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

Newmarket: Horses, Houses, Politics, Planning

Let’s please constrain the circumstances in which the Secretary of State can intervene in planning decision-making. Who is going to carry on investing in housing land promotion when, frankly, the outcome of betting on the horses can be more predictable?
The day before the Supreme Court’s ruling in Suffolk Coastal (where the Supreme Court justices examined the semantic intricacies of paragraphs 49 and 14 of the NPPF, extolled the virtues of expert inspectors and recognised the need to boost the supply of housing), judgment was handed down in Moulton Parish Council and the Earl of Derby v Secretary of State  (Gilbart J, 9 May 2017). 

The case concerned the controversial proposals by the Earl of Derby for residential development in Newmarket, in the heartland of the British horseracing industry. 
The Secretary of State had in 2012 dismissed an appeal against refusal by Forest Heath District Council of planning permission for mixed-use development including up to 1,200 dwellings, 36,000 sq m of B1 employment floorspace. Whilst various representatives of the horse-racing industry had argued the scheme would harm their interests, through the traffic and other effects arising, the appeal was only dismissed on the ground that the scheme was premature, in that due to its strategic implications, it should be considered through the development plan process. 
There had been a policy in the local plan that included an urban extension for 1,200 dwellings north east of Newmarket that included the appeal site. However, the grouping of horseracing interests had succeeded in quashing that policy and related housing provision policies in Save Historic Newmarket Limited v Forest Heath District Council  (Collins J, 25 March 2011). 
The Council carried out a “single issue review” of its housing policies, dealing with overall housing provision and distribution, and with site allocations and published a preferred options document for consultation. The review proposed a mixed use development, including 400 dwellings, on part of the previous site, and the Earl of Derby brought forward a planning application for that level of development. The application was resolved to be approved by the district council (after overcoming an attempted judicial review by objectors who sought unsuccessfully to overturn a negative EIA screening opinion) but it was called in by the Secretary of State on 11 July 2014. The inquiry took place in April and May 2015, the inspector’s report was dated 9 July 2015 and yet the Secretary of State didn’t issue his decision  until 31 August 2016. The Secretary of State rejected the application for a number of reasons, including concerns as to highway safety, raised again in no uncertain terms by those representing the horseracing industry.
So, a year for the Secretary of State to consider the inspector’s report and over two years since his intervention in the local decision-making process! One might think that the decision, which rejected the inspector’s recommendation that planning permission be granted, would be bullet-proof in its reasoning after such a delay. Hmm. The decision has been quashed by Gilbart J following a challenge brought by two parties, one unsurprisingly being the appellant, the Earl of Derby, but the other unusually being a parish council, Moulton, concerned at the additional pressure for development that would arise in its parish if the proposals do not proceed at the application site – after all, housing has to go in someone’s back yard, somewhere, sometime, doesn’t it?
The application will now have to be redetermined. 
I want to consider the following questions which arise out of this sorry but not unusual tale:
– what went wrong in the Secretary of State’s reasoning?

– why did his decision take so long?

– what is the role in practice of lobbying and political pressure in ministerial decision-making?

What went wrong in the Secretary of State’s reasoning?



The claimants’ successful grounds of challenge were that the Secretary of State:
– failed to apply his own policies set out in the NPPF; and

– failed to have regard to his own previous decision “where he had reached conflicting conclusions to those he now holds on matters relating to highway safety, or has reached a conclusion on safety without evidence, or which is irrational“.

A world away from the complexities facing the Supreme Court in Suffolk Coastal, the Secretary of State’s mistake on the first ground was an obvious one. The inspector reported that there were no up to date development policies in relation to housing provision and that therefore paragraph 14’s “tilted balance” in favour of sustainable development applied. However, the Secretary of State fails to address this material consideration at all in his decision letter. 
Gilbart J: “In this particular decision, it is plain that the effect of the tilted balance in NPPF [14] was of considerable importance. It was one of the eight main issues identified by the Inspector, and much debate between the parties. While the effect of the change in the housing supply position after the Inspector’s report had been received could have affected the weight to be given to the arguments about the 5 year supply, the issue relating to the important absence of housing policies remained. One of its particular contexts was that this site would meet important objectives of policy in terms of sustainability, as well as the fact that it was best and most versatile agricultural land. This is a local authority area where more land has to be found for housing, as suggested by the emerging local plan allocations.
In relation to the second ground, the inspector and Secretary of State had found in the case of the larger scheme that highway safety problems were not likely to arise. There was no explanation as to his volte face.

Gilbart J: “There is not a single reference by the SSCLG to the previous decision, let alone to the previous Inspector’s Report. In my judgement, the very least that was required of the SSCLG was to acknowledge the fact of the previous conclusions, and face up to the fact that he was being asked to reach conclusions which on any view were entirely at odds with the those he had reached in 2012. NHG had not held back in its case at inquiry that the first decision was wrong on this issue, with which contention the Claimants (and FHDC) disagreed, as did the Second Inspector. But despite that, it received no mention or consideration at all in the Decision Letter.”

How wasteful for such an important decision to fall at two basic hurdles – hardly Brecher’s Brook, were they? A single careful sentence in each case would in my view have saved the decision letter. 
Why did the Secretary of State’s decision take so long?


Call-in in this case led to a delay of over two years before his decision was received and the re-determination process will now add significantly to that delay, at no-one’s cost save for the Earl of Derby and indeed those in housing need. 
Gilbart J gives this explanation for the delays that occurred after the inspector’s report was received by the Secretary of State on 9 July 2015:
“About four months after the inquiry had finished the [Newmarket Horsemen’s Group] elected to make further representations in September 2015, as did the local member of Parliament the Rt Hon Matthew Hancock MP. The SSCLG circulated them for comment at the end of October 2015. He then circulated the comments he had received.

