Big EU News! (Latest CJEU Case on Appropriate Assessment & A Draft Withdrawal Agreement)

The European Court of Justice is certainly turning the screws this year via various cases in relation to the Republic of Ireland, with now three rulings against its Planning Board, An Bord Pleanála. Following People Over Wind (see my 20 April 2018 blog post EU Court Ruling: Ignore Mitigation Measures In Habitats Screening) and Grace, Sweetman (see the second half of my 18 August 2018 blog post What Is Mitigation?) we now have Holohan (CJEU, 7 November 2018).

In basic summary:

People Over Wind has removed the ability for the competent authority to screen out the need for appropriate assessment, under the Conservation of Habitats Regulations 2017, on the basis that a significant effect on a Special Protection Area or Special Area of Conservation is unlikely, where that conclusion is reliant on proposed mitigation measures. The result has been far more projects and plans requiring appropriate assessment to ascertain that they will not adversely affect the integrity of the relevant SPA or SAC.

Grace, Sweetman has removed the ability for the competent authority to reach a conclusion at appropriate assessment stage that there will be no adverse effect on integrity, where mitigation measures are relied on that in reality amount to compensatory measures for the loss of habitat.

Holohan now imposes more detailed requirements on the competent authority at appropriate assessment stage:

1.  […] an ‘appropriate assessment’ must, on the one hand, catalogue the entirety of habitat types and species for which a site is protected, and, on the other, identify and examine both the implications of the proposed project for the species present on that site, and for which that site has not been listed, and the implications for habitat types and species to be found outside the boundaries of that site, provided that those implications are liable to affect the conservation objectives of the site.

2.  […] the competent authority is permitted to grant to a plan or project consent which leaves the developer free to determine subsequently certain parameters relating to the construction phase, such as the location of the construction compound and haul routes, only if that authority is certain that the development consent granted establishes conditions that are strict enough to guarantee that those parameters will not adversely affect the integrity of the site.

3.   […] where the competent authority rejects the findings in a scientific expert opinion recommending that additional information be obtained, the ‘appropriate assessment’ must include an explicit and detailed statement of reasons capable of dispelling all reasonable scientific doubt concerning the effects of the work envisaged on the site concerned.

If you are relying on an appropriate assessment in relation to a project or plan, I suggest that you urgently check that it addresses these three requirements. An decision taken in reliance upon an appropriate assessment which does not cover off these points will be susceptible to legal challenge. If caught at the right time, deficiencies should be able to be addressed by some extra work. But it will be too late to rectify matters once the appropriate assessment is reached and the decision taken.

These CJEU rulings are unambiguous in their stated conclusions on the law, very different from our common law approach.

They are also likely to continue to be relevant, regardless of what happens with Brexit. After all, as set out in my 18 September 2018 blog post Planning, Brexit, Michael Gove as Secretary of State for Environment, Fisheries and Rural Affairs has committed that:

Where environmental principles are contained in specific pieces of EU legislation, these will be maintained as part of our domestic legal framework through the retention of EU law under the EU (Withdrawal) Bill. Any question as to the interpretation of retained EU law will be determined by UK courts in accordance with relevant pre-exit CJEU case law and general principles, subject to the other exceptions and restrictions within the Bill. For example, CJEU case law on chemicals, waste and habitats includes judgments on the application of the precautionary principle to those areas. This will therefore be preserved by the Bill“.

As set out in that blog post, we are still waiting for the draft Bill, required by section 16 of the EU (Withdrawal) Act to be published by Boxing Day 2018, that will set out the environmental principles to be applied post Brexit and the body that will enforce them.

What we now have seen of course is the draft withdrawal agreement published on 14 November 2018. Who knows whether it will be concluded but it envisages that the CJEU will continue to have jurisdiction in any proceedings brought against the UK during the transition period to 31 December 2020.

In the event of the backstop being triggered at the end of the transitional period if the Irish border issue hasn’t been settled, a series of commitments in relation to environmental protection will kick in, as set out in Part 2 of Annex 4 to the Protocol on Northern Ireland/Ireland (pages 356 to 360 of the overall draft agreement). The commitments include:

– Non-regression in level of environmental protection subsisting at the end of the transitional period.

– The principles to be reflected in legislation:

a)  the precautionary principle;
b)  the principle that preventive action should be taken;

c) the principle that environmental damage should as a priority be rectified at source; and
d)  the “polluter pays” principle

– The Joint Committee shall adopt decisions laying down minimum commitments for:

a)  the reduction of national emissions of certain atmospheric pollutants;
b)  the maximum sulphur content of marine fuels

c) those best available techniques, including emission limit values, in relation to industrial emissions

– Commitment to meet international obligations as to addressing climate change

– Commitment to carbon pricing and trading of allowance consistent with EU system

– Finally, although much of this is already in hand via section 16 of the EU (Withdrawal) Act and/or the subject of other international obligations, a commitment to effective enforcement of environmental laws as well as the following:

The United Kingdom shall ensure that administrative and judicial proceedings are available in order to permit effective and timely action by public authorities and members of the public against violations of its laws, regulations and practices, and provide for effective remedies, including interim measures, ensuring that any sanctions are effective, proportionate and dissuasive and have a real and deterrent effect.

The United Kingdom shall implement a transparent system for the effective domestic monitoring, reporting, oversight and enforcement of its obligations pursuant to this Article and to Article 2 by an independent and adequately resourced body or bodies…

The independent body shall have powers to conduct inquiries on its own initiative concerning alleged breaches by public bodies and authorities of the United Kingdom, and to receive complaints for the purposes of conducting such inquiries. It shall have all powers necessary to carry out its functions, including the power to request information. The independent body shall have the right to bring a legal action before a competent court or tribunal in the United Kingdom in an appropriate judicial procedure, with a view to seeking an adequate remedy.”

Professor Colin Reid’s 15 November 2018 blog post Environmental Commitments in the Withdrawal Agreement is a very good commentary on all of these provisions.

Finally, fabulous timing on the part of UKELA to have secured for next week’s annual Garner lecture Professor Juliane Kokott, Advocate General at the CJEU (who has been at the centre of so much EU case law, including the People Over Wind and Holohan cases referred to above). It will be fascinating to hear her perspective.

Simon Ricketts, 16 November 2018

Personal views, et cetera

PS David Elvin QC has since reminded me that the CJEU also on 7 November handed down its judgment in the Dutch Nitrogen Deposition case, which also contains important rulings in relation to appropriate assessment, for instance the extent to which agricultural activities amount to a “project”, as well as the extent of certainty required if conservation measures are to be relied upon as mitigation. See James Maurici QC’s blog post.

An Update On CIL: Reform Promised, Meanwhile Continuing & Increasingly Expensive Uncertainties

Well done for getting past the heading.

Someone recently asked me whether the Government ever changes its proposals as a result of a consultation process. For an example of just such a thing, I was able to point to the Government response to supporting housing delivery through developer contributions: a summary of consultation responses and the Government’s view on the way forward (29 October 2018). The proposals set out in the Government’s March 2018 consultation paper (summarised in my 10 March 2018 blog post Developer Contributions, CIL, Viability: Are We Nearly There Yet?) have been modified significantly as a result of consultation, mostly for the better in my view at least.

This blog post focuses on the changed proposals and then looks at some looming issues facing phased developments in areas where charging authorities are looking to increase rates (I’m focusing on the Mayor of London’s MCIL2 but I’m sure the issue is of wider application).

