QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
B e f o r e :
|THE QUEEN ON THE APPLICATION OF SAINSBURY'S SUPERMARKETS LIMITED||(CLAIMANT)|
|(1) THE FIRST SECRETARY OF STATE|
|(2) CHERWELL DISTRICT COUNCIL||(DEFENDANTS)|
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
MS N LIEVEN appeared on behalf of the FIRST DEFENDANT
Crown Copyright ©
"After careful consideration of the Inspector's report, the Secretary of State is of the view that he requires further information concerning the Inspector's conclusions on retail need in Kidlington and the potential impact on the vitality and viability of existing centres. In particular:
"the applicant's evidence on quantitative need stems from inquiry document SSL4 Tables 1-4. The Secretary of State would be grateful to know whether or not any other evidence was submitted on this matter and, if so, the nature of that evidence and whether or not the Inspector took it into account in concluding that there was evidence of quantitative need.
"The Secretary of State notes in paragraph 14.34 of the Inspector's report that the Inspector reports that both the applicant and the Council consider that even if one of the stores in Kidlington centre were to close, there would be no impact on the vitality and viability of the centre. The Inspector has also recorded in paragraph 14.21 of his report that there was significant under trading by other stores in Kidlington. The Secretary of State requires information from the Inspector on his findings with regard to these statements, and his conclusions on whether, taking account of the acknowledged under trading and potential closures, the proposed development would be likely to have any significant adverse effect on the vitality and viability of any nearby centres."
"In assessing applications for developments which may have an impact on a nearby town, district or local centre, local planning authorities should consider:
"the extent to which developments would put at risk the strategy for the town centre, taking account of progress being made on its implementation, in particular through public investment;
"the likely effect on future private sector investment needed to safeguard the vitality and viability of that centre;
"changes to the quality, attractiveness and character of the centre, and to its role in the economic and social life of the community;
"changes to the physical condition of the centre;
"changes to the range of services that the centre will continue to provide; and
"likely increases in the number of vacant properties in the primary retail area.
"Equally, local planning authorities should consider the likely effects on nearby centres if the proposed investment is not made. The information collected on the health of town centres should help in undertaking the assessment.
"4.4. In assessing impact it is essential that the local authority take a long-term view. Retailers may operate under long leases that discourage them from closing unprofitable branches in town centres until the end of the lease period. Accordingly, the full impact of the development may take some years to be felt."
"An important change made by PPG6 in June 1996 was the introduction of the sequential approach."
"By the application of this approach, and the other safeguards of PPG6, an applicant who seeks planning permission for a retail development out of a town centre, faces a series of stiff hurdles. He does not, however, have to show need as a precondition for the grant of permission, nor is need always a material consideration. I agree with the views expressed by the Inspector in his decision concerning a retail development in Richmond-upon-Thames. He said that he did not read paragraph 1.10 [that is of PPG6] as indicating that a developer had to show a need for the development before the sequential test was applied. He continued:
'...in relation to a particular proposal for a shopping development, it is my view that the likely impact of the development on the vitality and viability of town centres will indicate whether or not there is a need or capacity. A lack of impact will suggest spare capacity in the system whilst a considerable impact is likely to indicate that there is no need for further development of that type.'
To that extent, and in that way, need will often be relevant. But that is not to say that it is always relevant as a free-standing condition or material consideration."
"Our policy on town centres, including retail and leisure development, is set out in Planning Policy Guidance note 6: Town Centres and Retail Development (PPG6). This aims to sustain and enhance the vitality and viability of our existing town centres by focusing new investment, particularly for retail and leisure uses within city, town and district centres."
"Proposals for new retail and leisure development which accord with an up-to-date plan strategy or are proposed on sites within an existing centre, should not be required to demonstrate that they satisfy the test of need because this should have been taken into account in the development plan.
"However, proposals which would be located at an edge-of-centre or out-of-centre location and which:
"are not in accordance with an up-to-date development plan strategy; or
"are in accordance with the development plan but that plan is out of date, is inconsistent with national planning policy guidance, or otherwise fails to establish adequately the need for new retail and leisure development and other developments to which PPG6 applies, should be required to demonstrate both the need for additional facilities and that a sequential approach has been applied in selecting the location or the site.
"In the context of PPG6 and this additional guidance, the requirement to demonstrate 'need' should not be regarded as being fulfilled simply by showing that there is capacity (in physical terms) or demand (in terms of available expenditure within the proposal's catchment area) for the proposed development. Whilst the existence of capacity or demand may form part of the demonstration of need, the significance in any particular case of the factors which may show need will be a matter for the decision-maker.
