Affordable Housing Tax

In requiring the developers of private housing schemes to contribute to the provision of affordable housing, the planning system has become a tax collection system, and an inefficient, opaque one at that. 
The OECD classifies  taxes as follows:
“… compulsory, unrequited payments to general government. Taxes are unrequited in the sense that benefits provided by government to taxpayers are not normally in proportion to their payments. 

The term “tax” does not include fines unrelated to tax offences and compulsory loans paid to government. […]

General government consists of supra-national authorities, the central administration and the agencies whose operations are under its effective control, state and local governments and their administrations, social security schemes and autonomous governmental entities, excluding public enterprises.
Participants in the planning system seem to accept the political policy choice that has been made: to require developers to subsidise the provision of affordable housing, whether by requiring them to dispose of land or built units to registered affordable housing providers at less than market value (and nowadays at less than cost, given the increasing scarcity of any public sector grants or other forms of subsidy) or to make financial payments towards the provision of affordable housing elsewhere in the area. 
The provision of market housing does not in any way increase the need for affordable housing, indeed over time by increasing supply if anything it should decrease it. It may be said that mixed use communities can only be achieved by requiring the inclusion of affordable housing within market residential schemes, but that in itself does not justify the state putting the cost of the affordable housing at the door of the developer. The only reason that affordable housing section 106 planning obligations meet the requirements of regulation 122 of the Community Infrastructure Levy Regulations 2010 (necessary to make the development acceptable in planning terms; directly related to the development; and fairly and reasonably related in scale and kind to the development) is because of local policies seeking such obligations, supported by national policy. Policy could have easily required development across the board to contribute to affordable housing – or another category of development other than market housing. Why shouldn’t we use plain language and describe the extent of subsidy on each scheme as a tax? Hypothecated it may be but it still surely meets that OECD definition. For the rest of this post I will refer to it as Affordable Housing Tax, AHT. 
How to calculate AHT? Frequently, the high proportion of affordable housing that is required to be provided in connection with a private market housing development, when taken with the other costs of that development (including CIL where chargeable, a more straight-forward and transparent tax – that’s how bad AHT is!), would render the project unviable and so AHT ends up being as much as can be extracted from a development whilst allowing it to go ahead, assuming a fixed capped profit level for the developer and a fixed capped land value for the land owner (often less than its “real” value or actual acquisition cost). 
Take London. The London Plan requires boroughs to seek to maximise affordable housing provision. The current Mayor has indicated that his “long-term aim is for half of all new homes to be affordable”. In his November 2016 draft affordable housing and viability SPG (the subject of my 1.12.16 blog post  ), he introduced a ‘threshold approach’, whereby schemes meeting or exceeding 35% (by habitable room) affordable housing without public subsidy will not be required to submit viability information. There are also minimum requirements as to the proportions of different types of affordable housing that will be required (“tenure split” in the affordable housing industry jargon that we have grown up with). For schemes that cannot meet the threshold, viability appraisal is required to justify how much affordable housing the scheme can deliver.
Imagine such a concept in any other sector:
1. The market produces goods which reduce the need for the state to provide a service, or which are at least neutral. 

2. The market is taxed on those goods, with the tax applied towards provision of that service, instead of that service being paid for by the state. 

3. The level of that tax differs according to location but will often equate to all profits arising from the production of the goods, less a capped profit and capped input cost. 

I’m expressing no view as to whether this process is right or wrong. However, I do feel that the underlying reality has been conveniently forgotten. And the collateral damage from AHT is:
1. loading complexity into the planning process, with local planning authorities having to fulfil both a tax assessment and tax collection role

2. encouraging bad outcomes, with developers incentivised to expend resources on AHT mitigation (complex affordable housing negotiations, arguments over tenures, viability appraisal)

3. reducing housing delivery by rendering some projects unviable. 