The Government response

The document acknowledges some of the flaws of the current system:

The complexity and uncertainty of the current system of developer contributions is acting as a barrier to the delivery of housing. The system does not react quickly to changes in market conditions or allow local authorities to effectively secure the contributions needed to support new development. It is also not as transparent as it should be; local communities are not clear what infrastructure is provided alongside new development. And the current system could also be more effective in securing funding towards strategic infrastructure and supporting cross boundary planning.”

The Government intends to consult on draft regulations “later this year” to implement the changes set out in the March 2018 consultation document, as now modified. It is important to note that the Government will “also consider whether changes could be made to the Community Infrastructure Levy to incentivise the build out of developments.” (perhaps something that Sir Oliver Letwin might have looked at but…).

The Government has now modified its proposed changes as follows:

1. The previous proposal to replace charging authorities’ current statutory consultation requirements, in relation to proposed charging schedules, with self-certification as to whether it has sought “an appropriate level of engagement” has been amended. The Government “intends to take forward a modified proposal to ensure that regulations continue to require charging authorities to consult on draft charging schedules, whilst removing the current statutory requirement for two separate rounds of consultation in every circumstance.”

2. The pooling restriction will now be removed in its entirety in all areas. Hooray! Although of course there is the risk that tariff-type section 106 contribution requirements will again become more prevalent, in my view the pooling restriction led to many unnecessary problems and uncertainties, which would have continued under the Government’s March 208 idea of only removing the restriction in in areas where specified criteria were met.

3. The Government had intended to introduce a two month grace period for developers to submit a commencement notice in relation to exempted development, to address disproportionately severe problems arising for eg self-builders who, if they fail to meet procedural requirements, find not only that they fail to qualify for any exemption but that all CIL due has become immediately payable. The Government will not now introduce the grace period (which local authorities considered could lead to practical complications) but instead will be “making changes to the penalties associated with the failure to submit a Commencement Notice prior to development being started. This will ensure that any penalty is set at a proportionate level and will not result in the whole liability becoming payable immediately.”

There may also be more guidance as to potential exemptions: “A number of responses sought additional exemptions to address the unintended viability impacts of Levy liabilities on particular forms of development. The Government will consider how guidance could be used to manage these effects by encouraging authorities to take account of these issues when setting Levy rates and choosing how they use existing powers for discretionary social housing relief. In addition, the Government has already committed to bring forward legislation to exempt Starter Homes from the Community Infrastructure Levy.”

4. The complicated proposal in the March 2018 consultation document that charging schedules might be set with reference to the existing use of land has been dropped. “However, the Government has reviewed this proposal and considers there are existing flexibilities in the Community Infrastructure Levy Regulations that, through the use of differential Levy rates, will allow local authorities to go some way towards achieving the objective of the proposed reform. The Government therefore proposes to make changes to guidance to support local authorities to set differential rates more effectively.

5. At the time that it publishes the draft amendment regulations, the Government intends to “consult on changes to indexation of Levy rates and the way in which it would be implemented“. Its current preference is to index CIL rates “for residential development to the House Price Index using local-level data on an annual basis” and to index rates for non-residential development to the Consumer Price Index. It recognises the transitional issues that will arise.

6. The Government still intends to remove the restriction in relation to section 106 obligations that relate to an infrastructure project or type of infrastructure that is set out in the authority’s Regulation 123 list. “New reporting standards, which are set out in the Infrastructure Funding Statement, will address concerns about double dipping by ensuring that there is transparency over how developer contributions from both CIL and section 106 planning obligations are being used, rather than by placing formal restrictions in regulations.” We need to watch this one with care!

In relation to one specific issue that often leads to wrangles: “The Government also recognises the need to address existing uncertainty around using section 106 planning obligations to collect monitoring sums. The Government therefore intends to take forward proposals to make clear that local authorities can seek a fee from applicants towards monitoring planning obligations. In developing these proposals, the Government will consider how best to ensure that monitoring sums are set at an appropriate level.”

7. The Government had intended to give combined authorities and joint committees with strategic planning powers the ability to charge a Strategic Infrastructure Tariff. “The Government has decided to take forward a modified proposal, to enable Combined Authorities with strategic planning powers to take forward a Strategic Infrastructure Tariff, and to encourage groups of charging authorities to use existing powers to more effectively support the delivery of strategic infrastructure through the pooling of their local Community Infrastructure Levy receipts. In the longer term, the Government will bring forward proposals for allowing joint planning committees to charge the tariff, and will review options for giving other groups the power to levy a Tariff.”

The Government had also included a final “catch all” question seeking any other comments. Particular issues that were raised in responses included “the definition of gross internal area, implementation of the Levy in particular circumstances (such as in relation to development that takes place in a number of phases or there is a change of use), and the operation of exemptions and reliefs, indexation and in-kind payment.

Issues such as these are indeed causing much uncertainty.

The implications of increased rates/MCIL2

Whilst we wait for eventual reform of the system, of more immediate focus are the implications of gradual increases by charging authorities in CIL rates.

In London, the Mayor of London is waiting for the inspector’s report following the examination into the draft charging schedule for MCIL2. MCIL2 is proposed to part-fund Crossrail 2, in the way that MCIL1 (together with a related policy of seeking section 106 contributions in relation to some areas and types of development) is part-funding Crossrail 1.

The charging schedule for MCIL1 was adopted on 1 April 2012 (which is why there are many section 106 agreements and permissions dated March 2012, as developers and boroughs scrambled to ensure that permissions were not subject to the levy!).

This table sets out borough by borough the significant sums of money that MCIL1 has now raised:

The section 106 contributions policy for Crossrail (set out in the Mayor’s Crossrail Funding SPG, updated March 2016) predated MCIL1 and provided for section 106 contributions based on the following table and plans:

The standardised wording included in relevant section 106 agreements provides that any MCIL1 which is payable reduces the contributions which are required to be made under the relevant section 106 agreement.

As long as the inspector’s report is received on time and gives it a clean bill of health, MCIL2 will be adopted on 1 April 2019. The changes in rates, compared to where the 2012 rates currently sit with indexation applied, are mostly not huge, but they are significant in some areas. In areas where the increases are material, I am sure we will see a similar rush to beat the deadline.

One uncertainty is of course whether the examination inspector will accept a charging schedule that is predicated on Crossrail 2 coming forward. Little has progressed on the project since my 1 July 2017 blog post, Crossrail 2: Where Are You? We are all still awaiting outcome of an independent affordability review being chaired by Mike Gerrard. The Mayor is hedging his bets, simply indicating:

Should the Crossrail 2 project not be taken forwards, the Mayor would be able to apply the MCIL 2 proceeds to fund other strategic infrastructure.”

Assuming that MCIL2 is waved through and the charging schedule is adopted on 1 April, the relevant point at which it takes effect is determined by everyone’s least favourite phrase in the CIL Regulations: “at the time planning permission first permits the chargeable development“.

For a non-phased permission, this is the date of the permission – easy.

For a phased outline permission, this is either “the date of final approval of the last reserved matter associated with that phase” or “if earlier, and if agreed in writing by the collecting authority before commencement of any development under that permission, on the day final approval is given under any pre-commencement condition associated with that phase“.

For a phased full permission, this is either “the day final approval is given under any pre-commencement condition associated with that phase” or “where there are no pre-commencement conditions associated with that phase, on the day planning permission is granted“.

It will be seen that (1) the revised charging schedule is liable to bite in respect any phase of an existing phased permission if sufficient progress has not been made in relation to reserved matters or discharging pre-commencement conditions in relation to that phase and (2) that there are inherent uncertainties in the drafting, eg

⁃ What does “associated with that phase” mean?

