Case No: CO/10355/2005
Neutral Citation Number: [2007] EWHC 768 (Admin)
 
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, 
London, 
WC2A 2LL

Judgment handed down at
Preston Combined Court Centre
Openshaw Place
Ringway
Preston
PR1 2LL

Date: 26th April 2007

Before :

HIS HONOUR JUDGE GILBART QC
(sitting as a deputy High Court Judge)

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Between:
	VICARAGE GATE LIMITED	
Claimant	
	- and -		
	FIRST SECRETARY OF STATE	First Defendant	

	-and-
ROYAL BOROUGH OF KENSINGTON AND CHELSEA
	
Second Defendant
	
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David Holgate QC (instructed by Denton Wilde Sapte, solicitors of London EC4) for the Claimant
Richard Drabble QC (instructed by the Head of Legal Services, Royal Borough of Kensington and Chelsea, Town Hall, London W8) for the Second Defendant
The First Defendant did not appear and was not represented

Hearing dates: 14th, 15th March 2007
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JUDGMENT

JUDGE GILBART QC: 
Introduction
1.	This is a challenge by Vicarage Gate Limited (“VGL”), by virtue of section 288 of the Town and Country Planning Act 1990 (“TCPA 1990”), to a decision letter of  an Inspector appointed by the First Defendant First Secretary of State (“FSS”), issued on 4th November 2005, whereby he dismissed the appeals of VGL under section 78 TCPA 1990 against the failure of the Second Defendant Royal Borough of Kensington and Chelsea (“RBKC”) to determine 
(1)	its application for planning permission to demolish an existing building at Vicarage Gate House, Vicarage Lane within the Kensington Palace Conservation Area and construct 12 Class C3 residential apartments with 27 basement car park spaces, and  
(2)	its application for the requisite Conservation Area consent under the Planning (Listed Buildings and Conservation Areas) Act 1990. 
2.	In fact RBKC opposed the grant of both consents, and had resolved that it would have done so had the appeals not been made. The decision is challenged on 14 grounds. All relate to the first (planning) appeal. It is common ground that the second (Conservation Area) decision stands or falls with the first decision. The FSS has, as will be shown below, given consent to the decision being quashed on two grounds, as appears below. However the RBKC resists each of the grounds. All have been argued fully before me.
3.	I shall deal with matters as follows in this judgment
(a)	The site and the proposals
(b)	The main issues before the Inspector
(c)	The statutory background to planning decisions
(d)	The Development Plan and other policies
(e)	The arguments of the parties at the inquiry ( in summary form)
(f)	The decision letter of the Inspector
(g)	The grounds of challenge to the decision and the contentions of the parties
(h)	Discussion and conclusions.
A	The site and the proposals
4.	The site is that of a former nursing home constructed in the 1950s, and previously owned and operated by an organisation called the Elizabeth Finn Trust, a charity which provided residential accommodation and nursing care for 55 persons. The building had been unused and vacant since that establishment closed in 2001. 
5.	VGL proposed the erection of 12 large apartments (described by the Inspector as “family-sized”) with car parking. It also offered a unilateral undertaking under section 106 TCPA 1990 whereby, if planning permission were granted, it would either pay £4 million to the Council for the purposes of providing affordable Elderly Persons Accommodation, or would be required to provide 20 affordable housing units on a site elsewhere in the Royal Borough. As will become apparent, such arrangements are by no means unusual in the Royal Borough.
B	The main issues before the Inspector
6.	The Second Defendant RBKC resolved that had the failure to determine the planning application not been appealed to the First Defendant FSS it would have been refused by the Second Defendant RBKC on the following grounds:-
(i)	“The proposal involves the loss of elderly person’s accommodation, which is defined in the Unitary Development Plan as a social and community use, and therefore does not comply with the Council's Housing and Social and Community use policies, in particular Policy SC2, H2 and H24.
(ii)	The site has a capacity to provide 15 or more residential units, but does not make satisfactory provision for affordable housing and is therefore contrary to the Council's housing policies as set out in the Unitary Development Plan, in particular Policy H22.
(iii)	The proposal does not provide a range and mix of units that includes smaller units and therefore does not comply with the Council's housing policies, in particular Policies H18 and H19.”
 
7.	Those grounds crystallised into the following issues
(a)	Did the UDP policy SC2 give protection to the site as a former nursing home from development for another purpose, and would the grant of permission conflict with the policies in the Supplementary Planning Guidance issued by RBKC ?
(b)	If the site were suitable for redevelopment for housing purposes, should affordable housing provision be made on the site?
(c)	Did the proposed development contain an acceptable mix of dwelling types and sizes?

C	The statutory background to planning decisions
8.	It is sensible at this stage of the judgment to note the statutory basis for decision making by an Inspector appointed to conduct a planning appeal. S/he must
(a)	have regard to the statutory development plan (see section 70(1) TCPA 1990)
(b)	have regard to material considerations (section 70(1) TCPA 1990)
(c)	determine the proposal in accordance with the development plan unless material considerations indicate otherwise (section 38(6) Planning and Compulsory Purchase Act 2004 (“ PCPA 2004”)
(d)	give his/her decision with reasons in writing (The Town and Country Planning Appeals (Determination by Inspectors) (Inquiries Procedure) (England) Rules 2000 Rule 19). That duty required the Inspector to give proper, intelligible and adequate reasons which dealt with each of the substantial points raised by the parties (Save Britain’s Heritage v. No. 1 Poultry [1991] 1 WLR 153; South Buckinghamshire C.C. v. Porter  (No. 2) [2004] 1 WLR 1953)
9.	There are other principles at play here. None were the subject of dispute between counsel. They are:
(a)	while an Inspector is not required to invite submission from the parties if he adopts a line of reasoning open to him on the issues which have been raised at the inquiry, he should not rely on an issue which has not been so ventilated. This is the “fair crack of the whip” principle found in Fairmount Investments Limited v Secretary of State for the Environment [1976] 1 WLR 1255 at 1265 per Lord Russell;
(b)	it is for the decision maker to interpret policy. The Court will not interfere with his interpretation if it is one which it can properly bear; see R v Derbyshire County Council, ex parte Woods [1997] JPL 958, CA, per Brooke LJ at page 967 968, The Queen (on the application of Springhall) v London Borough of Richmond Upon Thames [2006] EWCA Civ 189 and the immensely useful summary of the authorities by Davis J in Cranage Parish Council v First Secretary of State [2004] EWHC Admin 2949 at paragraphs 45-50;
(c)	if it is shown that the decision maker had regard to an immaterial consideration, or failed to have regard to a material one, the decision will be quashed unless the Court is satisfied that the decision would necessarily have been the same: see Simplex GE (Holdings) Ltd v. Secretary of State for the Environment [1988] 57 P & CR 306;
(d)	decision letters by other Inspectors can be a material consideration. Guidance on how they are to be dealt with is given by Mann LJ in North Wiltshire District Council v Secretary of State for the Environment (1992) 65 P & CR 137 at 145 (very recently followed by the Court of Appeal in Dunster Properties Ltd v The First Secretary of State & Anor [2007] EWCA Civ 236):
"One important reason why previous decisions are capable of being material is that like cases should be decided in a like manner so that there is consistency in the appellate process. Consistency is self-evidently important to both developers and development control authorities. But it is also important for the purpose of securing public confidence in the operation of the development control system. I do not suggest and it would be wrong to do so, that like cases must be decided alike. An inspector must always exercise his own judgment. He is therefore free upon consideration to disagree with the judgment of another but before doing so he ought to have regard to the importance of consistency and to give his reasons for departure from the previous decision. 
To state that like cases should be decided alike presupposes that the earlier case is alike and is not distinguishable in some relevant respect. If it is distinguishable then it usually will lack materiality by reference to consistency although it may be material in some other way. Where it is indistinguishable then ordinarily it must be a material consideration. A practical test for the inspector is to ask himself whether, if I decide this case in a particular way am I necessarily agreeing or disagreeing with some critical aspect of the decision in a previous case? The areas for possible agreement or disagreement cannot be defined but they would include an interpretation of policies aesthetic judgments and assessment of need. Where there is disagreement then the inspector must weigh the previous decision and give his reasons for departure from it. These can on occasion be short, for example in the case of disagreement on aesthetics. On other occasions they may have to be elaborate."

D	The Development Plan and other policies
10.	The statutory development plan consisted of
(a)	the London Plan, which is the relevant spatial development strategy for the purposes of section 38(2)(a) of PCPA 2004 (see section 334 of the Greater London Authority Act 1999) That is intended to give strategic direction which is then translated into specific policies at the Borough level.
(b)	the RBKC Unitary Development Plan (UDP). 
11.	RBKC had also adopted a policy on Elderly Persons’ Accommodation falling under the commonplace description “Supplementary Planning Guidance.” Such policies, although properly regarded as policies in a public law sense, do not have the force of statutory Development Plan policies, but national policy in Planning Policy Guidance Note 12 accords them weight if they reflect statutory development plan policy and have been the subject of proper consultation 
12.	I shall now summarise the policies as they affect the three issues:
(a)	Housing Policies
(i)	The UDP explains at paragraph 5.vi that the price of accommodation in the Royal Borough is high, and that it is important to maintain and increase the supply of affordable housing, family dwellings, small units and accommodation for special needs. Policies  STRAT 16 – 19 set the strategic policy context:
“STRAT I6
To ensure the contribution of the Royal Borough to the dwelling stock of Greater London is not diminished and is increased wherever appropriate
STRAT 17
To seek to maximise the residential capacity of the Borough in line with Strategic Guidance for London.
STRAT 18
To encourage an adequate and continuing supply of land for new housing through the development of vacant and under-used land for residential use in appropriate locations.
STRAT I9
To seek an increase in the amount and range of sizes and types of dwellings to meet the needs of those seeking permanent accommodation in the Royal Borough, whilst maintaining the overall quality of the residential environment.
(ii)	The objectives are described thus
5.1	OBJECTIVES
5.1.1	There are four overall objectives for housing in the Borough:-
(A)	To protect permanent residential accommodation in order to maintain and enhance the residential function of the Borough.
(B)	To ensure that new residential development, including conversions and extensions, is of good quality in order to maintain and enhance the residential character of the Borough.
(C)	To increase the supply of housing in appropriate circumstances to help stem the decline of, and where possible to increase, the Borough’s permanent residential population, subject to other policies of the Plan.
(D)	To provide and retain a range of housing types and sizes, of a satisfactory standard, to meet the varied physical and economic needs of the Borough’s residents.
(iii)	The policies seek to “provide and maintain a wide range of housing” (paragraph 5.5). They include the following reasons and explanation and  policies H17-H19
Housing Mix
5.5.1	The mix of accommodation in the Borough should be related to the range in household types existing or likely to exist and to deficiencies in the range of accommodation. Households are typically smaller than elsewhere in the capital. In response to market demand, the private sector already provides a substantial proportion of smaller units, mostly through conversion schemes and it is therefore important to retain existing provision. A large stock of small residential units is also important in order to: maintain the level of population by allowing a more intensive use of residential properties; maintain the number of adult households who through their spending power, help support the ancillary services which underpin the residential function; and meet the overall housing provision envisaged by RPG3
H17              To resist the loss of existing, small, self-contained flats of one 
                      or two habitable rooms.
5.5.2	However, it is important to ensure that a sufficiently wide range of dwellings is provided in terms of type and size in redevelopment, rehabilitation, extension and conversion schemes, to satisfy the needs of larger households and rising standards.
H18	To seek the inclusion of smaller units (of one or two habitable rooms) and larger units (of three habitable rooms and more) in schemes for residential development.
H19	To seek an appropriate mix of dwellings within a scheme, having regard to the following factors:
a)	the physical character of the site or building and its setting;
b)	the previous or existing use of the site or building;
c)	access to private gardens or communal garden squares for family units;
d)	the likely effect on demand for car parking within the area;
e)	the surrounding composition and density of population;
f)	the location of schools, shops and open spaces;
g)	provision of accommodation for special needs (see paragraphs 5.5.19 to 5.5.31); and
h)	busy roads or railway lines nearby.
(iv)	It will be noted that Policies H 18 and H 19 are expressed in terms of “to seek.” The UDP states at paragraph 1.2.4 that 
“ ‘Encouraging’ policies
These set out that which the Council would like to see resulting from development in the Borough. Such policies do not of themselves provide reasons for refusal, however, if a proposal is in accordance with such a policy, this factor may be taken into account when considering the application. An example of such a policy is “TO SEEK”.”
(v)	Paragraphs 5.5.8 – 5.5.18 and policies H22 and H23 address affordable housing provision. Paragraph 5.5.8 describes the difficulty of providing homes for those on low and middle incomes. Paragraph 5.5.9 refers to assessments of local housing needs, concludes that at April 2006, there would be a shortfall of 5,697 dwellings between the number of households with high priority housing need and the number of households to be supplied. Paragraph 5.5.10 states that the Borough can only meet half the calculated need. It sets a UDP target of 2,850 dwellings over its 10 year period. Paragraph 5.5.11 says the Council wishes to ensure that the present proportion of affordable housing in the Borough of about one third was maintained. According to 5.5.13, a residential development proposal should provide a minimum of one third of its units as affordable housing. In exceptional cases provision can be made off site within the Borough, or alternatively a payment sought. Policies H 22 and 23 state
“H22 To negotiate the provision and retention of a significant proportion of affordable housing on sites suitable for residential use with a capacity of 15 dwellings or more.
H23	To negotiate the provision and retention of a significant proportion of affordable housing where indicated in the Schedule of Major Development Sites.”
Paragraphs 5.5.15-17 describe the degree of provision to be expected in negotiations with developers.
(vi)	Paragraphs 5.5.19- 5.5.31 and policies H 24- H29 appear under the heading of “Special Needs Accommodation”. The relevant parts read
Special Needs Accommodation
5.5.19	  People with special housing needs include the single homeless, the elderly, those with physical or mental disabilities, people with mental health problems, women who have experienced domestic violence, students, people with a long-term debilitating illness, and travellers. The Council is aware of the special housing needs of these groups and is concerned that they should be adequately provided for in appropriate locations.
H24                To welcome the provision of housing for people with special accommodation needs in appropriate locations, having regard to the existing distribution of similar types of accommodation within the areas
5.5.20	The Council welcomes purpose-built accommodation which enables people with special needs to maintain an independent lifestyle and supports the work of housing associations in this respect. However, the Council wishes to maintain an appropriate balance between different kinds of residential uses within local areas. The Council will resist proposals which would lead to a concentration of special provision within an area.
(i)	Residential Hostels
5.5.21	…………
		………….
(ii)	Sheltered Housing
5.5.28		Many elderly people are living in accommodation that is 	either unsuitable for their needs or is in poor condition. The 	provision of sheltered housing allows those who wish to 	move to specially designed group accommodation to do so. 	Sheltered accommodation can also provide better facilities 	for people suffering long-term debilitating illness. The most 	pressing need in the Borough is currently for ‘very’ 	sheltered housing, which provides a higher level of care, 	catering for the frail elderly and people recovering from 	mental illness. The Council will continue to support the 	work of housing associations in this respect.
H 27     To welcome the provision of sheltered housing, in particular very sheltered housing, in appropriate locations, having regard to the existing distribution of similar types of accommodation within the area.
5.5.27	……………………………………….
(iv) Access and Mobility
…………………………
(v)  Sites for Travellers
…………………………………….”

