England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		18th May 2004

1. MR JUSTICE SULLIVAN:

Introduction

2. This is an application under section 288 of the Town and Country Planning Act 1990 ("the Act") to quash the decision of the First Secretary of State refusing the claimant's appeal against the refusal by Durham County Council ("the council") of two applications relating to Crime Rigg Sand Quarry, Shadforth, Durham ("the quarry"). The Secretary of State's decision is contained in a decision letter dated 17th December 2003. The quarry is a long established mineral working located on the Magnesian Limestone Escarpment several kilometres to the east of the city of Durham. It is divided into two parts, the western and the eastern, by a rock pillar which carries a farm track which is also a bridleway. Having obtained ownership of the rock pillar the claimant made two applications, for planning permission and for a public path diversion order, to amend the existing permitted working plan and access arrangements and to divert the bridleway around the eastern edge of the quarry, to enable the minerals in the rock pillar to be worked. The quarry produces building sand, some asphalt sand and concreting sand. It is the only source of land won concreting sand in Co Durham. Removing the pillar would have released 56,320 tonnes of magnesian limestone and 288,800 tonnes of sand.
3. The council refused planning permission for three reasons, one of which was overcome by a modification to the access proposals. The principal reason for refusal was:

"There are significant landbanks for both magnesian limestone and sand suitable for aggregate use, and therefore no requirement for additional resources. The proposal does not accord with the strategy for future mineral working on the Magnesian Limestone Escarpment as adopting in the County Durham Minerals Local Plan. The proposal is contrary to policy M54 of the County Durham Minerals Local Plan. The proposed extension does not meet the requirements of policy M3 of the County Durham Minerals Local Plan."

The council also contended that the existing bridleway was an attractive route and the proposed alternative would be less convenient and attractive than the existing.

4. The claimant appealed to the Secretary of State who appointed an inspector to conduct an inquiry and report. The inspector held an inquiry between 7th - 14th January 2003. For the purposes of section 54A of the Act, the inspector concluded that the policies in the adopted County Durham Minerals Local Plan (December 2000) ("the local plan") provided the most specific Development Plan guidance.

The local plan

5. The Local Plan provides the framework for minerals planning throughout the county in the period up to 2006. Policy M1 stated that landbanks of permitted reserves of at least 7 years for sand and gravel and at least 10 years for crushed rock aggregate would be maintained throughout the plan period. Policy M2 set out the county's share of the regional supply of aggregates for 1992-2006 based on a subregional apportionment of the regional requirements that were set out in MPG6: 11 million tonnes of sand and gravel and 51.3 million tonnes of magnesian limestone.
6. At the inquiry there was no dispute that the landbank for magnesian limestone was more than adequate. The claimant contended that there was a shortfall in the landbank for concreting sand. The explanatory text in Chapter 4 of the Local Plan deals separately with the various kinds of mineral. Under the heading "Sand and Gravel", the three types of sand and gravel produced in Co Durham are considered: concreting sand and gravel, building sand, very fine deposits of which are used to make asphalt, and moulding sand. Sand and gravel supply to 2006 was set out in a table, Table 4.2. The table showed that there were (just) adequate reserves of building sand (including asphalting sand), but that further allocations totalling 600,000 tonnes were required in respect of concreting sand, which for the purposes of Table 4.2 included "other sand and gravel". Recognising that there was a need for further reserves of sand and gravel, the Local Plan defined five broadly based areas of search within the county. The areas were defined with the aim of minimising the impact on local communities and the environment, e.g. high quality landscapes were excluded and stand-off distances from residential areas were adopted for the purpose of defining the areas.
7. The Local Plan made it plain that planning permission would not automatically be granted for mineral extraction within areas of search. Policy M6 provides:

"Other than allowed for under Policies M12 ... sand and gravel extraction will be permitted only within the areas of search identified on the proposals map and where one or more of the following applies:

a) it is required to meet an established need which cannot be met from existing permissions or by the use of suitable secondary or recycled materials."

8. The quarry is not within an area of search. Paragraph 4.84 of the Local Plan explains the approach of the plan to proposals for mineral extraction outside the identified areas of search:

"Paragraphs 4.15-4.48 examine the position in relation to different minerals in County Durham and in many cases conclude that current reserves are adequate to maintain an identified landbank. Where a shortfall has been identified however, the Plan has identified areas of search and preferred areas as potential areas where mineral extraction may be acceptable. In order to give a degree of certainty to residents, and protect sensitive areas, new proposals outside these areas will not be allowed unless they are justified by special circumstances. These circumstances are set out in Policy M12, and are aimed at permitting extraction only where it is needed and cannot take place within an area of search or preferred area..."

Policy M12 is as follows (so far as relevant for present purposes):

"Outside areas of search ... proposals for mineral extraction, excluding opencast coal working, will only be permitted where one or more of the following applies:

a) it is required to meet an established need which cannot be met:

i) from existing permissions; or

ii) from within an area of search or preferred area; or

iii) by the use of suitable secondary or recycled materials; ..."

9. Policy M54, referred to in the council's reasons for refusal, states that:

"Within the Magnesian Limestone Escarpment Area defined on the proposals map, no new or extended magnesian limestone workings other than those allocated in this Plan will be permitted, and the progressive restoration of existing workings will be sought."

The quarry is within the defined escarpment area for the purposes of Policy M54.

10. For the sake of completeness it is necessary to mention policy M3, since removal of the rock pillar would be an extension to the existing quarry workings. So far as relevant, policy M3 states:

"Extension to mineral workings will be allowed ... under the criteria set out in policies M12 ... Additionally, extensions to existing mineral workings, other than for opencast coal or fireclay, will be permitted provided that they:

...

(g) do not involve any further mineral extraction on the Magnesian Limestone Escarpment."

