Court of Appeal finds Government policy on small developments to be lawful

Charles Felgate, Geldards

A judgment from the Court of Appeal has found that the UK Government acted lawfully in introducing a policy which excludes small developments from the application of affordable housing levies.

The policy had been announced by the Secretary of State for Communities and Local Government on 28 November 2014 in a Written Ministerial Statement. It was included in amended National Planning Practice Guidance. Key features of the policy were:

  • Developments of 10 units or 1000 sq m or less (including annexes and extensions) would be excluded from affordable housing levies and tariff based contributions.
  • A lower threshold would apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty (as defined in section 157 of the Housing Act 1985), with developments of 5 units or less to be excluded from affordable housing levies and tariff based contributions. Development of between 6 and 10 units would be subject to a commuted sum payable on or after completion.
  • Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a credit, equivalent to the floorspace of the vacant building, to be set against affordable housing contributions.

Judicial review proceedings were brought by West Berkshire District Council and Reading Borough Council taken and in July 2015, in a judgment from the Administrative Court, the Secretary of State’s Written Ministerial Statement and amendments to policy were be found unlawful. In the case of Secretary of State for Communities and Local Government v West Berkshire District Council and Reading Borough Council [2016] EWCA Civ 441, the Court of Appeal reversed that decision and as such the Written Ministerial Statement and amended National Planning Practice Guidance will stand.

The judgment of the Administrative Court in 2015 had upheld the challenge to the Written Ministerial Statement on four grounds:

  1. It was inconsistent with the statutory planning regime.
  2. The Secretary of State had failed to take into account necessary material considerations.
  3. The Secretary of State’s consultation upon the proposals for the policy was legally inadequate.
  4. The Secretary of State had failed properly to assess the impact of the proposals upon persons with protected characteristics.

The Court of Appeal allowed the appeal against the findings on all four grounds. The Court of Appeal found:

  1. The policy stated in the Written Ministerial Statement was not to be faulted on the ground that it did not use language which indicated that it was not to be applied in a blanket fashion or that its place in the statutory scheme of things was as a material consideration for the purposes of section 38(6) of the Planning and Compulsory Purchase Act 2004 and section 70(2) of the Town and Country Planning Act 1990. It did not countermand or frustrate the effective operation of those provisions.
  2. The planning legislation established a framework for the making of planning decisions but it did not lay down merits criteria for planning policy or establish what the policy-maker should or should not regard as relevant to the exercise of policy-making. In those circumstances the Secretary of State was not obliged to go further than he did into specific considerations identified by the judge in the Administrative Court. In consequence, the Secretary of State was not to be faulted for a failure to have regard to relevant considerations in formulating the policy set out in the Written Ministerial Statement.
  3. The consultation had been fair and the consideration of responses to it had been adequate.
  4. The Equality Statement produced in respect of the policy was adequate to comply with the requirements of the public sector equality duty in section 149 of the Equality Act 2010. It was acknowledged that the Secretary of State had failed to consider the requirements of the public sector equality duty before issuing the Written Ministerial Statement. However, the Court of Appeal regarded this as a consideration of a disciplinary nature and decided that considerations of a purely disciplinary nature were insufficient to warrant the quashing of the decision.

Although the judgment of the Court of Appeal found the UK Government’s policy to be lawful, it also made it clear that the policy is only one matter which will need to be considered when decisions are made on applications for planning permission and on preparation of local development plans. Comments made in the judgment provide some useful insight as to how a local authority might approach a position of any inconsistency between a development plan of the local authority and the national policy.

Paragraph 26 of the Court of Appeal judgment is particularly illuminating. That quoted the following points which were submitted on behalf of the Secretary of State in the Administrative Court:

“As a matter of law the new national policy is only one of the matters which has to be considered under section 70(2) of TCPA 1990 and section 38(6) of PCPA 2004 when determining planning applications or formulating local plan policies (section 19(2) of PCPA 2004), albeit it is a matter to which the Secretary of State considers ‘very considerable weight should be attached’;

Ministers did not pursue the option of using primary legislation to create the exemptions. Instead the changes were introduced as policy, not binding law;

In the determination of planning applications the effect of the new national policy is that although it would normally be inappropriate to require any affordable housing or social infrastructure contributions on sites below the thresholds stated, local circumstances may justify lower (or no) thresholds as an exception to the national policy. It would then be a matter for the decision-maker to decide how much weight to give to lower thresholds justified by local circumstances as compared with the new national policy;

Likewise if in future an LPA submits for examination local plan policies with thresholds below those in the national policy, the Inspector will consider whether the LPA’s evidence base and local circumstances justify the LPA’s proposed thresholds. If he concludes that they do and the local plan policy is adopted, then more weight will be given to it than to the new national policy in subsequent decisions on planning applications.”

The Court of Appeal accepted this and said that it amounted to no more than a conventional description of the law’s treatment of the Secretary of State’s policy in the decision-making process. It explained how the law required national policy to be applied.

The explanation clearly sets out that there will need to be exceptions when national policy will not be applied because of local circumstances. However, a local authority which intends to depart from the national policy by giving greater weight to a development plan with a different or no threshold for the application of affordable housing levies would need to have good reasons to justify such an approach. One possible reason could be the fact that the evidence base for a local authority’s development plan is recent and has been viability tested. The Secretary of State’s policy cannot therefore be ignored but local authorities may be able to take decisions not to follow it on particular occasions if the circumstances justify this and there is evidence to back this up.

The judgment in this case is also useful because although the points made on behalf of the Secretary of State related to a particular planning policy, the principles are broadly applicable to national policy and decision making generally. The Secretary of State’s acceptance that there could be exceptions to the policy to meet the needs of local circumstances and the Court of Appeal’s acknowledgement that this was how national policy should be applied will be of wider interest to anyone who has to work within any national policy framework. The approach taken in this case reflects an approach which is likely to be taken generally and could provide flexibility which will be helpful to decision makers in allowing them to take account of their local circumstances. The requirements of any particular policy however always needs to be considered on an individual basis and any departure from national policy would need to be justified by good reasons supported by strong evidence