OAN Goal

The Government’s goal remains as per Philip Hammond’s 22 November 2017 Autumn budget statement:

So today we set out an ambitious plan to tackle the housing challenge.

Over the next five years we will commit a total of at least £44 billion of capital funding, loans and guarantees to support our housing market.

To boost the supply of skills, resources, and building land.

And to create the financial incentives necessary to deliver 300,000 net additional homes a year on average by the mid-2020s.”

Will that number be reached? What pressure will the Government be under from its supporters, at next week’s party conference and subsequently, to resile from that 300,000 target in the light of the Office of National Statistics’ statistical bulletin, household projections in England published this month?

After topdown targets for individual authorities, derived from regional plans directly overseen by government, were abolished by the incoming 2010 coalition government, the 2012 NPPF has required each local authority to work out for itself, without any centrally prescribed methodology, what the objectively assessed need for housing is in its area. That quickly proved to be a recipe for complexity, uncertainty, local politicking and delay.

So the Government has been trying since 2015 to arrive out how to arrive at a simpler system that isn’t seen as centrally prescribed. As set out in my 20 September 2017 blog post Housing Needs: Assessed Or Assumed?, the Government decided to consult on a new “standard method” which would provide authorities with a minimum figure, desired from a formula based on household projections, local affordability and a cap on the extent of any increase deriving from the new formula.

Alongside its 14 September 2017 consultation document it published a spreadsheet showing “indicative” figures that would result for each authority from the new method, draft figures which it warned should be “treated with caution“. The total number totted up to 266,000 – a number that made the 300,000 look like a decent stretch target.

All admirably transparent and fascinating at the time, but surely in retrospect it was not helpful to publish those figures, particularly given that it was also stated that the new standard method would apply to local plans that weren’t submitted for examination by the later of 31 March 2018 and publication of the new NPPF?

Numbers drive actions. For some authorities there was clearly an immediate incentive to rush to submit their plan before the standard method was imposed, for others quite the reverse. We have seen corners cut by some authorities in their haste and the position became even more confused once (1) the possible 31 March 2018 deadline became, once the new NPPF was published containing a six months’ grace period, 24 January 2019 and (2) it became clearer that the figures and methodology were liable to change in any event.

The numbers were always likely to change given that the September 2017 household formation projections were arrived at by MHCLG using date going back to 1971 and the task for arriving at the final numbers was to be given to the Office of National Statistics, who would use the 2016-based population projections published in May 2018. When the ONS published its proposed methodology in June 2018 it became clear that ONS would only use trends in household formation back to 2001. Lichfields were expressing concerns about the likely consequences in a 27 June 2018 blog post:

We know that in the decade 2001-11 housebuilding fell to its lowest level and household formation amongst young adults changed significantly. If the new household projections only draw upon this (relatively) short term trend for projecting future household growth, is there a significant risk of ‘baking-in’ trends which are not reflective of future ‘need’ but simply an illustration of what the number would be if we continued more of what has been before?

ONS had consulted on its approach in 2017, and many respondents (including Lichfields) pointed out the need for the methodology to reflect not just a ‘purist’ demographic approach, but reflect on the real-world implications for housing need. Suggestions were made that ONS might wish to consider producing local ‘variant’ projections (as DCLG used to do at a national level) with modified formation rates as the basis for the standard methodology. It does not appear ONS intends to follow this advice.”

To be fair, the Government was not blind to what was likely to happen. As I set out in my 5 August 2018 blog post Housing Needs, Housing Shortfalls, when it published the final version of the NPPF on 24 July 2018, it published on the same dayits response document to the consultation on the draft, with this passage:

A number of responses to this question provided comment on the proposed local housing need method. The government is aware that lower than previously forecast population projections have an impact on the outputs associated with the method. Specifically it is noted that the revised projections are likely to result in the minimum need numbers generated by the method being subject to a significant reduction, once the relevant household projection figures are released in September 2018.

In the housing white paper the government was clear that reforms set out (which included the introduction of a standard method for assessing housing need) should lead to more homes being built. In order to ensure that the outputs associated with the method are consistent with this, we will consider adjusting the method after the household projections are released in September 2018. We will consult on the specific details of any change at that time.

