QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
London WC2A 2LL
B e f o r e :
|(1) PERSIMMON HOMES (NORTH EAST) LIMITED|
|(2) BARRATT HOMES LIMITED|
|(3) MILLHOUSE DEVELOPMENTS LIMITED||Claimants|
|BLYTH VALLEY BOROUGH COUNCIL||Defendant|
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Mr Anthony Porten QC and Ms Nicola Allan (instructed by Sharpe Pritchard) appeared on behalf of the Defendant
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"(1) Documents which must be specified in the local development scheme as local development documents are—
(a) documents of such descriptions as are prescribed;
(b) the local planning authority's statement of community involvement.
(2) The local planning authority may also specify in the scheme such other documents as they think are appropriate.
(3) The local development documents must (taken as a whole) set out the authority's policies (however expressed) relating to the development and use of land in their area.
(8) A document is a local development document only in so far as it or any part of it—
(a) is adopted by resolution of the local planning authority as a local development document;
(b) is approved by the Secretary of State under section 21 or 27."
"(2) In preparing a local development document the local planning authority must have regard to—
(a) national policies and advice contained in guidance issued by the Secretary of State..."
"(1) The local planning authority must submit every development plan document to the Secretary of State for independent examination.
(2) But the authority must not submit such a document unless—
(a) they have complied with any relevant requirements contained in regulations under this Part, and
(b) they think the document is ready for independent examination.
(5) The purpose of an independent examination is to determine in respect of the development plan document—
(a) whether it satisfies the requirements of sections 19 ... [and various regulations] relating to the preparation of development plan documents;
(b) whether it is sound."
It is the question of soundness which is at the centre of this claim.
"(a) the person carrying out the examination recommends that the document is withdrawn and that recommendation is not overruled by a direction given by the Secretary of State, or
(b) the Secretary of State directs that the document must be withdrawn."
One imagines that withdrawal would only be likely to be recommended or directed if the Inspector decides that it is not sound or it does not comply with the necessary matters set out in section 20(5). I suppose there may be other circumstances which could lead to a recommendation for withdrawal, but those are, one would have thought, the most likely ones.
"(1) The local planning authority may adopt a local development document (other than a development plan document) either as originally prepared or as modified to take account of—
(a) any representations made in relation to the document;
(b) any other matter they think is relevant.
(2) The authority may adopt a development plan document as originally prepared if the person appointed to carry out the independent examination of the document recommends that the document as originally prepared is adopted.
(3) The authority may adopt a development plan document with modifications if the person appointed to carry out the independent examination of the document recommends the modifications.
(4) The authority must not adopt a development plan document unless they do so in accordance with subsection (2) or (3).
"(6) If regard is to be had to the development plan for the purpose of any determination to be made under the planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise."
"(3)... the development plan is—
(a) the regional spatial strategy for the region in which the area is situated, and.
(b) the development plan documents (taken as a whole) which have been adopted or approved in relation to that area."
Accordingly, this Core Strategy has become a Development Plan when read with the other Development Plan documents which apply in the district. Thus, section 38(6) applies to it.
"(2) A relevant document must not be questioned in any legal proceedings except in so far as is provided by the following provisions of this section.
(3) A person aggrieved by a relevant document may make an application to the High Court on the ground that—
(a) the document is not within the appropriate power;
(b) a procedural requirement has not been complied with.
6) Subsection (7) applies if the High Court is satisfied—
(a) that a relevant document is to any extent outside the appropriate power;
(b) that the interests of the applicant have been substantially prejudiced by a failure to comply with a procedural requirement.
(7) The High Court may quash the relevant document—
(a) wholly or in part;
(b) generally or as it affects the property of the applicant."
"4.23 The policies in development plan documents will be tested thoroughly during the independent examination of the development plan document. Section 20 of the Act sets out the purpose of the independent examination of a development plan document ...