⁃ Does “any” mean “any” or, in fact, “all“?

As a final example of the inadequacies of the legislation: where there is a phased permission and a revised charging schedule is subsequently adopted, the only indexation that applies is of the amount arising from the initial charging schedule up to the end of the year prior to the date of the permission. There is no further indexation through to commencement of development or any indexation of the revised charging schedule insofar as it applies to the phases! Would it not be simpler and more predictable if indexation were not to stop at the initial grant of the permission and instead to continue through to final approval (or even commencement of development) in relation to each phase, but if the potential application of revised charging schedules were removed?

In case anyone has made it down this far…

In conclusion:

⁃ the proposed reforms, and most recent proposals, look to be mainly positive

⁃ but the whole regime really does still need simplifying: to state the obvious, significant liabilities can unexpectedly arise for the unwary – and large sums of money can turn on uncertain issues of interpretation.

Simon Ricketts, 9 November 2018

Personal views, et cetera

Oliver’s Twist: Letwin’s Proposals For Large Housing Sites

Sajid Javid had given Sir Oliver Letwin the following terms of reference for his review into the “build out of planning permissions into homes” that was announced in the Autumn 2017 budget.

The Review should seek to explain the significant gap between housing completions and the amount of land allocated or permissioned in areas of high housing demand, and make recommendations for closing it. The Review should identify the principal causes of the gap, and identify practical steps that could increase the speed of build out. These steps should support an increase in housing supply consistent with a stable housing market in the short term and so that over the long-term, house prices rise slower than earnings. The review will provide an interim report to the Chancellor of the Exchequer and the Secretary of State for Housing, Communities and Local Government in time for Spring Statement 2018 and a full report for Budget 2018.”

Has Letwin’s final report (published alongside the budget on 29 October 2018) twisted itself away from the examination question that he was set? In my view, read as a set along with the previous two stages of his work, it is pretty clear how his thinking has developed. But he has ended up making a surprisingly radical and, to my mind, impractical, set of recommendations that surely will not find traction with this Government and which on any reflection would surely not increase the “speed of build out“. Perhaps due to the deadline he was set, the recommendations in the final report are not accompanied by any evidence. They are also set out in some detail (see for example the tables embedded in a later part of this blog post) at the expense of any commentary on, for example, the proposals to encourage timely delivery that were set out in the February 2017 white paper.

Dear Philip and Sajid

There have been three stages to his work. In his 9 March 2018 letter to the Chancellor and Secretary of State he provided this initial analysis:

The fundamental driver of build out rates once detailed planning permission is granted for large sites appears to be the ‘absorption rate’ – the rate at which newly constructed homes can be sold into (or are believed by the house builder to be able to be sold successfully into) the local market without materially disturbing the market price. The absorption rate of homes sold on the site appears, in turn, to be largely determined at present by the type of home being constructed (when ‘type’ includes size, design, context and tenure) and the pricing of the new homes built. The principal reason why house builders are in a position to exercise control over these key drivers of sales rates appears to be that there are limited opportunities for rivals to enter large sites and compete for customers by offering different types of homes at different price-points and with different tenures.

When a large house builder occupies the whole (or even a large part) of a large site, the size and style (and physical context) of the homes on offer will typically be fairly homogeneous. We have seen examples of some variation in size, style and context on some large sites; but the variations have not generally been great. It has become apparent to us that, when major house builders talk about the absorption rates on a large site being affected by “the number of outlets”, they are typically referring not only to the physical location of different points of sale on the site, but also and more importantly to differences in the size and style (and context) of the products being offered for open market sale in different parts of the site. Even these relatively slight variations are clearly sufficient to create additional demand – and hence additional absorption, leading to a higher rate of build out.

It is also clear from our investigation of large sites that differences of tenure are critical. The absorption of the ‘affordable homes’ (including shared ownership homes) and of the ‘social rented housing’ on large sites is regarded universally as additional to the number of homes that can be sold to the open market in a given year on a given large site. We have seen ample evidence from our site visits that the rate of completion of the ‘affordable’ and ‘social rented’ homes is constrained by the requirement for cross-subsidy from the open market housing on the site. Where the rate of sale of open market housing is limited by a given absorption rate for the character and size of home being sold by the house builder at or near to the price of comparable second-hand homes in the locality, this limits the house builder receipts available to provide cross-subsidies. This in turn limits the rate at which the house builder will build out the ‘affordable’ and ‘social rented’ housing required by the Section 106 Agreement – at least in the case of large sites where the non-market housing is either mixed in with the open market housing as an act of conscious policy (as we have frequently found) or where the non-market housing is sold to the housing association at a price that reflects only construction cost (as we have also seen occurring). If freed from these supply constraints, the demand for ‘affordable’ homes (including shared ownership) and ‘social rented’ accommodation on large sites would undoubtedly be consistent with a faster rate of build out. And we have heard, also, that the demand for private rented accommodation at full open market rents (the scale of which is at present uncertain) would be largely additional to, rather than a substitute for, demand for homes purchased outright on the open market.

The interim report

His interim report in June 2018 then focused on three issues:

• what the build out rate on large sites in areas of high housing demand actually is;

• why the rate of build out on these sites is as it is; and

• which factors would be most likely to increase the rate of build out on these sites without having other, untoward effects.

The interim report is a solid document with strong analysis and a variety of conclusions, one of which being that “if either the major house builders themselves, or others, were to offer much more housing of varying types, designs and tenures (and, indeed, more distinct settings, landscapes and street-scapes) on the large sites and if the resulting variety matched appropriately the desires of the people wanting to live in each particular part of the country, then the overall absorption rates – and hence the overall build out rates – could be substantially accelerated. The policy levers required to bring this about without damaging the economics of individual sites or the financial sustainability of the major house builders are topics for the second phase of my work, on which I shall report at the time of the Budget.”

The final report

And this is precisely what he has sought in part to do in his final report, published alongside the budget on 29 October 2018. I say in part, as there is no real analysis as to whether his proposed policy levers would or would not damage “the economics of individual sites or the financial sustainability of the major house builders“.

Underlying his conclusions seems to be his scepticism as to whether the encouragement in the NPPF for “residential developments to have a mix of tenures, types and sizes which reflect local housing demand (as well as emphasising the importance of good design)“, together with the 2018 NPPF’s requirement for local authorities to encourage the sub-division of large sites, is sufficient to lead to less homogenous development or “the prospect of significant increases in the rapidity of build out on such sites“.

He gives no evidence for this assumption. Even the 2012 NPPF (as now revised) is, after all, still working through into plans and permissions.

Instead of trying to work with the grain of the existing system, he recommends that “the Government should adopt a new set of planning rules specifically designed to apply to large sites. The purpose of these rules should be to ensure that all sites in areas of high housing demand whose size exceeds a certain threshold are subject to an additional form of planning control that requires those owning such sites to provide a diversity of offerings on the site which are able to address the various categories of demand within the local housing market. This, in turn, should ensure that houses can be built at a greater rate than at present on such sites, because the absorption rate for each category of housing will be complementary, yielding, overall, a greater absorption of housing by the local market as a whole in any given period.”

Ahead of a new legislative structure (both primary and secondary legislation) and an annex to the NPPF (I suspect it would take more than an annex – he’s driving a coach and horses through the thing as far as large housing sites are concerned), he envisages that the new rules could first be brought in by a written ministerial statement, secondary legislation and the policy annex. “If, for example, the Government decides to adopt my recommendations at the end of 2018, I suggest that it should be made clear to the owners of existing large sites in areas of high housing demand, and to those who are taking such large sites through the current planning system before commencing works, that the new rules governing planning permission for large sites will come into force at the start of 2021, and will therefore govern any permissions granted for large sites on or after that date.”

