Community Benefits: Supreme Court, Resilient

Examination question: Was the Supreme Court’s ruling in Wright v Resilient right or resilient?

The problem is a practical one, and frequently arising. If an applicant promises that it will provide specific benefits for a community if it secures planning permission, and the decision maker takes into account those promises in approving the application, is any subsequent planning permission unlawful?

This was the issue for the Supreme Court in R (Wright) v Resilient Energy Severndale Ltd & Forest of Dean District Council (Supreme Court, 20 November 2019).

I covered the Court of Appeal ruling and the issues more generally in my 2 June 2018 blog post Community Benefits.

It is a difficult tight rope for developers – in promoting an unwelcome scheme they may be facing suspicion or even anger from local residents, and may be quite prepared to make funds available so as to be “seen to be doing the right thing”, to be “good neighbours” or simply reduce the extent of objection. But is this likely to lead to the risk of legal challenge?

In Resilient, an application was made for planning permission for a wind turbine.

“In its application for planning permission, Resilient Severndale proposed that the wind turbine would be erected and run by a community benefit society. The application included a promise that an annual donation would be made to a local community fund, based on 4% of the society’s turnover from the operation of the turbine over its projected life of 25 years (“the community fund donation”). In deciding to grant planning permission for the development the Council expressly took into account the community fund donation. The Council imposed a condition (“condition 28”) that the development be undertaken by a community benefit society with the community fund donation as part of the scheme.”

There would also be “the opportunity for individuals in the community to invest in the project by subscribing for shares in the proposed community benefit society, with estimated returns of 7% pa”.

There is Department of Energy and Climate Change best practice guidance from October 2014 in relation to “community benefits from onshore wind developments”, encouraging arrangements of this nature, albeit on a voluntary basis.

Mr Wright, an objector to the project, challenged the grant of planning permission on the grounds that the promised community fund donation was not a material planning consideration and the Council had acted unlawfully by taking it into account.

Lord Sales’ judgment follows the position of the High Court and the Court of Appeal in quashing the permission.

He takes a conventional route through the case law. To simplify:

“… the conditions imposed must be for a planning purpose and not for any ulterior one, and … they must fairly and reasonably relate to the development permitted. Also they must not be so unreasonable that no reasonable planning authority could have imposed them …” (Viscount Dilhorne in Newbury District Council v Secretary of State, House of Lords, 1981).

“…a planning purpose is one which relates to the character of the land”. (Lord Scarman in Westminster City Council v Great Portland Estates plc (House of Lords, 1985).

Lord Sales:

“A principled approach to identifying material considerations in line with the Newbury criteria is important both as a protection for landowners and as a protection for the public interest. It prevents a planning authority from extracting money or other benefits from a landowner as a condition for granting permission to develop its land, when such payment or the provision of such benefits has no sufficient connection with the proposed use of the land. It also prevents a developer from offering to make payments or provide benefits which have no sufficient connection with the proposed use of the land, as a way of buying a planning permission which it would be contrary to the public interest to grant according to the merits of the development itself.”

The question of whether something is a material consideration is a question of law. Lord Sales referred to the statement by Lord Hodge in Elsick Development Company Limited v Aberdeen City and Shire Strategic Development Planning Authority (Supreme Court, 25 October 2017): “The inclusion of a policy in the development plan, that the planning authority will seek … a planning obligation from developers [to contribute money for purposes unconnected with the use of the land], would not make relevant what otherwise would be irrelevant”. Lord Sales applied the same principle to the DECC guidance.

Lord Sales:

“In the present case, the community benefits promised by Resilient Severndale did not satisfy the Newbury criteria and hence did not qualify as a material consideration within the meaning of that term in section 70(2) of the 1990 Act and section 38(6) of the 2004 Act. Dove J and the Court of Appeal were right so to hold. The benefits were not proposed as a means of pursuing any proper planning purpose, but for the ulterior purpose of providing general benefits to the community. Moreover, they did not fairly and reasonably relate to the development for which permission was sought. Resilient Severndale required planning permission for the carrying out of “development” of the land in question, as that term is defined in section 55(1) of the 1990 Act. The community benefits to be provided by Resilient Severndale did not affect the use of the land. Instead, they were proffered as a general inducement to the Council to grant planning permission and constituted a method of seeking to buy the permission sought, in breach of the principle that planning permission cannot be bought or sold.”

Judicially, that is the final word on the issue until such time as there is a change in legislation. I hold to the practical, but not risk-free, suggestions set out in my June 2018 blog post as to how community benefits may safely be provided.

However, in my slow brain, the position remains unsatisfactory. The Supreme Court pretty much slapped down the submission by Martin Kingston QC for Resilient Energy that the meaning of “material consideration” is always being updated in line with changing government policy. Why wasn’t he right? I have read the ruling a few times and don’t understand the distinction the court draws with the case law establishing that material considerations can include, for instance a requirement to provide affordable housing or a requirement that there should be local procurement. Similarly the submissions by Richard Kimblin QC for the Secretary of State (Richard has generously made public his skeleton argument via LinkedIn) that the court might “wish to restate and clarify the meaning of “for a planning purpose” (or, “in planning terms”) in a manner which is fitting to modern planning circumstances”.

The final point to bear in mind is that of course this case concerned whether the offer of the proposed community benefits package was a “material consideration” which the decision maker could lawfully take into account (and a subsidiary issue as the lawfulness of a planning condition that sought to require that package to be delivered). If the arrangement had been secured by way of section 106 planning obligation, that would have engaged the even tougher test set out in regulation 122(a) of the Community Infrastructure Regulations 2010 – that the obligation is “necessary to make the development acceptable in planning terms” (part of Mr Kimblin’s case was that the court should bring the common law Newbury test into line with the statutory regulation 122 test).

In my previous blog post I referred to what may be at least part of the solution to this uncertainty, section 155 (still not yet switched on) of the Housing and Planning Act 2016:

“Finally, the way in which all of this to be reported to committee will be tidied up as and when section 155 of the Housing and Planning Act 2016 is brought into force, in that “financial benefits information” will need to be included in officers’ reports, including “a list of any financial benefits (whether or not material to the application) which are local finance considerations or benefits of a prescribed description, and which appear to the person making the report to be likely to be obtained” by the authority or third parties within a description to be prescribed, as a result of the proposed development, together with “in relation to each listed financial benefit, a statement of the opinion of the person making the report as to whether the benefit is material to the application” as well as any other prescribed information about each listed financial benefit.”

Simon Ricketts, 23 November 2019

Personal views, et cetera