking to assert, when the report has been published, that the examiner’s reasoning is deficient. 
The claimants’ first line of attack was that the examiner was wrong to conclude that the draft plan complied with the basic condition of being in conformity with the strategic policies of the 2002 local plan. 
Lang J sets the bar very low in terms of the extent of the examiner’s duty to give reasons for the conclusions in his report: “I consider that an Examiner examining a neighbourhood plan is undertaking a function which is narrowly prescribed by statute and he is subject to a limited statutory duty to give reasons. It is distinguishable from the function of an Inspector determining a planning appeal, where the duty to give reasons is expressed in general terms.”
Secondly, she makes clear that the requirement that the neighbourhood plan must be in general conformity with strategic policies in the relevant local plan is pretty loose in practice: “The authorities establish that the phrase “in general conformity” is a flexible test which allows for some differences. The plans do not have to match precisely. It was a matter of planning judgment for the Examiner to decide whether the degree of the differences was such that he could not properly find that “the making of the [plan] was in general conformity with the strategic policies in the development plan”, as required by paragraph 8(2)(e) of Schedule 4B. For that purpose, he was required to consider the plan as a whole.”



The judge found that it was sufficient that the examiner referred to his consideration of Farnham Parish Council’s Basic Conditions Statement, from which it could be taken that he accepted Farnham’s Basic Conditions Statement as the basis for identifying the strategic policies in the Local Plan 2002.
Lang J noted that even if the reasoning had been flawed, in the light of the Court of Appeal’s ruling in DLA Delivery, “the Examiner could lawfully have adopted a different route, holding that the strategic policies restricting housing development had become time-expired in 2006 and were now redundant, and could be disregarded.”
The claimants’ other grounds of challenge arose from detailed evidence and submissions that they had made on issues relating to SANGS land and relating to a landscape study on which a key policy in the draft plan was based. It is clear that the developers had approached both issues in some forensic detail. However, the judge was satisfied with the light-touch way in which the matters had been addressed in the report:

“It was sufficient that the Examiner recorded at paragraphs 2.4, 2.7 and 2.8 that he had considered all the written material submitted to him, together with the discussions at the public hearing, all of which provided him with sufficient information to enable him to reach his conclusions. The main points raised by the Claimants were adequately addressed in the report and the Examiner’s conclusions were made sufficiently clear
.”

“The Claimants invited me to infer that the Examiner did not consider the Wates’ material because he did not refer to it. However, given the limited scope of his examination, he was not required to refer specifically to the evidence and representations presented by the Claimants, and the points raised therein. There was a large volume of evidence and these were not principal documents. It was sufficient that the Examiner recorded that he had considered the representations. He also stated at paragraphs 2.4, 2.7 and 2.8 that he had considered all the written material submitted to him, together with the discussions at the public hearing, all of which provided him with sufficient information to enable him to reach his conclusions
.”

Faringdon Neighbourhood plan

Hoare v Vale of White Horse District Council (Deputy High Court Judge John Howell QC, 7 July 2017)
Here policy 4.5B in the draft plan sought to safeguard Wicklesham Quarry for employment uses following completion of quarrying and restoration activities on the site and to support such development on it provided that there is a demonstrable need for it, no other suitable site closer to the town centre is available and certain other conditions are met.
The claimant was a local resident objecting to the allocation. 
The court took a similar approach as in Bewley to complaints as to the lack of general conformity with strategic policies in the local plan:


“The phrase “strategic policies” is, like “general conformity”, inherently imprecise, and it is not one in my judgment to which the court should seek to give a spurious degree of precision. Which policies in a development plan warrant that classification will inevitably involve a question of planning judgment that will be framed (but not necessarily exhausted) by the objectives of the particular plan and the policy’s significance in relation to their achievement and to the character, use or development of land in the area to which the plan relates which it seeks to promote or inhibit. The more central or important the policy is in relation to such matters the more likely it will be that it may be a “strategic policy” in that plan. Its identification as “strategic” or as part of the “strategic policies” in that plan may well provide a good indication of its significance. But the fact that it is not so identified does not necessarily mean that it is not a strategic policy and its identification as such does not necessarily mean that it is.”



