Category: Retail

M&S Mess 2: “The SoS Appears To Have Become Thoroughly Confused On This Point”

Quite a week. I was going to write about the London Mayor’s Large-scale Purpose-built Shared Living London Plan Guidance (29 February 2024) – less prescriptive in relation to co-living than his initial draft as a result of constructive engagement with the industry, well received and good to see – or indeed the Competition and Markets Authority’s final report into housebuilding in England, Scotland and Wales (26 February 2024) – the best analysis of the house building and land promotion industry and indeed opportunities to reform the planning system that I have read. But all that will need to wait because one case has dominated the chat in the last day or so:

Marks & Spencer plc v Secretary of State (Lieven J, 1 March 2024)

This was of course the legal challenge by M&S to the Secretary of State’s refusal of the retailer’s application, which he had called in, for planning permission for the construction of a nine storey new mixed office and retail store to replace its existing store at the western end of Oxford Street.

As to the various stages in the decision making process which led to the Secretary of State’s decision, together with an initial critique at the time of that decision (as well as the statement at the time from the M&S chief executive who had described Mr Gove’s decision as taken “on the whim of one man” and “utterly pathetic”) see my 21 July 2023 blog post, M&S Mess.

Russell Harris KC and Heather Sargent acted for M&S on the legal challenge, together with Dentons. Well done all for the outcome. For the pithiest and precise summary of the outcome you cannot beat Heather’s LinkedIn post yesterday:

“Lieven J has held that:

– The Secretary of State’s statement that “there should generally be a strong presumption in favour of repurposing and reusing buildings, as reflected in paragraph 152 of the [2021 NPPF]” was a misinterpretation of the NPPF and an error of law;

– The Secretary of State unlawfully failed to explain why he disagreed with his Inspector’s conclusions that there was no viable and deliverable alternative to the redevelopment scheme proposed by M&S;  

– The Secretary of State unlawfully failed “to grapple with the implications of refusal and the loss of the benefits and thus departure from important Development Plan policies”;

– The Secretary of State unlawfully failed to provide adequate reasons for concluding (again in disagreement with his Inspector) that the harm to the vitality and viability of Oxford Street if M&S’s scheme (or an alternative) were not delivered would be “limited”; and

– The Secretary of State’s decision was also vitiated both by a factual error (namely, an erroneous understanding that there was no dispute that the proposed scheme would involve much greater embodied carbon than refurbishment) and by a misinterpretation of development plan policy on carbon. The judgment confirms that it is “clear beyond any rational doubt … that the offsetting requirements in [London Plan policy] SI 2C are in relation to operational carbon, and not embodied carbon”.

For the best explainer, a vivid and fascinating piece of prose as ever, you have to read Zack Simons’ 2 March 2024 blog post This is not just *any* judgment: M&S in the High Court.  

My (possibly unfairly) selective quote in the title to this blog post is from paragraph 116 of Lieven J’s judgment where she reports his apparent misunderstanding that the London Plan’s requirement for carbon off-setting applies to embodied carbon rather than just operational carbon (ground 5). She goes on to conclude:

“120 It would be astonishing if one of the key policies in the London Plan on carbon emissions could have suddenly expanded the scope of the off-setting requirements in such a significant way without anyone applying it in this way before. The approach of the SoS appears to believe that there is a “net zero” requirement of, or at least aspiration for, construction impacts, in a key Development Plan policy which has never previously been applied.

121 It is important to make clear that this case is not about whether or not it would be appropriate or justified to have such a policy in the light of the climate emergency. Such a judgement is not the function of the court. The issue for the court is whether the SoS erred in law by misinterpreting the adopted London Plan policy.”

The only further comment I would add at this point is that this saga is not yet at an end. The effect of the judgment is that (absent any application by the Government Legal Department to the Court of Appeal for permission to appeal)  the application goes back to the Secretary of State to be redetermined. No doubt the parties will need to be given the opportunity to make further representations. It will take months. Indeed, who will be the Secretary of State by then?

Paragraph 152 of the previous version of the NPPF, on which ground 1 turned, survives unchanged as paragraph 157 of the latest version of the NPPF but will any relevant policy changes be made before the final outcome of the redetermination process? We know from the Government’s December 2023 Future Homes and Buildings Standards consultation:

“ Embodied carbon, the carbon emissions generated from the production and transportation of building materials, construction process and maintenance of a building – is beyond the scope of this consultation and the existing Building Regulations. We recognise, however, that embodied carbon is a significant contributor to the whole life carbon of a building and that it is therefore crucial that we take steps to address it. The government intends to consult on our approach to measuring and reducing embodied carbon in new buildings in due course” (paragraph 1.1.4)

At a local level,  and as an example of how life constantly edges on, Westminster City Council also adopted on 28 February 2024 (I said it was a busy week)  its new Planning Obligations and Affordable Housing SPD, which is intended to become a material consideration in decision making from 7 March 2024, with, amongst other things, a swingeing increase in carbon off-set payments (see brief Westminster Property Association explainer here).

The Secretary of State’s call-in of this application in June 2022 will so far have caused (assuming, which is not in the bag yet, that planning permission is eventually granted) at least two years’ delay, vast expense and delay for M&S as well as opportunity cost for the most important traditional shopping street in the nation’s capital (for which there is no financial recompense for M&S or for London). There really should be a higher threshold for call-in by the Secretary of State (whatever his or her political persuasion) of decisions which are referable to the Mayor of London (whatever his or her political persuasion). And the “behind the scenes” weighing of planning considerations/political advantage which leads to decisions such as this and that in relation to the Television Centre (see my 9 February 2024 blog post, The Weighting Game) is unfathomable (a word which I was relieved to see I used in my M&S Mess post last year about the Secretary of State’s reasoning on some aspects in his M&S decision).

Finally on this subject, whether as a thumbs up to that M&S legal team, or as a general thank you tip for us planning law bloggers, or as a gesture of support to Russell Harris and most importantly the young people’s charities he is supporting by way of this mad thing, please do sponsor Russell’s Cycle to MIPIM 2024 . He and the rest of them will no doubt shortly setting out and would appreciate any support. When I last looked, he was about £1,500 short of his £11,000 target. As another retailer might say, every little helps.

Simon Ricketts, 2 March 2024

Personal views, et cetera

Extract from photograph by Victor via Unsplash

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

E = C3

Or, The Theory Of Residential-Rather-Than-Retail-Activity.

MHCLG’s consultation paper Supporting housing delivery and public service infrastructure (3 December 2020, consultation deadline 28 January 2021) sets out various proposed new permitted development rights, but, in what has been a disastrous week for traditional retail chains, guess which proposal has attracted the most attention?

The new class E was introduced into the Use Classes Order in July 2020 (see my 24 July 2020 blog post E Is For Economy) and took effect from 1 September 2020, forming a new, amalgamated commercial, business and service use class that includes the old A1 (with small exceptions), A2, A3, B1, some D1 and some D2).

It was always anticipated that new permitted development rights would be subsequently introduced that allowed changes from the new class E without the need for planning permission. At the moment, until 31 July 2021 the existing permitted development rights apply to whatever the relevant use would have been categorised as before class E was introduced.

But in updating the existing development rights so that they apply to the new class E from 1 August 2021, the Government now intends to allow significantly greater freedoms.

“It is proposed that the right would allow for the change of use from any use, or mix of uses, within the Commercial, Business and Service use class (Class E – see paragraph 12 above) to residential use (C3). The right would replace the current rights for the change of use from office to residential (Part 3, Class O of Schedule 2 to the General Permitted Development Order), and from retail etc to residential (Part 3, Class M of the General Permitted Development Order) which remain in force until 31 July 2021. (See also Part 3 of this consultation document in respect of consequential changes.) It will go significantly beyond existing rights, allowing for restaurants, indoor sports, and creches etc to benefit from the change use to residential under permitted development rights for the first time. The protections in respect of pubs, including those with an expanded food offer, theatres, and live music venues, all of which are outside of this use class, continue to apply and a full planning application is always required for the change of use to or from such uses.

The Commercial, Business and Service use class applies everywhere in all cases, not just on the high street or in town centres. In order to benefit from the right premises must have been in the Commercial, Business and Service use class on 1 September 2020 when the new use classes came into effect.”

So, there will for the first time be the right to convert restaurants, indoor sports centres, creches and so on to residential use.