(b)	 Social and Community Policies
(i)	These are dealt with in Chapter 9. STRAT 44 sets out the strategic policy
“STRAT 44 To protect and encourage social and community facilities which are easily accessible to meet the needs of those who live, work and study in the Royal Borough.”
(ii)	Paragraph 9.1 introduces the policies. Subparagraph 9.1.1 deals with “social and community uses and facilities” which are defined by 9.1.2  as including “ Social Service uses and facilities for general needs and specifically for children (….) and families, elderly people,……….” and “ all health facilities including hospitals, general practitioners, dentists, chiropodists and other specialist functions, whether located in individual premises, group practices or health centres;”
(iii)	The overall objectives are stated by paragraph 9.2 for “social and community developments in the Borough.” These are:
“(A)	To protect existing social and community uses and facilities in the Borough where an established local need exists.
  (B)	To encourage the provision of new social and community uses and facilities in appropriate locations and according to the needs of the Borough’s population.”
(iv)	Paragraph 9.4 deals with “Protecting Existing Social and Community Uses and Facilities” Paragraphs 9.4.1-2 and the succeeding Policy SC2 read
“Retention and Replacement of Existing Facilities
9.4.1 	The facilities which cater for the Borough’s social and community needs are an invaluable and essential component of the residential environment. Facilities such as meeting halls and community centres are also important as a recreational facility and are considered in more detail in paragraph 11.5.5 and Policy LR3O of the Leisure and Recreation chapter. These facilities, along with schools, health centres and hospitals, doctors’ surgeries, Social Services establishments, libraries and churches provide a communal resource through which residents can gain information, education, medical or welfare assistance, and social contact. The Council recognises the importance of these facilities in the Borough and will therefore resist their loss, whether through redevelopment of a site or buildings or change of use.
	  	SC2	To resist the loss of accommodation for social and community use
 	9.4.2	Properties which previously accommodated social or 				community uses may be considered for an alternative use in 			circumstances where the continued or future need for the use can 		no longer be established. All proposals will be considered on their 		merits and in accordance with the aims and policies of the Plan”
(v)	Paragraph 9.4.3 and policy SC 3 deal with the negotiation of planning obligations to replace such uses when lost to development.
(vi)	Paragraph 9.5 is a section dealing with the encouragement of provision of new social and community uses and facilities. Within that section appears policy SC5, which reads (in part)
SC5	To permit proposals for the development of social and community 	facilities to meet local needs, unless:
a) there would be a loss of permanent residential
accommodation, particularly accommodation for
people with special housing needs;
b)……………………………………..
c) ………………………………………
d)	the site is not well located in terms of the place of residence of the potential users, and/or local public transport facilities are inadequate;
e)………………………………………………………….. 
f)…………………………………………………………
g)………………………………………………...
(c)	The relevant passages in the London Plan do not require to be set out in this judgment. 
(d)	RBKC decided to issue Supplementary Planning Guidance on Elderly Persons’ Accommodation. 
(i)	It was published in draft in November 2003, went through a process of consultation and was adopted in April 2004. It was referred to as SPG 7. I shall refer further to the process of consultation when describing the parties’ contentions. The SPG states at section 1
“1 	Purpose and Scope of SPG
1.1	The purpose pf this supplementary planning guidance (SPG) is to establish the key considerations by which proposals for the provision of new or the re-use or redevelopment of elderly persons’ accommodation within the Borough will be determined.
1.2	The SPG is intended to complement the policies within the Royal Borough’s Unitary Development Plan (UDP) which was adopted in May 2002 and offer detailed guidance to planners, landowners and developers to assist in the implementation of planning policy. It therefore builds upon the advice and policy set out in the Social and Community Uses chapter of the Royal Borough’s UDP on the provision and retention of community facilities.
1.3	……………………………………….
1 .4	The main objectives of this SPG are:

•	To set out the planning policy framework related to development proposals for the re-use or redevelopment of existing residential or nursing homes;
•	To outline the justification the Council will require in support of applications involving the loss of elderly persons’ accommodation from within the Borough; and
•	To establish the key considerations by which proposals for new elderly persons’ accommodation will be determined.

A list of relevant definitions relating to different types of elderly persons’ accommodation is contained within Appendix One. The contents of this SPG excludes (sic) private sheltered housing schemes which are specifically designed housing developments for people usually over retirement age and have a resident warden and are covered by UDP Policy H27.”
(ii)	Section 2 of the SPG describes the need for a decline in the supply of elderly persons’ accommodation and an increase in demand. It set out the RBKC wish to assist in the retention, where possible, of the Borough’s supply of residential and nursing homes. 
(iii)	Section 3 is the “Policy Context”. It refers to national policy, to the London Plan, and to the UDP. It regards the following policies as relevant, inter alia: STRAT 44, SC2, SC5, and H 24. Section 4 identifies current provision, and  Section 5 sets out demand, and finds a shortfall of 244 places for residential and nursing home beds. It then considers future provision and concludes that at 2031, demand will be for 931 beds against a supply of 369. 
(iv)	Section 7 deals with the retention of residential care and nursing homes, which it describes as “important for several reasons” and states that residential and nursing homes for the elderly should be locally available to meet the identified local need for such facilities. It refers to policy SC2 again, and then contains this passage
“Assessing Proposals for the Redevelopment or Change of Use of Elderly Persons' Accommodation within the Borough
7.5	The Council expects the following issues to be addressed by applicants in justifying development proposals which involve the change of use or redevelopment of a building or site currently or formerly used for elderly persons’ accommodation:
•	local need and capacity;
•	Commercial viability; and
•	Suitability for conversion or extension
7.6	The following section outlines the issues which the Council will expect applicants to address to help justify the loss of residential care and nursing home facilities from the Borough. Applicants should seek to address each issue and the Council will expect such information and evidence to accompany any development proposals involving the redevelopment or change of use of existing elderly persons’ accommodation facilities.”
(v)	Section 7 then continues with what an applicant would be expected to address. It includes the following
(i)	“Applicants will be expected to demonstrate levels of local need and demand for residential and nursing homes which can justify the loss of such a facility from the Borough” (7.8)
(ii)	“Only when the continued or future need for the use can no longer be established will alternative uses be considered” (7.12)
(iii)	“Applicants will be asked to provide evidence of the commercial viability of the existing facility. The council will expect information to be provided on the following ….
•	Is the facility currently in operation? If not, have genuine attempts been made to sell……for use as a residential care or nursing home over an extended period of not less than 12 months?
•	……………….
•	………………….”  (7.14)

(iv)	“If …..building works are required, full estimates of costs …….should be submitted……..based on a detailed schedule and plans of the proposed works” (7.15)
(v)	“to help establish the commercial viability of the facility, calculations should also be provided to project the likely net operation surplus likely to be derived from a residential or nursing home operating…………..and its operational capital value………….The Council may seek an independent review of the evidence submitted.”
(vi)	Section 9 addresses development control criteria for new proposals under policies H 24 and SC5. 

E	The arguments of the parties at the inquiry (in summary form)
13.	The RBKC contended that
(a)	The site should be retained in nursing home use, for which there was a need in the Borough.
(b)	A nursing home fell within H 24. Protection was also given by Policy SC2 of the UDP.
(c)	The SPG was based on the UDP and had gone through appropriate consultation. It should accordingly carry considerable weight. 
(d)	While it was accepted that the existing building was not capable of reuse as a nursing home, a viable redevelopment for nursing home use could be carried out. While it would only be viable if charges were at the top end of the range (of between £ 1200 and £ 1300 per resident per week) that level was achievable.
(e)	VGL’s assessment of viability, which showed that a redevelopment was not viable, was flawed both in its costs inputs and in its assumed fee levels, which were too low. VGL had also failed to market the site for such a purpose. Accordingly the tests set by SPG had not been met.
(f)	Development Plan policy required that any housing scheme make provision for affordable housing, which ought to be on the site itself. 
(g)	The amount of affordable housing to be provided should be at least 30%, but could be higher given the London Plan figure of 50%.
(h)	The mix of housing proposed contained too few smaller dwellings when measured against policies H 17 and H 18. 
14.	VGL contended that
(a)	Policy SC2 did not apply to a nursing home. The terms of SC5 showed that nursing homes did not fall within the types of development to which that chapter applied. The relevant policy was H 27.
(b)	The SPG should not attract weight, because an objection by VGL pointing out the conflict between SC2 and SC5 had not been addressed properly.
(c)	The site was not viable for redevelopment as a nursing home.
(d)	It was accepted that affordable housing provision had to be made by the developer. The figure required by policy was 30% of the site’s capacity. If the capacity of the site was 30 dwellings, the offsite provision of 20 dwellings was double the amount obtainable on site. That was a countervailing benefit of substance.
(e)	RBKC had to balance against the loss of a nursing home site the fact that the grant of permission would result in twice the affordable housing provision elsewhere. That approach had been endorsed for the RBKC area on appeal by Inspectors. RBKC had never considered that approach in this case. 
(f)	The claims of RBKC that it regarded as objectionable that provision was not made on site were inconsistent with its common practice of accepting provision elsewhere.
(g)	The mix of dwellings was acceptable, and reference was made to other schemes approved by the RBKC.
15.	The public inquiry into the appeal took 9 days. Both sides were represented by Leading Counsel, and both called extensive technical and planning evidence. 

F 	The decision letter of the Inspector
16.	This is a substantial decision letter, but given the scope of the challenges made to it, it is necessary to set most of it out. The salient parts of the decision letter read thus:
“3	The terms ‘residential care homes’ and ‘nursing homes’ were used variously throughout the inquiry both in written and oral evidence, although both have now been technically superseded by the provisions of the Care Standards Act 2000. In common with the various witnesses I have used these terms on occasions throughout my decision. However, for the avoidance of doubt, ‘residential care’ or ‘residential homes’ assumes a care home providing personal care with no nursing element, whereas ‘nursing care’ or ‘nursing homes’ assumes a care home providing nursing care.
4	The appellant submitted a unilateral undertaking under Section 106 of the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991. In the event of planning permission being granted for the appeal proposal, this undertaking would require either a commuted sum of £4m to be paid to the Council for the sole purpose of providing Affordable Elderly Persons Accommodation; or would require the appellant to secure an appropriate site and provide 20 affordable housing units. This undertaking is discussed in further detail in the appropriate sections below.

Main Issues

5	The-Statement of Common Ground makes it clear that subject to the imposition of a number of conditions, many of the matters regarding the appeal proposal are not in dispute between the parties. These include the principle of a Class C3 residential use on this site (in the event of the appeals being successful); the design and form of the proposed building; landscaping and arboricultural matters; archaeological concerns, and matters of residential amenity for future occupiers and nearby residents. In the light of these points, I consider that for Appeal A (the planning permission), the main issues are the effect of the proposal firstly, on the provision of elderly persons accommodation within the Borough and, coupled with this, the viability of the continued provision of such accommodation on this site; secondly on the provision of affordable housing within the Borough; and finally, whether the proposal would provide an appropriate range and mix of housing units.
6	For Appeal B (the Conservation Area consent) I consider the main issue to be whether the proposed demolition of the existing building would preserve or enhance the character or appearance of the Kensington Palace Conservation Area, having regard to the detailed proposal for which planning permission is sought.