It should be noted that the intention is to consider adjusting the method to ensure that the starting point in the plan-making process is consistent in aggregate with the proposals in Planning for the right homes in the right places consultation and continues to be consistent with ensuring that 300,000 homes are built per year by the mid 2020s.”

So, as at July the position was that updated household projection figures would be released in September and the Government would then “consider adjusting the method after the household projections” and would “consult on the specific details of any change at that time.

The updated figures were indeed then published, on 20 September, and show significant downward movements in the projections for individual authorities and an overall decrease in the total required, from 266,000 to 213,000. There has been a quick succession of excellent blog posts from planning consultancies, going into the statistical detail and likely implications, including (with apologies to those I don’t mention) Bidwells, Barton Willmore, Turley and Lichfields. There have inevitably also been many calls from objectors to housing numbers within emerging local plans for those numbers to be reviewed in the light of the new figures.

But the goalposts haven’t moved (yet). I assume that the Government will now indeed consult on changes to the standard method to increase numbers back within spitting distance of the 300k. There is surely no point in any authority taking any steps in reliance on the September 2018 ONS figures, but then again the September 2017 MHCLG figures have a large question mark against them. If you are an authority looking to make progress with your plan with a view to submission after 24 January 2019 you really have very little to go on as to the approach to be adopted.

So it is urgent that the Government consults as to proposed changes to its methodology and what that is likely to mean for individual authorities – although that consultation paper is going to end up running very close up to the 24 January 2019 date, leaving very little time for, er, planning.

Furthermore, I’m not sure that the ONS numbers are going to be standing still. As Planning magazine have identified in their useful coverage of the new numbers, ONS’ analysis that accompanies their figures makes it clear that it is aware of some of the deficiencies in the data. It refers to responses to consultation on its proposed methodology:

There was a view that only using the 2001 and 2011 Censuses would result in a downward trend in household formation for the younger age groups, which in turn would downplay the need for housing for younger people. With these views in mind, Section 8 shows the results of sensitivity analysis in which 2014-based HRRs (projected using 1971 to 2011 Census data) are applied to the 2016-based subnational population projections (SNPPs), should users wish to investigate the impact of the change of HRR methodology on the household projections.”

ONS is also “planning to publish a set of variant 2016-based household projections in which household formation rates for younger adults (those aged 25 to 44 years) are higher – provisionally scheduled for 3 December 2018. The purpose of this variant would be to illustrate the uncertainty in the projections around the future household formation patterns of this age group.”

You numbers people will know better than me whether this is also likely to have an appreciable effect on the numbers, at least in some areas.

But it does seem odd that in order to gauge the level of housing need, in order finally to look to put right the increasing shortage and unaffordability of housing, the starting point has been to look at the rate at which people have been able to form households in particular areas, during that very period where lack of supply and high prices have led to them sharing with others or not moving from the parental home – or, in areas of particularly high demand and/or restraint, not having a hope of living near their family or job (or the job that they would seek were suitable affordable accommodation available).

There is now the dilemma at a national level that echoes the dilemma that local plan inspectors have had to grapple with at an individual authority level: whether to accept a coarse, hypothetical approach that can be implemented with relative ease or whether to insist on getting to a “pure” statistical answer. The latter may in my view be unrealistic: we need targets, with consequences if they are not met and we need to avoid giving convenient excuses for delay. Those targets need to be based on the best evidence but are ultimately political choices where national leadership is essential – this is not a local issue where individual authorities can operate without regard for wider consequences.

I would be disappointed if the Government, faced in any event with the prospect of not meeting its current target (which conveniently is expressed in any event by reference to a time frame, the “mid-2020s“, that takes it past the next election), were to see this current position, which should be a surprise to no-one, as an excuse to retreat from the 300k commitment. But they won’t get an easy ride from some I’m sure.