The primary legislation would:

” • define large sites both in terms of a size threshold (which might, for example, be set initially at 1,500 units2) and in terms of boundaries (to ensure that a site which is allocated as a single entity in a local development plan qualifies, even if it benefits from a number of different outline planning permissions);

• require local planning authorities, when granting allocations, outline permissions or final planning permissions for any large site or any part of a large site in areas of high housing demand, to comply with the new secondary legislation and the new planning policy relating to large sites – and, in particular, to include within all outline planning permissions for large sites in areas of high housing demand a requirement that ‘housing diversification’ on such sites should be a ‘reserved matter’; and

• establish the principle that all permissions for reserved matters granted in relation to such large sites should contain diversi cation requirements in accordance with the new secondary legislation and the new planning policy for large sites.”

The secondary legislation would:

” • amend the Town and Country Planning (Development Management Procedure)(England) Order 2015 to include type, size and tenure mix (alongside the current provision for prescription of access, appearance, landscaping, layout and scale) as characteristics that can be prescribed as reserved matters for large sites in areas of high housing demand; and

• require any applicant making an outline planning application for a large site or an application for final permission for a phase of a large site in an area of high housing demand to prepare a diversification strategy, specifying the types of diversity that will be exhibited on that site or in the part of the site to which the application refers.”

The new planning policy document would set out the diversification principles that are to apply to such large sites in areas of high housing demand in the future. By diversification, he means, for example, “housing of varying types, designs and tenures including a high proportion of affordable housing“, as well as “more distinctive settings, landscapes and streetscapes“. By all means strengthen the NPPF if further strengthening is needed (is it?) but how much of this is specific to schemes of 1,500 homes plus.

Then it really starts to get weird. Because there will be “scope for disagreement about whether a particular applicant has made a genuine effort to provide sufficient diversity to address multiple markets simultaneously and hence to increase the overall absorption rate and build out rate. Accordingly, in order to minimise recourse to appeal or litigation, I recommend that the Government should establish a National Expert Committee.

The primary purpose of this Committee should be to arbitrate on whether any application that causes a disagreement between the local planning authority and the applicant (and consequently comes to appeal) satisfies the diversification requirement, and is therefore likely to cause high build out rates.

The secondary purpose of the Committee would be to offer informal advice to any developer or local planning authority that was considering a large site application. I recommend that the Housing Secretary should guide local planning authorities to consult the National Expert Committee before approving any such large site application in an area of high housing demand.”

Why on earth would a new quango such as this be created?

For sites that will already have an outline planning permission before 2021, Letwin recommends that there should be financial incentives (ie government funding) for house builders to accept changes to their existing site plans. Developers would enter into a section 106 agreement to document their continued commitment to the diversity requirements. Letwin says that he has taken legal advice and is confident that the “voluntary transaction” that he proposes will prove to be lawful – perhaps, but it would certainly be unusual. Would the local planning authority be a party? Who would enforce?

One Step Beyond

He then goes “one step further” in relation to “large sites that have yet to be allocated within a local authority’s local plan“. He recommends “that the Government should, as part of the new primary legislation, introduce a power for local planning authorities to designate particular sites within their local plans as sites which can be developed only as single large sites and which therefore automatically become subject to the new planning rules for large sites. In addition, I believe that the local planning authority should be empowered to specify, at the time of designation, strong master-planning requirements including a strict design code as well as landscaping and full and specific infrastructure requirements.”

This in part appears to be a device to ensure that “the land value of those sites is not raised as far above the alternative use value as would be the case if a site were allocated in a local plan and subsequently obtained outline permission under our current rules“. But this can already be done by local planning authorities for good planning reasons, where comprehensive development is required for reasons of, for instance, sustainability or viability. Is Letwin going further than that?

What if there is no good planning reason why the site could not be sustainably be built out in parts? And what is indeed a single development? This will all prove hugely contentious. Particularly given that he goes on to indicate that to “ensure that a reasonable balance is struck between promoting the public interest through increased diversity and faster build out rates on the one hand, and proper recognition of the value of the land on the other hand, I recommend that the Housing Secretary (when issuing updated viability guidance alongside the new planning framework) should guide local planning authorities towards insisting on levels of diversity that will tend to cap residual land values for these large sites at around ten times their existing use value.”

No evidence is given as to why the level above which land values would be expropriated by the state without compensation (which, after all, would be the effect of the proposal) is set at 10 x EUV.

Letwin recognises that significant support will be needed from Homes England: “planning rules are by their nature passive and reactive. They can prevent things from happening (if they are properly enforced); but they can only do a very limited amount to encourage applicants to follow the spirit of the rules and hence to achieve fully the outcomes the rules have been created to achieve.”

He then goes on to visualise local authorities being empowered to bring forward sites themselves via a development vehicle, in one of two ways:

(a) the local authority could use a Local Development Company (LDC) to carry out this development role by establishing a master plan and design code for the site, and then bringing in private capital through a non-recourse special purpose vehicle to pay for the land and to invest in the infrastructure, before “parcelling up” the site and selling individual parcels to particular types of builders/providers offering housing of different types and different tenures;”

(b) the local authority could establish a Local Authority Master Planner (LAMP) to develop a master plan and full design code for the site, and then enable a privately nanced Infrastructure Development Company (IDC) to purchase the land from the local authority, develop the infrastructure of the site, and promote a variety of housing similar to that provided by the LDC model described above.

He sees local authorities that use these vehicles being given “clear” compulsory purchase powers over the large sites that the authorities allocate and indicates that “it would also make sense to consider the possibility of giving local authorities such CPO powers in relation to large sites that have been allocated in their local plan in the past but which have not obtained outline permission after a long period has elapsed.”

Even when compulsory purchase compensation values have been reduced by the mechanisms requiring build out as a single site (query how that is defined in practice) and by increasing the required diversity until the 10 x uplift on EUV is not exceeded, will development (with the required diversity) be viable for a local authority to bring forward? Will any authority have the resources for the task? Will non-recourse lending really be available to the extent that would be required? Why would anyone start on the process of promoting a large site for development when it can be snaffled as part of a larger “single site” in this way?

The notions in the report could be read as moving to the public sector the role of strategic land promotion companies, which I suspect (for all that they are maligned) to be responsible for a high proportion of the major housing sites that do come forward at present. So, to misappropriate Kit Malthouse’s recent analogy that he applied to Homes England, we would lose some WD40 in the system: the companies with the incentive to identify sites, assemble them, identify and overcome infrastructure constraints, devise a viable and acceptable form of development, pursue allocation and permission, open up land with strategic infrastructure and dispose of parcels to house builders. And, going back to the original terms of reference, this will “increase the speed of build out“?

I appreciate that this report was delivered to a deadline, which it achieved, but (unlike the previous stages of Sir Oliver’s review) it seems to me to lack any robust evidential basis at all to justify the wholly new structure that it proposes for allocating, permitting and delivering schemes with 1,500 or more dwellings. Nor does the review interest itself with any more practical nudges that could be introduced into the current system. If it just goes on the “nice but radical ideas” shelf, another year will have been wasted, without any real progress towards making practical improvements that might improve build out rates. After all, Homes England is already playing a hugely positive role in unlocking large-scale housing development and indeed on 30 October 2018 published its strategic plan for 2018/2019 – 2022/2023, setting how it intends to go much further to use its “land, money, powers and influence to increase the pace, scale and quality of delivery“. When the Government responds to the Letwin report in early 2019 I will be looking to see whether any measures that are to be taken forward will pragmatically assist Homes England’s practical work – they are the ones rolling up their sleeves on all this.