4.24 The presumption will be that the development plan document is sound unless it is shown to be otherwise as a result of evidence considered at the examination. The criteria for assessing whether a development plan document is sound will apply individually and collectively to policies in the development plan document. A development plan document will be sound if it meets the following tests ...
"it is a spatial plan which is consistent with national planning policy and in general conformity with the regional spatial strategy for the region or, in London, the spatial development strategy and it has properly had regard to any other relevant plans, policies and strategies relating to the area or to adjoining areas... "
And then (vii), under the heading "Coherence, consistency and effectiveness", reads:
"the strategies/policies/allocations represent the most appropriate in all the circumstances, having considered the relevant alternatives, and they are founded on a robust and credible evidence base..."
"Where the development plan document relates to housing, local planning authorities should produce housing trajectories which will demonstrate how the plan will deliver the policies relating to housing provision. This will be important in clarifying the delivery mechanisms of the development plan document which will be part of the test of whether it is sound. Annex B sets out further guidance on the preparation of a housing trajectory."
Again, I do not think it is necessary to go into the details of that in the context of this case because that is not a matter which has been specifically relied on.
"These housing policy objectives provide the context for planning for housing through development plans and planning decisions."
Those objectives by paragraph 9 include: achieving a wide choice of high quality homes, both affordable and market housing; widening opportunities for home ownership; improving affordability across the market; and creating sustainable inclusive mixed communities in all urban and rural areas. What should be delivered, according to paragraph 10, include a mix of housing, both market and affordable, particularly in terms of tenure and price, to support a wide variety of households in all areas, both urban and rural. Paragraph 11 provides that there must be collaborative working between local planning authorities and regional planning bodies, as well as early engagement with local communities, stakeholders and infrastructure providers, and local planning authorities will need to work closely with the private sector, particularly developers and householders, to achieve the Government's strategic housing objectives. There must be an evidence-based policy approach, informed by a robust shared evidence base, in particular of housing need and demand through a strategic housing market assessment and land availability, through a strategic housing land availability assessment.
"In Local Development Documents, Local Planning Authorities should:
– Set an overall (ie plan-wide) target for the amount of affordable housing to be provided. The target should reflect the new definition of affordable housing in this PPS. It should also reflect an assessment of the likely economic viability of land for housing within the area, taking account of risks to delivery and drawing on informed assessments of the likely levels of finance available for affordable housing including public subsidy and the level of developer contribution that can reasonably be secured. Local Planning Authorities should aim to ensure that provision of
affordable housing meets the needs of both current and future occupiers, taking into account information from the Strategic Housing Market Assessment."
"Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:
– meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices.
– include provision for the home to remain at an affordable price for future eligible households or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision."
"Set out the range of circumstances in which affordable housing will be required. The national indicative minimum site size threshold is 15 dwellings. However, Local Planning Authorities can set lower minimum thresholds, where viable and practicable including in rural areas. This could include setting different proportions of affordable housing to be sought for a series of site-size thresholds over the plan area. Local Planning Authorities will need to undertake an informed assessment of the economic viability of any thresholds and proportions of affordable housing proposed, including their likely impact upon overall levels of housing delivery and creating mixed communities. In particular, as the new definition of affordable housing excludes lowcost market housing, in deciding proportions of affordable housing to be sought in different circumstances, Local Planning Authorities should take account of the need to deliver low cost market housing as part of the overall housing mix."
That provision is the crucial one for the purposes of this case. Putting it generally, what is important within it is the requirement that consideration should be given by means of an informed assessment to the economic viability of thresholds and proportions to be adopted in a planning document, and so, in this Core Strategy, when setting the target for the affordable housing to be included in any development.
"Analysis suggests that any target of affordable housing up to around 83% would be justified (in terms of the need) -- this figure would only marginally be reduced (to 73%) if we were to look at the backlog of need over a ten year period. However, we would not recommend a target level of 83% (or 73%) be appropriate for the Council to seek on future housing developments. This is simply because it is highly unlikely that any site would be able to support anywhere near this level of affordable housing and it is likely that in setting such a target many sites would remained undeveloped (developers being put off by the high affordable housing targets).