How did we get here? There is an interesting 2002 study by the Joseph Rowntree Foundation, “Planning gain and affordable housing: making it count”, which starts with this brief history:

“Local authorities had been experimenting with ways of using the planning system to secure affordable housing in a number of areas in England in the 1970s, but official government endorsement first came in 1979 when the rural exceptions policy was announced. This enables rural planning authorities to grant planning consent for housing on sites that would not otherwise receive permission, provided that only affordable housing is developed on them
The approach was more widely sanctioned to enable affordable housing to be secured on all larger housing developments in 1981 and subsequently included in all Planning Policy Guidance on housing (PPG3) issued since then (DETR, 2000). Provided that local planning authorities have policies in their adopted statutory development plans that assess the need for new affordable housing in their districts, they may require private developers to contribute to meeting this need. They may also set specific targets to be achieved on sites allocated for new housing in adopted plans. When developers agree to make contributions these are made legally binding contracts, where they enter into agreements with the relevant planning authority under section 106 of the 1990 Town and Country Planning Act as part of the process of securing planning permission.”

“In 1998, the policy was amended, to reduce site thresholds above which contributions would normally be sought, and to link it more closely with the government’s policies on social inclusion, mixed communities and urban renaissance through on-site provision of affordable housing (DETR, 1998). In the 2000 version of PPG3, the government made it clear that developers’ unwillingness to make contributions to affordable housing would be an appropriate reason, of itself, to refuse planning permission (DETR, 2000). 

In the 2001 Green Paper on reform of the planning system the government proposed widening the scope of the affordable planning policy to incorporate small sites and commercial developments. It also proposed replacing negotiated contributions by standard authority- wide financial tariffs, which would still mainly be used for on-site provision. (DTLR, 2001a, 2001b).”
In my view, a significant turning point was paragraph 38 of PPG3 (1992): “A community’s need for affordable housing is a material consideration which may properly be taken into account in formulating development plan policies.”
This from an interesting 26 October 2011 paper  by Tim Mould QC:
At the time, the introduction of that policy provoked considerable controversy in planning circles. In Mitchell v Secretary of State, Roy Vandermeer QC sitting as a deputy High Court Judge held that a planning appeal decision based upon considerations of housing price and tenure was unlawful, on the ground that such considerations had nothing to do with the character and use of land. Had that view prevailed, the now conventional approach to delivering affordable housing through the planning process would have been dead in the water, considerations of price and tenure being part and parcel of the means whereby affordable housing is actually secured through the development control process. 

That view did not, however, prevail. The Court of Appeal overturned Mr Vandermeer’s decision. In Mitchell v Secretary of State [1994] 2 PLR 23, Saville LJ said (page 26G-H) : 

“On the law as it presently stands, therefore, the need for housing in a particular area is a planning purpose which relates to the character and use of land. Given that this is so, the proposition advanced on behalf of Mr Mitchell is that the need for a particular type of housing in an area is not a planning purpose which relates to the character of the use of land if that need is itself dictated or generated by considerations of cost or type of tenure. 

I cannot accept this argument. To my mind there is no sensible distinction to be drawn between a need for housing generally and a need for particular types of housing, whether or not the latter can be defined in terms of cost, tenure or otherwise. In each case the question is whether, as a matter of planning for the area under consideration, there is a need for housing which the grant or refusal of the application would affect. 

The fact that the need may be dictated by considerations of cost or type of tenure seems to me to be immaterial….
….the fallacy in the argument is that it simply confuses the need for housing (which on the authorities is a legitimate consideration) with the reasons for that need and concentrates exclusively on the latter while effectively ignoring the former. ”

Thereafter the national planning policy for the delivery of affordable housing through the planning process became encapsulated in a departmental circular devoted to that topic – DETR Circular 6/98 “Planning and Affordable Housing“. Building on the established materiality of the need for affordable housing, paragraph 1 of the circular required local planning authorities to investigate the degree of need for affordable housing in their area and, based on that evidence, to include in their local plans a policy for seeking an element of such housing on suitable sites. Such policies would then be material consideration in determining an application for planning permission.”