In February 2016, the Planning Consultants for the Claimant Lord Derby made representations, which were also circulated for comment. The responses received were also circulated. In April 2016, the SSCLG circulated the representations he had received, and also invited comment on the then recent Court of Appeal decision in Suffolk Coastal District Council v Hopkins Homes Ltd & Anor [2016] EWCA Civ 168, circulating the further responses on 5th May 2016.”

So we can see that the problem comes down to a combination of a slow decision-making process and the opportunities that gives third parties to seek to bolster their case with post-inquiry representations, relying on the inevitability of changing circumstances over time; indeed, the longer the decision-making takes, clearly the more vulnerable it is to such interventions. No doubt, the ministerial changes that followed the June 2016 referendum were another factor but my basic principle still holds, in my view. 

It may be said that the Secretary of State needs to be allowed sufficient time to make a considered decision. But the outcome of the challenge demonstrates that time does not ensure quality of outcome. A study as to what was happening week by week in relation to the decision, from July 2015 to August 2016 would surely be instructive. 
What is the role in practice of lobbying and political pressure in ministerial decision-making?

The principles to be applied by the Secretary of State in deciding to call in an application for his own determination have always been left extremely flexible. As summarised in a helpful July 2016 House of Commons library briefing paper on calling in planning applications , the 1999 ‘Caborn principles’ still apply:

“Such cases may include, for example, those which in his opinion: 

* may conflict with national policies on important matters; 


* [may have significant long-term impact on economic growth and meeting housing needs across a wider area than a single local authority]; 


* could have significant effects beyond their immediate locality; 


* give rise to substantial cross-boundary or national controversy; 


* raise significant architectural and urban design issues; or 
• may involve the interests of national security or of foreign Governments. 

However each case will continue to be considered on its individual merits “. 

The list of recent call-in decisions is a pretty long one.

A decision to call in or not to call in an application is barely justiciable in practice (as long as properly reasoned to a basic extent) given the breadth of the criteria. 
In this case the reasons stated in the inspector’s report as to why the Secretary of State had called in the application (for a relatively limited amount of development, against the background of an emerging supportive local development plan policy) were apparently:
“3.1  The proposal may have significant long-term impact on economic growth and meeting housing needs.

3.2  The proposal could have significant effects beyond its immediate locality.

…which tell us nothing.  
This obviously leads to speculation, however ill-founded. The Independent for instance inevitably ran a story, “Tory minister lines up with racing royalty against new homes”  on 16 August 2014. 

The political pressure being applied can surely not be doubted however. Recall as well that post-inquiry representations were being made against the scheme by the local MP,  Matthew Hancock. 
Even when these representations are made openly, one worries as to the further politicisation of this quasi-judicial process. But often there is suspicion that there are informal as well as formal attempts to influence ministerial decisions. The judiciary has recently of course in Broadview Energy Developments Limited v Secretary of State  (Court of Appeal, 22 June 2016) deprecated informal lobbying attempts by MPs, in that case Andrea Leadsom MP’s attempts to stop a wind farm scheme, with a conversation in the Commons tea-room and numerous emails from her to the minister, including one referring to her “badgering [him] in the lobby”. Longmore LJ in that case indicated that he “would not endorse that part of the judge’s judgment [at first instance] in which he said that lobbying of Ministers by MPs was part and parcel of the representative role of a constituency MP with its implication that such lobbying was permissible even when the Minister is making a quasi-judicial decision in relation to a controversial planning application. MPs should not, with respect, be in any different position from other interested parties.”

We have seen the influence that individual MPs can bring to bear on ministers, with MP for Sutton Coldfield, Andrew Mitchell MP, having brought about the Secretary of State’s holding direction (now lifted) in relation to the Birmingham development plan, as a result of his concerns as to proposed green belt housing allocations in his consistency. 

It may be said that planning cannot be separated from politics but it is depressing to see. It was also eyeopening to see that of the seven decisions issued by the Secretary of State in his last day before purdah, with the parties suddenly in pre-election mode, six were to refuse planning permission. When the decision as to whether a major scheme goes ahead is not to be taken at local level, with the promise of a quasi-judicial assessment, how do we ensure that the role of the inspector is respected: the careful evidence taking and testing at inquiry and neutral evaluation of that evidence as against the statutory criteria? Our role becomes that of guessers as to how the politics, against the deployed legal tactics on all sides, will play out.

This is how the next Secretary of State could make a difference: fewer call ins and fewer recovered decisions, but clearer guidance as well as renewed attempts to ensure that up to date local plans are in place. But what are the odds?
Simon Ricketts 13.5.17
Personal views, et cetera

NPPF Paras 49 & 14: So What Is The Supreme Court Really Saying?

The Supreme Court’s judgment in Suffolk Coastal District Council v Hopkins Homes and Richborough Estates v Cheshire East Borough Council, handed down on 10 May 2017, has been keenly anticipated but what does it mean for the development industry?
 The issue

 The issue at stake is subtle but crucial for promoters of residential development in areas that cannot show five years’ supply of deliverable housing sites. In such circumstances, paragraph 49 of the NPPF advises that “[r]elevant policies for the supply of housing should not be considered up-to-date” meaning that what is called the “tilted balance” in the second part of paragraph 14 applies: planning permission should be granted 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”.

 Footnote 9 of the NPPF gives examples of “specific policies”, such as green belt policies or policies relating to particular environmental designations.