The claimant also submitted that Policy 4.5B is about a “county matter”, which is a category of “excluded development” that cannot lawfully form part of a neighbourhood plan; and that the District Council erred in treating the quarry as “previously developed land” for the purpose of the NPPF. 
The deputy judge held that the policy was not about a county matter, given that it sought to safeguard the Quarry for employment uses following the completion of quarrying and restoration activities on the site: “The provision which is excluded from a neighbourhood plan is not any provision about any development in respect of land which is the subject of a restoration condition or an aftercare condition. It is any provision about development which “would conflict with or prejudice compliance with” such a condition. There may be operations or uses that can be carried on on such land without doing so. Moreover there is nothing to preclude a neighbourhood development plan making provision about a development that may be carried out on land subject to such conditions but only after they have been complied with. That may in fact be desirable in order to provide guidance about the future use of the land. Thus in my judgment the mere existence of such conditions applicable to an area of land does not mean that no provision about that land may be made in a neighbourhood plan.”



The deputy judge agreed that the council had indeed been wrong to categorise the site as previously developed land, given the restoration condition. However, he did not consider that the error was material to the outcome of the plan and declined to quash the plan on that basis.

 
Not easy to challenge a neighbourhood plan, is it?

Central Milton Keynes Business Neighbourhood Plan

The Secretary of State issued his decision letter on 19 July 2017, granting planning permission to Intu Milton Keynes Limited for extension of the Intu Milton Keynes shopping centre. The application was supported by Milton Keynes Council but had been called in by the previous Secretary of State Greg Clark in November 2015, who indicated that for the purposes of determining the application he wished to be informed as to “the consistency of the application with the development plan for the area including the Central Milton Keynes Business Neighbourhood Plan”.

The Central Milton Keynes Business Neighbourhood Plan was England’s first business neighbourhood plan. Central Milton Keynes Town Council objected to the application. As part of its objections it sought to portray the proposals as contrary to policies of the Neighbourhood Plan seeking to protect semi-public open space in Midsummer Place and seeking to retain Central Milton Keynes’ classic grid pattern.

However, the Secretary of State agreed with his inspector’s conclusion that the application was “in accordance with development plan policies, including those in the Neighbourhood Plan, and is in accordance with the development plan overall”.

The inspector indicated that her finding was “based on a balanced interpretation of Policy CMKAP G3. Had I taken an absolute approach to the policy, the reduction in the quantity of semi-public open space, would have resulted in a breach of the policy. Nevertheless, the proposed development would have been consistent with the development plan as a whole. In the final instance the considerable benefits of the proposal would have been material considerations sufficient to indicate that it should be determined other than in accordance with the development plan”. 



Buckingham Neighbourhood Plan

The Secretary of State declined to follow his inspector’s recommendation and, by his decision letter dated 17 July 2017, refused planning permission to Bellway Homes for a development of 130 dwellings in Buckingham. The inspector concluded that the neighbourhood plan was silent as to the proposed development of the application site. The Secretary of State disagreed:

“the larger housing sites, representing both the acceptable location and level of housing, are specifically identified and allocated in the BNDP. Both larger sites and the smaller windfall sites being confined to within the settlement boundary (HP7). The application site, being both unallocated and outside the settlement boundary, falls within neither category above and, as a consequence, the Secretary of State considers the proposals are not policy compliant. This is a policy conflict to which the Secretary of State attaches very substantial negative weight in view of the Framework policy (paragraphs 183-185) that neighbourhood plans are able to shape and direct sustainable development in their area and that where an application conflicts with a neighbourhood plan, planning permission should not normally be granted (paragraph 198).


