QUEEN'S BENCH DIVISION
PLANNING COURT IN LEEDS
1 Oxford Road, Leeds LS1 3BG
B e f o r e :
| The Queen on the Application of
SKIPTON PROPERTIES LIMITED
|CRAVEN DISTRICT COUNCIL
Michael Bedford QC (instructed by Solicitor to the Council) for the Defendant
Hearing dates: 7th and 8th March 2017
Crown Copyright ©
See Order at bottom of judgment.
MR JUSTICE JAY:
Essential Factual Background
"The changes made to the NAHC 2016, as compared to previous Council policy documents in respect of affordable housing, are also of direct interest to [the Claimant]. The introduction of vacant building credit and the requirement that off-site affordable housing contributions be provided in schemes of 6-10 dwellings in rural areas are both of relevance to [the Claimant's] commercial position in the area. Firstly, we are acutely aware of the fact that these two important policy changes will have an impact on the decisions made by all local housing developers in respect of the number, nature and location of sites to bring forward, which could have a profound effect on the housing market in Craven District Council. Secondly, the off-site contributions for 6-10 dwellings may well cause [the Claimant] to consider bringing forward smaller sites in the future."
"The Interim approach is to require affordable housing at 40% provision on sites of 5 or more dwellings, subject to site specific financial viability. Strategic Housing will provide guidance to applicants on how this will be delivered, including type, size and tenure issues.
Applicants would be advised that the failure to make provision for affordable housing may be a reason that is used to refuse planning permission."
"This document sets out the council's interim approach to negotiating affordable housing contributions, in connection with planning applications for residential development. The approach (which is not a development plan policy) was adopted for development control purposes by the Council's Policy Committee on 29th May 2012. Guidance explaining the approach has been updated, improved and expanded over time. This latest version will be used as a stop-gap measure, by planning and housing officers, until an affordable housing policy has been prepared as part of the new local plan.
In view of the above, the Council will commence negotiations with developers on the basis that, in developments of 5 dwellings or more, 40% of the units to be built on-site shall be affordable housing. On occasion, it may be appropriate to negotiate the payment of a cash-sum contribution, by the developer, in lieu of on-site affordable housing provision. All contributions will be subject to site-specific financial viability "
"The council will publish additional practical guidance on the provision of affordable housing in the form of a supplementary planning document (SPD). This will include guidance on the limited circumstances in which off-site provision or financial contributions will be considered in lieu of on-site provision."
"3.2 The main effects of national affordable housing policy and guidance are as follows:
- A new national site-size threshold has been introduced. Local Planning Authorities should no longer seek affordable housing contributions from developments of 10 dwellings with a maximum combined floor space of 1,000 sqm or less.
- In designated rural areas authorities may choose to implement a lower threshold of 5 dwellings or less, but only cash contributions (as opposed to on-site provision) should be sought from developments of 6-10 dwellings.
- Vacant building credit has been introduced. Authorities should apply the credit where developments include the re-use or re-development of empty buildings, so that affordable housing contributions relate only to net increases in floor space.
3.6 Paragraph 3.2 above, explains that changes to national policy and guidance are intended to lift the burden on small developers. It should be noted, therefore, that replacing the 5 dwelling threshold, adopted in 2012, with a 6 dwelling threshold will represent an improvement for landowners for landowners and developers in designated rural areas It is therefore considered that the recommendations of paragraphs 2.1 to 2.3 above, are likely to support the appropriate development of new homes, by small developers, in rural areas."
I should add that the Defendant has not yet amended its draft local plan (see paragraph 9 above) to reflect the Court of Appeal's decision. The position adopted in the draft NAHC 2016 (and, indeed, the final version) may not necessarily be reflected in the next draft of the local plan.
"The revised approach and guidance, contained in the appendix to this report, is based on the December 2015 version, but incorporates new site-size thresholds (page 2), cash-sum contributions (page 7) and vacant building credit (page 8). A contributions flow chart has also been added to help explain how affordable housing contributions are now determined (page 14). The following table appears on page 2 of the appendix and sets out a general approach to affordable housing negotiations.