 There have been various attempts by the courts to resolve what the phrase “relevant policies for the supply of housing” actually means:

* Should it be given a narrow interpretation, limiting it to policies that deal with the quantum and distribution of new housing, or a wider interpretation, including policies whose effect is to restrict housing development in certain parts of the authority’s area, for example gaps between settlements or land subject to particular landscape designations?

* Once those “relevant policies” have been identified, are they to be given limited weight, or no weight?

 The two cases

The Supreme Court (as did the Court of Appeal previously) had before it two separate cases raising these issues.

The Cheshire East case had first come before Lang J in the High Court. Richborough Estates had appealed against Cheshire East Borough Council’s non-determination of its planning application for 170 (later reduced to 146) homes between Willaston and Crewe. The inspector allowed the appeal. He concluded that the council was unable to demonstrate five years’ housing land supply and that policies in relation to “open countryside”, “green gap” and “housing in the open countryside” were relevant policies for the supply of housing to be given reduced weight by virtue of paragraph 49. Lang J quashed the decision, on the basis that the inspector had erred in treating the “green gap” policy as subject to paragraph 49.
 The Suffolk Coastal case had first come before Supperstone J in the High Court. Suffolk Coastal District Council had refused planning permission for a development of 26 houses in Yoxford. The developer, Hopkins Homes, had appealed and the inspector dismissed the appeal. Notwithstanding a relatively up to date local plan, the inspector had found that it was “very unlikely that a five years’ supply of housing land could now be demonstrated”. He considered that none of the policies in the plan relating to the boundary of settlements, landscape, townscape, settlement hierarchy and the character of key and local service centres were “relevant policies for the supply of housing”. He also found that the proposal would have an unacceptable effect on historic parkland. Supperstone J ruled that the inspector had erred in thinking that paragraph 49 only applied to “policies dealing with the positive provision of housing” and also considered he had failed properly to assess the significance or otherwise of the historic parkland as a non-designated heritage asset.

 The Court of Appeal

Both cases came before the Court of Appeal in January 2016 at a conjoined hearing. Lindblom LJ gave the judgment  of the court on 17 March 2016 and found for the developers in both cases. He gave the phrase in paragraph 49 the “wider” interpretation, construing the words as meaning relevant policies “affecting the supply of housing”. He considered that it was then for the decision maker to determine the weight that should be applied to these policies, deemed out of date.

 The Supreme Court

 The Supreme Court only hears cases that raise points of law of general public importance and this was the first time that issues concerning the NPPF had come before it, Sullivan LJ having granted permission on 1 May 2016. The case was heard by five Supreme Court justices, Lord Carnwath, Lord Neuberger, Lord Clarke, Lord Hodge and Lord Gill, at a hearing on 22 and 23 February 2017. Lord Carnwath gave the lead judgment for all of the justices save for Lord Gill who gave a separate judgment. 

Lord Carnwath and Lord Gill are the two justices most familiar with planning law south and north, respectively, of the border. Lord Gill indeed has been editor of the Scottish Planning Encyclopedia. This was his last case before retirement. His separate judgment provides a wider commentary on the proper role of the planning system in delivering sufficient housing, alongside that of Lord Carnwath, himself a former leading advocate at the planning bar. Carnwath, Gill, Sullivan, Lindblom: these are judges who understand our subject area and its particular complexities. 
As set out by Lord Carnwath at the beginning of his judgment, the appeals provided the opportunity for the court “not only to consider the narrow issues of interpretation of para 49, but to look more broadly at issues concerning the legal status of the NPPF and its relationship with the statutory development plan.”
 The following points may be of particular interest:

 Legal status of the NPPF

 There was some debate at the hearing as to the legal status of the (non-statutory) NPPF and as to the source of the Secretary of State’s power to issue national policy guidance as to the determination of applications and appeals, which could have led the court in an unanticipated direction. However’ despite the lack of any statutory basis (in relation to the determination of applications and appeals, as opposed to his role in relation to plan-making), the court pragmatically held that he did indeed have the power, which arose “expressly or by implication, from the planning Acts which give him overall responsibility for oversight of the planning system.” (Lord Carnwath, paragraph 19)

 Interpretation of the NPPF

 The court stressed that it is important not to overstate the scope of the Secretary of State’s policy-making role. The NPPF is no more than “guidance” and is no more than a “material consideration” for the purposes of section 70(2) of the 1990 Act: “It cannot, and does not purport to, displace the primacy given by the statute and policy to the statutory development plan. It must be exercised consistently with, and not so as to displace or distort, the statutory scheme”. (Lord Carnwath, paragraph 21)

 The distinction between interpreting the meaning of words (a matter for the courts) and the application of guidance (exclusively a matter for the planning authority and inspectors) is stressed in Lord Gill’s separate judgment.

 The interaction of law and policy

The Supreme Court had previously determined in Tesco Stores Limited v Dundee City Council  (2012) that “policy statements should be interpreted objectively in accordance with the language used, read as always in its proper context”. This has led to concerns (expressed by counsel appearing in these proceedings)  “about the over-legalisation of the planning process, as illustrated by the proliferation of case law on paragraph 49 itself…This is particularly unfortunate for what was intended as a simplification of national policy guidance, designed for the lay reader”. (Lord Carnwath, paragraph 23).

 The court made it clear that “it is important that the role of the court is not overstated”. There was a specific development plan policy under consideration in Tesco and “some policies in the development plan may be expressed in much broader terms, and may not require, nor lend themselves to, the same level of legal analysis”. (Lord Carnwath, paragraph 24). “It must be remembered that, whether in a development plan or in a non-statutory statement such as the NPPF, these are statements of policy, not statutory texts, and must be read in that light…Furthermore, the courts should respect the expertise of the specialist planning inspectors and start at least from the presumption that they will have understood the policy framework correctly” and the courts have “cautioned against undue intervention” in policy judgments within specialist tribunals’ areas of competence. (Lord Carnwath, paragraph 25). Applicants for judicial review should “distinguish clearly between issues of interpretation of policy, appropriate for judicial analysis, and issues of judgement in the application of that policy.” (Lord Carnwath, paragraph 26).