Barnham and Eastergate Neighbourhood Plan & the Walberton Neighbourhood Development Plan

 Yet another application called in so that the Secretary of State could consider whether development proposals (for 400 dwellings as well as commercial development in Fontwell, West Sussex) were consistent with (here two) neighbourhood plans. The Secretary of State granted planning permission, by his decision letter dated 13 July 2017, finding that the proposals were indeed consistent, “subject to careful consideration at the reserved matters stage”. 
In relation to each of these applications, call in by the Secretary of State on neighbourhood plan grounds has been directly responsible for significant delays, of at least 18 months. In each of the applications there has been significant debate, argument and uncertainty as to the meaning of neighbourhood plan policies – perhaps no surprise given the light touch, difficult to challenge, nature of the neighbourhood plans examination process.
Isn’t it time for a proper review of the costs and benefits of the neighbourhood plans system as it is currently operating?
Simon Ricketts, 22 July 2017

Personal views, et cetera

What The EU (Withdrawal) Bill Would Mean For (eg) EIA

So now we have, without any great surprises, what was first to be the Great Repeal Bill, then the Repeal Bill and now is the European Union (Withdrawal) Bill. It comes alongside extensive Explanatory Notes as well as a Memorandum justifying the use of delegated powers in the Bill .
This is a very narrowly defined blog post, asking myself one question: What does the Bill tell us in England about what will happen to EU law based legislation such as the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 once we reach the “exit date” (defined in the Bill as a date to be appointed by a minister but in practice to be 29 March 2019 or earlier, due to service by the Government of its Article 50 notice on 29 March 2017)? I have confined myself to England: there are additional complexities ahead for the devolved administrations. 
The EIA Regulations are EU-derived domestic legislation, as defined in the Bill, deriving as they do from the EIA Directive ie Directive 2011/92/EU as amended in 2014 by Directive 2014/52/EU. 
Clause 2(1) of the Bill provides:
“EU-derived domestic legislation, as it has effect in domestic law immediately before exit day, continues to have effect in domestic law on and after exit day.

So the Regulations will remain in force unchanged post exit day.   
For the avoidance of doubt clause 5(1) provides:
“The principle of the supremacy of EU law does not apply to any enactment or rule of law passed or made on or after exit day.”

So any change to environmental protection that is made following exit date cannot be challenged on the basis that it is contrary to EU law. Legislation excluding say the construction of a specific infrastructure project or type of infrastructure from EIA, or weakening its operation? There would no longer be any recourse to the Court of Justice of the EU (CJEU). But that would be the effect of leaving the EU in any event, so hardly needs to be spelt out. 
(Of course, the Government will need to ensure that any such legislation did not breach other international obligations such as the Espoo Convention and Aarhus Convention – where breaches are far more difficult to challenge by a complainant, whether in the domestic courts or in any international forum)
At present, in interpreting EU-derived legislation, our domestic courts have to apply EU law principles, having regard to decisions of the CJEU. After exit day, this will no longer be the case, in that there will be no requirement to have regard to post exit day decisions. Clause 6(1) provides:
“A court or tribunal

(a)  is not bound by any principles laid down, or any decisions made, on or after exit day by the European Court, and 

(b)  cannot refer any matter to the European Court on or after exit day.

Clause 6(2) makes it clear that a court may do “if it considers it appropriate to do so” but does not have to. So, (1) there will be uncertainty as to whether to bring post exit day CJEU rulings or advocate-general opinions before the domestic court to assist with interpretation (and so in practice they will be trawled out) and (2) CJEU jurisprudence is likely slowly to take a different direction to that of our domestic courts. Not straight-forward!
For a period from the coming into law of the Bill and two years after exit day, the Government will be going through all EU-law derived legislation, with the objective of making it continue to work post Brexit. Clause 7(1) provides:
A Minister of the Crown may by regulations make such provision as the Minister considers appropriate to prevent, remedy or mitigate— 

(a)  any failure of retained EU law to operate effectively, or 


(b)  any other deficiency in retained EU law, 


arising from the withdrawal of the United Kingdom from the EU. “

The justification in the accompanying memorandum: “Retained EU law will contain thousands of failures and deficiencies. This power enables UK ministers and the devolved authorities to make corrections in time for exit to ensure a functioning statute book.