Affordable housing contribution
More than 10 dwellings
40% of the units to be built on-site should be affordable housing
More than 1,000 sqm
6-10 dwellings in designated rural area
A cash contribution should be paid, once a reasonable proportion of the units is occupied, in lieu of on-site affordable housing provision
Less than 6 dwellings, but more than 1,000 sqm, in designated rural area
All contributions will be subject to vacant building credit and site-specific financial viability
"Under the council's current approach, which was adopted on 29th May 2012, on-site provision has been sought from all developments of 5 dwellings or more, with cash contributions only accepted in exceptional circumstances. This approach has worked well and the council has secured on-site provision from six developments of 6-10 dwellings in designated rural areas, delivering approximately four affordable homes per year on average. Though relatively small in number, these homes will have a significant impact on sparsely populated rural areas, helping local people stay living and working in the communities in which they have been brought up. Whilst changes in national policy and PPG mean that the council can no longer require affordable homes to be built on sites of 6-10 dwellings, cash contributions can be required in designated rural areas, which could avoid a disproportionate effect on rural communities "
"(1) That, the lower threshold for affordable housing contributions in designated rural areas and, in those areas, seek cash contributions from developments of 6-10 dwellings is implemented.
(2) That, there is a requirement that affordable housing contributions are paid in respect of developments of less than 6 dwellings with a combined floor space of more than 1,000 sqm.
(3) That, the approach and guidance set out in the document entitled 'NAHC (draft July 2016)' is approved."
The Legal Framework
"Regulations under this section may prescribe
(za) which descriptions of documents are, or if prepared are, to be prepared as LDDs;
(a) which descriptions of LDDs are DPDs;
(b) the form and content of the LDDs;
(c) the time at which any step in the preparation of any such document must be taken."
Even so, I do not overlook section 37(3) which defines a DPD as a "[LDD] which is specified as a [DPD] in the local development scheme". An issue arises as to whether a document which may fall within the prescribed description of an LDD (but is not prescribed as a DPD within regulations made under section 17(7)(a)) may still be treated by a local planning authority as a DPD.
"Local Development Documents
(1) For the purposes of section 17(7)(a) of the Act the documents which are to be prepared as [LDDs] are
(a) any document prepared by a local planning authority individually or in co-operation with one or more local planning authorities which contains statements regarding one or more of the following -
(i) the development and use of land which the local planning authority wish to encourage during any specified period;
(ii) the allocation of sites for a particular development or use;
(iii) any environmental, social design and economic objectives which are relevant to the attainment of the development and use of land mentioned in paragraph (i); and
(iv) development management and site allocation policies, which are intended to guide the determination of applications for planning permission.
(2) For the purposes of section 17(7)(za) of the Act the documents which, if prepared, are to be prepared as local development documents are
(a) any document which -
(iii) contains the local planning authority's policies in relation to the area; "
(1) DPDs: these are LDDs which fall within regulation 5(1)(a)(i), (ii) or (iv). They must be prepared and adopted as a DPD (as per the requirements of Part 6 of the 2012 Regulations). They must be subject to public consultation (regulation 18) and independent examination by the Secretary of State (section 20 of the PCPA 2004). As I have said (see paragraph 16 above), an issue potentially arises as to whether a document which does not fall within these regulatory provisions may nonetheless be a DPD because a local planning authority chooses to adopt it as such.
(2) SPDs: these are LDDs which are not DPDs and which fall within either regulation 5(1)(a)(iii) or (1)(b). They must be prepared and adopted as SPDs (as per the requirements of Part 5 of the 2012 Regulations). SPDs do not require independent examination but they do require public consultation (regulations 12 and 13).
(3) Residual LDDs: these are LDDs which are neither DPDs or SPDs. They must satisfy the criteria of section 17(3) and (8) of the PCPA 2004, and must be adopted as LDDs (as per (2) above). There are no public consultation and independent examination requirements: see paragraphs 44-46 of the decision of this Court on R (Miller Homes) v Leeds City Council  EWHC 82 (Admin). At paragraph 17 above, I said that LDDs are material considerations in planning applications although they do not have the status of DPDs. I consider that the same logic should hold that LDDs which are SPDs carry greater weight in such applications than do residual LDDs.
"17. Within the overarching roles that the planning system ought to play, a set of core land-use planning principles should underpin both plan-making and decision-taking. These 12 principles are that planning should:
? be genuinely plan-led, empowering local people to shape their surroundings, with succinct local and neighbourhood plans setting out a positive vision for the future of the area
? proactively drive and support sustainable economic development to deliver the homes, business and industrial units, infrastructure and thriving local places that the country needs. Every effort should be made objectively to identify and then meet the housing, business and other development needs of an area, and respond positively to wider opportunities for growth. Plans should take account of market signals, such as land prices and housing affordability, and set out a clear strategy for allocating sufficient land which is suitable for development in their area, taking account of the needs of the residential and business communities;
50. To deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities, local planning policies should:
- plan for a mix of housing based on current and future demographic trends
- identify the size, type, tenure and range of housing that is required in particular locations, reflecting local demand; and
- where they have identified that affordable housing is needed, set policies for meeting this need on site, unless off-site provision or a financial contribution of broadly equivalent value can be robustly justified
156. Local planning authorities should set out the strategic priorities for the area in the Local Plan. These should include strategic policies to deliver:
* the homes and jobs in the area.