 The meaning of NPPF paragraph 14

 The court drew the analogy with a policy for the supply of employment land which may become out of date because of the arrival of a major new source of employment in the area. Whether it is out of date, and what should be the consequence, are matters of planning judgement, including any effect on other related policies, for example for transport. Other competing policies may need to be given less weight, but “again that is a matter of pure planning judgement, not dependent on issues of legal interpretation”. (Lord Carnwath, paragraph 55).  This should also be the approach in relation to housing policies deemed “out of date” under paragraph 49. “It also shows why it is not necessary to label other policies as “out of date” merely in order to determine the weight to be given to them under paragraph 14. As the Court of Appeal recognised, that will remain a matter of judgment for the decision-maker”. (Lord Carnwath, paragraph 56).

 This is vital stuff! It changes what has been the orthodox approach to the paragraph 49/14 conundrum, rendering less important the analysis of which policies are “relevant policies” and bringing us back to a sensible balancing of the issues and allowing the need to secure an adequate supply of housing land to be taken into account in determining the weight to be applied to a policy, even for those policies not specifically  caught by paragraph 49.

 Lord Gill’s separate judgment stresses the importance that the NPPF places on boosting the supply of housing. “The message to planning authorities is unmistakeable”. (Lord Gill, paragraph 77). He refers to “the futility of authorities’ relying in development plans on the allocation of sites that have no realistic prospect of being developed within the five year period”. (paragraph 78).

 In passing it should be noted that Lord Carnwath and Lord Gill both read into the footnote 9 examples of protective designations in the NPPF, references to the related development plan policies. Lord Gill notes that the “rigid enforcement of such policies may prevent a planning authority from meeting its requirement to provide a five-years supply” (paragraph 79).

 The meaning of NPPF paragraph 49

 The meaning of “relevant policies for the supply of housing” on this analysis becomes less important. The court preferred the “narrow” interpretation, namely “housing supply policies”. “However, this should not be seen as leading, as the lower courts seem to have thought, to the need for a legalistic exercise to decide whether individual policies do or do not come within that expression.” If there is a failure to provide for a five year housing land supply “it matters not whether the failure is because of the inadequacies of the policies specifically concerned with housing provision, or because of the overly-restrictive nature of other non-housing policies.” (Lord Carnwath, paragraph 59). The shortfall is enough to trigger the “tilted balance”.

 Lord Gill puts it like this: “If a planning authority that was in default of the requirement of a five-years supply were to continue to apply its environmental and amenity policies with full rigour, the objective of the Framework could be frustrated”. (paragraph 83).

 Application of the principles to the cases

 On this basis, the inspector was wrong to adopt a wider interpretation to the policies at issue in the Cheshire East case. However, “that did not detract materially from the force of his reasoning…He was clearly entitled to conclude that the weight to be given to the restrictive policies was reduced to the extent that they derived from “settlement boundaries that in turn reflect out-of-date housing requirements”. The permission was upheld.

 On this basis, the inspector in the Suffolk Coastal case had embarked on an “inappropriate and unnecessary” exercise in distinguishing between policies which affected the supply of housing and those which did not. He should not have given the weight that he did to the settlement boundary policy  given that it was “to an extent at least, no more than the counterpart of the housing policies.” The decision to dismiss the appeal was quashed and will need to be re-determined.

 Concluding thoughts

 This is the highest court in the land telling us to be less legalistic about the way we frame our arguments as to the application of national and local policies to development proposals. The exercise is not so much a close technical examination as to whether policies are “relevant policies” for the purposes of paragraph 49 but a weighing up of the consequences of a housing supply deficit against policies which are restricting that supply. In the Cheshire East case it is noteworthy that the court considered that it was right that the green gap policy was given less weight – not because it was a paragraph 49 policy (they found that it was not) but because it reflected out-of-date housing requirements. 

We have all perhaps been guilty, spurred on particularly by the Supreme Court itself in Tesco v Dundee, of seeking too often to reduce matters of planning judgment to narrow points of legal interpretation. It is a habit we need to break. 
The court stressed the expert role of inspectors. Of course not all decisions are taken by inspectors. Is the same latitude to be given to local planning authorities’ decisions, whether given on or against officers’ recommendations, or to those of the Secretary of State? The point is unaddressed, given that the only two situations before the court were decisions taken by inspectors. 
If the advice of the court leads to fewer judicial reviews and statutory challenges, that is surely to be welcomed.  
The previous Government has of course been consulting on potential revisions to the NPPF. I would suggest that the new Government reflects on the approach that it should take in the light of this judgment. The amendments that the Government had proposed to paragraph 14 may not give rise to undue concern but shouldn’t more thought be given to whether it is right or not further to complicate paragraph 49 with reference to a three years’ supply safety net where a neighbourhood plan is in place containing defined housing policies, as proposed in the December 2016 written ministerial statement? Isn’t this precisely the over-prescriptive approach being deprecated by the court – and one driven perhaps by a concern that communities were seeing local designations in some way “switched off” or automatically being given less weight through being treated as “relevant policies”? This should no longer be feared. Instead, a sensible balancing exercise will need to be undertaken. 
Lastly, the relationship, in the statutory presumption, as between the adopted development plan and other material considerations, has been sought by some judges to be rigidly applied, in a way which does not sit well with this ruling. I am thinking particularly of Green J’s judgment in East Staffordshire Borough Council v Secretary of State and Barwood Strategic Land  (22 November 2016) an appeal against which is due to be heard by the Court of Appeal (probably again with Lindblom LJ as the lead judge) on 25 May 2017. It will be fascinating to see this early application of the Supreme Court’s thinking. 
Simon Ricketts 10.5.17
Personal views, et cetera

(Town Legal LLP acted for Richborough Estates in this case. Special personal thanks from me to Christopher Young and James Corbet Burcher, both of No 5 Chambers, and to my colleague Ricardo Gama). 