		Reasons

The effect on the provision of elderly persons' accommodation

Policy issues

12	In terms of policy protection for the existing lawful use of the appeal site, and the weight to be given to SPG7, the key difference between the parties is how nursing and residential care homes should be categorised. There is no. dispute that the UDP contains no specific policy resisting the loss of care homes, but this is not altogether surprising as neither the Housing Chapter, nor the Social and Community Uses (SCU) Chapter of the UDP contain any direct references to nursing homes or residential care homes.
13	The appellant’s position on this matter is that care homes are not ‘social and community uses’ within the context of the UDP, and do not therefore benefit from protection under policy SC2. Rather, the appellant argues that they should be considered as ‘special needs accommodation’, to be dealt with in the Housing Chapter. This argument is primarily based on the contention that the reference to Social Services uses and facilities for the elderly in. UDP .paragraph 9.1.2(b) does not relate to residential accommodation, but to other uses such as day centres. In this regard the appellant points out that no social and community use policies were mentioned as being relevant for a planning proposal for the Ellesmere Elderly Persons Home within the Borough, which was considered by the Cabinet in March 2004 shortly after the proposal which now forms the subject of these appeals were submitted. In addition the appellant argues that as policy SC5 makes an express exclusion for ‘special housing needs’, this demonstrates that there is a clear distinction between social and community uses and residential uses. 
14	The Council takes a contrary view, arguing that although there is no specific UDP policy which safeguards care homes this does not mean that other, more general policies do not provide protection to such uses. It points out that ‘social and community facilities’ are specifically defined in the SCU Chapter as relating to social service uses and facilities for elderly people (amongst other groups), and contends that care homes qualify as such uses and are therefore protected under policy SC2. The Council further points out that as far back as September 2001, in relation to a proposal at Delves House for a change of use from nursing home to self-contained residential apartments, it was taking the view that a home for elderly persons represents accommodation for social and community use. Moreover, the Council maintains that there is no inconsistency between policies SC2 and SC5, arguing that policy SC5 simply reinforces the case for there being policy protection for care homes.
15	In considering these conflicting views, I acknowledge that policy H24 welcomes purpose-built accommodation which enables people with special needs to maintain an independent lifestyle. Moreover, I have noted that the supporting text to London Plan policy 3A.10 (which relates to special needs and specialist housing) indicates that such housing can include sheltered housing with care support and care homes. However, I have also been mindful of the fact that following the enactment of the Care Standards Act 2000, all establishments providing residential accommodation and personal care now have to register with the Commission for Social Care Inspection (CSCI). The Act explains that an establishment is a care home if it provides accommodation together with nursing or personal care for older people, but is not considered to be a care home unless the care which it provides includes assistance with bodily functions, where such assistance is required.
16	Looking again then at ‘Special Needs Accommodation’, as covered by policy H24, the supporting text explains that this relates to a wide range of people and it is clear to me that not all of these would have a need for nursing or personal care. Under this general heading the elderly are specifically covered by policy H27, which relates to Sheltered Housing, but there (are) many different types of sheltered housing, ranging from those which provide low levels of support, perhaps with a resident or visiting warden, to those providing higher levels of care and support. The key point is that not all forms of sheltered housing provide the type of personal care which would require the establishment to be registered with CSCI. Because of this I consider there to be a distinction between accommodation which is provided in association with personal or nursing care, and that which is not. In my opinion this indicates that whilst some forms of accommodation for the elderly can sit quite comfortably within this policy H24 Special Needs Accommodation category, others cannot.
17	For these reasons I conclude that it is both logical and reasonable to regard residential accommodation for the elderly which is provided together with nursing or personal care, as constituting a social and community use. Accordingly I consider that the appeal proposal falls to be assessed against policies in the SCU Chapter of the UDP, and because of this I -am satisfied that SPG7 is correctly rooted in UDP policies. I therefore accord it substantial weight. I have noted the appellant’s contention that at consultation stage the Council did not respond to its key points that the draft SPG did not refer to policy SC5, and that the UDP treats accommodation falling within policy H24 as being distinct from ‘social and community uses’. However, references to both of these policies now appear in the adopted version of SPG7, and in the light of my comments on this matter outlined above, I am not persuaded that this lessens the weight which should be attached to this SPG.
18	The UDP identifies two overall planning objectives for social and community developments, the most relevant in the current appeals being the need to protect existing social and community uses and facilities in the Borough where an established local need exists. This objective of protecting such existing uses is given policy backing in STRAT44 and SC2. In addition, it is my view that Policy 3A.14 of the London Plan is directly relevant to’ the current appeals, as it addresses the needs of London’s population, with o1der people’ forming one of the distinct groups referred to in the policy’s supporting text. This policy states that existing facilities that meet the needs of particular groups should be protected, and where shortfalls have been identified policies should seek measures to address them proactively.
19	Although the appellant argues that ‘existing facilities’ cannot apply to an existing building which is unsuitable for identified needs (as is claimed in the present case), or to redevelopment of a redundant building, it is my view that this policy can embrace the lawful use of a site, and can therefore be used to protect such a use where a continuing need for it exists. As a result of the foregoing points I take the view that the existing lawful use of the appeal site is one that has a basic UDP policy protection against its loss. However, UDP paragraph 9.4.2 indicates that properties which previously accommodated social or community uses may be considered for an alternative use in circumstances where the continued or future need for the use can no longer be established. It is, therefore necessary to investigate whether or not there is a continuing need for such a use to be retained.  

	Demand
20-25   ………………………………………….
26	In view of all the above points I consider that there is a clear and strong demand for residential and nursing care facilities for self-funders, and in these circumstances I have 	no
doubt that there is a need for the type of top-end care home which the Council  contends
could be established on the appeal site.

		Viability

27	Planning applications for this proposal were first submitted in August 2003, and in the light of these applications GVA Healthcare (GVAH) was commissioned by the appellant to investigate the viability of Vicarage Gate for a continued care use. The Care Standards Act 2000, and its introduction of National Minimum Standards (NMS), meant that if the existing building was to be refurbished, there would have to be a reduction in the number of bedspaces in order to comply with the NMS. Four different scenarios were investigated in a report dated July 2003. Scenario 1 was the reconfiguration and refurbishment of the existing property and building envelope to accommodate referrals solely from the Council at local authority fee rates. Scenario 2 was for the same general works, but to a standard appropriate for solely privately funded referrals at enhanced fee rates. Scenarios 3 and 4 were both for a purpose-built elderly care home on the site, but again for local authority referrals and privately funded referrals respectively.
28	A further scenario was examined in a February 2004 report by GVAH, submitted in support of the duplicate planning applications now at appeal. This scenario considered a mixed-use development scheme comprising a care home on lower ground to second floors, with a total of four residential apartments on the third to fifth floors. The appellant concluded that none of the five schemes tested were viable.
29	For the purpose of this inquiry, the appellant assessed three schemes. Scheme 1 was based on a refurbishment of the existing structure to provide 47 bedrooms compliant with the NMS, along the lines of Scenario 2 above. The refurbishment assumes a high standard, sufficient to justify the high level of fees proposed, and for this scheme the appellant has relied on a design prepared for EFT in 2000. The NMS came into force after the existing care home had ceased trading, and the difficulties which the EFT envisaged would arise in trying to meet them was a contributory factor in the home’s closure.
30	Scheme 2 was based on a detailed development scheme for a 72 bed purpose-built care home, based on a design prepared for the appellant in May 2005. This proposed development would be accommodated within a building envelope to match that currently proposed for residential use through these appeals. Scheme 3 was for a mixed-use development comprising care home accommodation on three floors (ground to second), with three further floors of ‘close care’ apartments above. These are described as being for people over 55 years of age who can live independently, but who require some level of personal and/or nursing care in their apartments from time to time. Although such accommodation itself does not have to comply with the NMS, the care provided does. The Council made it clear that it was unaware of the existence of Schemes 2 and 3 until the receipt of the appellant’s proofs, and had had no input to their design or formulation. I understand that no potential care borne operators have had any input to the schemes either. The appellant concludes that none of the schemes discussed at the inquiry would be viable.
31	I accept that these assessments have been undertaken by experts who are very familiar with the complexities and requirements associated with the funding of privately run and financed projects. However, as pointed out by the Council, the fact remains that the underlying basis for these assessments was as support for a residential planning application for the site. A finding of viability for a care home use would, therefore, significantly undermine any case for residential use of the site. In these circumstances the Council makes the point that it is not surprising that the appellant maintains non-viability. Indeed the Council argues that because of the appellant’s clear desire to develop the site for purely residential purposes, the viability assessments should be treated with great caution.
32	In support of this view, the Council has produced its own assessments of versions of schemes 2 and 3 (which consider a 65 bedspace care home, in contrast to the 72 bedspaces assumed by the appellant), which it claims show clear viability. The methodology for these assessments differed from those used by the appellant, insofar as it looked at achieving minimum values for three financial criteria, namely a Developer’s Return of 15%; a figure for ‘Earnings before Tax, Interest, Depreciation and Amortisation’ (EBITDA) of between 25% and 30% of revenue; and a blended return to shareholders of 14.5%. However I have been mindful of the fact that the Council’s witness on this matter does not have direct personal experience of the assessment of privately run and funded care home projects, but that his expertise lies with Private Finance Initiative (PFI) projects. I have also had regard to the fact that banks and other investors look on these 2 types of projects differently, and that a greater level of risk with privately run and funded projects leads to the expectation of higher returns than would be the case where a certain level of income or return can be guaranteed, as is likely, to be the case with PFI projects.
33	Because of these points the appellant argues that the Council’s assessments are unrealistic, and do not reflect the financial realities of this type of project. Some of these points do, indeed, seem to me to be valid criticisms of the Council’s approach, and as a result they call into question the Council’s findings of viability for its versions of schemes 2 and 3. Unfortunately, I am therefore faced with polarised standpoints on the matter of viability, coupled with some doubts about the reliability and robustness of each party’s assessments. In view of these points, and because I have already concluded that there is both policy protection and demand for a Class C2 use on this site, I consider that it is vitally important for any assessments claiming non-viability to be demonstrably robust. However, as a result of the evidence presented and tested, I have formed the view that there are uncertainties surrounding the appellant’s assertions of non-viability, on two general counts. The first of these relates to the robustness of the assessments themselves, whilst the second is whether or not a full and appropriate range of options has been adequately and rigorously tested.
34	On the first point, the appellant relies on three different expert witnesses to deal with this topic. However, their evidence is inter-related, as the costings prepared by Mr Williams were used as the basis for the assessments undertaken by Mr Belcher, and figures produced by both Mr Williams and Mr Belcher were used as the inputs to Mr Jones’s assessments. The costing exercise undertaken by Mr Williams therefore forms a starting point in considering the robustness of the appellant’s assessments.
35	For the ‘all-care’ proposal (Scheme 2), the Council’s criticisms largely centre on three matters. These are firstly, the view that an unreasonably high value has been assumed for the superstructure costs; secondly, the view that fittings and fixtures are over-priced and inconsistent with costings accepted by the appellant in the context of the refurbishment option for the existing building (Scheme 1); and finally, the view that an unacceptably high figure of 22.54% has been assumed for Preliminaries. The Council levels these same criticisms at the ‘mixed-use’ scheme (Scheme 3), but in addition is critical of the scale of operation chosen for the care element as, at just 45 beds, it falls well below the figure of 60 which the appellant itself indicates is a minimum for achieving economies of scale.
36	In many respects I consider that the appellant’s figures are more reliable than the Council’s, as they relate to actual designs on an identified site, whereas the Council’s figures are based on standard rates, which are more appropriate where detailed site and. design considerations are not known. Nevertheless, I share the Council’s concerns that the costs for fittings and fixtures are significantly higher than figures which the appellant appeared quite happy to accept in the context of Scheme 1. Whilst the appellant argues that the agreement reached with the Council on the ‘cost per bedspace’ means that there is no real basis for criticising the appellant’s figures, I have noted that the Council has qualified its agreement somewhat, insofar as it indicates that its figures relate to a larger ‘floor area per bed allowance’ than do the appellant’s. As a result I have noted the Council’s comment that its figures would have to be considered as generous, if re-calculated using the same floor area per bed allowance as the appellant. I also consider that there is little firm or convincing justification to adopt the higher figure of 22.54% for Preliminaries, when a lower figure of 20% had been used by the same witness in assessments undertaken as recently as 2004.
37	With regard to the assessments undertaken by Mr Belcher, the Council has again been critical of a number of the inputs and assumptions, most notably the average weekly fees and a Contingency sum which the appellant acknowledges has been double-counted. The appellant argues that these assessments are robust because they have been based on high fee rates and high occupancy rates (£10l8 per week and 95% respectively), coupled with a high ‘Years Purchase’ of 10. I acknowledge that these could be viewed as optimistic assumptions which would tend to work to increase the case for viability. I also accept that there is likely to be a ceiling of some sort on fees, because at a certain level it is likely to be cheaper for prospective residents to employ a nurse to provide care in the resident’s own home. A figure of around £1000 per week was quoted in the RSMRR 2002 report, but what I understand are more recent figures, supplied by the appellant, indicate that at least one local nursing agency charges about £1475 per week for qualified nursing ‘live-in’ care.
38	In view of these points I consider there to be some merit in the Council’s assertions that as fees as high as £1300 per week are currently being charged for some rooms at the BUPA Kensington Nursing Home within the Borough, higher fees than £1018 could well be achievable here. A figure of £1100 per week was suggested as reasonable by the Council, which represents a less than 10% increase over the figure used in the appellant’s assessments. But because, of the multiplier used, I share the Council’s view that such a change in fee income could increase the operational business value by between £3m and £4m. Whether or not such fee levels would only be achievable with further increased staffing levels and costs, as maintained by the appellant, must remain debatable in the absence of firm evidence on this matter. Some of these matters would have become apparent by sensitivity testing, but this was not undertaken to any meaningful extent.
39	A further witness for the appellant, Mr Jones, uses the Discounted Cash Flow methodology to assess the commercial viability of the same three schemes considered for the inquiry by Mr Belcher, and similarly concludes that none of them would be commercially viable. However, as Mr Jones has adopted Mr Belcher’s assumptions regarding the costs and revenues of these schemes, the same criticisms and uncertainties detailed above also have to apply to these assessments. Overall I am left with the impression that relatively minor adjustments to various parameters can have a significant impact on the outcome of the assessments. In my opinion this points to the need for a focussed assessment by an operator with a genuine interest in running a Class C2 use on the site. Such an assessment would quite likely have been undertaken by prospective purchasers if the site had been seriously marketed for such a use, and the absence of any such marketing gives rise to my second broad area of uncertainty regarding the viability assessments before me, as outlined below.
40	There is no real dispute between the parties that in general terms, any care home use on this site would be expensive to re-establish, because of the somewhat restricted nature of the site, and other constraints such as the need to respect and respond to its conservation area setting. I also acknowledge that the need to avoid rooms with poor outlook, such as any at lower ground-floor levels would create additional constraints on design, as would the need to provide a ‘unitised’ design with appropriate dayspace, sanitary and dining facilities on each floor. In turn these factors are almost certain to point to a private ‘top-end’ care home charging high fees, for those who can afford to fund their own care. But ‘within that broad description, it seems to me that there ought to be a wide range of possible solutions, which can only really be rigorously tested through a serious marketing exercise which allows those with a genuine interest in pursuing a care home use for the site to consider and assess the viability of such options.
41	Because of these points I do not agree with the appellant that only limited weight should be attached to the absence of market testing of the site for Class C2 uses. Rather, I share the Council’s concerns that the appellant’s clear desire to develop the site for purely residential purposes could well have compromised the objectivity of the viability assessments. Put simply, I cannot be certain, on the basis of the evidence, before me, either that the specific options tested conclusively demonstrate non-viability; or that other proposals, not yet considered or tested, would not be viable.
42	To reinforce the importance of serious marketing in a case such as this, I have noted the significant difference in the gross development value assumed for the residential element of the mixed-use scheme considered in GVAH’s February 2004 report (£12.6m including an allowance for car parking spaces) compared to the Scheme 3 proposal being promoted at the inquiry (£9.31m). The first of these related to four large residential units, whilst the second related to twenty close-care apartments. I acknowledge that this change was made largely on the advice of leading estate agents, and that all of these agents also expressed similar concerns about the likelihood of successful ‘off-plan’ selling. I have no reason to doubt the accuracy or sincerity of this advice, and I accept that the Council could have sought independent expert opinion on this matter.
43	Nevertheless, by the estate agents’ own admissions, a mix of residential uses and a separate care home would be a unique venture. Because of the untried nature of such a project, and the significant difference in potential development value between the four and twenty residential unit schemes detailed above, it is my view that a more rigorous and robust testing of such options, including an exercise to sell ‘off-plan’, should have been undertaken. Without such evidence, and in the light of the points already made, I consider that it is not possible to establish, beyond reasonable doubt, the viability or non-viability of a care home use, in whatever form, on this site.
44 	Specific expressions of interest in operating a care home on the site were referred to both by the Council, and by a local Ward Councillor (who is also Chair of the Vicarage Gate Action Group which seeks to retain a care home use here). None of these amounts to a firm proposal, although this is not completely surprising as the previous owner’s desire to sell the site for purely residential purposes appears to have resulted in it actively discouraging interest from those wanting to continue a care home use. From the limited information placed before me regarding these proposals, I share the appellant’s view, that there is considerable uncertainty about the financial standing and relevant experience behind these expressions of interest. But this does not mean that I can reliably conclude that these parties, or others, could not put together a viable proposal in the context of serious marketing.
45		In this regard I have noted the appellant’s contention that the Council should have been able to find an interest in the site from an operator in this sector, if any such genuine interest existed. However, whilst I accept that it would have been open to the Council to produce such evidence, I do not consider that the onus for such investigations falls on the Council in view of the requirements of SPG7. Amongst other matters this expects applicants to have made genuine attempts to sell the building for use as a residential care or nursing home over an extended period of not less than 12 months. Rather, the reluctance of the previous owner and the appellant to contemplate or undertake such marketing weighs against the appeal proposal, as it introduces a significant element of real uncertainty into the viability exercise.
46		As noted previously, the appellant has offered a unilateral undertaking in this case. It seems to me that this is primarily to provide affordable housing, in the event that I find in the appellant’s favour on this first issue, but it also contains alternative clauses whereby a sum of £4m would be made available to the Council, in two tranches, for the purpose of providing Affordable Elderly Persons’ Accommodation. However, I am mindful of the fact that although UDP policy SC3 allows for the Council to negotiate planning obligations to replace essential social or community facilities lost through development, this is only in circumstances where their loss is unavoidable. I do not believe that to be the case here, in light of the reasons already discussed, and the uncertainties which still remain regarding the viability of a Class C2 use in some form on this site. Because of these points, and the clear conflict with policy which results, the unilateral undertaking is not appropriate in this case, and accordingly cannot make this proposal acceptable.