Therefore in terms suggesting a target to the Council we must draw on our own experience about what might be achievable and realistic. In our view the evidence of the survey suggests that (for example) a target of up to 40% can be justified. Targets of this level (and higher) have been adopted by a number of local planning authorities. At a level of 40% we would not typically expect to find any problems with financial viability, though this site specific matter may require investigation in some cases (eg severely damaged brownfield sites).
Additionally we suggest that site sized thresholds below the current Circular 6/98 level of dwellings should be considered. It is also suggested that all additional affordable housing should be social rented with perhaps some limited scope for shared ownership in the more expensive parts of the Borough."
"At least 30% affordable housing will be provided as a proportion of all new housing development in the borough.
The Blyth, Cramlington and Seaton Valley development plan documents will allocate a proportion of land for affordable housing in order to meet that requirement.
In addition all new housing developments above the following site size thresholds will be required to provide at least 30% affordable housing and will be judged against criteria set out in Policy DC6.
Blyth and Cramlington: 15 dwellings.
Seaton Valley: 10 dwellings."
"30% was considered to be a more realistic target in recognition of site viability issues. Requesting a higher proportion of 40% may result in developers going elsewhere, with a lower target, ie neighbouring Wansbeck, who have a 30% target, and the potential for no housing, including affordable housing to be provided at all."
"Faced with a number of large scale housing applications, the Council decided to prepare interim policy to provide consistency, clarity and transparency for developers in terms of how the Council would secure affordable housing in the intervening period until the Core Strategy was adopted. The 40% target recommended by the HNS was relatively high compared to other areas in the North East and was proving difficult to secure in the Borough. In May 2005, DTZ Pieda Consulting, on behalf of the Northumberland Local Authorities, were commissioned to conduct a Northumberland Housing Market Assessment. It found that Blyth Valley and Wansbeck comprise a single housing market. At that time, Wansbeck District Council had established a target of 30% affordable housing through its HNS, which was carried forward to the now adopted Wansbeck Local Plan. Due to the close integration of the two areas the council considered it appropriate to lower the affordable housing target to be consistent with the Wansbeck target.
3.7. The Interim Affordable Housing Policy therefore sought a borough wide affordable housing lower target of 30%. The Council consulted on the draft Interim Affordable Housing Policy which was adopted in August 2005. The Claimants by their agents ... were fully engaged in that consultation process and made representations."
"The Core Strategy complies with PPS3 in that it sets a Borough wide target for the provision of affordable housing based on an up to date assessment of need (paras 22 & 29)."
That, I fear, is simply inaccurate. It may well produce a target which is based on an up-to-date assessment of need, but paragraph 29 requires more than that, and specifically requires that it is based upon the economic viability of the relevant target, assessed in accordance with the approach set out in paragraph 29. Thus, as it seems to me, it is quite impossible to say that Policy H4, as set out by the Council, does comply with PPS3. I entirely accept Mr Village's submission that, in that respect, it clearly does not, and in fairness, Mr Porten did not submit that it did. His submissions are that, even without that, for reasons to which I will come, there was no unlawfulness in the approach adopted by the Inspector and in the upholding, with modifications, of Policy H4.
"No new evidence on the need for affordable housing was submitted to the inquiry. The emerging LDF Core Strategy proposes a target of at least 30% on new housing schemes, but that figure appears to be based on viability rather than need issues, and as a consultation draft the proposal can be given little weight."
"In these circumstances the Council is content that, as at the SDA inquiry, affordable housing should be dealt with by a condition which leaves the proportion to be agreed later. Arcot [the developers] endorses this approach, arguing that planning decisions should be made on a consistent basis. Whilst it would be much more satisfactory to establish the percentage of affordable housing prior to the application being determined, there is insufficient information on which to make a rational decision. Ultimately, there is no need to suppose that a suitable condition would not deliver an appropriate level of affordable housing."