 

 

 

 

 

 

 

 

 

 

Parliament, Purdah, Planning

The pre- general election “purdah” period starts at midnight tonight (21 April). What this means is set in Cabinet Office guidance published yesterday, 20 April.
The guidance says:

“During the election period, the Government retains its responsibility to govern, and Ministers remain in charge of their departments. Essential business must be carried on. However, it is customary for Ministers to observe discretion in initiating any new action of a continuing or long term character. Decisions on matters of policy on which a new government might be expected to want the opportunity to take a different view from the present government should be postponed until after the election, provided that such postponement would not be detrimental to the national interest or wasteful of public money

So don’t hold your breath for any decision letters to be issued. 
In relation to current consultation processes, the guidance says:

“If a consultation is on-going at the time this guidance comes into effect, it should continue as normal. However, departments should not take any steps during an election period that will compete with parliamentary candidates for the public’s attention. This effectively means a ban on publicity for those consultations that are still in process. 


As these restrictions may be detrimental to a consultation, departments are advised to decide on steps to make up for that deficiency while strictly observing the guidance. That can be done, for example, by: 


– prolonging the consultation period; and


– putting out extra publicity for the consultation after the election in order to revive interest (following consultation with any new Minister).

Some consultations, for instance those aimed solely at professional groups, and that carry no publicity will not have the impact of those where a very public and wide-ranging consultation is required. Departments need, therefore, to take into account the circumstances of each consultation.”

There are currently six DCLG consultation processes which are still open:

* Review of park homes legislation: call for evidence

* Running free: consultation on preserving the free use of public parks

* Banning letting agent fees paid by tenants

* 100% business rates retention: further consultation on the design of the reformed system

* Fixing our broken housing market: consultation

* Planning and affordable housing for Build to Rent

the last two of course being particularly important for us in the housing and planning sector. 

The Department for Transport is currently consulting on its draft Airports National Policy Statement in relation to the expansion of Heathrow and on reforming policy on the design and use of UK airspace.

Surely these consultation processes will all now be extended. Can any of them be said to be “aimed solely at professional groups”?
The Government faces an interesting dilemma in relation to its awaited consultation draft air quality plan. Garnham J had ordered on 21 November 2016 that the draft be published by 24 April 2017 following previous deadline breaches summarised in my 4.11.16 blog post. The announcement of the election and consequent purdah period does not automatically extend that deadline. Will we see a draft by the deadline or will ClientEarth be back before the court?
Notwithstanding purdah, Parliament will continue to sit until 2 May 2017. The outstanding Bills are:
• Bus Services Bill

• Children and Social Work Bill 

• Digital Economy Bill 

• Health Services Supplies Bill

• Higher Education and Research Bill 

• National Citizen Service Bill

• Pension Schemes Bill

• Technical and Further Education Bill

and of course the Neighbourhood Planning Bill, which is at its final stages, with final consideration by the House of Lords on 25 April 2017 of amendments made by the Commons. Whilst technically there is therefore the time available before Parliament dissolves, the BBC website  has an interesting analysis of the practical constraints that there will be on Parliamentary time during this final period. My understanding is that public Bills cannot be held over and so the Bill would fall. 
Finally, as we wait for the parties’ manifestos and various pressure groups compose their letters to Santa, this is a collection of some of the commitments which some Town Legal colleagues would personally like to see (tongue in cheek – what votes in many of these one wonders?). We will be jotting up the scores once the manifestos are published but a more than a 10% convergence would be doing pretty well I suspect…
1. Revised NPPF as previously signalled, but with consultation on final wording.

2. Real sanctions for local planning authorities which continue to delay in preparing plans or which do not plan adequately to meet housing requirements. Statutory duty to make local plans every 10 years. 

3. Review of green belt boundaries in the south east should be obligatory at least every 20 years. Where there are no green belt boundaries fixed because there are no local plans in place , the Secretary of State should appoint PINS to lead a plan making exercise at the expense of the defaulting council with step in rights if the Council wants to come back into the fold.

4. Review of effectiveness of Localism Act 2011 procedures, including neighbourhood plan making.

5. No weakening of environmental protections via Great Repeal Bill.

6. Urgent conclusion to CIL review, with short-term remedial measures, including greater flexibility for local planning authorities and developers in relation to strategic sites.

7. Enabling urban extensions and new settlements of true scale (eg 10,000 to 15,000 homes plus associated infrastructure and development) to proceed by way of NSIP.

8. Introduction of duty to cooperate to apply as between the London Mayor and local planning authorities.

9. Reform of rights to light law to reflect modern realities.

10. Greater flexibility for local authorities to dispose of land for less than best consideration.

11. Require better coordinated forward planning with statutory undertakers and infrastructure providers.

12. General commitment to consultation and piloting prior to legislative changes in relation to planning.

13. Increased resourcing in relation to the planning system so as to achieve better quality, more consistent, more timely and more efficient outcomes.