	Summary

47	To summarise the foregoing points, I am satisfied that there is a sound, UDP policy basis for SPG7 and that the protection of nursing or residential care homes for the elderly, where a need can be shown, is also an objective of the London Plan. I am also satisfied that there is a clear, identified demand for self-funded places in such homes within the Borough, including at the ‘top-end’ of the market. In these circumstances I consider that existing Class C2 land uses should be safeguarded, and that changes away from such uses should not be allowed, unless non-viability can be reliably demonstrated. I consider it reasonable to expect the guidance in SPG7 on assessing the commercial viability to be followed, including the undertaking of a genuine marketing exercise. In the absence of such an exercise in this case, and in 1ight of the uncertainties I have outlined, regarding the appellant’s viability assessments, I cannot be certain that a care home use would not be viable here. The offer of a unilateral undertaking is therefore not acceptable. Accordingly I have to conclude that the appeal proposal would have an adverse effect on the provision of elderly person’s accommodation within the Borough. It would therefore be at odds with the objectives of the relevant development plan policies to which I have already referred.
48	Before moving on to discuss affordable housing matters, I consider it appropriate to comment on the appellant’s contention that the Council’s deemed reasons for refusal give greater weight to the provision of a 65-72 bedspace top-end care home, than to a housing use which would generate, on the Council’s estimate, some 20 affordable housing units. Although the Council states that it has not explicitly considered this balance, I do not think it unreasonable for the appellant to summarise the issue in this way. But on the basis of the evidence before me, it is clear that there is a strong demand for both care bedspaces and affordable housing within the Borough. Because of this I consider that even if there was no policy protection afforded to social and community uses, as the appeal site has a lawful Class C2 use and as no significant residential amenity or other problems of operating a care home on this site have been brought to my attention, these matters would weigh in favour of the retention of such a use here.

	The effect on the provision of affordable housing

49	Both parties agree that this issue, and the one which follows, only have relevance if a care home use is found to not be viable on the appeal site. My adverse findings on the first main issue are sufficient to justify dismissing this appeal, and that is my overall decision. However, in the light of the evidence submitted and my view that the matter of viability needs to be revisited, I feel that consideration needs to be given to these other issues.
50	As a starting point on the issue of affordable housing, there is common ground between the parties that the appeal site would be suitable for residential use if a care home use could be shown to not be viable. However, the appellant maintains that the site would not give rise to a requirement for affordable housing. The appellant’s position appears to be that the current proposal for 12 large, family-sized flats represents the maximum number of units that can be accommodated on the site when other relevant matters are taken into account. These are the size of the site, a development mix which reflects the demographic profile of the Borough, and UDP residential density policies, all as set out in UDP paragraph 5.5.15. 
51	As a result the appellant argues that although the site could physically accommodate up to 30 residential units, development at such a density would not be appropriate, in light of the matters listed above and other constraints such as design and form, the relationship to neighbouring properties, and car parking. I have no difficulty with this stance as a matter of	principle, but I am not persuaded that it can be justified in the current case. Having said this, I accept the appellant’s view that the height and bulk of the currently proposed building is likely to be at or close to the maximum acceptable on this site, in the light of such matters as residential amenity and townscape.
52	1 have had regard to the 2001 Census information relating to the mix of dwelling types in the locality of the appeal site, submitted by the Council. I have also noted the appellant’s points that the majority of residential planning permissions over the last 5 years or so have provided smaller sized units, and that there is a clear demand for dwellings of the larger size proposed here. I discuss the matter of dwelling mix in more detail under the third main issue, but there does not seem to be any over-riding need or justification for the mix of dwelling units being pursued by the appellant. I consider it self-evident that a different mix of dwelling units, even using the same number of habitable rooms currently proposed, would result in a greater number of units than 12.
53	The Council has commissioned architects to produce an alternative internal layout for the proposed building, using the same envelope and window positions, and has concluded that it could easily accommodate 26 spacious units. The appellant has not seriously disputed this point and indeed, as noted earlier, has accepted that up to 30 units could be accommodated. As the external appearance of the building would be pre4ominantly the same whether it contained 12 units or 26, it is my view that either scheme would be appropriate to the local context. Based on minimum room sizes and with some degree of redesign, it is possible that the building could provide an even greater number of units, although as no drawings or other firm details have been submitted in this regard, I can only give limited weight to consideration of an even more intensive use of the site. However, for all the above reasons I am satisfied that a reasonable capacity for the site is about 30 units, having regard to its location and context. The site is therefore one which, if developed for residential purposes, would be required to provide affordable housing.
54	In terms of the amount which should be provided, UDP policy H22 contains no specific targets, but simply requires the provision and retention of ‘a significant proportion’ of affordable housing to be negotiated. From the supporting text, paragraph 5.5.11 indicates that the Council wishes to ensure that the present proportion of affordable housing in the Borough (one-third) is maintained, and paragraph 5.5.13 makes it clear that for qualifying developments, a minimum proportion of one-third of the housing should be affordable.
55	Paragraph 3.30 of the London Plan indicates that one of the Mayor’s strategic objectives is to increase substantially London’s supply of affordable housing, whilst paragraph 3.37 explains that the Mayor has adopted a strategic target that 50% of all additional housing should be affordable. This is carried forwards in policy 3A.7, which states that UDP policies should set an overall target for the amount of affordable housing provision over the plan period in their area. Policy 3A.8 expects individual Boroughs to have regard to such targets when negotiating on individual private residential and mixed-use schemes, with the aim of seeking the maximum reasonable amount of affordable housing.
56	As the London Plan recognises that not all Boroughs will, as yet, have adopted new affordable housing targets, I accept the appellant’s argument that although the Mayor’s strategic target clearly exceeds the current UDP figure, this does not constitute a conflict which would result in the strategic figure of 50% superseding the UDP figure. Rather, individual Boroughs will need to set new targets through the Local Development Framework process. In this regard, submissions made to the Examination in Public for the London Plan show that the Council considers that a 50% target would be unrealistic for the Borough as it would have a deterrent effect on development, and harm the Borough’s environmental quality. Moreover, this same evidence makes it clear that the Council’s view of this 50% figure is that it should be an aspirational target, to be used as a benchmark of annual performance, rather than being rigidly applied through UDP and development control policies in every circumstance.
57	Against this backdrop it is my view that a rigid 50% of affordable housing should not be sought here, especially as the London Plan policy 3A.8 states that targets should be applied flexibly, taking account of individual site costs, the availability of public subsidy and other scheme requirements. I accept that the absence of any newly adopted Council targets, in line with policy 3A.7, does not mean that the maximum reasonable amount of affordable housing should not be sought in this case, and if this topic had formed the subject of meaningful discussions between the parties I would have been better placed to assess this matter. However, because the appellant has insisted that the site does not give rise to the requirement for affordable housing no such discussions have taken place. In the absence of firm information to the contrary I therefore do not feel able to conclude that a higher proportion of on-site affordable housing than one-third would be appropriate in this case.
58	There is a general expectation that affordable housing will be provided on site, unless there are exceptional circumstances which make this impossible. Where such circumstances do exist, UDP paragraph explains that the Council will require the developer to identify and supply a suitable site, capable of accommodating the affordable housing. It is only when neither of these options can be achieved that the Council will seek a commuted payment to provide affordable housing elsewhere in the Borough. No firm reason has been put before me to justify or explain why on-site provision could not be pursued here. Nor does it appear that any serious attempt has been made to identify and supply a suitable alternative site. The 12 large residential units proposed in the current scheme would not be appropriate for affordable housing, and it would appear that the appellant has simply decided not to pursue any on-site provision or seek an alternative site, but has, as a first choice, offered a commuted payment through the unilateral undertaking discussed above. Taken at this basic level there is a clear conflict with the objectives of the UDP and London Plan policies referred to earlier.
59	In support of this option for off-site affordable housing provision, the appellant draws attention to a number of other schemes where such provision was considered acceptable by the Council, and where the appellant states that in each case it would have been physically possible to provide affordable housing on site. The appellant also points out that a substantial increase in the amount of affordable housing to be provided has, in other cases, been treated as an exceptional circumstance to justify off-site rather than on-site provision.
60	I consider that any departure from the requirement to provide affordable housing on-site should be clearly justified, and share the appellant’s view that such reasons should appear in the relevant Committee Reports. However, I cannot find any such justification in the Committee Reports relating to the other schemes to which I have been referred, although I am unaware whether or not such matters were discussed at the Committee meetings themselves. It appears to be the case, however, that for these other proposals there had been the opportunity for the Council to discuss both the matter of site capacity and the acceptability and practicability of on-site provision with the relevant applicants. This has not been possible in the current case because of the appellant’s insistence that the site does not give rise to a requirement to provide affordable housing.
61	Nevertheless, on the basis of the evidence before me I can discern no material difference between the offer of a commuted payment to provide off-site affordable housing at an enhanced rate in this case, and similar offers accepted by the Council in these other cases. But whilst I consider these other examples to be material considerations in the current appeal I am not persuaded, in view of the absence of convincing reasons, that they are of sufficient importance and relevance to outweigh the strong policy objective for on-site provision. In reaching this view I have placed great importance on the fact that on-site provision of affordable housing is a key method of achieving mixed and balanced communities, in line with Government guidance in PPG3 and Circular 06/98, in addition to the objectives of UDP policy H22.
62	On this second issue I conclude that if the site was to be developed for residential purposes, it would give rise to a requirement to provide a minimum of 10 affordable housing units. However, by not allowing for this affordable housing provision on site the appeal proposal would work against the Council’s objective of achieving mixed and balanced communities, as detailed above. Accordingly it would have an adverse impact on the provision of affordable housing within the. Borough, and would be in conflict with the relevant objectives of UDP policy H22 and London Plan policy 3A.7.

