The boundaries of materiality

In November 2019, the Supreme Court gave judgment in R (on the application of Wright) v Resilient Energy Severndale Ltd [2019], a case concerning a decision to grant planning permission for an onshore community wind turbine. The development proposals included a commitment to make annual donations to a community fund, to be spent on unspecified ‘community benefits’. The development proposals included a commitment to make annual donations to a community fund, to be spent on unspecified ‘community benefits’.

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This article was first published in Property Law Journal (February 2020) and is also available at www.lawjournals.co.uk.

Short-term lets (not?)

Since our 2018 blog on short-term lets, the Scottish Government has published its report Research into the impact of short-term lets on communities across Scotland (the Report) and section 17 of the new Planning (Scotland) Act 2019 (the Act) will equip local authorities with the power to introduce Short-Term Let Control Areas where they decide that this is in the interests of local communities.  The aim is for the regulations to be in place by spring 2021.  

The Act does not expressly define what a short-term let is but private residential tenancies under section 1 of the Private Housing (Tenancies) (Scotland) Act 2016 and tenancies of a dwellinghouse (or part of it) where all or part of the dwellinghouse is the only or principal home of the landlord or occupier are held not to constitute short-term lets. 

The Report indicated that although there were just under 32,000 active Airbnb listing in Scotland as of May 2019 (a three-fold increase since 2016), approximately half of these listings were in either the City of Edinburgh (CEC) (31%) or Highland Council (19) areas. 

Control areas will be optional.  This will not be a blanket approach across the country.  Instead, certain hotspot areas, such as Edinburgh and Skye (Highland Council), can designate all or part of their areas as control areas. Planning permission will always be required where a property is to be used for a short-term let within a control area.

The current situation is that where it can be shown that there has been a material change of use from a residential property to short-term let accommodation, planning permission is required.  This is on a case-by-case basis and assessed on (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. 

A recent (successful) appeal against the refusal of a certificate of lawful use application by CEC can illustrate the approaches.  The application was submitted on the basis that the existing use for short term residential letting, ongoing since around May 2019, was not a material change of use and consequently did not require planning permission.  The property in question was a two bedroom flat on the ground and basement floors of a four storey tenement building.  The property had its own private access, no services were provided to the occupants and there was a mix of uses within the vicinity of the property including a kebab shop, hairdresser and a financial services business.   Based on the above criteria, the Scottish Government Reporter concluded that the existing use was in keeping with the nature and size of the property and that there was no significant disturbance or impact from the use therefore a certificate should be granted. 

If, going forward however, the property fell in a control area, planning permission would automatically be required.  Same property.  Different result.  At least there would be certainty in knowing that planning permission would be required for properties falling within control areas. 

Local authorities already have the tools to combat short-term lets.  If CEC were to designate only the city centre ward (2,710 active Airbnb listings per the Report, more than the whole of Glasgow) as a control area, other wards within its jurisdiction that are not designated as control areas would still require to be dealt with on a case-by-case assessment.  When considering council resources alongside this approach, an authority may be unable to fight this battle on two fronts.  Managing the influx of a massive number of planning applications could prove catastrophic to planning departments while still having to deal with cases outwith control areas on an individual basis.  This may encourage planning authorities to designate all of their area as a control area or from a budgetary/resource perspective, not to implement a control area at all. 

Following the introduction of control areas, on 8 January 2020 the Scottish Government announced further powers for local authorities to regulate short-term lets by introducing a licensing scheme under the Civic Government (Scotland) Act 1982 also in force from spring 2021.    It will become a criminal offence to operate a property as a short-term let without a licence.  The scheme will include a new mandatory safety requirement and provide councils with the discretion to apply further conditions to address the concerns of local residents.  A new licensing scheme will present similar issues to the new planning controls – namely that of a lack of council resources. 

In addition to the above schemes, there is a commitment from Scottish Ministers to consider the taxation of short-term lets to compliment the Transient Visitor Levy Bill to be introduced later this Parliament. 

These new government measures are an attempt to balance the interests of local communities with the interests of visitors.   There are no overnight solutions for these issues.  Uncertainty remains for the foreseeable future for short-term lets in Scotland. 