Simon Ricketts, 29 September 2018

Personal views, et cetera

In A Cycle Superhighway In The Sky

The high ambition on the part of successive London Mayors since 2008 to create a network of (mostly) segregated cycleways across London has often been controversial and often impeded due to differences arising with individual boroughs.

Cyclists, please put me right if I have got any of this this wrong but I think there are now eight operational routes:

CS1 – Tottenham to the City

CS2 – Aldgate to Stratford

CS3 – Barking to Tower Gateway

CS3 (East-West) – Lancaster to Tower Hill

CS5 – Oval to Pimlico

CS6 – North-South – Farringdon to Kings Cross (Consultation started on 20 September 2018 on an extension to CS6 between Farringdon and King’s Cross, so that it will run from Elephant & Castle all the way up to King’s Cross.)

CS7 – Merton to the City

CS8 – Wandsworth to Westminster

Further routes have been long planned but are not yet open:

CS4 – London Bridge to Woolwich

CS9 – Hyde Park to Hounslow

CS10 – Cricklewood to Marble Arch

CS11 – West Hampstead to Hyde Park Corner

For more detail see London Cycling Campaign’s website.

The Mayor announced on 30 January 2018 that design work would begin on six new routes, namely:

• Lea Bridge to Dalston – 3km route between Lea Bridge Road and Cycle Superhighway 1 at Dalston.

• Ilford to Barking Riverside – 8km route between the town centres of Ilford and Barking.

• Hackney to the Isle of Dogs – 8km route from Hackney to the Isle of Dogs via Canary Wharf, Mile End and Victoria Park.

• Rotherhithe to Peckham – 4km route to connect with connect other cycling routes such as Quietway 1 and the proposed Cycle Superhighway 4.

• Tottenham Hale to Camden – 8km route covering seven junctions identified as being among the 73 with the worst safety records.

• Wembley to Willesden Junction – 5km route, north-west London’s
first major cycle route, connecting Wembley, Stonebridge Park and Willesden Junction.

Works to convert road carriageways to a cycleway do not amount to development requiring planning permission if they fall within section 55(2)(b) of the Town and Country Planning Act 1990: “the carrying out on land within the boundaries of a road by a highway authority of any works required for the maintenance or improvement of the road but, in the case of any such works which are not exclusively for the maintenance of the road, not including any works which may have significant adverse effects on the environment“.

In R (The Licensed Taxi Drivers Association) v Transport for London (Patterson J, 10 February 2016) the LTDA sought a declaration that the construction of the East-West Cycle Superhighway without planning permission constituted a breach of planning control.

This was rejected by Patterson J:

“...whether the proposals cause significant adverse environmental effect is not for the court to decide. As Sullivan J (as he then was) said in R v Rochdale Metropolitan Borough Council ex parte Milne [2001] 81 P&CR 27 at [106] to [108] the issue of environmental effect is an issue which requires an exercise of planning judgment which is not for the court. The issue for the court is whether the defendant erred in its contention or was irrational in reaching the conclusion that the works for the EWCS did not cause significant adverse environmental effect and did not require planning permission. For reasons that I have set out I am satisfied that the defendant on the evidence before it at the relevant time, did not err in law and was not irrational in reaching its conclusion that there was no significant adverse environmental effect from the proposals as a whole.”

Whether or not planning permission is required, on the facts, for any proposed cycleway, traffic regulation orders are required. Where the road is part of the local highway network rather than a TfL road, TfL needs the agreement of the relevant borough in order to secure all necessary orders. This was what of course recently scuppered TfL’s proposed pedestrianisation of Oxford Street.

The TfL road network:

Westminster City Council has also now successfully challenged TfL’s proposed construction of CS11, designed to run between Swiss Cottage and Portland Place, in R (City of Westminster) v Transport for London (Sir Ross Cranston, 13 September 2018), having taken over proceedings commenced by a group of local residents. Two parts of the route are on roads for which Westminster City Council is the statutory highway authority. Planning permission from the council is also potentially required for works proposed within Regent’s Park. The Council succeeded in its claim that TfL’s decision to proceed with constructing part of the route should have taken into account the legally relevant consideration that TfL might fail to obtain the necessary consents from Westminster City Council in relation to part of the route. TfL’s justification had assumed that the route would be constructed in its entirety and did not consider whether a phased approach would be viable.