But the radical part of the proposal is that there should be no size limit on the scale of the conversions allowed:

“Building on the delivery success of the permitted development right for the change of use from office to residential, it is proposed that there be no size limit on the buildings that can benefit from the right. The right would allow for the building, or part of the building, to change use, rather than lying vacant for example. It is recognised that some retail and office buildings in particular could be a substantial size, and therefore result in a significant number of new homes, the impacts of which would be managed through prior approvals. Permitted development rights do not apply to development that is screened as requiring an Environmental Impact Assessment.”

Whilst there is currently no size limit for conversion of offices, for retail and light industrial the limits are currently small (150 sq m and 500 sq m respectively). The new right would enable change of use of the very largest shops and light industrial buildings to residential, subject to similar prior approval requirements as presently apply. Whilst permitted development rights do not apply to development that would require environmental impact assessment, it will surely be very rare that the conversion of a building, however large, would require environmental impact assessment.

How better, it might be thought, both to find new uses for surplus floorspace and to add to housing stock? But of course such a right is going to have a huge effect on the real estate market and could itself help to accelerate the loss of retail where greater value can be extracted by residential conversion.

Unlike with most permitted development rights, this right would also apply in conservation areas. “However, in recognition of the conservation value that retail frontage can bring to conservation areas the right would allow for prior approval of the impact of the loss of the ground floor use to residential.”

These are proposed to be the necessary prior approvals:

“Similar to other permitted development rights for the change of use to residential:

• flooding, to ensure residential development does not take place in areas of high flood risk

• transport, particularly to ensure safe site access

• contamination, to ensure residential development does not take place on contaminated land, or in contaminated buildings, which will endanger the health of future residents

• To ensure appropriate living conditions for residents:

• the impacts of noise from existing commercial premises on the intended occupiers of the development

• the provision of adequate natural light in all habitable rooms

• fire safety, to ensure consideration and plans to mitigate risk to residents from fire

• To ensure new homes are in suitable locations:

• the impact on the intended occupiers from the introduction of residential use in an area the authority considers is important for heavy industry and waste management”

The usual concerns about the permitted development process remain, but now writ large, for instance:

⁃ How can the Government continue to justify not imposing on these permitted development schemes the requirements that would be applied by way of the section 106 planning obligations process to schemes that come forward by way of traditional planning application? Why no affordable housing requirements, or contributions to schools and other social infrastructure, and how is this fair for those developers struggling to deliver traditional projects in the face of policy requirements that permitted development schemes neatly sidestep?

⁃ How will associated applications for planning permission for external works to these buildings be dealt with? Coping with the fenestration, M&E and external aesthetic requirements arising from conversion of an office building is one thing, but imagine the challenges faced by the developer of a department store, supermarket or light industrial unit. And what of its curtilage? What principles should an authority adopt in determining such an application, so that adequate controls are maintained without making the right meaningless by giving the authority a de facto veto?

⁃ Aside from increasing their use of article 4 directions, how can authorities prevent the conversion of buildings in plainly unsustainable locations?

⁃ How can an authority influence its area by way of its development plan policies, when the authority is left with so little control?

⁃ To what extent will the use of the new right be stymied by conditions on existing permissions, disapplying the benefit of the General Permitted Development Order, or indeed Use Classes Order?

As it happens we are co-hosting a webinar with Landmark Chambers to answer questions such as these – and plenty of others that delegates have been sending in. Landmark’s Zack Simons will join Meeta Kaur, Victoria McKeegan and myself at 5.30 pm on 15 December, free registration here: https://us02web.zoom.us/webinar/register/WN_4SVkbXSeRsm6QJ9aDRBBDA .

Simon Ricketts, 4 December 2020

Personal views, et cetera

E Is For Economy

“It’s the economy, stupid.”

More E words: the English planning and property community was immediately, depending who you spoke to, exercised/excited by the changes to the Use Classes Order and General Permitted Development Order this week. Surprisingly so perhaps, given how heavily the changes had previously been trailed (although, it must be said, in terms of the Use Classes Order changes, not consulted upon). Inevitably and by contrast, the wider public appears to be oblivious as to what lies ahead, despite the potentially far-reaching implications of the creation of the new “commercial, business and service“ class E within the Use Classes Order in particular.

There are many good summaries already of the changes. My Town colleagues Nikita Sellers, George Morton Jack and Meeta Kaur have prepared a detailed summary.

I am not going to consider the rights and wrongs of the changes in any detail. I have referred previously to my disappointment that the Government has not required for example its nationally described minimum space standards to be applied in relation to the creation of new dwellings by way of permitted development rights (despite having published, with curious timing, a report Research into the quality standard of homes delivered through change of use permitted development rights, on the same day as publishing legislation which does not take into account the recommendations of that work, with no explanation for the discrepancy). The Use Classes Order changes do provide some overdue flexibility given the structural changes underway in our town centres in the light of changed shopping patterns (not just Covid-related but of course now accentuated), but they are extremely wide ranging and I query whether the various permutations of potential consequences have been adequately considered. But that is all for another day.

Instead, I wanted to pull us back to some planning law fundamentals – in what circumstances may owners find that they cannot rely on the expanded use rights after all?

First, in order to move within a use class, the initial use first has to have been instituted, so if for instance you have an as yet unimplemented planning permission for a shop, or if the development has been built but not yet been occupied, the development will first need to have been used as a shop before there can be a change to another use within the new class E (e.g. offices).

Secondly, there must not be a condition on the planning permission authorising the current use that has the effect of preventing use changes that would otherwise have been enabled by way of the Use Classes Order and/or General Permitted Development Order. This is familiar but not straightforward territory. There is much case law as to whether particular phrases in conditions actually achieved what the local planning authority intended and indeed whether the benefit of the condition was lost through the grant of subsequent permissions which did not expressly impose it.

The general answer is that it depends on a careful analysis of the existing planning permission (and of course any provisions within any section 106 agreement).

The Supreme Court considered a situation like this in London Borough of Lambeth v Secretary of State (Supreme Court, 3 July 2019), which I summarised in my 4 July 2019 blog post What Really Is The Meaning Of Lambeth?

The original permission read:

“The retail unit hereby permitted shall be used for the retailing of goods for DIY home and garden improvements and car maintenance, building materials and builders’ merchants goods and for no other purpose (including any other purpose in Class I of the Schedule to the Town and Country Planning (Use Classes) Order 1972 or in any provision equivalent to that Class in any statutory instrument revoking and re-enacting that Order).”

It was then amended to read:

“The retail use hereby permitted shall be used for the retailing of DIY home and garden improvements and car maintenance, building materials and builders merchants goods, carpets and floor coverings, furniture, furnishings, electrical goods, automobile products, camping equipment, cycles, pet and pet products, office supplies and for no other purpose (including the retail sale of food and drink or any other purpose in Class A1 of the Schedule to the Town and Country Planning (Use Classes) Order 1987 (as amended) or in any provision equivalent to that Class in any statutory instrument revoking and re-enacting that Order).”

The council then approved by way of section 73 a further change so that it was to read:

“The retail unit hereby permitted shall be used for the sale and display of non-food goods only and, notwithstanding the provisions of the Town and Country Planning (General Permitted Development) Order 1995 (or any Order revoking and re-enacting that Order with or without modification), for no other goods.”

However, the council neglected to include that wording in a condition. It was simply part of the description of the development.

The Supreme Court held that the permission was to be interpreted as constraining the use of the retail unit so that it was for the sale of non-food goods only. But for our purposes, this is an example that the courts (1) routinely treat conditions as able validly to restrict the operation of the Use Classes Order and/or General Permitted Development Order and (2) are perhaps currently more benevolent towards the local planning authority’s position than has previously been the case where there has been procedural imprecision, as long as what was intended was clear.

My 14 October 2017 blog post Flawed Drafting: Interpreting Planning Permissions referred to another recent example, Dunnett Investments Limited v Secretary of State (Court of Appeal, 29 March 2017) which concerned this condition:

“This use of this building shall be for purposes falling within Class B1 (Business) as defined in the Town and Country Planning (Use Classes) Order 1987, and for no other purpose whatsoever, without express planning consent from the Local Planning Authority first being obtained“.

The court held that “express planning consent” did not include prior approval pursuant to the “office to residential” permitted development right. The restriction applied.

