The King (on the application of Worcestershire Acutehospitals NHS Trust v Malvern Hills District Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holgate |
| Judgment Date | 31 July 2023 |
| Neutral Citation | [2023] EWHC 1995 (Admin) |
| Court | King's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/4577/2022 |
and
[2023] EWHC 1995 (Admin)
THE HON. Mr Justice Holgate
Case No: CO/4577/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
PLANNING COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Paul Cairnes KC and Ashley Bowes (instructed by The Wilkes Partnership LLP) for the Claimant
Hugh Richards and Sioned Davies (instructed by Malvern Hills District Council, Wychavon District Council and Worcester City Council) for the Defendants
Zack Simons and Barney McCay (instructed by Worcestershire County Council) for the 1st Interested Party
Saira Kabir Sheikh KC (instructed by Osborne Clarke UK) for the 23 rd Interested Party
Interested Parties 2–22 and 24–27 did not appear and were not represented
Hearing dates: 18 and 19 July 2023
APPROVED JUDGMENT
Factual Background
The claimant, the Worcestershire Acute Hospitals NHS Trust (“the Trust”), applies for permission to bring proceedings for judicial review against the three defendants, Malvern Hills District Council (“MHDC”), Wychavon District Council (“WDC”) and Worcester City Council (“WCC”) in respect of a planning permission granted by MHDC on 26 October 2022. The case is concerned with the legality of the handling by the authorities of the Trust's request for a s.106 contribution from the developer in respect of its services.
The Trust is established under s.25 of the National Health Service Act 2006 (“NHSA 2006”) as a “NHS provider”. It provides acute hospital and specialist health care facilities for nearly 600,000 people living in Worcestershire. It is commissioned to provide services by three clinical commissioning groups (“CCGs”):
— NHS Redditch and Bromsgrove CCG
— NHS South Worcestershire CCG
— NHS Wyne Forest CCG
The Trust operates three main hospitals: Alexandra Hospital in Redditch, Kidderminster Hospital and Treatment Centre, and Worcestershire Royal Hospital in Worcester. By the Health and Care Act 2022 CCGs have been replaced by Integrated Care Boards with effect from 1 July 2022. The parties do not suggest that that materially altered the statutory framework or legal principles for the purposes of the present case.
In February 2016 the three defendants jointly produced the South Worcestershire Development Plan (“SWDP”) to cover the whole of their respective areas. Policy SWDP45 allocated land for six urban extensions to Worcester, of which the largest was SWDP45/1, a site with an area of nearly 250ha, referred to as the Broomhall Community and Norton Barracks Community. It was allocated to provide inter alia around 2,600 dwellings and 20ha of employment land.
The 1 st Interested Party, Worcestershire County Council is the highway and education authority for the area.
The 23 rd Interested Party, Welbeck Strategic Land LLP (“WSL”), is the developer of the site. As long ago as 29 May 2013 they applied to the three defendants for outline planning permission for a mixed-use development on the site, which falls within the administrative area of each authority. The second and third defendants agreed with MHDC that planning permission should be granted and that MHDC should issue the decision notice on their behalf.
The remaining 25 Interested Parties hold interests in different parts of the site.
The consideration of the planning application and the negotiations for a planning agreement under s.106 of the Town and Country Planning Act 1990 (covering large scale infrastructure, education facilities and affordable housing) was a complex and lengthy process. Eventually the application was considered by MHDC's Northern Area Planning Committee on 7 March 2018. They passed a resolution authorising the Head of Housing and Planning to grant planning permission subject to the satisfactory completion of a s.106 agreement covering a list of financial contributions and other obligations. The amounts involved had already been explained in the body of the officers' report and set out in Table 2.
The planning permission was for inter alia:
— a mixed-use development with a local centre
— up to 2,204 dwellings including affordable housing
— up to 14ha of employment land
— a hotel
— elderly persons accommodation
— business uses
— retail uses
— a health facility
— a primary school
— assembly and leisure uses
— outdoor sports and leisure
— open space
The Trust did not make any representations in the examination of the SWDP or on the planning application before the resolution of 7 March 2018 was passed. But in January 2019 it made representations to MHDC for the first time in which it asked the defendants to require the developer to make a financial contribution in the s.106 agreement to cover an alleged gap in the Trust's funding for the use of its services by residents of the dwellings who are new to the Trust's area. This gap is said to relate solely to the first occupation of a dwelling on the site by such a resident and even then, only to the part of the Trust's financial year from which that occupation begins. The Trust accepts that at the end of that financial year its funding by the CCGs takes into account from then on (but not retrospectively) the residents new to the area who will have moved onto the site in the preceding financial year. So the gap in funding is for the provision of the Trust's services to such persons for up to one year.
The Trust said to MHDC that it would not be fully funded for those services. The Trust therefore accepted that it will receive some funding for the services it provides to new residents on the site during their first year of occupation. That funding is therefore available to make at least some contribution to the costs of services provided by the Trust to new residents and hence to the alleged funding gap. But the Trust never explained to MHDC how the funding allocated to CCGs for population growth translates, or should be translated, into funding for the Trust, so as to identify the true size of the funding gap it says would exist, if any. At all events, in January 2019 the Trust sought a s.106 contribution of £3,357,949.
Around the same time the Trust also sought contributions totalling £4.36m in relation to planning applications for three other substantial urban extensions to Worcester. Those proposals were for 1,400, 965 and 255 new homes.
An officers' report was provided to the meeting of MHDC's committee on 14 August 2019. The members were advised that there were ongoing discussions with the Trust on the methodology it had put forward and that officers remained unconvinced that components of the “calculated need” were appropriate or relevant. But in any event, officers advised that the committee needed to reach an overall planning judgment on the planning obligations necessary to make the proposal acceptable in planning terms.
Officers said that in order to ensure that the development paid first for essential highway infrastructure and educational facilities, the provision of affordable housing had been reduced from a requirement of 40% to 20% of the total number of units, on the basis of independent advice on viability. Accordingly, the Trust's request could only be accommodated (in whole or in part) at the expense of that infrastructure and affordable housing, which had been judged to be necessary in order to make the proposals acceptable in planning terms. The Trust's request could not be acceded to without disturbing the planning balances and priorities previously reached. The officers advised that the obligations which MHDC had resolved on 7 March 2018 had to be provided for in a s.106 agreement remained necessary in their judgment to make the proposals acceptable and they were of a higher priority. However, because the Trust's request was a major issue which had not previously been considered, it would also have to be referred back to the two other authorities.
The three authorities decided that the contributions sought by the Trust on all four sites should not be pursued. They decided that the existing s.106 requirements and contributions were all essential and should be retained.
The Trust did not send any further representations to MHDC for 17 months until 14 January 2021. In the meantime planning permissions were granted between November 2019 and April 2020 in respect of the three other proposed urban extensions, without requiring the contributions sought by the Trust. No challenge has been made by the Trust to any of those decisions.
The Trust's representations of 14 January 2021 explained in more detail why it sought a s.106 contribution, which was now revised downwards to £1,839,839 It set out the nature and scale of its activities, the numbers of staff employed and the need also to use agency staff. An 85% bed occupancy rate is used as a benchmark for patient safety and to help ensure a timely flow of patients through the hospital and allocation to the right type of bed spaces for treatment. Operating a hospital above the 85% level...
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