Section 73 Changes – Don’t Let the Gremlins In

The Court of Appeal’s decision in Finney v Welsh Ministers in late 2019 – that Section 73 permissions cannot alter the description of development – should not have come as a shock.  We noted in the original Lambeth appeal case that S73 should be approached as doing what it says in the 1990 Act – authorising development other than in accordance with conditions imposed on the original grant of permission.

Unusual Restraint

In Finney, the developer had applied for (and obtained) permission for “…two wind turbines, with a tip height of up to 100m“. It appealed against the later refusal of permission under S73 for amendments to conditions to extend the tip height to 125m.  The Inspector considered the merits of the increased height and decided to grant permission, deleting reference to the height in the description of development while doing so (to avoid the fundamental inconsistency between it and the revised conditions that would otherwise result).   The Court of Appeal confirmed that the there is no power to do this (and rejected an earlier High Court decision to the contrary).

None of this should make much difference in practice, because the judgment is simply applying a literal interpretation of the words of Section 73.  

Gremlins

Gremlins creep in because of the way that planning applications are handled.  This is avoidable but sometimes appears to be irresistible. 

Building heights, use classes, floorspace figures and unit numbers rarely need to be included in the ‘operative’ description of development.  They can be controlled by condition. Where Section 73 is later used to amend these parameters, a planning judgement is then needed.  In some cases, this may require more information on impacts (including, where EIA is applicable, additional environmental information). 

There is a tendency to add in all sorts of unnecessary detail when applications are submitted, however.  In Finney, the applicant did this to itself.  Elsewhere, LPAs will clutter the description of development on receipt and refuse to budge until it has been piled high with detail (much of which ironically then fails to make it into conditions). 

There is an open question about whether authorities have the jurisdiction to do this (or whether they simply have to determine the application as submitted, subject to whatever conditions they see fit).  It is moot, because no applicant wants to get off on the wrong foot and so changes are conceded which create inflexibilities.  These can then hamstring the ability to make mundane changes later on. 

Taking away solutions?

Section 96A of the 1990 Act is a useful tool, if used properly.  Unlike the S73 power, S96A is not limited to changes to conditions.  The power simply allows changes to the decision notice (including conditions), as long as they are “not material“.

Descriptions of development can therefore legitimately be decluttered, where changes are – cumulatively – non-material in planning terms.  This is undoubtedly a low threshold, but one which will nonetheless not be breached in many cases.  For example, deleting a use class or unit numbers from a description of development where use and unit numbers are already controlled by condition.  Section 96A was after all introduced in an economic downturn in order to avoid unnecessary fresh planning applications. Although there is no right of appeal against S96A refusal, it provides a sensible basis for changes that – by definition – are trivial.

Post-Finney, doubt is being raised about the use of S96A in this way.  Given that the Court of Appeal recently confirmed in the Fulford case that S96A may be used to make non-material changes to reserved matters approvals, concerns about non-material changes to the planning permission itself (whether the description of development, the conditions or the informatives) need to be put in perspective. 

The real issue for S96A, which is not legal, is whether:

  • as a matter of planning judgement there are land use planning effects that make the change material; and
  • there is an adequate information base to make that assessment.

If this begins to become a blocker to sensible changes to schemes to get them off the ground, Government should issue guidance confirming this position to avoid decelerating planning at a time when it is trying to speed it up.

The cost of justice: certainty?

Are the Courts starting to be more generous to Councils when they make mistakes when granting planning permission?

The Court of Appeal confirmed the judgment of a lower court centred around an error by Wirral Borough Council. Wirral Borough Council mistakenly granted planning permission to Thornton Hall for three marquees within the Thornton Manor estate without any planning conditions. This Council had intended to issue the permission temporarily for a period of 5 years. This was apparent in the committee report and the section 106 agreement, which included a draft decision notice. The appellant waited 5 years and informed the Council that the marquees still stood.   

Exceptionally, the initial judgment granted a 5 year extension of time for the judicial review. The permission was quashed, with Thornton Hall’s knowledge of the error being cited as important. While the facts are extremely specific, it does open up the scope for judicial review way past the usual 6 week period. The decision prioritises proper planning outcomes over the need for a clear and certain planning record.