Clause 7(6) contains some protections:
But regulations under this section may not— 

(a)  impose or increase taxation,

(b)  make retrospective provision, 


(c)  create a relevant criminal offence, 


(d)  be made to implement the withdrawal agreement, 


(e)  amend, repeal or revoke the Human Rights Act 1998 or any subordinate legislation made under it, or 


(f)  amend or repeal the Northern Ireland Act 1998 (unless the regulations
 are made by virtue of paragraph 13(b) of Schedule 7 to this Act or are amending or repealing paragraph 38 of Schedule 3 to the Northern Ireland Act 1998 or any provision of that Act which modifies another enactment). “


The memorandum says this by way of example: “The impact of not making such changes would include inadvertently removing environmental protections. The Town and Country Planning (Environmental Impact Assessment) Regulations 2017 require an environmental impact assessment of certain applications for planning permission. They refer to “other EEA States” in a number of places, mainly in the context of development likely to have significant transboundary environmental effects. A correction amending the references to “other EEA States” to “EEA States”, would make it clear that the requirement on transboundary consultation continues to function on exit as it does now. This would remove uncertainty and help ensure that an important piece of environmental protection law continues to operate effectively. “

I referred to obligations arising under other international obligations. Clause 8(1) provides:
“A Minister of the Crown may by regulations make such provision as the Minister considers appropriate to prevent or remedy any breach, arising from 
the withdrawal of the United Kingdom from the EU, of the international obligations of the United Kingdom.

The memorandum more generally seeks to justify the breadth of use of delegated ministerial powers under the Bill:
“i. Time: The two year timetable for exit is provided for in Article 50 of the Treaty on the European Union. Therefore, the UK needs to be in a position to control its own laws from March 2019, which is why the UK Government and devolved administrations need to take a power so they can act quickly and flexibly to provide a functioning statute book. The complexity of identifying and making appropriate amendments to the converted and preserved body of law should not be underestimated. There is over 40 years of EU law to consider and amend to ensure that our statute book functions properly on our exit from the EU. According to EUR- Lex, the EU’s legal database, there are currently over 12,000 EU regulations and over 6,000 EU directives in force across the EU.2 We are not yet in a position to set out in primary legislation how each failure and deficiency should be addressed, nor would it be practical to do so…”

“ii. Practicality: The power will be exercised by UK ministers and the devolved authorities, enabling them to make the necessary corrections to the statute book required to make the law function effectively in their own field of expertise and competence. Making all corrections on the face of the Bill, at this stage, would not be practical. 

iii. Flexibility: Many of the potential deficiencies or failures in law arise in areas in which the UK is considering pursuing a negotiated outcome with the EU. The UK must be ready to respond to all eventualities as we negotiate with the EU. Whatever the outcome, the UK Government and devolved authorities, with the appropriate scrutiny by Parliament and the devolved legislatures, must be able to deliver a functioning statute book for day one post-exit.”

So in the case of environmental impact assessment, are we likely to see any early substantive changes? In my view we won’t. What we will see is amendments made so as to seek to ensue that the Regulations still work in legal terms post exit day and there may be arguments as to whether some of those amendments go beyond what is required to achieve that aim. But the substantive changes (which I’m sure will come) will be for a later stage. The explanatory notes to the Bill say this: “The Bill does not aim to make major changes to policy or establish new legal frameworks in the UK beyond those which are necessary to ensure the law continues to function properly from day one. The Government will introduce separate primary legislation to make such policy changes which will establish new legal frameworks.” (para 14). 
This is a commitment that we need to keep the Government to. No changes beyond what is necessary without primary legislation. 

Simon Ricketts, 13.7.17

Personal views, et cetera

Courts Interpret NPPF Paras 14, 133/134, 141 (But Couldn’t It Be Clearer In The First Place?)

