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ALNWICK DISTRICT COUNCIL v. SECRETARY OF STATE FOR ENVIRONMENT, TRANSPORT AND REGIONS and SAFEWAY STORES PLC AND OTHERS [1999] EWHC Admin 782 (4th August, 1999)

IN THE HIGH COURT OF JUSTICE CO/1398/98

QUEEN'S BENCH DIVISION

(CROWN OFFICE LIST)

Royal Courts of Justice

The Strand

Wednesday, 4th August 1999

B e f o r e:

MR JUSTICE RICHARDS

- - - - - -

ALNWICK DISTRICT COUNCIL

-v-

THE SECRETARY OF STATE FOR THE ENVIRONMENT,

TRANSPORT AND THE REGIONS

and

SAFEWAY STORES PLC AND OTHERS

- - - - - -

Handed down judgment of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 41 4040

Official Shorthand Writers to the Court)

- - - - - -

1. MR J HOGGETT QC and MR V FRAZER (Instructed by Legal Department, Alnwick District Council ) appeared on behalf of the Applicant.

2. MR D ELVIN (Instructed by The Treasury Solicitors) appeared on behalf of the First Respondent.

3. MR J STEEL QC (instructed by Clifford Chance) appeared on behalf of the Second Respondent.

- - - - - -

J U D G M E N T

(AS APPROVED )

- - - - - -

Wednesday, 4th August 1999

1. MR JUSTICE RICHARDS: In these proceedings Alnwick District Council applies to quash an order made by the Secretary of State under section 100 of the Town and Country Planning Act 1990 modifying an outline planning permission granted by the council in 1993 for the development of a site at Willowburn Avenue, Alnwick. In his decision letter dated 5 March 1998 the Secretary of State accepted the recommendations contained in the report of his Inspector following a public inquiry in June 1997. The order was made on the same date.

2. The application raises a number of legal issues concerning the exercise of powers under section 100 of the 1990 Act, including the question whether the Secretary of State should take into account, as a material consideration, the impact on the local authority of paying the compensation to which a developer may be entitled in the event of modification of an existing planning permission.
The facts

3. The subject site is 5.2 ha in size and is located some 1.9 km from the centre of Alnwick. At the time of grant of outline planning permission it had no designation in a statutory development plan but was specified in the emerging local plan as a site for industrial and employment development.

4. On 9 July 1993 an application was lodged for planning permission in respect of a range of uses, including class A1 retail (food and non-food). Outline permission was granted on 20 December 1993 for the development "as described in your application for planning permission". The council thought that it was giving permission for a development involving retail use of up to 3,252 sq m. But the Inspector concluded, by reference to the figures submitted in support of the application, that the outline permission granted was in fact for retail use of up to 4,654 sq m. That conclusion is not the subject of challenge.

5. Safeway Stores plc, the second respondent in these proceedings, subsequently became interested in the site and acquired the freehold. Safeway submitted three applications for approval of reserved matters, differing in their details but each for a retail store of 4,307 sq m.

6. On 30 January 1996 the Government Office for the North East ("GO-NE") invited the council to consider revocation or modification of the outline planning permission on the ground that it was contrary to national and development plan policies. On 22 May 1996 the Secretary of State consulted the council as to whether he should exercise his powers under section 100 of the 1990 to make an order to revoke or modify the planning permission. There followed the appointment of the Inspector, a public inquiry and the Inspector's report. The inquiry and report related to two principal matters: (1) the Secretary of State's proposed modification order, a draft of which was before the Inspector and proposed the deletion of permission for class A1 retail use, and (2) appeals against the council's non-determination of Safeway's applications for the approval of reserved matters. A letter dated 18 November 1996 from GO-NE also identified a number of specific matters about which the Secretary of State wished to be informed for the purposes of his consideration of the case.

7. In the concluding part of his report the Inspector dealt with the following matters: the appropriate test for determining whether to exercise the powers of revocation or modification; the scope of the 1993 planning permission; the implications for the vitality and viability of Alnwick town centre; the need for retail use on the subject site; the likely impact on the surrounding area's amenity; the degree of conformity with structure and local plan policy; the degree of conformity with PPG6 (July 1993); other material considerations; conclusions; and recommendations. The first two of those sections were preliminary matters, the remainder reflected the list in GO-NE's letter of 18 November 1996 of specific matters about which the Secretary of State wished to be informed.

8. The Inspector's conclusion in relation to the proposed modification order, at paragraph 18.1 of his report, was as follows:

"On the proposed modification order I conclude that the Council was grossly wrong to misinterpret what was applied for in 1993 and to grant permission when the clear evidence then, and now, is that the permission for the store of 3,252 sq m that the Council thought it was giving, or for the larger store of 4,654 sq m which is what is actually permitted, would firstly, adversely affect the vitality and viability of Alnwick town centre; secondly, not accord with the actual need for retail use on the subject site; and thirdly, be contrary to national planning guidance and Structure and Local Plan Policies. Other material considerations raised at the Inquiry ... do not in my opinion outweigh the wrongness of the Council's decision. I consider that the 1993 decision was, and is, so demonstrably and seriously perverse such that significant harm to Alnwick's vitality and viability as a shopping centre was and is likely to occur. It is therefore expedient to modify the 1993 permission by the deletion of A1 use, and the proposed modification order should be authorised."

9. The Inspector stated that if the proposed modification order were authorised, then the reserved matters applications could not be determined. He reached separate conclusions on those matters in case the proposed modification order were not authorised.

10. In his decision letter the Secretary of State adopted the Inspector's conclusions and the reasons for them. He therefore made the order deleting A1 retail use from the 1993 planning permission.

11. The consequences of the order, in terms of the payment of compensation by the council to Safeway, are considered below.

12. The challenge to the order is brought by the council and resisted by the Secretary of State. Safeway's position is that it disagrees with the Secretary of State's decision but does not challenge it or submit that the order was unlawful. Indeed, it has appeared as second respondent to advance arguments in support of the order. None of the other respondents has taken any part in the proceedings.

13. The statutory framework

14. The material provisions of sections 97 to 100 of the 1990 Act, under the heading "Revocation and modification of planning permission", are these:

"97. (1) If it appears to the local planning authority that it is expedient to revoke or modify any permission to develop land granted on an application made under this Part, the authority may by order revoke or modify the permission to such extent as they consider expedient.

(2) In exercising their functions under subsection (1) the authority shall have regard to the development plan and to any other material considerations.

....

98. (1) Except as provided in section 99, an order under section 97 shall not take effect unless it is confirmed by the Secretary of State.

(2) Where a local planning authority submit such an order to the Secretary of State for confirmation they shall serve notice on ....

(3) The notice shall specify the period within which any person on whom it is served may require the Secretary of State to give him an opportunity of appearing before, and being heard by, a person appointed by the Secretary of State for the purpose.

(4) If within that period such a person so requires, before the Secretary of State confirms the order he shall give such an opportunity both to him and to the local planning authority.

....

(6) The Secretary of State may confirm an order submitted to him under this section either without modification or subject to such modifications as he considers expedient.
....

100. (1) If it appears to the Secretary of State that it is expedient that an order should be made under section 97, he may himself make such an order.

(2) Such an order which is made by the Secretary of State shall have the same effect as if it had been made by the local planning authority and confirmed by the Secretary of State.

....

(7) The provisions of this Part and of any regulations made under this Act with respect to the procedure to be followed in connection with the submission by the local planning authority of any order under section 97 and its confirmation by the Secretary of State shall have effect, subject to any necessary modifications, in relation to any proposal by the Secretary of State to make such an order and its making by him.

...."

15. Section 107 contains provisions as to the payment of compensation where planning permission is revoked or modified:

"(1) ... where planning permission is revoked or modified by an order under section 97, then if, on a claim made to the local planning authority within the prescribed time and in the prescribed manner, it is shown that a person interested in the land ... -

(a) has incurred expenditure in carrying out work which is rendered abortive by the revocation or modification; or
(b) has otherwise sustained loss or damage which is directly attributable to the revocation or modification,

the local planning authority shall pay that person compensation in respect of that expenditure, loss or damage."

