ON APPEAL FROM THE ADMINISTRATIVE COURT
PLANNING COURT IN BIRMINGHAM
MR JUSTICE HICKINBOTTOM
Strand, London, WC2A 2LL
B e f o r e :
Lord Justice Tomlinson
Lord Justice Lindblom
| Oadby and Wigston Borough Council
- and –
|(1) Secretary of State for Communities
and Local Government
(2) Bloor Homes Ltd.
Mr Gwion Lewis (instructed by the Government Legal Department) for the
Mr Reuben Taylor Q.C. (instructed by Squire Patton Boggs (UK) LLP) for the
Hearing date: 28 July 2016
Crown Copyright ©
Lord Justice Lindblom:
The issue in the appeal
Policy in the NPPF
"To boost significantly the supply of housing, local planning authorities should:
- use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this Framework, including identifying key sites which are critical to the delivery of the housing strategy over the plan period;
- identify and update annually a supply of specific deliverable sites sufficient to provide five years worth of housing against their housing requirements with an additional buffer of 5% (moved forward from later in the plan period) to ensure choice and competition in the market for land. Where there has been a record of persistent under delivery of housing, local planning authorities should increase the buffer to 20% (moved forward from later in the plan period) to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land;
- identify a supply of specific, developable sites or broad locations for growth, for years 6-10 and, where possible, for years 11-15;
- for market and affordable housing, illustrate the expected rate of housing delivery through a housing trajectory for the plan period and set out a housing implementation strategy for the full range of housing describing how they will maintain delivery of a five-year supply of housing land to meet their housing target; and
- set out their own approach to housing density to reflect local circumstances."
Paragraph 49 states:
"Housing applications should be considered in the context of the presumption in favour of sustainable development. Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites."
"Local planning authorities should have a clear understanding of housing needs in their area. They should:
- prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which:
• meets household and population projections, taking account of migration and demographic change;
• addresses the need for all types of housing, including affordable housing and the needs of different groups in the community …; and
• caters for housing demand and the scale of housing supply necessary to meet this demand;
- prepare a Strategic Housing Land Availability Assessment to establish realistic assumptions about the availability, suitability and the likely economic viability of land to meet the identified need for housing over the plan period."
"Plan makers should make an assessment of the likely change in job numbers based on past trends and/or economic forecasts as appropriate and also having regard to the growth of the working age population in the housing market area. Any cross-boundary migration assumptions, particularly where one area decides to assume a lower internal migration figure than the housing market area figures suggest, will need to be agreed with the other relevant local planning [authorities] under the duty to cooperate. Failure to do so will mean that there will be an increase in unmet housing need.
In the guidance on "Housing and economic land availability assessment", under the heading "What is the starting point for the five-year housing supply", paragraph 3-030-20140306 states:
"Where evidence in Local Plans has become outdated and policies in emerging plans are not yet capable of carrying sufficient weight, information provided in the latest full assessment of housing needs should be considered. But the weight given to these assessments should take account of the fact they have not been tested or moderated against relevant constraints. Where there is no robust recent assessment of full housing needs, the household projections published by the Department for Communities and Local Government should be used as the starting point, but the weight given to these should take account of the fact that they have not been tested …".
"(i) Household projections: These are demographic, trend-based projections indicating the likely number and type of future households if the underlying trends and demographic assumptions are realised. …
(ii) Full Objective Assessment of Need for Housing: This is the objectively assessed need for housing in an area, leaving aside policy considerations. It is therefore closely linked to the relevant household projection; but it is not necessarily the same. An objective assessment of housing need may result in a different figure from that based on purely demographics …
(iii) Housing Requirement: This is the figure which reflects, not only the assessed need for housing, but also any policy considerations that might require that figure to be manipulated to determine the actual housing target for an area. For example, built development in an area might be constrained by the extent of land which is the subject of policy protection, such as Green Belt or Areas of Outstanding Natural Beauty. Or it might be decided, as a matter of policy, to encourage or discourage particular migration reflected in demographic trends. Once these policy considerations have been applied to the figure for full objectively assessed need for housing in an area, the result is a "policy on" figure for housing requirement. Subject to it being determined by a proper process, the housing requirement figure will be the target against which housing supply will normally be measured."