"In the circumstances referred to above, the need for such proposals should be considered carefully when determining planning applications. A failure to demonstrate both the need for such proposals and that a sequential approach has been applied in selecting the application site would normally justify the refusal of planning permission unless there were weighty additional material considerations."
"... sustain and enhance the vitality and viability of town and other existing centres by focusing retail, leisure and other key town centre uses which attract a lot of people within those centres. PPG6 emphasises the plan-led approach ..."
"In summary, applicants must:
"demonstrate that there is a need for the development;
"having established that such a need exists, adopt a sequential approach to site selection;
"consider the impact on nearby centres; and
"provide evidence on the site's accessibility by a choice of means of transport, as demonstrated by a transport assessment (see PPG13), the likely changes in travel patterns over the relevant catchment area, and any significant environmental impacts.
"All these tests apply equally to proposals for extensions as well as to new developments."
"Some applicants have sought to make a distinction between quantitative and qualitative need for new retail facilities. PPG6 does not make this distinction although evidence on both has frequently been presented at planning inquiries. The First Secretary of State accepts that need can be expressed in quantitative and qualitative terms but considers that evidence presented on need is becoming increasingly and unnecessarily complicated. He therefore places greater weight on quantitative need for new retail provision to be defined in terms of additional floorspace for the types of retail development distinguished in PPG6, which are comparison and convenience shopping. Where both comparison and convenience goods are proposed to be sold within the same development, the First Secretary of State will expect to have evidence on the need of each type of goods."
"The traditional way to identify quantitative need is to look at expenditure flows in the catchment area at the date of assessment. The date of assessment is normally the assumed opening date of the store/extension but can be other dates. Rather than doing a 'real life' assessment of actual turnovers, a model is created which assumes that all stores are trading at company average benchmark turnover levels. The cumulative total of all these benchmark turnovers is then deducted from the total expenditure available in the catchment area (derived as a straight multiplication of population in the catchment area and expenditure per head) to give a notional level of available expenditure.
"34. This approach is, obviously, subject to a number of potential refinements including an initial debate about the appropriate catchment area and the correct retention rates within that catchment area. Clearly there are few catchment areas that retain all the expenditure of residents within the catchment area although there will, inevitably, also be some inflow of expenditure.
"35. The Claimant did not submit this type of information at the inquiry. For the reasons outlined above in paragraphs 5-7 a conscious decision was taken that the complexities of the catchment area would render the results of such an analysis less meaningful than the findings on retail need arising from the undisputed overtrading of the store and the clear evidence of expenditure growth."
"While the traditional route looks at the present day picture and makes assumptions about company benchmark turnover levels, an alternative approach is to look at the catchment area at an earlier point in time, assume that the available expenditure and store turnover was then in balance and then treat expenditure growth after that date as 'available'. Effectively, this is the approach that the Claimant took at the inquiry using a 1991 'assumed balance date'. 1991 was chosen on the basis that it was the last date when major retail floorspace was built in the catchment area."
"37. In practice, the approach needs to be refined for example to take account of changes since the 'assumed balance date'. Some stores will have been refurbished. New stores will have opened. Stores will have closed. Adjustments are normally made to the expenditure growth figures to allow for this."
"The increase in convenience goods based expenditure in the Primary Catchment Area in the period 1991 to 2003 is estimated to be £8.5 m [7.20]. It is forecast to increase by a further £2.3m by 2006 [7.20]. The equivalent convenience business based figures are £28.6m and £8m. Allowing for the only significant foodstore development in the Primary Catchment Area since 1991, the Marks & Spencer food hall in Summertown (£6.5m), this would leave an increase in capacity of £4.3m on a convenience goods based basis or £30.1m on a convenience business based basis."
"I was told that the existing store is trading at a sales density some 50% above the company average even after the opening of the Marks & Spencer store in Summertown [7.10]. Accepting that the turnover of that store might increase slightly from its present level, it is not expected to alter the overtrading situation at the Kidlington Sainsbury's store [7.10]. Although put forward as part of the qualitative need for the proposed extension, I consider that this degree of overtrading can also be regarded as an indicator of a quantitative need for additional floorspace.
"14.21. Set against those indicators of quantitative need is the evident underperformance of the existing supermarkets in Kidlington shopping centre. The reported sales figures for the stores accepted by all parties at the inquiry, when compared with those in the earlier MVM report which based the estimated turnover figures for Tesco and the Co-op on company average sales density figures, indicate £4.5m under-trading by Tesco and £1.5m under-trading by the Co-op [7.47]."
"It is common ground between the parties that a qualitative need for the proposed extension can be demonstrated [7.12-7.17]. The overtrading referred to above leads to cramped conditions for customers and the need for frequent restocking of shelves [7.13, 7.17]. It is also claimed that the inability to carry as wide a range of products as other company stores also represents an element of qualitative need [7.13-7.15].