It’s difficult entirely to blame the Mayor for these delays in rolling out CS routes. The control held by individual boroughs can be difficult to work around – RBKC having been another particularly intransigent authority – which makes delivery of these, by definition, cross-borough schemes slow and difficult.

Despite the wider strategic benefits of cycling in terms of health and air quality, the TRO statutory process can often be seen by local people as inadequate to protect their particular interests in relation to, for instance, the effects caused by displaced traffic or the implications for them of roads being closed to motor vehicles – leading to adversarial positions being taken.

But whatever the rights or wrongs in relation to CS11 or indeed in relation to the proposed pedestrianisation of Oxford Street, I find it disappointing to see such public disagreements between the Mayor and Westminster City Council. After all, no one wants a London version of the Gallagher brothers.

Simon Ricketts, 23 September 2018

Personal views, et cetera

Planning, Brexit

In all the Brexit noise, like me you may have missed that a draft Bill of Parliament is shortly to be published by DEFRA that will have direct relevance for English planners and planning lawyers.

The European Union (Withdrawal) Act 2018 was enacted on 26 June 2018. As a result of amendments to the Bill introduced in the House of Lords and substantially accepted when the Bill returned to the Commons, section 16 of the Act seeks to secure that “environmental principles” are maintained once we leave the EU and we no longer have the monitoring and enforcement functions currently being carried out by the European Commission and European Court of Justice. It provides as follows:

Maintenance of environmental principles etc.

(1) The Secretary of State must, within the period of six months beginning with the day on which this Act is passed, publish a draft Bill consisting of—

(a)  a set of environmental principles,

(b)  a duty on the Secretary of State to publish a statement of policy in relation to the application and interpretation of those principles in connection with the making and development of policies by Ministers of the Crown,

(c)  a duty which ensures that Ministers of the Crown must have regard, in circumstances provided for by or under the Bill, to the statement mentioned in paragraph (b),

(d)  provisions for the establishment of a public authority with functions for taking, in circumstances provided for by or under the Bill, proportionate enforcement action (including legal proceedings if necessary) where the authority considers that a Minister of the Crown is not complying with environmental law (as it is defined in the Bill), and

(e)  such other provisions as the Secretary of State considers appropriate

(2) The set of environmental principles mentioned in subsection (1)(a) must (however worded) consist of—

(a)  the precautionary principle so far as relating to the environment,

(b)  the principle of preventative action to avert environmental damage,

(c)  the principle that environmental damage should as a priority be rectified at source,

(d)  the polluter pays principle,

(e)  the principle of sustainable development,

(f)  the principle that environmental protection requirements must be integrated into the definition and implementation of policies and activities,

(g)  public access to environmental information,

(h)  public participation in environmental decision-making, and

(i)  access to justice in relation to environmental matters.”

This was not a big concession for the Government to make. In January 2017 the Commons Environmental Audit Committee recommended that the Government introduce an Environmental Protection Act to ensure that environmental enforcement and governance mechanisms were not lost after leaving the European Union.

The Government committed to consulting “early in 2018” on “establishing a new, world-leading, independent, statutory body to give the environment a voice, championing and upholding environmental standards as we leave the European Union” in DEFRA’s 25 Year Environment Plan (11 January 2018)

In England DEFRA on 10 May 2018 started a consultation process, Environmental Principles and Governance after EU Exit, which closed on 2 August 2018. The consultation paper indicates that the proposed Environmental Principles and Governance Bill will be published in draft in “Autumn 2018“, although as a result of section 16 the absolute statutory deadline for publication of the draft is 26 December.

The Environmental Principles and Governance Bill will need to provide for:

⁃ the formulation of a set of environmental principles to be adhered to; and

⁃ the establishment of an independent body to enforce environmental law.

The DEFRA consultation paper does not go into much detail. It sets out the following basic position:

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.” (paragraph 26)

The consultation paper invites views from consultees as to whether the environmental principles (without giving any detail as to what these principles will look like) should be articulated in the Bill itself or should be left to be addressed in a subsequent statutory policy statement.

