Failing to take account of the up to date local development plan

A recent decision by the Court of Session has quashed a planning appeal refusal determined by the Scottish Ministers for failing to take account of the up to date local development plan.   The case emphasises the importance of monitoring assumptions made as part of the planning process.

An application for planning permission in principle was made for a residential development of 600 units, including affordable housing, commercial space, a public park and a new primary school near Bridge of Allan.

When the application was submitted, Stirling’s Local Development Plan (“LDP”) did not allocate sufficient land for housing  to provide a 5 year supply.  As such, the relevant LDP housing policies would be considered out of date and Scottish Planning Policy (“SPP”) would apply. The SPP provides a presumption in favour of development which contributes to sustainable development as a significant material consideration.

However, the development was proposed on land lying within the North Stirling Green Belt and the LDP contained policies protecting the green belt from development.

The planning officer recommended the application for approval due to the benefit of the development outweighing the effect on the green belt; the SPP favouring sustainable development; the significant weight to be attached to the SPP which outweighed the policies of the LDP; and the impact of the development being mitigated by a proposed Section 75 Agreement and the imposition of planning conditions.

However, the application was refused on 23 March 2016.  The Council determined that the benefits of the development would not outweigh non-compliance with the LDP and the proposed mitigation of the impact of the development on the greenbelt, flooding and transport would not be sufficient.

An appeal was submitted and was called in by the Scottish Ministers and a Reporter was instructed to examine and report on the appeal. During the appeal process, a new LDP was being progressed which sought to provide a sufficient 5 year land supply for housing.  In his report to the Scottish Ministers, the Reporter made certain assumptions about the incoming LDP and stated that:

On the assumption that the proposed replacement development plan should identify sufficient sites, the land supply shortage may be resolved before development commences on site; … and … There is also an expectation that the proposed replacement LDP, currently under examination, will properly address the shortfall before any housing is built on this site if the appeal is allowed.

The Reporter estimated that the number of units which could realistically be provided by the proposed development within the 5 year land supply period would be 175 which was some way short of addressing the 896 unit shortfall.

The Reporter concluded that the development would only address the housing land shortfall in part; the harm to the green belt must be given considerable weight; that this would not be outweighed by the SPP presumption in favour of sustainable development; and to approve the development would be prejudicial to the emerging LDP which would set out the location of sufficient housing land for a 5 year supply.  As such, the Reporter recommended refusal of the appeal.

However, when the LDP was approved for adoption on 3 May 2018 the new LDP still did not provide a sufficient housing land  supply with a shortfall of 169 units. Despite this being brought to the attention of the Scottish Ministers in a report prepared by its officials on 17 May 2018, the Scottish Ministers issued their decision on 18 June 2018 refusing the appeal, stating that they accepted the Reporter’s recommendations and conclusions and adopted them for the purpose of their own decision. 

By doing so, the Scottish Ministers adopted a decision which was based, in part, on a material consideration regarding the emerging LDP to provide sufficient housing land supply which had later proved to be incorrect. 

The applicant appealed the Scottish Ministers’ decision to the Court of Session and Lord Carloway, delivering the opinion of the Court, determined that it was incumbent on the Scottish Ministers, as the decision maker, to take into account all relevant material considerations.  In this instance, the Scottish Ministers in adopting the Reporter’s recommendation, had (1) taken into account a material consideration which had become irrelevant; and (2) failed to take into account a material consideration that the approved emerging LDP did not provide a sufficient housing land supply.  Therefore, the decision to refuse the appeal was quashed. The Court of Session can only review the legal validity of the appeal decision and cannot substitute its own decision.  It therefore falls upon the Scottish Ministers to reconsider the appeal.  They will have to be more careful next time.

Viability – Speed of Delivery Matters

Last year, the High Court in R (McCarthy and Stone Retirement Lifestyles Ltd) v Greater London Authority [2018] EWHC 1202 (Admin) found the Mayor of London’s 2017 Affordable Housing and Viability SPG unlawful in one respect: the SPG sought to require all planning applications that do not provide at least 35% affordable housing to be subject to early and late stage viability reviews (the ‘Viability Tested Route’). 

This, the Court found, is inconsistent with current London Plan Policy 3.12 which only requires further reviews on developments that are ‘likely to take many years to implement‘.  It was therefore not something that the SPG could, as guidance, properly cover.

So what?

Policy H6 of the Draft New London Plan now seeks to convert the SPG’s approach to viability into policy.  The Mayor has therefore been unruffled by the judgment. Although the Draft London Plan is not yet adopted, he has given full weight to the emerging policy. 

