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(FIRST) GRAHAM'S THE FAMILY DAIRY AND OTHERS IN THE PETITION OF ELAN HOMES SCOTLAND LTD FOR JUDICIAL REVIEW [2021] ScotCS CSOH_74 (21 July 2021)
URL: http://www.bailii.org/scot/cases/ScotCS/2021/2021_CSOH_74.html
Cite as:
[2021] ScotCS CSOH_74,
[2021] CSOH 74,
2021 GWD 24-336,
2021 SCLR 569
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OUTER HOUSE, COURT OF SESSION
[2021] CSOH 74
P111/21
P118/21
OPINION OF LORD CLARK
In the cause
(FIRST) GRAHAM'S THE FAMILY DAIRY (PROPERTY) LIMITED AND
(SECOND) MACTAGGART AND MICKEL HOMES LIMITED
and in the petition of
ELAN HOMES SCOTLAND LIMITED.
Petitioners
for
Judicial Review of decisions of the Scottish Ministers
Petitioners: J d C Findlay QC, Colquhoun: Shepherd and Wedderburn LLP and Campbell Smith
Respondents: Crawford QC, P Reid; Scottish Government Legal Directorate
21 July 2021
Introduction
[1]
The petitioners seek judicial review of decisions of the Scottish Ministers to make
changes to planning policy, following a consultation process. The decisions challenged are:
firstly, to amend Scottish Planning Policy ("SPP (2014)") in accordance with the document
Scottish Planning Policy- Finalised Amendments-December 2020 ("the Finalised
Amendments"); secondly, to publish SPP- Finalised Amendments Impact Assessments
2
("FAIA"), and thirdly to publish Planning Advice Note 1/2020 ("PAN 1/2020"). These
documents were published on 18 December 2020. The petitioners in the first petition are
Graham's The Family Dairy (Property) Limited and Mactaggart and Mickel Homes Limited.
The second petition is raised by Elan Homes Scotland Limited. The parties moved the court
to have the petitions heard together as they raise the same issues and the same arguments
would be made in each case. Accordingly, this opinion deals with both petitions.
Background
Planning law and policy
[2]
A central feature of the challenges made by the petitioners concerns the changes to
paragraph s 32, 33 and 125 of SPP (2014). In their original form, they state:
"Development Management
32. The presumption in favour of sustainable development does not change the
statutory status of the development plan as the starting point for decision -making.
Proposals that accord with up-to-date plans should be considered acceptable in
principle and consideration should focus on the detailed matters arising. For
proposals that do not accord with up-to-date development plans, the primacy of the
plan is maintained and this SPP and the presumption in favour of development that
contributes to sustainable development will be material considerations.
33. Where relevant policies in a development plan are out-of-date or the plan does
not contain policies relevant to the proposal, then the presumption in favour of
development that contributes to sustainable development will be a significant
material consideration. Decision-makers should also take into account any adverse
impacts which would significantly and demonstrably outweigh the benefits when
assessed against the wider policies in this SPP. The same principle should be applied
where a development plan is more than five years old.
...
Maintaining a 5-year Effective Land Supply
125. Planning authorities, developers, service providers and other partners in
housing provision should work together to ensure a continuing supply of effective
land and to deliver housing, taking a flexible and realistic approach. Where a
shortfall in the 5-year effective housing land supply emerges, development plan
policies for the supply of housing land will not be considered up-to date, and
paragraph s 32-35 will be relevant."
3
[3]
Two recent decision of the Inner House are of particular importance and assistance in
relation to the meaning of these paragraph s in SPP (2014), as well as providing the relevant
context in planning law and policy. The following acronyms are occasionally used in those
decisions and in this opinion:
HLA
Housing Land Audit
HLR
Housing Land Requirement
HLS
Housing Land Supply
HST
Housing Supply Target
HNDA
Housing Need and Demand Assessment
LDP
Local Development Plan
NPPF
National Planning Policy Framework (England)
SDP
Strategic Development Plan
[4]
In the first decision, Gladman Developments Ltd v The Scottish Ministers [2020] CSIH 28
("Gladman 2"), issued on 3 June 2020, delivering the opinion of court the Lord President
(Carloway) noted that there was, in respect of paragraph 33 of SPP (2104) a similar
provision (paragraph 14) in the NPPF that applies in England. The conclusions reached by
the Inner House in Gladman 2 on the meaning of SPP (2014) are of particular significance for
the purposes of the present petitions and the key points are as follows:
"[45] Once a housing land shortage is established, SPP paragraph 125 dictates that
paragraph s 32 to 35 become relevant. Paragraph 33 provides that the effect of this is
that the presumption in favour of development becomes a significant material
consideration. The paragraph requires that the development contributes to
sustainability. That is not a barrier to the application of the tilted balance. Graham's
The Family Dairy v Scottish Ministers (supra) determined that the tilted balance did
apply, in much the same way as under the similar but by no means identical English
provisions, for the reasons given in Hopkins Homes v Secretary of State for Communities
4
[46] A housing development which will remedy, to some extent, a housing shortage
is something which almost inevitably "contributes to sustainable development",
which is what paragraph 33 requires, in one degree or another. It will do so also in
terms of the economic benefits of construction and in other ways too. Whether it is,
in overall terms, a sustainable development is another question. That is one for
planning judgement, but it involves the use of the tilted balance. The correct
approach, in practical terms, where there is a housing shortage, is to regard that
shortage as `a significant material consideration'. It is not determinative.
Paragraph 33 goes on to provide that, in such a situation, where the tilted balance is
thus in play, the decision maker must take into account any adverse impacts. These
will include factors such as greenbelt, environmental and transport policies as set out
in the otherwise `out-of-date' SDP or LDP. Each factor will play a part in the
determination of whether, overall, the development is to be regarded as sustainable.
In short, the existence of one or more adverse findings in relation to the thirteen
guiding principles to sustainability in terms of SPP (para 29) does not prevent the
operation of the tilted balance, but it may result in the balance tilting back to a
refusal."
[5]
Applying that approach to the decision under challenge in that case, the Inner House
held that:
"[47]...The starting point ought, on the contrary, to have been that there was a
presumption in favour of this development because, inter alia, it provided a solution,
at least in part, to the housing shortage. Thereafter, the question was whether the
adverse impacts, notably the other policies in the development plan, `significantly
and demonstrably outweighed' the benefits of the development in terms of the
housing shortage and the economic gain."
[6]
In addition, on calculation of the level of housing shortage, the Inner House stated:
"[50] SPP (para 115) states that development plans should address the supply of land
for housing. They require to set out the HLS target for each area, based on the
HNDA. This is the number of houses which the planning authority has determined
will be delivered over the period of the development plan. It represents the demand
in the particular market sector. This number is (para 116) to be increased by a
margin of 10 to 20% in order to ensure a generous supply of land for housing. It is
this augmented figure which represents the housing land requirement. When the
SPP is referring to a shortage in the `effective housing land supply', it is to the figure
identified in the development plan as increased by the percentage margin selected;
ie the housing land requirement. It is to that figure that regard should be had by a
reporter in order to determine the level of shortage. The greater the shortage, the
heavier the weight which tilts the balance will be. If the appellants' figures for the
shortage are correct, that weight may well be very substantial."
5
[7]
The second of the two decisions, Mactaggart and Mickel Homes Ltd and Others v
Inverclyde Council and The Scottish Ministers [2020] CSIH 44, was issued on 22 July 2020 and
contains a succinct summary of aspects of the law and policy framework relevant for present
purposes. Again delivering the opinion of the court, the Lord President (Carloway) noted
that:
"Law and Policy Framework
[5] A local authority is required to adopt an LDP at least every five years (1997 Act,
s 16(1)(a)(ii)). The authority must ensure that the LDP is consistent with the SDP
(s 16(6)). The SDP establishes an HST and an HLR for each local authority housing
market area. Once an LDP is in place, there is a presumption that a planning
decision will be determined in accordance with it, unless material considerations
indicate otherwise (ibid s 25(1)). The decision-maker must have regard to the LDP
(ibid s 37(2)).. One of the functions of an LDP is to allocate sufficient sites for housing.
It needs to demonstrate how the HLR is to be met. That involves having a 5-year
supply of effective housing land (Scottish Planning Policy, para 110). Unless such a
supply exists, the presumption in favour of sustainable development becomes a
significant material consideration (ibid, paras 32, 33 and 125) in individual planning
applications."