The Supreme Court supported Lambeth Borough Council on a similar case earlier in the month. The site involved a Homebase store originally granted permission in 1975. A section 73 application to vary an extant permission to sell a wider range of goods was granted to the site in 2010. The new consent explicitly stated that this was limited to ‘non-food goods’.  A further section 73 permission was granted in 2014, and did not include the ‘non-food goods’ condition. The landlord applied for a certificate of lawful use and argued that there were no restrictions on what could be sold. On appeal the inspector agreed and a certificate of lawful use was issued.

The Secretary of State was ruled to have acted correctly by the High Court and Court of Appeal. The Supreme Court overruled this judgment. It found that the conditions of the 2010 section 73 permission continued to have effect, so far as they were consistent with the 2014 permission.

This adds an element of uncertainty into the interpretation of the planning history of a site. It means applicants will have to pay close attention to previous section 73 permission(s) and their conditions and work out whether earlier restrictive conditions should be considered to be “rolled forward”.  That is a rather subjective approach.

In both cases the outcome was understandable.  Why should the public at large suffer, and the owner gain, from Council mistakes? On the other hand the decisions make it more difficult to be clear about what uses are lawful.  Justice comes at the cost of certainty and simplicity.

With thanks to George Fennell who assisted in preparing this blog post.

Reserved Matters approval can be amended

In R (on the Application of Fulford Parish Council) v City of York Council [2019] EWCA Civ 1359 the Court of Appeal has generously confirmed that the statutory power conferred by section 96A of the Town and Country Planning Act (“the Act”) to make non-material changes to a planning permission includes the power to make non-material changes to conditional approvals of reserved matters.

Persimmon Homes’ outline planning permission was granted for approximately 700 dwellings subject to a large number of conditions.  A conditional approval of a reserved matters application was granted by York City Council that included the requirement to submit for approval a detailed Bat Mitigation Strategy prior to any development taking place.  York City Council then approved an application for a non-material amendment that permitted changes to the bat house types and layouts, and changes to the strategy.  In response, Fulford Parish Council brought a judicial review on the basis that section 96A’s statutory power is limited to making non-material amendments to “planning permissions”, and the approval of reserved matters did not constitute a “planning permission”.

Referring to the primary source of the power to grant planning permission (s.70(1) of the Act), the court decided that the grant of outline planning permission is the grant of planning permission defined by the Act and since the grant is “subject to” conditions, the conditions must be seen as an intrinsic part of the grant; therefore the conditional approval of a reserved matters application is itself a condition to which the planning permission has been granted. 

In the court’s judgment:

  1. the “planning permission” referred to in s.96A refers to a package consisting of the grant of planning permission itself, together with any conditions to which it is subject, whether the conditions are imposed at the time of the grant or subsequently; and
  2. the application for an amendment to an approval (or conditional approval) of reserved matters is an application for the alteration of an existing condition, which is expressly permitted by s.96A(3)(b).

Importantly, the court stressed that the power under s.96A is restricted to non-material changes otherwise the need for public participation will again be required and the change will be outside of the powers of s.96A.

Whilst this judgment will be welcomed by developers, a word of caution –  as the term “non-material change” is not defined by the Act it will be important for both developers and local planning authorities to consider sensibly whether proposed scheme amendments can rightly be classified as “non-material changes” especially in those situations where there is organised local opposition to a proposal.  One possible, and ironic, outcome of the case is that authorities become even more cautious about what they will accept as non material amendments.

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.

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”.

A reasoned approach

We look at a local planning authority’s duty to give reasons, in light of recent case.  In September 2016, the Court of Appeal ruled that Dover District Council had failed to give legally adequate reasons for its decision, against the advice of its planning officers, to grant planning permission for a controversial development partly in an area of outstanding natural beauty (AONB) (R (on the application of Campaign to Protect Rural England) v Dover District Council [2016]). This was one of several recent cases which have dealt with, and have generated some uncertainty about, the duty to give reasons.

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

Mind the Gap – Letwin Review should take care to avoid policy overload

The Letwin Review is considering why there is a significant gap between the number of planning permissions being granted and the number of homes built.