The proposed range and mix of housing units

63	I turn now to the issue of housing mix, which in many ways is linked to the previous affordable housing issue. The Council maintains that as the proposed development would not provide an adequate range and choice of accommodation, it would fail to maximise the potential of the site and would constitute a type of development which would hinder social inclusion. As a result it would run counter to the objectives of UDP policies H18 and H19. The appellant has pointed out that paragraph 1.2.4(c) of the UDP explains that ‘to seek’ types of policies, such as H18 and H19, cannot, in themselves, provide reasons for refusal. However, the paragraph goes on to explain that if a proposal is in accordance with such a policy, this factor may be taken into account when considering the application. Because of this, I see no reason why the fact that a particular proposal would not further the objectives of specific UDP policies should not be similarly taken into account.
64	In addition to these policies themselves, I have also had regard to UDP paragraph 5.5.1, which states that the mix of accommodation in the Borough should be related to the range in household types existing or likely to exist, and to deficiencies in the range of accommodation. The paragraph goes on to give a number of reasons why it is important to retain a large stock of small residential units, whilst paragraph 5.5.2 also points out that it is important that a sufficiently wide range of dwellings is provided, in terms of type and size, to satisfy the needs of larger households and rising standards.
65	With regards to the London Plan, policy 4B.3 states that the Mayor will, and Boroughs should, ensure that development proposals achieve the highest possible intensity; of use compatible with, amongst other matters, local context. I agree with the Council that this objective is relevant and operative in the current case. The policy goes on to indicate that Boroughs should develop residential and commercial density policies in their UDPs in line with this policy, and adopt the residential density ranges set out in Table 4B.1. However, as the appellant rightly points out, the policy does not state that Boroughs must slavishly adhere to the table, or that the table should be taken to apply already within the Borough.
66	Notwithstanding this latter point the appellant maintains that the dwelling types proposed in the current scheme are appropriate for the context of this site, and would comply with this density table in any event. It was agreed that the appeal site lies within an ‘urban zone’ as shown on the Character Map which accompanies the matrix. It was further agreed that in UDP terms (which allow for half of the road width to be included in the site area), the appeal proposal would represent a density of 422 habitable rooms per hectare (hrha), or 66.6 units per hectare (uha). The London Plan relies on ‘net’ site density, which excludes any allowance for the width of the surrounding roads, and in these terms the proposal would represent a density of 447 hrha or 70.6 uha. As the local area largely comprises terraced houses and flats, and as the proposed dwellings are described by the appellant as large lateral flats, equivalent to houses, then the appropriate density figures from Table 4B.1 are 200-450 hrha and 55-175 uha, and on the basis of the above figures the appeal proposal would fall within both of these ranges.
67	However, this table is based on the assumption that dwellings of this type would have an average of 3.1 habitable rooms per unit and for a development with 447 hrha, such as is proposed here, this would equate to some 144 uha. As this is more than twice the number of units per hectare currently proposed, it seems to me that when considered in terms of dwellings or residential units, the proposal could not be said to be achieving the highest possible intensity of use, as sought by London Plan policy 4B.3 Using the column for ‘mostly flats’ from the matrix, as advocated by the Council, leads me to a similar conclusion.
68	To further support the view that the form of dwellings proposed would be appropriate here, the appellant points out that the majority of schemes for developments of between 5 and 25 dwellings, approved over the last 5 years, made provision for smaller units. But that only about 23% of the schemes provided larger units such as 4, 5 and 6 bedroom dwellings. In this regard the Council agrees that the appeal proposal would not upset the overall balance of housing provision indicated by policies H18 and H19.
69	However, in terms of a regional framework against which to consider housing mix, I have had regard to the GLA Housing Requirements Study of December 2004, referred to in the Mayor of London’s draft SPG on Housing Provision. This estimates that the London-wide housing requirement over the next 15 years is for 32% of 1 bedroom households; 38% of 2/3 bedroom households; and 30% of 4 bedroom or larger households. I have also been mindful of information from the 2001 Census, which shows that for the Campden ward and for the 2 smaller census zones within which the appeal site lies, some 57% of all households occupy dwellings with 1-4 rooms. Taken together these data indicate that not only is there likely to be a continuing demand for smaller residential units throughout the capital as a whole, but that any smaller units provided as part of a development on the appeal site would not be out of keeping with other dwellings in the immediate locality.
70	In addition, I have noted that all of the examples which the appellant has drawn my attention to, which provide 1 units or more, provided an element of smaller accommodation in the form of 1 or 2 bedroom units as well as larger units, thereby providing a mix of dwelling units in accord with policies H18 and H19. In view of the above points I see no good reason why the appeal proposal should not do similarly. I acknowledge that ground floor units on this site, which would have access to garden areas, would be suitable for family accommodation. But I am not persuaded, on the evidence before me that such units should exclusively be provided here. I also accept that the overall objective of providing a mix of dwelling types need not necessarily preclude developments exclusively of one type of dwelling. But it is my view that such an approach here would make it harder, to achieve the Council’s and Government’s objective of creating mixed and balanced communities. 
71	In summary, I have taken account of all the above information, but it does not persuade me that there is an over-riding need for these larger units in this location to the total exclusion of smaller units. Although a number of local estate agents have indicated there is a high demand for such large units, other evidence, outlined above, clearly points to there being a high demand for smaller units as well As a result I conclude that the appeal proposal would not provide an appropriate range and mix of housing units and would not, therefore, achieve the highest possible intensity of use, compatible with local context. Because of this it would be in conflict with the objectives of UDP policies H18 and H19, and with London Plan policy 4B.3.

The Conservation Area Consent
72	I have already indicated, in paragraph 5 above, that the Council does not raise objection to the proposed building from a design point of view, as it considers that any outstanding matters in the design as currently proposed could be satisfactorily addressed by the imposition of planning conditions. I share this view, and agree that the proposed building would be a visual improvement over the current building, and more in keeping with the design of other buildings in the locality. However, as I have found against the appellant on the main issues in this case, it follows that at the present time there is no satisfactory scheme for redevelopment of this site. In these circumstances it would not be appropriate to grant Conservation Area Consent, as to do so would conflict with UDP policy CD 60.

Conclusion

73	My adverse findings on the first main issue are, in my judgement, sufficient to cause the appeals to fail. But even if I had found in the appellant’s favour on this issue, I have concluded that the proposal is also unacceptable with regards to the issues of affordable housing provision and housing mix. For the reasons given above I therefore conclude that both appeals should be dismissed. I have had regard to all other matters raised, but they are not sufficient to outweigh the considerations which have led me to my conclusion.”

G   The grounds of challenge to the decision and the contentions of the parties
(i)	The Claimant’s case
17.	Mr Holgate QC, for the claimant developer (and appellant at the inquiry) started his submissions by noting some agreed facts. It was agreed at the inquiry that the existing premises on the site (the former nursing home) were not capable of being reused for that purpose. It was also agreed that, if redeveloped as a nursing home the only kind of nursing home which could be viable (and whether it would be viable had been in dispute) was one catering only for the wealthy elderly, each paying over £52,000 per annum in fees. 
18.	It will be seen from the decision letter that the Inspector included three sections on 
(i)	The effects on nursing home provision in RBKC
(ii)	The issue of on site provision of affordable housing
(iii)	The mix of housing proposed.
19.	Mr Holgate QC argued that, notwithstanding the Inspector’s reasoning at paragraphs 49 and 73, the three main issues are not freestanding. He pointed out that the connection between issues (ii) and (iii) is acknowledged at paragraphs 52 and 63. He contended also that any benefits accruing in planning terms under one head must be measured against harm found under another. Thus, any benefit under either (ii) or (iii) must be weighed in the balance against any harm found to be caused under issue (i). 
20.	He advanced his grounds 1-8 on the first issue. They took the following form
	Ground 1: 
(a)	It was fundamental to the Inspector’s approach that he held that there was a distinction in UDP policy between sheltered housing (which would fall under H 27) and a nursing home, which if it was addressed by the Housing policies at all, was addressed by H 24, and also fell to be protected as a social and community facility under policy SC2. The basis he adopted for doing so was by reference to his interpretation of the Care and Standards Act 2000, which he never raised at the inquiry, nor sought submissions otherwise. Nor did any other party raise it. In advancing his arguments on his approach, he concentrated on a definition of care (that in sections 3 and 121 of the 2000 Act) which, he argued, distinguished this type of home from one subject to policy H 24. In fact RBKC had argued at the inquiry that policy H 24 covered an establishment of that kind.
(b)	The Claimant had been deprived of the opportunity of dealing with this approach.

	Ground 2
(c)	The Inspector’s reasoning for exclusion of the relevance of H 24 was inadequate. It used a definition of care in an Act not concerned with land use planning and arrived at a definition different from that used by the RBKC, namely that in Class C2 and Article 2 of the Town and Country Planning (Use Classes ) Order 1987. 

Grounds 3-4
(d)	In his interpretation of the UDP as protecting a care home for the elderly under policy SC2 as a “ social and community facility”, he had failed to take into account the fact that while a care home was addressed as residential accommodation under H 24 (or if he was right H 27) the terms of policy SC5, which encouraged the provision of social and community facilities, excluded such provision at (a) where it would cause a loss of “ permanent residential accommodation, particularly…….for people with special housing needs.”  Alternatively, his reasoning was inadequate.

Ground 5
(e)	When making submissions to RBKC on the draft SPG, the claimant had argued that RBKC had not addressed the point that SC5 (a) could not be reconciled with its treatment of a care home as falling under SC2, when it was treating a care home as falling under H 24. Instead, RBKC had treated the objection as pointing out the lack of a reference to SC5 within the SPG. The Inspector, argued Mr Holgate QC, had not addressed the Claimant’s argument (or had used inadequate reasoning in addressing the argument) that that failure affected the weight which the SPG should attract, because the local planning authority had not conducted its process of consultation conscientiously (R v N and E Devon HA ex p Coughlan [2001]QB 213 at paragraph 108)

Ground 6
(f)	The Inspector had treated Policy 3A.14 of the London Plan as a development control policy as opposed to a policy directed at requiring the RBKC (and other London Boroughs) to address the needs of the identified groups in UDP policies. It was also argued that he should not have treated “existing facilities” as including the site of a former nursing home which required complete rebuilding to be reused. 

Ground 7 
(g)	The Inspector had failed to weigh the gain in affordable housing (of double the requirement under RBKC policy) against the loss of luxury sector nursing home provision. That required him to consider and address the merits of the two in a proper manner. He had failed to consider how the need for affordable housing compared to that for nursing home provision, and had only considered demand issues when the UDP stated that there was a need for affordable housing. He had also placed weight on an immaterial consideration, namely the fact that the site had been used for a nursing home use. Alternatively, his reasoning was inadequate.