Tim then points to PPS3 (2005), which is even more specific as to what was required from developers: “planning authorities were required to set overall targets for affordable housing during the plan period based on (inter alia) the findings of a Strategic Housing Market Assessment; to include separate targets for social rented and intermediate housing; to specify the size and type of affordable housing likely to be needed in particular locations; to set out the range of circumstances in which affordable housing would be required; and to set out the approach to seeking developer contributions towards affordable housing provision in their area. There was further guidance on the provision of affordable housing in rural areas.”
As we then move forward to the publication in 2012 of the NPPF, the references to seeking developer contributions to affordable housing are lost. Not because the approach has changed but because by now this is just the system, isn’t it?
The NPPF simply says this about affordable housing, para 50:

“To deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities, local planning authorities should: 

    * plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community (such as, but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes); 


    * identify the size, type, tenure and range of housing that is required in particular locations, reflecting local demand; and 


    * where they have identified that affordable housing is needed, set policies for meeting this need on site, unless off-site provision or a nancial contribution of broadly equivalent value can be robustly justified (for example to improve or make more effective use of the existing housing stock) and the agreed approach contributes to the objective of creating mixed and balanced communities. Such policies should be sufficiently exible to take account of changing market conditions over time“
 

Similarly, there is the assumption in the Government’s 2014 planning practice guidance, along with specific references later introduced into the document as to the circumstances in which affordable housing requirements should not be sought (reflecting the 28 November 2014 written ministerial statement that set out the small sites threshold and the vacant building credit). 

Throughout this period the availability of public subsidies to support the delivery of affordable housing has reduced.  
What an example of mission creep all of this is. How enticing for successive governments to restrict general taxation by progressively increasing the burden of paying for affordable housing onto private sector residential development. 
The political sleight of hand goes further: recognising the financial impact that this responsibility places on residential development, beneath the headline proportions of affordable housing that are sought, the definition of affordable housing has been adjusted to the disadvantage of those in most need of it:
– first with the introduction of affordable rent rather than social rent (see the House of Commons Library briefing paper dated 7 May 2015), affordable rent being a reduction of at least 20% on market rent as opposed to social rent’s generally lower, fixed rent, levels
– more recently with consultation on widening the definition of affordable housing to include “starter homes” and also, for build to rent development, discount market rent (see my 4.3.17 blog post). 

One advantage of calling a tax a tax would be that we could then have an honest conversation as to whether it is right that CIL always has priority over AHT. That 15% of CIL that is for neighbourhoods to apply (25% where a neighbourhood plan is in place) – can’t AHT take priority over that? Indeed, given that neighbourhood slice doesn’t even have to be spent on the provision of infrastructure (but on either “the provision, improvement, replacement, operation or maintenance of infrastructure” or “anything else that is concerned with addressing the demands that development places on an area”), why not advise that in areas of particular need of affordable housing the neighbourhood slice should automatically go toward affordable housing?
Of course the very term “affordable housing” is politician-speak. After all, all housing is affordable to some and unaffordable to others. Don’t we really mean “subsidised housing”, “low income housing” or “public housing”? I’m surprised indeed we haven’t yet seen it rebranded as “community housing”. 
But what other approach could be taken to securing it, other than the present one?
An interesting exercise would be to calculate, nationally or authority area by authority area, the annual level of AHT that is secured from developers by way of section 106 obligations (some useful national figures to begin with are within Annex A of the Government’s May 2016 starter homes consultation paper) and then to work out what that might equate to if it became an across the board (all development, not just housing) CIL-type charge. As I say, why should the cost of affordable housing solely fall on residential development? Indeed, arguably it is employment development that adds more directly to the need for homes. 
Indeed, as part of any review of CIL, doesn’t the concept of a Community Housing and Infrastructure Levy, or CHIL, have a ring to it?
Furthermore, whilst there is a much bigger role for local authorities to play in delivering affordable housing, direct and in conjunction with registered providers and the private sector (and potentially with a greater focus on neighbourhood, community, participation in delivery and management), why not turn the system on its head and boost production by making it positively in the developer’s interest to deliver affordable housing, through offering tax credits? This has been the US model, via the Low-Income Housing Tax Credit (LIHTC), ironically now under threat due to Trump’s proposed tax changes (see for example Bloomberg piece Trump Corporate Tax Shakeup Puts Housing Developers in Tailspin 26 April 2017). 