So care is needed! Where there are restrictive conditions which would restrict the flexibility that the new class E would otherwise give, of course consideration can be given to applying to remove those conditions by way of section 73 application.

Thirdly, when applications for planning permission are now to be determined, careful consideration will need to be given to the proposed description of development and no doubt there will be issues arising as to whether decision makers are justified in imposing conditions which restrict the operation of the new Use Classes Order and General Permitted Development Order flexibilities. It will be the B1(a), (b) and (c) arguments all over again, but writ large.

I hope that we will have updated Planning Practice Guidance. In the meantime, the current Planning Practice Guidance has passages such as these:

“It is important to ensure that conditions are tailored to tackle specific problems, rather than standardised or used to impose broad unnecessary controls.”

1. necessary;

2. relevant to planning;

3. relevant to the development to be permitted;

4. enforceable;

5. precise; and

6. reasonable in all other respects.”

“Is it appropriate to use conditions to restrict the future use of permitted development rights or changes of use?

Conditions restricting the future use of permitted development rights or changes of use may not pass the test of reasonableness or necessity. The scope of such conditions needs to be precisely defined, by reference to the relevant provisions in the Town and Country Planning (General Permitted Development) (England) Order 2015, so that it is clear exactly which rights have been limited or withdrawn.Area-wide or blanket removal of freedoms to carry out small scale domestic and non-domestic alterations that would otherwise not require an application for planning permission are unlikely to meet the tests of reasonableness and necessity. The local planning authority also has powers under article 4 of the Town and Country Planning (General Permitted Development) (England) Order 2015 to enable them to withdraw permitted development rights across a defined area, where justified.

Will that guidance be sufficient to avoid disputes? I doubt it.

Am I entitled to apply for planning permission simply for Class E use? Given that Parliament now deems changes within class E not be material, why not? How will such applications be determined as against development plan policies which are likely to be at odds with such an approach, and how will CIL be calculated, given that many CIL charging schedules distinguish as between, for instance, retail and office use?

Fourthly, planning permission will still be required for operational works that materially affect the external appearance of the building. To what extent will local planning authorities seek to exert control by that route, as we have sometimes seen with office to residential conversions? How to guard against plainly substandard conversions of shops to offices and of, for instance, units on out of town business parks to shops?

Fifthly, there is going to be much focus on how precisely the General Permitted Development Order operates in relation to the new class. For an initial period, until 31 July 2021, the GPDO will operate as against how the relevant use was categorised before the changes to the Use Classes Order became effective. Are we to expect further changes to the GPDO in the coming period?

Sixthly, quite apart from these planning law constraints, private law constraints imposed by way of, for instance, restrictive covenants and user covenants in leases will still apply.

But, there’s no way round it, class E has huge implications for much of the world around us, from central business district to market town, to out of town retail or business park. It also brings with it, and this is its very point, huge opportunities to allow for adaptation and for entrepreneurship. How is all this going to work out in practice? Will people start using the new freedoms and then find that inevitably in due course the rules tighten again, by which time the horse has bolted, or, that for land owners, they may have unwittingly lost the right to the use which was most valuable in investment terms? E is also for experiment.

Simon Ricketts, 24 July 2020 (expanded version 25 July 2020)

PS and for Emily! Happy birthday daughter.

Personal views, et cetera

Blue Christmas

Duncan Field, Victoria McKeegan and I were speculating in our 16 December 2019 planorama vlog as to what the new Government’s legislative programme and policy priorities are likely to be in relation to planning, infrastructure and the environment

We now have the blueprint, in the form of the Queen’s Speech on 19 December 2019 and particularly the 151 pages of background notes published the same day.

There is going to be an “ambitious” planning white paper in due course, but what is promised in the meantime in this very blue paper that these notes represent? The government has little excuse not to deliver on what it has set out, given the size of its majority. The most relevant references are as follows:

Housing (pages 48 to 50):

“My government will take steps to support home ownership, including by making homes available at a discount for local first-time buyers.”

● The Government will support people to realise the dream of homeownership. One of the biggest divides in our country is between those who can afford their own home and those who cannot.

● The Government will shortly launch a consultation on First Homes. This will provide homes for local people and key workers at a discount of at least 30 per cent – saving them tens of thousands of pounds.

● The discount on First Homes will be secured through a covenant. This means these homes will remain discounted in perpetuity, supporting people now and in the future who aspire to own a home of their own.

● The Government will also renew the Affordable Homes Programme, building hundreds of thousands of new homes for a range of people in different places. This will help us prevent people from falling into homelessness while also supporting further people into homeownership.

● We will introduce a new, reformed Shared Ownership model, making buying a share of a home fairer and more transparent. This new model will be simpler to understand and better able shared owners to buy more of their property and eventually reach full ownership.

● To deliver on the homes this country needs, the Government is committed to building at least a million more homes over this Parliament. In the coming months we will set out further steps to achieve this, including an ambitious Planning White Paper and funding for critical infrastructure.

● The Planning White Paper will make the planning process clearer, more accessible and more certain for all users, including homeowners and small businesses. It will also address resourcing and performance in Planning Departments.

● The new £10bn Single Housing Infrastructure fund will provide the roads, schools and GP surgeries needed to support new homes. Alongside First Homes, this will ensure local people truly benefit from house building in their area and build support for new developments

● To help those who rent, the Government will build a rental system that is fit for the modern day – supporting landlords to provide high quality homes while protecting tenants. The Government’s Better Deal for Renters will fulfil our manifesto commitments to abolish ‘no fault’ evictions and to introduce lifetime deposits, alongside further reforms to strengthen the sector for years to come.

● The Government is taking forward a comprehensive programme of reform to end unfair practices in the leasehold market. This includes working with the Law Commission to make buying a freehold or extending a lease easier, quicker and more cost effective – and to reinvigorate commonhold and Right to Manage.

● The Government will ensure that if a new home can be sold as freehold, then it will be. We will get rid of unnecessary ground rents on new leases and give new rights to homeowners to challenge unfair charges. The Government will also close legal loopholes to prevent unfair evictions and make it faster and cheaper to sell a leasehold home.

● For those in the social rented sector, we will bring forward a Social Housing White Paper which will set out further measures to empower tenants and support the continued supply of social homes. This will include measures to provide greater redress, better regulation and improve the quality of social housing.

● This Government has committed to end rough sleeping by the end of this Parliament. The Government will continue to invest in key rough sleeping interventions, building on the progress that we made last year in reducing rough sleeping numbers. The Government will also continue to support those at risk of homelessness and rough sleeping through the continued enforcement of the Homelessness Reduction Act.

Building Safety Bill (pages 51 to 53):

“New measures will be brought forward…to improve building safety.”

● An enhanced safety framework for high-rise residential buildings, taking forward the recommendations from Dame Judith Hackitt’s independent review of building safety, and in some areas going further by:

○ Providing clearer accountability and stronger duties for those responsible for the safety of high-rise buildings throughout the building’s design, construction and occupation, with clear competence requirements to maintain high standards.

○ Giving residents a stronger voice in the system, ensuring their concerns are never ignored and they fully understand how they can contribute to maintaining safety in their buildings.

○ Strengthening enforcement and sanctions to deter non-compliance with the new regime, hold the right people to account when mistakes are made and ensure they are not repeated.

○ Developing a new stronger and clearer framework to provide national oversight of construction products, to ensure all products meet high performance standards.

○ Developing a new system to oversee the whole built environment, with local enforcement agencies and national regulators working together to ensure that the safety of all buildings is improved.

● We will also legislate to require that developers of new build homes must belong to a New Homes Ombudsman.

Fire Safety Bill (pages 54 to 55):

“New measures will be brought forward…to improve building safety.”

● Clarifying that the scope of the Fire Safety Order includes the external walls of the building, including cladding, and fire doors for domestic premises of multiple occupancy.

● Strengthening the relevant enforcement powers to hold building owners and managers to account.

● Providing a transitional period for building owners and managers (the “responsible person”) and Fire and Rescue Services to put in place the infrastructure for these changes.”

National Infrastructure Strategy (pages 90 to 91):

“My government will prioritise investment in infrastructure…”

● The National Infrastructure Strategy will be published alongside the first Budget, and will set out further details of the Government’s plan to invest £100 billion to transform the UK’s infrastructure.