The list of environmental principles in section 16 (2) is plainly potentially relevant to every aspect of the planning system, but we need to see the detail!

The consultation paper proposes the following in relation to the proposed independent body:

Objectives for the establishment of the body are that it should:

⁃ Act as a strong, objective, impartial and well-evidenced voice for environmental protection and enhancement.

⁃ Be independent of government and capable of holding it to account.

⁃ Be established on a durable, statutory basis.

⁃ Have a clear remit, avoiding overlap with other bodies.

⁃ Have the powers, functions and resources required to deliver that remit.

⁃ Operate in a clear, proportionate and transparent way in the public interest, recognising that it is necessary to balance environmental protection against other priorities. ”

There is a specific section in the consultation paper in relation to the potential relevance of the body to the operation of the planning system:

Interaction with the planning system

133. Planning aims to ensure that the right development happens in the right place at the right time, benefiting communities and the economy. It plays a critical role in identifying what development is needed and where, what areas need to be protected or enhanced and in assessing whether proposed development is suitable.

134. The new body’s functions in relation to environmental aspects of the planning framework would need to work alongside, while ensuring clear boundaries between, the established systems in place for scrutiny of and appeal against planning decisions and development plans. The intention would be that individual decisions made under relevant planning legislation would continue to be handled under the existing processes.

135. As with other areas of environmental law, we need to consider how the body would interact with the existing planning system in relation to environmental laws that apply to planning activities, notably those concerning implementation of habitats regulations assessments, environmental impact assessments and strategic environmental assessments. This should not be a case-by-case review of decisions regarding development plans and proposals, which would be duplicative and would amount to another tier in the planning process. The body would have no role in individual planning policy decisions. The focus of the new body would therefore be on ensuring the correct application of relevant environmental law within the planning system.

136. In relation to wider planning policy, the body could have two roles. Firstly, it could be a key consultee, when certain planning policy is being considered, for example when the National Planning Policy Framework is updated. Furthermore, if the body has a wider policy role, it could provide advice on the implementation of the environmental aspects of existing planning policy and suggest future potential changes. The government would not be bound to agree to such suggestions, but should consider them alongside wider policy aims

All sorts of questions of course arise from these proposals:

– how detailed will the environmental principles be? Will the principles contain targets in the manner of DEFRA’s 25 Year Environment Plan (11 January 2018) or will they be a generic summary of the principles currently underlying EU environmental legislation along the lines of, for instance article 191 of the Treaty of the Functioning of the European Union (and if so how useful will they be?).

⁃ to the extent that the principles, such as the “principle of sustainable development” overlap with existing guidance, for instance within the NPPF, will the principles (having a statutory basis) be relevant to decision making in relation to applications and appeals and to plan making? How can we avoid unanticipated effects in that regard? Even if the intention is to retain the status quo, at least for the time being, how easy will that be?

⁃ will Parliament kick the can down the road by relegating the principles to a statutory policy statement, for how long will this be, what will be the consultation process, what voting process will be required within Parliament and what will be the mechanism for making subsequent amendments?

⁃ Surely it is for the courts to ensure “the correct application of relevant environmental law within the planning system“? Non-legally binding views from this new authority on the way in which the law is to be interpreted, beyond views already formally expressed by ministers or government bodies such as the Environment Agency, Natural England or Historic England, may just add confusion.

⁃ how can a body be created which does not overlap with existing bodies such as the Environment Agency, has a “baked in” constitutional status and which is not susceptible to lobbying and repeated judicial reviews?

⁃ whilst the proposed body is not intended to be embroiled in individual planning decisions, what safeguards will there be as to its potential influence on planning outcomes in other ways, for instance through expressing views on types of development?

⁃ to what extent will there be coordination and consistency as between England and the devolved nations?