16. The Secretary of State's policy with regard to the use of his powers under section 100 was set out in a statement to Parliament by a junior minister on 20 December 1989:

"Section 100 is a default power. Amongst other things, it enables the Secretary of State to take action to revoke a planning permission, after following the specified procedures. There is provision for compensation to be paid.

Mr Rt Hon Friend's practice has been to use this power only rarely. He has taken the view that the power should be used only if the original decision is judged to be grossly wrong, so that damage is likely to be done to the wider public interest.

Recently, however, a particular kind of case has come to the attention of my Rt Hon Friend in which he may well be prepared to exercise his power to revoke a planning permission. This is where he considers that consistency is needed between a local planning authority's decisions in different cases, in order to ensure that similar circumstances give rise to similar decisions and that the provisions of the development plan, so far as it is material, and other material considerations have been taken into account.

....

Mr Rt Hon Friend will continue to consider each case on its merits bearing in mind this policy."

The issues

17. Mr Hoggett QC, for the council, has made clear that the challenge is directed towards alleged errors in the Inspector's report on which the Secretary of State's decision was based. In his oral submissions he has identified five issues which are being pursued. They recast and to some extent limit the matters set out in the notice of motion and skeleton argument, and may be summarised as follows:
(1) whether the Secretary of State erred in treating as irrelevant the impact on the council of paying compensation, either generally or in so far as it had land use consequences by preventing the council from providing proposed new leisure facilities;
(2) whether the Secretary of State erred in applying his policy in relation to section 100, in particular that part of the policy referring to damage to the wider public interest;
(3) whether the Secretary of State erred in deciding to delete the totality of the class A1 retail use from the planning permission when the evidence and correct application of policy ought to have led him to conclude that permission for retail use in respect of a reduced floorspace (up to 1,765 sq m) was appropriate;
(4) whether the Secretary of State erred in deciding to delete the totality of the class A1 retail use when there was no evidence to support its deletion in so far as it related to non-food retailing;
(5) whether the Secretary of State erred in concluding that it was not open to him to modify the draft order so as to limit retail use to no more than 1,765 sq m or in failing to consider whether he could modify the order so as to limit it to non-food retailing.

18. All of those issues have been addressed both by Mr Hoggett for the council and by Mr Elvin for the Secretary of State. For Safeway, Mr Steel QC has addressed issues (3) to (5), the main relevance of which is that the council contends (though Safeway does not accept) that the value of planning permission for a 1,765 sq m store would be close to that for a 4,654 sq m store and that the compensation payable on the making of the modification order would therefore be much lower. In addition, Mr Elvin and Mr Steel have raised certain points on the withholding of relief in the exercise of the court's discretion if the council succeeds on any of its grounds of challenge.

19. Issue (1): relevance of payment of compensation

20. The evidence before the Inquiry was that Safeway would be making a claim of at least £3 million by way of compensation in the event of the planning permission being modified as proposed. It now appears that the figure will be in excess of £4 million.

21. In its oral evidence to the Inspector the council made brief reference to the impact on it of paying compensation. The point was summarised in paragraph 14.5 of the Inspector's report:

"Also, if the Council is forced to pay compensation, this would mean that it may not be able to provide new leisure facilities planned for the District."

22. In paragraph 17.40 of his conclusions the Inspector stated, with a cross-reference to paragraph 14.5:

"With regard to the possible financial consequences for the Council if the proposed modification order is made and comparison is claimed, this is not a land use planning matter and therefore not one which I can have regard to."

23. The case advanced for the council is that (i) the Inspector thereby failed to take into account the land use consequences of payment of compensation, i.e. the inability of the council to provide the planned leisure facilities if it had to pay compensation to Safeway; and/or (ii) the Inspector was wrong to proceed on the basis that payment of compensation more generally is not capable of being a material consideration. The same errors are attributed to the Secretary of State in adopting the Inspector's conclusions.

24. The court has been brought up to date with regard to the planned leisure facilities. Matters have reached a relatively advanced stage, with a conditional offer of funding in principle from the Lottery Sports Fund. The expected total cost of the project is £5.9 million, with Lottery funds providing just over £3 million, the Duke of Northumberland donating land, and the balance of £2.65 million coming from the council's capital reserves. What is said, however, is that expenditure of that order would not be sanctioned by the council if compensation had to be paid to Safeway pursuant to the Secretary of State's modification order. Thus, it is said, there is still a real issue as to the impact of the order on the ability of the council to proceed with the proposed leisure facilities.
The council's submissions

25. In relation to the first limb of the council's case Mr Hoggett cites R v. Westminster Council, ex parte Monahan [1990] 1 QB 87, which was a challenge to the grant of planning permission for a far-reaching redevelopment of the Royal Opera House. Permission had been granted for the whole development on the basis that desirable improvements to the opera house could not be financed unless office development was also permitted. It was contended by the applicants for judicial review that such financial considerations were not capable of being a material consideration. The Court of Appeal rejected the contention. It approved the approach of Forbes J in Sovmots Investments Ltd. v. Secretary of State for the Environment [1977] QB 411, 425, as followed by Woolf J in Sosmo Trust Ltd v. Secretary of State for the Environment [1983] JPL 806:

"all that the court can do is to say that cost can be a relevant consideration and leave it to the Minister to decide whether in any circumstances it is or is not. Of course it follows that the weight to be given to cost, if it is a relevant factor, is also a matter for the Minister and not one in respect of which any court is entitled to substitute its opinion .... I would conclude that it is impossible to say that cost can never be a relevant consideration either in a planning matter or in a compulsory purchase matter. It can be both or either and it will depend in every case on the circumstances of the case. It is then a matter for the Minister to decide whether or not in any particular instance cost is in fact a relevant consideration."

26. The approach so laid down was applied by Mr Malcolm Spence QC, sitting as a deputy judge of the High Court, in Northumberland County Council v. Secretary of State for the Environment (1989) 59 P&CR 468. The challenge in that case was to a decision of the Secretary of State based in part on the view that the economic advantages of a proposed development outweighed the environmental objections to it. Such a view was held to constitute a correct application of the development plan which stated that economic as well as environmental factors had to be taken into account. But the deputy judge also found, obiter, that the Secretary of State would have been entitled to proceed on that basis even if there had been no relevant policy in the development plan. He proceeded from the basis that "it is now well settled that economic considerations may amount to planning considerations to be borne in mind when granting or refusing planning permission (see, for example, the Royal Opera House case itself)".
He went on to stress, however, that they must relate to the use and development of land:

"What I have said is subject always to the proposition that the consideration to be sought to be brought into play in assisting upon the judgment as to whether permission should be granted, be it financial or otherwise, must relate to the use and development of land .... [I]t will be for the inspector and the Secretary of State to decide in each case whether the other piece of land is one that can properly be brought into consideration as a matter of fact and degree in the circumstances of a particular case" (476-7).

27. Mr Hoggett submits that those authorities show that financial consequences are capable of being a material consideration at least in so far as they relate to the use and development of land: a remote or knock-on consequence for a desirable development elsewhere can be a material consideration. There can be no difference in principle between a "material consideration" for the purposes of section 97(2) and a "material consideration" for the purposes of the grant of planning permission. Thus, contrary to the approach adopted by the Inspector and Secretary of State, the financial impact of the payment of compensation on the council's ability to proceed with the proposed leisure facilities was capable of being a material consideration.