● The Strategy will set out the Government’s long-term ambitions across all areas of economic infrastructure including transport, local growth, decarbonisation, digital infrastructure, infrastructure finance and delivery.

● The Strategy will have two key aims:

○ To unleash Britain’s potential by levelling up and connecting every part of the country. Prosperity will be shared across all of the UK, and long- standing economic challenges addressed, through responsible and prudent investment in the infrastructure.

○ To address the critical challenges posed by climate change and build on the UK’s world-leading commitment to achieve net zero emissions by 2050.

● The Strategy will also provide the Government’s formal response to the National Infrastructure Commission’s 2018 National Infrastructure Assessment, which made a series of independent recommendations to government across all sectors of economic infrastructure (transport, energy, digital, waste, water and flood management).”

Rail reform and High Speed Rail 2 (West Midlands – Crewe) Bill (pages 101 to 103)

● Last year the Government launched a ‘root and branch’ review of the railways led by Keith Williams. The Review is the first comprehensive assessment of the rail system in a generation and is tasked with making ambitious proposals to reform the rail industry.

● The Review is focused on reforms that will put passengers at the heart of the railway, provide value for taxpayers and deliver economic, social and environmental benefits across Britain.

● The Government will publish a White Paper informed by the recommendations next year. Among other things, this will end the complicated franchising model to create a simpler, more effective system.

● The Government has also committed to a number of major investments in the railway, including:

o Midlands Rail Hub, to improve services around Birmingham and throughout the West and East Midlands;

o Northern Powerhouse Rail;

o Reopening a number of the lines and stations closed under the

Beeching cuts in the 1960s; and,

o Significant upgrades to urban commuter and regional services outside London.

● Separate to the wider review of the railway system, the Government awaits the review, of the High Speed Two (HS2) network led by Doug Oakervee which is looking at whether and how to proceed with HS2, including the benefits and impacts; affordability and efficiency; deliverability; and scope and phasing, including its relationship with Northern Powerhouse Rail.

● Without prejudice to the Oakervee Review’s findings and any Government decisions that follow, it is expected that the High Speed Rail (West Midlands – Crewe) Bill will be revived in this Parliament. The Bill was first introduced in Parliament in July 2017 and will enable Phase 2a of HS2. The Bill passed through the House of Commons and had completed Second Reading in the House of Lords before the dissolution of the previous Parliament. Following revival it would begin its next stages in the House of Lords.

English Devolution (pages 109 to 110):

“My government…will give communities more control over how investment is spent so that they can decide what is best for them.”

● We are committed to levelling up powers and investment in the regions across England and allowing each part of the country to decide its own destiny.

● This means proposals to transform this country with better infrastructure, better education, and better technology.

● We will publish a White Paper setting out our strategy to unleash the potential of our regions, which will include plans for spending and local growth funding.

● It will provide further information on our plans for full devolution across England, levelling up powers between Mayoral Combined Authorities, increasing the number of mayors and doing more devolution deals.

● These increased powers and funding will mean more local democratic responsibility and accountability.

● We remain committed to the Northern Powerhouse, Midlands Engine, and Western Gateway strategies.

Business rates (page 111):

“To support business, my government will…bring forward changes to business rates.”

● The Government is committed to conducting a fundamental review of business rates.

● The Government recognises the role of business rates as a source of local authority income and will consider input from the sector as part of the review of business rates. Further details on the review will be announced.

● We are committed to increasing the retail discount from one-third to 50 per cent, extending that discount to cinemas and music venues, extending the duration of the local newspapers discount, and introducing an additional discount for pubs.

● We will also progress legislation to bring forward the next business rates revaluation by one year from 2022 to 2021 and move business rates revaluations from a five-yearly cycle to a three-yearly cycle. This will allow the Government to press ahead with delivering an important reform that has been strongly welcomed by business.

● More frequent revaluations will ensure that business rates bills are more up- to-date reflecting properties’ current rental values. Moving to three-yearly revaluation will make the system more responsive to changing economic conditions.

Environment Bill (pages 112 to 114):

“To protect and improve the environment for future generations, a bill will enshrine in law environmental principles and legally-binding targets, including for air quality. It will also ban the export of polluting plastic waste to countries outside the Organisation for Economic Co-operation and Development and establish a new, world-leading independent regulator in statute.”

● Establishing new long term domestic environmental governance based on: environmental principles; a comprehensive framework for legally-binding targets, a long term plan to deliver environmental improvements; and the new Office for Environmental Protection.

● Improving air quality by setting an ambitious legally-binding target to reduce fine particulate matter (PM2.5), the most damaging pollutant to human health. The Bill also increases local powers to address sources of air pollution and brings forward powers for the Government to mandate recalls of vehicles when they do not meet legal emission standards.

● Protecting nature by mandating ‘biodiversity net gain’ into the planning system, ensuring new houses aren’t built at the expense of nature and delivering thriving natural spaces for communities. We will improve protection for our natural habitats through Local Nature Recovery Strategies and give communities a greater say in the protection of local trees.

● Preserving our resources by minimising waste, promoting resource efficiency and moving towards a circular economy. These measures include extended producer responsibility, a consistent approach to recycling, tackling waste crime, introducing deposit return schemes, and more effective litter enforcement. We will also ban the export of polluting plastic waste to non- OECD countries, consulting with industry, NGOs, and local councils on the date by which this should be achieved.

● Introducing charges for specified single use plastic items. This will build on the success of the carrier bag charge and incentivise consumers to choose more sustainable alternatives.

● Managing water sustainably through more effective legislation to secure long- term, resilient water and wastewater services. This will include powers to direct water companies to work together to meet current and future demand for water, making planning more robust, and ensuring we are better able to maintain water supplies.

Climate change (pages 115 to 118):

“My government will continue to take steps to meet the world-leading target of net zero greenhouse gas emissions by 2050. It will continue to lead the way in tackling global climate change, hosting the COP26 Summit in 2020.”

● We will build on our progress with an ambitious programme of policy and investment, with our first Budget prioritising the environment. This will help deliver the green infrastructure needed to improve lives and achieve Net Zero, including by investing in carbon capture, offshore wind, nuclear energy, and electric vehicle infrastructure so that individuals are always within 30 miles of a chargepoint. We will make sure we help lower energy bills investing in the energy efficiency of homes, schools and hospitals. And away from home, we will use our £1 billion Ayrton Fund to develop affordable clean energy for developing countries.

● The government will continue to use our position as a global leader in this area by hosting the UN Climate Change Summit in Glasgow in 2020 (COP26). We will ask our partners to match the UK’s ambition.

● With a focus on nature based solutions at our upcoming COP summit, at home we will be substantially increasing our tree-planting commitment and creating a £640 million new Nature for Climate fund.

● Our natural environment is one of our greatest assets, and can play a crucial role in the fight against climate change. This government will:

○ introduce a landmark Environment Bill – the first one in twenty years – that will create an ambitious environmental governance framework for post Brexit, as well as banning the export of plastic waste to non-OECD countries;

○ establish a new £500 million Blue Planet Fund to help protect our oceans from plastic pollution, warming sea temperatures and overfishing;

○ lead diplomatic efforts to protect 30 per cent of the world’s oceans by 2030; and,

○ in our trade negotiations, never compromise on our high environmental protection

● We will also ensure that we are protecting our citizens by investing £4 billion in flood defences and lowering energy bills by investing £9.2 billion in the energy efficiency of homes, schools and hospitals.

● We will increase our ambition on offshore wind to 40GW by 2030, and enable new floating turbines.

● We will support decarbonisation of industry and power by investing £800 million to build the first fully deployed carbon capture storage cluster by the mid-2020s; and £500 million to help energy-intensive industries move to low-carbon techniques.

Constitution and democracy (pages 126 to 127):

“A Constitution, Democracy and Rights Commission will be established. Work will be taken forward to repeal the Fixed-term Parliaments Act.”

Setting up a Constitution, Democracy & Rights Commission that will:

● Examine the broader aspects of the constitution in depth and develop proposals to restore trust in our institutions and in how our democracy operates. Careful consideration is needed on the composition and focus of the Commission. Further announcements shall be made in due course.

It’s a blue, blue, blue, blue Christmas.

The usual askew perspectives and commentary will continue here in 2020.