The Government’s chief planner Steve Quartermain has confirmed this week that the revised NPPF will be published before the end of the year. To what extent will it reflect the proposed changes set out in the previous Government’s ‘response to consultation’ document that was published alongside the February 2017 housing white paper and to what extent will it take on board any changed political priorities since the June 2017 election or indeed various inherent uncertainties and ambiguities which have continued to occupy the courts?
Paragraph 14
I have previously blogged as to the Supreme Court’s ruling in Suffolk Coastal, which resolved (by way of a judgment of Solomon in which all parties, by operation of unexpected judicial reasoning, both won and lost) the question as to how the paragraph 14 presumption applies where there is no five year supply of housing land. 
The Court of Appeal in Barwood Strategic Land II LLP v East Staffordshire Borough Council (30 June 2017) has now resolved the question as to the presumption in favour of sustainable development applies in the mirror image position, where there is a five year supply and where the plan is not in other respects out of date. 
As in other matters, the NPPF is unclear on the meaning and application of the presumption in favour of sustainable development. Perhaps the presumption is oversold in the ministerial foreword: “Development that is sustainable should go ahead, without delay – a presumption in favour of sustainable development that is the basis for every plan, and every decision.
Paragraph 14 expresses the presumption as a “golden thread running through both plan-making and decision-taking“, before going on to set out what this means for plan making and decision making. For decision making it means:
” ◦ approving development proposals that accord with the development plan without delay; and

    * where the development plan is absent, silent or relevant policies are out-of-date, granting permission unless: 
– any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or

– specific policies in this Framework indicate development should be restricted.

The question that has exercised the courts in a series of cases is whether the presumption applies outside these specific instances, for example even where a scheme is contrary to an up to date plan. 

Lindblom LJ first sets out how judges should approach questions of policy interpretation, referring back to his first instance judgment in Bloor Homes East Midlands Ltd. v Secretary of State for Communities and Local Government (19 March 2014): 
“Planning policies are not statutory or contractual provisions and should not be construed as if they were. The proper interpretation of planning policy is ultimately a matter of law for the court. The application of relevant policy is for the decision-maker. But statements of policy are to be interpreted objectively by the court in accordance with the language used and in its proper context.”
He refers to his statement having been “underscored” by the Supreme Court in Suffolk Coastal where they set out that “the interpretation of policy will be suitable, in principle, for legal analysis – though only to a degree that depends on the context and content of the policy in question.”
Lindblom LJ followed the approach taken by Holgate J in Trustees of the Barker Mill Estates v Test Valley Borough Council (25 November 2016) in finding that is no freestanding presumption in favour of sustainable development outside para 14. 
Of course that is not to say that, as long as paragraph 14 is correctly interpreted, applicants cannot pray in aid other matters (factors where the development would accord with other policies in the NPPF) as material considerations, to overcome the presumption. It was a shame that (because in this case the judge was found to have misinterpreted paragraph 14) Lindblom LJ did not find it necessary expressly to put right some curious reasoning of the first instance judge, Green J, as to the operation of the statutory presumption in favour of the development plan set out in section 38(6) of the Planning and Compulsory Purchase Act 2004. In his judgment Green J tries to box in the exercise of a decision maker’s discretion with odd passages such as this:
Insofar therefore as paragraph [14] permits of a residual discretion it must be recognised that the outcome arrived at by the operation of paragraph [14] should carry considerable gravitational pull. It should yield only as an exception to the norm where there exists objective and substantial reasons which can be readily demonstrated to a high degree of probative value and which takes into account the particular reasons why a development has been found to collide with the Local Plan. I should add however (see paragraph [54] below) that I express no concluded view on exactly how exceptional “exceptional” actually is; this being an issue better explored in a case where that issue truly arises.”

Whilst not specifically tackling this approach, Lindblom LJ pointedly follows the Supreme Court in Suffolk Coastal and Holgate J in Barker Mill with a warning against excessive legalism in matters of policy interpretation:

“I would, however, stress the need for the court to adopt, if it can, a simple approach in cases such as this. Excessive legalism has no place in the planning system, or in proceedings before the Planning Court, or in subsequent appeals to this court. The court should always resist over-complication of concepts that are basically simple. Planning decision-making is far from being a mechanical, or quasi-mathematical activity. It is essentially a flexible process, not rigid or formulaic. It involves, largely, an exercise of planning judgment, in which the decision-maker must understand relevant national and local policy correctly and apply it lawfully to the particular facts and circumstances of the case in hand, in accordance with the requirements of the statutory scheme. The duties imposed by section 70(2) of the 1990 Act and section 38(6) of the 2004 Act leave with the decision-maker a wide discretion. The making of a planning decision is, therefore, quite different from the adjudication by a court on an issue of law (see paragraphs 8 to 14, 22 and 35 above). I would endorse, and emphasize, the observations to the same effect made by Holgate J. in paragraphs 140 to 143 of his judgment in Trustees of the Barker Mill Estates.