28. The alternative and broader part of the council's case, that the cost to the local planning authority of paying compensation is capable of being a material consideration irrespective of specific land-use consequences, proceeds as follows. Payment of compensation is an immediate consequence of the making of a modification order. In principle, the consequences of a discretionary decision are a material consideration when exercising the discretion. The closest application of that principle is to be found in Vasiliou v. Secretary of State for Transport [1991] 2 All ER 77. In that case the Secretary of State made an order stopping up the highway notwithstanding the inspector's finding that it was likely to result in the failure of the applicant's business and there would be no possibility of compensation. He did so on the basis that the economic effect of the order on the applicant's business was not a relevant consideration. The applicant applied successfully for the order to be quashed. In the Court of Appeal, Nicholls LJ stated:

"As a matter of first impression I would expect that when considering how to exercise this discretion the minister could take into account, and, indeed, that he ought to take into account, the adverse effect his order would have on those entitled to the rights which would be extinguished by his order. The more especially is this so because the statute makes no provision for the payment of any compensation to those whose rights are being extinguished. I would not expect to find that such extinguishment, or expropriation, is to take place in the exercise of a discretionary power without the minister in question so much as considering and taking into account the effect that such expropriation would have directly on those concerned.

Having read and reread the sections I can see nothing in their language, or in the subject matter, to displace my expectation ...." (83d-e).

29. Mr Hoggett accepts that the statute may exclude what would otherwise be relevant considerations. He refers in this connection to a decision upon which Mr Elvin, for the Secretary of State, places considerable reliance, Alliance against the Birmingham Northern Relief Road v. Secretary of State for the Environment, Transport and the Regions [1999] JPL 426 (see below). He submits that the statutory language and context in that case were materially different and that there is nothing in the 1990 Act to exclude consideration of the impact of the local authority's duty to pay compensation. If there is an analogy with compulsory purchase orders, where compensation is payable to those affected, then he submits that a local authority when considering whether to make such an order must be entitled to ask itself not only whether an order is desirable but also whether the authority can afford to make it. The language of "if it appears ... expedient" in sections 97 and 100 also suggests that a broad range of considerations may be taken into account (cf. Mills v. Secretary of State for the Environment [1998] 3 PLR 12 in the context of tree preservation orders).

30. More generally it is submitted that it would be extraordinary if a local planning authority were required to revoke a planning permission whatever the impact might be on its own costs and services. A local authority, as a quasi trustee of local taxpayers' funds, must be entitled to take into account the costs of the proposed action when exercising a discretionary power: see, by way of illustration, Taylor v. Munrow [1960] 1 WLR 151 at 157. If a local authority is entrusted with a wide discretion which involves as a consequence the expenditure of public money, it requires the strongest statutory language to remove the normal obligation to consider the impact of a decision on its funds generally and, by necessary extension, the consequences for its other policies.

31. Finally, Mr Hoggett submits that implied judicial acceptance of the proposition for which he contends is to be found in R v. Bassetlaw DC, ex parte Oxby [1998] PLCR 283. The case related to planning permissions granted in circumstances where certain councillors had failed to disclose an interest. The council applied by way of judicial review to quash the grant of the planning permissions. One of the arguments advanced against it was that there existed a more appropriate and adequate alternative remedy in the form of revocation of the planning permissions under section 97 of the 1990 Act. The council, however, did not consider it expedient to revoke the permissions; it took the view that permissions vitiated by bias should be declared void without the payment of any compensation, and that it would indeed be wrong not to seek to have the permissions set aside but to choose to revoke them and pay compensation. The Court of Appeal accepted the validity of council's approach. Hobhouse LJ stated at 294:

"In my judgment this is a legitimate and proper attitude for the council to adopt. If they are entitled to have the consents set aside without the payment of compensation, that is what should occur and they should not lend themselves to the payment of inappropriate and unnecessary compensation by reason of exercising their power under section 97."

The respondents' submissions

32. For the Secretary of State, Mr Elvin submits first that the financial impact of a modification order on the local planning authority is not a material consideration; secondly, that in any event the test applied by the Secretary of State encompasses concern about the financial consequences; and thirdly, that the issue was one of such little significance before the Inspector that the court should exercise its discretion against quashing the decision even if there was an error of law in relation to it.

33. As to the first submission, Mr Elvin contends that the closest parallel in the authorities, and one that is firmly against the council's case, is that of Alliance against the Birmingham Northern Relief Road v. Secretary of State for the Environment, Transport and the Regions [1999] JPL 426. The context was the making of compulsory purchase orders, an expropriatory act giving rise to the payment of compensation and therefore closely analogous to the present situation. The primary powers in issue arose under the Highways Act 1980 and the New Roads and Street Works Act 1991, though the compulsory purchase procedures of the Acquisition of Land Act 1981 were also engaged. They were discretionary powers, even though not expressed in terms of "if it appears expedient". The applicants contended that the Secretary of State, in approving certain schemes and orders, had taken into account an irrelevant consideration, namely the fact that he would be exposed to claims for compensation if he did not approve them. Latham J held that the decision would have been the same even if the Secretary of State had excluded the issue of compensation from his mind. But he went on to deal obiter with the question whether compensation was a relevant consideration:

"... I confess that I do not understand how the question of compensation could be relevant to the highway and other public policy considerations under the 1980 Act, nor to the merits of the proposals to make a tolling order under the 1991 Act. In my judgment, the applicants are correct in their submission that the question of compensation is no more relevant to these considerations than would be the fact that, in the more normal highway proposals, a decision not to make the relevant schemes and order would render all the time and expense devoted to devising, promoting and dealing the relevant inquiries, nugatory. The fact that section 1(4) of the 1991 Act makes provision for compensation in certain eventualities does not make the question of compensation a relevant consideration any more than does the fact the 1980 Act envisages that the highway authority will be put to enormous expenses in obtaining ministerial agreement to highway proposals. Nor can I see how it can be relevant merely because, if the Secretary of State refused to make the schemes and orders either at all or timeously, this would result in a claim for compensation which would in effect be an extra cost in relation to any subsequent proposals which may be put forward to give effect to what was described as the proven need for the motorway. Quite apart from the fact that I cannot see how this consideration can be relevant to the merits of the proposals under consideration, the argument begs two questions, first whether or not any subsequent proposals will be forthcoming and secondly whether or not such proposals may not prove more cost-effective ultimately than the ones under consideration. I do not suggest that financial consequences are themselves irrelevant. The cost-effectiveness of proposals will always form part of the debate in any highway inquiry. That has a direct relevance to the question of whether or not the highway need has been established. But that does not mean that any costs consequences of either approving or not approving the proposals is a relevant highway consideration under the 1980 Act or toll consideration under the 1991 Act" (432-3).

34. The same approach is said to apply in the present context. The Secretary of State is intervening because of the conflict between the planning permission granted and planning policies. The Secretary of State must be guided by the planning consequences, not the financial consequences, because the legislation's concern is with the planning consequences. The grosser the local planning authority's error in granting permission, the more likely is it that the financial consequences of revocation or modification will be large; yet it cannot have been intended that that should weigh in the balance against the revocation or modification. The use of the term "expedient" in sections 97 and 100 does not avail the council, since the context requires expediency to be assessed by reference to the planning issues. Further, the council's submissions go too far since, if payment of compensation is a material consideration, it must always be a material consideration in the exercise of powers under sections 97 and 100; but the authorities do not go so far as to suggest that financial consequences are always material considerations.

35. As to the other authorities, they show that the materiality or otherwise of financial consequences depends on the context. That is apparent from the passage of Forbes J's judgment in Sovmots Investments Ltd which was approved in R v. Westminster Council, ex parte Monahan [1990] 1 QB 87. Ex part Monahan itself was not a compensation case, but was concerned with the grant of planning permission and, in particular, the question whether it was permissible for the local planning authority to take into account the fact that a desirable part of a proposed development would not be financially viable unless permission were given for the other part of the development. Vasiliou v. Secretary of State for Transport [1991] 2 All ER 77 was likewise not a compensation case, but a case about expropriation without compensation. The question was whether the serious adverse effect on the landowner of making a stopping-up order could and should be taken into account. The observations of Nicholls LJ were made in that context and are not to be read as a general statement about the relevance of financial consequences in the exercise of statutory powers. R v. Bassetlaw DC, ex parte Oxby [1998] PLCR 283 was a case about alternative remedies, in circumstances where the original planning permissions were unlawful and an order under section 97 would not give the same relief as the quashing of those permissions. The validity of the council's concerns with regard to the financial consequences of exercising its powers under section 97 was not the subject of argument or of decision by the Court of Appeal.