Simon Ricketts, 21 December 2019

Personal views, et cetera

Pound Land: Government & Towns

I wanted to gather together for myself the steps that the Government has recently been taking, by way of funding commitments or planning interventions, in the face of the problems being faced by so many town centres. After all, the position is dire, with multiple threats: economic, social and technological. See for instance this Guardian piece from 11 September 2019, Retailers call for action as high street store closures soar, the House of Commons MHCLG Select Committee report High streets and town centres in 2030 (21 February 2019) (to which the Government responded in May 2019) or indeed the December 2018 High Street Report by the High Streets Expert Panel, chaired by Sir John Timpson.

Funding

Sometimes, tracking Government funding announcements can be like trying to win at the three cups game.

However, let’s have a go.

In response to the Timpson report, on 29 October 2018 the Government announced the future high streets fund as follows:

“In July this year, the Secretary of State for Housing, Communities and Local Government asked Sir John Timpson to consider these issues and make recommendations how to support local areas to respond to these changes. In the run-up to the Budget, he made two main recommendations to the Chancellor and the Secretary of State: to set up a High Streets Taskforce to support local leadership and to establish a new fund to support the renewal and reshaping of high streets and town centres.

The Chancellor and the Secretary of State agree with Sir John’s diagnosis and recommendations. Therefore, to respond, a new £675 million Future High Streets Fund will be set up to help local areas to respond to and adapt to these changes. It will serve two purposes: it will support local areas to prepare long-term strategies for their high streets and town centres, including funding a new High Streets Taskforce to provide expertise and hands-on support to local areas. It will also then co-fund with local areas projects including:

• investment in physical infrastructure, including improving public and other transport access, improving flow and circulation within a town / city centre, congestion-relieving infrastructure, other investment in physical infrastructure needed to support new housing and workspace development and existing local communities, and the regeneration of heritage high streets; and

• investment in land assembly, including to support the densification of residential and workspace around high streets in place of under-used retail units”

It was clear from the call for proposals that “£55m of the Fund has been allocated to the Department for Digital, Culture, Media and Sport to support the regeneration of heritage high streets. This has two elements: helping to restore historic high street properties through Historic England, and equipping communities with their own resources to put historic buildings back into economic use – for example as residential buildings, new work spaces or cultural venues, supported by the Architectural Heritage Fund.“

The Government then launched the £1.6bn Stronger Towns Fund on 4 March 2019 “to boost growth and give communities a greater say in their future after Brexit.”

“A total of £1 billion will be allocated using a needs-based formula. More than half this share (£583 million) will go to towns across the North with a further £322 million allocated to communities in the Midlands. Communities will be able to draw up job-boosting plans for their town, with the support and advice of their Local Enterprise Partnerships.

Another £600 million will be available through a bidding process to communities in any part of the country.”

So that made a total of £2.275bn.

In his first week in office, the new prime minister gave a speech in Manchester, referring to a £3.6bn “towns fund”:

“Our post-industrial towns have a proud, great heritage – but an even greater future. Their best years lie ahead of them.

So we are going to put proper money into the places that need it.

We will start by ensuring there is investment from central government – by bringing forward plans on the UK Shared Prosperity Fund – and we have growth deals as well for Scotland, Wales and Northern Ireland.

And we’re now going to have a £3.6 billion Towns Fund supporting an initial 100 towns. So that they will get the improved transport and improved broadband connectivity that they need.”

A subsequent MHCLG press statement 100 places to benefit from new Towns Fund (6 September 2019) made it clear that the £3.6bn represented an additional commitment of £1.325bn over the previous commitment:

“The 100 places invited to develop proposals for a new generation of multi-million-pound Town Deals have today (6 September 2019) been announced by Local Government Secretary Rt Hon Robert Jenrick MP.   

The towns eligible for support from the £3.6 billion Towns Fund include places with proud industrial and economic heritage but have not always benefitted from economic growth in the same way as more prosperous areas.”

“Today’s announcement follows the Prime Minister’s confirmation in July of an additional £1.325 billion to support towns as part of a renewed vision to level up our regions, which took the total value of the Towns Fund to £3.6 billion.”

The 100 towns are being invited to bid for funding. A total of £241m is available to support towns in 2020-2011, and the 100 towns can bid for up to £25m each. We await the prospectus and eligibility criteria. The basis on which the towns have been selected has also not been published (as far as I know). I assume that this shortlisting represents a merging of the previous future high streets fund and stronger towns fund but if you are on the outside of these processes, frankly it is not easy to follow!

Today there was a further announcement: £95 million to revive historic high streets (14 September 2019).

“£92 million will be provided by the Government and overseen by Historic England to create 69 new High Street Heritage Action Zones.

£3 million will be provided by the National Lottery Heritage Fund to support a cultural programme to engage people in the life and history of their high streets.”

“The initiative will be funded by combining £40 million from the Department for Digital, Culture Media and Sport’s Heritage High Street Fund with £52 million from the Ministry of Housing, Communities and Local Government’s Future High Street Fund. £3 million will be provided by the National Lottery Heritage Fund to support a cultural programme to engage people in the life and history of their high streets.”

The £52m is from the existing £3.6bn commitment.

What do I take from this? The Government is certainly directing additional funding to selected towns. The criteria for selecting the towns is not wholly transparent. Of the headline £3.6bn number, the short term commitment in 2020/2021 appears to be circa £250m.

Planning

What planning measures have been introduced?

Well the previous Secretary of State James Brokenshire announced in his 13 March 2019 written statement proposed changes to the GODO so as to allow “(A) use classes to diversify and incorporate ancillary uses without undermining the amenity of the area, to introduce a new permitted development right to allow shops (A1), financial and professional services (A2), hot food takeaways (A5), betting shops, pay day loan shop and launderettes to change use to an office (B1) and to allow hot food takeaways (A5) to change to residential use (C3). Additionally, to give businesses sufficient time to test the market with innovative business ideas we will extend the existing right that allows the temporary change of use of buildings from 2 to 3 years and enable more community uses to take advantage of this temporary right, enabling such premises to more easily locate on the high street.”

The Town and Country Planning (Permitted Development, Advertisement and Compensation Amendments) (England) Regulations 2019, giving effect to this, came into force on 25 May 2019

Revised planning practice guidance on town centres and retail was published on 22 July 2019, replacing the previous “ensuring the vitality of town centres” guidance in the PPG. The main changes were

• Consistent with other changes in the PPG, the guidance refers to up to date policies rather than up to date plans.

• The sequential and impact tests remain but there is in paragraph 013 recognition that town centre development can be more expensive and complicated than development elsewhere so that authorities are advised they need to be realistic and flexible when applying the sequential test.

• There is new guidance on the need for local planning authorities to plan for town centres and their vitality and viability, for the need for local planning authorities to take a leading role and consider in particular structural changes in the economy, changing shopping and leisure patterns and formats and the impact that these are having on individual town centres.

• There are new paragraphs which explain the role of the new permitted development rights.

What of recent decisions?There have been no recovered appeal or call in decisions yet by the new Secretary of State raising town centre issues. The previous Secretary of State considered three called in applications for out of town retail and leisure development in Handforth, Cheshire in a decision letter dated 12 June 2019.

There were three applications, only the first of which was approved, the others refused:

“Phase 1b – application reference 16/3284M, dated 4 July 2016, seeking outline consent for the erection of 2320m2 of retail floorspace.

• Phase 2 – application reference16/0802M, dated 26 November 2015, seeking outline consent for the erection of four restaurants and three drive-thru restaurant/cafes, along with associated car parking, servicing and landscaping.

• Phase 3 – application reference 16/0138M, dated 8 January 2016 (amended 16 March 2017), seeking outline consent for construction of 23,076m2 of class A1 retail floorspace, 2,274m2 of class A3/A5 floorspace, along with associated car parking, access and servicing arrangements and landscaping.”

“The Secretary of State considers that, due to its small-scale and limited nature, Phase 1b can take place in isolation of Phases 2 and 3, and subsequently cannot be seen as having the negative effects that Phases 2 and 3 would have on Macclesfield and Stockport town centres.”

James Brokenshire announced in his March 2019 written statement that he would “also shortly publish “Better Planning for High Streets”. This will set out tools to support local planning authorities in reshaping their high streets to create prosperous communities, particularly through the use of compulsory purchase, local development orders and other innovative tools.”