14. High speed Broadband and electric car charging should be a standard requirement.

15. Clarity on approach to viability and review mechanisms.

16. A more stable system with no more changes for the next two years at least (save for these ones!)

Back to the day job…

Simon Ricketts 21 April 2017

Personal views, et cetera

Definitely Maybe: Defining Affordable Housing

Affordable housing is defined in the NPPF as follows:
The Government carried out a consultation  in December 2015, proposing that the definition be expanded so as to include

– low cost ownership models, which “would include products that are analogous to low cost market housing or intermediate rent, such as discount market sales or innovative rent to buy housing”
– starter homes (of which more later). 

Two further changes were proposed in the February 2017 response to consultation:  
* introduction of a household income eligibility cap of £80,000 (£90,000 for London) on starter homes. 

* introduction of affordable private rented housing

The Government is accordingly consulting until 2 May 2017 on the following replacement definition for the NPPF (long isn’t it?):


Starter homes

There were howls of anguish at the starter homes initiative as first unveiled by the Government, the key elements of which were (as set out in chapter 1 of the Housing and Planning Act 2016 and March 2016 technical consultation):
– a legal requirement that 20% of new homes in developments should be starter homes, ie
– to be sold at a discount of at least 20% to open market value to first time buyers aged under 40. 

– Price cap of £250,000 (£450,000 in London)

– The restriction should last for a defined number of years, the first suggestion being five years, replaced with the concept of a tapered restriction to potentially eight years

– Commuted sums in lieu of on site provision for specified categories of development, eg build to rent

The obvious consequence would have been a significant reduction in the potential for schemes to include a meaningful proportion of traditional forms of affordable housing. 
After all of last year’s battles over the Bill, it is now plain from the Government’s response to the technical consultation, that the starter home concept is now much watered down:
– There will be no statutory requirement on local planning authorities to secure starter homes, just a policy requirement in the NPPF, which is to be amended accordingly. 

– Rather than requiring that 20% of new homes be starter homes, the requirement will be that 10% of new homes will be “affordable housing home ownership products” so could include shared equity or indeed low cost home ownership. 

– maximum eligible household income of £80,000 a year or less (or £90,000 a year or less in Greater London 

– 15 year restriction

– No cash buyers, evidence of mortgage of at least 25% loan to value

– It will only be applicable to schemes of ten units or more (or on sites of more than 0.5h). 

There will be a transitional period of 18 months (to August 2018) rather than the initially intended 6 to 12 months. 
Whilst we now have a more workable arrangement, plainly all that Parliamentary work was a complete waste of time. There was no need for chapter 1 of the 2016 Act – the current proposals can be delivered without any need for legislation. 
We will need to see the degree to which LPAs embrace the starter homes concept in reviewing their local plans. We will also need to be wary that we may lose the only benefit of a national standardised approach, ie the hope that there might be a standard set of section 106 clauses defining the operation of the mechanism (which will not be straightforward – see my 21.6.16 blog post Valuing Starter Homes). 
Affordable Private Rent
One of the documents accompanying the Housing White Paper was a consultation paper: Planning and affordable housing for build to rent.
The term Affordable Private Rent is now used for what we have all previously been calling Discounted Market Rent. Changes to the NPPF are proposed (subject to consultation) advising LPAs to consider asking for Affordable Private Rent in place of other forms of affordable housing in Build to Rent schemes, comprising a minimum of 20% of the homes in the development, at a minimum of 20% discount to local market rent (excluding use of comparables within the scheme itself), provided in perpetuity. The Affordable Private Rent housing would be tenure blind and representative of the development in terms of numbers of bedrooms. Eligible income bands are to be negotiated between developer and LPA. Developers will be able to offer alternative approaches where appropriate (eg greater discount, fewer discounted homes – or different tenures). “Build to Rent” will be defined and it is acknowledged that developers should be able to cease to operate the property as Build To Rent subject to payment of a commuted sum reflecting the affordable housing requirement that would otherwise have been applicable. 
There is also recognition in the consultation paper that factors in London may be different, allowing for an amended response and recognition of Mayor of London’s November 2016 affordable housing and viability draft SPG.
There will be a transitional period of 6 months from the time that the NPPF changes are made. The possibility is held out of model section 106 clauses, which would help minimise unnecessary delays. 

The recognition that Build to Rent is a model that doesn’t sit well with ‘ownership’ forms of affordable housing is what that industry (largely self-defining through scale of scheme and extent of professional management) has been lobbying for. Nor is there any more any reference to off-site starter home provision.
Wider implications
The extensions to the meaning of ‘affordable housing’ are all in the direction of private sector provision. The definition is now very wide indeed. Battles lie ahead once LPAs consider the implications of the changes for their local plan affordable housing requirements against a backdrop of, for example:
– reduced levels of socially rented housing over the last six years or so following the introduction of affordable rent (minimum discount of at least 20% to market rent), vividly demonstrated in the Government’s affordable housing statistics published on 2 March 2017:

– restrictions on housing benefit, for instance ineligibility of 18-21 year olds from 1 April 2017 under the Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017  made on 2 March 2017. 
– the continuing, onerous, requirement on registered providers since 2015 to reduce rents by 1% a year for four years resulting in a 12% reduction in average rents by 2020-21. 
– Loss of stock via the Housing and Planning Act 2016’s voluntary right to buy scheme in relation to registered providers and the Act’s provisions requiring local authorities to sell vacant higher value housing (the Government’s most recent statistics on sales date from October 2016 but already show significant numbers). 
A debate took place in the House of Lords this week, on 2 March 2017, on the Economic Affairs Committee’s July 2016 report, Building More Homes  in the context of the Housing White Paper. Lord Young closed for the Government saying many of the right things but, after such a background of continuing changes (I believe it was Adam Challis at JLL who recently counted 180 housing initiatives since 2010), with further uncertainty for at least 18 months, surely we now just need to get on with the matter in hand – ensuring that there are enough homes to meet all social needs, whilst not killing the golden goose without which this will simply not happen under any foreseeable system, ie profitable development by the private sector.
Simon Ricketts 4.3.17
Personal views, et cetera

From The White Paper Mountain, What Do We See?