"26. … I accept [counsel's] submissions for Hunston that it is not for an inspector on a Section 78 appeal to seek to carry out some sort of local plan process as part of determining the appeal, so as to arrive at a constrained housing requirement figure. An inspector in that situation is not in a position to carry out such an exercise in a proper fashion, since it is impossible for any rounded assessment similar to the local plan process to be done. That process is an elaborate one involving many parties who are not present at or involved in the Section 78 appeal. … [It] seems to me to have been mistaken to use a figure for housing requirements below the full objectively assessed needs figure until such time as the Local Plan process came up with a constrained figure.
27. It follows from this that I agree with the judge below that the inspector erred by adopting such a constrained figure for housing need. It led her to find that there was no shortfall in housing land supply in the district. She should have concluded, using the correct policy approach, that there was such a shortfall. The supply fell below the objectively assessed five year requirement."
The evidence and submissions on housing need at the inquiry
The inspector's decision letter
"20. The SHMA puts forward its conclusions as representing the "policy off" assessment. However, the SHMA has not been tested through a formal examination, and there are some points where questions are raised as to how accurate it is. In particular, the SHMA is based upon 2011 population projections whereas the methodology set out in PPG expects the latest population projections to be used as the basis for assessing need. As noted above, the 2012 SNPP figures are now available.
21. The Leicester and Leicestershire Member Advisory Group has produced a Memorandum of Understanding (seemingly primarily to support the Charnwood Borough Local Plan), aligning the authorities with the conclusions of the SHMA, but this does not have the force of a formally constituted liaison or cooperation as outlined at paragraph 157 of NPPF, in that policies (and associated numerical limits etc), which may be covered by the Memorandum of Understanding have not yet been subject to post-NPPF scrutiny through a local plan examination. Of particular significance is how the SHMA has taken employment-led growth and affordable housing provision into account, and how that is reconciled across the HMA on a district-by-district basis."
"22. There are indeed significant questions relating to the provision for affordable housing. Paragraph 9.25 of the SHMA particularly notes that there are "acute levels of need" for affordable housing in Oadby & Wigston. Table 39 in the SHMA identifies a backlog of 412 households in "unsuitable housing" which is translated into a 'Gross Need' figure for affordable housing of 251 in Table 40. To which can be added the 188 newly forming households in affordable housing need shown in Table 41. Table 42 gives an annual requirement of 51 affordable dwellings up to 2036 to accommodate the need arising from existing households. This comes to 188+51 = 239 per annum for existing and newly forming households, to which has to be added at least a proportion of the backlog figure (251) to give an objective assessment of annual need for affordable housing.
23. However, taking account of the back-log of affordable housing provision, to support "full affordable housing delivery" Table 84 gives an annual need for just affordable housing of 163 2011-2031 and Table 85 gives a figure of 160 per annum for 2011-2036; both figures being more than double the figure which would be needed simply to fulfil the demographic-led (ie SNPP) projection. Nevertheless, Table 84 concludes with an OAN range for all housing for Oadby & Wigston of 80-100 per annum for 2011-2031 and Table 85 gives an annual range of 75-95 for 2011-2036. Both ranges are below the notional identified need for affordable housing of not less than 239 per annum noted above, let alone any need for open market housing.
24. The discrepancies between the apparent identified need and the OAN conclusions were explained at the inquiry to be attributable to cross-boundary provision and economic growth being accommodated by commuting for work purposes within the HMA. However, the mechanism for implementing and monitoring the success of this – particularly for affordable housing – is not clear; for example, no evidence was provided to show there is a mutual acceptance between neighbouring authorities of households on housing waiting lists.
25. Private rented housing is seen to be meeting a proportion of the affordable housing need in that it provides accommodation for households in receipt of housing benefit payments. Whereas there may have been historical reliance on the private rented sector to meet some of the demand for affordable housing, there have to be question over whether this truly meets the needs of such households in terms of security of tenure and quality of accommodation. Paragraph 50 of NPPF looks for either housing to be provided or a financial contribution of broadly equivalent value to have been put in place – ie it is the development industry and public sector together which should be providing affordable housing, not the private rented sector drawing on subsidies via social benefit payments.
26. I acknowledge that 100% of the affordable housing needs could not be met even within the SHMA's housing growth numbers discussed at [this] inquiry. However, as noted [at] paragraph 6.64 of the SHMA, what the acceptable proportion to be accommodated by the private rented sector would be is a "policy on" decision."
"27. There is, therefore, a degree of uncertainty over what is the actual FOAN, including the provision for affordable housing. That could lead to a significant lacuna in meeting housing need; the consequences of which would include some form of shared housing, overcrowding and perhaps eventually homelessness. All of which would be contrary to the expectations of NPPF which looks for a significant boost in the supply of high quality housing. I do, therefore, have sympathy with the view put forward at the inquiry by the appellant that the FOAN for Oadby & Wigston could be considerably more than the 90 per annum which is the basis for [core strategy] Policy CS1, and the maximum of 100 given in Table 84 of the SHMA.