Lastly, if as a consequence of implementation of these proposals we were to see the private sector focusing its attention on smaller sites, in preference to these sites which can really make a difference in terms of delivering at scale, that would in my view be inconsistent with the brief that was set.

Stick or twist?

Simon Ricketts, 3 November 2018

Personal views, et cetera

PS No sooner had I finished this post and poured some strong coffee than I saw this morning’s announcement that the Secretary of State has appointed Professor Sir Roger Scruton to chair a ‘Building Better, Building Beautiful’ Commission – no-one could criticise the current build out rate of MHCLG when it comes to reports and reviews.

LAMP lighter

MHCLG Consults On A Changed Basis For Assessing Local Housing Need & Other Urgent Repairs

I’m not sure anyone was expecting MHCLG to act quite so quickly to try to mend a number of problems that have been arising from the July 2018 NPPF (although perhaps problems of its own making).

Its technical consultation on updates to national planning policy and guidance (26 October 2018) invites comments by 7 December 2018 on the following:

Local housing need assessment

I referred in my 29 September 2018 blog post OAN Goal to the confusion caused by the publication by the ONS on 20 September 2018 of updated 2016-based household projections that resulted in the national minimum housing need calculated by the NPPF’s standard method falling significantly from data published in September 2017 which had been based on 2014 household projections.

There was widespread concern that the updated figures were not reliable. The Government had indicated that the figures would not lead to a reduction in the national 300,000 new homes target. A revision to the standard method was to be made so that the new household projections did not cause that target to be missed but in the meantime how were authorities to plan?

The consultation paper is unambiguous: the Government has decided that it is not right to change its aspirations and the ONS figures are indeed misleading due to the way that they only draw from two censuses (rather than previous projections based on five censuses) “which focuses it more acutely on a period of low household formation where the English housing system was not supplying enough additional homes“. In addition:

⁃ “Household projections are constrained by housing supply

⁃ “The historic under-delivery of housing means there is a case for public policy supporting delivery in excess of household projections, even if those projections fall“.

⁃ “Other things being equal a more responsive supply of homes through local authorities planning for more homes where we need them will help to address the effects of increasing demand, such as declining affordability, relative to a housing supply that is less responsive“.

⁃ “The above factors have led to declining affordability…This indicates that the Government should not be less ambitious for housing supply“.

The Government has decided that the best way of responding to the ONS household figures is to ignore them completely, ie in its language:

1. For the short-term, to specify that the 2014-based data will provide the demographic baseline for assessment of local housing need.

2. To make clear in national planning practice guidance that lower numbers through the 2016-based projections do not qualify as an exceptional circumstance that justifies a departure from the standard methodology; and

3. In the longer term, to review the formula with a view to establishing a new method […] by the time the next projections are issued.”

So for local plans submitted from 24 January 2019, the 2014-based household projections as per the September 2017 data are to be used but with current figures used for the calculation of the ratio of local median house prices to local median earnings (where the ratio exceeds four the standard method formula will continue to increase local need above household projections). This all provides authorities with welcome clarity – ignore the September 2018 ONS projections and no need to wait for tweaks to the methodology.

Housing land supply

The 2018 NPPF provides that in calculating how many years’ supply of housing land supply each authority has, the standard method for assessing local housing need is to be used as the baseline for housing land supply calculations where plans are considered to be out of date. The NPPF is to be amended (and updated planning guidance is to be published) so as to clarify that whilst in exceptional circumstances authorities can use a justified alternative approach to the standard method for calculating housing need, this only applies to plan making rather than in the calculation of need in the determination of applications and appeals where the scale of housing land supply is relevant.

The definition of deliverable

In order to determine whether an authority has a five year supply of deliverable sites, the definition of “deliverable” is critical. The Government has held its hands up: the definition of “deliverable” in the 2018 NPPF could be clearer. It proposes the following revised definition:

To be considered deliverable, sites for housing should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years. In particular:

a) sites which do not involve major development and have planning permission, and all sites with detailed planning permission, should be considered deliverable until permission expires, unless there is clear evidence that homes will not be delivered within five years (for example because they are no longer viable, there is no longer a demand for the type of units or sites have long term phasing plans).

b) where a site has outline planning permission for major development, has been allocated in a development plan, has a grant of permission in principle, or is identified on a brownfield register, it should only be considered deliverable where there is clear evidence that housing completions will begin on site within five years.”

There will be further guidance in due course “to provide further information on the way that sites with different degrees of planning certainty may be counted when calculating housing land availability“.

Development requiring Habitats Regulations Assessment

The Government belatedly intends to address a problem that has arisen from the European Court of Justice’s ruling in People Over Wind (see my 20 April 2018 blog post EU Court Ruling: Ignore Mitigation Measures In Habitats Screening). The 2018 NPPF followed the 2012 NPPF in disapplying the presumption in favour of sustainable development where appropriate assessment is required, even though the effect of People Over Wind is that appropriate assessment is now routinely required in relation to proposed developments where mitigation will avoid any potential from harm, thereby removing the presumption in relation to many more development proposals than had previously been the case.

Paragraph 177 is now proposed to be amended to read:

The presumption in favour of sustainable development does not apply where the plan or project is likely to have a significant effect on a habitats site (either alone or in combination with other plans or projects), unless an appropriate assessment has concluded that there will be no adverse effect from the plan or project on the integrity of the habitats site.”

So now the need for appropriate assessment will not be a bar to the presumption applying. The wording in fact now allows the presumption to apply to more schemes than was the case pre People Over Wind.

The Government could have dealt with this issue before the 2018 NPPF was published. It makes the rather weak excuse: “Although some consultation responses asked for an amendment to the Framework in the light of the ruling, there was not an opportunity for all interested parties to comment at the time.” Well, why was there not even a written ministerial statement to clarify the position? I’m sure I am not the only one to have lost a planning appeal partly due to the absurd position that arose.

The government also indicates that it is “considering what other changes to regulations and guidance may be necessary following the European Court’s ruling“.

In my view MHCLG should take some credit for trying to sort out all of these issues. It is also interesting that the previous approach of avoiding making running repairs to the NPPF has been abandoned – we can soon expect NPPF version 2.1.

Simon Ricketts, 26 October 2018

Personal views, et cetera

Planning Inquiries: Expert Witnesses & Success Fees

If you give evidence as an expert at planning inquiries, I recommend that you read the judgment of Holgate J in Gardiner and Theobald LLP v Jackson (VO) (Upper Tribunal (Lands Chamber), 3 August 2018).

In the superficially different context of a rating dispute, he sets down unambiguously the perils that await any expert witness whose remuneration is in any way contingent on the outcome of the dispute. This reflects the position in the RICS code of conduct.

The question I then asked myself is whether the position can be any less strict in relation to any planning dispute, where someone is giving evidence as an expert (most commonly a planning inquiry but in my view equivalent considerations apply where a report is provided, on the basis that it is to be relied upon as independent expert evidence, in other proceedings that may appear less formal, such as hearings, examinations and written representations procedures).

The RTPI position is less explicit than that of the RICS (whose code equally applies to expert evidence in planning maters). I haven’t researched other professional codes of conduct (after finding that the Chartered Institution of Highways and Transportation does not appear to have a code of conduct on-line I gave up on that line of research for a Saturday morning).

In reading the judgment, bear in mind of course that Holgate J is both President of the Upper Tribunal Lands Chamber and the Planning Court’s Planning Liaison Judge (ie head of the Planning Court).

