QUEEN'S BENCH DIVISION
PLANNING COURT IN BIRMINGHAM
33 Bull Street
B e f o r e :
| OADBY AND WIGSTON BOROUGH COUNCIL
|- and -
(1) SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT
(2) BLOOR HOMES LIMITED
Director of Legal Services, Oadby & Wigston Borough Council) for the Claimant
Gwion Lewis (instructed by the Government Legal Department) for the First Defendant
Reuben Taylor QC (instructed by Squire Patton Boggs) for the Second Defendant
Hearing date: 26 June 2015
Crown Copyright ©
Mr Justice Hickinbottom:
The Legal Background
i) Section 70(2) of the 1990 Act provides that, in dealing with an application for planning permission, a decision-maker must have regard to the provisions of "the development plan", as well as "any other material consideration". "The development plan" sets out the local planning policy for an area, and is defined by section 38 of the Planning and Compulsory Purchase Act 2004 ("the 2004 Act") to include adopted local plans.
ii) Section 38(6) of the 2004 Act provides:
"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."
Section 38(6) thus raises a presumption that planning decisions will be taken in accordance with the development plan, but that presumption is rebuttable by other material considerations.
iii) "Material considerations" in this context include statements of central government policy which are now largely set out in the National Planning Policy Framework ("NPPF"), effective from 27 March 2012, as supplemented by the Secretary of State's web-based Planning Practice Guidance ("the PPG"), which from 6 March 2014 replaced a plethora of earlier guidance documents and which is subject to regular updates.
iv) The true interpretation of policy, including the NPPF, is a matter of law for the court to determine (Tesco Stores Ltd v Dundee City Council  UKSC 13).
v) Whilst he must take into account all material considerations, the weight to be given to such considerations is exclusively a matter of planning judgment for the decision-maker, who is entitled to give a material consideration whatever weight, if any, he considers appropriate, subject only to his decision not being irrational in the sense of Wednesbury unreasonable (Tesco Stores Ltd v Secretary of State for the Environment  1 WLR 759 at page 780F-G).
vi) An inspector's decision letter cannot be subjected to the same exegesis that might be appropriate for a statute or a deed. It must be read as a whole, and in a practical, flexible and common sense way, in the knowledge that it is addressed to the parties who will be well aware of the issues and the arguments deployed at the inspector's inquiry, so that it is not necessary to rehearse every argument but only the principal important controversial issues. The reasons for an inspector's decision must be intelligible and adequate to enable an informed observer to understand why he decided the appeal as he did, including his conclusions on those issues. They must not give rise to any substantial doubt that he proceeded in accordance with the law, e.g. in his understanding the relevant policies (see Seddon Properties v Secretary of State for the Environment (1981) 42 P&CR 26 at page 28 per Forbes J; Bolton Metropolitan Borough Council v Secretary of State for the Environment  71 P&CR 309 at page 314; South Somerset District Council v Secretary of State for the Environment  1 PLR 80 at pages 82H, 83F-G per Hoffmann LJ; and South Bucks District Council v Porter (No 2)  UKHL 33 at  per Lord Brown). That standard of required reasons applies even where there are issues that turn on expert evidence: a planning decision-maker is not required to give detailed reasons for accepting or rejecting expert evidence, so long as it is apparent why the decision-maker has found as he has on the principal important controversial issues (a well-established proposition, recently confirmed in Wind Prospect Developments Limited v Secretary of State for Communities and Local Government  EWHC 4041 (Admin) at  per Lang J).
vii) Although an application under section 288 is by way of statutory application, it is determined on traditional judicial review grounds.
Housing Projections, Assessments and Requirements Etc
"(i) Household projections: These are demographic, trend-based projections indicating the likely number and type of future households if the underlying trends and demographic assumptions are realised. They provide useful long-term trajectories, in terms of growth averages throughout the projection period. However, they are not reliable as household growth estimates for particular years: they are subject to the uncertainties inherent in demographic behaviour, and sensitive to factors (such as changing economic and social circumstances) that may affect that behaviour. Those limitations on household projections are made clear in the projections published by the Department of Communities and Local Government ('DCLG') from time-to-time (notably, in the section headed 'Accuracy').