28. The [council] argued that even if the [core strategy] is not seen to be compliant with the NPPF on account of it being based upon the revoked EMRP, the SHMA figures are broadly similar to the [core strategy], and therefore there is no practical difference with regard to the amount of development growth to be planned for. However, whilst I do not necessarily endorse any of the four scenarios put forward by the appellant as being definitive, from the evidence given at this inquiry, until the SHMA has been tested through a local plan examination the degree of uncertainty is so great that it would be unreasonable to accept that the figures given in the SHMA are in accordance with the expectations of NPPF and the methodology in PPG.
29. As stated above, I acknowledge that the SHMA states that it presents a "policy off" appraisal – but that is "policy off" for the HMA as a whole, not for the constituent local authorities with a stake within the HMA. I recognise that the historical performance of the housing market in the HMA cannot be ignored and the SHMA is accepted by the local planning authorities within the HMA as being a reasonable basis for the distribution of housing provision. This is supported by the Memorandum of Understanding, which has to be an indication of a degree of cooperation between the authorities with a stake in the HMA. However, that also implies that the housing need figure for Oadby & Wigston could be a constrained, "policy on", figure in terms of at least the distribution of growth across the HMA and between the various authorities.
30. Without any mechanism to formalise a reliance on cross-boundary provision, the conclusions set out in the SHMA, not least relating to affordable housing provision, have to be seen as an unsupported or untested "policy on" position – which would not correspond with the Hunston judgment. The initial distribution of development within the PUA was arrived at through the EMRP examination, which was held well before the NPPF was published and its expectations of how local plans should be prepared and scrutinised. That is, the overall figure for the HMA may be "policy off", but the distribution of the identified need between the various authorities would be – at least in part – a "policy on" position. That apportionment has not been tested at a NPPF compliant local plan examination.
31. Taking all of the above into account, I come to the view that these represent material considerations which could, subject to my findings on other matters, justify coming to a decision on the appeal scheme which would not accord with the development plan."
"33. Although I do not regard any of the scenarios put forward at the inquiry as being definitive of the housing need for Oadby & Wigston, as discussed above, the figure is likely to be in excess of the 90 dwellings per annum set out in Policy CS1. Whether the FOAN is as high as the 161 per annum postulated in one of the scenarios has to be open to question but, if using the Chelmer Model and based on only the household (demographic) projection figure – not allowing for economic growth adjustments – the figure could be in the order of 147 per annum.
34. In any event, whatever the calculated figure might be, it is not consistent with the NPPF to regard that as a ceiling. The driving principle behind the NPPF policy is, as noted above, to significantly boost the supply of housing and, unless a particular scheme would not be compliant with other aspects of NPPF, it would not be necessary or even desirable to resist any theoretical 'oversupply' in the number of houses to be permitted. Having said that, for the purposes of this appeal I will adopt 147 per annum as the indicative figure for calculating whether the [council] is able to demonstrate a 5-year supply of housing land."
"85. The appeal site is outside the defined limits of development for the PUA, as set in the Core Strategy. However, the Core Strategy pre-dates the publication of the NPPF and its policies are not compliant with the expectations of the NPPF, in particular with regard to the adequacy of housing land supply to meet identified local needs. Whereas there have been efforts to draw up a housing strategy which addresses the whole of the PUA the SHMA has not been tested through a local plan examination and there is uncertainty over the operation of any joint or mutually agreed policy to meet needs across local authority boundaries. That is, the quantum of the full, objectively assessed need as looked for by NPPF is not settled, and neither is it certain that the level of cooperation – and its implementation – implied by the Memorandum of Understanding and the SHMA satisfy the duty to cooperate set out at paragraph 157 of NPPF."
The proposed development would make "a significant contribution" to meeting the shortfall of 270 dwellings in the five-year housing need (paragraph 86). And it would be "sustainable development" (paragraph 87). The inspector therefore concluded that the appeal should be allowed, and conditional planning permission granted (paragraph 88).
The judgment of Hickinbottom J.