⁃ depending on the nature of any Brexit transitional arrangements, what about the interregnum between the cessation of the European Commission and European Court of Justice’s jurisdiction and the establishment of new regimes within England, Wales, Scotland and Northern Ireland? 26 December 2018 is only the deadline for the draft Bill. How long before the Bill itself is introduced, enacted and brought into force, with this new body up and running? If we have a “deal” and a transition period, time will be tight but there may not be a gap. If there is “no deal”, there will be a period before the promised structure is in place, indeed there will be no environmental principles in place, nor an independent body to ensure compliance.

The Commons Environmental Audit Committee has been conducting the Environmental Governance Consultation Paper Inquiry seeking answers to a number of questions along these lines. Michael Gove gave evidence to the inquiry on 11 July 2018. The session is pretty unedifying with much attempted point scoring but there are some interesting exchanges.

For example, the Committee chair asked how the policy statement for the principles will be developed and scrutinised:

Michael Gove: I think that it would be developed within the Government, like any other policy statement. An analogy has been drawn—no analogy is perfect—with the National Planning Policy Framework. I would propose or suggest that the Government draw up their policy statement. Obviously it would be up to any Government Minister as to how they would set about gathering evidence, consulting, and making clear what the means might be for shaping that policy statement. Then I hope that it would be presented to the House of Commons and then debated and voted on in the House of Commons.

Chair: That is where the row is going to happen again, is it not? Across Government the rows will come back in from Treasury, from DCLG, and from Transport about how this is not going to be accepted by Ministers. Then you are going to have all the green groups and the NGOs rightly asking for much higher standards. What is the process of engaging with the public? You are saying there is a legal policy process in the Government. How long will the public have to look at this statement?

Michael Gove: That is a very fair point. One of the things is we want to have it debated and voted on in Parliament, to take the concerns you have. Were there to be a future Government Minister in another Government Department that wanted in some way to include in the policy statement things that you or I might think were not necessarily a good idea for the better protection of our environment, were that hypothetical future Minister to prevail in the shaping of the policy statement in a way that you or I might not altogether approve of, when it came to the House of Commons I think it would be the case that the NGOs that you mention and members of the public or you or I might say, “Hmm” and would seek therefore to say, “I am sorry, as you bring this forward, I do not think you will necessarily get a majority in the House of Commons for this provision, because it will be seen as weakening protection. Therefore, we in the House of Commons will not stand for it”.

In the same way as the House of Commons and the House of Lords together amended the EU (Withdrawal) Bill in a particular way, so I could see a situation in the future where the prospect of defeat in the House of Commons for a particular proposition might lead the Government to then amend their policy statement so that the hypothetical Minister in a future case who might have wanted to weaken protections would find that his or her ambitions were thwarted by the democratic majority in the House.”

The Committee had originally hoped to conclude the inquiry by DEFRA’s consultation deadline of 2 August but we still await its report. I hope that its conclusions will be able to be taken into account by DEFRA before it proceeds to publish its draft Bill, although I suspect we have a long way to go before an actual set of principles starts to emerge, alongside a clearer idea as to the nature of the authority that is to hold the ring on all of this.

In the meantime of course, existing legislation will need to be scrubbed free, via statutory instruments, of any references to EU law, to be replaced by references to the relevant EU legislation frozen at time of exit or relevant domestic legislation, but that will not be where the substantive effects are likely to be felt. Instead, watch out for the draft Bill and surrounding announcements and let’s be alert for any unintended implications for our town and country planning system.

Simon Ricketts, 18 September 2018

Personal views, et cetera

London Plan Examination Update

We are now clearer as to what lies ahead, for the next year at least: the documents and deadlines are beginning to come thick and fast.

The appointed panel of inspectors (Roisin Barrett, William Fieldhouse and David Smith) set out this timetable in their Panel Note No 1 (August 2018):

• End of August 2018 – Panel consult the Mayor on a draft list of matters and participants.

• Mid September – Publication of draft list of matters and participants.

• Mid October – deadline for comments on draft list of matters and

• Early November – Technical seminars (if necessary).

• Early November – Publication of final list of matters and participants (at
least 6 weeks before EIP starts).

• Early December – first deadline for written statements in response to EIP

• Mid January to May 2019 – EIP hearing sessions.