Assessing the extent of the 5-year supply of effective housing land
[8]
The number of houses which in terms of the development plan are to be completed
over the next five years can be identified (by differing methods, discussed below). The
annual HLA to be conducted in terms of paragraph 123 of SPP (2014) will provide
information showing what land is available to seek to satisfy the 5-year supply of effective
HLS. A comparison will then show whether there is to be a shortfall or a surplus (see e.g.
Gladman Developments Ltd v Scottish Ministers [2019] CSIH 34 ("Gladman 1")). There are two
main candidates for the appropriate method of calculation of the number of houses needed
to comply with the development plan. The first is what is described as the "residual" (or
"compound") approach. The formula which can be applied is to take, over the period of the
development plan, the number of homes to be built, minus the completions to date, divide
6
that figure by the number of years for the plan left to run and then multiply the resulting
figure by 5. It would be possible to use either the HST or the HLR in working out the
number of homes to be built to comply with the plan. As the HLR is always to be 10%-20%
higher than the HST, use of the HLR increases the prospect of there being a shortfall. As
noted above, in Gladman 2, the Inner House considered that the HLR should be used. In
Mactaggart and Mickel, (at [60]) the Inner House concluded that, on the face of it, the
compound (residual) approach would seem to be the most sensible one.
[9]
The other main approach is the "average" method. This does not rely upon actual
completions to date. The average method is normally to use the HST, divided by the plan
period to give an annual figure and then multiply that by five. In effect, the average method
ignores past shortfalls of actual construction when measured against the intended annual
amount of housing in the given year. The residual method does take account of the
completions and if there are past shortfalls as against the intended annual amount then the
5-year effective HLS actually needed will be greater and is more likely not to be met by the
amount of land that is available. By way of example, the Housing Land Research Paper,
which is discussed further below, when looking at the position in S tirling, indicates that
using the average method the required forward 5-year effective HLS would be for 2,080
homes. For the residual method and using the HST it would be 2,944 and if the HLR is used
rather than the HST then it would be 3,471.
Internal memorandum
[10]
On 25 June 2020, the Planning and Architecture Division of the Scottish Government
issued a memorandum to the Minister for Local Government, Housing and Planning
concerning the decision in Gladman 2. The Memorandum was, as I understand it, disclosed to
7
the petitioners after the present complaints were raised. It stated, inter alia:-
"5
...The Court found against the Scottish Ministers on both grounds. As
previously discussed, we recommended not appealing the decision to the
Supreme Court, given the uncertainty of a positive outcome, the lengthy period
involved to achieve a decision, and because Scottish Ministers have the more
effective option of altering the disputed policy."
...
7. The Court's view is at odds with our view of the meaning and application of several
aspects of the SPP. We are concerned that the decision and its acceptance of a `tilted
balance' is based on the English system. We also disagree with the technical approach
of calculating the 5-year land supply, and have concerns that the application of the
`residual approach', particularly at this time when completions are low, will result in
many more development plans being viewed as out-of-date and the presumption
(including a more heavily `tilted balance') being used more frequently as a justification
for granting consent for unsuitable housing developments."
The consultation
[11]
In July 2020, the Scottish Government published a consultation document entitled
"The Scottish Planning Policy and Housing - Technical Consultation On Proposed Policy
Amendments". It includes the following:
"Overview
1. The Scottish Ministers are consulting on proposed interim changes to the Scottish
Planning Policy (SPP) (2014) to clarify specific parts of the Scottish Planning Policy
that relate to planning for housing.
2. The changes, once finalised, will apply over the interim period ahead of the
adoption of National Planning Framework 4 (NPF4). Publication of the draft NPF4 is
expected in September 2021. Following consultation and consideration by the
Scottish Parliament, SPP will be fully replaced when the final version of NPF4 is
published in 2022.
Why We are Consulting
3. The Scottish Government is committed to a plan -led planning system. This was
comprehensively supported by a wide range of stakeholders through the review of
the planning system. Development plans form the basis of planning decision -
making to enable the right developments in the right locations.
4. The context for planning for housing in Scotland has changed significantly in
recent months. The pandemic is having an impact on the ability of planning
8
authorities to maintain the review cycle of local development plans within the
timeframes they intended. We expect that more development plans will extend
beyond five years in the coming months and are keen to support authorities in
adapting to the current circumstances. The pandemic is also affecting delivery
programmes and the rate of housing completions. This, coupled with revised plan
timescales, has implications for the plan-led approach to development.
5. Furthermore, a recent decision by the Court of Session on an appeal by Gladman
Developments Ltd raises a number of issues about the current wording of the policy
that we now believe require clarification.
Introduction
6. The Scottish Ministers want the planning system to support the delivery of good
quality homes in the right locations. This is of even greater importance now, as it has
become even clearer that the quality of our homes can contribute a great deal to our
health and wellbeing, and that housing delivery will play a key role in our future
economic recovery. However, to achieve housing development in a sustainable way
that works with, rather than against, the needs of communities, we need to overcome
current conflict in the system, and actively address the lengthy technical debates we
are seeing about the numbers of homes that we will n eed in the future. This will
allow us to focus more on how we can strengthen delivery and enable good quality
development on the ground.
7. Taking this into account, and to ensure that our policy is clear and can be more
easily and consistently applied in practice, the Scottish Ministers wish to update and
clarify specific parts of the SPP to achieve the following policy objectives:
Supporting a plan-led approach to decision-making and maintaining the legal
status of the development plan as a basis for decisions in all cases.
Removing the presumption in favour of development that contributes to
sustainable development from the SPP (`the presumption') given that it is
considered to have potential for conflict with a plan -led approach and has
given rise to significant number of issues it has generated for decision -makers
in its application.
Providing a clearer basis for decisions on applications for housing on sites
that have not been allocated in the local development plan where there is a
shortfall in the effective housing land supply.
Clarifying what is meant by a 5-year effective housing land supply and in
particular preventing sites that are capable of becoming effective being
excluded solely on the basis of programming assumptions.
8. This consultation paper sets out proposed policy amendments to achieve these
objectives and invites views on them. The relevant policies are set out in
paragraph s 28, 29, 30, 32, 33 and 123-125 of the Scottish Planning Policy."
9
The consultation document proposed inter alia the removal of the reference to the
presumption in paragraph 30, the removal of paragraph s 32 and 33 in their entirety, and
the deletion of the last sentence in paragraph 125 (which refers to a shortfall and plans not
being considered to be up-to-date, resulting in paragraph s 32-35 applying). In relation to
calculation of the forward 5-year effective HLS, the proposed amendment to paragraph 125
stated that it should be calculated by dividing the HST set out in the adopted local
development plan by the plan period (to identify an annual figure) and multiplying that
figure by 5; that is, the average method.
[12]
The consultation document goes on to explain:
"15. These proposals have been designed to address issues associated with planning
for housing. We recognise that paragraph s 28, 29, 30, 32 and 33 have wider
application but we do not expect that the proposed amendments will directly affect
decisions relating to other types of development to the same extent as housing
proposals."
[13]
In certain circumstances, assessments are required in relation to the impact of
proposals such as those in the consultation document on the environment, equality, child
welfare and any business and regulatory impact. Declarations or statements can be made by
the Scottish Government to exempt it from undertaking these assessments. Several of these
declarations or statements were published on the website alongside the consultation
document. The consultation document goes on:
"16. We have considered the requirements for statutory impact assessments,
including by screening the proposals in relation to the criteria for Strategic
Environmental Assessment, Equalities Impact Assessment, and Children's Rights
and Wellbeing Impact Assessment. Our view at this stage is that a fuller assessment
is not required, given the procedural and technical nature of the proposals."
[14]
In relation to paragraph s 15 and 16, consultees were then asked whether they agreed
or disagreed with the views stated and, if the latter, to provide evidence to support their
own view. While paragraph 15 may appear to hint at a potential effect on decisions in
10
relation to housing proposals, each of the four impact assessments published alongside the
consultation paper stated that the proposed amendments were to clarify the existing policy
and were of a technical and procedural nature (echoing the point made in paragraph 16).
Importantly, three of the impact assessments expressly stated that the proposed
amendments would or will "not influence the outcome of planning decisions".