36. Mr Elvin's second main submission, that the test applied by the Secretary of State encompasses concern about the financial consequences, is based on the terms of the Parliament statement which set out the Secretary of State's policy with respect to the exercise of his powers under section 100. The opening paragraph of the statement refers to the fact that this is a default power, which involves the revocation of an existing right with provision for the payment of compensation. The financial consequences of the exercise of the power are therefore given recognition and are taken into account in the policy.

37. The final main submission is that the issue was not one of any significance at the inquiry, and even if the Inspector was in error the court should exercise its discretion against quashing the decision. The passage at paragraph 14.5 of the Inspector's report refers to a point that was not part of the council's written evidence. It emerged only in the oral evidence and even then did not form a substantial part of the council's case. The cost to the council was not mentioned in the council's closing submissions, otherwise than as a philosophical point in support of the submission that the use of section 97 should be a rarity. It was not included in the summary of the council's case. Nor was it mentioned in Safeway's closing submissions. There is no evidence that any financial analysis was provided, or any clear indication of the impact of the payment of compensation on the council's finances. Thus the council did not raise this as a serious point for the Inspector to grapple with. It is wrong for the council now to try to use the point as a means of attacking the Secretary of State's decision. Moreover it cannot seriously be suggested that the Inspector would have found it a compelling factor if he had considered it to be legally relevant, or that it might have made a difference to the decision (see the test in Bolton MBC v. Secretary of State for the Environment (1990) 61 P&CR 343).
Conclusions

38. I reject at the outset Mr Elvin's alternative submission that consideration of financial consequences is encompassed within the Secretary of State's policy as to the exercise of his powers under section 100. On no reasonable interpretation of the policy does it encompass the point: the mere mention of provision for the payment of compensation is not enough. Nor is that how the matter was reasoned by the Inspector or, therefore, by the Secretary of State. Had it been reasoned in that way, it would have been necessary to consider whether an exception from the policy was called for in the circumstances of the case.

39. I turn back to the main issue, whether the cost to the local planning authority of paying compensation is capable of being a material consideration as a matter of general principle (i.e. leaving aside the separate argument about specific land-use consequences for the council). The Inspector and the Secretary of State proceeded on the basis that it is not, since it is not a land use planning matter. In my judgment that was a correct approach.

40. A decision-maker will often be entitled, if not required, to take into account as a relevant or material consideration the financial consequences of his decision. Consideration of the effects of a decision on others is a normal aspect of the decision-making function and there is no difference of principle between financial effects and other effects. The observations of Nicholls LJ in Vasiliou v. Secretary of State for Transport as to the relevance of the adverse effects of a ministerial order were directed to the specific context of an order extinguishing or expropriating an individual's rights but are in my view capable of more general application. Nor is the point limited to the effects of a decision on others. It also applies to the financial consequences for the decision-maker himself. Where decisions involve the expenditure of public funds, the decision-maker will normally be entitled or required to take into account matters such as the availability of funds and competing demands on those funds.

41. All that, however, is at a level of generality. Whether a particular consideration is one that a decision-maker is entitled or required to take into account in the exercise of a statutory power depends ultimately on the statute conferring that power. A statute may restrict the range of permissible considerations either expressly or by implication. Whether it does so is to be determined by reference to its provisions and to the statutory purpose.

42. In the exercise of their functions under sections 97 and 100 of the 1990 Act with regard to the revocation and modification of planning permissions, local planning authorities and the Secretary of State are required to have regard to "material considerations" (see section 97(2)). What is capable of amounting to a material consideration for this purpose must in my view be the same as in relation to the initial determination of planning applications, i.e. the "material considerations" referred to in sections 70(2) and 54A. Although the courts have adopted a flexible approach towards the concept, a consideration must in broad terms be a "planning" consideration in order to be material for that purpose. Any consideration which relates to the use and development of land is capable of being a planning consideration (see Stringer v. Minister of Housing and Local Government [1970] 1 WLR 1281 at 1294).

43. It follows that financial consequences are capable of amounting to a material consideration in so far as they relate to the use and development of land. R v. Westminster Council, ex parte Monahan is an example. The need for a connection with the use and development of land was helpfully spelled out in the application of that decision in Northumberland County Council v. Secretary of State for the Environment .

44. It also follows, however, that in so far as financial consequences do not relate to the use and development of land, they are not capable of amounting to material considerations. In my view that is fatal to the general proposition for which Mr Hoggett contends, that the cost to the local authority may be taken into account irrespective of land-use consequences. I see no warrant for treating cost as a permissible consideration even where it is not a "material consideration" within the meaning of the legislation. It is wholly consonant with the statutory purpose that decisions under sections 97 and 100 should be guided only by planning considerations. It cannot have been the legislative intention, in introducing provision for the payment of compensation, that the impact of such payment upon a local planning authority's financial position should condition the exercise of the powers to revoke or modify planning permissions. Payment of compensation enters into the picture only after a decision to revoke or modify has been taken. Its purpose is simply to ensure that persons interested in the land are compensated for any loss they suffer by reason of the revocation or modification of the permission.

45. I therefore reach the same conclusion as that reached by Latham J in relation to the analogous context of compulsory purchase orders in Alliance against the Birmingham Northern Relief Road v. Secretary of State for the Environment, Transport and the Regions . Nothing turns on the different language in which the powers under sections 97 and 100 of the 1990 Act are expressed, in particular the use of the word "expedient" upon which Mr Hoggett has placed emphasis. The statute contemplates a planning judgment. What is expedient is to be assessed in those terms.
R v. Bassetlaw DC, ex parte Oxby does not assist the council. The point now in issue was not in issue in that case. Even if the court assumed that financial consequences were a legitimate reason for not exercising the authority's powers under section 97, that was not the subject of any binding decision. Further, I think it clear that the outcome of the case would have been the same even if financial consequences had been held to be irrelevant to the exercise of powers under section 97. What the court was considering was whether the availability of an alternative procedure under section 97 made judicial review inappropriate. In the circumstances of the case it was plainly not inappropriate for the matter to proceed by way of judicial review.

46. I turn to consider Mr Hoggett's narrower argument that the cost to the council was capable of being a material consideration in this case because of its land use consequences, namely the effect on Alnwick's proposed leisure facilities. It is a weightier argument, but I am not persuaded by it. It seems to me that the matters relied on as relating to the use and development of land are altogether too remote. The financial considerations in ex parte Monahan were closely related to the proposed development, since one part of the development would not be viable unless permission were granted for the other part. The relevant issue in Northumberland County Council was the weighing of the economic advantages of a development against the environmental objections to it. By contrast, the consideration raised in the present case has nothing to do with the development that is the subject of the planning permission. It arises as a contingent consequence of the statutory obligation to pay compensation once the relevant planning decision (i.e. to revoke the permission) has been taken. I say "contingent" consequence because everything depends upon the particular circumstances of the local planning authority at the time of the decision: it is a function of the funds available to the authority and of the authority's existing plans for development. I do not think that such an indirect consequence of the payment of compensation is sufficient to justify treating the financial impact on the local authority as a consideration relating to the use and development of land.

47. I therefore reject both limbs of the submissions advanced by Mr Hoggett on the first issue. If I were wrong in relation to either or both of those points, I would nonetheless refuse relief on grounds of discretion. I accept Mr Elvin's submissions on this point. In my judgment the financial consequences of the payment of compensation were not raised as a substantial issue in the inquiry. The possible effect on the proposed leisure facilities was not elaborated or supported by detailed evidence. Moreover, given the strength of the reasons that led the Inspector to recommend confirmation of the modification order, I see no real possibility that the financial consequences of the payment of compensation would have affected the outcome even if they had been treated as legally relevant. Looking at the matter in terms of the test laid down in Bolton, I am satisfied that this would be an appropriate case in which to exercise my discretion not to quash the decision even if had taken the view that there had been a legal error.