174. Local planning authorities should set out the policy on local standards in the Local Plan, including requirements for affordable housing
[I note the definitions of "affordable housing", "development plan", "local plan" and "supplementary planning documents", but in my view these do not merit direct citation]"
Strategic Environmental Assessment
"plans and programmes which
(a) are subject to preparation or adoption by an authority at a local level,
(b) are prepared by an authority for adoption, through a legislative procedure by Parliament or Government; and in either case
(c) are required by legislative, regulatory or administrative provisions "
"(1) Subject to paragraphs (5) and (6) and regulation 7, where
(a) the first formal preparatory act of a plan or programme is on or after 21st July 2004; and
(b) the plan or programme is of the description set out in either paragraph (2) or paragraph (3)
the responsible authority shall carry out, or secure the carrying out of, an environmental assessment, in accordance with Part 3 of these Regulations, during the preparation of that plan or programme and before its adoption or submission to the legislative procedure.
(2) The description is a plan or programme which -
(a) is prepared for agriculture, forestry, fisheries, energy, industry, transport, waste management, water management, telecommunications, tourism, town and country planning or land use, and
(b) sets the framework for future development consent of projects listed in Annex I or II of Council Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directive 97/11/EC.
(4) Subject to paragraph (5) and regulation 7 -
(a) the first formal preparatory act of a plan or programme, other than a plan or programme of the description set out in paragraph (2) or (3), is on or after 21st July 2004;
(b) the plan or programme sets the framework for future development consent of projects; and
(c) the plan or programme is subject to a determination under regulation 9(1) that it is likely to have significant environmental effects,
the responsible authority shall carry out, or secure the carrying out, of an environmental assessment, in accordance with Part 3 of these Regulations, during the preparation of that plan or programme and before its adoption or submission to the legislative procedure.
(6) An environmental assessment need not be carried out
(a) for a plan or programme of the description set out in paragraph (2) or (3) which determines the use of a small area at local level; or
unless it has been determined under regulation 9(1) that the plan, programme or modification, as the case may be, is likely to have significant environmental effects, "
"(1) The responsible authority shall determine whether or not a plan, programme referred to in
(a) paragraph (4)(a) and (b) of regulation 5;
(b) paragraph (6)(a) of that regulation;
(c) paragraph (6)(b) of that regulation,
is likely to have environmental effects.
(2) Before making a determination under paragraph (1) the responsible authority shall -
(a) take into account the criteria specified in Schedule 1 to these regulations; and
(b) consult the consultation bodies.
(3) Where the responsible authority determines that the plan, programme is unlikely to have significant environmental effects (and, accordingly, does not require an environmental assessment), it shall prepare a statement of its reasons for the determination."
The NAHC 2016
"This current version incorporates a ministerial statement issued in 2014 and related to changes to planning practice guidance. It will be used as a stop-gap measure, by planning and housing officers, whilst an affordable housing policy is being prepared as part of the new local plan."
(i) Paragraph 3: this sets out the general approach, and reflects the table I have included at paragraph 11 above.
(ii) Paragraph 4: this defines "affordable housing" with reference to the definition in the glossary section of the NPPF.
(iii) Paragraph 6: as regards the "size and tenure of affordable housing units", the general approach to securing the local housing needs as set out in the 2015 SHMA is to prioritise small affordable homes for "forming and growing households". There should also be an affordable housing mix of about 75% affordable rented and 25% intermediate housing for sale.
(iv) Paragraph 7: affordable housing units should, as a general rule, be spread through developments rather than concentrated in particular areas.
(v) Paragraph 8: the design requirements should be as laid down by the HCA and in the Defendant's own document, "Design Guidance for Affordable Housing Providers". Paragraph 8 also specifies minimum space standards.
(vi) Paragraphs 10-12 deal with the detail of housing transfer prices, cash-sum contributions and vacant building credit.
Anyone proposing a development of 6 or more dwellings, or more than 1,000 sqm, should discuss affordable housing requirements with the council's housing development team at a pre-application meeting.
If an applicant believes that affordable housing requirements are not financially viable, he/she should submit a financial viability appraisal before submitting a planning application
Applicants are urged to take the opportunities offered to engage in pre-application discussions, as insufficient attention to affordable housing requirements is likely to result in a refusal of planning permission."