The parties' cases at the inquiry

11. The claimant argued that there were "acute shortages" of the sands produced by the quarry. By their nature Minerals Local Plans take a considerable time to prepare, and for the purposes of the inquiry the council had updated the figures contained in Table 4.2. The updated figures showed a landbank shortfall for concreting sand (as defined in Table 4.2) of 1.9 million tonnes for the period up to 2013. The claimant argued that in practice the shortfall was greater. Because the reserves had been overestimated the shortfall for concreting sand was said to be "more likely to be 3.18 M tonnes" (paragraph 6.3 inspector's report).
12. In response, the council argued that the reserves figures had been produced in accordance with the methodology in MPG6. Paragraphs 7.14 and 7.15 of the inspector's report summarise this aspect of the council's case as follows:

"7.14 On the demand side it is notable that the ODPM draft revised guidelines for aggregates provision indicate a substantial fall in the annual production figures currently used in MPG6. Within the North East region there is a 54% reduction in predicted demand for crushed rock and sand and gravel. Although they are still at consultation stage, it seems likely that guideline figures for use in future aggregates supply will be significantly lower than those upon which the current Minerals Local Plan is based.

7.15 Differences arising from the updating of Table 4.2 of the Minerals Local Plan result from only small changes in assumptions and are not of much significance. Although there is a theoretical shortfall in the landbank for concreting sand in the period to 2013 ..., it should be noted that the latest available figures (for 1999) indicate annual increases in permitted sand and gravel reserves for Durham/Tees Valley and the North East region; and in the regional reserves of both building/asphalt sand and concreting sand ... Despite the theoretical shortfall in concreting sand reserves, at the Appellant's 2000 and 2001 levels of sales its reserves at Crime Rigg Sand Quarry would last for some 30 years ... It is clear from this that there is no actual shortage in the market: otherwise Crime Rigg sales would be much greater. The appeal proposals cannot be justified on the grounds of need, either at local or regional level."

The inspector's conclusions

13. The inspector identified three main issues:

"(1) whether or not the scheme is in accordance with development plan policies controlling extensions to sand and gravel workings, having regard to the location on the Magnesian Limestone Escarpment;

(2) whether or not its environmental impact, particularly in respect of the bridleway route and adjacent hedgerows, would be unacceptably harmful to the countryside and to its enjoyment by the public, contrary to policy M35; and

(3) whether or not any resulting harm, including conflicts with the development plan, would be outweighed by other material considerations."

14. On the first of those issues the inspector concluded that the claimant's proposals were not in accordance with the development plan. Although the main target mineral was sand, the scheme was an extension to a magnesian limestone working and was therefore contrary to policy M54. For the same reason the scheme did not accord with policy M3 because the extension failed to satisfy criterion (g). Since the quarry was not within an area of search the claimant could not rely directly on policy M6, but that policy envisaged an alternative means of compliance with the Local Plan under policy M12. Sub-paragraphs (a)-(f) in policy M12 described various special circumstances under which mineral extraction could be permitted outside areas of search. Of these only paragraph (a) (above) was applicable.
15. In paragraphs 10.6 to 10.9 of his report, the inspector said this:

"10.6 ... That leaves criterion (a) of policy M12, which is concerned with meeting an established need. I find no argument to show that the need for the types of sand at Crime Rigg for the period to 2013 can be met from existing permissions or by the use of suitable secondary or recycled materials: the issue is whether it can be met from the Areas of Search ...

10.7 The degree of uncertainty about the quantity and quality of reserves in the Areas of Search was a factor that was taken into account by the Inspector reporting on objections to the Minerals Local Plan. Despite the substantial submissions by the Appellant, I am not convinced that the Inspector would in present circumstances have concluded differently on the adequacy of the Areas of Search ... It appears to me that reported current shortages of sand reserves may be more to do with the operation of the market than with insufficient planning provision. I am particularly conscious of the limited size of the shortfall in Table 4.2 and the fact that the figures are based on the need to maintain a 7-year landbank until 2006 ... I return to the question of updating Table 4.2 in considering the third main issue.

10.8 Although the revision of national and regional guidelines for aggregates provision is still at consultation stage, I believe it is reasonable to give some weight to the likely direction of change portended in the consultation draft, which strikes me as emphatic ... This could affect the apportionment figure used in the Table [4.2] although it is too early to make assumptions about the extent of any reduction.

10.9 That no proposals have yet come forward in the Areas of Search may simply reflect the limited period that has elapsed since the adoption of the Minerals Local Plan, and/or that shortages are not as severe as claimed ... It may be the case that customers have become more discriminating in their quality requirements in recent years although it is not clear to me that this is a significant change since the time of the Inspector's report ... I find little direct evidence to show that the Areas of Search do not have adequate suitable reserves. The bulk of the firm evidence brought by the Appellant pre-dates the geological report upon which the Areas of Search were based and should therefore have been taken into account in that report and in deliberations leading to the adoption of the Minerals Local Plan ... All things considered I conclude that the appeal scheme has not been shown to satisfy criterion (a) of policy M12 and that it therefore fails to comply with policies M12 and M6."

16. The inspector resolved the second main issue in the claimant's favour, concluding that the overall effect in terms of policy M35 would be positive. When dealing with main issue three he concluded that any resulting visual harm would be insignificant, and he said in paragraph 10.19:

"Although there are conflicts with the development plan the resulting harm would be very limited in practical terms ... I conclude that the aims of the policies concerned, and especially the need to prevent or limit cumulative adverse effects on the environment of the Magnesian Limestone Escarpment, would not be materially affected by the scheme. If anything, this conclusion is strengthened by the public response to the proposals..."