48. Issue (2): erroneous application of policy with respect to section 100?

49. The council's case on this issue is that the Inspector and the Secretary of State misapplied the stated policy by failing to look at the consequences of the grossly wrong decision for the wider public interest.
The council's submissions

50. The policy states that the power under section 100 should be used "only if the original decision is judged to be grossly wrong, so that damage is likely to be done to the wider public interest " (emphasis added). The words "so that" are words of consequence, not of explanation. Thus the policy does not just require a finding that the decision was grossly wrong, but a separate finding as to the consequence, namely that damage is likely to be done to the wider public interest (the emphasised words). The "wider" public interest must be a public interest wider than that which makes the decision grossly wrong in the first place. Thus it is not sufficient in the present case to look simply at the effects on Alnwick which are said to have made the decision grossly wrong.

51. The error of the Inspector and the Secretary of State, it is submitted, lay in a failure to look at the wider public interest. The Inspector's report looks only at the reasons why the original decision was grossly wrong. In paragraph 17.3 the Inspector states:

"I consider that my interpretation of a grossly wrong decision in this case should be one that is so demonstrably and seriously perverse such that significant harm to Alnwick's vitality and viability as a shopping centre is likely to occur, having regard to the development plan and to all other relevant material considerations at the time the decision was taken by the Council in 1993, and in the light of the information available now."

52. In his overall conclusions at paragraph 18.1, which I have set out previously, he echoes that test in finding that the 1993 decision "was, and is, so demonstrably and seriously perverse such that significant harm to Alnwick's vitality and viability as a shopping centre was and is likely to occur."

53. That approach is contrasted with two other decisions to which Mr Hoggett has referred. One is a decision dated 3 August 1993 in respect of land in North Cornwall, where it is said that the Secretary of State relied on specific additional factors in support of the exercise of his powers:

"He is in no doubt that the decision in this case was grossly wrong, such that damage is done to the wider public interest of protecting Areas of Outstanding Natural Beauty. He is also concerned that the practice of taking personal factors into account in deciding applications for retirement dwellings submitted by members of the farming community introduces a serious inconsistency into the Council's decision-making which has brought the planning system into disrepute in the Council's area."

54. Similar language about bringing the system into disrepute had been used in support of an earlier decision, dated 14 March 1991, relating to land in East Sussex.
The respondents' submissions

55. Mr Elvin submits that the Inspector and the Secretary of State plainly had the stated policy clearly in mind and it is inherently unlikely that either of them failed to apply the policy. The wording of the policy should not be analysed too strictly, but the reference to damage to the wider public interest is to be read as an amplification of the "grossly wrong" test: the wrong has to be gross in the sense that it has an adverse effect on the wider public interest, and the "wider" public interest means no more than the "general" public interest (as compared with the narrower interests of those directly concerned in the planning permission).

56. What constitutes damage to the wider public interest is a matter of judgment for the Secretary of State. In the North Cornwall decision, for example, the wider public interest lay in the protection of Areas of Outstanding Natural Beauty and in the avoidance of serious inconsistency which brought the planning system into disrepute. In the present case the wider public interest lay in the effect on Alnwick as a shopping centre and in the correct application of national policy and the development plan. It is plain from what he says about the "grossly wrong" test and from the substance of his report as a whole that the Inspector was looking at such matters and thereby having proper regard to the wider public interest.

57. Reliance is also placed on the fact that the council has failed to identify any yet wider public interest, going beyond national policy and the development plan, that might be of any relevance to the case. It is not said that the Inspector or Secretary of State failed to take any specific matter of public interest into account.

58. Even if the policy is not clearly to be interpreted as contended for above, Mr Elvin submits that its interpretation is a matter for the decision-maker and that the court will intervene only if the meaning in fact attributed to it is one that the decision-maker could not reasonably have attributed to it: see Virgin Cinema Properties Ltd. v. Secretary of State for the Environment [1998] 2 PLR 24. The interpretation adopted by the Inspector and Secretary of State in this case was within the reasonable range of possible interpretations of the policy.
Conclusion

59. In my judgment Mr Elvin's submissions are clearly correct. The Parliamentary statement concerning the exercise of powers under section 100 is no doubt carefully formulated, but it remains a statement of policy and not a statute. The interpretation of that policy is a matter for the Secretary of State, subject only to control on Wednesbury principles. The words bear the interpretation adopted by the Inspector and, through his acceptance of the report, by the Secretary of State. Their interpretation was within the reasonable range of possible interpretations of the policy. Indeed, I would find in favour of the Secretary of State even if it fell to me to construe the policy as a matter of law, rather than considering the matter on Wednesbury principles. There is in my view a clear link between the two limbs of the policy. The damage to the wider public interest is to be looked at not as a separate exercise, consequent upon a finding that the original decision is grossly wrong, but as part and parcel of determining whether the decision is grossly wrong. The words "so that" are words of explanation rather than of consequence.

60. The earlier decisions referred to by Mr Hoggett seem to me to be entirely consistent with this analysis. In the present case it is clear that the Inspector considered the damage to the wider public interest to lie in the harm to Alnwick's vitality and viability as a shopping centre. That was a proper application of the policy.

61. Issue (3): wrong to revoke the totality of class A1 retail use rather than to permit limited floorspace of 1,765 sq m?

62. The issue here is whether the Secretary of State was entitled to decide on the revocation of the totality of the class A1 retail use, or whether he should have permitted retail use of up to 1,765 sq m. If that would have been the appropriate result, then it is said that the Secretary of State should have achieved it by modifying the draft order (issue (5)) or, if that was not possible, by declining to confirm the existing draft order and then producing a new draft order for consideration.

63. The issue arises out of a study prepared for the council in 1996 ("the STG study"). The study had recommended that there was scope for an additional 1,394 sq m net, which could be increased to 1,765 sq m net (these net figures are to be contrasted with the figure of 4,654 sq m gross permitted by the 1993 planning permission, though the net/gross point is not itself of any significance for present purposes). Against that background it was common ground in the inquiry that there was scope for an additional 1,765 sq m.

64. The Inspector examined the point in the section of his conclusions headed "The need for retail use on the subject site". He stated that two questions needed to be considered under that heading: firstly, whether the subject site was the only site in Alnwick that could accommodate a store of up to 4,654 sq m gross; and secondly whether the subject site was the only site that could accommodate a smaller store sufficient to meet the identified need for additional floorspace. On the first question he stated that there was no evidence that there was any site closer to the town centre than the subject site which could accommodate a store of up to 4,654 sq m gross. He then stated that if the Secretary of State agreed with the STG conclusion that the amount of additional floorspace that Alnwick could and should accommodate without harm to the vitality and viability of the town centre was less than was permitted in 1993, then the need for retail use on the subject site had to be examined by consideration of the possible alternatives. He went on to consider the possible alternatives. He rejected extension and improvement of the existing Safeway store. He referred to several sites within or on the edge of the centre which had been examined at the inquiry as possible sites for a smaller store. He rejected one and stated that too little detailed evidence was put forward for him to reach a conclusion on two others. Moving out from the town centre, he identified one site as potentially attractive and referred to another (the Willis site) as preferable to the subject site. He said that he had taken into account Safeway's submission that it would not be interested in building a smaller store than the one permitted in 1993 and would not allow a competitor to build a store on the subject site; and that he did not regard as conclusive the evidence in support of Safeway's assertion that there would be no commercial incentive for any retailer to build a store of the same size or smaller than the existing Safeway town centre store. All this led to the following conclusion (paragraph 17.25):

"I therefore conclude on the matter of the need for retail use on the site as follows. There is no evidence of any alternative site for a store of the size I consider is permitted by the 1993 permission. However, from my conclusions on retail impact, if the Secretary of State agrees that a smaller store than the one permitted is more appropriate, then I conclude that other options to the subject site require more detailed investigation to see if such a store could be accommodated closer to the town centre, to accord with the advice in PPG6 and PPG13".