(1) Did the Defendant act unlawfully in failing to adopt the NAHC 2016 as a DPD in accordance with regulation 5(1)(a)(i) or (iv) of the 2012 Regulations? (Ground 1)
(2) Did the Defendant act unlawfully in failing to adopt the NAHC 2016 as an SPD in accordance with Regulation 5(1)(a)(iii) of the Town and Country Planning (Local Planning) (England) Regulations 2012? (Ground 2)
(3) If the answer to (1) or (2) is yes, did the Defendant breach the SEA Directive and Regulations in failing to carry out an environmental assessment? (Ground 3)
(4) What is the proper scope of this claim?
(5) Does s. 31(2A) of the Senior Courts Act 1981 apply to this Claim?
The Rival Contentions
The Claimant's Case
"The logical implication of this viewed in the round, it is clear that the NAHC does contain statements that seek to encourage residential development in a form that accords with the requirements of the NAHC 2016 until such time as a new local plan is adopted."
When, during oral argument, I pointed out that this formulation rather tended to circularity, Mr Jones recast his headline submission slightly. His principal submission was that the NAHC 2016, properly construed and seen in context, encourages residential development of a particular type: namely, affordable housing. In the alternative, Mr Jones submitted that the NAHC 2016 encourages residential development more generally, because the fixing of the percentage allocation of affordable housing to market housing has a direct impact on the latter, and on the commercial attractiveness of residential development generally.
The Defendant's Case
(1) on the assumptions that (a) the "and" in this sub-paragraph should be read disjunctively, and (b) paragraphs 75-76 of the judgment of Mr Howell QC in RWE are correct, it cannot be said that the NAHC 2016 is a policy guiding applications for planning permission generally. It is concerned only with the issue of affordable housing provision, which amounts to a specific policy not dissimilar from the sort of policy under scrutiny in RWE itself.
(2) In the alternative, the "and" in this paragraph should be read conjunctively, which is its more natural and ordinary meaning. This chimes with the more sensible, purposive construction of the provision inasmuch as a disjunctive interpretation lends no separate life to the second limb of regulation 5(1)(a)(iv): this is because all site allocation policies will already be DPDs on account of the wording of paragraph 5(1)(a)(ii), there being no material difference in the regulatory language. Recognising that this alternative analysis is inconsistent with paragraphs 193-197 of RWE (on the basis that development management policies simpliciter would be outside the regulatory scheme, because they could not be DPDs), Mr Bedford did not shrink from submitting that Mr Howell QC was wrong, and should not be followed. This is the issue I mentioned at paragraph 16 above. Regulation 5(1)(a) does not establish an exhaustive code. Not merely are there residual LDDs, local planning authorities may decide that particular documents should form part of the local plan, and be processed as such. Section 37(3) is wide enough to enable this to happen.
Analysis and Conclusions
" But in my judgment regulation 5(1) is not concerned with documents containing statements that merely repeat the policies already contained in the adopted local plan or in another [LDD] by way of background or for the sake of clarity."
I entirely agree. However, in the instant case the NAHC 2016 did not merely repeat earlier statements of policy by way of background or for the sake of clarity. In RWE, the earlier statements retained their legal vigour; in the instant case, they no longer exist. Mr Bedford's riposte that this is to elevate form over substance would have appeal were it not for the fact that his clients decided to take this particular course.
(1) A putative LDD which does not fall within the descriptions of documents referred to in regulation 5 may still be an LDD, because of the combined effect of section 17(3) and (8) of the 2004 Act. These are the "residual LDDs" discussed at paragraph 22 above (paragraphs 59-60).
(2) By contrast, the class of possible DPDs is limited to those prescribed in regulation 5 (paragraphs 193-197).
(3) "what all [LDDs] contain are "policies" relating to the use and development of land. What regulation 5(1)(a) is thus concerned with are statements that contain policies, which are described in sub-paragraphs (i) to (iv)" (paragraph 67).
(4) In order to ascertain whether a document encourages the development and use of land, regard must be had to the type of statements a document contains, not on what the effect of such statements may be in practice (paragraph 70).
(5) The Wind SPD was not a DPD within regulation 5(1)(a)(i) because, on the facts of that case, any statements of encouragement merely repeated the statements in Milton Keynes' adopted DPD (paragraph 69).
(6) The Wind SPD was not a DPD within regulation 5(1)(a)(iv) because the new parts of the Emerging Policy were all connected with a particular form of development that Milton Keynes' adopted DPD already sought to encourage, namely proposals to develop wind turbines; they were not connected with regulating the development or use of land generally (paragraph 76). Specifically (at paragraph 75):
"In my judgment the difference, between (a) documents containing statements regarding matters referred to in sub-paragraphs (i) to (iii) of regulation 5(1)(a) of the 2012 Regulations and (b) a document containing statements regarding a development management policy which is intended to guide the determination of applications for planning permission, is that the former are all connected with particular developments or uses of land which a local planning authority is promoting whereas the latter is concerned with regulating the development or use of land generally."
