Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Company Ltd (Scotland)

JurisdictionScotland
JudgeLord Hodge,Lord Neuberger,Lady Hale,Lord Mance,Lord Reed
Judgment Date25 October 2017
Neutral Citation[2017] UKSC 66
CourtSupreme Court (Scotland)
Docket NumberNo 5
Date25 October 2017
Aberdeen City and Shire Strategic Development Planning Authority
(Appellant)
and
Elsick Development Company Limited
(Respondent) (Scotland)

[2017] UKSC 66

before

Lord Neuberger

Lady Hale

Lord Mance

Lord Reed

Lord Hodge

THE SUPREME COURT

Michaelmas Term

On appeal from: [2016] CSIH 28

Appellant

Martin Kingston QC

Alasdair Sutherland

(Instructed by Morton Fraser LLP)

Respondent

Roy Martin QC

Alasdair Burnet

(Instructed by Burness Paull LLP)

Heard on 13 June 2017

Lord Hodge

(with whom Lord Neuberger, Lady Hale, Lord Mance and Lord Reed agree)

1

This appeal raises an important question of planning law. A planning authority foresees and plans for significant growth in its area. Major investment in transport infrastructure is required to accommodate the aggregate of the planned development. The planning authority seeks to achieve this investment by adopting a policy in its development plan which in substance requires developers to enter into planning obligations with it to make financial contributions to the pooled fund to be spent on the infrastructure, including interventions at places where a particular development has only a trivial impact. Is such a policy within the existing powers of the planning authority under current planning legislation?

Factual background
2

The Aberdeen City and Shire Strategic Development Planning Authority ("the Authority") has the responsibility for preparing a strategic development plan for its area. The Authority foresaw the need for significant new and improved infrastructure to accommodate the cumulative impact of new development for which it planned. There were already proposals for transport infrastructure which involved major public sector investment, including the Aberdeen Western Peripheral Route ("AWPR"), new bridges, park and ride sites, making the A96 into a dual carriageway road and the creation of twin tracks on significant parts of the Aberdeen-Inverness railway line, all of which was to be paid for out of public funds. In 2010 the North-East of Scotland Transport Partnership ("Nestrans") commissioned a cumulative transport appraisal for the area ("the CTA"), in which it estimated that £86.6m was required on top of already committed public sector investment in order to fund a package of infrastructure developments, which it identified, to address the cumulative impact of the proposed new development in the area.

3

In December 2011 the Authority approved non-statutory supplementary planning guidance which proposed the establishment of a Strategic Transport Fund ("the Fund"). In February 2013 the Authority published its proposed strategic development plan. In that plan the Authority stated that it intended to prepare supplementary guidance in support of the plan. This guidance would allow for the Fund to deliver the transport projects which were needed to deal with the combined effect of new development in four identified strategic growth areas within the Aberdeen Housing Market Area. The Authority stated that it would need to secure a higher percentage of the increase in land values, which resulted from the grant of planning permission, than it had in the past in order to be able to create sustainable mixed communities.

4

Elsick Development Ltd ("Elsick") proposes to develop approximately 4,000 houses together with commercial, retail and community facilities at Elsick, near Stonehaven. Elsick's site is located within the southerly of the four strategic growth areas. In November 2011 Elsick objected to the draft supplementary planning guidance while it was subject to consultation.

5

Elsick also objected to the proposed strategic development plan and sought to have the reference to the Fund removed from that plan on the ground that it was contrary to the guidance of the Scottish Ministers on planning obligations which is set out in circular 3/2012, "Planning Obligations and Good Neighbour Agreements" ("the Circular"). The Circular advised planning authorities to seek to have developers enter into planning obligations only if the obligations met specified tests. These tests were that the obligations (i) were necessary to make the proposed development acceptable in planning terms (para 15), (ii) served a planning purpose (para 16), (iii) related to the proposed development either as a direct consequence of the development or arising from the cumulative impact of development in the area (paras 17–19), (iv) fairly and reasonably related in scale and kind to the proposed development (paras 20–23), and (v) were reasonable in all other respects. Elsick's principal concern was with (iv); Elsick asserted that the contribution to the Fund which the proposed plan envisaged was out of all proportion to the demands which its development would make on the infrastructure which expenditure from the Fund was to improve.