Homes for Scotland
[15]
The response to the consultation by Homes for Scotland, a body which represents
housing developers, included the following comment:
"With the Scottish Government having characterised the consultation as purely
technical and procedural, and the policy changes as only clarificatory and without
impact, many stakeholders have little impetus to engage. We know from our early
discussions with other stakeholders that some have indeed considered the
consultation to be of little or no importance to them; wrongly assuming that the
changes only apply to housing, given the title of the consultation paper. The
outcome will be that you are unlikely to achieve the depth and reach of engagement I
am sure you would want."
Thereafter, on 6 August 2020, staff from Homes for Scotland attended a meeting with
members of the Scottish Government's planning team and in a subsequent letter dated
19 August 2020 Homes for Scotland recorded the following concern behind the consultation,
arising from Gladman 2, as expressed on behalf of the Scottish Government at the meeting:
"You are concerned the court decision will require planning authorities and
Reporters to approve development that they would not have granted permission in
the period between Scottish Planning Policy being introduced in 2014 and
the...decision."
The outcome of the consultation process
[16]
In the Finalised Amendments, the wording added to the key paragraph s in
SPP (2014) is underlined below, other wording having been deleted:
11
"Development Management
32. The presumption in favour of sustainable development does not change the
statutory status of the development plan as the starting point for decision -making.
The 1997 Act requires planning applications to be determined in accordance with the
development plan unless material considerations indicate otherwise. Proposals that
accord with development plans should be considered acceptable in principle and the
consideration should focus on the detailed matters arising.
33. Proposals that do not accord with the development plan should not be
considered acceptable unless material considerations indicate otherwise. Where a
proposal is for sustainable development, the presumption in favour of sustainable
development is a material consideration in favour of the proposal. Whether a
proposed development is sustainable development should be assessed according to
the principles set out in paragraph 29.
Maintaining an effective housing land supply
125. Planning authorities, developers, service providers and other partners in
housing provision should work together to ensure a continuing supply of effective
land and to deliver housing, taking a flexible and realistic approach. Proposals that
do not accord with the development plan should not be considered acceptable u nless
material considerations indicate otherwise. Where a proposal for housing
development is for sustainable development and the decision -maker establishes that
there is a shortfall in the housing land supply in accordance with Planning Advice
Note 1/2020, the shortfall is a material consideration in favour of the proposal.
Whilst the weight to be afforded to it is a matter for decision -makers to determine,
the contribution of the proposal to addressing the shortfall within a five year period
should be taken into account to inform this judgement. Whether a proposed
development is sustainable development should be assessed according to the
principles set out in paragraph 29."
[17]
The document FAIA summarised the finalised policy changes:
·
Amendment of the wording of the presumption in favour of development that
contributes to sustainable development. We originally proposed removing
relevant sections of the Scottish Planning Policy and associated paragraph s.
However, having taken into account views and evidence received, we have now
decided that the policy can be amended rather than removed. The proposed
changes would clarify that there is a presumption in favour of sustainable
development, rather than in favour of development that contributes to
12
sustainable development. We will also set out that this should be assessed with
reference to the principles set out under paragraph 29. This would help to
ensure decision-makers understand that we support sustainable development
rather than any development which may not be sustainable. The proposed
changes also amend wording of paragraph 33 of the Scottish Planning Policy to
set out how applications that do not accord with the development plan should
be considered. The references in paragraph 33 to policies in a development plan
being out-of-date and to the age of the development plan would be removed to
confirm the statutory status of the development plan.
·
We are amending the policy on housing and maintaining a five year effective
housing land supply (paragraph 125). Rather than the changes originally
proposed, setting out a full methodology for calculating the land supply in the
SPP, we are linking changes with guidance on our preferred methodology for
calculating the extent of the land supply. This is based on an average rate of
housing delivery over the plan period as a whole, rather than adjusted to factor
in housing completions.
·
The proposed changes clarify how proposals for housing development which do
not accord with the development plan should be assessed where there is a
shortfall in the 5-year effective housing land, by linking decisions to the
presumption in favour of sustainable development.
·
Other changes originally proposed will no longer be taken forward, including
references to site programming and revised glossary definitions.
The document contains declarations that, on the impact of proposals on the environment,
equality, child welfare and any business and regulatory impact, no further impact
13
assessments were required, including for the reason that "the impact on numbers of homes
delivered is unknown but could reasonably be expected to be neutral". In the Fairer
Scotland Duty Assessment, contained within the document, reasons are given as to why no
assessment in that regard is required.
[18]
PAN 1/2020 advises that in assessing the extent of the 5-year supply of effective
housing land, the average method is to be used, based on the HLR rather than the HST.
[19]
On 18 December 2020, the Scottish Ministers also published a document entitled
Housing Land Research Paper, which was stated as having been used to inform the
amendments to the Scottish Planning Policy.
The key changes
[20]
In summary, as a result of the changes, where a proposal for housing development is
for sustainable development (rather than being just a contribution to sustainable
development), the existence of any shortfall in the 5-year effective HLS (preferred now to be
determined after calculation by the average method) is a material consideration (rather than
a significant material consideration) in favour of the proposal and the contribution of the
proposal to addressing the shortfall is to be taken into account (rather than the benefits
having to be significantly and demonstrably outweighed). While the complete removal of
the presumption and of paragraph s 32 and 33, as originally proposed, did not occur, the
changes made substantially alter the policy from the meaning explained in Gladman 2.
Grounds of challenge
[21]
The petitioners put forward seven grounds of challenge. Ground 1 concerns the
consultation process, which is argued to have been so unfair as to be unlawful. Ground 2
14
challenges the consideration of the changes to paragraph s 32 and 33 of SPP and ground 3
attacks the introduction of the average method in relation to calculating whether there is a
shortfall in the 5-year effective HLS. Ground 4 challenges the FAIA and ground 5 criticises
the Fairer Scotland Duty Assessment. Grounds 2-5 allege that the decisions on these points
were irrational as a result of specific errors in the decision -making process. Ground 6 argues
that the FAIA are materially flawed for the reasons set out in Grounds 4 and 5. Ground 7
contends that PAN 1/2020 is irrational for the reasons set out in Grounds 2 and 3. The
respondents deny that the test for unlawfulness in respect of the consultation is met and also
argue that the petitioners present no proper basis for concluding that any of the resulting
decisions were irrational.
Submissions
[22]
The court had the benefit of full and detailed Notes of Argument for the parties, as
well as extensive oral submissions over several days. These have been taken fully into
account and what follows is a brief summary of the central points made on behalf of the
parties.
Submissions for the petitioners
Ground 1: errors in relation to the consultation
[23]
The consultation process necessarily undertaken by the Scottish Ministers in advance
of the changes was unlawful. The Court of Appeal in England had provided a helpful
exposition of the relevant principles. Reference was made to R (Bloomsbury Institute Ltd) v
15
R v N&E Devon HA, ex p. Coughlan [2001] QB 213; R (Moseley) v Haringey LBC
[24]
There was very little, if any, evidence or analysis supplied as part of the consultation
in either the consultation document or the pre-screening assessments. Simply asserting
absence of impact was not enough. The clear driving motivation behind the consultation
was dissatisfaction with the Inner House's decision in Gladman 2. The lack of material in the
consultation to respond to was alluded to at the time by each of the petitioners. Homes for
Scotland had made similar points. The Scottish Ministers' assertions that the petitioners
were perfectly well able to make an intelligent response to the questions posed was no
answer. Homes for Scotland made clear that other stakeholders considered the consultation
to be of no importance because of its misleading terms. The correct standpoint was to assess
it from the viewpoint of the reasonable reader.
[25]
By contrast, the Finalised Amendments relied heavily on the material primarily
provided in the Housing Land Research Paper. That paper went some way to providing an
evidential and analytical basis for the policy changes, capable of evoking an intelligent
response. But it was never subject to consultation and, if it had been, the petitioners and
many others no doubt would have responded. There were a number of arguably highly
contentious conclusions reached in the Housing Land Research Paper, which should have
been consulted upon if they were to be relied upon (which they were) as influencing the
outcome of the consultation.
[26]
The lack of evidence was most acute in terms of the surprising assertion that the
changes would have no impact on planning decisions. It was particularly unfair for the
Scottish Ministers to reach that view on either (i) no evidence justifying a mistaken
supposition of no impact at the time of consultation or (ii) on evidence which was asserted
16
to justify a neutral view as set out in the December paper without consultees having a
chance to consider such evidence and respond thereto. In fact, the internal memorandum
made clear that the consultation was prepared specifically to address a concern that,
following Gladman 2, the combination of the residual method and the tilted balance would
result in more decisions to grant planning permission. The changes proposed were
apparently designed to ensure there would be an impact on decision-making, albeit this
material only came to light after the outcome of the consultation was known.