"New residential development should seek to provide affordable housing consistent with the overall strategic target of 10% having regard to the:
• Identified local need;
• Nature and scale of the location and the development proposed;
• Characteristics of the site; and
• Economics of provision.
This is to be informed by the Strategic Housing Market Assessment covering Blyth Valley Borough Council and the outputs of the sub-borough areas.
All new housing development above the following site threshold of 15 net additional dwellings will be considered in the context of the above strategic target and criteria."
"In addition, the HNS was subject to extensive consultation with stakeholders in any event. At each stage of the consultation process it was placed on deposit with the core planning documents. There was every opportunity for stakeholders to comment on the HNS and the claimants' consultants participated in that process. Their representations are recorded in the Schedule of Responses [all that does is to indicate that they were named as those who were able to make representations, although I do not think the representations as such, other than of course the later ones, are referred to]. Also NLP [the representatives] for the claimants and representatives of other house builders attended the Consultation Workshop held in June 2006.
5.16. Further, whilst the HNS provides the evidence base for the Core Strategy, it does not form policy. The policies are found in the Core Strategy, and those policies, including Policy H4, were subject to extensive consultation at various stages of the adoption process, including:
(i) The issues and Alternative Options consultation in July 2005;
(ii) The Interim Affordable Housing Policy consultation in 2005;
(iii) The Core Strategy Preferred Options consultation in September 2005; and
(iv) The Core Strategy Submission Draft consultation in April 2006."
"In practice affordable housing targets have been set by custom and practice once a reliable evidence base has been established. Thus targets are a yes/no feature of the planning system: they can only be set if there is robust evidence of need but cannot be mechanically worked out from any given level of housing need."
"(iv) In para 2.7 the Objector [in that case George Wimpey] recites from the recently published (Nov 2006) PPS3 and the general requirement for Strategic Housing Market Assessments. Clearly the 2004 HNS was written long before this. However it does contain analysis of the housing market which conforms to what is required by PPS3. The Objector points to the requirement for stakeholder involvement, which clearly was not met in 2004. However, as the leading firm in the SHMA field (we are carrying out SHMAs for about 50 local authorities, and nearest to Blyth Valley would be the one we are starting in Newcastle) we can safely say that no stakeholder involvement has ever resulted in errors in the analysis of housing need being pointed out."
"The Objectors seek to cast doubt upon the 2004 HNS, and upon the sense of the 30% draft target in Policy H4 which the Council has set following it. In neither case is the objection well founded. Despite attempts to imply it, no detailed consideration has yet been given to the 2004 HNS, and no conclusions drawn by Inspectors from any such consideration. The only comments have been about the low level of house prices in Blyth Valley. As chapter 4 shows, this has changed a lot since 2004, and all in the direction of increasing rather than decreasing the level of housing need and thus of any affordable housing target. The 30% level looks more modest now than it did a year or two ago. The Objectors have not made any coherent case against either the HNS or the draft policy."
"The requirement now involves undertaking a Strategic Housing Market Assessment, which may form part, all, or more than a local planning authority's area, and should be prepared collaboratively with stakeholders. The SHMA will determine not only the overall proportion of households requiring affordable housing, but also the likely profile of housing types and tenures required, the size and type of affordable housing required and in which locations. The implication is that the distribution of need and demand may vary across a housing market and/or local authority area. Separate targets should also be set for social rented and intermediate affordable housing.
It is apparent that the 2004 Fordham Study, which is based on guidance published in 2000, cannot possibly provide an adequate and up-to-date evidence base to satisfy the government's latest requirements, particularly when their latest guidance on preparing an SHMA has yet to be published."
"Prior to the start of the examination the Planning Inspectorate will set deadlines for the submission of any further material from those seeking a change to the statement of community involvement together with the deadline for any local planning authority response."
That relates to the statement of community involvement and perhaps is not of the most obvious relevance.
