M&S Mess

I never thought I would live to see a chief executive of Marks and Spencer plc (Marks and Spencer plc!) issue a statement such as this:

““After a two-year process where our proposals were supported at every stage, our investment in 2,000 jobs, building one of the most sustainable buildings in London, improving the public realm and creating a flagship store, is now effectively in the deep freeze. Today the Secretary of State has ignored his appointed expert David Nicholson who recommended approval of our scheme.

When 42 of the 269 shops on what should be our nation’s premier shopping street sit vacant, disregarding the expert opinion and approval of the appointed planning inspector and playing to the gallery by kiboshing the only retail-led regeneration proposal is a short-sighted act of self-sabotage by the Secretary of State and its effects will be felt far beyond M&S and the West End. It is particularly galling given there are currently 17 approved and proceeding demolitions in Westminster and four on Oxford Street alone, making it unfathomable why M&S’s proposal to redevelop an aged and labyrinthian site that has been twice denied listed status has been singled out for refusal. 

The suggestion the decision is on the grounds of sustainability is nonsensical. With retrofit not an option – despite us reviewing sixteen different options – our proposed building would have ranked in the top 1% of the entire city’s most sustainable buildings. It would have used less than a quarter of the energy of the existing structure, reduced water consumption by over half, and delivered a carbon payback within 11 years of construction. It is also completely at odds with the inquiry process where the analysis on sustainability, including from independent experts Arup, was accepted. 

We cannot let Oxford Street be the victim of politics and a wilful disregard of the facts. At a time when vacancy rates on what should be the nation’s premier shopping street are 13% higher than the average UK high street and Westminster Council is pleading for help in managing the growing proliferation of sweet shop racketeers, the Secretary of State has inexplicably taken an anti-business approach, choking off growth and denying Oxford Street thousands of new quality jobs, a better public realm and what would be a modern, sustainable, flag-bearing M&S store.

There is no levelling up without a strong, growing Capital city, but the ripple effect extends well beyond Oxford Street. Towns and cities up and down the country will feel the full effects of this chilling decision, with decaying buildings and brownfield sites now destined to remain empty as developers retreat. The nation’s fragile economic recovery needs Government to give confidence to sustainable regeneration and investment as well as following due process; in London and across the UK. Today the Secretary of State has signalled he is more interested in cheap shot headlines than facts and if it weren’t so serious it would be laughable.

We have been clear from the outset that there is no other viable scheme – so, after almost a century at Marble Arch, M&S is now left with no choice but to review its future position on Oxford Street on the whim of one man. It is utterly pathetic.” (Stuart Machin, 20 July 2023)

I last wrote about this saga in my 23 April 2022 blog post Does My Embodied Carbon Look Big In This?

Let’s remind ourselves of the route this application for planning permission has taken:

• Application submission: 2 July 2021
• Resolution to grant by Westminster City Council: 23 November 2021
• Confirmation by the Mayor that he would not intervene by directing refusal or recovering the application for his own determination: 7 March 2022
• U-turn by the Mayor – he would consider intervening after all
• Re-confirmation by the Mayor that he would not intervene by directing refusal or recovering the application for his own determination: 4 April 2022
• Call-in by the Secretary of State: 20 June 2022
• Inquiry held by inspector David Nicholson between 25 October and 4 November 2022
• Decision by the Secretary of State to refuse planning permission, contrary to inspector David Nicholson’s recommendations: 20 July 2023 (David Nicholson’s report having been delivered to the Secretary of State on 1 February 2023).

Throughout this process there has been ferocious opposition to the scheme by some prominent groups and individuals – with detailed representations made; lobbying at each stage, and commentary in the media and social media.

I have often criticised the process whereby the Secretary of State can call-in an application, or recover an appeal, for his own decision-making.

What is the point of local democracy? What is the point of a hugely expensive, lengthy, quasi-judicial process, and a 109 page report by one of our most experienced planning inspectors, when you arrive at this sort of outcome?

If Secretary of State didn’t like the scheme when he called it in, and was going to refuse it in any event, why even the pretence of due process?

To dip into the decision. First point: of course it’s written with an eye to being watertight against legal challenge, by way of making sure that the conclusions revolve around the degree of weight to be attached to specific material considerations and around ultimately subjective assessments as to harm and significance (albeit assessments made without the benefit of hearing the evidence, of accompanied site visits or the ability to ask questions of witnesses). Time will tell if that objective has been secured.