(ii) Full Objective Assessment of Need for Housing ['FOAN']: This is the objectively assessed need for housing in an area, leaving aside policy considerations. It is therefore closely linked to the relevant household projection; but is not necessarily the same. An objective assessment of housing need may result in a different figure from that based on purely demographics if, e.g., the assessor considers that the household projection fails properly to take into account the effects of a major downturn (or upturn) in the economy that will affect future housing needs in an area. Nevertheless, where there are no such factors, objective assessment of need may be and sometimes is taken as being the same as the relevant household projection.
(iii) Housing Requirement: This is the figure which reflects, not only the assessed need for housing, but also any policy considerations that might require that figure to be manipulated to determine the actual housing target for an area. For example, built development in an area might be constrained by the extent of land which is the subject of policy protection, such as Green Belt or Areas of Outstanding Natural Beauty. Or it might be decided, as a matter of policy, to discourage particular migration reflected in demographic trends. Once these policy considerations have been applied to the figure for full objectively assessed need for housing in an area, the result is a 'policy on' figure for housing requirement. Subject to it being determined by a proper process, the housing requirement figure will be the target against which housing supply will normally be measured."
The "proper process" there referred to is the rigorous process that is required before a development plan is adopted, to which I have referred.
"Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market."
The PPG emphasises that:
"Homes that do not meet the above definition of affordable housing, such as 'low cost market' housing, may not be considered as affordable housing for planning purposes."
Relevant National Policies
"At the heart of the [NPPF] is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking.
For plan-making this means that:
• local planning authorities should positively seek opportunities to meet the development needs of their area;
• Local Plans should meet objectively assessed needs, with sufficient flexibility to adapt to rapid change, unless:
any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or
specific policies in this Framework indicate development should be restricted
For decision-taking this means [unless material considerations indicate otherwise]:
• approving development proposals that accord with the development plan without delay; and
• where the development plan is absent, silent or relevant policies are out-of-date, granting permission unless
any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or
specific policies in this Framework indicate development should be restricted ".
"47. To boost significantly the supply of housing, local planning authorities should:
- use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this Framework, including identifying key sites which are critical to the delivery of the housing strategy over the plan period;
- identify and update annually a supply of specific deliverable sites sufficient to provide five years' worth of housing against their housing requirements with an additional buffer of 5% (moved forward from later in the plan period) to ensure choice and competition in the market for land. Where there has been a record of persistent under delivery of housing, local planning authorities should increase the buffer to 20% (moved forward from later in the plan period) to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land;
- identify a supply of specific, developable sites or broad locations for growth, for years 6-10 and, where possible, for years 11-15;
- for market and affordable housing, illustrate the expected rate of housing delivery through a housing trajectory for the plan period and set out a housing implementation strategy for the full range of housing describing how they will maintain delivery of a five-year supply of housing land to meet their housing target;
49. Housing applications should be considered in the context of the presumption in favour of sustainable development. Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites."
These policy provisions inform the relevant housing requirement to be used by a local planning authority for both its strategic plan-making function when (e.g.) preparing a local plan, and its function of decision-making in respect of a particular planning application.
"158. Each local planning authority should ensure that the Local Plan is based on adequate, up-to-date and relevant evidence about the economic, social and environmental characteristics and prospects of the area. Local planning authorities should ensure that their assessment of and strategies for housing, employment and other uses are integrated, and that they take full account of relevant market and economic signals.
159. Local planning authorities should have a clear understanding of housing needs in their area. They should:
- prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which:
- meets household and population projections, taking account of migration and demographic change;
- addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as, but not limited to) families with children, older people, people with disabilities, service families (and people wishing to build their own homes); and
- caters for housing demand and the scale of housing supply necessary to meet this demand..."
- prepare a Strategic Housing Land Availability Assessment to establish realistic assumptions about the availability, suitability and the likely economic viability of land to meet the identified need for housing over the plan period."
"Plan makers working with relevant colleagues within their local authority (e.g. housing, health and social care departments) will need to estimate the number of households and projected households who lack their own housing or live in unsuitable housing and who cannot afford to meet their housing needs in the market.
This calculation involves adding together the current unmet housing need and the projected future housing need and then subtracting this from the current supply of affordable housing stock."
Paragraphs 2a-29 states:
"The total need for affordable housing should be converted into annual flows by calculating the total net need (subtract total available stock from total gross need) and converting total net need into an annual flow.
The total affordable housing need should then be considered in the context of its likely delivery as a proportion of mixed market and affordable housing developments, given the probable percentage of affordable housing to be delivered by market housing led developments. An increase in the total housing figures included in the local plan should be considered where it could help deliver the required number of affordable homes."
