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A better alternative?

buttThe latest of our series focussing on the Housing and Planning Bill considers the controversial Government amendment to “test the benefits” of introducing competition to the processing of planning applications. Amidst the furore surrounding many of the Bill’s provisions, such as those on affordable housing and permission in principle, this one caught many by surprise.

What is proposed?

Applicants in designated areas will be able to choose whether to have their planning application processed by a “designated person” rather than by a specified local planning authority.

As with many aspects of the Bill, Regulations and Development Orders will contain the all-important detail about how this will work in practice. There are a multitude of  issues of principle though.

What does it mean for planning?

Denounced in the Lords as being tantamount to the privatisation of planning, this has the potential to change the face of development control as we know it, if adopted across the board.

However, before the death knell sounds in council planning departments across the country, some key points to bear in mind:

  • the clause makes it clear that determination of the application will remain the responsibility of the specified local planning authority;
  • it is a pilot to test the waters – it will run in specified areas for a specified time period;
  • it will be optional – applicants can choose whom they want to process their application;
  • it will apply only to developments of a “specified description” – we await clarity as to what that means.

While much of the focus (and concern) centres on private sector processing, the government has made clear its intention is to foster innovation amongst councils through competition. Indeed, there will be opportunities for those able to seize them.

Some food for thought

  • Process vs determination – an artificial distinction? To what extent can they be separated, given that qualitative judgments are often required throughout the life of a planning application? Is it really possible to hive off elements which are genuinely process-driven and isolate them from the inherent politicism of planning?
  • A viable alternative? There continues to be much nervousness around the public disclosure of viability information in planning applications. Might private sector processors be favoured on the basis that they may not be subject to the requirements of the FOIA and EIR regimes?
  • It may shift the traditional focus within local authorities away from development control and towards strategic plan-making. Not necessarily a bad thing, particularly with other measures in the Bill designed to incentivise plan-making.
  • Has the government side-stepped the issue of resourcing planning departments? It is committed to encouraging innovation and driving down costs, so will this address long-standing resourcing issues? It also has to be seen alongside the recent Ministerial announcement that the Government will consult on allowing “well-performing planning departments” to increase their fees in line with inflation.

Check your privilege – information rights and pre-planning advice

The High Court decision in Hallows v Wilson Barca LLP, concerning the disclosure of evidence in a damages claim, is a reminder that correspondence with a local planning authority (LPA) is vulnerable to requests under the Freedom of Information Act (FOIA) (or the Environmental Information Regulations (EIR)).

The facts in Hallows are unusual.  Hallows had brought a damages claim against his former solicitors, Wilson Barca, for failing to register rights of ways for a property he owned.  The Claimant’s litigation solicitor wrote to the LPA requesting pre-planning advice on the likelihood of obtaining planning permission for residential development of the site.  The Claimant intended to use the response as evidence to establish his losses in the damages claim, rather than to support a bona fide planning application.

Be careful what you ask forpriv

The Defendant got wind of the LPA’s response – which was unhelpful to the Claimant – and obtained it by FOIA request.  The Claimant asked the Court to restrict the use of the information, which would probably have meant that it could not be used as evidence.  It claimed that the information was subject to legal professional privilege and should never have been disclosed by the LPA to the defendant under the FOIA.

Privilege has limits

It is worth noting that the normal rule is that information created to support a claim attracts legal professional privilege and that means it cannot be used against the party that created the document, unless the privilege in the information is waived.

In this case, the court ruled that:

  • the pre-planning advice could attract legal professional privilege, and thus be exempt from release under FOIA (or use in any subsequent legal proceedings), but
  • this would only be the case if the LPA had been informed of the true purpose of the request for information.  In this case they had no idea that the claimant was only seeking pre-planning advice to assist with establishing his losses.

Lessons

Although there are a number of quirks relating to this judgment (not least that the case turned on FOIA when the EIR arguably applied), several points are worth keeping in mind when considering the application of the information rights regime in the planning context:

  • It is a timely reminder of the how FOIA/EIR requests can be used strategically to gain advantage in litigation;
  • It is a warning for those people and companies who regularly provide sensitive information to LPAs that the information produced by the public sector can only rarely be regarded a truly safe from disclosure;
  • In the rare circumstances where a person has asked an LPA to produce information, and the predominant purpose for the request is to support litigation, then in order to benefit from the protections offered by legal professional privilege, they must inform the LPA why they are asking for the information.  Although there are many circumstances where an LPA would be sufficiently “spooked” by the possibility of litigation arising from a request, there may be circumstance where it is happy to cooperate.