"The presumption will be that the submitted development plan document is fundamentally sound unless it is shown to be otherwise as a result of evidence considered at the examination.79 The local planning authority will rely on the evidence, collected through the preparation process of the development plan document, to demonstrate that the plan is sound; others will need to demonstrate why that is not the case. As part of their evidence in relation to housing the local planning authority should produce housing trajectories which will demonstrate how the plan will deliver the policies relating to housing provision. This will assist in clarifying the delivery mechanisms of the plan which will be part of the test of whether it is sound."
That is based on the assumption that the local planning authority will have gone through all the necessary procedures and obtained for itself all the necessary information in order to produce a document which reflects, and properly reflects, the requirements that are necessary in its district. That reflects back on the nine tests of soundness, which are set out and which I have already cited in paragraph 4.24 of PPS12. That in itself reflects the requirement of what has been described as front loading. The whole point is that LPAs should not submit the documents for examination until they have ensured that they have taken all the necessary steps to produce a plan which is in conformity with all the requirements of the Act.
"If proper front loading has taken place, there should be no need for pre-hearing changes, other
than in exceptional circumstances. It is clear that
to date there has been insufficient appreciation
of the critical importance of frontloading by all
interested in or affected by the planning of an
area. This includes LPAs, key stakeholders such
as statutory bodies and infrastructure providers
and the development industry. Problems have
arisen in the early examinations where LPAs have
sought changes in response to submission stage
representations. If the plan preparation process
has been engaged in by all effectively there
should be no surprises and no need for an LPA
to provide any more material than that provided in the submission documentation. If the LPA
consider it necessary to make material changes
to the submission document it suggests that they
have not submitted what they consider to be a
"Inspectors have to reach conclusions on the
issues of soundness (to which the representations
relate), not the representations. Where representations made at preferred options stage
are made again in similar terms on the submission
of the DPD, LPAs should have considered the matters at preferred options stage and will not need to do further work in response to the representation."
"Most significantly, GO-NE have been consulted on this matter throughout and at the Examination confirmed that, in their opinion, the CS complies with national policy. Planning Policy Statement 3 (PPS3) was published in November 2006 after the submission draft CS was released. Changes have therefore been proposed to the CS to ensure that it conforms with PPS3. These are considered in section 7 of this report."
"The alternative and preferred options papers produced by the Council clearly state the evidence base that has underpinned the selection of options and alternatives. The evidence base includes an up-to-date Urban Housing Capacity Study, a Housing Needs Assessment, an Open Space, Sport and Recreation Needs Assessment, a Retail Capacity Study and an Industrial Land Capacity Study amongst other documents. Supporting text in the CS summarises how the policies have been developed from the evidence base. National policy and good practice guidance, where available, has been followed in the preparation of all evidence base documents and both GO-NE and the NEA have not sought to doubt the credibility of the evidence used in the preparation of the CS."
And that includes the housing aspect.
"7.29 The Housing Needs Survey (HNS) of 2004 concluded that there was a need for 83% of housing to be affordable housing. Though the HNS was reliant on data such as the 2001 census no evidence has been brought forward to indicate that the housing needs situation in Blyth Borough has changed significantly since 2004. Blyth Valley remains one of the Boroughs in the country where the cost of housing is low but it is also one of the Boroughs that has the lowest income levels. Uncontested evidence indicates that between 2004 and 2006 house prices rose by 40% whilst incomes rose by around 10% and that a crude price to income ratio rose from 4.3 in 2003 to 5.3 in 2006. A reconsideration of the HNS in 2006 indicates that between 2003 and 2006 the number of households on the Council's Housing Register more than doubled and though this is not necessarily a reliable indicator of housing need it does add to a conclusion that the 2004 HNS remains a credible and robust evidence base. There is no evidence to indicate that any stakeholders have been excluded from the HNS process. The HNS is a public document and no statistical evidence has been produced to undermine its conclusions. The reconsidered HNS is not undermined by the adoption of PPS3."
That is of course all correct, insofar as the HNS was concerned with need and did not consider any material that went to viability.