Or do we have it right with our present system? Question. 
Simon Ricketts 28.5.17
Personal views, et cetera

Five Problems With Neighbourhood Plans

The real effects of neighbourhood plan making on housing delivery and on the efficient, democratic operation of the planning system are hard to pin down and yet the Government continues to champion its role. Are we really heading in the right direction? After all, despite the positivity of government sponsored initiatives such as mycommunity.org.uk  it isn’t all sweetness and light. Here is my personal worry list:
1. Neighbourhood Plans are usurping the role of local plans, whilst being subject to a lighter-touch examination process
The Court of Appeal, in R (DLA Delivery Ltd) v Lewes District Council  (10 February 2017), has now confirmed that a neighbourhood plan may be made without there being an up to date local plan. Until such time as the local plan comes forward, as the only up to date development plan, the neighbourhood plan’s policies will benefit from the statutory presumption in section 38(6) of the Planning and Compulsory Purchase Act 2004 and from paragraph 198 of the NPPF: “[where] a planning application conflicts with a neighbourhood plan that has been brought into force, planning permission should not normally be granted”.
This gives neighbourhood plans a role which was surely not foreseen by Parliament. Neighbourhood plans are intended to be in general conformity with the local plan’s strategic policies. But instead any policy vacuum can be filled by the neighbourhood plan’s own strategic policies. Whilst the Planning Practice Guidance urges collaborative working between neighbourhoods and local planning authorities, this does not prevent problems from arising which are exacerbated by two further factors:
–  in order to survive the ‘relatively limited‘ (Court of Appeal in DLA Delivery, para 5) examination process, neighbourhood plans only have to satisfy the ‘basic conditions’ set out in the paragraph 8(2) of Schedule 4B to the Town and Country Planning Act 1990 as applied to neighbourhood plans by section 38A of the Planning and Compulsory Purchase Act 2004, rather than the wider and more rigorous soundness test applicable to local plans. 
–  the Neighbourhood Planning Bill proposes to accelerate the process, by deeming post-examination pre-referendum neighbourhood plans to be a material consideration in the determination of planning applications (clause 1) and by deeming post-referendum neighbourhood plans to be treated as part of the statutory development plan ahead of formally being made by the district or borough council (clause 2). It will be easier for the Secretary of State to dismiss appeals on the basis of inconsistency with emerging neighbourhood plans (a sensitive subject for DCLG given for example Holgate J’s quashing in Woodcock Holdings Limited v Secretary of State, 1 May 2015 and a series of examples of the Secretary of State having consented to judgment in similar circumstances). 
2. The Neighbourhood Plan process is “complex and burdensome”
Not my words but a description given by participants, according to recent research by the University of Reading: Neighbourhood Planning Users Research Revisited.  
Any community embarking on a neighbourhood plan has to be ready for the long haul. Because policies within the plan can have real consequences for communities and developers alike, it is no surprise that the process can be litigious. 
R (Crownhall Estates Limited) v Chichester District Council  (Holgate J, 21 January 2016) was the third (third!) judicial review in relation to the Loxwood Neighbourhood Plan, with the claimant developer seeking unsuccessfully to challenge the plan’s provision for only 60 homes against a background of a failure of the district council to meet its obejectively assessed housing needs. 

I do not believe that there is a transcript of Dove J’s rejection in Swan Quay LLP v Swale Borough Council on 31 January 2017 of a challenge to the Faversham Creek Neighbourhood Plan which contained a policy preventing redevelopment of the claimant’s property on the basis that it would lead to ‘gentrification’. The ruling is summarised by the Faversham Creek Trust in a press release.  
Challenges commonly focus on whether there has been compliance with the requirements of the Strategic Environmental Assessment Directive, another unsuccessful ground of challenge in DLA Delivery. R (Stonegate Homes Limited) v Horsham District Council (the late, missed, Patterson J, 13 October 2016) was an example of a successful challenge on this basis. The Haddenham Neighbourhood Plan is another, where Aylesbury Vale District Council consented to judgment.
3. Neighbourhood Plans dissipate the local planning authority’s resources

Parish councils such as Haddenham are unlikely to have the resources to resist a legal challenge, leaving the responsibility to the local planning authority which, under the legislation, formally “makes” the plan. How much say will they have over the way in which the defence case is brought and, as importantly, why should the local planning authority’s resources be stretched in this way?