[27]
Such material as was contained in the Housing Land Research Paper, and in the
Finalised Amendments, should have been made available for consultation: R v SOS for
Health, ex parte United States Tobacco International Inc [1992] QB 353 per Taylor LJ at 371G-H
[2007] Env LR 9, Auld LJ (at [10] and [105-106]). The expressly obiter comment on this issue by
Lord Hoffmann following appeal to the House of Lords [2008] UKHL 22 (at [44]) was not
relevant.
[28]
In the consultation and pre-screening assessments, the reader was told that the
changes would not influence the outcome of planning decisions, whereas it is clear they
could well do so (see e.g. Gladman 2). This would be so both in housing and in the other
planning cases. This statement was misleading. It was important to note that the impact
would be (i) the removal of the tilted balance and (ii) the removal of the concept of plans
being out-of-date and (iii) the adoption of an average approach to assessment of the 5-year
effective housing land supply, which means that far fewer authorities will be considered to
have a shortage of housing land supply. By the time of the Finalised Amendments, it
appeared to be accepted in terms of (i) above that the tilted balance "has the potential to
mean that developments may ... be granted consent where there is a shortfall in housing
17
land supply" but no view seemed to have been taken in respect of the impact of changes (ii)
or (iii). It was wrong for the consultation to assert that there would be no impact on
planning decisions when that appears to have been one of the very purposes of the changes
and it was misleading not to bring that to the consultees' attention. The Scottish Ministers
took their decision against the background of admitted uncertainty as to impact in respect of
an issue they had previously expressed certainty on. They should have realised the need for
a change of view both as to impact on housing and on other developments.
[29]
The changes were neither technical nor procedural, nor were they required to add
clarity, save arguably as to methodology. As the Inner House had stated, with the exception
of the method to be used to calculate the 5-year effective HLS where a policy vacuum
existed, the pre-existing provisions were clear. The proposed changes were potentially far
reaching. More importantly, the Scottish Ministers were seeking to change policy, and
significantly so, but misrepresented the position. By contrast, in terms of the methodology
for calculation of the 5-year effective HLS they were introducing new policy with potentially
significant impacts. Reference was made to R v Secretary of State for Transport ex p. Richmond
Upon Thames LB 1995 Env L.R. 390, at 405.
[30]
The Scottish Ministers' position failed publicly to recognise that, in respect of many
of the changes, it was changing its policy in direct response to the decision of the Inner
House in Gladman 2. A lawful process involves a public recognition that it is seeking to
materially change its policy. There was no basis for the Scottish Ministers' suggestion that
the result in Gladman 2 subverted the original policy intent of paragraph 33 of SPP. The
words used made the policy intent clear. That view was reached in several cases, including
Graham's The Family Dairy Ltd v Scottish Ministers [2019] CSIH 3, and Gladman 1. In those
cases, there was no submission of the kind now made about the original policy intent. In
18
Gladman 2, there was an express admission by the Scottish Ministers about the tilted balance.
In Mactaggart and Mickel Homes Ltd and Others v Inverclyde Council and The Scottish Ministers,
the Lord President re-iterated the legal and policy framework, at [4]-[10], consistent with the
above cases. There was nothing in the consultation that preceded SPP (2014) or the SPP
position statement of January 2014 supporting any different approach. If the policy
intention was so different from that consistently identified by the court it surely would have
found exposition in some contemporaneous document. Reference was made to Tesco v
[31]
The proposals were also misleading as to: (a) impact on planning decisions;
(b) impact on planning in aspects other than housing; (c) the import of Gladman 2, with the
suggestion being it was somehow inconsistent with the primacy of the development plan or
overrode normal planning judgment; and (d) failure to identify the consequences of removal
of the concept of a plan being out-of-date for development management purposes.
Ground 2: errors in considering changes to paragraph s 32 and 33 of the SPP
[32]
In the Finalised Amendments, the Scottish Ministers erred in law in their
consideration of changes to paragraph s 32 and 33 of SPP (2014). They took as their starting
point that "there are different interpretations of the existing policy", which ignored the fact
that in Gladman 2 the court found the correct meaning of relevant existing policy, and further
clarified it in Mactaggart and Mickel. They materially misconstrued the court's opinion in
Gladman 2. They continued to imply that Gladman 2 supports the approach of development
at any price or in any location or that calculations on land supply should not be the
determining factor in planning decisions to the extent that it outweighs other factors
required to make a development sustainable. Gladman 2 does not support either approach.
19
The Scottish Ministers also failed to provide any or any logical explanation for the inclusion
in the original paragraph 33 in SPP (which reflects in part at least the then wording of the
NPPF) of the tilted balance if it was not "an intended feature of our policy", and thus failed
to recognise that it was changing its policy away from, a tilt in favour of housing
development where there was a shortfall. They also failed to consult on the material in the
FAIA and provided no or any adequate reason for failing to consult on such material at the
appropriate stage contrary to the guidance they produced in respect of such impact
assessments. There should have been a further consultation, particularly given an
acceptance that at least 5,000 houses had been granted planning permission as a result of the
presumption, and the very limited detailed analysis upon which Scottish Ministers relied.
There was no assessment of the impact of removal of the concept of a plan being out -of-date
or recognition as to the change to the SPP in this regard. These flaws and failures resulted in
the decision on these paragraph s being irrational.
Ground 3: errors in considering changes to calculation of 5-year effective housing land supply
[33]
The prescribed method of calculation was now to be the average method. The
respondents were entitled to adopt, within reason, whatever methodology they wished to,
including the average method, but had to do so lawfully. There was no assessment of the
impact of such changes. These were likely to have a significant impact on provision of
housing if, as instanced in one of the affidavits, many local authorities can now demonstrate
absence of any shortfall whereas they could not before. It was perverse to institute such a
change without evaluating the impact, let alone failing to consult on it.
[34]
There was no recognition that adopting an average method will mean that the HLR
set out in the relevant development plan will not be met. This left out of account an
20
obviously material consideration. This outcome was reflected in several of the Inner House
decisions, particularly Gladman 1. There was also a failure to give balanced consideration.
The average method directs decision-makers to ignore shortfalls in delivery of housing
against the housing requirement. It was unclear how a decision -maker could reach a view
on unmet demand without considering the number of houses delivered to date.
[35]
The Scottish Ministers' answer that PAN 1/2020 is not prescriptive an d with good
reason need not be followed wholly missed the point. No policy was prescriptive but the
Scottish Government clearly intended that its reporters and local authorities should follow
it. Its terms did not suggest that it was simply a preferred methodology. If decision-makers
were to be allowed complete freedom to choose between the application of the residual and
average methods, there was no purpose in specifying only the average method.
[36]
There was a fundamental uncertainty as to what methodology should apply to
development planning and as to the interface between a development plan calculated on
one basis and a 5-year effective HLS calculated on another basis. SPP and SDPs require an
LDP to maintain a 5-year effective HLS at all times. There could be no justification for one
methodology applying on the date of adoption and another applying the day after. If the
average methodology applied from the date of adoption, the LDP may never allocate the
right sort of land to ensure that the needs of future residents are met as they arise. If, as the
Scottish Ministers appeared to suggest, the methodology in PAN 1/2020 is not directly
applicable at the development planning stage, that was a material consideration which had
been left out of account, or at least was a matter which should have been considered and
consulted upon.
21
Ground 4: material flaws in Finalised Amendments Impact Assessments
[37]
There was a lack of assessment of the impact of changes other than to paragraph s 32
and 33 of SPP. In particular, the failure to compare the position with what should happen
post-Gladman 2 was not met by the assertion relating to the original policy intention. The
true impact of the changes should have been comparing the likely outcome between
decision-makers following Gladman 2 and the approach of the Inner House on the one hand
and the new policy on the other. That reinforced the view that Scottish Ministers' claim that
the changes would be neutral was simply perverse, and indeed inconsistent with concerns
expressed outside the consultation. No specification was provided as to where impact on
non-appeal decisions was assessed.