"… For an authority to decide not to accommodate additional workers drawn to its area by increased employment opportunities is clearly a policy on decision which affects adjacent authorities who would be expected to house those additional commuting workers, unless there was evidence (accepted by the inspector or other planning decision-maker) that in fact the increase in employment in the borough would not increase the overall accommodation needs. In the absence of such evidence, or a development plan or any form of agreement between the authorities to the effect that adjacent authorities agree to increase their housing accommodation accordingly, the decision-maker is entitled to allow for provision to house those additional workers. To decide not to do so on the basis that they will be accommodated in adjacent authorities is a policy on decision."
And the second difficulty (at paragraph 34(ii)) was this:
"Similarly, the justification provided for keeping the true affordable housing requirements out of the account is inadequate. First, insofar as the Council relied upon adjacent authorities to provide affordable accommodation, that is a policy on decision for the same reasons as set out above. Second, as the SHMA itself properly confirms, the benefit-subsidised private rented sector is not affordable housing, which has a particular definition (paragraph 6.79 …). Indeed, insofar as unmet need could be taken up by the private sector, that is described in the SHMA itself as "a matter for policy intervention and is outside the scope of this report" (paragraph 6.64). It remains policy intervention even if the private sector market would accommodate those who would otherwise require affordable housing, without any positive policy decision by the Council that they should do so: it becomes policy on as soon as the Council takes a course of not providing sufficient affordable housing to satisfy the FOAN for that type of housing and allowing the private sector market to take up the shortfall."
"… Housing requirements in such a plan are, of course, policy on. [Stewart J.] was not looking at housing requirements in a development control context – as I am. In that context, paragraph 49 of the NPPF refers to relevant policies for the supply of housing not being considered up-to-date "if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites" (emphasis added). In a development control context, a local planning authority could not realistically demonstrate such a thing on a HMA-wide basis, which would require consideration of both housing needs and supply stocks across the whole HMA. Paragraph 49 is focused on the authority demonstrating a five-year housing land supply on the basis of its own needs and housing land stocks."
He therefore concluded (at paragraph 36) that "the Inspector was right – and, certainly, entitled – to conclude that the SHMA figures for housing requirements for Oadby & Wigston, as confirmed by the 2012-based SNPP and supported by Mr Gardner, were policy on and thus not the appropriate figures to take for the housing requirement for the relevant five year period".
Did the inspector err in his understanding and application of NPPF policy?
(ii) Paragraph 47 NPPF requires the Local Plan to meet the full OAN in the HMA. That much is clear.
(iii) Paragraph 159 NPPF is helpful in clarifying this. It is to be noted that it deals particularly with housing. It begins by requiring LPAs to have a clear understanding of housing needs "in their area". It then proceeds to require LPAs to prepare a SHMA to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. In other words, the LPA has to have the clear understanding of their area housing needs, but in assessing these needs, is required to prepare an SHMA which may cross boundaries.
"… [Once] the relevant area for the assessment of housing needs, on the true interpretation of the NPPF, may cover more than the area of one district council, a basis for apportionment of need has to be found. That is where the co-operation and agreement of the local authorities comes in. It provides, on whatever basis it is done, for the full objectively assessed needs of each area. …"
and (at paragraph 81):
"… Hull CC and ERYC had agreed that Hull CC should stem out-migration into ERY, in the interests of both, and so the past out-migration levels had not been carried forward into the future needs assessment of ERYC. If that is so, it would mean that no objectionable restraint policy had been applied anyway, no needs of ERYC were being left unmet. There is nothing in the parts of the PPG which deal with such issues which means that past migration patterns cannot be adjusted in the assessment of future need, responding to the provision of housing and other developments, without offending [paragraph 49 of the] NPPF. …".
"… As Hickinbottom [J.] found at [paragraph] 42 of that judgment, what the Inspector did in that case was to exercise his planning judgment, firstly, to conclude that the FOAN was higher than the council's figure and secondly, (again deploying planning judgment) to arrive pragmatically at a figure for the FOAN in order for it to be used to assess the five-year housing land supply. The council's figure was regarded by the Inspector in that case as being short because it failed to properly take account of factors which should have been included in the FOAN, including considering affordable housing need. Understood in this way, references to "policy on" and "policy off" become a red herring. The appropriate figure was for the Inspector's judgment to determine taking account of all the matters involved in finding the FOAN."
and (in paragraph 35):
"… When a planning authority has undertaken or commissioned a SHMA, that will obviously be an important piece of evidence, but it is not in and of itself conclusive. It will be debated and tested at the local plan examination or (as in the present case) in appeals within the development control process."
As it seems to me, those observations of Dove J. sit perfectly well with Hickinbottom J.'s essential reasoning in this case.
Lord Justice Tomlinson
Lady Justice Black