Paragraphs 133/134

What is the extent of the setting of a listed building for the purposes of assessment of harm?

In Steer v Secretary of State (Lang J, 22 June 2017) the main issue was treatment by an appeal inspector of the impact that proposals in Allestree, Derbyshire, for residential development and associated development would have on the landscape character of the area and heritage assets, namely Kedleston Hall (a grade 1 listed building), Kedleston Park (a grade 1 listed park), Kedleston Conservation Area, Kedleston Hotel and Quarndon Conservation Area. The Council, Historic England, the National Trust and others had opposed the appeals on the basis that whilst the proposed development was at some distance from, and would not be visible from the assets, there were historic and social/economic connections between the areas which meant that the appeal site was properly to be regarded as within the setting of the listed hall and park. 
The definition of ‘setting’ in the glossary to the NPPF is unspecific: “The surroundings in which a heritage asset is experienced. Its extent is not fixed and may change as the asset and its surroundings evolve.”
Lang J concluded that the inspector adopted an unlawfully narrow approach when determining whether the appeal site was part of the setting of Kedleston Hall and misdirected himself that a visual connection was necessary or determinative, in addition to the evidence of a historical connection.
The judge found that the inspector’s “focus was upon identifying a visual connection, and assessing the proposal’s impact upon it. The historic social and economic connections were set to one side in this exercise.”
“The evidence was that the appeal site was part of the setting of the Hall because it had formed part of the estate, managed historically as an economic and social entity, and it remained in its historic agricultural use, with hedges and mature trees characterising the field boundaries. From the Hall and the Park, the surrounding rural context was important in preserving a sense of a parkland landscape at the centre of a managed rural estate, rather than in a suburban context. The site was on the primary visitor route to the Hall and Park and so visitors would experience the historical narrative, and the concentric influence of the Hall on its landscape, as they traversed the agricultural estate, then entered the enclosed, designed park and gardens, enjoying the drama of anticipation as a great English country house was revealed to them.
In reaching her conclusion it is interesting to see the reliance that Lang J places on Historic England’s good practice guide on the setting of heritage assets. 

Paragraph 141

Hayes v City of York Council (Kerr J, 9 June 2017) concerned a planning permission granted by York Council for the construction of a visitor centre at the base of the motte at Clifford’s Tower in York and the installation of a new staircase and tower floor, with walkways, balustrading, a roof deck with a café and other restoration works. A car park next to the site is to be removed. The project includes archaeological works and disturbance to buried artefacts. 

The case concerned the meaning of paragraph 141 of the NPPF, which states that where heritage assets are lost or partly lost, local planning authorities and developers should make archaeological records publicly available, but “the ability to record evidence of our past should not be a factor in deciding whether such loss should be permitted”. 
The challenge was brought by a member of the council. One of his complaints was that the council had taken account of a legally irrelevant factor, namely the ability to record evidence of the past.
Kerr J reviewed the more detailed national heritage policies that preceded the NPPF and the way in which the precise wording changed and finally was summarised in, and replaced by, the NPPF:

The codification exercise which created the NPPF delivered commendable brevity, at the price (well worth paying) of replacing detailed exposition with general policy statements that can be Delphic, as in this instance.”

He turned to paragraph 141:
“The difficulty arises from the wording in the last sentence: “the ability to record evidence shall not be a factor in deciding …”. Those words do express, as a matter of language, what appears in conventional public law parlance to be the exclusion of a material consideration. Read literally, those words say not only that the ability to record evidence cannot be the sole justification for the harm; it cannot even contribute to the justification for the harm.”
Kerr J had real difficulty with this literal reading:
“Why should the preservation of information about an asset not be weighed in the balance along with other factors in favour of a development that harms a heritage asset? The harm is attenuated by the preservation of information and making it publicly available, which enhances and better reveals the significance of the harmed asset and hence its positive contribution to the locality and to our heritage.”