The council's submissions

65. The submissions made on behalf of the council appear to me to have two strands to them. The broad point is the contention that the Inspector (and therefore the Secretary of State) failed to ask himself whether planning permission for 1,765 sq m would be grossly wrong; if he had asked himself that question, on the evidence and the correct application of national and development plan policy he could not have concluded that it would be grossly wrong; and in those circumstances he should have permitted limited retail use rather than revoking the totality of such use. Embedded in the broad point is a separate strand of criticism of the Inspector's approach in this section of the report towards certain policy issues.

66. I shall deal first with the criticisms of the Inspector's approach towards policy issues. Mr Hoggett submits that the Inspector misapplied the test laid down in the June 1996 version of PPG 6 (I should explain that it was and is common ground that the correctness of the 1993 planning permission had to be examined both in terms of policy as it stood in 1993 and in terms of the policy prevailing at the time of the decision on the modification order). PPG 6 lays down a sequential approach to the identification of additional sites for retail development. This is explained in paragraphs 1.11 and 1.12 of the guidance:

"1.11 Adopting a sequential approach means that first preference should be for town centre sites, where suitable sites or buildings suitable for conversion are available, followed by edge-of-centre sites, district and local centres and only then out-of-centre sites in locations that are accessible by a choice of means of transport.

1.12 .... Local planning authorities should be sensitive to the needs of retailers and other town centre businesses and identify, in consultation with the private sector, sites that are suitable, viable for the proposed use and likely to become available within a reasonable period of time."

67. Picking on the expression "likely to become available" in paragraph 1.12, Mr Hoggett contends that in so far as he was purporting to apply PPG 6 the Inspector was wrong to look merely at "possible" alternatives closer to the centre: it was the wrong test for determining the acceptability of the subject site under PPG 6. Mr Hoggett accepts that a similar argument, that PPG 6 does not leave it open to a decision maker to reject an out-of-centre proposal on the basis that a town centre or edge-of-centre site might possibly become suitable, viable and available at some time in the future, was rejected in Shanley Group v. Secretary of State for the Environment, Transport and the Regions [1999] PLCR 188, but he submits that that decision is not applicable or was wrongly decided.

68. It is also submitted that the Inspector's conclusion that the Willis site was preferable was based on a separate misapplication of PPG 6. Where there is no town-centre or edge-of-centre site, the key considerations laid down by paragraph 1.16 of PPG 6 for application to out-of-centre developments include "their accessibility by a choice of means of transport; and their likely effect on overall travel patterns and car use". In considering the Willis site, however, the Inspector did not look at choice of transport but only at its being nearer the town for car-borne shoppers.

69. A further issue concerns Policy ED12 of the Northumberland County Structure Plan, the relevant development plan. That policy provides that retail development will only be permitted outside existing town centres where it can be demonstrated that (a) they are not capable of being accommodated within or adjacent to an existing centre, (b) they will not adversely affect the vitality and viability of existing centres, (c) good customer access can be provided by both public and private transport, (d) additional traffic generated can be satisfactorily accommodated within the surrounding road network, and (e) they will not adversely affect the character or setting of the settlement, surround land uses or heritage and conservation interests. As to those criteria, (a) was found by the Inspector, (b) was conceded, (c) was found by the Inspector, in relation to (d) the Inspector found that additional traffic could be accommodated, and in relation to (e) he found the details of the proposed development satisfactory in the local context. It is submitted that the Inspector ought therefore to have concluded that there was compliance with the Structure Plan.

70. The broad point raised, as I have indicated, is the alleged failure to consider whether permission limited to 1,765 sq m would be grossly wrong. It is said that the issue of a 1,765 sq m store is examined only in terms of PPG 6 and not in terms of the justification for making a modification order in the form of the draft. No reference is made to in the Inspector's overall conclusions. To the extent that an analogy with compulsory purchase orders is appropriate, then it is submitted that the test that should have been applied was not whether there were other sites that might be investigated (paragraph 17.25 of the Inspector's report), but whether it was necessary in the public interest to expropriate even that part of the permission that extended to no more than 1,765 sq m, or, to put it another way, whether the revocation of the totality was justified as being in the public interest. Reliance is placed on Prest v. Secretary of State for Wales (1982) 81 LGR 193 at 198, where Lord Denning stated it to be a principle of our constitutional law that no citizen is to be deprived of his land by any public authority against his will unless it is expressly authorised by Parliament "and the public interest decisively so demands", and approved the proposition that an authority seeking to dispossess a citizen of his land "must do so by showing that it is necessary ...". It is further submitted by reference to R v. Secretary of State for Transport, ex parte de Rothschild [1989] 1 All ER 933 that the onus is on the Secretary of State to satisfy himself that the order is justified in the public interest.

71. It is then said that, in circumstances where 1,765 sq m could have been developed without harm to Alnwick, the Inspector had to apply his mind to whether it was necessary in the public interest to make an order expropriating the whole of the existing permission for class A1 retail use. Paragraph 17.25 of the report shows, however, that the Inspector was not considering that issue. He treated it as if it were a planning appeal and purported to apply the policy in PPG 6. By concluding that there had been insufficient investigation of other sites, he was placing the onus on Safeway. But no such onus lies on the developer in the context of a modification order, any more than in the context of compulsory purchase. So there was an error of approach infecting the whole of the Inspector's conclusion on whether the modification order should be confirmed.
The respondents' submissions

72. The Secretary of State accepts that, given the element of expropriation of existing rights, there is an analogy with compulsory purchase orders, though the policy relevant to the present context is that laid down in the Parliamentary statement (the "grossly wrong" test) rather than policy statements applicable specifically to compulsory purchase. He submits that the correct general approach towards compulsory purchase orders is to be found in R v. Secretary of State for Transport, ex parte de Rothschild [1989] 1 All ER which modifies the test in Prest v. Secretary of State for Wales (1982) 81 LGR 193 as well as rejecting the applicability of the concept of onus of proof in relation to a decision of this kind. Slade LJ, giving the leading judgment, stated (at 938j-939b):

"First, I do not accept that any special rules beyond the ordinary Wednesbury/ Ashbridge rules fall to be applied when the court is considering a challenge to the Secretary of State's confirmation of a compulsory purchase order. Second, however, the Secretary of State, as counsel on his behalf accepted and submitted, must be satisfied that the compulsory purchase order is justified on its merits before he can properly confirm it. He must not exercise his powers capriciously. Given the obvious importance and value to land owners of their property rights, the abrogation of those rights in the exercise of his discretionary power to confirm a compulsory purchase order would, in the absence of what he perceived to be a sufficient justification on the merits, be a course which surely no reasonable Secretary of State would take.

I think that this approach to the matter reconciles the judgment in Prest v. Secretary of State for Wales with the ordinary principles of our law applicable to claims for judicial review. Furthermore, it has the merit of avoiding any reference to onus of proof, which is an expression more appropriate, as counsel for the Secretary of State pointed out, to a lis inter partes ...."

73. So far as concerns the council's detailed criticisms of paragraphs 17.18 to 17.25 of the Inspector's report, Mr Elvin submits that they are based on a number of errors. First, it is wrong to proceed on the basis that, because 1,765 sq m would not harm the vitality and viability of Alnwick town centre, it is therefore acceptable in planning terms. The sequential approach laid down in PPG 6 may be failed even if there is no such harm. Thus, if there was limited capacity for alternative retail development without causing harm to the town centre, it was necessary in the light of PPG 6 to consider whether appropriate sites existed. A proposal may fail in that respect under PPG 6 simply because there has been insufficient investigation and evidence. Paragraph 1.9 of PPG 6 provides, for example:

"In the absence of a planning brief, if a developer is proposing an out-of-centre development the onus will be on the developer to demonstrate that he has thoroughly assessed all potential town centre options."