The Issue before the Inspector
"Whether there is a 5 year housing land supply in the local authority area and how this may impinge upon the applicability of current development plan policies with particular regard to the distribution of new housing development."
The burden of demonstrating a five-year housing land supply fell on the Council.
i) The available housing land sites. The Inspector found that sites had been identified for 705 dwellings over the five-year period (paragraph 54). That finding is not challenged.
ii) The relevant housing requirement figure. Citing Hunston and Gallagher at first instance, the Inspector correctly noted that, as the Oadby & Wigston Core Strategy had been adopted prior to the NPPF coming into effect, and there had been no post-NPPF review, it was necessary to consider the policy-off FOAN (paragraphs 13-14). To the FOAN figure would have to be added (a) the appropriate buffer (in view of the Council's persistent past failures to meet housing requirement targets, 20%) and (b) backlog (93 over the five-year period), neither of which is in issue before me. What is in issue is the Inspector's adoption of 147 dpa for the policy off FOAN for housing indeed, that is the core issue in the application now before me.
i) The mid-point demographic housing need per annum for Oadby & Wigston was 75 dpa. The net affordable housing need (160 dpa) as a percentage of the demographic need was therefore 213% (paragraph 6.61 and table 47). On the basis that, to ensure housing development was commercially viable, affordable housing could be no more than, say, 20% of the total housing, to meet the full affordable housing need would requiring increasing the annual total housing requirement to 800 dpa (paragraph 6.63 and table 48) which was clearly unrealistic and unviable (paragraph 6.80).
ii) The private sector would in fact make up for shortages of affordable housing, by providing accommodation in the private market through the provision of housing benefit for those who would otherwise require affordable housing. The estimated number of such lettings was in excess of the total need derived through housing needs analysis; and there was no obvious shortfall in the supply of private rental sector dwellings and its ability to meet the needs of households that would otherwise require affordable housing: (paragraphs 6.68-6.69).
i) Of the 80-100 dpa range in the SHMA, the lower figure was based on demographic projections, and the 25% uplift that was added to give the higher end of the range which was, amongst the Leicestershire HMA authorities, one of the higher uplifts was "based on seeking to enhance affordable housing delivery and growth in the workforce" (paragraph 3.41).
ii) The 80-100 dpa range was "clearly" a policy off assessment (paragraph 3.43).
iii) The SHMA was based on 2011 data, and paragraph 2a-16 of the PPG encouraged the use of the most up-to-date projections. However, a detailed analysis of the 2012-based Sub-National Population Projections ("SNPP") using the same methodology as the SHMA, namely the mid-point between the 2011-based and the tracked 2008-based DCLG households projections' household formation rates, whilst suggesting a different housing trajectory over time, confirmed a FOAN of 80 dpa over the whole relevant period (paragraphs 4.16-4.18, and the separate annexed September 2014 FOAN analysis report on the basis of the 2012-based SNPP).
iv) It was therefore appropriate to continue to use the housing requirement figure of 90 dpa, as originally set in Policy CS1 and confirmed in the SHMA. The increase from the demographic projection of 80 dpa to 90 dpa might reduce the need for housing elsewhere (e.g. in Leicester City) and allow for higher household formation rate and for a greater proportion of younger households to enter the housing market (paragraphs 6.16-6.19).
v) The employment-driven need for housing would be met by commuters from (in particular) Leicester City, where unemployment is relatively high. The high "notional" level of affordable housing need would be reduced in practice by (a) affordable housing in adjacent authority areas, and (b) the contribution of the private rented sector, which provided housing subsidised by housing benefit payments, such accommodation being affordable in fact although not "affordable housing" by definition (see paragraph 9 above).
Mr Gardner therefore concluded that, on the basis of the SHMA and the 2012-based SNPP, the Policy CS1 figure for housing requirement of 90 dpa remained good.
i) Mr Longley noted that the Leicestershire SHMA figures had not been formally tested through the examination process (paragraph 5.2).
ii) On the basis of the 2012-based SNPP and using projections generated using the Chelmer Population and Housing Model, he calculated assessment of housing need on four different scenarios. Scenario 1 was based on short-term (5 and 6 year) migration trends: it indicated a need or 72 dpa or 91 dpa including backlog. Scenario 2 was based on 10 year migration trends: it indicated a need of 147 dpa. Those figures did not include any increase in need driven by employment trends. Scenarios 3 and 4 assessed how many houses would be required to match the working age population with jobs. Scenario 3 indicated a need for 161 dpa. During the course of the hearing before the Inspector, as I understand it, Mr Longley conceded that his approach to the migration figures in Scenarios 2 and 3 was flawed, and consequently the basis for his figures of 147 dpa and 161 dpa was undermined.