Mr Howell QC's reason for this conclusion was that any different construction of regulation 5(1)(a)(iv) would render (i), (ii) and (iii) effectively otiose (paragraph 74).
(7) Mr Howell QC endorsed what was common ground before him, namely that the "and" in regulation 5(1)(a)(iv) should be read disjunctively "were it otherwise a document containing a simple development control policy could not form part of the local plan for the purpose of the 2012 Regulations and become part of the development plan" (paragraph 72).
(1) "regarding" (in the stem of regulation 5(1)(a)) signifies a relatively loose relationship between the "document" and the matters contained in (i)-(iv) (paragraph 23).
(2) The Interim Policy did not encourage the development and use of land. Specifically (at paragraph 26):
" The court must look at the substance as to whether the LPA wishes to encourage the development and use of land; the court must also have regard to the subjective element in the verb 'wish'. There will be situations where an LPA wishes to encourage the development and use of land, for example to regenerate an area. The Interim Policy is very different. It sets out criteria which are an attempt by the LPA to comply with the NPPF. These criteria encourage and discourage development, albeit that the overall net effect is to release further land. Nor does the fact that there is reference in subparagraph (v)(a) of the Interim Policy to regeneration change the character of the document as a whole."
(3) The Interim Policy did not fall within regulation 5(1)(a)(iv) because Policy N34 was not a development management policy: it was a safeguarding policy, rather than a policy which regulated the development or use of land. Thus, statements in the Interim Policy were not regulating a development management policy (paragraphs 36-37).
(4) It was unnecessary to decide whether the "and" in regulation 5(1)(a)(iv) was conjunctive or disjunctive. Even if disjunctive, Miller's case could not succeed (paragraph 38).
(5) It was common ground that Policy N34 was not restricted to a particular land use (paragraph 36). By implication, therefore, Stewart J was proceeding on the basis of Mr Howell QC's distinction between particular and general policies.
(6) "The material word [in regulation 5(1)(a)(iv)] is "regulating". Regulating land may include a number of features for example density of housing, housing mix etc." (paragraph 37). I agree with Mr Bedford that this was obiter.
(1) despite the textual difficulties which arise (see paragraph 78 above), and notwithstanding the analysis in Miller (which addressed the claimant's formulation of its case), I cannot accept that it is necessary to identify a development management policy which is separate from the statements at issue. As I have already pointed out, the whole purpose of regulation 5 is to define LDDs qua policies, by reference to statements which amount to or include policies. A sensible, purposive construction of regulation 5(1)(a)(iv) leads to the clear conclusion that the NAHC 2016 could fall within (iv) if it contains development management policies (subject to the below).
(2) I would construe the "and" in regulation 5(1)(a)(iv) disjunctively. This is in line with regulation 5(1)(a)(iii) (see the first "and", before "economic") and the overall purpose of the provision. As Mr Howell QC has rightly observed, a conjunctive construction would lead to absurdity. It would have been better had the draftsperson broken down (iv) into two paragraphs ("development management policies which "; "site allocation policies which ") but the upshot is the same.
(3) I agree with Mr Howell QC, for the reasons he has given, that it is possible to have LDDs which are outside regulation 5 but that it is impossible to have DPDs which are outside the regulation. This is another reason for supporting a disjunctive construction.
(4) I disagree with Mr Howell QC that regulation 5(1)(a)(i) and (iii) applies to particular developments or uses of land, whereas (iv) is general (see paragraph 79 above).
(5) The real question which therefore arises is whether the NAHC 2016 contains development management policies which guide or regulate applications for planning permission. It may be seen that the issue here is not the same as it was in relation to regulation 5(1)(a)(i) because there is no need to find any encouragement; this provision is neutral.
(6) I would hold that the NAHC 2016 clearly contains statements, in the form of development management policies, which regulate applications for planning permission. I therefore agree with Stewart J's obiter observations at paragraph 37 of Miller.
UPON HEARING Counsel for the Claimant and Counsel for the Defendant
IT IS HEREBY ORDERED THAT:
1. The claim is allowed.
2. The Defendant's interim policy document entitled "Negotiating Affordable Housing Contributions 2016" is quashed.
3. The Defendant do pay the Claimant's costs to be assessed if not agreed and limited to £35,000.
4. The Defendant do pay the Claimant's reasonably incurred costs in preparation of its evidence in response to the witness statement and exhibits of Ms Sian Watson, to be assessed if not agreed.