Secretary of State for Communities and Local Government v West Berkshire District Council and Another

JurisdictionEngland & Wales
JudgeLaws LJ,Treacy LJ,Master of the Rolls
Judgment Date11 May 2016
Neutral Citation[2016] EWCA Civ 441
Docket NumberCase No: C1/2015/2559
CourtCourt of Appeal (Civil Division)
Date11 May 2016
Between:
Secretary of State for Communities and Local Government
Appellant
and
(1) West Berkshire District Council
(2) Reading Borough Council
Respondents

[2016] EWCA Civ 441

Before:

The Master of the Rolls

Lord Justice Laws

and

Lord Justice Treacy

Case No: C1/2015/2559

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

PLANNING COURT — CO/76/2015

MR JUSTICE HOLGATE

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr R Drabble QC and Mr D Blundell (instructed by the Treasury Solicitor) for the Appellant

Mr D Forsdick QC and Mr A Mills (instructed by Legal Services at West Berkshire District Council) for the Respondents

Hearing dates: 15 & 16 March 2016

Treacy LJ

Laws LJ and

INTRODUCTION

1

This is the Secretary of State's appeal, with permission granted by Lewison LJ on 22 September 2015, against the decision of Holgate J given in the Administrative Court on 31 July 2015 ( [2015] EWHC Admin 2222) following a rolled-up hearing of a claim for judicial review brought by two planning authorities, the West Berkshire District Council and the Reading Borough Council. They are of course now respondents to the appeal. Holgate J held that a planning policy promulgated by the Secretary of State in a Written Ministerial Statement ("the WMS") made in Parliament on 28 November 2014 was unlawful, and granted a declaration accordingly.

2

The policy in question is described in the first witness statement of Ms Jane Everton, who is a senior official responsible for government policy on the use of planning obligations under s.106 of the Town and Country Planning Act 1990. Her account of it is described by the judge below as follows (judgment paragraph 2):

"(i) Developments of 10 units or 1000 sq m or less (including annexes and extensions) would be excluded from affordable housing levies and tariff based contributions;?

(ii) A lower threshold would apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty (as defined in section 157 of the Housing Act 1985), with developments of 5 units or less to be excluded from affordable housing levies and tariff based contributions. Development of between 6 and 10 units would be subject to a commuted sum payable on or after completion;?

(iii) Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a 'credit', equivalent to the floorspace of the vacant building, to be set against affordable housing contributions." (judge's emphasis)

Given the nature of the major issue in the case the language of the WMS itself is important. We should cite the following paragraphs.

"We consulted in March this year on a series of measures intended to tackle the disproportionate burden of developer contributions on small scale developers, custom and self-builders. These included introducing into national policy a threshold beneath which affordable housing contributions should not be sought. The suggested threshold was for developments of ten units or less (and which have a maximum combined gross floor space of no more than 1,000 square metres.

We received over 300 consultation responses many of which contained detailed submissions local data. After careful consideration of these responses, the Government is making the following changes to national policy with regard to S.106 planning obligations:

Due to the disproportionate burden of developer contributions on small scale developers, for sites of 10 units or less, and which have a maximum combined gross floor space of 1,000 square metres, affordable housing and tariff style contributions should not be sought. This will also apply to all residential annexes and extensions.

For designated rural areas under Section 157 of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty, authorities may choose to implement a lower threshold of 5 units or less, beneath which affordable housing and tariff style contributions should not be sought. This will also apply to all residential annexes and extensions. Within these designated areas, if the 5 unit threshold is implemented then payment of affordable housing and tariff style contributions on developments of between 6 to 10 units should also be sought as a cash payment only and be commuted until after completion of units within the development."

3

Holgate J's judgment contains a very full account of the planning background, not least under the headings "The policy context for the challenge" (paragraphs 5 – 22), "Affordable housing policies in local plans" (39 – 46), and "The evolution of the Secretary of State's policy" (47 – 79). This gives much valuable detail, but we will not replicate it here. What follows is the barest thumbnail sketch.

4

For many years planning policy had made provision for affordable housing. Affordable housing levies and tariff-based contributions were required of developers. But by 5 December 2013, when the Chancellor of the Exchequer announced the 2013 Autumn Statement, Ministers had reached the opinion that such charges were having an adverse impact on small scale housing development. The construction of new housing had fallen significantly below housing need at a national level. The small scale housing industry had not recovered from the recession and continued to decline. In consequence the government proposed to reduce the requirement for affordable housing contributions. On 23 March 2014 a consultation paper was published. Under the heading "What are we proposing?" this was stated:

"We are also proposing to introduce a 10-unit and 1000 square metre gross floor space threshold for affordable housing contributions through section 106 planning obligations. This will aid the delivery of small scale housing sites. Rural Exception Sites will be excluded from this threshold."

It seems that the use of thresholds for affordable housing contributions goes back at least to 1993. As the WMS stated, over 300 responses to the consultation exercise were received by the Secretary of State.

5

At length on 28 November 2014 the Minister of State announced the new policy in the House of Commons by way of the WMS. The National Planning Practice Guidance (NPPG) was amended on the same day, and subsequently revised on 27 February and 26 March 2015.

6

The learned judge upheld the respondents' challenge to the WMS on four grounds.

(i) It was inconsistent with the statutory planning regime.

(ii) The Secretary of State had failed to take into account necessary material considerations.

(iii) The Secretary of State's consultation upon the proposals was legally inadequate.

(iv) The Secretary of State had failed properly to assess the impact of the proposal upon persons with protected characteristics: Equality Act 2010 s.149.

Holgate J found it unnecessary to enter into a fifth ground of challenge, namely that the policy was irrational.

7

The Secretary of State now seeks to overturn the judge's conclusions on all four grounds. Before addressing them we should give some account of the statutory provisions which principally bear on the case.

THE LEGISLATION

8

The place of development plans in the planning regime is central to the first ground (inconsistency with the statutory scheme). In the law of town and country planning a development plan is a set of documents containing a local planning authority's policies and proposals for the development and use of land in their area: see in particular ss.17(3) and 38 of the Planning and Compulsory Purchase Act 2004 (the 2004 Act). S.38(6) is especially important in light of counsel's submissions on the first ground:

"If regard is to be had to the development plan for the purpose of any determination to be made under the planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise."

We should refer also to s.13 of the 2004 Act which was summarised by the judge at paragraph 26 of his judgment thus: "s.13 requires each LPA to 'keep under review the matters which may be expected to affect the development of their area or the planning of its development', which include the principal physical, economic, social and environmental characteristics of the area, the principal purposes for which land is used, the size, composition and distribution of the population and the effect of changes on the planning of development in the area. These statutory surveys form an important part of the evidence base for the preparation of development plans." S.19(2) provides in part:

"In preparing a local development document the local planning authority must have regard to—

(a) national policies and advice contained in guidance issued by the Secretary of State…"

9

The 2004 Act confers other powers on the Secretary of State which it is helpful to notice at this stage. We may adopt the judge's summary:

"34. In addition, the Secretary of State has a broad power to intervene if he considers a local plan, or a policy in a local plan, to be 'unsatisfactory'. He may direct the LPA to modify the plan and the authority must comply with any such direction unless they withdraw the plan (sections 21 and 22). Any such modification will then generally be considered in the examination process (section 21(5)).

35. By section 26(1) an LPA may prepare a revision of its local plan at any time. Section 26(2) empowers the Secretary of State to direct the authority to prepare a revision of its plan in accordance with a timetable set by him.

36. Section 27 gives the Secretary of State a very wide default power if he considers that an LPA is failing to do...

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