We also have of course dissipation of CIL proceeds, with 15% of CIL proceeds available to be spent by parish councils, increased to 25% where a neighbourhood plan is in place – proceeds that would otherwise have applied towards infrastructure projects required to deliver development. 
4. Neighbourhood Plans are unnecessary and marginalise the role of the local planning authority

District and borough councils are designed to operate down to ward level. We elect ward councillors to represent our local interests – that is to say, the things we care about in relation to our home environment, our neighbourhood. Local plans can and do include policies at neighbourhood level. Additionally, there is scope for area action plans to provide more detailed site-specific policies where justified. 

We should all engage more with local plan making. Does the distraction of neighbourhood planning fuel the inaccurate sense that what happens at district or borough level is remote and not to do with us? What if the energy that one sometimes sees expended on neighbourhood planning were to be properly harnessed at local planning authority level, with proper access to officers and with consistency of plan making over a strategically sensible area?
5. Neighbourhood Plans are not fit for the further roles that Government continues to give them
Neighbourhood planning is of course voluntary. It is more prevalent in affluent areas and its heartland is in the south east (Turley research, 2014). In unparished areas it is the preserve of unelected groups. And yet the Government intends it to play a grown up role alongside local plans. Indeed, given that they have statutory force, unlike the NPPF, have neighbourhood plans in fact become more important than the Government’s own planning policies?
Gavin Barwell’s 12 December 2016 written ministerial statement (see my blog post That Ministerial Statement) set out that relevant policies for the supply of housing in a neighbourhood plan that is part of the development plan should not be deemed to be ‘out-of-date’ under paragraph 49 of the National Planning Policy Framework where the following circumstances arise at the time a planning decision is made: 
* the written ministerial statement making the policy change on 12 December 2016 is less than 2 years old, or the neighbourhood plan has been part of the development plan for 2 years or less;

* the neighbourhood plan allocates sites for housing; and

* the local planning authority can demonstrate a three-year supply of deliverable housing sites. 

The statement is of course the subject of a judicial review. In the meantime, the Government’s Housing White Paper has added the further qualification that neighbourhoods should be able to demonstrate that their site allocations and housing supply policies will meet their share of local housing need and that the local planning authority should be able to demonstrate through the White Paper’s housing delivery test that, from 2020, delivery has been over 65% (25% in 2018; 45% in 2019) for the wider authority area (to ensure that delivery rates across the area as a whole are at a satisfactory level). 
 The White Paper also proposes changes to the NPPF to “highlight the opportunities that neighbourhood plans present for identifying and allocating small sites that are suitable for housing, drawing on the knowledge of local communities”.

Finally, local planning authorities will now be “expected to provide neighbourhood planning groups with a housing requirement figure, where this is needed to allow progress with neighbourhood planning. As part of the consultation on a new standard methodology for assessing housing requirements, we will seek views on whether a standard methodology could be developed for calculating housing need in a neighbourhood plan area“.
Let us remember that these are voluntary plans, prepared by parish councils and community groups. Are we not seeing, yet again, a relentless move towards process and complexity, in an effort to make running repairs to a mechanism that was not designed for this function? 
Simon Ricketts 19.2.17
Personal views, et cetera