Strange Tides – Courts And Tribunal Pull In Different Directions

Viability debates continue to shape planning. The frontline is shifting, from debates about key principles, towards the wider issue of transparency and participation.

The Information Commissioner’s Office (ICO) and, ultimately, the First Tier Tribunal (FTT) hear appeals under the Environmental Information regime, intended to give effect international commitments to participatory decision-making. In RB Greenwich v IC and Brownie (EA/2014/0122), the FTT required disclosure of pricing and profit assumptions, sales and costs forecasts.  Given the finding of limited commercial harm, the decision is unremarkable.  It is one example of disclosure being increasingly required either because there is little real harm or that real harm is outweighed by the public interest in understanding the reasons for particularly controversial decisions.

shellThe Courts’ approach is different. George Turner v SoS CLG and others [2015] EWHC 375), concerned a challenge to the Secretary of State’s decision to approve the Shell Centre redevelopment.  A financial appraisal was submitted with the application to explain the level of affordable housing provision (and reviewed by the local authority’s expert). It was not forwarded to the SoS. The expert’s summary report was reluctantly disclosed two days before the inquiry began. The claimant argued that it was impossible to properly determine the viability justification for the departure from plan policies without scrutiny of the full appraisal.

In rejecting the claim, the judge followed the Arsenal case (Bedford v LB Islington and Arsenal Football Club Plc [2002]) where a confidential consideration of viability, with a report giving only the “gist of” the findings, was allowed. He stressed that the law only requires the disclosure of the materials placed before the decision maker.

Two questions stand out.  Firstly, the judgment is silent on an authority’s duty to pass application materials to the Secretary of State (under s.77 TCPA 1990). The Call-In Direction required all application documents to be sent to the decision maker. That did not happen. The facts were therefore different to Bedford.  Secondly, inquiry evidence must be heard in public, unless the SoS makes a – rare – direction for a shielded procedure for scrutiny of sensitive information.  It may have made more sense to use that process, rather than limit the material provided.

The Court of Appeal will now consider these issues in deciding whether to hear the claimant’s appeal, in the context of real concerns recognised by the judge at first instance about the conduct of the Inquiry.

Viability in planning – the environmental information regime

The recent First Tier Tribunal (FTT) (Information Rights) decision on disclosure of key parts of Lend Lease’s Heygate Estate viability appraisal illustrates the important differences between the Environmental Information and Freedom of Information Act 2000 (FOI) regimes. The differences are significant for applicants and public-private joint ventures, where thought is needed on preventing unecessary information leakage.

FOI and EIR

Both the FOI Act 2000 and Environmental Information Regulations 2004 (EIR) give rights of public access to information held by public authorities. The differences are worth noting:

  • The EIR implement European Directive 2003/4/EC on public access to environmental information, which follows and expands on the 1998 Aarhus Convention. The Convention’s primary goal is to increase the quality and extent of public involvement in and scrutiny of decisions on the environment. The EIR regime must be approached in that light.
  • All of the exceptions to disclosure under the EIR are ‘qualified’ – if any exception is engaged it is still necessary to consider the balance of the public interest in maintaining the exception or disclosing the information. This includes areas that are absolute exemptions under the FOI regime (such as confidentiality).
  • The FOI exemption on commercial prejudice is stronger: the EIR require the authority to prove there ‘would be’ harm, in the sense of being more probable than not (as opposed to merely a significant chance under FOI). Assembling and presenting that kind of evidence is often challenging.  As above, the public interest test will still apply (and the ICO’s decisions confirm that the threshold for non-disclosure is high).
  • EIR exceptions must be interpreted and applied narrowly. Redaction, not refusal to disclose, should be the starting point. Unlike FOI, there is an explicit presumption of disclosure in the EIR.
  • EIR only covers ‘environmental information‘.  Whilst the First Tier Tribunal expressed concern in the Heygate decision about the burgeoning use of EIR for planning matters, the practice of the ICO (see below) suggests that it will continue to be used broadly.

The ICO and FTT are there to strike the balance between giving the public the ‘full picture’ and giving it enough information – perhaps in summary form – to participate without undermining the quality of the commercial information provided.