17. The inspector grouped the other material considerations under four heads (1) "need"; (2) the restoration scheme; (3) sustainable development; and (4) safety matters. Under (2) he considered that the effect of the scheme on the restoration of the site would be "neutral to slightly positive". Under (4) he considered that there was some, but not a major benefit. While the scheme had some other merits under (3), the principal benefit was set out in paragraph 10.26:

"With regard to sustainable development objectives, there was general agreement at the inquiry that the approved scheme effectively involves the sterilisation of sand resources that the appeal proposals seek to extract ... Although not a very high value mineral the sand is apparently of good quality ... The extension area is itself very small but I have already concluded that the sand reserves released would not be without quantitative significance. My earlier findings also lead me to conclude that this sterilisation would be unnecessary in practical terms. In this respect the appeal scheme would be of definite benefit. It would contribute to objective (vi) of national and local sustainable development objectives and to one of the four aims of the Minerals Local Plan..."

18. The inspector dealt with material consideration (1) in paragraphs 10.21 and 10.22 as follows:

"10.21 With regard to 'need' there is some evidence of shortages of the sands produced at Crime Rigg, but again, I am not convinced that they are acute and persistent ... I am also conscious that market conditions should not generally be regarded as having a bearing on supply (MPG6:84). It may be the case that the quality and quantity of reserves have been over-estimated but the evidence is understandably limited and it does not all point in the same direction ... Having regard to MPG6(82) I do not consider it is appropriate to disregard reserves with valid planning permission at dormant sites. At the inquiry there were some differences in the updating of Table 4.2, but these do not seem to me to have an important bearing on the issue and do not alter my conclusion that there is a continuing shortfall in the landbank in respect of concreting sand ...

10.22 All points considered, I conclude that the Appellant's evidence is not so compelling as to invalidate the Council's reliance on the Areas of Search to meet requirements. Nonetheless, although the proposed extraction is small in absolute terms it would amount to a worthwhile and not insignificant addition to the sand and gravel landbank."

19. Drawings the threads together, the inspector said in paragraph 10.30:

"I conclude that the above benefits, when taken together, add significant weight to the Appellant's case. In view of section 54A of the Town and Country Planning Act 1990 (as amended) the development plan is clearly of primary importance in coming to an overall conclusion. However, in my assessment the benefits associated with these other material considerations are sufficient to outweigh the harm that would be caused, including that associated with the policy conflicts I have identified."

20. The inspector's overall conclusion was "in favour of the appeal proposals and path diversion" and he therefore recommended that planning permission should be granted and the bridleway diverted. He sent his report to the Secretary of State on 4th March 2003.

Post inquiry correspondence

21. In a letter dated 17th July 2003 the Secretary of State drew the parties' attention to the revised National and Regional Guidelines for the Provision of Aggregates for the 16-year period 2001-2016 issued on 10th June 2003 ("the new guidelines") which replaced the guidelines previously contained in Annex A to MPG6, published in 1994 ("the old guidelines"). The letter stated that the Secretary of State considered that the new guidelines were a new material consideration which he should take into consideration in reaching a view on the claimant's appeals, enclosed a copy of the new guidelines and invited the parties to comment on the appeals in the light of the new guidelines. After dealing with other matters not relevant for present purposes, the letter said:

"The First Secretary of State wishes to emphasise that representations on the above issues are to enable him to take a fully informed decision since he has not yet determined the appeals. This letter should not be read as any indication as to his attitude to the proposals generally one way or the other."

22. The new guidelines contained a figure of 20 million tonnes for land won sand and gravel from the North East region. This was a reduction from the figure of 23 million tonnes which had been contained in the Consultation Draft of the new guidelines which the inspector referred to in paragraph 10.8 of his report. Comparison with the old guidelines is complicated by the fact that in 1994 the Northern Region included Cumbria. Nevertheless, it is common ground that the new figure of 20 million tonnes for the North East region for the 15 years from 2001-2016 is a very substantial reduction by comparison with the 50 million tonnes for the Northern Region (North East region plus Cumbria) for the 15-year period to 2006 contained in MPG6.
23. The claimant responded to the Secretary of State's invitation to comment on the new guidelines in a detailed paper attached to a letter dated 31st July 2003 ("the response"). At that stage there had been no subregional apportionment of the 20 million tonnes. The response carried out such an apportionment (making due allowance for the loss of Cumbria). Using the most recent sales figures, the claimant updated Table 4.2 in a series of tables based upon a number of assumptions that were explained in the response. Table 3 showed that, on the basis of the revised figures, there was no shortfall in the 7-year landbank of concreting sand, rather there was a very small surplus of 20,000 tonnes. However, it was contended that "in accordance with the logic of Policy M1" there should be an 11-year supply of concreting sand (the remaining plan period plus 7 years). On that basis, Table 6 showed a shortfall of 620,000 tonnes in the 11-year landbank of concreting sand.
24. The response also argued that the new guidelines were inadequate and that a more realistic subregional requirement would be based on the last two years' sales/production. On that basis the shortfall in the 11-year landbank for concreting sand was shown in Table 6a as 1.25 million tonnes.
25. The conclusions in the claimant's response were as follows:

"The National and Regional Guidelines for Aggregates Provision in England, 2001-2016 are inadequate to supply the sand and gravel requirements of the north east region.

If the new regional apportionment for land won sand and gravel is extrapolated into a sub regional apportionment, then the reserves of concreting sand required by the logic of Policy M1 of the [Minerals Local Plan] will not be met by existing permissions. The provision of a 7 year land bank of concreting sand exists with a margin of only 20,000 tonnes.

If a more realistic view of the sub regional requirement is taken then the existing reserves of concreting sand are seriously inadequate, with, at most, a 5/6 year landbank currently existing.

Granting the appeal would help to meet the sub regional need for concreting sand."