74. The absence of a thorough assessment is a matter about which the Inspector complains throughout the section, with general adverse comments in paragraph 17.18, detailed comments about the absence of sufficient evidence in relation to specific sites, and his conclusion that if the Secretary of State were to agree that a smaller store was appropriate, more detailed investigation would be required to see if such a store could be accommodated closer to the town centre.

75. If the council was contending that planning permission for a smaller floorspace would accord with PPG 6 (and that the permission should therefore be modified only to the extent of cutting down the floorspace permitted), it was for the council to adduce adequate evidence about the absence of alternative sites. The sequential approach under PPG 6 is something that must have been known to all the parties. The issue of the availability and suitability of alternative sites had been directly raised by the Secretary of State in advance of the inquiry. The Inspector concluded that, because the evidence was inadequate, the Secretary of State could not modify the 1993 permission so as to permit a smaller floorspace. It is implicit in his conclusion that he considered the investigation not to comply with PPG 6.

76. It follows, in Mr Elvin's submission, that the council's contention that the Inspector applied the wrong test under PPG 6 (possibility rather than likelihood) is misplaced. The Inspector did not get that far along the path laid down by PPG 6 and did not need to get that far. He took the view, as he was entitled to do, that there was evidence of potential alternative sites but thorough investigation had not been done and no conclusion could therefore be reached. In any event Shanley Group v. Secretary of State for the Environment, Transport and the Regions [1999] PLCR 188 shows that the language of possibility is consistent with PPG 6. Similarly there was no misunderstanding of the sequential approach with respect to the Willis site. The Inspector was again looking at the matter in terms of sufficiency of information.

77. The contention that permission for a smaller floorspace would be in compliance with the development plan is also mistaken. Policy CD2 of the Local Plan (to which the Inspector referred at paragraph 17.32 of his report) provides that major shopping facilities outside the primary shopping area of Alnwick will only be permitted where they are not capable of being satisfactorily accommodated within or adjacent to the primary shopping areas. Similar language is to be found in Policy ED12 of the Structure Plan (to which the Inspector referred at paragraph 17.31). Both those policies give greater flexibility as to location than is provided for in PPG 6. One of the reasons why the Inspector considered the 1993 permission to be in conflict with Policy ED12 was that "it has not been demonstrated conclusively that the additional floorspace deemed appropriate for Alnwick could not be accommodated nearer the town centre". There was no error in his application of the development plan. He formed a judgment which was reasonably open to him as to conflict with the development plan.

78. In considering this section of the report it must also be borne in mind that in it the Inspector is simply covering one of the matters about which the Secretary of State had stated he wished to be informed for the purposes of his consideration of the case, summarised in the heading as "the need for retail use on the subject site" but also including the availability and suitability of alternative sites, including town centre sites, in Alnwick. This was only one of the elements to be taken into account in the overall assessment of whether the original decision was grossly wrong.
Conclusion

79. First, I accept Mr Elvin's submissions that the Inspector did not err in his application of the June 1996 version of PPG 6 in relation to a store of 1,765 sq m. In the section of his report on "the need for retail use on the subject site", the Inspector pointed repeatedly to the absence of sufficient investigation of possible alternative sites. That seems to me to reflect the threshold requirement laid down in, for example, paragraph 1.9 of PPG 6. His conclusions on that point meant that he did not get as far as considering, and did not need to get as far as to consider, whether suitable and viable alternative sites were "likely to become available" within the terms of paragraph 1.12. They also meant that nothing ultimately turned on the view (or the adequacy of the reasons for the view) that he expressed about the Willis site being preferable to the subject site. It was sufficient that the overall absence of detailed investigation meant that the subject site had not been demonstrated to be in conformity with PPG 6. I note in this respect the terms of paragraph 17.34, in which, having concluded that the permission conflicted with the 1993 version of PPG 6, he stated: "This conclusion is not altered by the current version of PPG6 which, if anything, is more telling against the proposal because it has not , in my opinion, been demonstrated that the subject site passes the sequential test for accommodating the additional floorspace which the STG study, the Council and Safeway Stores PLC agree is appropriate for Alnwick" (emphasis added).

80. The same point lay behind the Inspector's conclusion that there was a conflict with Policy ED12 of the Structure Plan. His observation that it had not been demonstrated that the additional floorspace deemed appropriate for Alnwick could not be accommodated nearer the town centre was plainly directed towards a store of 1,765 sq m. In those circumstances he was entitled to find a conflict with the policy. A similar point would appear to apply in relation to Policy CD2 of the Local Plan. I therefore reject the council's contention that a store of 1,765 sq m would have been in conformity with the development plan.

81. Those conclusions take the ground from under Mr Hoggett's submission that the Inspector could not have concluded, on the evidence and the correct application of national and development plan policy, that a planning permission for 1,765 sq m would be grossly wrong. But I should still go on to examine his submission that there was a failure to consider the application of the "grossly wrong" test in relation to the smaller floorspace.

82. In my view Mr Hoggett is mistaken in his treatment of the authorities on compulsory purchase and seeks in any event to carry the analogy too far when he contends that there was an onus on the Secretary of State to satisfy himself that revocation of the totality of class A1 retail use was justified as being in the public interest. The test that the Secretary of State had to apply was that laid down in the relevant policy, i.e. whether "the original decision is judged to be grossly wrong, so that damage is likely to be done to the wider public interest". It was for him to form that judgment. His judgment is open to review on Wednesbury principles; and given the element of expropriation involved in the making of an order, the court will look carefully at the sufficiency of justification in the application of those principles. But it is wrong to talk in terms of an onus on the Secretary of State, or to express the relevant test in terms other than those laid down in his policy. To the extent that Mr Hoggett relies on Prest v. Secretary of State for Wales as imposing any greater or different requirement on the Secretary of State, that decision must be qualified by what was said in R v. Secretary of State for Transport, ex parte de Rothschild and by reference to the specific differences in context. So qualified, in my view it does not support Mr Hoggett's argument.

83. The view formed by the Inspector and the Secretary of State on the application of the "grossly wrong" test in the present case was based on a consideration of all the matters set out in the concluding part of the Inspector's report, including what was said about planning permission for a store of 1,765 sq m. In my view proper account was thereby taken of that matter. It was not necessary to reach a separate conclusion on whether planning permission for a store of 1,765 sq m would be grossly wrong. In any event, however, I think it implicit that the Inspector and the Secretary of State did conclude that planning permission even for a store of 1,765 sq m would be grossly wrong.

84. For all those reasons I reject the council's case on the third issue.

85. Issue (4): wrong to revoke totality of class A1 retail use when there was no evidence to support revocation in relation to non-food retailing?

86. This issue is linked with issue (3) in that the council's case is again that the Secretary of State was wrong to revoke the totality of class A1 retail use in the 1993 planning permission rather than to leave in permission for part of such use (in this case, non-food retailing).
The council's submissions

87. Mr Hoggett submits that there was an undue concentration on food retailing and a failure to consider non-food retailing. The 1993 planning permission, reflecting the application and supporting material, was for class A1 retail use (food and non-food ). It was intended that there should be other forms of class A1 retailing. The Inspector's findings on PPG 6 and the development plan, however, all related to food rather than to other retail uses. There was no finding that, in respect of non-food retailing, the original grant of planning permission was wrong. Had he applied his mind to this, he might well have concluded that non-food retailing did comply with the relevant policies. There was a failure to consider in this respect whether it was expedient to revoke only part of the permission for A1 retail use rather than the totality of such permission.