As noted in the previous blog, the FTT decided in Heygate that despite the significant Picture1controversy concerning the disposal of public land and delivery of affordable housing, only parts of the appraisal materials should in fact be disclosed.  We understand that the Royal Borough of Kensington & Chelsea is now withdrawing its appeal against the ICO’s decision to require disclosure of the viability assessments in relation to Capco’s proposed scheme at Earls Court. The FTT hearing was scheduled for mid-June but the campaigners now expect the authority to disclose unredacted documents. The ICO had criticised the RBKC’s reasoning for withholding Capco’s financial model and costs assumptions as ‘lacking substance or detail’.  It also noted that two viability reports had been prepared – one for public use and the other withheld, showing different levels of viable affordable housing outturn.

Dodging the bullet

The FOI regime allows authorities to refuse to deal with requests that would take too long – more than 18 hours – to process. This is usually because the request has been poorly targeted, but it is increasingly used by authorities to dodge disclosure.  The position under EIR is harder – whilst the exception for ‘manifestly unreasonable’ requests can apply, the ICO has acknowledged that the EIR are intended to have a much higher bar for resisting disclosure under this heading than FOI. Monmouthshire County Council was unable to resist disclosure of material relating to the allocation and development of Deri Farm in August 2013 on this basis, despite estimating that it would take 25 person hours to do so.  The public interest in understanding the site allocation process was key.  Strategic land owners should be therefore careful what they include in pre-allocation correspondence.

In the Heygate case, LB Southwark accepted the disclosure request from a local pressure group as an EIR request, but then sought to characterise it on appeal as an FOI matter. Had it been successful, the absolute FOI exemption relating to confidential information would have applied. Whilst the FTT did not accept this, it did express reservations about the increasingly widespread application of the EIR to planning matters.

Scope of EIR

Whilst authorities will increasingly seek to deal with information requests under FOI rather than EIR, they will, and should, struggle in many cases. The Tribunal’s October 2013 judgment concerning the Independent School Playing Fields Advisory Panel minutes relating to Wandsworth Borough Council’s application for consent to dispose of school playing fields at Elliott School in Putney is a case in point. The FTT accepted that the Panel and the Secretary of State were only concerned with the educational impact of disposal of the playing field land (rather than land-use issues), but upheld the ICO’s April 2013 decision that FOIA did not apply and the request had to be dealt with under the EIR regime. It did so on the basis that Wandsworth Council’s disposal application included “information indicating an intention for the playing fields of the school to be redeveloped for housing” and that if consent was given, it is more likely than not that the Council would pursue its plans to redevelop and the measure would be likely to affect the land or landscape. As such, it was a measure ‘affecting or likely to affect’ the environment.  The starting point was of disclosure in the public interest.

Applicants, authorities and objectors therefore need to consider the EIR – and the related decisions of the ICO and the FTT – to ensure that when applications are dealt with  the right balance is struck between disclosure and confidence.

Viability in planning – transparency where it matters?

We highlighted the significance of the Information Commissioner’s Office (ICO) decision to require disclosure of financial information relating to the Heygate Estate renewal scheme in July last year. Local interest groups had challenged London Borough of Southwark to show the workings out behind an affordable deal that will result in less than 4% of the new homes being social rented. The First Tier Tribunal’s recent decision on the appeal against the ICO’s decision highlights the need for care in dealing with confidential information in the planning process.

Balancing considerations

LB Southwark’s decision to accept 25% affordable housing (rather than the target 35%) in relation to Lend Lease’s Heygate scheme has been under intense local scrutiny. The viability appraisal was submitted on a confidential basis, but local groups sought full disclosure under the Environmental Information Regulations 2004 regime (EIR). The ICO is the first port of call once the authority’s complaints procedure has been exhausted

The ICO heard the challenge to LB Southwark’s decision to refuse disclosure last year. It accepted that disclosure of redacted elements of the reports would be commercially harmful. Nonetheless, applying the public interest test under the EIR regime, it decided that the interest in disclosure outweighed the harm. LB Southwark appealed the decision to the First Tier Tribunal, which has now held that:

  • The viability assessment is “environmental information” under the Environmental Information Regulations 2004. The EIR regime operates with a presumption of disclosure, unlike the Freedom of Information Act 2000 regime.
  • Publication of viability forecast data relating to deals to be done with other businesses should not be disclosed, because the commercial harm was not in the public interest, but private sales and registered provider deals should be.
  • The ICO was wrong to refuse to treat Lend Lease’s development model as a “trade secret” and there was no need to show monetary loss arising from disclosure.
  • The Council’s suggestion of absolute confidentiality in relation to the activities of its staff was wrong. Likewise, there is not always a public interest in maintaining secrecy around public private partnership negotiations – the law on information disclosure is drawn to ensure transparency where it matters.
  • Disclosure of the starting point in negotiations (i.e. the initial viability reports) is not the same as the disclosure of the full continuum of those negotiations – the likelihood of a chilling effect on other deals should be viewed in that light.
  • The public interest warranted disclosure of much of the information – given “the importance, in this particular project, of local people having access to information to allow them to participate in the planning process”.  That factor was held to outweigh the public interest in maintaining the remaining rights of Lend Lease and those subcontractors who contributed to the document.