Given that some may think (I couldn’t possibly comment) that this is how the Secretary of State reached his decision, I’m going to start with the overall conclusions (paragraph 51 onwards).

The first set of subjective conclusions (paragraph 51) are findings as to “overall conflict with development plan policies D3 and 38 which deal with design, and partial conflict with heritage policies HC1 and 39”.

That enables him to take the position that the scheme is in conflict with the development plan overall. With the onus shifted, the question for him is accordingly “whether there are material considerations which indicate that the proposal should be determined other than in line with the development plan.”

In favour of the proposal are (paragraph 52)  “the advantages of concentrating development in such a highly accessible location, which attracts substantial weight; and the potential harm to the vitality and viability of the area which could follow from a refusal of permission, which attracts limited weight. The heritage benefits carry moderate weight, and the possibility of demolition attracts limited weight. The benefits to employment and regeneration through improved retail and office floorspace, and the benefits in terms of permeability and connectivity, safety and shopping experience and the public realm collectively carry significant weight.” As long as properly reasoned, the weight to be attached to each consideration is for the decision maker.

Against the proposal (paragraph 53) “is the Secretary of State’s finding that in terms of paragraph 152 of the Framework, the proposal would in part fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings, which carries moderate weight. He has also found that harm arising from the embodied carbon carries moderate weight; and the future decarbonisation of the grid carries limited weight.”

In terms of assessing the heritage impacts of the proposal “the Secretary of State has taken into account the requirements of s.66 of the LBCA Act and the provisions of the Framework. He has found that in terms of paragraph 202 of the Framework, the harm to the settings, and so the significance, of the designated heritage assets would fall into the ‘less than substantial’ category. In respect of Selfridges and the Stratford Place CA, he has found the harm would be at the upper end of that category; in respect of the Mayfair CA it would be in the middle of that category; and in respect of the Portman Estate CA it would be at the lower end of the category. Overall he has found that the harm to the settings of, and significance of the designated heritage assets carries very great weight. He has further considered paragraph 202 of the Framework and has found that the public benefits of the proposal do not outweigh the harm to the significance of the designated heritage assets. The Secretary of State considers that harm from the loss of the nondesignated heritage asset of Orchard House attracts substantial weight and has considered paragraph 203 of the Framework in coming to this decision. In respect of paragraph 189 of the Framework, the Secretary of State considers that the proposal would overall fail to conserve the heritage assets in a manner appropriate to their significance, so that they can be enjoyed for their contribution to the quality of life of existing and future generations. He considers that the possibility of an Oxford Street CA attracts limited weight.”

So what did the scheme in was its design, its less than substantial harm to designated heritage assets which he gives “very great” weight, not outweighed by public benefits; harm from the loss of unlisted Orchard House which he gives substantial weight, and, in terms of climate change issues, the failure to support the transition to a low carbon future (moderate weight), failure to encourage the reuse of existing resources (moderate weight), harm arising from the embodied carbon  (moderate weight) and future decarbonisation of the grid (limited weight).

Let’s look in more detail at how the Secretary of State reached some of those conclusions.

Design

His conclusion on non-compliance with policy D3 is said by him to follow from his conclusions on the impact on designated heritage assets (paragraph 43). Similarly policy 38 (paragraph 44). Aside from these conclusions, based on concerns as to heritage aspects, he reaches no conclusions on the design of the scheme.

Heritage

So let’s turn to heritage.

The Secretary of State agrees with the Inspector (paragraphs 12 to 15) as to the level of harm caused to designated heritage assets. However, he disagrees as to the weight to be given to any harm (paragraph 15): “Given the significance of Selfridges, and his conclusions in paragraphs 13-14 above, the Secretary of State considers that the harm to designated heritage assets in this case carries very great weight. He does not agree with the Inspector’s assessment that the harm to the setting and so to the significance of Selfridges, including with the additional harm to the settings of the CAs, carries only moderate weight (IR.13.11 and IR13.78).”

The Secretary of State agrees with Historic England rather than the inspector as to the significance of Orchard House as a non-designated heritage asset (paragraph 16) and considers that its loss attracts substantial weight. He recognises, some heritage benefits of the scheme, to which he ascribes moderate weight.