I assume that this will be published in due course by his successor. Initiatives and funding announcements are great as long as everything is of course properly targeted and, above all, leads to some early positive outcomes. A lot of talk, a lot of money being dangled, but it is going to take much more than that to give many of our high streets a new reason for being, and local people a new reason to use them. We’re falling out of the habit fast.

Simon Ricketts, 14 September 2019

Personal views, et cetera

Town Centres First? Two Recent Decisions

I blogged in Sequential Test: Still Testing (23 September 2016) on the uncertainties of the “town centres first” sequential test in the NPPF and in particular how much flexibility needs to be shown by a prospective developer in looking for more central sites before being granted permission in an edge or out of town centre location. At the time I wrote, the most recent judgment was that of Ouseley J in the Aldergate case. I included in my blog post extensive quotes from the judgment where he set out his views on the flexibility required in determining whether a site would be suitable. 
The issue is seldom easy. If too little flexibility is required, it is too easy for the promoter of an out of centre scheme to demonstrate that the scheme can’t fit anywhere more central. On the other hand, if too much flexibility is required, economic activity, often generated by specific trading models or retailer requirements, that would not be likely to take place in a more central location can end up being unnecessarily stifled. And what does flexibility mean? How similar would the scheme on the town centre site need to be? What if the scheme could be split (“disaggregated”) onto more than one site? How immediately available does the town centre site need to be?

The issue has come to the fore again in two recent planning appeals. 

Kingswood, Hull
By his decision letter dated 20 December 2017 inspector Robert Mellor dismissed an appeal in relation to a proposed retail development on an edge of centre site in Kingswood, Hull. He found that the proposal failed both the sequential and impact tests in the development plan (which had been adopted during the course of the inquiry) and in the NPPF, supplemented by the PPG. He also found that the proposed development would be inconsistent with the site’s allocation for employment and community uses in a 2016 area action plan. The decision letter is interesting for the analysis that the inspector gives to each of these issues but in this blog post I want to continue to focus on the question of how the sequential test is to be applied. 
The inspector was faced with an outline proposal for the erection of class A1 and class A3/A5 units totalling 11,148 sq m together with associated works on a greenfield site. The site would allow for large retail units and there was to be provision for “ample surface car parking which is likely to be free to use and which would take up a large proportion of the site“. There were two candidate alternative sites to be considered in Hull city centre, namely the Albion Square and Myton Street sites.  
First the inspector considered what flexibility was required: “there is dispute as to how alike the sites and schemes need to be for the in-centre site or sites to be considered suitable. In particular there is dispute as to the interpretation of the Framework phrase: ‘demonstrate flexibility on issues such as format and scale’, as that wording does not itself explain what degree of flexibility is appropriate.”
The appellants argued for “the use of wording which would require the development to be implemented only on one site and which would require the development, in that and other regards, to be ‘closely similar’ to the appeal proposal. In effect this could mean seeking to insert a retail park style of development with on- site parking and a main road frontage into only one city centre site.”
The inspector did not consider “that the term ‘closely similar’ provides a useful and readily applicable definition of the limits of flexibility that is capable of wider application. In particular it is difficult to distinguish its meaning from the term ‘not precisely similar’ which is the approach that the PPG expressly seeks to exclude. Moreover the strict application of such a term as ‘closely similar’ would risk making the sequential approach unworkable for the same reasons as set out in the Tesco v Dundee case.”

He noted that the scheme was speculative without identified occupiers. “Thus the question of an individual retailer or corporate personality does not arise.” He noted that “whilst the appeal scheme is for a single terraced building, the Appellants’ witnesses did not object to the subdivision of the development into separate buildings and there is no obvious reason why those would not be suitable for the intended occupiers“. He noted that the appellants maintained that a 10% overall reduction in floorspace would provide adequate flexibility but did not justify that figure and he assumed that it could be achieved in various ways, whether by for instance removing at least one unit or generally reducing their size. He noted that flexibility by way of form or format could include “whether the proposal can be provided in one or more buildings: whether space is on one or more levels; how individual units are laid out; and how and where parking and servicing provision is made.”
The inspector then turned to the two potentially sequentially preferable sites.

He concluded that the Albion Square site “would have the capacity to accommodate all, or most, of the retail floorspace and food and beverage units sought in the appeal proposal together with on-site parking. However this would be likely to require some revisions to the layout in order to create all the large retail units on 2 levels which the appeal scheme proposes and to optimise the scheme’s attractiveness to potential occupiers. That in turn could affect how and where the residential and ice arena elements of the Council’s most recent proposals are accommodated and how much car parking could be provided. However a city centre site would be attractive to retail occupiers seeking a range of unit sizes. Some flexibility should be expected in unit scale and format. A 929sqm minimum size for all units would not be necessary on a city centre site. The Appellants had previously been satisfied with a smaller minimum unit size at Kingswood.”

He concluded that the Myton Street site was “not of sufficient size to provide all of the floorspace in the appeal scheme together with full on-site surface parking. It could provide much of the floorspace if reliance were to be placed on use of the adjacent multi-storey car park. However it would then be less attractive to retailers than the Albion Square site due to its weaker pedestrian links to the rest of the Primary Shopping Area.”
The inspector then went on to consider whether the floorspace in the appeal scheme should be disaggregated for the purposes of determining whether it could be accommodated more centrally. He concluded yes:
“In this case there is no particular evidence that it would be commercially or functionally necessary to accommodate a variety of individual and as yet unidentified comparison goods retailers either in only one building or on only one site in the City Centre. I therefore conclude that in addition to the option to accommodate all of the appeal proposal on the Albion Square site, they could all be readily accommodated in the city centre, and at the same unit size, if the development were to be sub-divided with approximately half of the floorspace at The Albion Square site and half at the Myton Street site. In that event there would also be the possibility of more generous surface parking provision at Myton Street if that was considered necessary to make that scheme more attractive to some types of retailer.”
Then the inspector considered whether the alternative sites could be said to be available:
“I consider it would be unreasonable to exclude sites as non-available where there is a reasonable prospect that they will be both vacant and in single ownership within a matter of months.”
He accordingly concluded that the scheme had failed the sequential test. 

Tollgate, Colchester
The appellant’s submissions in Hull that development on a town centre on town centre site would have to be “closely similar” in order to be sequentially preferable were based on the conclusions of an inspector in relation to a partly edge of centre retail scheme at Tollgate, Colchester, accepted in a decision letter from the Secretary of State dated 4 August 2017. The inspector put it like this: 
“The sequential test therefore means that whilst a sequentially preferable site need not be capable of accommodating exactly the same as what is proposed, it must be capable of accommodating development which is closely similar to what is proposed“. 
(This conclusion was perhaps strange given that it followed an earlier passage:
“In this case there is no evidence that the proposed format is necessary or fundamental to the proposal. Whilst the proposal is in outline, not a single retailer has been identified, and the size and location of units within the site has not been established and there is no defined timescale or phasing. It is difficult to conceive of a more open ended proposal. The parameters established by plans show a greater level of gross floor space than permission has been sought for. Most importantly the Appellants have themselves disaggregated within the appeal site with three distinct zones. DZ1 and DZ3 are some distance apart. In these circumstances disaggregation within the sequential test would be justified.”)
The inspector found that the town centre sites put forward by the council and objectors were not suitable or available. The appeal was allowed. 

But surely, as the inspector identified in Hull, a test of “closely similar” would risk making the sequential test unworkable? The main objectors to the Tollgate appeal challenged the Secretary of State’s decision to allow the appeal. Permission was first refused on the papers by Lang J, who commented that “closely similar” was a fair summary of Ouseley J’s guidance in the Aldergate case. The objectors then renewed their challenge at a hearing on 19 December 2017 before none other than Ouseley J. Whilst Ouseley J also refused permission, his reasoning should be noted by anyone dealing with the sequential approach. His judgment was ex tempore and there is not yet an official transcript but, according to colleagues’ notes, his comments during the course of the hearing included the following:
* “If I had meant ‘closely similar’ I would have said ‘closely similar’.”
* If the developer has committed to no specific details in its scheme, then the sequential test should not require the sequential sites to meet a test which the application scheme itself could not pass.

* With reference to his statement in Aldergate, Ouseley said: judges may use particular language, but this language is not a substitute for the policy itself. Instead, the language is applying the policy in a particular context. There is a danger that people think that judges are providing a substitute for policy.