Ground 5: Fairer Scotland Duty Assessment was irrational
[38]
On ground 5 the complaints were largely parasitic on the points made above,
although it was also wrong for the Scottish Ministers to conclude that the changes were not
strategic. The first reason given by the Scottish Ministers was that the amendments are closely
targeted interim amendments to an existing policy to reflect the original policy intention. This
failed to recognise that what is proposed is a change of policy, not clarification, and does not
represent the original policy intention. The second reason given by the Scottish Ministers was
that the amendments do not directly address the preparation of local development plans. This
was flawed as the amendments may well affect the preparation of local development plans,
and changes to the approach to development management can be properly described as
strategic, and regard appears only to be had to the removal of the tilted balance but not the
alteration to the calculation of the 5-year housing land supply and the removal of the concept of
out-of-date development plans, both of which can properly be described as strategic. Reference
22
was made to how that term is explained in the "Fairer Scotland Duty Interim Guidance for
Public Bodies" at page 11, and to the Equality Act 2010. The third reason given was that the
amendments do not set priorities, allocate resources or commission services. The third reason
was also flawed as it failed to recognise that the outcome will affect the priority to be given to
the provision of new housing where there is a shortfall in any particular local authority area.
The changes were indeed strategic; that they were considered not to be is consistent with the
playing down of the impact of the proposals.
Grounds 6 and 7
[39]
On ground 6, the FAIA were materially flawed for the reasons set out in Grounds 4
and 5. On ground 7, PAN 1/2020 was irrational for the reasons set out in Grounds 2 and 3.
Submissions for the respondents
Relevant legal principles
[40]
In respect of planning law generally, reference was made to: R (West Berkshire DC ) v
Secretary of State for Communities and Local Government [2016] 1 WLR 3923; sections 25 and 37
of the 1997 Act; City of Edinburgh Council v Secretary of State for Scotland 1998 SC (HL) 33;
Tesco Stores Limited v Dundee City Council; R (Friends of the Earth Ltd and another) v Secretary of
State for Transport [2021] PTSR 190; sections 7 and 8 of the Environmental Assessment
(Scotland) Act 2005 and the Children and Young People (Scotland) Act 2014. As to the
requirements of a lawful consultation: the "Sedley criteria", were approved in R (Moseley) v
Haringey London Borough Council. Reference was also made to R v North and East Devon
Health Authority, ex parte Coughlan; Uprichard v Scottish Ministers 2013 SC (UKSC) 219; R (Law
Society) v Lord Chancellor [2019] 1 WLR 1649; R (Medway Council) v Secretary of State for
23
1528 (Admin); R (Nettleship) v NHS South Tyneside Clinical Commissioning Group [2020] PTSR
928.
Ground 1: errors in relation to the consultation
[41]
There was nothing before the court to support the suggestion that others may not
have been able to properly respond to the consultation. Given that lack of evidence, and
standing the admission now made by the petitioners that they were fully able to respo nd,
this ground was, on the facts, unfounded.
[42]
On the alleged absence of information, the reasons for the proposed changes were
enumerated: (i) the existing terms had caused considerable confusion and undermined the
transparency of the system; (ii) the court's interpretation of the wording of the presumption
was not consistent with the policy intention; (iii) the primacy of the development plan
should not be undermined in decision-making; (iv) the tilted balance was not intended to be
a feature of the Scottish planning system that overrides normal planning judgment based on
the development plan and other material considerations; (v) the reference to relevant
policies of plans being out-of-date had a range of interpretations and differing positions
were being taken; and (vi) as a result of Covid-19 restrictions and to ensure proper
consultation, more development plans were likely to exceed five years in age in the coming
months and the Scottish Ministers did not wish to undermine a plan -led system. The
Scottish Ministers were entitled, from their own knowledge of the planning system, to form
the view that there was considerable confusion regarding these aspects of SPP (2014). This
was reflected by the use of the tilted balance argument by developers that is applicable in
the English planning policy and how the angle of any such tilt is to be assessed.
24
[43]
It was perfectly plain from the submissions presented to the court in Gladman 2 that
the Scottish Ministers' policy intention did not accord with the meaning the SPP was held by
the court to have. The statutory provisions of sections 25 and 37 of the 1997 Act directed
decision-makers to determine planning decisions in accordance with the development plan
unless material considerations indicate otherwise. The court's interpretation of
paragraph s 33 and 125 of SPP (2014) (both in respect of the tilted balance and the degree to
which it should be angled) would have the effect of diluting the primacy of the development
plan and its weight which would otherwise remain for the decision-maker. The import of
the English concept of a tilted balance to the Scottish planning system was not what had
been intended. The practical consequences of Gladman 2 were matters properly for the
Scottish Ministers to consider.
[44]
The petitioners incorrectly averred that the proposal was to remove the development
management concept of out-of-date development plans. If a plan is out-of-date it was, and
is, the development plan. No changes were proposed to paragraph 30 which required, inter
alia, development plans to be up-to-date. An out-of-date policy in a development plan could
continue to be a material consideration in the determination of a planning application. The
proposed change was to paragraph 33 and the concept of "relevant policies" being "out-of-
date", and similarly to paragraph 25 which treated relevant policies as being out-of-date
where a housing shortfall was identified. The effect of paragraph 125 was to render newly
adopted plans as being out-of-date by virtue of a housing shortfall being identified and
thereby becoming a significant material consideration in favour of a development, thus
diluting the plan-led system.
[45]
In relation to plans exceeding five years in age, the Scottish Ministers were entitled to
consider the impact of Covid-19 restrictions on development plan making, and the
25
consequent effect on development management. The consultation addressed paragraph 125
and proposed providing a clearer approach to establishing the extent of the 5-year effective
HLS and taking this into account in decision-making. The reasons were that: (a) there was a
need for standard calculation; (b) the current circumstances and Covid-19 meant that the
Scottish Minister were not convinced that the residual method would produce accurate
outputs; (c) a shortfall is relevant, but should not be determinative, as part of the wider
planning judgment; and (d) exceptional releases of land may be appropriate. The Scottish
Ministers maintained their view of the need for the adequate forward supply of effective
land.
[46]
The Scottish Ministers were entitled, having regard to the nature and extent of the
proposed changes in the consultation and to how SPP (2014) had been applied prior to
Gladman 2, to conclude that the proposed changes would have no or minimal impact: the
proposed changes were designed to reflect the policy intention, were consistent with
previous decision-making and confirmed that decisions should be based on planning
judgment taking into account the development plan and leaving it to the decision -maker to
establish the weight to be given to material considerations. They were entitled to state
(para 14 of the consultation) that the presumption proposals would not directly affect other
types of development to the same extent as housing proposals.
[47]
Following the close of the consultation the Scottish Ministers considered, inter alia,
the objections to the proposed changes. The responses were analysed by external
consultants. The Scottish Ministers decided to undertake research and analysis in order to
address the responses and, in particular, the objections in order to inform their decision. The
Finalised Amendments document explained what the Scottish Ministers took into account
when making those amendments. That included their internal analysis of planning appeals
26
(as reported in the Housing Land Research Paper), views from the construction sector,
evidence about the housing market, evidence provided to the Scottish Parliament by
industry bodies, external Research Papers such as the Scottish Housing Market Review July-
September 2020, the impact of Covid-19, assessment of housing land audit practice, evidence
from Heads of Planning on the availability of housing land and the Development Planning
Consultation and Engagement May 2020. There were no fundamental changes in the
proposals that required re-consultation. The petitioners had identified no basis on which the
Scottish Ministers were obliged to consult on the Housing Land Research Paper.
[48]
As a result of the responses received to the consultation, a fuller screening was
undertaken. The view was taken that full assessments were not required. In respect of the
SEA screening, the statutory consultees agreed with that view. There was no statutory
obligation to consult publicly on any of these screening decisions, other than with the
statutory consultees. The consultation considered that the presumption proposals would
not directly affect other types of development to the same extent as housing proposals.
Consultees were expressly invited to comment on the Scottish Ministers' assessment.
Responses to the consultation were not limited to the housing sector. The effect of
Gladman 2 would result in an imbalance of the planning judgment required under the 1997
Act. It was said by the court that a housing development which will make any contribution
to housing shortage "almost inevitably" contributes to sustainable development (para [46] of
Gladman 2). The nature of the proposed changes were made clear in the consultation.