"The Council stated at the Cramlington South-west Sector Inquiry that 30% affordable housing would result in the development being unviable. This and other major housing commitments will be assessed, for provision of affordable housing, on site specific circumstances and the viability issues in each case. PPS1, at paragraph 8, states that '…applications for planning permission should be determined in line with the plan, unless material considerations indicate otherwise' [that of course is a reflection of section 38(6) of the Act]. This approach is followed for each planning application and if material considerations dictate that the 30% target for affordable housing required by policy H4 is not achievable then the Council would seek a lesser percentage provision. This approach was followed at both aforementioned Inquiries and should be followed for any future application for housing development within Blyth Borough."
That, as it seems to me, is an important paragraph because it will be able to be relied on by any applicant for planning permission for housing development, and the Inspector makes it as clear as it could be that the 30 per cent is a target, and must be regarded only as a target, and that if there is evidence in any individual development that that target is not able to be met, then that will have to be considered. Nonetheless, it is equally important to bear in mind that the target set must be a target which is not flawed by any deficiency in the process which has led to it being imposed, and if it is a flawed target, it should not stand as one which is to be achieved.
"The Council has considered alternatives ranging from 10% to 40%. A 40% target would not be viable and a 10% target would not adequately address the significant need. In these circumstances a 30% target is the most appropriate option. There is no evidence to suggest that committed sites will not be brought forward with a target of 30% affordable housing or that such a target will risk the delivery of sites identified in the UCS. At no time has the Council suggested that failing to achieve 30% affordable housing on sites early in the plan period would result in them seeking a higher percentage on sites in the latter part of the plan period. The policy would be applied on a site by site basis.
7.34 Paragraph 29 of PPS3 states that 'The national indicative site size threshold is 15 dwellings' but indicates that local planning authorities can set lower minimum thresholds where viable and practicable. No evidence has been brought forward to suggest that, as a matter of principle, a site for 10 dwellings cannot support an element of affordable housing. It may be that a site suitable for 10 dwellings could not support affordable housing at 30% but it might support a lower level of provision. If the site size threshold was 15 dwellings then all sites for 14 dwellings or less would provide 0% affordable housing. A site size threshold of 10 dwellings is appropriate in a Borough where there is a current high level of need, where house prices are increasing at a rate far in advance of income and where the UCS identifies a significant number of smaller previously developed sites.
7.36 Following the Examination housing round table hearing the five housing consultants present collectively proposed an amendment to policy H4 which was accompanied by a resume of their concerns regarding the HNS and other matters. The Council had no opportunity to produce counter evidence because the consultants' response to the request was produced at the closing session of the Examination. However, the document produced by the consultants has been considered as simply repeating that which was commented on at greater length in their individual representations or at the hearing. There is nothing of substance in the collective document that was not in previous representations or was not discussed at the hearing.
7.37 The government published, in November 2006, 'Delivering Affordable Housing', a document designed to support local authorities and other key parties in delivering more affordable housing. The Council's approach to the delivery of affordable housing generally accords with the advice in this recently published document. The document requires local authorities to develop a strategic approach to housing by undertaking Strategic Housing Market Assessments (SHMA). Practice guidance on SHMAs and an advice note on 'Identifying sub-regional housing market areas' were published shortly before this report was completed. With the guidance and advice now in place the Council should move swiftly to implement government initiatives on delivering affordable housing by undertaking viability studies on UCS sites and by commissioning an SHMA for the Borough."
"I also do not consider the non-consultation on the underlying study point a strong point. The relevant part of the guidance PPS3 in relation to this were only promulgated in November 2006. To apply the standards set in them in 2006 to a document competed in 2004 is a recipe for great complexity in process Planning policies are evolving and if each time a policy evolves then all steps that have been taken an earlier stages of a process have to be rethought in term of the new situation, this is a recipe for chaos. The trend in planning law has been to speed up the process."
"Although the case depends on its own circumstances, the approach under section 113, ie an assumption of soundness, is new, and should, if the defendants' wish, be considered by the Court of Appeal."