iii) The figures adopted in the SHMA, in Mr Longley's view, did not include the full and unconstrained figure for affordable housing need. However, he did not adjust his assessment of need to take account of the need for affordable housing. Mr Rose dealt with that issue. He relied on the SHMA evidence for affordable housing need (i.e. a net 160 dpa), but did not specify an uplift to the housing provision for affordable housing. As I understand it, before the Inspector, Mr Rose would not commit to a specific uplift figure.
i) It failed to take into account the employment-related housing requirement. The SHMA itself identified that requirement as 173 dpa (see paragraph 26 above). The Council's justification for not adopting a FOAN figure incorporating housing needs based on employment projections i.e. that those needs could be met by increased commuting, coupled with increased housing in (say) Leicester City for those commuters was a policy on decision by the Council not to meet an element of identified need for housing in the borough. There was no evidence that that need would in fact be satisfied in any adjacent authority. The Memorandum of Understanding did not do so: it simply said that each authority in the Leicestershire HMA could satisfy its full housing requirement within its area (see paragraph 28 above). On the basis of the SHMA, Mr Taylor submitted, assessment of housing needs to meet employment requirements demonstrated "that a figure substantially in excess of 150 dpa is appropriate to adopt as the housing requirement in this section 78 appeal process" (paragraphs 71-95 of Mr Taylor's written closing submissions, the quotation coming from paragraph 95).
ii) Similarly with affordable housing. The SHMA identified the net affordable housing requirement as 160 dpa (see paragraph 26 above). The Council's determination of a FOAN of 80-100 dpa, because the affordable housing needs could in effect be met by the private sector and/or by adjacent areas, was again a policy on decision. Again, Mr Taylor submitted, on the basis of the SHMA assessment of housing needs to meet affordable housing requirements, "the only reasonable conclusion is that a figure substantially in excess of 150 dpa is the appropriate figure to adopt as the housing requirement" (paragraphs 96-123 of Mr Taylor's written closing submissions, the quotation coming from paragraph 120).
i) For an authority to decide not to accommodate additional workers drawn to its area by increased employment opportunities is clearly a policy on decision which affects adjacent authorities who would be expected to house those additional commuting workers, unless there was evidence (accepted by the inspector or other planning decision-maker) that in fact the increase in employment in the borough would not increase the overall accommodation needs. In the absence of such evidence, or a development plan or any form of agreement between the authorities to the effect that adjacent authorities agree to increase their housing accommodation accordingly, the decision-maker is entitled to allow for provision to house those additional workers. To decide not to do so on the basis that they will be accommodated in adjacent authorities is a policy on decision.
ii) Similarly, the justification provided for keeping the true affordable housing requirements out of the account is inadequate. First, insofar as the Council relied upon adjacent authorities to provide affordable accommodation, that is a policy on decision for the same reasons as set out above. Second, as the SHMA itself properly confirms, the benefit-subsidised private rented sector is not affordable housing, which has a particular definition (paragraph 6.79: and see paragraph 9 above). Indeed, insofar as unmet need could be taken up by the private sector, that is described in the SHMA itself as "a matter for policy intervention and is outside the scope of this report" (paragraph 6.64). It remains policy intervention even if the private sector market would accommodate those who would otherwise require affordable housing, without any positive policy decision by the Council that they should do so: it becomes policy on as soon as the Council takes a course of not providing sufficient affordable housing to satisfy the FOAN for that type of housing and allowing the private sector market to take up the shortfall.
" [The local planning authority] has to have a clear understanding of their area housing needs, but in assessing these needs, is required to prepare an SHMA which may cross boundaries."