26. The council's comments on the new guidelines in a letter dated 4th August 2003 were relatively brief:

"• The evidence of the County Council's witness Mr Provan makes reference in paragraph 3.4.6 to the consultation undertaken by the First Secretary of State in 2002 on the draft guideline figures. The evidence notes that the draft figures equate to a 54% reduction in predicted demand for crushed rock and sand and gravel within the North East region. The figures now published by the ODPM take account of the responses to the consultation exercise on the draft figures. The guideline figures for the North East now published are broadly in line with the consultation draft however the Authority note the predicted demand for land won sand and gravel in the north east has been reduced from 23 million tonnes to 20 million tonnes. The reduction in predicted demand will be reflected in reduced annual sales of primary won aggregates (both rock and sand and gravel), in turn increasing the predicted life of the permitted landbank of mineral suitable for aggregate uses. The Authority is of the view that the recently published guidelines support the grounds for refusing permission for the proposed development as there is no need to release more minerals for aggregate production at this time."

27. In a letter dated 23rd September the Secretary of State made sure that the parties had seen each other's comments and invited any final comments from them by 7th October 2003. On 7th October, in a letter sent to the claimant's solicitors, the council said this, inter alia:

"I would refer to the comments which I made in my letter of 4th August 2003 and would add the following. The Regional Aggregates Working Party met on 18th September 2003 and I enclose a copy of the minutes and the report which it considered concerning the Sub-Regional Apportionment of the Regional Guidelines for Aggregates Provision 2001-2016. At the meeting, agreement was reached that a sub-regional apportionment for supply until 2016 can be achieved from existing permitted resources and that, using the recognised methodology of calculation, there are already sufficient permitted reserves of sand and gravel in County Durham to meet its share for the period until 2016. I would refer to minute 5.10 and paragraphs 2.4 and 3.1 of the report.

In short, there is no need to allow the appeal in order to make available supplies of sand or limestone."

28. The council sent the claimant a copy of the working party report, although in fact the claimant is represented on the working party.
29. Paragraph 2.4 of the working party's report stated that if information contained in a 2002 survey was used there would be "sufficient permitted reserves of sand and gravel in County Durham". Paragraph 3.1 of the working party's report said this:

"The first issue to address is whether there are sufficient permitted or allocated resources in the sub-regions to meet the apportioned guideline figures (apportioned on the basis of current supply patterns) to 2016. The evidence suggests that, with the possible exception of crushed rock in Tyne and Wear, there are sufficient permitted or allocated resources in the sub-regions to meet the regional guidelines."

The Secretary of State's decision letter

30. Having said that, for the reasons given in the decision letter he disagreed with the inspector's recommendation, the Secretary of State dealt with the post-inquiry correspondence. In paragraph 5 of the decision letter he said:

"The Secretary of State has taken account of this evidence ... in his consideration of the case, but he does not consider that the responses raise any new issues. He notes that the parties did not consider that the revised National and Regional Guidelines for the Provision of Aggregates changed their case. ... The Secretary of State's consideration ... of the revised Guidelines [is set out at] paragraphs 13 to 16."

31. The Secretary of State agreed with the inspector's identification of the three main issues, and agreed with his conclusions in relation to the first two issues. In paragraph 11 the Secretary of State of said:

"The Secretary of State agrees with the Inspector's conclusion that the appeal scheme is not in accordance with the development plan (IR10.11) for the reasons set out in IR10.3 - 10.10." (References in parenthesis in the decision letter are to paragraphs in the inspector's report.)

32. Under "Other Material Considerations" the relevant paragraphs of the decision letter are as follows:

"Need

13. The Secretary of State has had due regard to the Inspector's conclusions concerning need in IR10.21 - 10.22. However, he considers that these conclusions must be viewed in the light of the revised National and Regional Guidelines for the Provision of Aggregates in England 2001 - 2016 which were published after the close of the inquiry and after the Inspector completed his report.

14. The Secretary of State notes that a draft version of the revised Guidelines was available at the inquiry. He has had due regard to the weight given by the Inspector to the likely direction of change as set out in the draft Guidelines, and that the Inspector viewed this change of direction as emphatic (IR10.8). The draft Guidelines have now been carried forward as the revised National and Regional Guidelines, published in 2003, and the Secretary of State has had due regard to the fact that the reduction in the regional provision for sand and gravel production for the North East has been reduced in these new revised Guidelines to 20 million tonnes. This figure represents a substantial reduction when taken against the previous national and regional guidelines published in 1994.

15. The Secretary of State has had due regard to your client's view, as expressed in Ward Hadaway's letter of 31 July 2003, in response to the Secretary of State's letter of 17 July ... that the production figures in the June 2003 Guidelines are not adequate to supply the sand and gravel requirements of the North East region and that, if a more realistic view of the Durham requirement is taken, the existing reserves of concreting sand are seriously inadequate.

16. However, the Secretary of State concludes that there is currently no need to release more minerals for aggregate production at the Crime Rigg Sand Quarry. He agrees with the Council's view, as expressed in its letter of 4 August 2003, that the reduction in predicted demand set out in the revised Guidelines will be reflected in reduced annual sales of sand and gravel which will in turn increase the life of the existing landbank, and that County Durham's supply of sand and gravel until 2016 can be achieved from existing permitted resources.

Restoration Scheme

17. The Secretary of State agrees with the Inspector's conclusion that the effect of the appeal scheme on the restoration of the site would be neutral to slightly positive ... However, because the Secretary of State concludes that there is currently no need to release more minerals for aggregates production, he affords this little weight.

Sustainable Development

18. The Secretary of State agrees with the Inspector's conclusion (IR10.26) that the approved scheme effectively involves the sterilisation of sand resources. However, because the Secretary of State concludes that there is currently no need to release more minerals, he does not agree that the release of more sand resources would be a benefit."