Information hygiene

Any information with public authorities for partnership and development projects should be viewed in light of the potentially broad scope, purposive intent and presumption of disclosure under the EIR. That includes the usually prolific email communications,  meeting notes and telephone notes. Handling such information should be done with care to minimise the chances of unnecessary disclosure. Importantly, where a departure from policy requirements is being justified on viability grounds then the significance of the competing public interests in facilitating development (in particular partnership approaches to public sector land) and interrogating the viability analysis needs to be borne in mind.

How the viability analysis is put together and disseminated is crucial in striking an appropriate and workable balance. Doing so is far cheaper than making the case for exemptions after the event.

A blog highlighting the significance of the Environmental Information regime in this context, will follow.

Unspent 106 monies

Freedom of information requests made by the BBC suggest that local authorities in England are holding £1.5bn of unspent section 106 contributions, with £421m of those funds not allocated to any future schemes.  The BBC’s investigations indicate that over the past 5 years £9.8m of unspent section 106 contributions had been returned to developers, a relatively modest amount given the extent of the section 106 funds sitting in council’s accounts.  In response to these findings Nick Boles issued a statement saying many people would be surprised that Councils are “hoarding millions of pounds” and that councils “should not be pocketing the cash”.  He added that in many cases councils “could also risk losing the money and be forced to pay it back if unspent within a set time frame”.   Is Mr Boles right?  Can councils be forced to pay back unspent section 106 contributions?

Potentially yes would be the answer.  In the case of Hampshire County Council v Beazer Homes Ltd [2010] EWHC 3095  a section 106 agreement in connection with a major mixed use development project required the developer, Beazer Homes, to make financial contributions towards the cost of various highway works, including traffic management measures and the construction of the Fleet Inner Relief Road. At the time the section 106 agreement was negotiated the parties were alive to the potential that the Council might decide not to build the Fleet Inner Relief Road.  The agreement provided for this by way of a refund of any monies which were unexpended after the completion of the Relief Road or any schemes undertaken as an alternative.  Beazer Homes argued that a similar term should be implied into the agreement obliging the Council was to account for the cost of the proposed traffic management works and refund any excess contribution. 

Beazer Homes succeeded on this argument.  The judge held that a term can only be implied into a section 106 agreement in very limited circumstances where the parties had plainly intended it to form part of the contract. The court was willing to imply a term in relation to the traffic management contribution similar to that in relation to the Relief Road.  As the contribution could only be applied for the purpose of the traffic management works the judge held there needed to be some provision as to how any surplus would be dealt with.   

Whilst much turns on the wording in the agreement of the use to which a contribution is to be put, the absence of a clawback provision in a section 106 agreement is not necessarily fatal to obtaining a refund of an unexpended or partly unexpended contribution.  This might come as unwelcome news to local authorities.  However, they can take some comfort that the CIL regime does not provide for any such return of levy payments.  In the meantime developers may wish to dust off their old section 106 agreements and review the contribution wording.

Heygate Estate Information Commissioner’s report

The Information Commissioner’s report on a complainant’s request for financial information relating to the Elephant and Castle project raises some interesting issues.

One point of principle is that if a Council is asked to rely on a financial justification for waiving a policy requirement then the developer should often expect that material to be public in due course. If the policy is adopted, it is clear, post Cherkeley, that developers cannot challenge its legality/appropriateness.  Depending on the nature of the scheme, the choice is stark – either live with the development plan requirement or be prepared for the public to test the justification for departing from it.  The decision confirms the overriding importance of the public interest test under the Environmental Information Regulations 2004, which – unlike the Freedom of Information regime – stem from the Aarhus Convention on access to justice in environmental decision-making. 

The ICO’s decision is helpful for developers, though, in confirming that Lend Lease’s appraisal information was confidential, how such information needs to be handled and that as a starting point its disclosure would cause commercial prejudice. 

Developers should (and in most cases can) submit appraisal material that causes no real disclosure problem, but need to ensure that it is handled properly and where the scheme involves public land, policy breaches or other controversial elements, be aware of the ultimate risks of disclosure.