Ground 8
(h)	In addressing the viability analysis under SPG, he adopted an approach at paragraphs 41, 43 and 47 of his decision letter of imposing a burden of proof on the claimant to show that the redevelopment as a nursing home would not be viable, and then applying a standard of proof that he required to have it demonstrated so that it was “certain” or “beyond reasonable doubt.” He submitted that the Inspector’s reasoning conflicts with the principles that the concept of burden of proof is inappropriate in planning appeals (Pye (Oxford) Estates Ltd v. Secretary of State for the Environment [1982] J.P.L. 577) or indeed in other types of public inquiry (Chesterfield Properties plc v. Secretary of State for the Environment (1988) 76 P & CR 117, 125-6), and that the concept of any particular standard of proof is also inappropriate (Chesterfield at p. 226).

21.	 He advanced his grounds 9-10 on the second issue. They took the following form
Ground 9
(a)	The Inspector was required to consider the Aubrey Walk decision letter, which showed that provision of double the affordable housing element offsite could justify provision being made off site. The Inspector failed to treat it as material or give reasons for his departure from it, contrary to the principles set out in North Wiltshire DC v Secretary of State for Environment [1993] 65 P & CR 137. 

Ground 10
(b)	The Inspector, in rejecting off site provision, should have, but failed to, give reasons why the practice followed by the RBKC of accepting off site provision should not be followed in the case of the appeal proposal.

22.	He advanced his grounds 11-14 on the third issue. They took the following form
Ground 11
(a)	The Inspector treated policies H 18 and H 19 of the UDP as justifying refusal, whereas such policies fell into the class of “Encouraging policies” in the UDP which did not provide reasons for refusal. He had thus misinterpreted the policies.

Ground 12
(b)	The Inspector, in finding that the proposal failed to provide a development of sufficient density, failed to have regard to the Claimant’s case that  this had never been a reason for refusal advanced by RBKC, whose officer had expressly accepted the proposed density.

Ground 13
(c)	In paragraph 71, the Inspector has applied a policy in the London Plan, but has failed to take into consideration the fact that the density policies to be applied were to be considered by the RBKC in its UDP.

Ground 14
(d)	The Inspector had no evidential basis for his conclusions in paragraph 70 about the provision of smaller units in other developments in RBKC
(i)	The evidence showed no units where there were 1 bedroom units
(ii)	He had treated staff accommodation within a development as independent units
(iii)	The policy was concerned with numbers of habitable rooms, not numbers of bedrooms.

(ii)	The position of the First Defendant, the First Secretary of State
23.	The Secretary of State did not appear before me, but indicated that it accepted two of the grounds. On 11th May 2006, it stated that it would consent to judgement on the following grounds
   “2	………………..The Defendants (sic) concede that the said decision contains an error of law and should not be allowed to stand, for the reasons set out in paragraphs 3 and 4 of this schedule.
3.	The first main issue before the inspector was the effect of the proposal on the provision of elderly person’s accommodation within the Borough, including the viability of the continued provision of elderly persons’ accommodation on the site. The inspector decided that the existing C2 use should be safeguarded unless non-viability could be demonstrated. In reaching his conclusion on this issue, the inspector erred in law in requiring non-viability to be established beyond reasonable doubt.
4.	The third main issue before the inspector was whether the proposal would provide an appropriate range and mix of housing. In reaching his conclusion on this issue, the inspector referred to polices H18 and H19 of the Unitary Development Plan (UDP”), which concerned the provision arid maintenance of a wide range of housing. By virtue of paragraph 1.2.4(c) of the UDP, these policies should not, of themselves, provide a reason for refusal. However, in his consideration of this issue, the inspector went beyond regarding the provision of a range and mix of housing as material, and treated the proposal’s failure to meet the objectives of policies H18 and H19 as a reason in itself for rejecting the appeal. Accordingly, in reaching his conclusion on this issue, the inspector misinterpreted the UDP and erred in law.”
24.	It follows that the First Secretary of State was conceding the Claimant’s Grounds 8 and 11.
(iii)	The Second Defendant RBKC’s case
25.	The RBKC resisted the claim on every ground. Mr Drabble QC’s submissions were as follows
Generally
(a)	If RBKC succeeded in upholding the Inspector’s conclusions on the first issue, then the terms of paragraph 73 mean that the decision must be upheld irrespective of the outcome of the challenges on the second and third issues;
(b)	If a challenge is successful on the grounds that a material consideration has not been had regard to (or an immaterial one had regard to) then the RBKC must still succeed in resisting the claim if it shows that the outcome would have been the same; see  Simplex GE (Holdings) Ltd v Sec of State for Environment [1988] 57 P & CR 306;
(c)	The logic of the Decision Letter was as follows
(i)	The retention of a nursing/care home use on the site was in accordance with an established policy background, derived from policy SC2 in the UDP, the SPG and policy 3A.14 of the London Plan (both forming part of the development plan).
(ii)	The SPG specifically indicated the 
“Applicants will therefore be asked to provide evidence of the commercial viability of the existing facility. The Council will expect information to be provided on the following to assist in determining viability: is the facility currently in operation. If not have genuine attempts been made to sell the building for use as a residential care or nursing home over an extended period of not less than 12 months ?” 
(iii)	The Inspector accepted the RBKC submission that it was therefore appropriate to require that the evidence said to support non-viability should be “demonstrably robust” 
(iv)	The modelling evidence led by VGL contained many uncertainties, listed by the Inspector in paragraphs 36 to 39. 
(v)	Accordingly, the absence of any serious marketing exercise, of the sort envisaged by the SPG, was a matter of considerable importance. Without such an exercise, the Inspector was not willing to hold that non-viability was established
(vi)	Quite separately from the issue of preservation of the existing use, the appeal should fail because it failed to provide on-site affordable housing
(vii)	Further, the Appeal proposal failed to further the objectives of the UDP in relation to mix and range of housing units. The Inspector was fully aware of paragraph 1.2.4(c) of the UDP and did not treat this issue as a free standing ground of refusal (see paragraph 63). The Inspector was perfectly entitled to find that there was a conflict with the objectives of UDP policies H18 and H19 and London Plan policy 4B.3 (see DL 71).

26.	On the first issue (Grounds 1-8) Mr Drabble QC’s submissions were as follows
Grounds 1-2
(a)	The interpretation put on SC2 by the Inspector was one which it could bear.  The matters relied on by Mr Holgate QC at Grounds 1-4 were seeking to impeach his reasoning, and complain of fairness in not raising the CSA 2000 definition at the inquiry.
(b)	He was not bound to raise this issue with the parties- see Hoffman-La Roche v Trade Secretary [1975] AC 295 at 399E.
(c)	He had no need to refer to the CSA 2000, but it raised no new definition. It is in fact possible to have a registrable care home where personal care as defined in section 121(9) is not provided. It was an unnecessary diversion which made no difference to his reasoning or to the outcome on this issue.
(d)	There is a spectrum of needs for those such as the elderly. It goes at one end from accommodation with no form of supervision or care through sheltered housing with more supervision and some care to an establishment where the elderly do not have independent dwellings, but live in a managed home where care is provided. The spectrum is recognised in the UDP. The UDP says that those above the line have protection under SC2. All the Inspector was doing was to consider where the line should be drawn. H 24 in the UDP does address this type of provision, but H 27 does not.

Grounds 3 and 4 
(e)	The Inspector was entitled to find that SPG was rooted in Policy SC2, and there was no conflict based on the terms of Policy SC5. He was entitled to find that SC2 covered care homes. This was a challenge by the claimant through Mr Holgate QC to the interpretation of SC2 adopted by the Inspector, but dressed up as a rationality challenge.

Ground 5
(f)	As the Inspector has found himself that policy SC 2 applies, the degree of weight he gave to SPG does not matter. 

Ground 6
(g)	Paragraph 3A.14 was not necessary to the Inspector’s conclusion that SPG was entitled to weight, but he was entitled to have regard to it as giving weight to SPG.

Ground 7
(h)	The Inspector did not have to address any question of balance if, as he plainly did, he thought that a housing scheme would be unacceptable. Once he found an unacceptable breach of policy SC 2, he did not need to ask whether the benefits from off site housing provision outweighed the loss of the site from nursing home use.

Ground 8
(i)	There is nothing wrong with a policy requiring that an applicant for planning permission demonstrate something, just as SPG 7 does here. He was entitled to ask if the evidence and case presented were robust.

27.	He advanced his arguments on the second issue in opposition to Mr Holgate QC’s Grounds 9 and 10. They took the following form
Grounds 9-10
(a)	He was entitled to apply his own approach and is not bound to follow the decision of another Inspector. The circumstances at Aubrey Walk were different.

28.	He advanced his arguments on the third issue in opposition to Mr Holgate QC’s Grounds 11-14. They took the following form;

Ground 11
(a)	The Inspector did not dismiss the appeal on the grounds of conflict with H18 and H 19. It was a sensible approach to say that a failure to further the policy objectives could justify refusal. Even if that submission is wrong, and he had not found fault with the proposal on the housing mix issue, the appeal would still have been dismissed on the first issue. This issue is also discrete from the second issue. 

Ground 12
(b)	The matter had been canvassed at the inquiry, and the Inspector was entitled to form the view he did.

Ground 13
(c)	The Inspector was entitled to form this view, and to rely on a policy in the London Plan, which is part of the Development Plan.