33. In paragraph 19 the Secretary of State agreed with the inspector's conclusions that there would be some other benefits in terms of sustainable development. The Secretary of State's conclusions in respect of the other material considerations are contained in paragraph 20 of the decision letter:

"The Secretary of State has had due regard to the benefits associated with these other material considerations. However, in the light of the revised Guidelines published in June 2003, the Secretary of State does not agree with the Inspector that the proposed extraction would amount to a worthwhile addition to the sand and gravel landbank (IR10.22), and he also therefore does not agree that the release of resources sterilised by the approved scheme would be a benefit (IR10.26). The Secretary of State disagrees with the Inspector's conclusion that the benefits associated with these other material considerations are sufficient to outweigh the harm that would be caused, including that associated with the policy conflicts (IR10.30)."

34. The Secretary of State's overall conclusions are set out in paragraphs 21 and 22 of the decision letter:

"21. For the reasons set out above, the Secretary of State concludes that the appeal scheme is not in accordance with the development plan. The Secretary of State has also given significant weight to the revised National and Regional Guidelines for the Provision of Aggregates in England 2001-2016. In the light of those Guidelines he has concluded that County Durham's supply of sand and gravel until 2016 can be achieved from existing permitted resources and that there is currently no need for this appeal scheme.

22. ... He agrees that the scheme does offer some benefits including the proposed restoration scheme and in terms of sustainable development. However, in the light of the Revised National and Regional Guidelines for the Provision of Aggregates, the Secretary of State does not consider that the proposed extraction would amount to a worthwhile addition to the sand and gravel landbank, or that the release of resources sterilised by the approved scheme would be a benefit. The Secretary of State concludes that the limited benefits are not sufficient to outweigh the harm that would be caused, including that associated with the policy conflicts."

The claimant's challenge

35. On behalf of the claimant, Mr Pickles challenged the Secretary of State's decision on four grounds. He submitted that the Secretary of State had:

(1) Failed to have regard to the claimant's case that there continued to be a need for concreting sand notwithstanding the new guidelines, alternatively failed to give adequate reasons for rejecting the claimant's case on the continuing need for concreting sand.

(2) Failed to have regard to the desirability of avoiding the unnecessary sterilisation of minerals, alternatively failed to give adequate reasons for rejecting the inspector's conclusions in respect of that issue.

(3) Failed to have regard to the nature/extent of any harm arising from conflict with development plan policy, alternatively failed to explain the nature/extent of such harm.

(4) Failed to comply with Rule 17(5) of the Town and Country Planning (Inquiries Procedure) (England) Rules 2000.

36. Rule 17 deals with the procedure to be followed after an inquiry. Paragraph (5) of Rule 17 provides:

"If, after the close of an inquiry, the Secretary of State-

(a) differs from the inspector on any matter of fact mentioned in, or appearing to him to be material to, a conclusion reached by the inspector; or

(b) takes into consideration any new evidence or new matter of fact (not being a matter of government policy)

and is for that reason disposed to disagree with a recommendation made by the inspector, he shall not come to a decision which is at variance with that recommendation without first notifying the persons entitled to appear at the inquiry who appeared at it of his disagreement and the reasons for it; and affording them an opportunity of making written representations to him or (if the Secretary of State has taken into consideration any new evidence or new matter of fact, not being a matter of government policy) of asking for the re-opening of the inquiry."

Discussion and conclusions

Ground (1)

37. Although Mr Pickles, understandably, placed considerable emphasis on the inspector's conclusions that "there is a continuing shortfall in the landbank in respect of concreting sand" and that the proposals "would amount to a worthwhile and not insignificant addition to the sand and gravel landbank", it is important to set those particular conclusions in context when considering the adequacy of the Secretary of State's response to the claimant's case in the light of the new guidelines. In summary, the inspector's conclusions were as follows.

(1) He did not accept the claimant's contention that there were "currently acute shortages" of the sands produced at the quarry. While there was "some evidence" of shortages, those shortages were not "acute and persistent" (10.21). It appeared that "current shortages of sand reserves may be more to do with the operation of the market than with insufficient planning provision". In effect, the inspector agreed with the council that the calculated shortfall in the landbank for concreting sand for the period to 2013 was more "theoretical" than real.

(2) While he accepted that "it may be the case that the quality and quantity of reserves have been over-estimated", he said that "the evidence is understandably limited and it does not all point in the same direction". He did not think it appropriate to disregard reserves with planning permission at dormant sites (10.21). In short, he did not accept all of the claimant's criticisms of the landbank summarised in paragraph 6.3 of the report, which had led to the claimant's revised shortfall for concreting sand of 3.18 million tonnes. He noted that there were differences in the updating of Table 4.2 but felt that it was unnecessary to resolve those differences or to quantify the continuing shortfall in the landbank in respect of concreting sand (10.21).

(3) It is reasonable to infer that the inspector did not find it necessary to quantify the (calculated) shortfall in the landbank in relation to concreting sand, because he did not accept the claimant's criticisms of the quantity and quality of the reserves in the areas of search (10.7 and 10.9), and was satisfied that the established need (however it was quantified) could be met from the areas of search, hence his conclusion that the proposals were in conflict with policy M12 (10.9 and 10.22).

(4) He nevertheless concluded that removing the minerals comprising the rock pillar would result in a worthwhile and not insignificant addition to the sand and gravel landbank.