After so long we have reached the top of the mountain: the white paper and accompanying documents have all been published today, 7 February 2017. However, now we see a series of further peaks on the horizon. 
A good way into the white paper itself, Fixing Our Broken Housing Market, is to start at the back end. From page 72 you have the detailed proposals listed, including a series of proposed changes to the NPPF and other policies which are now the subject of a consultation process from today until 2 May 2017. The consultation focuses on a series of 38 questions but some of the questions are potentially very wide-ranging. Further consultation is proposed on various matters, including 
– housing requirements of older people and the disabled

– Increasing local authorities’ flexibility to dispose of land at less than best consideration and related powers

– Potentially increasing fees for planning appeals (up to a maximum of £2,000 for the largest schemes, recoverable if the appeal is allowed)

– Changes to section 106 processes (with further consideration being given to dispute resolution “in the context of longer term reform”)

– Requiring housebuilders to provide aggregate information on build-out rates and, for large-scale sites, as to the relevance of the applicant’s track record of delivering similar schemes

– Encouragement of use of CPO powers to support the build out of stalled sites. 

There is a supplementary consultation paper on planning and affordable housing for build to rent  containing a further 26 questions, with a consultation deadline of 1 May 2017.
There are responses to previous consultation papers and reports:
– Summary of responses to the technical consultation on implementation of planning changes, consultation on upward extensions and Rural Planning Review Call for Evidence  (including a u-turn on the previous idea of an upwards extensions permitted development right in London, now to be addressed by policy). 
– Government response to the Communities and Local Government Select Committee inquiry into the report of the Local Plans Expert Group 
There is plenty to get to grips with, for example:
– the housing delivery test and new methodology for assessing objectively assessed need

– an understandable focus on whether the applicant will proceed to build out any permission and at what rate, although with a worrying reduction of the default time limit for permissions from three to two years

– Homes and Communities Agency to become “Homes England”. 

It is also reassuring to see the Government applying real focus to build to rent, reducing its emphasis on starter homes – and also reducing its reliance on permitted development rights. 

However, it is surprising how much still remains unresolved. We will apparently have a revised NPPF “later this year” but for much else the start date looks to be April 2018, for example a widened affordable housing definition including watered-down starter homes proposals (no longer a statutory requirement and with reference to a policy target of a minimum of 10% “affordable housing ownership units” rather than the requirement of 20% starter homes previously proposed) and a new methodology for assessing five year housing land supply. 

Liz Peace’s CIL review team’s review of CIL: “A new approach to developer contributions”  (October 2016 but only now published) remains untackled. The Government’s response will be announced at the time of the Autumn Budget 2017. 

Decision-makers will need to grapple very quickly with the question as to the weight they should give to the white paper as a material consideration, given the Government’s clear policy direction now on a range of issues. 


Simon Ricketts, 7.2.17
Personal views, et cetera

What Happened To The Beautiful Jigsaw? Government Policy v The Plan-Led System

“If we are doing things in parallel, it does mean when we get towards the summer we can make sure these things are knitting together properly and actually bring them together, with those pieces of the jigsaw starting to come together as one whole piece—hopefully, one whole beautiful piece as well” – Brandon Lewis, then minister for housing and planning, 24 February 2016, in evidence to the Commons CLG Select Committee – responding to concerns as to the various changes to the planning system then (and still) underway, including proposed changes to the NPPF, LPEG review and the Housing and Planning Bill (now an Act but still inchoate). (And he was referring to summer 2016…)
Of course a few other things happened to knock summer 2016 off course. But still we wait for the full picture and hence the growing frustration over continued delays to the Housing White Paper and speculation as to its contents.
“OK, that’s politics”, we may say, but is there a more fundamental, longterm, problem to be tackled?
“[M]inisters cannot frustrate the purpose of a statute or a statutory provision, for example by emptying it of content or preventing its effectual operation” (Supreme Court in R (Miller) v Secretary of State for Exiting the European Union 24 January 2017, para 51). 
On reading this, it struck me that there is a logical disconnect at the heart of the modern planning system. Section 38(6) of the Planning and Compulsory Purchase Act 2004 requires that decisions be taken in accordance with the statutory development plan “unless material considerations indicate otherwise”. However, the Government’s non-statutory NPPF, despite an amorphous status as a “material consideration”, somehow often ends up trumping the statutory plan (for example – currently – by way of para 49 deeming policies for the supply of housing to be regarded as out of date in defined circumstances, triggering the para 14 presumption and – under the changes consulted upon last year – by way of the proposed housing delivery test). From where does the NPPF gain its authority in our statutory plan-led system? What is to prevent an LPA from deciding to give its policies little weight and how does the resultant uncertainty help anyone?
The Court of Appeal in Suffolk Coastal District Council v Hopkins Homes, Richborough Estates v Cheshire East Borough Council  (Court of Appeal, 16 March 2016) set out the position as follows:
“The NPPF is a policy document. It ought not to be treated as if it had the force of statute. It does not, and could not, displace the statutory “presumption in favour of the development plan”, as Lord Hope described it in City of Edinburgh Council v Secretary of State for Scotland [1997] 1 W.L.R. 1447 at 1450B-G). Under section 70(2) of the 1990 Act and section 38(6) of the 2004 Act, government policy in the NPPF is a material consideration external to the development plan. Policies in the NPPF, including those relating to the “presumption in favour of sustainable development”, do not modify the statutory framework for the making of decisions on applications for planning permission. They operate within that framework – as the NPPF itself acknowledges, for example, in paragraph 12 (see paragraph 12 above). It is for the decision-maker to decide what weight should be given to NPPF policies in so far as they are relevant to the proposal. Because this is government policy, it is likely always to merit significant weight. But the court will not intervene unless the weight given to it by the decision-maker can be said to be unreasonable in the Wednesbury sense”
Whilst the statutory role of government guidance is clear in relation to plan-making (section 19 of the Planning and Compulsory Purchase Act 2004 provides that “in preparing a local development document the local planning authority must have regard to…national policies and advice contained in guidance issued by the Secretary of State”) there is no such statutory signposting in relation to decision-making. 
It didn’t have to be this way. Consideration was indeed given to giving the NPPF statutory status as the Localism Act went through Parliament. The then minister of state for decentralisation Greg Clark stated in Public Bill Committee on 15 February 2011:
“There are some suggestions that a reference to the significance of the NPPF would be helpful. Against that, however, I have heard some concerns in our discussions that link to the points made by the right hon. Gentleman the Member for Greenwich and Woolwich about not taking a year zero approach to things and completely designing the system from scratch. One of the features of the present regime with which the right hon. Gentleman is familiar is the importance of section 38(6) of the Planning and Compulsory Purchase Act 2004. That provision establishes the primacy of the development plan, which obviously needs to be consistent with national policy. If we were to establish in the Bill a new primacy for national policy that is different from how we have managed in recent decades, I would want to be cautious that we did not introduce something, albeit with the best of intentions, that changed the accepted understanding of the importance of the primacy of the development plan and that, in effect, interferes with section 38(6) without good purpose. If there is a balance of advantage in the approach, I think we can contemplate it, but it behoves us to reflect carefully on the representations that have been made, which I undertake to do.