However, Stewart J's comments were made in the context of a challenge to a local plan under section 113 of the 2004 Act. Housing requirements in such a plan are, of course, policy on. The judge in that case was not looking at housing requirements in a development control context as I am. In that context, paragraph 49 of the NPPF refers to relevant policies for the supply of housing not being considered up-to-date "if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites" (emphasis added). In a development control context, a local planning authority could not realistically demonstrate such a thing on a HMA-wide basis, which would require consideration of both housing needs and supply stocks across the whole HMA. Paragraph 49 is focused on the authority demonstrating a five-year housing land supply on the basis of its own needs and housing land stocks
"33. Although I do not regard any of the scenarios put forward at the inquiry as being definitive of the housing need for Oadby & Wigston, as discussed above, the figure is likely to be in excess of the 90 dwellings per annum set out in Policy CS1. Whether the FOAN is as high as the 161 per annum postulated in one of the scenarios has to be open to question but, if using the Chelmer Model and based on only the household (demographic) projection figure not allowing for economic growth adjustments the figure could be in the order of 147 per annum.
34. In any event, whatever the calculated figure might be, it is not consistent with the NPPF to regard that as a ceiling. The driving principle behind the NPPF policy is, as noted above, to significantly boost the supply of housing and, unless a particular scheme would not be compliant with other aspects of NPPF, it would not be necessary or even desirable to resist any theoretical 'oversupply' in the number of houses to be permitted, Having said that, for the purposes of this appeal I will adopt 147 houses per annum as the indicative figure for calculating whether the Council is able to demonstrate a 5-year supply of housing land.
34. The 147 dwellings per year does not make any specific allowance for the number of affordable homes needed either as part of, or even in addition to, this figure. However, taking note of the need to address the 'acute levels of need' for affordable housing in Oadby & Wigston , the 147/year should give the opportunity to make inroads into that requirement. The appeal scheme would include 45 affordable dwellings."
i) The housing requirement figure for the purpose of assessing the five-year housing land supply involves an exercise of planning judgment, with which the court will not interfere unless the decision-maker errs in law by (e.g.) adopting an unlawful approach or coming to an irrational conclusion (Bloor Homes Limited v Secretary of State for Communities and Local Government  EWHC 754 (Admin) at -, and South Northamptonshire Council v Secretary of State for Communities and Local Government  EWHC 754 (Admin) at .
ii) The Inspector was patently not attempting to fix the housing requirements for the borough he did not have to assess the precise figure for either the requirement or available supply (see South Northamptonshire Council v Secretary of State for Communities and Local Government  EWHC 573 (Admin) at  per Ouseley J, and Cheshire East Council v Secretary of State for Communities and Local Government  EWHC 573 (Admin) at  per Lewis J). He was concerned with the question as to whether the Council has demonstrated a five-year supply.
iii) At the beginning of paragraph 33 of his decision letter, the Inspector made clear that he was not persuaded by the analysis of any of the scenarios which Mr Longley had deployed, including Scenario 2.
iv) Scenario 2 concluded with a precise figure for the housing requirement, namely 147 dpa. However, from the beginning of paragraph 34, it is again clear that the Inspector was not adopting any calculated figure, including that calculated on the basis of the analysis in Scenario 2. In addressing the question of five-year land supply, the Inspector repeatedly emphasised that there was degree of uncertainty as to the actual FOAN, including the provision for affordable housing (see, e.g., paragraph 27 of his decision letter); and that the figure he chose was not a precise figure for the FOAN, but that he adopted that figure "as the indicative figure for calculating whether the Council is able to demonstrate a 5-year supply of housing land" (paragraph 34), a figure that "should not be taken as precise" but which represented a "reasonable indication of the need situation in Oadby & Wigston " (paragraph 55).
v) The Inspector was entitled to take a conservative figure for housing requirement if, even on that figure, the Council fell well-short of demonstrating a five year housing land supply, as in this case. The Inspector said that he "sympathised" with the Developer's view that the FOAN could be considerably more than the 90 dpa in Policy CS1 or the 100 dpa in the SHMA (paragraph 27 of his decision letter). Given the (lawful) conclusion of the Inspector that the 80-100 dpa range was policy on, and failed properly to reflect the affordable housing needs and the needs generated by economic factors (which the SHMA out at 160 net dpa and 173 dpa respectively), 147 dpa appears to be a modest figure. Looking at the decision letter as a whole, it is clear that, on all the evidence before him, the Inspector considered that, although the figure if tested might prove to be higher, 147 dpa was a conservative but appropriate figure for FOAN. In respect of demonstrating a five-year housing land supply, the burden was of course on the Council: the Inspector was clearly unpersuaded on the evidence that the FOAN (and, thus the relevant housing requirement) was less than 147 dpa. It could not be suggested nor does Mr Leader suggest that that was an irrational conclusion on all of the evidence.
Grounds of Challenge