38. Against the background of these conclusions, an unquantified shortfall in the landbank in concreting sand that was not in practice "acute and persistent", and which was capable of being met from the areas of search, it was very much a matter of planning judgment as to whether the proposed addition to the sand and gravel landbank would or would not be "worthwhile". Common sense would suggest that, all other things being equal, if new information was received which resulted in an increase in the life of a landbank and a corresponding reduction in the need to rely upon the areas of search to make good any shortfall in permitted/allocated reserves, then adding the minerals in the rock pillar to the landbank would tend to become less "worthwhile". In essence that is what the Secretary of State concluded, and his conclusion is not in the least surprising in the light of the information contained in the new guidelines.
39. In paragraph 11 of the decision letter the Secretary of State agreed with the inspector's conclusion that the proposals were contrary to the development plan for the reasons given by the inspector in paragraphs 10.3-10.10. In paragraph 10.3 the inspector had concluded that the reported current shortages of sand reserves may be more to do with the operation of the market than with insufficient planning provision, and in paragraph 10.9 the inspector had concluded that the proposals did not satisfy criterion (a) in policy M12, because it had not been demonstrated that there was an established need which could not be met from the areas of search.
40. Against that background, the Secretary of State clearly understood the thrust of the claimant's response to the new guidelines. In paragraph 5 he noted that the new guidelines had not caused the parties to change their cases. Thus, the claimant continued to argue that there was a shortfall in the landbank for concreting sand, and the council continued to argue that any calculated shortfall was theoretical rather than real and could be met if necessary from the areas of search.
41. In paragraph 15 of the decision letter, the Secretary of State summarised the claimant's response to the new guidelines. They did not make adequate provision for the sand and gravel requirements of the North East and "if a more realistic view of the Durham requirement is taken, the existing reserves of concreting sand are seriously inadequate."
42. In paragraph 16 of the decision letter the Secretary of State made it clear that he did not accept those arguments and agreed with the council and the working party that the predicted demand in the new guidelines would be reflected in reduced annual sales which would increase the life of the landbank. Rather than having to rely on the areas of search to make up a calculated shortage in the landbank, the Secretary of State agreed with the working party's view that "County Durham's supply of sand and gravel until 2016 can be met from existing permitted resources." Although concreting sand is not specifically mentioned, it is clearly included under the heading "sand and gravel". If the working party had felt that there was concern about the supply of concreting sand to 2016, then it would undoubtedly have said so. The claimant is represented on the working party.
43. In these circumstances the Secretary of State was entitled to disagree with the inspector's conclusion that the proposed addition to the sand and gravel landbank would be "worthwhile" and it is readily understandable why he so concluded (paragraph 20 of the decision letter).
44. Mr Pickles submitted that there had been three strands to the claimant's response to the new guidelines and the Secretary of State had addressed only two of them. The claimant had argued that the guidelines themselves were inadequate. The Secretary of State had not accepted that argument and had been entitled to accord the new guidelines "significant weight". The claimant had also argued that the reserves of concreting sand were seriously inadequate if a "more realistic view" of the subregional requirement was taken based on higher sales figures over the last two years.
45. It was accepted that the Secretary of State, in agreeing with the council's assessment of the effect of the new guidelines (that they would reduce annual sales), had rejected that argument based upon increased sales figures. However, it was contended that the Secretary of State had failed to deal with the argument, represented by Table 6, that applying the new guidelines and the methodology used to produce Table 4.2 in the Local Plan there was still a shortfall of 620,000 tonnes in the landbank in respect of concreting sand. In essence the claimant contends that the council's response to the new guidelines -- with which the Secretary of State agreed -- considered sand and gravel generally, but did not "erase or erode the sub-regional shortfall of concreting sand". Thus the Secretary of State failed to grapple with an essential aspect of the claimant's case in the light of the new guidelines.
46. I do not accept that submission. In its conclusions in the response (see above) the claimant drew attention to the fact that a 7-year landbank of concreting sand existed "with a margin of only 20,000 tonnes". That was the figure which was contained in Table 3. Thus the claimant's own revised figures showed that, on a comparable basis to that presented at the inquiry, the shortfall of concreting sand (which had been calculated by the council at 1.9 million tonnes and by the claimant as 3.18 million tonnes) had been erased. The claimant's own figures also showed that, however the shortfall was calculated, it had been substantially eroded. It will be noted that the 620,000 tonne shortfall in Table 6 now relied upon by Mr Pickles was not specifically referred to in the conclusions in the claimant's response. It was however based upon a need to maintain an 11-year landbank for concreting sand. Upon the premise that such a calculation was required for the purposes of policies M1 and M2 in the Local Plan, it will be recalled that the inspector (with whom the Secretary of State agreed) did not consider that the shortfall in the 7-year landbank, which the council had calculated at 1.9 million tonnes, represented an "acute and persistent need" or "an insufficiency of planning provision". On the claimant's own revised figures there was not even a calculated shortfall in the 7-year landbank. The claimant could maintain its case that there was still a shortfall (of 620,000 tonnes) in the landbank for concreting sand in the light of the new guidelines only by looking even further into the future. On the claimant's own revised case, there was a much reduced shortfall by comparison with the figures that had been considered by the inspector, and a shortfall only if one looked at an 11-year period.
47. Reading the decision letter as a whole, it is plain that the Secretary of State did not accept that this was a realistic assessment of need. In the light of what the Secretary of State described as "the substantial reduction" in the regional provision in the new guidelines, which would be reflected in reduced annual sales of sand and gravel, the Secretary of State concluded that there is "currently no need to release more minerals for aggregate production" at the quarry (my emphasis). In so concluding, the Secretary of State appreciated that the inspector had considered the appeal against the background of the consultation draft of the new guidelines which reduced the regional provision for sand and gravel. The inspector considered that the change of direction was "emphatic". The Secretary of State noted that there was a further reduction (from 23 million tonnes to 20 million tonnes in the final version of the new guidelines) (paragraph 14 of the decision letter).
48. Looking to the future against this policy background, the Secretary of State expressly agreed with the council's view that the county's supply of sand and gravel until 2016 could be achieved from existing permitted resources. Thus when considering "current" needs, the Secretary of State was also looking well into the future.
49. For these reasons, I am satisfied that the Secretary of State did consider all the aspects of the claimant's argument that there continued to be a need for concreting sand, notwithstanding the new guidelines. He rejected those arguments and gave adequate and intelligible reasons for so doing. In essence he agreed with the case that had been advanced by the council in response to the new guidelines.
50. It follows that the principal ground of challenge, ground (1), fails and I can deal relatively shortly with the remaining grounds.