The position in relation to expert evidence given in court proceedings is clear. Holgate J refers to the R (Factortame) v Secretary of State (Court of Appeal, 3 July 2002) case, which related to an attempt by accountants to recover, as part of a costs claim, success-related fees that they had secured from Anglo-Spanish fishing companies though their work in relation to judicial review proceedings stemming from a dispute as to entitlements to fish in British waters. One of the matters for the court to consider was the extent to which the fees related to work which the firm had carried out that could be categorised as giving expert evidence.

The Court of Appeal held on the facts that it was not, but said this:

 “Expert evidence comes in many forms and in relation to many different types of issue. It is always desirable that an expert should have no actual or apparent interest in the outcome of the proceedings in which he gives evidence, but such disinterest is not automatically a precondition to the admissibility of his evidence. Where an expert has an interest of one kind or another in the outcome of the case, this fact should be made known to the court as soon as possible. The question of whether the proposed expert should be permitted to give evidence should then be determined in the course of case management. In considering that question the Judge will have to weigh the alternative choices open if the expert’s evidence is excluded, having regard to the overriding objective of the Civil Procedure Rules.”

“To give evidence on a contingency fee basis gives an expert, who would otherwise be independent, a significant financial interest in the outcome of the case. As a general proposition, such an interest is highly undesirable. In many cases the expert will be giving an authoritative opinion on issues that are critical to the outcome of the case. In such a situation the threat to his objectivity posed by a contingency fee agreement may carry greater dangers to the administration of justice than would the interest of an advocate or solicitor acting under a similar agreement. Accordingly, we consider that it will be in a very rare case indeed that the Court will be prepared to consent to an expert being instructed under a contingency fee agreement.”

Holgate J identifies that whether the Factortame approach is to be applied by the Upper Tribunal is a question for the Upper Tribunal (or, on appeal, the Court of Appeal). There is the question, not previously conclusively determined, as to whether the existence of a contingency fee arrangement goes to the weight to be given to the evidence or whether it is to be admissible in the first place.

He sets out some of the potential advantages and disadvantages of each approach before concluding:

These issues would need to be the subject of well-considered submissions following detailed research. We also raise them for consideration by, and discussion amongst, the Tribunal’s users and the various professional bodies involved. No doubt there will be other matters to consider which we have not identified.

However, one thing is certainly clear. Whatever approach this Tribunal decides to adopt on the issues raised by Factortame, it remains wholly unacceptable for an expert witness, or the practice for which he or she works, to enter into a conditional fee arrangement, without that fact being declared (and in sufficient detail) to the Tribunal and any other party to the proceedings from the very outset of their involvement in the case. The Tribunal will treat such a failure as a serious matter.”

In the Gardiner and Theobald case, the expert engaged by G&T had not disclosed to the Valuation Tribunal that whist he was not charging on a contingent basis for his expert witness role before the VTE, his firm would still benefit from success-related fees flowing from his previous work.

The judgment is pretty scathing in its terms. Nor was the expert able to hide behind any argument that it was all the fault of his firm’s standard terms of engagement:

This aspect was not investigated during the hearing and so we make no finding about it. No doubt many surveyors and other experts, particularly those in larger practices, will operate on an assumption that standard form conditions will have been drafted by the practice so as to comply with the requirements of the tribunals before whom they appear and of the professional bodies to which they belong.  In practice, an individual expert may not consider questioning the content of the standard conditions which are regularly used by the firm for which he or she works.  But that cannot override or detract from the obligations which each individual expert personally owes, not only to the relevant tribunal or court, but also under any professional code of conduct. All these considerations only serve to emphasise the importance of a practice ensuring that its standard terms of engagement are drafted with care and clarity so that they do indeed comply with those obligations. Furthermore, individual experts must ensure that any specific terms agreed for individual cases, whether varying or supplementing the standard conditions of a practice, also meet the same requirements.”

Holgate J restates the principles that apply to expert witnesses, as set down in the Ikarian Reefer case:

The expert’s duty to help the Tribunal, which overrides any obligation to the client (rule 17(1) of the 2010 Rules), connotes an obligation to act independently and without bias.  The obligation is so similar to that in CPR 35.3 that it is helpful to refer to the related commentary in “Civil Procedure” (2018).  Because this obligation is fundamental to the duty of an expert giving evidence in the Tribunal, it is appropriate to set out certain of the key principles summarised in the “Ikarian Reefer” [1993] 2 Lloyd’s Rep 455: –

1. Expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation (Whitehouse v. Jordan [1981] 1 WLR 246at p. 256, per Lord Wilberforce).

 

2. An expert witness should provide independent assistance to the Court by way of objective, unbiased opinion in relation to matters within his expertise (seePolivitte Ltd. v. Commercial Union Assurance Co. plc [1987] 1 Lloyd’s Rep. 379 at p. 386 per Garland J and Re J [1990] FCR 193 per Cazalet J). An expert witness in the High Court should never assume the role of an advocate.

 

3. An expert witness should state the facts or assumptions upon which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion (Re J supra).

 

4. An expert witness should make it clear when a particular question or issue falls outside his expertise.

 

5. If an expert’s opinion is not properly researched because he considers that insufficient data is available, then this must be stated with an indication that the opinion is no more than a provisional one (Re J supra). In cases where an expert witness, who has prepared a report, could not assert that the report contained the truth, the whole truth and nothing but the truth without some qualification, that qualification should be stated in the report (Derby & Co. Ltd. v Weldon The Times 9 November 1990 per Staughton LJ).

 

6. If, after exchange of reports, an expert witness changes his view on a material matter having read the other side’s expert’s report or for any other reason, such change of view should be communicated (through legal representatives) to the other side without delay and when appropriate to the Court.”

Holgate J stresses the importance of the statement of truth (which I will come back to):

Any notion that, by way of example, the inclusion and signing of an expert’s declarations in his or her report is a mere formality, or something which may be dealt with perfunctorily, needs to be completely dispelled.”

So how does all of this apply to planning inquiries?

It seems to me that the position for chartered surveyors as expert witnesses is clear, in the light of RICS Practice Statement and Guidance Note: Surveyors acting as expert witnesses. The practice statement sets out the tribunals to which it applies, which includes evidence given to “inspectors, commissioners and reporters (for example, in planning proceedings, including inquiries, hearings, examinations in public – independent panels; independent examination and proceedings of the Infrastructure Planning Commission, and Planning and Water Appeals Commissions).

As quoted by Holgate J, the practice statement deals with conditional fees in the following terms:

“10.1 You should not undertake expert witness appointment on any form of conditional or other success-based arrangement including where those instructing you are engaged on such a basis.

10.2 It is inappropriate to be remunerated by way of a conditional fee arrangement when acting as an expert witness but it may be an appropriate fee basis when acting as an advocate.  When acting in a dual role as an expert witness and advocate, where permitted in lower tribunals, a conditional fee arrangement may be acceptable because it will be seen as attached to the role of advocate.  Such a dual role improves access to justice by reducing costs and therefore a conditional fee payment can be supported in these limited and strict circumstances.

10.3 When acting in a dual role and where a conditional fee arrangement has been agreed, this must be declared to the tribunal.

10.4 It is unlikely that a dual role will be permitted in higher tribunal formats and consequently previously agreed conditional fees when the surveyor has appeared in a lower tribunal will, at the point of transferring to the superior or higher tribunal, need to be commuted and replaced by an hourly rate or fixed fee arrangement.”