Ground 2: errors in considering changes to paragraph s 32 and 33 of the SPP
[49]
The Scottish Ministers properly directed themselves to what was decided in
Gladman 2 and the consequences of that decision. The Scottish Ministers did not require to
27
consult on the material in the FAIA. There was no fundamental change in circumstances.
The Scottish Minsters were entitled to conclude that there would be no significant impact as
a result of the finalised amendments. In so far as reasons were required for why the Scottish
Ministers did not consult, those were provided by the terms of the FAIA.
Ground 3: errors in considering changes to calculation of 5-year effective housing land supply
[50]
The calculation of a 5-year effective HLS had been controversial and there have been
various arguments about how best to calculate it. That controversy had necessarily given
rise to a degree of uncertainty. Certainty and consistency are important values of public law
and were to be encouraged. Accordingly, there was nothing inherently objectionable in the
Scottish Ministers issuing guidance on the calculation of 5-year effective HLS. The Finalised
Amendments document took account of the Housing Land Research Paper. Objections to
the average method were noted and the fact that the residual method has been used in many
cases was taken into account. The Finalised Amendments set out and explained that the
reasons for a shortfall will be varied and may not be due to a lack of availability of land or
planning consents. This will be addressed in the fuller review of NPF4. The Scottish
Ministers explained that pending that review a cautious approach is appropriate when
considering the release of additional land (land that is not allocated in the development
plan). They also noted that exceptional release of land was no guarantee that development
will in fact proceed. The Scottish Ministers' consideration of the strengths and weaknesses
of the residual versus the average method of calculation was carried out having taken into
account, inter alia, the objections to the average method. The average method, for the
interim period until completion of NPF4, was considered to be realistic and to accord with
past levels of completion. The Scottish Ministers took account of the inaccuracy of the
28
housing land audits. The Scottish Ministers were entitled to exercise their judgment in the
manner that they did and for the reasons provided. The Scottish Ministers accordingly set
out their preferred methodology in PAN 1/2020, which represents advice. The Scottish
Ministers do not usually consult on PANs. The petitioners could have had no expectation
that they would be consulted on a PAN. PAN 1/2020 did not prescribe that only the average
method should be used. Decision makers retained discretion in the exercise of their
planning judgment to prefer an alternative methodology. PAN 1/2020 was adopted to
support the amendments to paragraph 125 of SPP (2014).
Ground 4: material flaws in Finalised Amendments Impact Assessments
[51]
Out-of-date development plans will remain a material consideration for the decision -
maker to take into account and weigh in the exercise of planning judgment and there was no
need to consider adequately, or at all, the impact of adopting an average method
particularly on the long-term delivery of development plans, not least because the focus of
PAN 1/2020 is on development management. In any event, it was an interim change
pending the adoption of NPF4. The Scottish Ministers were entitled to conclude that the
impact of the changes would be minimal for the reasons stated and had a proper basis to do
so. They were entitled to compare how decision-makers applied SPP (2014) pre Gladman 2
to address whether the decisions accorded with the law as decided in Gladman 2. The pre
Gladman 2 approach was broadly consistent with the Scottish Ministers' original policy
intention and the changes would have a minimal impact. The Scottish Ministers explained
in the Housing Land Research Paper why they examined appeal decisions, not least because
those provide readily accessible reasons.
29
Ground 5: Fairer Scotland Duty Assessment was irrational
[52]
This ground was a repetition of earlier complaints about the nature of the proposed
changes and their likely impact. For the reasons already given, those complaints are
unfounded. In respect of the Fairer Scotland Duty Assessment, the reasons given for not
requiring a full assessment were clear, rational and sound.
Grounds 6 and 7
[53]
Grounds 6 and 7 added nothing to the grounds set out above. They fell to be refused
as unfounded or, in the alternative, as being superfluous to the grounds already discussed.
Decision and reasons
Ground 1: errors in relation to the consultation
Relevant legal principles
[54]
Senior counsel for each of the parties referred to a number of decisions concerning
the law on consultations. I summarise the relevant principles as follows. Ultimately, it is a
question of fairness: has the consultation process been so unfair as to be u nlawful?: R (West
Berkshire DC) v Secretary of State for Communities and Local Government, at [60]. What fairness
requires will turn on the individual circumstances. That will include, for example, the
identity of who is being consulted and the extent to which they could be expected to
understand the issue(s): R (Moseley) v Haringey LBC, at [26]. The consultation
documentation must be read and examined in the spirit of the purpose for which it is
produced. It must be read and considered from the standpoint of a reasonable member of
the public or reasonable reader: R (Stephenson) v SOSHCLG, at [44]. When considering
whether the non-disclosure of particular information renders a consultation process so
30
unfair as to be unlawful, relevant considerations include: (i) the nature and potential impact
of the proposal; (ii) the importance of the information to the justification for the proposal
and the ultimate decision; (iii) whether there was good reason for not disclosing the
information; and (iv) whether consultees were prejudiced by the non-disclosure: R (Law
Society) v Lord Chancellor, at [73].
[55]
The public body which is consulting must put a consultee into a position properly to
consider and respond to the consultation request, without which the consultation process
would be defeated. Consultees must be told enough, and in sufficiently clear terms, to
enable them to make an intelligent response. Therefore, a consultation will be unfair and
unlawful if the proposer fails to give sufficient reasons for a proposal or where the
consultation paper is materially misleading or so confused that it does not reasonably allow
a proper and effective response: R (Help Refugees Ltd) v SOSHD, at [90], under reference to
several authorities. What the duty requires of the consultation is fact-specific and can vary
greatly from one context to another, depending on the particular provision in question,
including its context and purpose (ibid). The courts will not lightly find that a consultation
process is unfair. Unless there is a specification as to the matters that are to be consulted
upon, it is for the public body charged with performing the consultation to determine how it
is to be carried out, including the manner and extent of the consultation, subject only to
review by the court on conventional judicial review grounds. Therefore, for a consultation
to be found to be unlawful, "clear unfairness must be shown" (ibid). A duty of consultation
will exist in circumstances where there is a legitimate expectation of such consultation,
usually arising from an interest which is held sufficient to found such an expectation, or
from some promise or practice of consultation: R (Moseley) v Haringey LBC, at [35]. The
31
proposer must give sufficient reasons for any proposal to permit of intelligent consideration
and response (ibid, per Lord Wilson, at [25], approving the "Sedley criteria").
[56]
While an earlier authority stated that there had to be a factual finding that
"something has gone clearly and radically wrong", this is not an additional hurdle to be
jumped and the test remains whether the process was so unfair as to be unlawful. This
expression also does not assist much, if at all, in cases where the allegation is that a claimant
or class of claimants likely to be particularly affected by the operation of the policy was not
given sufficient information which they needed to know in order to make informed and
meaningful representations to the decision-maker before a decision was made:
R (Bloomsbury Institute Ltd) v The Officer for Students, at [69]. Consultation is not negotiation:
R (Medway Council) v Secretary of State for Transport, at [26). It is not, absent exceptional
circumstances, necessary to share matters that emerge internally during a consultation. To
do so has the potential to lead to a never-ending dialogue and to be inimical to the principle
that there must come a time when finality is achieved: R (Robin Murray & Co) v Lord
Chancellor, at [47]. It is probably correct that there is no duty to re-consult unless there is a
fundamental change of circumstance: R (Nettleship) v NHS South Tyneside Clinical
Commissioning Group, at [43].
Application of these principles
Assertions about the impact of the proposals
[57]
Planning decisions on housing are plainly of importance to all stakeholders,
including the general public. Whether any proposed policy changes will impact on such
decisions is obviously a material factor. While there was, in paragraph 15 of the
consultation document, perhaps a hint of some potential impact of the proposed
32
amendments on the outcome of planning decisions, the impact assessments (referred to in
the consultation document) expressly stated that there will be no impact. The assertion of
no impact was apparently based upon a comparison between the proposed amended policy
and how it was understood (although not evidenced) that reporters had approached matters
pre-Gladman 2. However, the consultation did not state that to be the comparison and also
failed to state that the impact on future decisions which would otherwise have followed
Gladman 2 was not considered.