Ground (2)

51. The Secretary of State dealt with sustainable development in paragraphs 18 and 19 of the decision letter. He agreed with the inspector that the existing scheme of working effectively involved the sterilisation of sand resources and agreed with the inspector's other conclusions under the heading of sustainable development. He did not agree with the inspector's conclusion that the release of the sterilised sand resources would be a benefit, because he had concluded that there was "currently no need to release more minerals". That conclusion must be seen in the context of the Secretary of State's agreement with the council that County Durham's need for sand and gravel until 2016 could be achieved from existing permitted reserves.
52. Mr Pickles submitted that in policy terms the avoidance of sterilisation of mineral reserves was an end in its own right. He pointed to the four aims set out in paragraph 3.2 of the Local Plan, one of which is "the protection of mineral resources from unnecessary sterilisation". Under the heading of "Sustainability", paragraph 3.5 of the plan says:

"In relation to the Minerals Local Plan sustainable development has particular importance in the need to:

i) conserve minerals as far as possible whilst ensuring an adequate supply to meet the needs of society for minerals. This means ensuring that resources are only extracted where they are required to meet an established need ... and that mineral resources are not unnecessarily sterilised.

...

vi) prevent the unnecessary sterilisation of mineral resources."

53. I do not accept Mr Pickles' submission that the Secretary of State effectively ignored the fact that the avoidance of sterilisation was a policy objective in its own right in the Local Plan. In deciding what weight to give to the achievement of that policy objective it will often be necessary to strike a balance between ensuring that planning permission is granted for minerals extraction only in response to an established need and avoiding unnecessary sterilisation of reserves. In striking the balance in any particular case the extent to which need has been established is bound to be a relevant consideration. The Secretary of State did not lose sight of the policy objective. There is no suggestion in the decision letter that he disagreed with the inspector's analysis of this issue in policy terms. He simply disagreed with the inspector's conclusion that releasing the sand resources in the quarry would be a "benefit". In considering whether there would be a "benefit" in releasing more sand resources, the Secretary of State was considering the issue in the round: whether a grant of planning permission which would avoid sterilisation (desirable in principle in policy terms) would be of any practical advantage, given that there was currently no need to release more minerals. Since the inspector had concluded that the proposals would be a "worthwhile addition" to the sand and gravel landbank, it is not surprising that he also considered that not sterilising this "not insignificant" reserve would be a benefit. Since the Secretary of State was entitled to conclude that the addition to the landbank of the mineral resources in the rock pillar would not be worthwhile, he was also entitled to conclude that avoiding the sterilisation of those resources was not a "benefit", even though non-sterilisation is desirable in principle in policy terms. I therefore reject ground (2).

Ground (3)

54. In paragraph 10.19 of the inspector's report, the inspector concluded that although there were conflicts with the development plan "the resulting harm would be very limited in practical terms". Ground (3) boils down to a complaint that the Secretary of State failed to acknowledge this, by cross-reference or otherwise, in the decision letter. The inspector concluded in paragraph 10.30 that the benefits that he had identified were "sufficient to outweigh the harm that would be caused, including that associated with the policies conflicts" that he had identified. Thus, the inspector balanced the benefits that he perceived against the harm that he had perceived.
55. There is nothing in the decision letter to suggest that the Secretary of State disagreed with the inspector's assessment of the harm that would be caused by the proposals, including that associated with conflict with the development plan. The decision letter explains where the Secretary of State disagreed with inspector's conclusions and why he did so. Although the inspector did not refer to them as such, the two principal benefits identified by him were the conclusion that the proposed extraction would be a "worthwhile addition" to the sand and gravel landbank, and a "definite benefit" in sustainability terms because it would avoid unnecessary sterilisation of mineral resources.
56. Reading the inspector's report as a whole, it is plain that the other benefits, with which the Secretary of State did not disagree, were relatively minor by comparison. In the light of the new guidelines, the Secretary of State disagreed with the inspector's conclusions in relation to the two principal benefits. That caused the balance to tip against the grant of planning permission contrary to the development plan, and the Secretary of State to conclude that were in his view "the limited benefits" were not sufficient to outweigh the harm that would be caused, including that associated with the policy conflicts. As summarised in paragraph 22 of the decision letter (see above) the Secretary of State's position in this respect is readily intelligible. I therefore reject ground (3).

Ground (4)