Ground 14
(d)	There was evidence to support his conclusions.
H 	Discussion and conclusions
29.	I think it helpful to start with the important rules on decision making to be found in section 70 TCPA 1990 and in s 38(6) PCPA 2004. Their effect is to require the decision maker to perform the following steps
(a)	To identify the relevant Development Plan policies, remembering always that they may pull in different directions
(b)	To identify what he considers to be the other material considerations, and to have regard to them
(c)	To determine the appeal in accordance with the development plan unless material considerations indicate otherwise.
30.	It is important that that process enables him to weigh planning advantages arising from one aspect of a proposal against disadvantages or harm arising from another aspect, and deciding whether the one outweighs the other. Provided he does that, and produces a reasoned decision which deals with the principal important issues which have been raised, the court will not interfere.
31.	Against that background, it is helpful to identify the way in which the Inspector approached his task. He had a proposal before him which involved different elements which had to be addressed
(a)	The loss of a site from care/nursing home use. On his interpretation of policy, that was in conflict with the UDP;
(b)	The provision on the site of upper market apartments. If policy were applied, provision for 10 units, being 1/3 of the site’s capacity of 30 units, should be provided in the form of affordable housing on site;
(c)	If provision were not made on site, the provision elsewhere of 20 units, being 2/3 of the site’s capacity in the form of affordable housing. 
32.	The UDP identified a very considerable need for affordable housing, as it and SPG 7 also did for the retention of care and nursing homes. On any reasonable view the provision of affordable housing as a result of the appeal proposal was a material consideration of weight, as was the loss of the nursing home. Both merited serious consideration. Given the explicit terms of the UDP on the need to maximise the provision of affordable housing in the Borough it was in my judgment essential that he weighed the benefits of the increased provision which would arise if it were made off site against such harm as he had found under the first two heads, and also essential that he did so in a way which dealt with the arguments fairly. It was a point expressly argued by the Claimant in its submissions to the Inspector, and deserved proper treatment. It will be recalled also that this might be thought a strong point for the Claimant at the inquiry, given the approach of RBKC to similar schemes, where offsite provision of an increased amount had been regarded as so beneficial that it had been accepted. The Claimant also had a very recent Decision Letter from another Inspector appointed by the FSS on another site in RBKC (Aubrey Walk) which supported its approach.
33.	I shall therefore start with Ground 7. In doing so, I shall assume for the purposes of this part of my judgment that the Inspector’s conclusions on the meaning of the UDP policy SC2 and on his rejection of the Claimant’s case on SPG 7 and on viability were proper and supported by adequate reasoning. The Inspector addresses this issue at paragraph 48, which lies within the part of his Decision Letter where he is addressing his first issue. In that passage, he addresses “demand” for care home places or for affordable housing units. However he had already formed a judgement by then that there was a need to protect nursing or residential homes for the elderly. But the UDP had itself sought the provision of affordable housing, whose provision it thought was most important: see paragraph 5.vi and polices STRAT 16-19 and policies H 21-H 23 and their supporting reasoning. It follows that the issue was not whether there was simply a “demand” for affordable housing. He states at paragraph 48 that there was a demand for both affordable housing and care home spaces. In my judgment that cannot be an answer of itself to the argument that was properly raised by the Claimant Appellant. Firstly “demand” is not a synonym for “need”, nor necessarily a proxy for it, although very often in planning appeals and decisions there is elision to a greater or lesser extent between the two concepts in their treatment in evidence at inquiries and in decision letters. “Need” is a term which can cause difficulty if not used carefully, and problems can and do occur when definitions are extracted from dictionaries and applied in a way which is inappropriate to a planning decision. As an example, if a retail planning survey concludes that a town should have another supermarket, it is said to be “needed” just as the results of demographic projections and housing land availability studies are said to produce a “need” for some particular level of housing provision. The true position is that “need” is properly used in the planning context to express a strong planning case being made for provision of some type of development. Thus for example, if a planning policy in national planning guidance or in a statutory Development Plan looks to meet an identified demand for a type of use or development, and does so in a way which expresses a strong planning case for its being met, then there will be a “need” in planning terms to meet that demand.
34.	In this case, there was, if his other judgements are correct, a strong planning case to be made for the provision (or retention) of either care homes or affordable housing. It was incumbent on him to give reasons, and adequate ones, why he preferred one to the other.  Secondly, if the Inspector was to choose between the case for care home provision/retention and the case for affordable housing provision, he had to form some judgment on the level of requirements for accommodation. It was not enough to say that there was a demand for both, without saying something about what he found to be the level of demand or requirement, and about the effect that the provision of x care home spaces or y affordable units would have. This would not have required him to explore areas where he had no evidence, for at this inquiry he had expert evidence called before him on both topics. I note also that the UDP did give actual figures for requirements in both cases. As a matter of fact the shortfall in affordable housing units in numerical terms was much greater than the shortfall in care beds, but of course a different value may be put on one rather than the other. That was for him to do as decision maker. 
35.	His reason for his decision on this issue was that the site had “a lawful Class C2 use” and that no significant residential amenity or other problems would be caused by the operation of a care home on the site. I regret to say that I find that reasoning quite inadequate, and also quite unclear. As the existing premises could not be reused as a care home and would require rebuilding for that purpose, reference to the Use Class and existing use rights is not to the point, as there would be an entirely new building on the site, so that use class rights are irrelevant. The right to use the replacement premises as a nursing home would derive from the fact that it was designed for that purpose - see section 75(3) TCPA 1990.  But in any event, the Inspector gives no basis for holding that retention of an existing use, or its resumption in a new building, is of itself advantageous, let alone why it is more advantageous than the provision of affordable housing. 
36.	In addition, it will be recalled that the first issue was “the effect of the proposal on the provision of elderly persons accommodation within the Borough and, coupled with this, the viability of the continued provision of such accommodation on this site.” What he had to do when addressing the balance was to consider what harm flowed from the effect on the provision of such accommodation, and then ask whether the benefits of the provision of affordable housing to this enhanced degree would outweigh any harm he had found. But, as Mr Holgate QC pointed out, he addressed this question under the heading of the first issue. That too showed an absence of adequate reasoning when dealing with this important argument, which should have been dealt with after he had reached his conclusions on the first issue.
37.	Ground 7 therefore succeeds for the reasons given above. Had he addressed this question properly it is not possible to say that his overall decision would have been the same.
38.	I shall deal now with the other conclusions on the first issue. The Inspector had to grapple with the question of whether the previous use as a care home was protected from a housing development under Policy SC2. The court will only interfere if the meaning he gave to the policy was not one it could reasonably bear, or if he failed to have regard to material considerations, failed to use adequate reasoning, or reached his decision in a procedurally unfair way. The situation was not straightforward, because RBKC argued that a nursing home use did fall under the housing chapter via policy H 24, but also argued that it was protected under SC 2, which sat alongside SC5 (a) which, as Mr Holgate QC points out, is only explicable logically if a “housing use” is not a social or community facility. It was for the inspector to weigh up the various arguments. 
39.	What he did was to rely on a definition in a piece of legislation (the CSA 2000), whose effects on this point had never been addressed at the inquiry. Why he felt he had to do so is something of a mystery given the fact that the statutory Planning Code contains a specific definition in this area in the form of Classes C2 and C3 in the Town and Country Planning (Use Classes) Order 1987. I was at first attracted by Mr Drabble QC’s argument that it had been an unnecessary and unwise diversion which made no difference to his decision, but I am persuaded by Mr Holgate QC that the Inspector took something from his interpretation of sections 3 and 121 of the CSA 2000 which made a difference to his reasoning. In paragraph 16 of the Decision Letter he states “The key point is that not all forms of sheltered housing provide the type of personal care which would require the establishment to be registered with CSCI. Because of this I consider there to be a distinction between accommodation which is provided in association with personal or nursing care, and that which is not. In my opinion this indicates that whilst some forms of accommodation for the elderly can sit quite comfortably within this policy H24 Special Needs Accommodation category, others cannot.” (My italics). Thus, he appears to be saying that, absent his interpretation of the CSA 2000, H24 would apply. As the CSA 2000 is never addressed in the UDP (although its existence is referred to in the SPG 7), and as the RBKC contended that H 24 did apply, and as RBKC now submit via Mr Drabble QC that the sections which I find were relied on by the Inspector do not justify the distinction he drew, it is inevitable that I must hold that there has been unfairness in his not inviting submissions on his interpretation before making his decision. 
40.	It follows that Grounds 1 and 2 must succeed.
41.	As to Grounds 3-4, it seems to me that his interpretation of the policy SC2 and H 24 must be affected by the error into which he had fallen and which forms the subject matter of Grounds 1 and 2. Had I not concluded as I have done on Grounds 1 and 2, I would have rejected Ground 3. In my judgment his reasoning was adequate, and flows from his interpretation of SC2 and H 24.
42.	As to Ground 5, it is clear that RBKC had not adequately addressed the point about SC5 which had been raised in the consultation, and the Inspector has fallen into the same error. However, I accept Mr Drabble’s argument that had his conclusion on the meaning of SC2 stood, the inadequacies of consultation by RBKC could have made no difference to his conclusion that the SPG reflected UDP policy, and I would not have quashed the decision on this ground. 
43.	As to Ground 6, I consider that it was for the Inspector to determine whether he gave weight to Policy 3A.14 of the London Plan. In my judgment he did so in the context of assessing the importance of providing for the needs of the elderly. That gives rise to no legal challenge. The fact that the building required replacement if it were to function as a care home was relevant, but did not prevent that passage in the London Plan from being relevant. 
44.	I have dealt with Ground 7 above. As to Ground 8, the complaint made (and conceded by the First Secretary of State) is that the Inspector was wrong to apply concepts of the burden or standard of proof. I think it important to identify some concepts
(a)	The “burden of proof” in the context of litigation or criminal prosecution, serves to identify which party is expected to make a case for a finding to be made. If the party fails to discharge that burden, then the finding cannot be in its favour. Thus in a criminal case the burden of proof generally lies on the prosecution, save for those few cases where it shifts to the defence on some issue (e.g. in Health and Safety prosecutions by virtue of section 40  Health and Safety at Work Act 1974). In a civil case the burden is on the claimant, although it may shift to the Defendant if certain facts are proved by the claimant or admitted by the Defendant;
(b)	The “standard of proof” describes the degree of persuasiveness required of the case called by the party which shoulders the burden of proof. The standards in a criminal case are (in the case of the prosecution) that the jury is “sure” of the facts which the prosecution seeks to prove (N.B. not “beyond reasonable doubt” – a formula long disapproved by the Court of Appeal), or (in the case of a Defendant who bears the legal burden on some issue) that the jury considers that his case on that issue is probably true. In a civil case, the standard is generally that the party on whom the burden of proof falls must prove it on the balance of probabilities.
(c)	An “evidential burden” deals with those cases where a court may not reach a finding unless a party has called evidence to raise the issue. But even when that occurs, the burden of proof (which in many cases is the burden of rebuttal) may still fall on another party. Thus in criminal trials some defences are relevant if some evidence has been called. Once raised the burden of disproving them lies on the prosecution. 
45.	But in the planning context, one may have policies which require an applicant for permission to show that some circumstances exist, and that his case for the grant of consent attains a specified standard. The most obvious example is that of Green Belt policy in the Secretary of State’s Planning Policy Guidance Note 2, whereby a developer who is proposing what is defined as “inappropriate development” must satisfy a stringent test. Paragraph 3.2 states (my italics)
“Inappropriate development is, by definition, harmful to the Green Belt. It is for the applicant to show why permission should be granted. Very special circumstances to justify inappropriate development will not exist unless the harm by reason of inappropriateness, and any other harm, is clearly outweighed by other considerations. In view of the presumption against inappropriate development, the Secretary of State will attach substantial weight to the harm to the Green Belt when considering any planning application or appeal concerning such development.” 
46.	Other examples where policy requires a developer to show that some state of affairs exists include retailing. Thus, in the Secretary of State’s Planning Policy Statement 6 on Planning for Town centres, which addresses retail planning policy and development control, the policy sets out what applicants for permission are expected to demonstrate. It introduces the tests for development control thus (my italics)
“3.3 The key considerations for identifying sites for allocation in development plan documents, as set out in Chapter 2, apply equally to the assessment of planning applications. This Chapter sets out only the additional detail relevant to the consideration of planning applications, and should be read in conjunction with Chapter 2.
3.4 In the context of development control and subject to the policies set out below, local planning authorities should require applicants to demonstrate:
a) the need for development (paragraphs 3.8–3.11);
b) that the development is of an appropriate scale (paragraph 3.12);
c) that there are no more central sites for the development (paragraphs 3.13–3.19);
d) that there are no unacceptable impacts on existing centres (paragraphs 3.20–3.23); and
e) that locations are accessible (paragraphs 3.24–3.27).
3.5 Subject to the policies set out below, local planning authorities should assess planning applications on the basis of the above key considerations and the evidence presented. ……..
3.6 …………………………..
3.7 The level of detail and type of evidence and analysis required to address the key
considerations should be proportionate to the scale and nature of the proposal.”
47.	It then continues in considerable prescriptive detail on what is expected of an applicant in such a case. There are examples where planning policy requires the local planning authority to justify its case. An obvious example is in the case of conditions, where national policy in Circular 11/96 at paragraph 87 discourages the imposition of conditions which would restrict changes otherwise permitted under the Use Classes Order, in these terms (my italics)
“87…………….. Save in exceptional circumstances, conditions should not be imposed which restrict either permitted development rights granted by development orders or future changes of use which the Use Classes Order would otherwise allow. The Secretaries of State would regard such conditions as unreasonable unless there were clear evidence that the uses excluded would have serious adverse effects on amenity or the environment, that there were no other forms of control, and that the condition would serve a clear planning purpose.”
48.	Those policy requirements are not applying a burden of proof, or defining a standard of proof to be attained, or the type of evidence to be adduced, as a matter of law. They are applying a policy that those tests should be met, and as a policy, exceptions can be made if reasons are given, whereas in the case of a legally derived burden or standard of proof no such possibility exists on a case by case basis. But while there is a different provenance (policy rather than law) for the requirement to adduce evidence or of the imposition of a duty to persuade on one party or another, there can be no doubt that the effect in forensic terms at an inquiry is very similar to that in litigation of a legally derived burden or standard of proof. The decision maker will still be looking for the party identified by the policy to adduce evidence of the kind prescribed by the policy to the standard set by the policy.
49.	That being so, it is also open to the decision maker to determine that the value of what would be lost is such that, before he permits the loss, he requires robust evidence in the assessment intended to justify it. 
50.	It is true to say that in Pye (Oxford) Estates Ltd v. Secretary of State for the Environment [1982] J.P.L. 577 Mr David Widdicombe QC sitting as a deputy High Court Judge disapproved of the use of the term “burden of proof” as it was used in civil litigation in the context of planning appeals, and disliked the use of the words “the onus lies on the authority” in Circular 9/76. The fact is that since that first instance decision, policies which do cast the onus of demonstrating a state of affairs or a case for permission have become well used. I am bound to observe also that the forerunner of PPG 2 on Green Belts was itself well established at the time of that decision, and I find no distinction drawn in the learned deputy judge’s reasoning between “legal” and “policy” tests. In my judgment, the former are objectionable at a planning inquiry, whereas the latter are not. I decline to adopt his reasoning, which is not binding on me. 
51.	In Chesterfield Properties plc v. Secretary of State for the Environment (1988) 76 P & CR 117, 125-6. Laws J considered an argument that before a confirming authority could confirm a compulsory purchase order, it had to be satisfied that the development which it was to enable would probably be carried out. That argument was mounted by a commercial property company which had objected to a compulsory purchase order because the retail development to be constructed on the subject land if the Order were confirmed would compete with one owned by the objector. It had argued that the development on the subject land would not be viable. Laws J at p 125-6 disapproved of the use of the burden of proof, being a concept designed for a lis inter partes, as a tool in the compulsory purchase inquiry context. He also disapproved of the use of the concept of the standard of proof, for the same reason. There is nothing in that which conflicts with the approach I have adumbrated above. I note also that (rightly) no-one appears to have suggested to Laws J that there was anything untoward about the longstanding policy of the Secretary of State that a compulsory purchase order should not be confirmed unless “ there is a compelling case in the public interest” as it is now put in Circular 06/2004 at paragraph 17. In  my judgment that is to all intents and purposes a policy which sets a standard which the Secretary of State expects to see met if he is to confirm the order, and he expects the promoting authority to call evidence to show such a compelling case. In my judgment Laws J was rightly deprecating the importation of concepts from the litigation context as accretions to the statutory planning code and to the usual well recognised rules on the application of policy. I find nothing in his judgment which supports any argument that policy tests of the type described above are to be discouraged.
52.	Having established that the provenance of the tests is different, and that the way in which they are applied can be very different, in my judgment one must still not be surprised if the language used is similar as between the litigation context and the inquiry context. Lawyers (and planning inspectors) are as prone to the use of labels as any other profession, and the concepts that a party has to show something, and must do it in a particular way, are generally, if not precisely, encapsulated in the shorthand use of the expressions the “burden of proof” and “standard of proof,” which have been borrowed from ‘ordinary’ litigation. But the real question is not whether the Inspector used one form of shorthand or another. It is whether his process of reasoning reflected a due regard for the relevant policy and material considerations.
53.	The relevant policy at issue in this part of the Decision Letter is that contained in the supplementary planning guidance SPG 7. That policy required applicants to “demonstrate levels of local need and demand “ (7.7, 7.9) and stated that “ Only when the continued or future need for the use can no longer be established will the alternative uses be considered.” (7.12). Applicants were asked “ to provide evidence of the commercial viability of the existing facility” (7.14) and expected information on whether “genuine attempts” had been made to sell the building for such use over a period of not less than 6 months (7.14). If repairs or building works were required it expected “full estimates” of building works costs, including a “detailed schedule and plan” (7.16). It expected calculations of operating surplus “to help establish the commercial viability of the facility” (7.16) If conversion or extension were required to meet current standards, the Council required “detailed justification and evidence as to why such works cannot be undertaken” (7.17). 
54.	Given the terms of policy SC2 of the UDP, which he had found applied, and given the terms of the SPG, which place the onus of demonstrating non-viability firmly on the shoulders of those seeking permission for a different user, there was nothing wrong in the Inspector directing himself that the appeal should fail unless the claimant produced evidence which was of sufficient cogency to persuade him that he should allow the site to be taken out of social and community use. He was also entitled to consider the robustness of the claimant’s viability analysis. He found it wanting in several respects, as set out at paragraphs 33-40 of the decision letter. 
55.	His use of the phrase “beyond reasonable doubt” in paragraph 43 is noted. However the Consent Order drafted for the First Secretary of State misquotes it. It does not say that he was requiring that non-viability be established beyond reasonable doubt. What it actually says (my italics)  is “Without such evidence, and in the light of the points already made, I consider that it is not possible to establish, beyond reasonable doubt, the viability or non-viability of a care home use, in whatever form, on this site.” It is clear from that that he is not setting that as a test for the applicant. What he is doing is describing with vigour how he cannot make his mind up either way. What is more significant is his phrase in paragraphs 41 and 47 that he cannot be “certain” on the evidence before him that non-viability has been shown. But what is clear from paragraph 47 is that what he was saying was that, as the requirements of SPG 7 had not been met in terms of the evidence produced, he could not conclude that non-viability had been shown. 
56.	It is important to remember that the UDP policy SC2, if it applied, resisted proposals such as this one. As the decision maker, he was in my judgment entitled to decide that in his judgment the planning merits of retention of such uses demanded that a strong case for not applying the policy was shown before the protection of the user was set aside. In my judgment it was a reasonable interpretation of the policy in SPG 7 that a strong case be shown. Thus, the Inspector was doing no more than setting out his application of policy and his conclusions upon it. In my judgment he did not step outside the ambit of the policy context provided by the UDP, as he had interpreted it, and SPG7. I therefore reject this Ground. 
57.	I come now to the two challenges which relate to the second issue, namely Grounds 9 and 10. In the case of other decision letters the test is set out by Mann J in North Wiltshire District Council v Secretary of State for the Environment (1992) 65 P & CR 137 at 145 and is set out at paragraph 9(d) above .
58.	That authority relates to decision letters, and not to planning decisions by the local planning authority. Here, the Claimant had relied on a decision (at Aubrey Walk, Kensington) and also relied on other decisions by the RBKC. The Inspector identified the other RBKC decisions. He did so in the sense that he indicated the effect of what had been decided. In my judgement he gave reasons why he was not following the RBKC approach in their other planning decisions. I am however concerned that he did not address the Aubrey Walk decision letter. That decision, which was issued during the inquiry and was put before the Inspector, concerned a proposal for residential development, where the developer proposed that the affordable housing be provided off site in greater quantity than on site. It also argued that it could be provided more quickly than provision on site. The Inspector in that decision letter  concluded that 
“18………………………………………….. the provision of this affordable housing in these alternative locations does not run seriously counter to the Council’s aim, reflecting Government advice, of encouraging mixed and balanced communities. At the same time the doubling of the number of units available is a very tangible and real benefit to contribute towards the present need for affordable housing. Insofar as there may be a loss of some benefit towards a mixed community in the immediate local area of the appeal site, I am satisfied that this is more than outweighed by the benefit elsewhere, in locations where there is also a need in both numerical terms and in terms of community balance.”
59.	It is not possible to reconcile that with the instant Inspector’s approach. Indeed it is exactly what the claimant appellant had argued was the right way of dealing with the issue. On the basis of North Wiltshire District Council he was duty bound to address it specifically and give his reasons for reaching a different conclusion. I can find nothing in paragraphs 49-62 of the decision letter which indicates that he has even considered it, let alone given any reasons for adopting a different approach.  It follows that Ground 9 succeeds, whereas Ground 10 does not.
60.	I turn now to the group of challenges (Grounds 11-14) which relate to the third issue. I start by dealing whether there is any linkage between his identified issue 3 and the other two issues. The inspector describes issues 2 and 3 as “linked” (see paragraph 63). That must be sensible, because if he had accepted the Claimant’s arguments on the second issue (that there could be much more extensive off site provision than was feasible on site) then that must have affected the weight he gave to any deficiencies which he found in the mix proposed on the appeal site, as the overall gain in affordable housing would be much reduced thereby. But as importantly, it is wise to remember that insofar as the Inspector saw the three issues as discrete, I have already concluded that that was of itself a significant flaw in his decision, and that he should have addressed the overall balance.
61.	Ground 11, which relates to the alleged misinterpretation of policies H 17 and H 18, is accepted by the Secretary of State but resisted by RBKC. Mr Drabble QC, whom I suspect wanted to distance himself from the conclusions on the third issue, sought to persuade me that the Inspector did not reject the appeal under the third head, and referred me to paragraph 73 of the decision letter. It reads
“73 My adverse findings on the first main issue are, in my judgement, sufficient to cause the appeals to fail. But even if I had found in the appellant’s favour on this issue, I have concluded that the proposal is also unacceptable with regards to the issues of affordable housing provision and housing mix. For the reasons given above I therefore conclude that both appeals should be dismissed. I have had regard to all other matters raised, but they are not sufficient to outweigh the considerations which have led me to my conclusion.”
62.	In my judgment the second sentence shows beyond argument that he found the proposal objectionable on the grounds of housing mix, whether discretely or as added to his conclusions on the second issue. 
63.	There can be no doubt that the UDP states that policies H 17 and H 18 are “encouraging” policies, expressly formulated and described in the UDP at paragraph 1.2.4 thus
“These set out that which the Council would like to see resulting from development in the Borough. Such policies do not of themselves provide reasons for refusal, however, if a proposal is in accordance with such a policy, this factor may be takers into account when considering the application ………”
64.	 That being so, reliance on these policies to justify refusal would be in conflict with the Development Plan. It follows that he could only have relied on these policies to justify a refusal if he had acted under section 38(6) PCPA 2000 and found that there were material considerations which “indicated otherwise.” But his rationale at paragraph 63 for rejecting the claimant’s case on this was to rely on the same paragraph in the UDP to justify his regarding a conflict with those policies’ objectives as justifying refusal. That is not intellectually coherent, and amounts to the Inspector seeking to avoid the effect of Development Plan policy by using another sentence in the Development Plan to undercut it. In my judgment he was faced with a choice; either he had to be faithful to the UDP way in which these policies were couched, or he had to give reasons derived from elsewhere or from other material considerations for his decision not to apply UDP policy. What he did instead was to try and water down the effect of the clear language in the UDP by reference to other passages. In my judgment, that was impermissible. 
65.	I do not accept that his decision on this issue would have been the same anyway, had he addressed the matter properly. His approach to policies H 17 and H 18 as affording potential reasons for refusal (see paragraph 71) prevent any Simplex argument being taken here by RBKC. Ground 11 therefore succeeds.
66.	As to Ground 12, while I accept that RBKC had disavowed density arguments through the mouth of their professional witness, it was a point that had arisen at the inquiry, and I consider that the Inspector was entitled to form his own view upon it. This ground fails.
67.	In the case of Ground 13, while I accept that on this topic (density levels set in the London Plan) less weight could arguably be attached to the London Plan because its policies had to go through the consideration by RBKC in the UDP process and otherwise, it was still part of the Development Plan, and this was a matter for his planning judgment as decision maker. This Ground also fails.
68.	Ground 14 relates to the Inspector’s reasoning in paragraph 70. The Claimant feels aggrieved because a standard is being applied to its development which, it asserts, is not applied to proposals by other developers of this type of development in the Borough. If the Inspector had reached an adequately reasoned conclusion on the evidence, no complaint could be made. However it became apparent from looking at the case papers and materials before him that his paragraph 70 is not supported by it. The material shows that far from “all of the  examples…. which provided 12 units or more, provided an element of smaller accommodation in the form of 1 or 2 bedroom units as well as larger units” (paragraph 70), the facts are that while most developments (80%) contained some 1 bedroom units , some developments provided larger units. The papers contain the officer’s reports on some developments, which showed that of those pointed out to me
(a)	One development provided some 1 bedroom units
(b)	Two provided some 2 bedroom units
(c)	A number did not provide any 1 or 2 bedroom units.
This ground therefore succeeds also. 
69.	It follows that 
(a)	the Claimant succeeds on the following 
Grounds 1, 2, 7, 9, 11, 14
(b)	and fails on the following
Grounds 5, 6, 8, 10, 12, 13. Grounds 3-4 would have failed if Grounds 1-2 had not succeeded.
70.	Accordingly there must be judgment for the claimant, and both of the decisions in the decision letter are quashed. I circulated this judgment in draft to Counsel, and invited submissions in writing on
(a)	Permission to appeal
(b)	Applications for costs. 
71.	I have received submissions and set out my decisions on those issues below. I am also grateful to Counsel for their suggested corrections of typographical and syntactical errors. This judgment contains minor changes from the draft which I circulated. None of the changes is of any significance. 