[58]
A comparison between the effects of the proposed amendments and planning
decisions post-Gladman 2 would not have supported the assertion of no impact. The internal
memorandum expressed clear concerns about the impact of Gladman 2 and that it might
result in granting consent for unsuitable housing developments. This was also noted as a
concern of the Scottish Government in the letter dated 19 August 2020 from Homes of
Scotland. When, after the consultation, this comparison was made in the Finalised
Amendments document, it was accepted that the decision could change how the policy is
applied and that the amendments may therefore lead to different decisions. However, it
was then said that "the evidence shows that the role of the presumption is neither clear cut
nor determinative" and that:
"The impact, in terms of numbers of homes built or other developments affected
cannot be accurately predicted. However the impact on number of homes delivered
could reasonably be expected to be neutral given the continuing role of planning
judgement in decision-making and taking into account the revised amendments we
are now proposing. The effect of changes on other sectors is also expected to
limited."
[59]
In my view, it was incumbent upon the Scottish Ministers, when making the
comparison and concluding on impact at the time of the consultation, to make clear to the
reader what it was comparing in reaching that conclusion. As that was not done, the
33
reasonable reader had no inkling of what was being compared. The reasonable reader
would be likely to take the assertion of no impact at face value and rely upon it. As a
consequence, the reasonable reader may well have decided either not to respond at all to the
questions or may have given a response that was largely or at least partly predicated on
accepting that assurance. As is obvious, a clear statement about the absence of any impact of
proposed changes is a significant factor in the participation and thought-process of a
consultee in such a consultation. The making of such statements, based on a comparison
that was not explained and which actually ignored the effects of Gladman 2, was a materially
unfair aspect of the consultation process.
Other factors contributing to unfairness
[60]
A number of other points contribute to, or compound, the unfairness of the key
factor of the impact of the proposed amendments. Firstly, viewed from the objective
perspective of the reasonable reader, there was little or no evidence or analysis supporting
the proposals in the consultation document and in particular the assertion that there would
be no impact on planning decisions on housing. There was no proper basis given for any
assessment of the impact of the proposed changes. In addition, there was a failure in the
consultation document to identify or assess the consequences of removal of the concept of a
plan being out-of-date for development management purposes. Further, on the proposed
introduction of the average method of calculation, there was no assessment of how this
could affect whether the HLR would be met or whether it had any potential consequences in
relation to development planning. Secondly, the absence of impact also seems (although
this was not stated in the consultation document) to have been based on there having been a
uniform approach in practice before Gladman 2. On the information put before me there is
34
real room to doubt that proposition and if it was to underpin the point about impact then it
would have required evidence. Thirdly, the Housing Land Research Paper shows, in part,
the actual form of reasoning, evidence and analysis that supported and justified the changes
that came to be made. It demonstrates that material of that kind was missing in the
consultation document. I appreciate of course that this paper was not available at the time
of the consultation, but that does not in my view justify proceeding with a consultation
when evidence or analysis for important factual issues is not made available. The affidavits
lodged by the petitioners explain that there were matters of some significance (such as how
previous decisions had dealt with the application of the presumption on contribution to
sustainable development) that consultees would have wished to raise had they been given
notice of the content of the paper. I do not go as far as concluding that the Housing Land
Research Paper involved a fundamental change that required re-consultation and that an
actual failure to re-consult occurred. Rather, its content illustrates the absence of evidence
and analysis, on matters of materiality which had a bearing on the final decisions, in the
original consultation document. Fourthly, when viewed in their proper context and in light
of their intended impact, the proposed changes cannot properly be described (as they were
in the consultation document) as clarification, or technical and procedural. They were
indeed substantive and potentially far-reaching.
Other considerations
[61]
The planning policy is not a set of rules, but it is plainly very significant guidance. I
do of course accept that there were divided responses to the consultation and it is clear that
persons with an interest similar to the petitioners opposed many of the proposals. It seems
fair to say that all of the responses were properly considered. It is also correct that the
35
reasons for the proposed changes were set out, at least in summary form (although not
including reasons for concluding that there would be no impact and not setting out evidence
or analysis for that conclusion). When one considers the terms of the reasons stated, it is
clear that many of them did not require further evidence or analysis. In particular, the
effects of Covid-19 and the assertion by the Scottish Ministers that the decision in Gladman 2
did not reflect their policy intentions did not, in my opinion, require any further vouching. I
bear in mind that there is a temporary or interim lifespan to the changes and therefore that
their impact may be limited. But there was seen by the Scottish Ministers to be a pressing
need for the amendments, even though perhaps temporary, and it is also clear that they
were intended to reflect the current policy intentions and so could be viewed as laying a
potential path for the way forward. The interim policy would of course affect decisions in
that interim period. I also have full regard to the fact that the Covid-19 pandemic does seem
to have played a significant role in the decision -making. However, these points do not
outweigh the factors that contribute to unfairness.
[62]
I also bear in mind that direct unfairness to the petitioners is difficult to identify,
given their own resources and knowledge and indeed what they said in response. I also
note that the response from Homes for Scotland does n ot itself actually identify other
stakeholders who did not participate because of what was represented to them. There is no
direct evidence of a consultee having been unable properly to respond or being misled.
However, all consultees, including the petitioners, were unable to comment on evidence and
analysis that later came to be relied upon. Also, this was a consultation open to the general
public, and individuals made up a reasonable proportion of the responders (just over 38%).
These are likely to be individuals with some interest in planning matters and I take that into
account in assessing fairness. But individuals with an interest in the practical outcome, that
36
is, the provision of housing including affordable housing, form part of that group and were
not treated fairly for the reasons I have given.
[63]
There were a number of submissions on behalf of the petitioners suggesting that the
Scottish Ministers were, and knew that they were, changing their policy. In contrast, the
respondents contended that the original policy intentions differed from the interpretation in
the recent case law, and in particular in Gladman 2, in which the submissions for the Scottish
Ministers included that it was only if a developer succeeded in passing the gateway of
sustainability that the tilted balance came into play. While one does not see (e.g. in the
consultation pre-SPP (2104)) any express reference to a different intended meaning of the
paragraph s that came to be interpreted in Gladman 2, there is also nothing that I have seen
from the Scottish Ministers to suggest that a tilted balance approach of the kind determined
in that case was intended. I do not consider it necessary for the Scottish Ministers to have
demonstrated their original policy intention. However, I conclude that a change to the
wording of a policy to alter its meaning, that meaning having been determined by the Inner
House, is to be viewed as a change in policy. As is obvious and already noted, going
forward without such changes would result in the court's view being the meaning of the
policy. The fact that there was this level of change in policy goes to the nature and impact of
the proposed amendments.
[64]
On the other points raised on behalf of the petitioners as to the consultation being
misleading, the document specifically asked consultees whether or not they agreed that
planning decisions on other types of development would be affected and did not mislead in
that regard. Its summary of Gladman 2 may not have been absolutely correct but the general
gist of the decision was set out.
37
Conclusions on ground 1
[65]
In summary, I accept the submission that consultees were not put into a position
properly to consider and respond to the consultation request. I view the Homes for Scotland
response, quoted above, as providing some support for that view. The consultees were not
told enough, and in sufficiently clear terms, to enable them to make an intelligent response.
The reasons given, of themselves, did not suffice. Viewed from the perspective of the
reasonable reader who would have some form of interest in this kind of consultation, no
evidence or information supporting there being no impact was given and that assertion was
made on a wrong comparison and in the context of the characterisation of the consultation
process as being to give clarification and it being technical and procedural. This resulted in
it being materially misleading, albeit not intentionally, and not reasonably allowing a proper
and effective response. The fact that the Scottish Ministers noted that there was a good level
and range of responses to the consultation does not affect assessment of how the consultees
would have responded had they been given the required information. Nothing was
presented to counter the inference that the reasonable reader would have been misled.
[66]
The consultation resulted in the issuing of Finalised Amendments and PAN 1/2020.
For the reasons explained above, having regard to the nature, purpose, scope and overall
effect of the consultation, I conclude that the process was so unfair as to be unlawful. This
results in sustaining the petitioners' submissions seeking the reduction of the Finalised
Amendments and PAN 1/2020.
Ground 2: errors in considering changes to paragraph s 32 and 33 of the SPP
[67]
Grounds 2-7 assert irrationality on the part of the Scottish Ministers. The relevant
legal principles are reasonably well-established (see e.g. Wordie Property Co Ltd 1984 SLT 345,
38
per the Lord President (Emslie), at 347-8). In R (Friends of the Earth Ltd) v Heathrow Airport
Ltd [2020] UKSC 52 Lord Hodge and Lord Sales (at [116]-[120]) give guidance as to the
materiality of factors that are considered in public decision -making, in particular to
considerations so obviously material that regard has to be had to them so as to avoid
challenge. They viewed that test as the familiar Wednesbury irrationality test, under
reference to that case and Council of Civil Service Unions v Minister for the Civil Service
[1985] AC 374, (at 410411, per Lord Diplock), in which irrationality was said to apply:
"to a decision which is so outrageous in its defiance of logic or of accepted moral
standards that no sensible person who had applied his mind to the question to be
decided could have arrived at it".