* The words of NPPF 24 are simple and meant for application in a wide range of circumstances.

* “In Aldergate, I had in mind something broader than ‘closely similar’.”

Conclusions

I draw a few conclusions from this tangle:
– There are real conceptual difficulties in being too specific about the necessary elements of a scheme which is speculative without, for instance, retailers on board with specific requirements.
– Without a requirement to show ‘need’, the only constraint on the scale of an out of centre or edge of centre scheme is the risk of being refused permission on the basis that there would be an unacceptable impact to nearby centres – aside from that, the bigger the scheme, the less likely there are to be sequentially preferable sites if there is not allowed to be a significant degree of flexibility.

– There are dangers in rigidly applying case law or previous appeal decisions across the board. Each case turns on its circumstances. Equally there are dangers in relying on paraphrasing by courts or inspectors of what policies say – go back to the wording of the policy itself. 

– In particular, take care over relying on the Colchester decision. 

– The guidance could be clearer (indeed it used to be!)

Simon Ricketts, 22 December 2017

Personal views, et cetera

(Town acted for separate groups of town centre investors in relation to the Hull and Colchester appeals. Thank you to Town colleague Ricky Gama in particular for his work on those cases and for his notes quoted above). 

Sequential Test: Still Testing

The  “town centres first” sequential test in paragraph 24 of the NPPF still leads to much uncertainty as to its practical application. This post briefly summarises (largely just by cutting and pasting the relevant passages) the recent Warners and Aldergate court rulings and the Secretary of State’s Exeter decision letter, all from the last month alone.

But first, the paragraph:

“Local planning authorities should apply a sequential test to planning applications for main town centre uses that are not in an existing centre and are not in accordance with an up-to-date Local Plan. They should require applications for main town centre uses to be located in town centres, then in edge of centre locations and only if suitable sites are not available should out of centre sites be considered. When considering edge of centre and out of centre proposals, preference should be given to accessible sites that are well connected to the town centre. Applicants and local planning authorities should demonstrate exibility on issues such as format and scale”

A little, but not much more, guidance is set out in the NPPG:

“It is for the applicant to demonstrate compliance with the sequential test (and failure to undertake a sequential assessment could in itself constitute a reason for refusing permission). Wherever possible, the local planning authority should support the applicant in undertaking the sequential test, including sharing any relevant information. The application of the test should be proportionate and appropriate for the given proposal. Where appropriate, the potential suitability of alternative sites should be discussed between the developer and local planning authority at the earliest opportunity.The checklist below sets out the considerations that should be taken into account in determining whether a proposal complies with the sequential test:

  • with due regard to the requirement to demonstrate flexibility, has the suitability of more central sites to accommodate the proposal been considered? Where the proposal would be located in an edge of centre or out of centre location, preference should be given to accessible sites that are well connected to the town centre. Any associated reasoning should be set out clearly.
  • is there scope for flexibility in the format and/or scale of the proposal? It is not necessary to demonstrate that a potential town centre or edge of centre site can accommodate precisely the scale and form of development being proposed, but rather to consider what contribution more central sites are able to make individually to accommodate the proposal.
  • if there are no suitable sequentially preferable locations, the sequential test is passed.”

This replaced more detailed practice guidance  which was withdrawn on 7 March 2014.

Warners Retail (Moreton) Ltd v Cotswold District Council & Ors [2016] EWCA Civ 606 (24 June 2016)

The Court of Appeal rejected a claim for judicial review brought by the owner of a Budgens store in Moreton-in-Marsh, seeking to quash a planning permission granted for an out of town food store. The arguments were around whether the applicant had been sufficiently flexible before rejecting as sequentially preferable an extension to the Budgens. (The permission was granted when the more detailed practice guidance was in place, hence references in the passages below).

Lindblom LJ:

“Under paragraph 24 of the NPPF both applicants and local planning authorities are expected to “demonstrate flexibility on issues such as format and scale”. What bounds can reasonably be set on an applicant’s preference and intentions as to “format and scale” in any individual case will always, and necessarily, depend on the facts and circumstances of that particular case. The policy in paragraph 24 of the NPPF should not be seen as prescriptive in this respect. It plainly is not.

Flexibility was also called for under the practice guidance, in somewhat more elaborate terms. It is very clear from paragraphs 6.42 and 6.45 that the identification of a relevant “need” or “need/demand” for the purposes of the sequential approach was not intended to be merely a self-serving exercise on the part of the developer himself. As paragraph 6.45 made plain, sites were not to be rejected on the strength of the “self imposed requirements or preferences of a single operator …”. Otherwise, the sequential approach would likely become a merely self-fulfilling activity, divorced from the public interest. It is also clear, however, that the authors of the practice guidance regarded the developer’s own intentions as generally having some bearing on the application of the sequential test. One sees this, for example, in paragraph 6.37 – in the reference to “the need or demand which the proposal is intended to meet”; in paragraph 6.42 – in the concept of “what aspect(s) of the need are intended to be met by the site(s)”, the recognition that a more central site does not have to be able to “accommodate precisely the scale and form of development being proposed”, and the need to consider what contribution such a site might make to “meeting the same requirements”; in paragraph 6.45 – in the reference to the “need/demand [the applicant’s] proposal is intended to serve”; and also in paragraph 6.46 – in the reference to “the scale/form of town centre uses proposed …” (my emphasis).

The only site said to have been a sequentially preferable alternative to Minton’s is the site of the Budgens store. It is not suggested that that site could have accommodated an additional food store of the kind assumed by Minton for the purposes of the sequential test, even if the permitted extension to the Budgens store were not built. In essence, Mr Warren’s argument was that the members should have asked themselves, but did not, whether the extended Budgens store could meet the identified need, and, if the answer was that it could, should have found that Minton’s proposal for an additional food store must fail the sequential test because there was no need for it. 

In my view that argument is untenable. It does not reflect the national planning policy and guidance bearing upon the council’s decision on the Minton proposal. In effect, it seeks to restore to national planning policy for retail development a test of need that has not been there since PPS4 replaced PPS6 in December 2009. That, of course, is not possible. Minton’s proposal did not have to be justified by a demonstration of need.

One of the grounds for the challenge was that the officer had wrongly treated the Supreme Court’s ruling in the Tesco v Dundee City Council  case on suitability as directly applicable to the NPPF notwithstanding differences in the language of the guidance north and south of the border.

“I think one must be careful here. The Government’s policy for the sequential approach in paragraph 24 of the NPPF and the practice guidance are not in all respects the same as the NPPG8 and development plan policies construed by the Supreme Court in Tesco v Dundee City Council. They are similar in broad intent, but they are not in identical terms. An obvious similarity, though the language is different, lies in the concept of “flexibility”. The requirement in the final sentence of paragraph 24 of the NPPF for both applicants and local planning authorities to “demonstrate flexibility on issues such as format and scale”, as amplified by the advice in paragraphs 6.42 to 6.46 of the practice guidance, bears some similarity to the requirements for “flexibility and realism” on the part of both developers and retailers and planning authorities in paragraph 13 of NPPG8 and the requirement for planning authorities to be responsive to the needs for retailers in paragraph 14. That much is clear. But one should not simply read across the Supreme Court’s interpretation of the Scottish policies in Tesco v Dundee City Council as if it were the construction of the differently worded policy in paragraph 24 of the NPPF and the corresponding parts of the practice guidance. It is not.”

Aldergate Properties v Mansfield District Council and another [2016] EWHC 1670 (Admin) (8 July 2016)

The High Court quashed planning permission for a proposed out of town Aldi foodstore, following a challenge by the owner of a site in Mansfield town centre. The town centre had been ruled out by the applicant as a potential location, partly because there is already an Aldi store near to the centre and planning permission for another.

Ouseley J summarises parts of the planning committee report that, led to approval of the application, as follows:

“The Report continued, saying that as the application site was out of centre, a sequential assessment had to be carried out. The Report referred to the agreement that the exercise did not need to include sites covered by the catchment areas of the existing store on Nottingham Road or the recently permitted store at Leeming Lane South, to the south and north respectively of Mansfield town centre, because it was “unrealistic that Aldi would operate a store in close proximity to these existing and committed stores, and it would therefore be unreasonable to require a search for sites that would not make commercial sense for the operator”. 

