R (on the application of the University Hospitals of Leicester NHS Trust) v Harborough District Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holgate |
| Judgment Date | 13 February 2023 |
| Neutral Citation | [2023] EWHC 263 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/2298/2022 |
[2023] EWHC 263 (Admin)
THE HON. Mr Justice Holgate
Case No: CO/2298/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
PLANNING COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Paul Cairnes KC and Dr Ashley Bowes (instructed by The Wilkes Partnership Solicitors) for the Claimant
Dan Kolinsky KC and David Lock KC (instructed by Harborough District Council) for the Defendant
Zack Simons and Isabella Buono (instructed by Leicestershire County Council) for the First Interested Party
Hearing dates: 7 and 8 December 2022
JUDGMENT APPROVED
This judgment was handed down remotely at 10.00am on 13 February 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
The claimant, the University Hospitals of Leicester NHS Trust (“the Trust”), challenges the grant of planning permission by the defendant, Harborough District Council (“HDC”), by a decision notice dated 17 May 2022 to the first interested party, Leicestershire County Council (“LCC”), in relation to land east of Lutterworth, Gilmorton Road, Lutterworth, Leicestershire (“the site”). LCC is the principal landowner of the site. The second interested party, Hadraj Limited, owns part of the site but did not take part in these proceedings.
The decision notice grants inter alia:-
(i) outline planning permission for up to 2,750 dwellings, business, general industrial, storage and distribution uses, two primary schools, a neighbourhood centre, public open space, green space and associated infrastructure; and
(ii) detailed planning permission for a spine road and associated junctions with the A426 and the A4304 east of junction 20 of the M1.
The site comprises 225 ha of predominantly agricultural land and lies predominantly to the east of the M1. The town of Lutterworth lies to the west of the motorway. A proportion of the residential development, 40%, would be provided as affordable housing. There would be 10 ha of B1/B2 general employment land, 13 ha for B8 storage and distribution uses and 111 ha for green infrastructure. Condition 3 of the permission restricted the development to the principles and parameters shown in a number of specified documents. Condition 5 required a phasing programme to be approved and then the development to be carried out in accordance with that programme.
HDC adopted the Harborough Local Plan 2011–2031 on 30 April 2019. The spatial strategy in Policy SS1 requires 12,800 dwellings to be provided during the plan period. Much of that figure comprises development already completed, or committed by the grant of planning permissions. The site is allocated as a strategic development area (“SDA”). It is the largest allocation in the Local Plan and represents about a third of the housing allocated in the district (see Policy H1). The site is to provide 1,260 new homes during the plan period to 2031.
HDC's housing trajectory assumed in 2019 that housing completions on the site would begin in 2023/4 and continue through to 2030/31. It was also assumed that about 1,490 homes would be completed between 2031 and 2036, after the end of the local plan period. So it was projected that 25 dwellings would be completed in 2023/4, rising to about 200 dwellings a year during the period 2027/8 to 2030/31. It is estimated that the 23 ha of employment land will generate about 2,500 new jobs.
Policy L1 of the Local Plan allocated the Lutterworth SDA as a “new neighbourhood”, a sustainable urban extension to Lutterworth with facilities for living, working and recreation. Thus, in addition to the employment land, Policy L1 requires the provision of community facilities, including two 2-form entry primary schools in parallel with the progress of the housing development, appropriate contributions to secondary education if necessary and a neighbourhood centre. That centre is to include shops to meet local needs, a public house or café, a doctor's surgery and a community hall. In other words, the educational and medical facilities to be provided on site are those which would be expected for a sustainable community on this scale.
The Trust does not object to the development as a matter of principle. The central issue in this case is whether HDC erred in law by not requiring the payment of a contribution under s.106 of the Town and Country Planning Act 1990 (“TCPA 1990”) of about £914,000 towards the delivery of health care by the Trust to mitigate what are said to be the harmful effects of additional demands upon its services from that proportion of the people moving to the site who would be new to the Trust's area (referred to as “new residents”). The Trust estimates that the 2,750 houses on the site would accommodate 7,520 people, of whom 38.5%, or 2,896 people, would be new residents in the Trust's area.