• Summer 2019 – Panel report.

Over 20,000 representations to the draft plan were received from around 4,000 individuals and organisations (the GLA website has a useful link to them).

The Panel published today, 14 September 2018, its:

Panel Note no 3

draft list of matters for consideration at the EIP

draft list of participants

There will be a maximum of 22 participants at each session. Those who have not been invited to appear have an opportunity until 11 October 2018 to make representations as to why they should be invited.

The Panel asked the Mayor a series of preliminary questions in their Panel Note no 2 to which he responded earlier this month. The exchange encapsulates some of the main themes that lie ahead such as:

⁃ whether all of the policies can be justified as of strategic importance

⁃ the extent to which there is or is not agreement with the London boroughs and other relevant interests

⁃ the extent to which the draft plan deviates from national policies and guidance eg in relation to the application of affordable housing requirements with regard to small sites, the vacant building credit and the green belt

⁃ the extent of cooperation with other authorities, regardless of whether the duty to cooperate formally applies.

The Mayor published on 13 August 2018 600 or so pages of “early suggested changes” to the draft plan, which are minor in nature (see Lichfields’ summary for some of the headline changes).

It is difficult to keep up! For instance, I would also draw attention to a July 2018 practice note on how public sector land is defined for the purposes of the 50% affordable housing threshold in the affordable housing and viability SPG and policy H6 of the draft plan.

I referred in my 5 August 2018 blog post Housing Needs, Housing Shortfalls to the Secretary of State’s letter dated 27 July 2018 to the Mayor of London, setting out the changes that the Secretary of State wishes to see to the current draft London Plan, as well as the need for a more fundamental review once it is adopted. It is interesting to note that MHCLG is an invited participant in relation to a number of the examination sessions.

My 23 April 2017 blog post, Make No Little Plans: The London Plan set out the statutory constraints that apply to the London Plan and the difficulties that previous London Mayors have faced in securing an adopted plan until late in their first term.

Would a simpler, more focused, perhaps less ambitious plan have stood more chance of early adoption? That May 2020 election is going to come round very quickly.

Simon Ricketts, 14 September 2018

Personal views, et cetera

What If? The Trinity One Case

What if your development were subject to a section 106 agreement that provided for a commuted sum to be paid towards affordable housing, the precise amount payable to be calculated in accordance with a formula; at the date that the agreement was completed in 2003 the formula would have arrived at a commuted sum of between £500,000 and £700,000 but by the time that it was triggered the basis for calculating the formula had been abolished and so there was no way of arriving at an appropriate figure? Would you go to the High Court and Court of Appeal to seek to resist a claim from the local planning authority that was seeking a sum of £533,058 plus interest?

Well that was what the developer did in the Council of the City of York v Trinity One (Leeds) Limited (Court of Appeal, 21 February 2018). Not only that but they pursued a separate section 106BA and BC application and appeal, before the 30 April 2016 deadline for applications under that procedure, to seek to argue that in any event it should be released from the obligation in order to prevent its development from being economically unviable (a process where it is separately currently pursuing a second judicial review). I don’t know the facts beyond what is stated in the Court of Appeal’s judgment but I would suspect that this saga must pretty much have cost the parties in legal fees the sum being fought over and there remains the possibility of the local planning authority losing out on a substantial contribution towards affordable housing. Mediation anyone?

Hindsight is of course a wonderful thing but the dispute has arisen from not enough “what if?” questions being asked when the agreement was negotiated in 2003.

The relevant clause in the agreement provided that the commuted sum “shall be calculated on the amount of Social Housing Grant necessary to secure affordable rented homes of an equivalent type and size on another site [in a similar residential area in the City of York] which grant for the avoidance of doubt shall be calculated at normal grant levels from regional TCI tables provided on an annual basis by the Housing Corporation or such equivalent grant calculation current at the time and supported by the Housing Corporation”.

Social Housing Grant was defined as “the grant that may be provided in respect of affordable housing in the Council’s administrative area in accordance with Government and Housing Corporation Guidance.”