The McCarthy and Stone judgment was more circumspect about weight (paragraph 57), noting that only once representations had been considered and the DNLP amended would it have equal weight to guidance.  It would, it was held, be normal at that point for it to have “some” weight. 

London Plan Weightlessness

The Millharbour appeal decision in December bears out the limited weight that the draft policies deserve. The Inspector found that a late stage review was not necessary to make a proposal, offering 16% affordable housing, acceptable in planning terms.

This was a single-phase, mixed-use scheme including two tall buildings and 319 residential units in Tower Hamlets.

The Council agreed with the developer that only 16% affordable housing could be provided, but nonetheless sought to justify a late stage review on two grounds:

  • first, the appellant’s earlier viability assessments suggested 35% and 40% affordable housing could be provided;
  • second, the Draft London Plan applies the Viability Tested Route where the relevant affordable housing threshold is not met.

Rejecting that, the Inspector had ‘no reason to quibble with the [agreed] 16% level‘ and found that:

  • the previous affordable housing offers carried no weight in justifying a late stage review. The Draft London Plan carried only ‘limited weight’;
  •  a late stage review would only be needed (citing McCarthy and Stone) where a scheme ‘took ‘many years’ to implement or build out‘. It was ‘very unlikely this scheme would be left unfinished for any length of time or that it would take many years to complete’. Hence, no late stage review was required.

This appeal decision shows that decision-takers may, at least in the short term, find it harder to rely on policy alone to justify further viability reviews for schemes offering sub-threshold levels of affordable housing. Where policy is being relied on, it is likely to focus minds on the ‘likely to take years to implement’ criterion, imprecise and evidentially problematic though it is.

The decision also suggests that a) speedy delivery (i.e. of smaller, more straightforward schemes) as a matter of policy has the potential to compromise affordable housing, and b) conversely, slower and longer/phased schemes may be subject to higher affordable housing requirements. The Mayor will be concerned that this does not create perverse incentives. In any event, all sides will be keenly watching the examination of Draft Policy H6.

A legitimate expectation to what, exactly?

The Court of Appeal has considered whether the Secretary of State is required to give reasons for deciding not to ‘call in’ a planning application. In R (on the application of Save Britain’s Heritage) v Secretary of State for Communities and Local Government [2018], Save Britain’s Heritage (Save) challenged the lawfulness of the Secretary of State’s (SoS’s) decision under s77 of the Town and Country Planning Act 1990 not to call in an application relating to the ‘Paddington Cube’ development. We consider the court’s findings and its implications.

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This article was first published in Property Law Journal (December 2018/January 2019) and is also available at www.lawjournals.co.uk.

Holiday lets in Edinburgh – has the bubble burst?

Fancy a city break anyone? Who could resist a few days in an iconic European city that also happens to be a UNESCO World Heritage Site?

So, where to stay – one of Edinburgh’s many hotels or perhaps a flat is more appealing? There are lots of options to consider. Interestingly, the concentration of Airbnb’s in Edinburgh is four times greater than in London, Paris or New York, but could three recent enforcement notice appeal decisions (1, 2, 3) point the way towards a clampdown on the operation of Airbnb’s and short term holiday lets in Edinburgh?

The appeals related to three separate properties in the same block located in the heart of the tourist centre and lying in close proximity to Princes Street Gardens and the Castle. All three properties were one bedroom flats, with sofa beds in the living room, thereby allowing occupation by up to 4 adults. In summary, the enforcement notices stated that the flats were being used for short term commercial visitor accommodation, without having obtained planning permission and, accordingly, required the alleged use to cease within two months.

The key here was whether there had been a material change of use from residential flats which had resulted in harm to the amenity of adjoining occupiers. Reference was made in the various submissions to City of Edinburgh Council’s Local Development Plan policy Hou 7 (inappropriate uses in residential areas) and the Council’s non-statutory Guidance for Business. The Guidance provides advice on whether the use of a residential property for short term commercial visitor accommodation requires planning permission and refers to the need for an assessment of (i) the character of the new use and the wider area; (ii) the size of the property; (iii) the pattern of activity associated with the use, including the number of occupants, the period of use, issues of noise, disturbance and parking demand; and (iv) the nature and character of any services provided.

In all three cases, the Scottish Government Reporter refused the appeals having concluded that there had been a material change of use, taking account of the number of arrivals and departures, the likelihood of increased noisy activity late in the evening, increased activity due to cleaning the properties, luggage drop-off in between checking in and out and the increased use of the communal drying area by guests for socialising – all of which would be greater than if the properties were in use by a single household.

Meanwhile, the Green MSP, Andy Wightman, has successfully tabled an amendment to the Planning (Scotland) Bill which would require property owners to obtain planning consent in order to change a main residence into a short-term let property such as an Airbnb. This would only apply to a main residence, rather than second homes and is still to be considered by all MSPs at Stage 3 of the Bill next year.