Politician, Heal Thyself: Pruning Planning

Let’s not use the term “red tape”. It is a value-laden term liked by politicians as it suggests that we are all tied up by unnecessary bureaucratic procedures which have arisen by way of inefficient administrative processes, when the truth is that our planning system (and every other arm of government I would therefore guess) is over-burdened with procedures that have been entirely driven by short term political aims – introduced with no rigorous testing and little understanding of their likely effects.
The previous government’s “Red Tape Challenge” produced a long list  of regulations to be scrapped but in my view has ultimately made little difference. No lessons have been learned. 
The current government supposedly has a “Cutting Red Tape” programme  with proposals awaited in various areas, including “house building” and “local authorities” but I do not sense any great activity. Indeed, it is clear from the government’s vacuous and condescending twitter feed @CutRedTapeUK that nothing much is happening.  
So what would I scrap? These are just some examples:
The vacant building credit
It was never an idea that had any logic (being in practice only of benefit to schemes that were already viable) but once first the planning policy guidance was watered down to allow for exceptions and then once the Court of Appeal in their 11 May 2016 judgment underlined that the policy necessarily could not be required to be applied automatically, it really lost any force or relevance. 
The “positive and proactive” incantation
Since December 2012, following the Town & Country Planning (Development Management Procedure) (England) (Amendment No.2) Order 2012, notices for approval or refusal of planning permission now have to include a statement explaining “how, in dealing with the application, the local planning authority have worked with the applicant in a positive and proactive manner based on seeking solutions to problems arising in relation to dealing with a planning application”.
This has no effect in influencing the behaviour of LPAs whatsoever!
“Special measures” applications
The Growth and Infrastructure Act 2013 introduced a procedure for placing statistically poorly performing LPAs into ‘special measures’, enabling applicants to choose to make their planning application directly to the Secretary of State (via the Planning Inspectorate). It is high stakes for an applicant, given that there is no right of appeal from the Planning Inspectorate’s decision. 
Until now the procedure has been limited to applications for major development (eg for ten or more homes). The first application using the procedure was a Gladman scheme for 220 homes in Blaby, which was rejected  in July 2014. I am unsure how many other applicants have dared to follow suit. I’m not sure that I would advise it. 
Since 21 October 2016, a statutory instrument  has extended the procedural route to non-major planning applications as well. Untrialed, of course, so none of us know whether the procedure will remain unused or whether the Planning Inspectorate will be swamped and embroiled in fine-grained planning authority work for which they have little in place by way of the necessary procedural infrastructure. 
Various neighbourhood planning procedures
It was the 5th birthday this month of the Localism Act 2011. A huge amount of work went into the legislation and the various processes that were invented. Views may differ on the concept and reality of neighbourhood plans – and I certainly believe that the assets of community value procedure unduly raises community expectations. But for the purposes of this blog post I have in my sights the Community Right to Build and Neighbourhood Development Orders.  
As of February 2015 Community Rights UK asserted that only three community right to build applications had reached application stage. 
In a web trawl this morning I noticed that the proposed Congresbury new village hall is the subject of an order made by North Somerset Council on 8 November 2016. Reading the independent examiner’s report, I am slightly at a loss as to how this is in any way simpler as a process than a traditional planning application. 
As for Neighbourhood Development Orders, is the Cockermouth NDO made by Allerdale District Council on 10 September 2014 the sole example?
The CLG Commons Select Committee report on Community Rights  (2 February 2015) highlights a number of parts of the Localism Act where there has been little take up. 

Imagine the sheer waste in civil service and Parliamentary time creating these new bespoke procedures, and in each LPA then understanding and promoting them, only for them to rest almost entirely unused. Surely it’s scandalous. 

And it keeps coming

Of course the new bespoke procedures keep coming. We await the secondary legislation necessary to give reality to the permission in principle procedure introduced by the Housing and Planning Act 2016. 

Oh and the section 106 dispute resolution procedure introduced by the same Act. 
And I say nothing of CIL ahead of the Government’s long-awaited publication of the CIL review panel’s recommendations and its response. 

Simon Ricketts 26.11.16
Personal views, et cetera

There Goes The Neighbourhood? Recent Challenges To NDPs

There is still significant legal debate as to what is the proper scope of neighbourhood development plans. This has resulted in a series of cases in which the parish council or neighbourhood forum that has promoted the relevant NDP sits on the sidelines (due to lack of resources) as the borough or district council which has been required to make it finds itself embroiled in significant legal proceedings. 
Can an NDP be made in advance of an up to date local plan?