Scotland’s National Planning Framework has statutory effect pursuant to section 1 of the Planning etc (Scotland) Act 2006
In relation to infrastructure, we of course have a statutory regime of national policy statements  to set the framework for decisions in relation to development consent orders, with ten NPSs having been prepared so far pursuant to section 5 of the Planning Act 2008.
In contrast to these regimes, the NPPF can be amended with little Parliamentary scrutiny. 
The position is even worse in relation to written ministerial statements on planning policy matters, when one recalls, for example:
– Eric Pickles’ 20 May 2010 statement that the then intended abolition of regional strategies was to be a material planning consideration in decision-making, which led to Cala Homes (South) Limited v Secretary of State  (Court of Appeal, 27 May 2011). The court concluded that “…it would not be safe for the Court to assume that at this stage there are no circumstances in which any decision-maker could rationally give some weight to the proposed abolition of regional strategies. In view of the uncertainty created by the legal obstacles…[the need for Parliamentary process to be undergone and SEA]… and any decision-maker who does think it appropriate to give some weight to the Government’s proposal when determining an application or an appeal would be well-advised to give very clear and cogent reasons for reaching that conclusion, but that does not mean that there could be no case whatsoever in which any decision-maker might be able to give such reasons.

– Eric Pickles’ 28 November 2014 statement introducing the vacant building credit and small sites affordable housing threshold, which led to West Berkshire Council v Secretary of State  (Court of Appeal, 11 May 2016). Despite the absolute wording of the statement, it was interpreted by the court as necessarily admitting of exceptions, leading now to a mess of conflicting appeal decisions by inspectors, well documented by Planning magazine (27 January 2017 issue).
– Gavin Barwell’s 12 December 2016 statement amending (without prior consultation) the five year housing land supply threshold in para 49 of the NPPF, which has recently led to a judicial review being brought by a group of no fewer than 25 housebuilders and developers. 
Brandon Lewis’ statement at the outset of this post is quoted in the Commons CLG Select Committee’s review of consultation on national planning policy  published on 1 April 2016. The Committee responded to his optimism as follows:
“We welcome the Minister’s indication that any changes to the NPPF resulting from this consultation will be made during summer 2016, and that he intends to draw together the outcomes of the consultation with those of the other changes affecting the sector“. 

The Committee’s formal recommendations included: 

“As a priority the Department should publish clear timescales for the next steps for this consultation, including timescales for the Government’s response, implementation, and suitable transitional arrangements. If the changes to the NPPF are delayed beyond summer 2016, we expect the Minister to write to us to explain the reasons and provide updated timescales”

” As a matter of principle, we believe that when changes are made to the wording of a key policy framework such as the NPPF, there should be a two-stage consultation process: first on the overall policy, and subsequently on the precise wording which will give effect to the change. If there is no further consultation on the specific wording of the consultation proposals, it is essential that the Department listens carefully to concerns about ambiguity or lack of clarity in the revised NPPF, and provides clarification where required”

“To ensure that proper consideration is given to the impact of changes resulting from this consultation, and from other developments in the housing and planning sector, the Department should carry out a comprehensive review of the operation of the NPPF before the end of this Parliament. The review must include sufficient opportunity for appropriate consultation with stakeholders, and should follow a two-stage approach to consulting, first on general principles, and subsequently on precise wording.”
All sensible, but what a waste of energy. Nine months after the report there has been no Government response!

How are decision-makers meant to balance non-statutory, unstructured interventions from ministers with the outcomes pointed to by statutory planning policies? This surely a very difficult task for decision-makers and with the constant risk of unwelcome surprises for those at the sharp end. Personally, I would go further than the Select Committee’s recommendations and instil basic, legally binding, procedural discipline into ministers’ approach to policy making, given the risk that the statutory planning system is otherwise frustrated, emptied of content or prevented from effective operation (to use the words of the Supreme Court). 
Simon Ricketts 28.1.17
Personal views, et cetera