The Report noted the centres and sites considered, and the reasons why they were not suitable. In order to be suitable for Aldi, sites needed to be at least 0.6 ha in size. The applicant was thought to have been fairly flexible in terms of more central sites, and in format and scale by looking for sites “which are slightly smaller than the application site”. Aldi’s reasoning for not being more flexible was based on Tesco Stores Limited v Dundee City Council, (dealt with below), set out in the Planning and Retail Statement with particular reference to paragraph 38 of the judgment, which focussed suitability on the developer’s proposals, not on some alternative scheme which might be suggested by the authority. The question, said the Report, was whether an alternative site was suitable for the development proposed, not whether the proposed development could be altered to fit an alternative site. The sequential test was thus passed and the principle of retail development acceptable. There was no separate discussion of impact.”

Ouseley J ruled that it was inappropriate to rule out the town centre as a potentially more suitable location, purely due to the identity of the proposed retailer:

“[…] In my judgment, “suitable” and “available” generally mean “suitable” and “available” for the broad type of development which is proposed in the application by approximate size, type, and range of goods. This incorporates the requirement for flexibility in [24] NPPF, and excludes, generally, the identity and personal or corporate attitudes of an individual retailer. The area and sites covered by the sequential test search should not vary from applicant to applicant according to their identity, but from application to application based on their content. Nothing in Tesco v Dundee City Council, properly understood, holds that the application of the sequential test depends on the individual corporate personality of the applicant or intended operator.

[…] NPPF [24] positively “requires” retail investment in the first place to locate in town centres rather than elsewhere. Its thrust is rather more emphatic than policies which advise developers and retailers to have regard to the circumstances of town centres, as in Tesco v Dundee [28]. It is the purpose of the planning system to control development, that is to permit, prevent, encourage, inhibit or limit and condition it, so that the individual private or commercial interest and the broader public interest meet in reconciliation however uneasily. NPPF [24] cannot therefore be interpreted as requiring “suitability” and “availability” simply to be judged from the retailer’s or developer’s perspective, with a degree of flexibility from the retailer, and responsiveness from the authority.

Third, and of critical importance here, still less can it be interpreted as envisaging that the requirement or preferences of an individual retailer’s trading style, commercial attitudes, site preferences, competitive preferences whether against itself or greater competition should dictate what sites are “suitable” or “available” subject only to a degree of flexibility. NPPF [23] and [24] are simply not couched in terms of an individual retailer’s corporate requirements or limitations. That would be the antithesis of planning for land uses and here, its default policies. It would take very clear language for such an odd result to be achieved.”

The applicant had accepted a condition that made the permission personal to Aldi. However, the judge held:

“This is not solved by the imposition at the end of the process of a condition restricting occupation to a particular retailer. That may be necessary for consistency of approach but it would reinforce the error of approach; instructively though it was opposed here by Aldi which had benefited from an approach unique to Aldi. The town centre remains where development is required; the out of centre development may inhibit or prevent a store coming forward in the town centre, and draw away town centre trade, trips, expenditure and vitality.

Fourth, there is a further reason why the identity of the applicant, as opposed to the sort of development it proposes, is not generally relevant to the sequential test. The sequential test in the NPPF is not just one of suitability; it covers availability: “only if suitable sites are not available, should out of centre sites be considered.” A town centre site may be owned by a retailer already, to use itself for retailing, who is not going to make it available to another retailer. It is plainly available for retailing, though only to one retailer. That does not mean that another retailer can thus satisfy the sequential test and so go straight to sites outside the town centre. “Available” cannot mean available to a particular retailer but must mean available for the type of retail use for which permission is sought.”

The judge had delayed handing down the judgment so as to be able to take into account the Court of Appeal’s ruling in Warners but found nothing in that to change the approach he was taking.
The Secretary of State’s decision letter dated 30 June 2016 in relation to the north of Honiton Road and west of Fitzroy Road, Exeter, site 

This was a recovered appeal in relation to a proposed district centre. The Secretary of State dismissed the appeal, partly because he agreed with his inspector that the more centrally located bus and coach station site was sequentially preferable and had been wrongly discarded.

The Secretary of State agreed that it was wrong to argue that the core strategy was “inconsistent with the NPPF, or out of date on the grounds that whether development is acceptable is now only to be determined by reference to the sequential and impact tests”. He agreed that the NPPF expects local plans to “fill the gaps” by meeting the criteria set out in paragraph 23 of the NPPF for policy making, including a network and hierarchy of centres. The core strategy defined local centres and the proposal would go beyond any reasonable of local centre for the purposes of the core strategy.

The inspector goes into an interesting analysis of the previous decision of the Secretary of State in Rushden Lakes dated 11 June 2014  distinguishing it on the basis that in that case the local plan’s settlement hierarchy policies were found to be out of date.

On the suitability of a potentially preferable site and whether sufficient flexibility had been shown, the Secretary of State says this:
“For the reasons set out at IR11.30-11.37, the Secretary of State agrees with the Inspector that given no more than reasonable flexibility, the Bus and Coach Station site would be suitable for the town centre uses proposed for the appeal site (IR11.37). The Secretary of State has taken into account the Inspector’s reasoning at IR11.38-11.40. He agrees that there is no rationale for concluding that the site must be on the open market to any developer, and that the new retail floorspace would be marketed to traders who would occupy it regardless of who developed or owned the scheme (IR11.39). He further agrees that the requirement for a bus station and a leisure outlet on another part of the Bus and Coach Station site does not mean that the area earmarked for retail development is not available (IR40). Overall he considers that the Bus and Coach Station site is available.”

The inspector:

11.32 Tesco v Dundee looked at how the policy should be interpreted including flexibility. As above, it found that the question of suitability does require judgement but also that the purpose of flexibility is not to require the application to be transformed into something significantly different. Here, the proposed retail elements could be accommodated without disaggregation but the configuration of floorspace would need to be different to take account of the relative size of adjacent properties (their scale) and the floorspace would most likely need to be concentrated nearest to the existing PSA for commercial reasons. This would be no more than showing reasonable flexibility. 

11.33 To insist on the same requirement for parking and access in a town centre, which has ample existing parking, service roads and excellent links to public transport, would be unreasonable. Drive-through restaurants do feature within the definition of a town centre and so, to be suitable, it must be possible for these to be accommodated. Nevertheless, as with general access requirements for servicing and other vehicular needs, it would be no more than showing reasonable flexibility to accept that existing streets and access arrangements could provide part of the drive element of such a proposal if not the restaurant area. Moreover, drive-through restaurants are not fixed elements of the proposals as they do not feature specifically in the description of development, would not be a requirement of the suggested conditions, and could easily be varied to another use. The scheme would also include a gym which would fall within the health and fitness centres part of the NPPF definition. However, the Council’s contribution to the PHL as a whole includes a leisure centre. It was not suggested that an operator who might occupy the gym proposed for the appeal site would not be interested in a City Centre location, and there are already other gyms in Exeter.

11.38 The NPPF and the PPG both refer to availability with regard to the sequential test but neither clarifies how this should be defined. The appellant argued that the BCS is not available since CEH and the Council have agreed on a way forward and are unlikely to allow other developers a look in. The purpose of retail policy in NPPF 23 is to promote competitive town centre environments and manage the growth of centres. The NPPF test should not be used to prevent development unless a sequentially preferable site could actually deliver the proposals. 

11.39 However, there is no sound basis for finding that the BCS site is not available to traders and no rationale for concluding that the site must be on the open market to any developer. Providing PHL goes ahead, the new retail floorspace would be marketed to traders who would occupy it regardless of who developed or owned the scheme. The need for flexibility in the Judgment in Tesco v Dundee refers to retailers as well as developers and this strengthens the conclusion that available means for the development proposed not for the landowner hoping to carry out the development. Although on the separate point of specific locational requirements, the PPG does state that land ownership does not provide a justification for excluding a site. 

11.40 In the absence of any clearer interpretation, the preference in NPPF 24 should refer to availability to traders. It follows that it doesn’t matter who develops the site so long as it can provide the proposed level of shop floorspace. As above, the requirement for a bus station and a leisure outlet on another part of the BCS site does not mean that the area earmarked for retail development is not available. On this point as well, the BCS would be sequentially preferable.”

Simon Ricketts 23.7.16

Personal views, et cetera