The statement of truth that is required by the RICS to be included in expert reports includes: “I confirm that I am not instructed under any conditional or other success-based fee arrangement.”

It is interesting to note that the Planning Inspectorate’s Planning Appeals Procedural Guide does not include any advice on the question of success-related fees and the recommended wording, within Annex O, for the statement of truth, is simply:

The evidence which I have prepared and provide for this appeal reference APP/xxx (in this proof of evidence, written statement or report) is true [and has been prepared and is given in accordance with the guidance of my professional institution] and I confirm that the opinions expressed are my true and professional opinions.”

As it happens, the RTPI recently updated guidance for its members, Practice Guidance September 2018, Planners as expert witnesses, but again there is nothing explicit on the question of success-related fees (although there is useful advice on, for example, the issues arising where evidence is given on behalf of the witness’s employer or, in the case of local authority planners, in support of a decision by councillors in the face of officers’ recommendations). Perhaps it will be said that it is implicit in one of the RTPI’s core principles: “Members must not make or subscribe to any statements or reports which are contrary to their own bona fide professional opinions, nor knowingly enter into any contract or agreement which requires them to do so.” But surely, particularly following that invitation from Holgate J to professional bodies, consideration should now be given to a much clearer statement? After all, situations inevitably arise where, even though the expert has no direct success-related fee arrangement, further work and fees will inevitably arise from a particular outcome, and where is the dividing line to be drawn?

So, I conclude, tentatively (do put me right, please) as follows:

There is no specific legal authority to support any proposition that expert evidence to a planning inquiry is inadmissible if the expert (or his or her firm) stands to gain in some way from a specific outcome from the proceedings. However, RICS members are subject to an express prohibition; members of other professional organisations may be under implied restrictions, and at the very least the decision maker is in any event liable to place significantly less weight on evidence which is given on a success-related fee basis – and such a basis should certainly be disclosed.

Simon Ricketts, 20 October 2018

Personal views, et cetera

The Up Right

In his speech to the Conservative party conference on 1 October 2018, James Brokenshire announced that the Government will consult “in due course” on “introducing a new permitted development right to allow property owners to extend certain buildings upwards, while maintaining the character of residential and conservation areas and safeguarding people’s privacy“.

Not that one again?!

My second ever blog post, on 15 June 2016, Permitted Development: What Next? summarised the February 2016 consultation paper jointly published by DCLG and the previous Mayor of London, which sought views on proposals “to increase housing supply in the capital by allowing a limited number of additional storeys to be built up to the roofline of an adjoining building through permitted development rights, local development orders or development plan policies”. The paper set out in some detail the criteria and prior approval requirements which would apply.

Nothing then happened, perhaps due to the change in Mayor and the ministerial changes that followed the June 2016 referendum, or perhaps it was always going to be a difficult piece of legislation to draft in a way that arrived at a mechanism that would be simpler for developers than a traditional planning application but which secured necessary amenity protections.

My 17 March 2018 blog post Permitted Development: À La Recherche Du Temps Perdu reported on the conflict between on the one hand a ministerial policy statement on 5 February 2018 which appeared to make it clear that the initiative (now across England, not just London) would be dealt with by policy, within the NPPF and then on the other hand Sajid Javid’s speech launching the draft revised NPPF on 5 March 2018 which had this passage:

And there are also other areas in which we’re ready to go further to take the delivery of housing up a gear.

Including a new permitted development right for building upwards to provide new homes”.

Paragraph 118 (e) of the new NPPF does specifically address upwards extensions: Planning policies and decisions should “support opportunities to use the airspace above existing residential and commercial premises for new homes. In particular, they should allow upward extensions where the development would be consistent with the prevailing height and form of neighbouring properties and the overall street scene, is well- designed (including complying with any local design policies and standards), and can maintain safe access and egress for occupiers.”

In the light of the Javid speech, the Brokenshire announcement was not a big surprise but I do wonder how the permitted development will be drafted so as to avoid the obvious issues that arise and why that NPPF statement isn’t considered to be sufficient.

The RTPI’s response to the announcement on 2 October 2018 was surely right, in which its chief executive, Victoria Hills, said:

Densification of built-up areas can bring about much needed housing supply, but quality is as important as numbers. Blanket height extensions come with issues that have potentially serious impact on streetscape and people’s access to light. National policy can provide a favourable steer, but local communities should be able to set standards which enable higher buildings to make a positive contribution to housing supply.”

There is no indication as to when the consultation will take place. For instance, is the Chancellor’s 29 October Autumn budget statement too soon?

It is interesting that Brokenshire did not take the opportunity at the party conference also to reheat the Autumn 2017 budget policy paper announcement that “the government will consult on introducing… a permitted development right to allow commercial buildings to be demolished and replaced with homes“.

In the meantime, the existing office to residential permitted development right continues to be controversial.

Earlier this year, the RICS published a research paper, Extending permitted development rights in England: the implications for public authorities and communities (1 May 2018)

The study estimated that “between 86,665 and 95,045 dwellings (depending on how student accommodation is classified) might potentially have been created under the extended PD rights between 2010 and 2017. The bulk of these additional dwellings arises from small-scale (less than 10 units created) conversions from commercial uses (including offices) to residential use and from agricultural buildings use to residential use.

These small schemes have been broadly distributed (largely in locations with relatively low property values) through cities and towns without any marked regional patterning. The large-scale conversions of office and other commercial uses to residential use that are a key matter of concern to policy makers are less important with regard to the overall number of dwellings delivered and are overwhelmingly concentrated near the cores of major urban areas. These large scale office conversions (excluding student accommodation) are concentrated in the South East. The scale of PD occurring entirely within the industrial and commercial use classes is relatively modest.

Cost-Benefit Analysis (CBA) compared the direct costs and benefits to local authorities of extended PD rights with the outcomes of an identical development that had obtained formal planning permission. The key findings were that:

The largest estimated financial impact is the loss in affordable housing contributions. This amounted to about £42.5m.

The benefits arising from savings in staffing costs within planning departments (£14m) are not enough to offset the loss of fees (£22m).

Overall, this part of the analysis estimates that the direct financial impact of the extension of PD rights is a net loss to all the Local Authorities across England of around £50m.”

The research indicates that office to residential conversions under PD have also produced a higher amount of poor quality housing than schemes governed through full planning permission.”

But the mechanism still has its cheer leaders. Conservative MP Nick Herbert wrote a piece in the Standard, Permitted development is key to race to build homes on 8 October criticising the London Mayor for encouraging, in the draft London Plan, boroughs to use article 4 directions to remove the permitted development right.

Then a penny dropped. Nick Herbert is chairman of a think tank, called The Project for Modern Democracy. Who should be the research director for the “Planning Change” strand of the think tank’s work but Alex Morton? As set out on the Project for Modern Democracy’s website:

“Alex was Special Adviser to then Prime Minister (David Cameron) for two and a half years, focused on housing, planning, and local government. He also drafted the Conservative 2015 Manifesto on those areas. Prior to working in No.10, he led on housing and planning at the Policy Exchange think tank.”

He was lobbying for a permitted development right to convert offices to residential as long ago as 2011 in a Policy Exchange paper, More Homes: Fewer Empty Buildings.

Morton has now published a short paper, A backwards step on Permitted Development (26 September 2018) on which the Nick Herbert article was based. The piece seeks to rebut criticisms of the office to residential permitted development right, particularly that it has led to shortages of business space, lower affordable housing and “unsuitable homes“. Read it for yourself but I found it a pretty weak analysis. I also found it strangely inconsistent with a comment piece he had written in the Independent in 2013, which contained passages like this:

Finally, there are unnecessary and unhelpful side-shows like the extensions debacle last week, which stripped immediate neighbours of their powers to object to major changes next door, and which even most supporters of planning liberalisation felt went too far.