Carbon

This is the area where we need to pay particularly careful attention.

First, to note that he reaches no concluded view on whether the redevelopment would over the life of the building use less carbon than any replacement: “the Secretary of State has also taken into account the applicant’s argument that over the life of the building it would use less carbon than any refurbishment, which would have to rely on an inefficient building envelope (IR13.38). He agrees with the Inspector, for the reasons given in IR13.37 and IR13.39, that the understanding of WLC Assessments and the tools available for calculations are still developing, and therefore it is no surprise that there was disagreement over the lifetime carbon usage for the proposals and, more particularly, for a refurbishment.” (paragraph 21).

That might be seen as surprising given that surely it is the core issue.

It was said by some that redevelopment should be delayed until the grid is decarbonised, when “the extent of embodied energy, particularly from manufacturing materials, and from vehicle emissions would be much lower or eliminated. He agrees that the proposed development now would result in far more carbon emissions than after the UK has achieved a net-zero grid (IR13.99), because a fully renewably sourced electricity grid should allow most construction vehicles, and the manufacture of concrete, steel and other materials, to be undertaken using renewable energy rather than fossil fuels (IR13.40).” However, he recognised that would not be a practical general principle: “An assessment of the weight to give to the fact that development now will give rise to far more carbon emissions than in the future with a net-zero grid depends on the facts of the case and the planning policy context. Evidence has been put before the Secretary of State that the existing store is currently assessed as failing (IR13.71), and M&S has stated that it will not continue to occupy and trade from the store for very much longer if permission is refused (IR13.46). The Secretary of State has also concluded that the development is supported by some current and up to date development plan policies which aim to support the regeneration and economic development of the area (paragraph 26 below). Overall he considers that this matter carries limited weight against the proposal.” (paragraph 22)

Strangely, although possibly because of the lack of empirical evidence on the point at the inquiry,  he gives no weight to any possible reduction in pressure for development elsewhere (paragraph 23).

Paragraph 24 is important:

“The Secretary of State agrees with the Inspector at IR13.43 that there should generally be a strong presumption in favour of repurposing and reusing buildings, as reflected in paragraph 152 of the Framework. In the circumstances of the present case, where the buildings in question are structurally sound and are in a location with the highest accessibility levels, he considers that a strong reason would be needed to justify demolition and rebuilding. However, he agrees that much must depend on the circumstances of the case, including how important it is that the use of the site should be optimised, and what alternatives are realistically available. Like the Inspector, the Secretary of State has gone on to consider whether there is a reasonable prospect of an alternative scheme going ahead.”

The Secretary of State’s position as to the prospect of an alternative scheme going ahead is vital to his overall decision:

“31. The Secretary of State considers that given the Inspector could not draw clear conclusions on this matter, and its importance in the determination of this application, a degree of caution ought to be exercised in drawing overall conclusions from the evidence, and considering the weight to be given to this issue. He finds the applicant’s evidence much less persuasive than the Inspector appears to have done in light of the gaps and limitations identified by the Inspector. He does not consider it appropriate to draw such firm and robust conclusions about this issue as the Inspector does (IR13.70- 13.75 and IR13.97). The Secretary of State is not persuaded that it is safe to draw the same conclusion reached by the Inspector, namely that ‘there is no viable and deliverable alternative’ (IR13.74), which leads to the Inspector’s overall conclusion that ‘there is unlikely to be a meaningful refurbishment of the buildings’ (IR13.97).

32. Overall, the Secretary of State concludes that the evidence before him is not sufficient to allow a conclusion as to whether there is or is not a viable and deliverable alternative, as there is not sufficient evidence to judge which is more likely. The Secretary of State also does not consider that there has been an appropriately thorough exploration of alternatives to demolition. He does not consider that the applicant has demonstrated that refurbishment would not be deliverable or viable and nor has the applicant satisfied the Secretary of State that options for retaining the buildings have been fully explored, or that there is compelling justification for demolition and rebuilding.