Some of you may remember the Total Cost Indicator tables that were previously used by the (now defunct) Housing Corporation as a basis for calculating the level of (now defunct) Social Housing Grant.

The lawyers negotiating the agreement at least had asked themselves what if TCI tables were no longer provided on an annual basis by the Housing Corporation but beyond that there was little imagination as to how far the affordable housing funding arrangements might change: if TCI tables ceased to be published, the calculation was to be done on the basis of “such equivalent grant calculation current at the time and supported by the Housing Corporation”. Hmm. No “what if social housing grant and/or the Housing Corporation cease to exist“? No provision for the parties to agree another reasonable benchmark, with the ability to go to an independent expert in the event of dispute?

The Court of Appeal identified that the issue “turns on the balance between giving effect to the intention of the parties and the language of the contract“. It upheld the ruling of the High Court that the clause was not unenforceable due to the lack of certainty as to how the sum was now to be calculated. The court sets out in some detail the approach to be taken, drawing upon principles articulated by the Supreme Court in Arnold v Britton (Supreme Court, 10 June 2015).

The Supreme Court in that case had considered the interpretation of service charge contribution provisions in the leases of a number of chalets in a caravan park in South Wales, and whether annual increases in service charge were to be calculated on a compound basis, resulting in absurdly high increases. Lord Neuberger summarised the correct approach as follows:

When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.”

Lord Neuberger set out six principles and the Court of Appeal in Trinity One drew particularly the first and sixth:

First, the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook, paras 16-26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision.”

Sixthly, in some cases, an event subsequently occurs which was plainly not intended or contemplated by the parties, judging from the language of their contract. In such a case, if it is clear what the parties would have intended, the court will give effect to that intention. An example of such a case is Aberdeen City Council v Stewart Milne Group Ltd[2011] UKSC 56, 2012 SCLR 114, where the court concluded that ‘any … approach’ other than that which was adopted ‘would defeat the parties’ clear objectives’, but the conclusion was based on what the parties ‘had in mind when they entered into’ the contract (see paras 17 and 22).”

Applying these principles, the Court of Appeal in Trinity One identified that:

⁃ the intention of the parties was that a commuted sum was to be paid.

⁃ the uncertainty related to quantification rather than the principle of payment.

⁃ “It would defeat the underlying purpose of the Agreement if the clause were unenforceable due to lack of certainty. The consequence would be that TOL would receive the benefit of planning permission without providing affordable housing or a commuted sum. In simple terms, that was not the bargain.”

⁃ “…the quantification of that sum should be that which is equivalent to the amount of money which would have been provided had the SHG remained in being. Although this is a departure from the literal words of the contract, this is the only sensible solution to the problem posed by the abolition of the SHG on which the clause is premised. The clause provides that the developer should pay enough money so that the Council can provide equivalent affordable housing: the best the court can do is work out a roughly equivalent figure for that sum.”

⁃ The figure that had been arrived at of £533,508 was a “reasonable attempt to reach a figure equivalent to the SHG which would have been payable before 2006“.

To a non-lawyer this may all seem obvious, but who wants to go to the Court of Appeal to establish what a provision means, just because not enough “what if” questions weren’t asked at the outset?

York Council isn’t yet entirely out of the woods. I mentioned the pending judicial review in relation to the developer’s section 106BC appeal. The Court of Appeal held that if the section 106BC appeal is ultimately successful, it will have retrospective effect notwithstanding that the council’s rights to be paid had already accrued. That seems strange to me, but given that the section 106BA and BC procedure is no longer available, this issue is of limited continuing wider relevance.

So please remain patient when your solicitor asks you yet another series of “what if” questions. In another part of our legal world, the European Medicines Agency is reported to be seeking to set aside its lease at Canary Wharf on the basis that Brexit will amount to an event of frustration. It was reported elsewhere that the “what if” question may in fact have been asked and then set on one side. Now that can be even more awkward.

This blog post is a belated companion to my 14 October 2017 post, Flawed Drafting: Interpreting Planning Permissions.

Simon Ricketts, 8 September 2018

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