88. The council says that this point was raised by it at the inquiry and that the Secretary of State was under an obligation to consider it even if it was not specifically raised. It is for the Secretary of State to satisfy himself that it is appropriate to make the order in the form proposed.
The respondents' submissions

89. Mr Elvin submits that the possibility of deleting the class A1 permission only in so far as it concerned food retailing was an issue of no significance at the inquiry. There was a passing comment in the council's submissions, directed at a very much smaller unit of 500-600 sq m. The council was not putting this forward as a realistic alternative and does not now contend that the Inspector should have considered it as such. It was no part of the council's case at the inquiry that permission should be retained for a non-food store even if permission for food retailing were deleted. The submissions for the council and for Safeway were all focused on the question of food retailing. That was the principal important controversial issue; and the Inspector's omission to deal with the point to the extent that it was raised could not in any event have made any difference to the outcome. Further, there was ample opportunity to raise objections along the lines now advanced if those concerned had wished to do so. It is not open to the council to dredge the point up after the event for its application to the court.

90. Those submissions are supported by Mr Steel on behalf of Safeway. This was not a matter on which Safeway made submissions at the inquiry since it was not an issue at the inquiry. Had the point been raised, Safeway would have opposed it.
Conclusion

91. I am satisfied that the matter now advanced was not an issue at the inquiry and that it would have met with strong opposition from Safeway had it been raised. In those circumstances the Inspector's report and the decision of the Secretary of State are not open to criticism on the ground of their failure to deal with the point. It was not incumbent on them to deal with a point of this kind of their own motion and in the absence of evidence and submissions directed towards it.

92. Issue (5): was it open to the Secretary of State to modify the draft order?

93. This issue is directed towards the Inspector's conclusion that it was not open to the Secretary of State to modify the draft order in the way considered under issue (3) or (though it was not specifically addressed by the Inspector) under issue (4). The Inspector stated at paragraph 17.41 of his report:

"I finally consider whether the proposed modification order could be used to achieve any other course than to delete A1 use from the 1993 permission. I consider that modification orders are similar to compulsory purchase orders and the advice in Circular 14.94 is therefore relevant. The power to modify a proposed modification order should be used sparingly and not to re-write orders extensively. The Council's suggestion that the 1993 permission should now be limited to a floorspace of 1,765 sq m would amount to a fundamental rewriting of the proposed order which is not possible. In my opinion the proposed order should be authorised, or not authorised, as it is written."

94. There are two reasons why nothing seems to me to turn on this issue. First, the Secretary of State's decision to confirm the order in materially the form of the draft considered at the inquiry was based on his conclusion that it was appropriate to revoke the totality of the permission for class A1 retail use; a conclusion which, as I have held in relation to issues (3) and (4), he was entitled to reach. The outcome did not therefore depend on the view that it was not permissible as a matter of law to modify the order in the manner envisaged in those issues. Secondly, had he reached the conclusion that it was appropriate to revoke only a part of the permission for class A1 retail but that, for example, limited permission for a store of 1,765 sq m should be retained, he could if necessary have achieved that result by declining to confirm the existing draft order and putting forward a new draft order in the appropriate form. It might have been a procedurally elaborate course but it would in my view have been open to him. Again, therefore, the outcome would not have depended on the view that it was not permissible as a matter of law to modify the existing order in the manner envisaged. Nevertheless I think it appropriate to set out the submissions and my conclusions on the issue.
The council's submissions

95. It is common ground that, by virtue of s.98(6) as applied by s.100(7), the Secretary of State had the power to confirm the draft order subject to such modifications as he considered expedient. The limits of such a power of modification have been laid down in a number of authorities, differences in statutory context being immaterial for present purposes. In Evans v. Waverley Borough Council [1995] 3 PLR 80, which concerned the modification of a tree preservation order, the Court of Appeal adopted the remarks of Jowitt J in an earlier case:

"It is clear that although the Secretary of State has wide powers to modify the commission's recommendations, he cannot transform them so that they become a different animal. It is a question of degree."

96. Circular 14/94, "Compulsory Purchase Orders: Procedures", to which the Inspector referred in his report, states in paragraph 27:

"The power of modification is used sparingly and not to re-write orders extensively. Some minor slips can be corrected, but not significant matters, e.g. substitution of a different, or insertion of an additional, purpose."

97. Mr Hoggett submits that the advice given in the circular is wrong, since the correct test is the "different animal" test referred to in Evans v. Waverley BC and not the "extensive rewriting" test referred to in the circular. Reliance on the circular may have led the Inspector into error. In any event the test that he applies, "fundamental rewriting", is neither clear nor correct. The right question was whether deletion of only part of the 1993 permission, so as to take away some but not all of the rights in respect of class A1 retail use, would transform the permission into a "different animal". The answer to that question is that such a deletion would not transform the permission into a different animal.
The respondents' submissions

98. Mr Elvin's response is, first, that paragraph 27 of Circular 14/94 accords with the "different animal" test laid down by the authorities as to the limits of the power of modification of draft orders. Although the circular does not refer in terms to the "different animal" test, the language used (including the non-exhaustive example as to substituted or additional purposes) provides acceptable guidance as to the correct approach. The application of the test was for the Inspector and the Secretary of State, and there is no basis for holding their conclusion to have been irrational. The matters considered at paragraphs 17.18 to 7.25 of the Inspector's report show that there were major land use implications in granting permission for a substantially smaller amount of retail floorspace.

99. Mr Steel QC for Safeway adopts Mr Elvin's submissions and underlines them by reference to the difference in function between a 4,654 sq m store and a 1,765 sq m store. It was common ground at the inquiry that a store of the latter size would function in a different way and would require less land space. The differences were qualitative as well as quantitative. It is also to be noted that significant differences exist between the definitions of "superstores" and "supermarkets" in Annex A to PPG 6. In the June 1996 version, for example, "superstores" are defined as "single level, self-service stores selling mainly food, or food and non-food goods, usually with more than 2,500 square metres trading floorspace, with supporting car parking", whereas "supermarkets" are defined as "single level, self-service stores selling mainly food, with a trading floorspace less than 2,500 square metres, often with car parking". Thus, apart from the 2,500 sq m cut-off point, superstores may be "food and non-food" whereas supermarkets are "mainly food". Other differences include the total area of land required, the layout of the development, and the differences in terms of numbers of employees, vehicles, claw-back and attractiveness to shoppers and the market. Further, the evidence was that Safeway had no commercial interest in developing a smaller store. Thus a 1,765 sq m store was plainly a different animal from the 4,654 sq m store that was the subject of the 1993 permission.
Conclusion

100. I accept the respondents' submissions on this issue. In my view Circular 14/94, to which it was legitimate for the Inspector to refer by way of guidance, is consistent with the correct legal test as to the limits of the power of modification even though it does not use (and might usefully be amended in due course to use) the language of "different animal". The fact that the Inspector talked in terms of "fundamental" rewriting shows that he was applying a broadly correct approach. In any event I take the view that the only reasonable conclusion open to him in the circumstances of the case was that modification of the draft order in the manner envisaged in issues (3) and (4) would transform it into a different animal.

101. Mr Steel has also raised a more general issue on discretion which encompasses issues (3) to (5) and on which I should briefly indicate my conclusion. He submits that to cut down the permission would cause prejudice to Safeway. Applications for approval in respect of reserved matters had to be submitted by February 1996, pursuant to condition 2 of the 1993 permission. All Safeway's applications related to a 4,654 sq m store, not to a smaller or different store; and it is now too late to submit further applications for approval of reserved matters. Since this situation has arisen out of the council's failure to advance any clear alternative proposal, the relief sought by the council should be refused even if there were any legal basis to its contentions. The answer to that, as it seems to me, is that if the Secretary of State were required to reconsider the modification order and were to come to the conclusion on reconsideration that it would be appropriate for permission to be limited to, say, a store of 1,765 sq m, it would be open to him at the same time to amend condition 2 so as to give Safeway a further period to apply for approval of reserved matters. It is difficult to see how, in the circumstances hypothesised, he could reasonably decline to adopt that course. I should also mention that all parties are agreed that if, the Secretary of State's decision were to be quashed in so far as it concerns the modification order, then it should also be quashed in so far as it relates to the reserved matters appeals, so that the issues arising could be reconsidered in their entirety.

102. Overall conclusion

103. For the reasons given above, the council fails on each of the issues pursued and its application is dismissed.