"14.23. I consider that the existing store layout appears a little dated and that it does not match the quality of more modern stores. Whilst the store is slightly cramped and is no doubt crowded at certain times, it appears that this does not deter customers to the extent that the store fails to attract them. In terms of the retail offer, whilst it may not match that of more modern stores such as Cobham, it appears to be superior to that provided by the Co-op and Tesco stores in Kidlington as demonstrated by the degree of undertrading in those stores.
"14.24. Whilst the additional convenience goods based expenditure in the period 1991 to 2006 of £10.8m would be sufficient to justify the need for the proposed extension and there are also indicators of a qualitative need, consideration needs to be given to balancing this against the theoretical capacity of the existing stores in Kidlington shopping centre. The apparent failure of the Tesco and Co-op stores to attract additional custom even when conditions at the Sainsbury's store appear to indicate that some customers might be deterred from shopping at the store, supports the view that those stores cannot match the existing retail offer at the Sainsbury's store. In my view it is highly unlikely that either could match the quality of the offer that the applicant is proposing in the extended Sainsbury's store.
"14.25. The growth in convenience expenditure in the primary catchment area has given rise to a quantitative need, whether it is assessed on the lower convenience goods basis or the higher convenience business basis. The 2 under-trading stores in Kidlington shopping centre are not meeting that need and the evidence points to that situation continuing. I conclude therefore that there is a substantive quantitative need for the proposed development on the Sainsbury's site, whether that is assessed on a convenience goods or convenience business basis. Moreover qualitative considerations further strengthen the case for the proposed development on grounds of need."
"I concluded in Paragraphs 14.18 and 14.19 of the main report that having regard to the increase in convenience goods based expenditure in the Primary Catchment Area in the period 1991 to 2003, there would just be sufficient capacity to accommodate the proposed extension. I also concluded that on convenience business based figures, there was more than sufficient capacity for the proposed store extension.
"11. In reaching those conclusions I had regard to Mr Goddard's evidence, which supported the evidence of qualitative need put forward by the appellant, and I accorded it considerable weight because of Mr Goddard's professional standing and expertise and his role and experience in advising the Council on retail planning matters over a number of years.
"12. However Mr Goddard's view that there is a quantitative need sufficient to support the grant of planning permission for the proposed extension, is subject to the caveat that there are no preferably sequential opportunities to improve the range and quality of food shopping facilities within the centre, or any risk to the vitality and viability of Kidlington centre. My conclusions on the suitability, viability and availability of sequentially preferable sites were addressed in Paragraphs 14.26 to 14.32 of the main report. I concluded that there were no alternative sequentially preferable sites."
"The Secretary of State notes that the applicant has put forward a case for retail need using quantitative and qualitative indicators. He notes that the existing store is trading at a sales density some 50% above the company average [IR 14.20] and agrees with the applicant that this is an indicator of a qualitative need for the proposed extension. However, he does not agree with the Inspector that this can be regarded as an indicator of a quantitative need for additional floorspace; the fact that the store is trading better than other Sainsbury's stores does not demonstrate quantitative retail need in this location [IR 14.24]. Overall, having regard to the Inspector's conclusions in paragraphs 14.20 - 14.24, the Secretary of State considers that there is evidence demonstrating a qualitative need for the proposal."
"12. The McNulty Statement acknowledged that need can be expressed both in quantitative and qualitative terms."
"However, the Secretary of State disagrees with the Inspector that the estimated growth in convenience expenditure in the Primary Catchment Area is a demonstration of a quantitative need. This is because the applicant has not compared this estimated or potential growth in expenditure with actual existing expenditure. The applicant has submitted an assessment of a growth in expenditure, not evidence of a quantitative need for additional floorspace, over and above the existing floorspace, to satisfy an unmet demand in Kidlington. The applicant has not therefore demonstrated that there is expenditure in the catchment area that has not been, or is not being, met and that there is available capacity to justify a need for additional retail facilities [IR 14.25]. The Secretary of State does not agree, therefore, that the applicant has demonstrated a quantitative need for the proposal."
"The Secretary of State concludes that the proposed development is not in accord with an up to date development plan strategy. For the reasons given in paragraphs 11 to 16 above, he has concluded that it has not been demonstrated that there is a quantitative need for the proposal, contrary to a key objective of PPG6. He has considered whether there are any material considerations which could outweigh these conclusions, particularly as the Development Plan should be considered in the context of more recent Government policy guidance. He has taken into account the benefits mentioned in paragraph 25 above, but has concluded that there are no material considerations sufficient to outweigh the development plan and policy conflicts that he has identified."