RULINGS ON APPLICATION FOR PERMISSION TO APPEAL 
AND ON APPLICATIONS FOR COSTS

1.	The Second Defendant seeks permission to appeal, by written grounds dated 10th April 2007. I had circulated my judgment in draft form on 2nd April 2007, and invited submissions in writing.
2.	Mr Drabble QC suggests, firstly, that the statement of principle by Mann J in North Wiltshire District Council v Secretary of State for the Environment [1992] 65 P & CR 137 at 145 may require reconsideration by the Court of Appeal. However, it has very recently been the subject of consideration and approval by the Court of Appeal in Dunster Properties Ltd v The First Secretary of State & Anor [2007] EWCA Civ 236. It follows that there is no reasonable argument to be made that the principle merits further reconsideration by the Court of Appeal. Mr Drabble QC’s argument on Ground 9 seeks to excuse an Inspector not dealing with a decision which was, in Mr Drabble’s phrase, simply “related.” I disagree with that argument, which, in my judgment, does not properly reflect the facts of the case. The Aubrey Walk decision was directly relevant in terms of the type of approach to be adopted, and, in accordance with the N Wiltshire principles, had to be addressed by the Inspector. I consider that there is no reasonable prospect of a successful appeal against my judgment on the Ground 9 issue.
3.	The second limb of Mr Drabble’s argument goes to my conclusions on both Grounds 7 and 9 and is that the decision of the Inspector would have been the same in any event, because the Inspector was bound to conclude that the proposal was unacceptable on housing grounds, and Mr Drabble notes that he cited the objective of achieving balanced and mixed communities. That is to miss the point successfully made by the claimant. The policy context cited by the Inspector does not seek the creation of a balanced community on every site. The method the claimant suggested could be argued to be directed towards the same end, and to achieving the increased provision of affordable housing. As the Aubrey Walk decision letter showed, this was a case directly relevant to this issue of balance which had to be struck by the Inspector. Had he followed that approach, he might have concluded that the offsite provision would be an advantage to be set against the disadvantages he had found. It therefore potentially affects the decision to dismiss the appeal.  I regard this argument as not having a reasonable prospect of success on appeal.
4.	It is immaterial whether the Inspector’s interpretation of Policy SC 2 was right or wrong for the purposes of Grounds 7 or 9 succeeding. Given my refusal of permission to appeal on Grounds 7 and 9, it is not necessary to consider the applications on Grounds 1 and 2, even though Mr Drabble advances no particular reasons why my conclusions on those Grounds are wrong. However I also consider that the failure by the Inspector to invite comment on an interpretation of a statute (which interpretation conflicted with that relied on in the RBKC case) was a simple failure to observe the “fair crack of the whip” principle, and led to unfairness. 
5.	No case of any substance is advanced by Mr Drabble so far as my decisions on Grounds 11 and 14 are concerned. I consider that there is no reasonable prospect of a successful appeal against those decisions. They affect a judgment made by the Inspector which should have affected his approach to his conclusions on the weight to be given to his conclusions on the first issue. If no appeal lies against my conclusions on those grounds, it would render any grant of permission to appeal on Grounds 1 and 2 otiose. 
6.	As far costs are concerned, the parties have reached agreement in correspondence. I therefore order
a.	That the First Defendant pay costs, agreed in the sum of £ 14,000, to the Claimant 
b.	That the Second Defendants pay costs, agreed in the sum of £ 34,000, to the Claimant.