City of Edinburgh Council believes a licensing regime would be the best way to control short term lets and has asked the Scottish Government to consider introducing this.

So, plenty to consider going forward for owners of holiday lets – maybe book that city break sooner rather than later?

Planning TV: Delivery Challenge – Speeding up build out

The focus on the rate of delivery of housing on sites that have planning permission has sharpened recently. This was  signalled in the Housing White Paper, 2017 and accelerated by the announcement in January 2018 of a Ministry of Housing, Communities and Local Government (MHCLG) review on this matter, chaired by Sir Oliver Letwin MP. Housing delivery has also been a focus of for the Local Government Association.

Planning TV asked a group of planning experts to come up with creative solutions to get housing delivered on a real site in a town in the south of England with a for permission 200 homes with where build out has slowed and in currently stalled with only a handful of homes built over several years – presenting a bit of planning mystery. Lindsey Richards – Homes England, Anna Rose – Planning Advisory Service and Mary Parsons – Places for People share their insights on how to tackle this problem site and speed up build out.

Brought to you by Dentons and Citiesmode it draws on the knowledge of a core panel of experts from across the sector, supplemented with special guests hand picked for their particular expertise. From Greenbelt to Brownfield, national planning policy to local plan-making and everything in between, Dentons Planning TV provides a unique insight into the thoughts of those involved at the sharp end.

Section 203 as a regeneration tool

It has been two years since s203 of the Housing and Planning Act 2016 became operative, replacing s237 of the Town and Country Planning Act 1990. While s203 does not entirely resemble its predecessor, this does not appear to have dampened or affected the development industry’s confidence on the benefits of using the provision, and it continues to be utilised as part of the development process.  We look at the lack of consistent guidance when implementing s203.

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This article was first published in Property Law Journal (November 2018) and is also available at http://www.lawjournals.co.uk/

Consenting New Towns

Development Consent Orders are a great way to draw together the consents necessary for a piece of infrastructure.   As the locally led garden towns movement grows there are siren calls to use the DCO process to help deliver some of the housing that is needed. Could a DCO could be used for a new town or major urban extension?

Building a windfarm and creating a community are very different. Any new town worth its salt will evolve over time – both during initial development and beyond. Having the ability to evolve is crucial.  What we imagine now as the community of the future is, almost inevitably, wrong. People will live differently. They will travel differently.  Education will be delivered differently. Health and well-being will be part of daily life, to prevent the cost of medicine and elderly care becoming a national millstone.  Shopping will have undergone several revolutions. The nature of jobs, and the balance between jobs, homes and social life will probably be unrecognisable. New communities will also need be actively curated. Success will depend as much on the relationships that are created as upon the bricks and mortar. The built form of all communities will have to change, and adapt over time, to reflect these processes.

The present breed of DCOs is probably ill-suited to this type of long-term social engineering. At the moment they suffer from inflexibility.  They work well where the proposal is clear, neat, tidy and fixed – like a windfarm.  New towns are not so neat and tidy.  DCOs to date have also largely been governance free exercises – aside from a few controls on “reserved matters” and security for CPO compensation.  Delivering new towns will need the active participation of the public and private sector, as well as both existing and future communities. It will need both active and passive governance. None of this has been addressed, so far, in the DCO process.

One of the hardest lessons for those delivering new towns is that they are, and should be changeable, iterative, complicated, exercises in trial and error, buffeted by markets, politics and people. There will be many different ways to deliver them, from private sector schemes going through the traditional planning process with negotiated long term quality partnerships through to development corporations, both nationally and locally led. And there will be numerous variants in between.  A common factor to all will be the need to facilitate and encourage change.   We need to ensure that the benefits of variety and the capacity to evolve is not straitjacketed by the using DCOs if they remain as rigid as they are at present.  Remember that the sirens called ships to ruin on their rocks.

Transient Transparency?

In the recent Paddington Cube case, the Court of Appeal has confirmed that, at the moment, the Secretary of State (SoS) is required to give reasons when deciding whether or not to call in any planning permissions pursuant to Section 77 of the Town and Country Planning Act 1990.

SAVE’s appeal centred around the basis that the SoS should give reasons when deciding not to call in an application on two grounds, (i) there was a legitimate expectation to do so and (ii) there was a common law duty to give reasons. The Court allowed the appeal on the first grounds but dismissed it on the second.

On the basis that the SoS had previously given commitments publicly to give reasons when deciding not to call in applications, the Court found that this gave rise to a legitimate expectation that the “promised” approach would be followed and reasons therefore given.