Under the legislation governing the National Health Service (“NHS”), the Trust is responsible for providing acute services to NHS commissioning bodies, who at the relevant time were the Clinical Commissioning Groups (“CCGs”). According to the Trust's representations to HDC, the relevant CCGs were the Leicester CCG, the Leicestershire CCG and the Rutland CCG. Mr. Cairnes KC, who together with Dr. Bowes appeared on behalf of the claimant, told the court that the geographical area covered by these three CCGs is co-extensive with that of the Trust. There are about 1 million residents in that area (para. 2 of claimant's skeleton).
From the 2020/21 financial year the CCGs pay for services provided by the Trust under a block contract. Those payments represent the Trust's main source of income to pay for its acute care services. Under a block contract a trust receives a lump sum in respect of all the services contracted for, in contrast to a “pay by results” arrangement, under which a trust receives a rate for each patient actually treated for the condition treated. As Haddon-Cave LJ explained in R (Shepherd) v NHS Calderdale Clinical Commissioning Group and Monitor [2019] PTSR 790 at [44], a block contract provides for payment by way of a fixed sum regardless of the number and type of activities undertaken by the provider of services.
Each of the Trust's block contracts lasts for one year and are re-negotiated at the end of that year. The funding paid by a CCG “is based upon locally agreed planned activity which is informed by the previous year's activity”. If the activity during the year of a block contract is greater than that which was assumed in arriving at the lump sum figures, the Trust is not entitled to any additional payment, whether during that year or retrospectively in the next year (see claimant's skeleton para. 40). Equally if the level of activity during a year turns out to be less than had been assumed for the purposes of the contract, the Trust is not required to repay any money to the CCGs. One advantage of block contracts is that they facilitate financial planning by a trust (see para. 36 of the claimant's skeleton).
The Trust's concern relates solely to the first financial year (or more precisely that part of the financial year) in which a “new resident” begins to occupy a dwelling and is treated by the Trust. It says that any treatment it provides for such residents is not accounted for in the funding agreed under the block contract for that year. Net increases in population from new development are not inputs to the funding mechanisms used within the NHS or the negotiations for block contracts.
The Trust is operating at what it describes as “full capacity”. But even so, it is not able to turn away new residents living on the site, whether for that reason or because the block contract has not allowed for that additional activity. Instead, those patients will be treated, but there will be a consequential increase in the time taken to provide treatment for patients in general. In addition, there will be delays in being able to allocate patients on arrival to the appropriate type of bed, because the relevant occupancy benchmark is already exceeded. The Trust's case is that these adverse impacts on the timing of treatment appropriate for achieving good health outcomes and on the health of the community are land use planning considerations relevant to the determination of the planning application for the Lutterworth SDA.
The object of the s.106 contribution sought by the Trust is to provide funding for additional staff, drugs, materials and equipment which will mitigate those impacts.
Although the Trust has often objected to the use of the term “funding gap”, the Trust itself has used that language in its representations to HDC in order to explain its case on how the development will cause those impacts (see e.g. pp.37 and 39 of Appendix 7 to the Trust's representations dated 23 July 2020 — answers to questions 1 and 3). As Mr. Cairnes KC rightly accepted, if the Trust could not point to a funding gap for the provision of health services attributable to the occupation of housing on the site, there would be no relevant impacts from the SDA scheme to justify a s.106 contribution. Equally, and as a matter of common sense, the size of that gap would be relevant to determining the amount of any s.106 contribution which may be justified. As a result of this concession many of the Trust's complaints in this case fall away. Nevertheless, I will address the arguments
It is important to note that the Trust's case relates solely to an alleged funding gap during the first financial year in which a new resident occupies a dwelling on the site. This is because the Trust accepts that when the block contract comes to be...
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