57. Although Mr Litton on behalf of the Secretary of State and Mr Taylor on behalf of the council sought to persuade me to the contrary, I am satisfied that there was a breach of Rule 17(5). Assuming that the revised figures for regional production of sand and gravel in the new guidelines were matters of government policy, the Secretary of State undoubtedly took into account "new evidence", viz the council's comments on the new guidelines and in particular the working party's conclusion, as a result of the subregional apportionment, that County Durham's supply of sand and gravel until 2016 could be achieved from existing permitted reserves.
58. It was this new evidence, which included but was not confined to matters of government policy, which caused the Secretary of State to disagree with the inspector's view that the addition to the sand and gravel landbank would be worthwhile and that the release of resources sterilised by the existing working plan would be a benefit, and hence caused him to disagree with the inspector's recommendation that planning permission should be granted.
59. At some stage after the receipt of the council's letter dated 7th October 2003 and before the date of the decision letter, there must have been a time when the Secretary of State was "disposed to disagree" with the inspector's recommendation because he had taken this new evidence into consideration.
60. At that stage he should have notified the parties of his disagreement with the inspector and the reasons for it and given them an opportunity of making written representations or asking for the reopening of the inquiry. The letter dated 17th July 2003 made it clear that the Secretary of State was not, at that stage, disposed either to agree or to disagree with the inspector's recommendation. He merely wished to be in a position to take a fully informed decision.
61. However, the Secretary of State did give the parties an opportunity to comment on the implications of the new guidelines for the appeal. The claimant took full advantage of that opportunity and made very detailed representations. Having ensured that each party had seen the other's representations, the Secretary of State then invited final representations from the parties. The claimant chose not to make any further representations in response to the council's letter dated 4th August 2003, and did not address the working party's conclusions which the council had drawn to the Secretary of State's attention in its letter dated 7th October 2003.
62. Although it is true that the Secretary of State did not tell the claimant that he was disposed to disagree with the inspector's recommendation, the claimant was clearly well aware of the fact that there was a very real possibility that the substantial reduction in the regional provision for sand and gravel production would lead the Secretary of State to the conclusion that planning permission should be refused on the ground of need. It is precisely for this reason that it argued in its representations that the new guidelines should not lead the Secretary of State to that conclusion. The council argued to the opposite effect.
63. In these circumstances, the breach of Rule 17(5) can fairly be described as merely technical, and I am satisfied that it has not caused any substantial prejudice to the claimant. The claimant's response had explained in great detail the reasons why it contended that there was a continuing case on the basis of need, notwithstanding the new guidelines. The Secretary of State considered the claimant's arguments and rejected them. In reality, there were no further arguments that could have been advanced by the claimant if the Secretary of State had said that he was minded to disagree with the inspector for the reasons summarised in paragraph 22 of the decision letter. For this reason, I reject ground (4).
64. I should add that even if I had been persuaded that there had been substantial prejudice, I would still have hesitated long and hard before quashing this particular decision letter as a matter of discretion. The Secretary of State's view of the implications of the new guidelines for the appeal proposals is very clear indeed. There is absolutely nothing to indicate that quashing this decision letter might result in the Secretary of State reaching a different decision on the need for the release of more minerals at the quarry in the light of the new guidelines.
65. For these reasons, this application must be dismissed.
66. Mr Litton, yes.
67. MR LITTON: The question of costs arises. I understand that agreement was reached as between the Secretary of State and the claimant that in the event that the claim should fail that the claimant should pay the Secretary of State's costs to the tune of £6,500.
68. MR JUSTICE SULLIVAN: Confirmed?
69. MR PICKLES: Your Lordship, confirmed. Absolutely no point in relation to the Secretary of State's costs.
70. MR JUSTICE SULLIVAN: Right.
71. Miss Olley, is there any point in relation to the second defendant's, the county's costs, or are you keeping your head down?
72. MISS OLLEY: My Lord, I do have an application for our costs.
73. MR JUSTICE SULLIVAN: You do, right.
74. MISS OLLEY: My Lord, do you have our schedule that we supplied to you?
75. MR JUSTICE SULLIVAN: I do not think I have. Wait a minute, I might have put it at the back of this bundle. So it is possible it arrived a long time ago, I cannot remember. I will just have a look. (Pause)
76. MISS OLLEY: My Lord, may I pass up another copy to assist your Lordship? (Handed)
77. MR JUSTICE SULLIVAN: The answer is I have not. I think rather than the detail, it is rather more the principle of the thing, is it not? You would have to persuade me that there were particular reasons why there should be two lots of costs in this case.
78. MISS OLLEY: Yes, my Lord.
79. MR JUSTICE SULLIVAN: So if we deal with that before we delve into the detail, maybe.
80. MISS OLLEY: The application is made on the basis that the planning authority's presence was necessary to assist in the explaining of the figures on minerals planning need.
81. Further, in relation to the ground of argument relating to regulation 17(5), the First Secretary of State did not indicate in its skeleton argument that it would be suggesting that, first, the regional guidelines represented government policy or, secondly, that no substantial prejudice arose. In the event, the regulation 17(5) issue has turned on whether or not substantial prejudice existed. The local planning authority therefore had to attend to ensure that that point was taken.
82. MR JUSTICE SULLIVAN: Can I just remind myself of Mr Litton's skeleton argument. I seem to remember it did not give Mr Pickles too much hope, I would have thought, on the Rule 17(5) point.
83. MR LITTON: I certainly did not in the skeleton argument raise the issue of substantial prejudice. That was a point that was put against me and argued by Mr Pickles. You may recall that my retort was that actually the onus was on him to demonstrate there was substantial prejudice.
84. MR JUSTICE SULLIVAN: Your point was that there was no --
85. MR LITTON: His skeleton had not done that.
86. MR JUSTICE SULLIVAN: I do remember that, that tit for tat. But I think your point was there had not been a breach of Rule 17(5) at all. So on your approach you would not have got substantial prejudice. It was not as though you gave Mr Pickles an undue amount of comfort.
87. That is the basis on which you put the --
88. MISS OLLEY: Yes, my Lord.
89. MR JUSTICE SULLIVAN: Thank you very much.
90. Mr Pickles, I do not think I need to trouble you about that application.
91. The order of the court is that the application will be dismissed. The claimant is to pay the Secretary of State's costs summarily assessed in the sum of £6,500.
92. In respect of the council's costs, I make no order in response to the application that is made. The general rule is that two lots of costs are not awarded. I am not persuaded that the circumstances here were sufficiently exceptional to justify an award of two lots of costs. I can well understand that the County Council would wish to be here, but that is not a sufficient reason to justify an award of costs.
93. In respect of the two matters that were specifically raised, there was no indication in the Secretary of State's skeleton argument that any concession would be made in relation to regulation 17(5). So far as the figures were concerned, it was a feature of the council's evidence that a deal of information was indeed given about the minerals figures, but that went (if I could put it as politely as possible) somewhat beyond the information that was contained in the inspector's report and which would have been germane for the purposes of this case, and perhaps verged upon a re-argument of the merits on slightly different figures.
94. For those reasons, I am not persuaded that this is a case which justifies two lots of costs. I intend no criticism of the council at all in that respect. It is simply that has not got over the high threshold for justifying two lots of costs.
95. In conclusion, I would like to thank all counsel for their assistance. Miss Olley, I would be grateful if you would thank Mr Taylor please as well.
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