“This difficulty can only be overcome, in my judgment, once it is recognised that a non sequitur crept in when PPS 5 replaced PPS 16, and then found its way into the language of NPPF paragraph 141. In my judgment, the last sentence of that paragraph only makes good sense if interpreted so that the words “should not be a factor” are taken to bear the meaning “should not be a decisive factor”, in deciding whether the harm to the asset should be permitted.

I appreciate that, even allowing for the fact that the NPPF is a policy document and not a statutory provision, this interpretation stands uneasily with the actual words of the last sentence of the paragraph. But unless the paragraph is interpreted in that way, it would be very difficult to apply in a coherent manner.”

Kerr J rejected paragraph 141’s “literal interpretation in favour of a sensible and liberal construction of the paragraph in its proper historical context“.
Wider thoughts

So, three recent examples of the way in which the courts embark upon interpreting policy (whether national or local) and its application, consistent of course with the Supreme Court’s approach in Tesco Stores Limited v Dundee City Council (21 March 2012) that “policy statements should be interpreted objectively in accordance with the language used, read as always in its proper context. 

That is not to say that such statements should be construed as if they were statutory or contractual provisions. Although a development plan has a legal status and legal effects, it is not analogous in its nature or purpose to a statute or a contract. As has often been observed, development plans are full of broad statements of policy, many of which may be mutually irreconcilable, so that in a particular case one must give way to another. In addition, many of the provisions of development plans are framed in language whose application to a given set of facts requires the exercise of judgment. Such matters fall within the jurisdiction of planning authorities, and their exercise of their judgment can only be challenged on the ground that it is irrational or perverse (Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759, 780 per Lord Hoffmann). Nevertheless, planning authorities do not live in the world of Humpty Dumpty: they cannot make the development plan mean whatever they would like it to mean.”
Despite the reference to interpreting policies “objectively”, it will be seen that the courts will draw upon context, previous gestations of guidance and extraneous guidance documents to assist them. Sometimes, as in Hayes, the strict meaning of words will be stretched in a way that potentially leads to uncertainty. 
A broader approach to the interpretation of development consents by reference to extraneous documents than has traditionally been the case was signalled by the Supreme Court in Trump International Golf Club Scotland Limited v the Scottish Ministers (16 December 2015):
“When the court is concerned with the interpretation of words in a condition in a public document such as a section 36 consent, it asks itself what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and of the consent as a whole. This is an objective exercise in which the court will have regard to the natural and ordinary meaning of the relevant words, the overall purpose of the consent, any other conditions which cast light on the purpose of the relevant words, and common sense. Whether the court may also look at other documents that are connected with the application for the consent or are referred to in the consent will depend on the circumstances of the case, in particular the wording of the document that it is interpreting. Other documents may be relevant if they are incorporated into the consent by reference (as in condition 7 set out in para 38 below) or there is an ambiguity in the consent, which can be resolved, for example, by considering the application for consent.”
To my mind, this all takes us into dangerous territory. Isn’t the public, or a purchaser of a development site, entitled to take words as meaning what they say. The courts are having to step in and complete the gaps left by inadequate drafting. Whilst its focus is a long way away from planning law, Lord Sumption’s speech The Supreme Court and the Interpretation of Contracts given at Keble College Oxford on 8 May 2017 is a thought-provoking read. One of the concluding passages:
“It is I think time to reassert the primacy of language in the interpretation of contracts. It is true that language is a flexible instrument. But let us not overstate its flexibility. Language, properly used, should speak for itself and it usually does. The more precise the words used and the more elaborate the drafting, the less likely it is that the surrounding circumstances will add anything useful. I do not therefore accept that the flexibility of language is a proper basis for treating the surrounding circumstances as an independent source from which to discover the parties’ objective intentions.
I agree! Let’s aspire to use words precisely, whether in the drafting of policies, permissions or indeed agreements, rather than relying on the courts as a slow, expensive and unpredictable backstop. And given their broad effect, surely policies ought to be written even more carefully than contracts?
Simon Ricketts, 8 July 2017
Personal views, et cetera
Image by Rob Cowan.