Initial findings are due to be published with the Chancellor’s Spring Statement 2018 in March (with the final report in the Autumn Budget).  There are a few things to think about before engaging in another orgy of Plan-Shaming and policy overload.

Apples and Pears

There is a need to be careful about how sites are looked at in the first phase of the Review:

  • Treating outline consents as if they are, or should be, immediately implementable is wrong. Outline consents can require significant work to reach detailed approval, let alone readiness for mobilisation and delivery.
  • Care is needed too, on what is treated as ‘delivery’.  Site mobilisation (for example enabling infrastructure) takes time and pre-dates construction of homes.

Defining what delivery and success look like is therefore important to avoid categorising sites that are being invested in – but have not yet yielded homes – as dormant. This will be significant in the context of the emerging Housing Delivery Test, which should be a fundamental part of the Local Plan system.

90% of percentages are wrong…

Various figures are bandied around on how many consents are ‘unimplemented’. Even adopting the higher level figure of 423,000 unimplemented homes with consent:

  • that is a tiny proportion of total supply – roughly 12-14 months of planning approvals
  • it illustrates the need for a deeper stock of permissions to achieve the heroic build out rates the Government is now committed to.

A Local Plan system which made more (and more detailed) site allocations, with clarity about infrastructure requirements, would make a big contribution to closing the gap between in principle approval for development and the detail needed for delivery. Likewise, a Local Plan system that sniffed and snuffed out unrealistic assumptions on delivery rates when trajectories are being examined would help ensure the right number of consents are granted in the first place to create the stock needed.

Diversification

Businesses will generally develop at the rate they are best able to achieve and which reflects the overarching price/demand relationship.  Rather than blaming the private sector for the speed it can – prudently –  build at, it would be more productive to look at how to achieve an increase in direct delivery (or directed delivery) by public bodies which have historically made up at least 100,000 of the gap to the Government’s 300,000 homes per year commitment.

In some cases that will involve more assertive use of land assembly and policy tools in a way that creates greater certainty about land values up front so that builders can build and sell more quickly.

Planning blame-fest?

Evidence from the sector on the non-Planning constraints to delivery is important.  Is there a skills gap, what will Brexit do to it and if Government is sponsoring Brexit how will it sponsor the solution?

From the frontline, a few of the  Planning matters that do slow things down are:

  • Length of time taken to deal with highways works agreements. The absence of a standard template agreement is a real blight on the development process.
    Constant reinvention of the wheel and imposition of poorly drafted and unreasonable requirements does have a real impact on the site mobilisation process. Government could sponsor a standard form and issue guidance recommending its use.
  • The bloat and general time-soak associated with unnecessary use of planning obligations. Our ‘speeding tickets’ blog flagged ways to speed things up without scarce Parliamentary time being needed.

Regulation change to allow LPAs to sell land with benefit of planning permission granted to themselves

From 23 February 2018, an LPA will be able to grant itself planning permission and sell the relevant land with the benefit of that planning permission. This small statutory change has the potential to significantly bolster LPAs’ role in facilitating development and ensuring that it is comprehensively planned.

The Town and Country Planning General (Amendment) (England) 2018 (the Amending Regulations) will remove Regulation 9  from Town and Country Planning General Regulations 1992 (the 1992 Regulations), with the effect that planning permissions granted by LPAs to themselves  will now run with the land.

Currently, Regulation 9 provides that a planning permission (where applied for by an LPA on its own land) will be personal to the LPA and where applied for jointly, only for the benefit of LPA and the named applicant. This has severely impeded the ability of an LPA, having secured planning permission to then sell the land on with the benefit of that planning permission. This has had cost implications requiring more complex land structures to be put in place before applications for development proposals could be made.

Oddly, the Regulations do not apply to any planning permissions granted before 23 February 2018. Given that future consents will run with the land it is strange that past consents have not been similarly “liberated”.

The removal of Regulation 9 was proposed in last year’s Housing White Paper on the basis that it will save time that developers would otherwise spend securing planning permission in relation to land which they purchase from LPAs.

It should achieve this. Now the Government needs to make sure that the best consideration requirements are changed so that land can be sold on for the best use for the area rather than just for the best price.