33. The Secretary of State notes that M&S has stated that it will not continue to occupy and trade from the store for very much longer if permission is refused (IR13.46). Whether or not M&S leave the store following the Secretary of State’s decision is a commercial decision for the company. However, taking into account the locational advantages of the site, the Secretary of State does not agree with the Inspector at IR13.75 that redevelopment is the only realistic option to avoid a vacant and/or underused site. He considers that there is potential for some harm to the vitality and viability of Oxford Street as suggested by the Inspector at IR13.46-47 and IR13.74. However, he does not agree with the Inspector that harm would be caused to the wider West End beyond Oxford Street (IR13.46) as he considers that this overstates the scale of the impact. He also does not agree with the Inspector’s conclusion that the harm would be substantial. The Secretary of State considers that potential harm to the vitality and viability of Oxford Street could arise from a refusal of permission but, unlike the Inspector, he considers that 8 the extent of any such harm would be limited. He attributes limited weight to this possibility.”

Time will tell if he is right.

I find his conclusion on the carbon which would go into construction materials unfathomable given that he failed to reach a conclusion on whether the new building would use less carbon than refurbishment of the existing building (paragraph 21 quoted earlier above):

“45. In respect of paragraph 152 of the Framework, the Secretary of State agrees that a substantial amount of carbon would go into construction (IR13.32), and that this would impede the UK’s transition to a zero-carbon economy (IR13.87). He has found that there has not been an appropriately thorough exploration of alternatives to demolition (paragraph 32 above). He has also taken into account that the carbon impacts would be to an extent mitigated by the carbon offset payments secured via the s.106 Agreement, which would be used to deliver carbon reductions (albeit it has not been demonstrated that the carbon reductions would fully offset the embodied carbon arising from this proposal). He has also taken into account the sustainability credentials of the new building (paragraph 21 above). Overall he concludes that in terms of paragraph 152 of the Framework, the proposal would in part fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings. The Secretary of State considers that this carries moderate weight against the scheme.

46. The Secretary of State has also considered the Inspector’s conclusion at IR13.99 that of the material considerations in this case, the extent of embodied energy weighs most heavily against the scheme. He has taken into account that a substantial amount of embodied carbon would go into construction. He has also taken into account at paragraph 21 above the sustainability credentials of the new building, and has further taken into account that the carbon offset payments secured via the s.106 Agreement would be used to deliver carbon reductions (albeit it has not been demonstrated that the carbon reductions would fully offset the embodied carbon arising from this proposal). Given his conclusions on these matters, he considers, unlike the Inspector at IR13.99, that in the particular circumstances of this case, the embodied carbon carries moderate weight.”

Finally, a warning against treating this decision as too much of a precedent:

“47. The Secretary of State has considered the Inspector’s comments at IR13.94 that there is a ‘growing principle that reducing climate change should generally trump other matters’; and his comments at IR13.99 that as climate change policy is still developing, the Secretary of State is entitled to use his judgement to give this consideration greater weight than the Inspector has attributed to it. Policy in this area will continue to develop and in due course further changes may well be made to statute, policy or guidance. This decision letter sets out the Secretary of State’s judgement on the weight which attaches to these matters in the circumstances of this particular case.

48. The Secretary of State has considered the Inspector’s comment at IR13.95 that fear of precedent could be a material consideration of sufficient weight to justify dismissing the application. However, he is confident that any future decision-maker would pay attention to the whole decision and the detailed reasoning and not just to the outcome of the decision. In any event, the decision turns on its own very specific facts, including the relevant development plan policy matrix, the Inspector’s report and the evidence which was before the inquiry, which are all unlikely to be replicated in other cases.”

Easy to say but of course there will be attempts to read across these findings to other projects.

My overall prediction? An important part of Oxford Street may well indeed become vacant or subjected to uses which will do nothing for this vulnerable commercial area – which is currently frankly a disgrace. A project has been first stalled, then killed, brought forward by one of the country’s most respected companies, for reasons which aren’t even based on any finding that demolition and rebuild will lead to greater release of carbon over the lifetime of the building than a hypothetical refurbishment of the existing building – and, in so far as they are heritage-based, on the one hand ascribe a surprising amount of weight to the moderate levels of harm arising and on the other ascribe little weight to the public benefits that would surely arise from a twenty first century flagship department store in Oxford Street.

Some of you will get very upset by this blog post I’m sure. But not as upset as Mr Machin is about Mr Gove.

Simon Ricketts, 21 July 2023

Personal views, et cetera