This question is critical because, if so, there is significant freedom for the NDP to set the local policy agenda on issues (such as housing numbers in the neighbourhood) which might be thought to be more properly the domain of the local plan (whereas if there is an adopted local plan there is the statutory constraint that the NDP must be in “general conformity” with its “strategic policies”). 

To date High Court judges have taken the view that the answer is “yes” but this will come before the Court of Appeal for the first time this coming week, when the claimant’s appeal from the ruling of Foskett J in R (DLA Delivery) v Lewes District Council  (31 July 2015) is heard on 15 and 16 November 2016. Foskett J had taken an equivalent approach to that of Lewis J in R (Gladman Developments Limited) v Aylesbury Vale District Council  (18 December 2014) and Holgate J in Woodcock Holdings v Secretary of State  (1 May 2015). 
Can an NDP require new dwellings to be occupied as a “principal residence”?
This was the main issue before Hickinbottom J (promoted to the Court of Appeal since the hearing) in R (RLT Built Environment Limited) v Cornwall Council  (10 November 2016). This of course concerned the St Ives Neighbourhood Plan’s proposed ban on new dwellings being used as second homes. 
As is so often the case in NDP challenges (see below for more of this) the first line of attack was as to the adequacy of the strategic environmental assessment that had been carried out. The claimant, a local developer, claimed that increasing the amount of market housing for local people to buy was a “reasonable alternative” that should have been assessed. The judge disagreed – as an alternative it was an “obvious non-starter” as it did not achieve the objective of the policy which was to reduce the number of second homes in the area.  
The second line of attack was that the policy would amount to an unjustified interference with the right to a home in Article 8 of the European Convention on Human Rights. The judge held that whilst the right might in theory be interfered with if a resident had to leave the area due to changes in personal circumstances, the interference was proportionate and therefore acceptable. The LPA would also be able to take personal circumstances into account in deciding whether or not to take planning enforcement action. 
Whilst much turned on the local circumstances of the second home honeypot that is St Ives, can one extrapolate to other areas under pressure from second homes, such as parts of London?
When will a plan be quashed on the basis of inadequate strategic environment assessment?
There have been many challenges, whether to decisions to screen out SEA (eg R (Larkfleet Homes Limited) v Rutland County Council  (Court of Appeal, 17 June 2015)) or to the adequacy of the SEA process (most recently in the Cornwall case but before that in for instance in BDW Trading Limited v Cheshire West and Chester Borough Council  (Supperstone J, 9 May 2014)). Until last month, I only knew of one example of an NDP being quashed on the basis of inadequate assessment: the Haddenham Neighbourhood Plan, where Aylesbury Vale District Council consented to judgment  in March 2016 (to the chagrin of the parish council that had promoted the plan). 
So R (Stonegate Homes Limited) v Horsham District Council  (Patterson J, 13 October 2016) is quite something: the Henfield Neighbourhood Plan was quashed by the High Court following a contested hearing on 4 October (Mark Lowe QC acted for the successful claimant, who incidentally also acted for the successful defendant in the Cornwall case two days later on 6 October). The plan favoured residential development to the east of the settlement and, relying on perceived problems with the local road system, no assessment was carried out of the possibility of development to the west, despite a planning appeal having been allowed to the west and a highways reason for refusal having been withdrawn by the LPA following agreement between the appellant and the county council. The plan was quashed on the basis of a flawed assessment of reasonable alternatives within the SEA process as well as on the basis that there was no evidential basis for the examiner of the plan ruling out locations to the west or for the LPA to conclude that the plan met EU law requirements.  
The case is an encouraging example of the SEA Directive fulfilling a necessary role in providing a safeguard against loose or lazy thinking, against the background of a process where examination can be light touch (to put it charitably) and where the legislation has as many holes as a Cornish trawler net when it comes to NDPs, minnows of our plan led system. 

Simon Ricketts 12.11.16
Personal views, et cetera

Emerging Neighbourhood Plans (nudge, nudge)

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

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

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

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

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

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

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

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

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

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