The petitioners argued that a flaw in logic can render a decision unlawful, under reference
to Coughlan (above, at p 244D-E), but in my view such a flaw requires to be of the nature
described by Lord Diplock. I also regard it as important to recognise that the decisions
challenged in grounds 2-7 were made post-consultation, in light of the consultation
responses and the substantial further material that was available and that some of the
proposed changes (including removal of the presumption and of paragraph s 32 and 33 in
SPP (2014) in their entirety) were not carried through. The arguments about irrationality
have to be considered in that context.
[68]
Much of what is argued in support of ground 2 relies upon the respondents having
erred in law in their consideration of changes to paragraph s 32 and 33 of SPP (2104) by
misconstruing the court's opinion in Gladman 2. It is true that one could arguably take from
what is said in the Finalised Amendments document that it does not fully and accurately reflect
the approach taken in Gladman 2 (for example, the implication that the approach taken dilutes a
plan-led system and a failure to recognise that in Gladman 2 the Lord President explicitly stated
that the contribution to sustainability of a shortage of housing land supply was capable of
39
being outweighed by other factors on sustainability). But I do not regard the discussion of
Gladman 2 as involving any obviously material error or irrationality. For example, the reference
to tilted balance applying in the context of deciding whether a development is a sustainable
development has some support in Gladman 2 (at [46]). The reference in the Finalised
Amendments document to there being different interpretations of the existing policy is not in
my view a slight on the court's decision in Gladman 2 or other cases. It is merely making the
point that the Scottish Minister's understanding of the policy, and its application (by, for
example, at least some reporters) differed. The argument that the Scottish Ministers failed to
take into account the shortfall issue when explaining Gladman 2 is not well-founded. A
summary of the matters covered by the decision is given in the Finalised Amendments
document, including that the decision-maker should first identify whether or not there is a
shortfall, based on the housing land requirement and comparing this with the amount of
effective land included in the 5-year programme in the latest HLA to determine the scale of
any shortfall. They were aware of the court's position on shortfall.
[69]
As regards the failure to recognise that the Scottish Government was changing its own
policy, I accept (in light of the meaning of the policy explained in Gladman 2 and as noted
above) that this occurred. However, that failure, when considering changes to paragraphs 32
and 33 post-consultation is not in my view irrational in the sense explained in the authorities. It
was clear that the Scottish Ministers wished to take a different approach from that in Gladman 2.
[70]
I also conclude that in reaching the final decisions the respondents did not require to re-
consult upon the material set out in the FAIA. Rather, I take that material as evidencing the
importance of a proper impact assessment and the lack of this in the initial consultation. The
failure to address the impact of removal of the concept of a plan being out-of-date can be
regarded as a flaw. But given that the reference in paragraph 30 requiring development
40
plans to be up-to-date remained, and the Scottish Ministers appear to have proceeded on the
basis that a decision-maker may have regard to that matter, I am unable to view this flaw as
meeting the test for irrationality.
[71]
Viewed individually or cumulatively, I therefore do not consider the points in ground 2
to establish that the consideration of changes to paragraphs 32 and 33 was irrational.
Ground 3: errors in considering changes to calculation of 5-year effective housing land
supply
[72]
There has for some time been a lack of clarity and consistency in relation to the
calculation of the 5-year effective HLS. The issuing of further guidance was justified and it
was for the Scottish Ministers to decide which method should be recommended. Objections
by consultees to the use of the average method were considered. The Housing Land
Research Paper formed the basis for the decision reached on this matter. Within that
document, there is a reasonably detailed consideration of the methods of calcu lation and
their consequences. While the discussion in the paper is not absolutely comprehensive and
there is force in some of the submissions for the petitioners as to failings in relation to the
implications and impact of use of the average method (for example in relation to meeting the
HLR) there is in my view no obviously material factor that was left out of account such as to
satisfy the test of the decision being irrational. In reaching that view, I take into account the
various points made in the Finalised Amendments document about this issue and that this
was a decision as to the appropriate mode of planning guidance in the interim period,
having regard to the effects of Covid-19, and prior to the fuller review for the purposes of
NPF4. As to whether it is unclear if PAN 1/2020 applies to development planning, there is
some force in that point and as I have noted, any such impact was not considered in the
41
consultation document. However, the Scottish Ministers could it seems have proceeded on
the basis that its link to paragraph 125 suggests that it is a tool for development
management, albeit it is not in terms expressly restricted to that issue. I am not satisfied that
this failure demonstrates that the decision reached was irrational. I therefore accept the
respondents' submissions on this ground and conclude that no irrationality has been
identified.
Ground 4: material flaws in Finalised Amendments Impact Assessments
[73]
Several alleged "material flaws" are founded upon by the petitioners on this ground.
On a detailed forensic analysis of the approach taken in these finalised assessments, there is
some basis for the criticisms made. But these are points of some intricacy and in my view the
broad decisions made in the FAIA were open to the Scottish Ministers to reach, on the basis of
the reasonably substantial further information obtained post-consultation. The criticisms do
not, individually or cumulatively, satisfy the test for irrationality. Again, PAN 1/2020 is
guidance rather than an absolute requirement and its focus appears to have been intended to be
on development management, on an interim basis prior to NPF4. A reasonably detailed
consideration of the appropriate approach is given in the Housing Land Research Paper.
Rather than there being an express conclusion of the proposed changes having no effect, the
Scottish Ministers now concluded that the effect was unpredictable but reasonably expected to
be neutral. In reaching their views in respect of the FAIA, in respect of the SEA screening, the
Scottish Ministers did consult with those whom they were required to consult under the
relevant statute.
42
Ground 5 - Fairer Scotland Duty Assessment was irrational
[74]
On this ground, the petitioners again found upon flaws, said to be material, in the
reasons given for the view that the amendments to SPP (2014) did not constitute a strategic
decision. The challenge founds in part upon the absence of any material showing the original
policy intention. For the reasons I have given earlier, that position does not, in my view,
require to be vouched by evidence. The petitioners did not present any proper basis for the
proposition that the changes do not represent the original policy intention.
[75]
I accept the respondents' position that this assessment was not irrational. The
reasons given for not requiring a full assessment are reasonably clear and once again while
there might be some criticisms these fall short of the hurdle for irrationality. It cannot be
said that not viewing the changes as strategic was a clear defiance of logic, given the
differing interpretations in this context as to what may be strategic. The concept of an out-
of-date plan has been removed from paragraph s 33 and 125, which is an important change
and in relation to potential impact it is relevant to the unfairness point in ground 1 above.
But for the purposes of ground 5 and the test of irrationality, I see some force in the
respondents' position that paragraph 30 still requires plans to be up-to-date. Quite how
that will come to be interpreted remains to be seen. While PAN 1/2020 would in practice be
likely to be applied, it is not "prescriptive in its application" of the average method.
Grounds 6 and 7
[76]
These grounds allege irrationality in relation to the Finalised Amendments Impact
Assessments and PAN 1/2020, founding upon points made in the grounds 2-5, which I have
already held do not meet that criterion.
43
Conclusions
[77]
The consultation process challenged in ground 1, considered in terms of the authorities
on the procedural fairness of a consultation, was in my view so unfair as to be unlawful for the
various combined reasons given. On the separate challenges in the other grounds to the
decisions made post-consultation, while some of the factors relied upon contributed to that
earlier unfairness and other criticisms on points of detail are legitimately made, I am not
persuaded that the rigorous test for irrationality in respect of any of these decisions is satisfied.
Disposal
[78]
In relation to ground 1, I shall sustain the first plea-in-law for the petitioners and grant
decree of reduction of the Scottish Planning Policy-Finalised Amendments-2020 and PAN
1/2020. On the remaining grounds, I shall sustain the fourth, fifth and sixth pleas-in-law for the
respondents. I shall also repel the parties' other pleas-in-law and reserve in the meantime all
questions of expenses.