I wonder what the Project for Modern Democracy thinks about the proposed Up Right?

Simon Ricketts, 13 October 2018

Personal views, et cetera

A Promise Is A Promise

I set out the principles of legitimate expectation in my 24 March 2018 blog post Once More Unto The Breach Of Legitimate Expectation, Dear Friends and referred to 29 November 2017 Lang J’s judgment at first instance in Save. The Court of Appeal has now partly overturned that judgment, in R (Save Britain’s Heritage) v Secretary of State (Court of Appeal, 4 October 2018). The case resulted from the Secretary of State’s decision not to call in the application for planning permission for the proposed Paddington Cube development, although given that planning permission and listed building consent was subsequently granted by Westminster City Council for that development, which was beyond challenge, these proceedings continued to the Court of Appeal on a basis which was only academic as far as that development was concerned.

Lang J had reached a curious conclusion. She accepted that a legitimate expectation had arisen, as a result of statements in 2001 (first in a green paper and then in ministerial statements), repeated in a 2010 ministerial statement, that the Secretary of State would give reasons when deciding not to exercise his power to call in planning decisions. But she found that “in 29 February 2014, in the course of preparation for the High Court case of Westminster City Council v Secretary of State for Communities and Local Government [2014] EWHC 708 (Admin), a departmental decision was made to cease the practice of giving reasons” and therefore the earlier statements and practice relied upon by the claimant “could no longer found an expectation that reasons would be given. If any such expectation was held, it had ceased to be a legitimate one, because of the change in practice.”

Lang J accordingly dismissed the claim, in effect concluding that a promise could be publicly given by Government and privately retracted.

The Court of Appeal took a different view. The judgment of Coulson LJ is pretty scornful as to the Government’s position and the circumstances of the alleged 2014 change in policy:

It is the SoS’ case that, at some unknown date early in 2014, a decision was taken not to give reasons for a decision declining to call in an application and that, since then, such decision letters have been issued without giving reasons. The confused circumstances in which this change came about, and the extent to which it could fairly be said to be a change of policy at all, are dealt with in greater detail in Section 5 below.”

“…it is a recipe for administrative chaos if a legitimate expectation can be generated by an unequivocal ministerial promise, only for it then to be lost as a result of an unadvertised change of practice.”

“…it is worth noting how and why the SoS says that this change of practice occurred. It appears that, in the Westminster case, the Minister had given reasons for not calling in the decision which were plainly wrong on their face. As a result of this error, somebody (and it is quite unclear who) within the Department for Communities and Local Government decided that it would be more prudent for reasons not to be given under s.77. In consequence, changes were made to the template letter sent out (to the relevant LPAs, or to the objectors who had requested call in) when a decision was made not to call in an application under s.77. Mr Harwood QC was therefore right to say that this was not an open or transparent way to withdraw a public ministerial promise made in Parliament.”

“…a close textural analysis of the samples included in the court bundle only serves to confirm that the alleged change of practice relied on by the SoS was negligible.

From the SoS’ point of view, therefore, so far, so bad: but it gets worse. Ms Lieven QC was counsel for the SoS in the Westminster case. When Lang J asked her how it was that the change in practice had occurred, it was apparent from her answers (given on instructions) that, at the time of the Westminster case in 2014, nobody in the Department recalled or had in mind the unequivocal promise made in 2001 (and repeated in 2010). Thus, Mr Harwood QC was right to submit that the change in practice relied on by the SoS was brought about in ignorance of the 2001 policy promise. So, even on the SoS’ case, the promise to give reasons was never consciously withdrawn, whether for good reason or not; it had instead been forgotten altogether. In consequence, neither of the typical answers to a legitimate expectation claim identified in paragraph 39 above (a conflict with other statutory duties or a reasonable decision not, after all, to honour the promise) can arise on the facts of this case. It is difficult to see how a person can be said to have changed a policy of which they were unaware at the relevant time.”

Accordingly, it seems to me that the legitimate expectation rightly identified by Lang J did not come to an end as a result of the confusion and muddle generated by the Westminster case and/or the apparent decision to make, at best, minor changes to the template letter. An unequivocal promise was made, and that unequivocal promise should have been publicly withdrawn when (or if) a conscious decision was taken no longer to give reasons for not calling in applications under s.77. For these reasons, I consider that SAVE’s legitimate expectation case has been made out.”

A separate ground of appeal, that Lang J was wrong not to find that there was a general duty to give reasons, quite aside from any legitimate expectation, failed.

The 2014 Westminster case referred to in Save did indeed cause “confusion and muddle“. That case related to a challenge by English Heritage to the decision of the then Secretary of State not to call in an application for planning permission made to Lambeth Borough Council for the redevelopment of Elizabeth House, next to Waterloo Station. In that case Westminster City Council was an objector, having objected to the application and having sought call-in without success.

Whilst it was accepted that there was no general duty to give reasons, the argument made was that the Secretary of State had volunteered reasons and therefore they had to be adequate.

The Secretary of State’s letters to Westminster City Council and Lambeth Borough Councils, informing them that the application would not be called in, were said by Collins J to be “badly drafted” and on their face showing errors in the application of the Secretary of State’s call in policy.

The judgment contains this classic sentence in relation to the letter sent to Lambeth:

It is so obviously wrong particularly, as will become apparent, when read with the advice given that it cannot and does not reflect the defendant’s thinking.”

Collins J accepted the submissions of Nathalie Lieven QC, on behalf of the Secretary of State, that the letter was so bad that it could not have been intended to contain any reasoning!

Ms Lieven supported by Mr Harris and Mr Simons submitted that the letter was doing no more than informing the recipient LBL that the defendant had decided not to call in the application. She accepted as was inevitable that it was poorly drafted and that in effect that part of it should be ignored. It was not purporting to give reasons. She relies on the advice given to the defendant and in effect submits that since neither the defendant nor Mr Boles could conceivably have believed that it did not engage some of the matters which required consideration to be given to calling in the application it could not have set out the defendant’s thinking nor could it properly have done so.

Mr Cameron understandably expressed surprise that it was said that the letter was so obviously wrong that the defendant could not have meant what is set out in it. However, I am satisfied that regrettably that is the case. The letter cannot be regarded as one which was intended to give reasons. The defendant was relying on his right not to give reasons and the letter must be read accordingly. It is plain when the advice to him is seen that he could not have been unaware of nor could he have misunderstood his policy. It follows that the first three grounds relied on must fail since in addition there is no question of giving reasons. While it may be that it would be desirable if the defendant were required to give reasons why he decided not to call-in in a case which did meet the criteria for call-in but it is not open to me in the light of the existing authorities to impose such a duty.”

A brave but successful defence. No wonder that in the context of those letters being under the microscope, civil servants presumably decided that it would be safer to stay well away from giving reasons – although the Secretary of State was fortunate that the claimant did not argue breach of legitimate expectation, because surely, on the basis now of Save, that case was wrongly decided

So what is the practical effect of the Court of Appeal’s ruling in Save? It is a useful statement of the law in relation to legitimate expectation where that expectation arises by way of a promise and of immediate effect in relation to future decisions which the Secretary of State may make as to whether or not to call in planning applications for his own determination but of course the Secretary of State can change his policy on giving reasons at any time, as long as he does it formally and openly. Will he?

Simon Ricketts, 5 October 2018

Personal views, et cetera

Pic courtesy of Mixology