6

In the meantime, on 30 September 2013 Elsick entered into a planning obligation under section 75 of the Town and Country Planning (Scotland) Act 1997 (as amended) ("the 1997 Act") with Aberdeenshire Council ("the Council") to contribute to the Fund in terms of the draft non-statutory supplementary planning guidance or any revision or replacement of it in the proposed strategic development plan, but the agreement also provided that no contributions to the Fund needed to be paid if the supplementary planning guidance were found to be invalid. On 2 October 2013 the Council granted outline planning permission for the development and detailed planning permission for a first phase of 802 houses and other facilities.

7

The proposed strategic development plan was examined by a reporter appointed by the Scottish Ministers. In his report dated 21 January 2014 the reporter stated that it was right that the principle of the Fund should be established in the development plan and concluded that the CTA had demonstrated that the overall traffic growth, which the development promoted in the plan would create, would have harmful effects unless there were mitigation measures. He expressed concern that the mechanism for raising contributions to the Fund did not comply with national policy in the Circular because there was not a sufficiently clear and direct relationship between the development supplying the contribution and the infrastructure to be delivered. He advised that para 5.9 of the proposed plan be amended "to establish that the Fund will only be used to gather contributions towards infrastructure improvements that are related to the developments concerned and strictly necessary in order to make any individual development acceptable in planning terms".

8

The Strategic Development Plan was amended to take account of the reporter's comments. As so amended the relevant paragraphs of the Plan stated:

"5.8 Developers will have to accept the need for contributions towards necessary infrastructure, services and facilities within their own site. However, in cases where development has wider effects, we will have to secure contributions to deal with these as well, although the public sector will also need to make an important contribution.

5.9 We will prepare supplementary guidance in support of this plan. This will allow (through a 'Strategic Transport Fund') transport projects which are needed as a result of the combined effect of new development to be funded and delivered. … We will look for contributions from housing, business, industrial, retail and commercial leisure developments in the strategic growth areas within the Aberdeen Housing Market Area, (detailed criteria will be set out in the supplementary guidance). We will only use contributions to support projects that are related to the developments concerned and that are necessary to make those developments acceptable in planning terms."

9

The Authority then resolved to convert the non-statutory supplementary planning guidance into statutory guidance. On 12 December 2014 the Authority issued a consultation draft of the proposed statutory guidance. In a report to the meeting of the Authority which approved the consultation draft it was explained that the consultants who had prepared the CTA had re-presented table 7.2 of the study, which I discuss in more detail in para 16 below, to show a clear and direct link between the development providing a contribution to the Fund and the infrastructure improvement to be delivered. The report also stated that the supplementary guidance was

"based on a strategic level evidence base and uses this to derive appropriate contribution levels for individual developments. The main driving force behind the preparation of the existing non-statutory guidance was the need to facilitate development rather than leave it to individual developers to try to satisfy Transport Scotland and the two councils that they had adequately mitigated all their cumulative impacts on the transport network."

10

Elsick and others objected to the consultation draft on several grounds, including that it failed to comply with the Circular. The Authority responded to Elsick's representations by stating that all but one of the transport interventions were within a three-mile radius of Aberdeen City centre and had strong inter-relationships and that the modelling of the CTA had demonstrated that there was a cumulative impact from all development areas to all of the interventions. The Authority approved the draft supplementary guidance on 24 April 2015 and sent it to the Scottish Ministers for ratification.

11

The Scottish Ministers advised that the Authority could adopt the draft supplementary guidance if they added a statement that the use of any planning obligation shall follow the guidance in the Circular. The Authority made that amendment and adopted the supplementary guidance ("SG") on 25 June 2015. As I explain below when I discuss the legislative background, the SG forms part of the development plan for the...

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