In this case, the “legitimate expectation” arose from a series of promises made by the SoS, dating from 2001 (contained in the Planning Green Paper, an announcement by Lord Falconer in the House of Commons and other subsequent publications) that reasons would be given by the SoS when deciding not to call in planning applications.

The key points are:

  • “legitimate expectation” can arise either through an express promise or by a practice, and either can occur in the planning context;
  • if a public body sets out “a clear and unequivocal policy” an individual is entitled to expect that policy to be operated;
  • such an expectation continues to apply unless and until that policy is modified, withdrawn or otherwise would interfere with statutory duties;
  • the withdrawal or modification of a policy should be done so publicly;
  • no common law duty arises to give reasons for procedural decisions which are not directly determinative of a party’s rights and obligations;

It is notable that whilst LJ Singh accepted that no common law duty arose in the SAVE case, he did not dismiss altogether the possibility that such a duty could still arise in cases of a procedural discretion, stating this “was to be decided in each particular context where the issue may arise in the future“.  This leaves the door open for continued debate as to whether there should be a common law duty to give reasons in planning decisions.

SAVE have presented the case as a victory for transparency.  Their victory may be doubly pyrrhic.  First, the main judgement suggests that the level of reasoning required when declining to call in applications is not great, and that the promise to give reasons can easily be withdrawn.  Secondly, it is already bittersweet since SAVE were denied the right to challenge the underlying Paddington consent – with the Court saying that to do so would have been an “abuse of process”.

Legislation not the ‘agent of change’

Supporters of the Planning (Agent of Change) Bill 2018-19 had been looking forward to its second reading in the House of Commons on 26 October 2018. On 10 September, however, the Bill was withdrawn.

Parliamentary bale out

Music/ cultural venues and pubs in particular will be disappointed. There will be no legal planning protection for existing such uses, which are often threatened by nearby noise-sensitive (i.e. residential) development.

It is not clear why the Bill was withdrawn. The Bill itself was not published (or, if it was, it was withdrawn shortly afterwards), so we do not know what we are missing.

Planning policies fill the gap?

The agent of change principle is, however, included in Paragraph 182 of the new NPPF, which provides:

Where the operation of an existing business or community facility could have a significant adverse effect on new development (including changes of use) in its vicinity, the applicant (or ‘agent of change’) should be required to provide suitable mitigation before the development has been completed.

The Paragraph 182 provision that the new use ‘should be required’ to mitigate is in itself strong, but it is subject to there being a ‘significant adverse effect’ – a high threshold. It does not necessarily preclude complaints to councils or, worse, nuisance claims.

The NPPF is highly material but will need to be applied flexibly. In practice, the effectiveness of the principle is likely to depend on development plan policies, planning officers and council members upholding it. This in turn depends in some cases on communities demonstrating the importance of music venues and pubs in their area. It also requires decision-takers to recognise the wider nuisance-sensitive uses that should benefit from protection against parachuting in, for example retail operations. The Draft London Plan Policy D12 helpfully unpacks some of these elements but is also artificially narrow, protecting ‘venues’ rather than the wider range of uses that make up diverse and, increasingly, intensified, city spaces.

However, regardless of any planning policy mitigation measures, there will always be a risk of a statutory nuisance claim. Legislation will be needed to deal with that problem, ideally providing a partial immunity to both existing and new cultural and entertainment facilities.

Setting the Tone

There is a general consensus that land should be “right priced”. Where it is viable the costs of providing both hard and social infrastructure needed to support development should be established and thoroughly tested so that they can be reflected in land values. The local plan and CIL examination and inquiry processes are an essential, if not perfect, basis for setting a viability benchmark.

Right pricing land will, however, often lead to values below landowners’ existing aspirations. Necessarily, it removes some hope value and reduces market value. It has been pointed out that this loss of expected value will lead to some landowners to hold back on their land, potentially starving the development market of a staple need. They will continue to ask for unadjusted values and that will cause problems since developers will not be able to pay those prices and still deliver policy compliant schemes.

One answer to this is that the CPO process can be used to buy land, at a price that reflects adopted planning policy and any CIL and realigns land value expectations. Quite rightly critics have observed that it is impossible to compulsorily acquire all the land required for 300,000 homes a year. There is no capacity within local authorities (or within housebuilders to be fair) to support such an effort. While that is true CPO powers do not need to be used to acquire all development land, just enough to make it clear that inflated expectations of site value should not stand in the way of housing delivery.

If the local plan and CIL processes work properly, and are held to account by those affected, there should still be a healthy margin, or incentive, for landowners to sell their land. The initial landowners affected would be rather like the unfortunate Admiral Byng, being subject to the judicious use of CPO powers “pour encourager les autres”.