High Court rules that Government exemption from affordable housing contribution is unlawful

• United Kingdom

• Real estate
• Real estate planning
• Real estate sector

14-08-2015

The High Court has recently held¹ that a Government policy creating a blanket exemption to the requirement to deliver affordable housing or tariff style contributions, operating in favour of small housing developments, is unlawful.

The case concerned a written ministerial statement (WMS) given by the Minister of State for Housing and Planning, Brandon Lewis MP, on 28 November 2014. Whilst the legal conclusions set out in the judgment are specific to the facts of the case, the ruling has important wider implications for the creation of Government planning policy.

Background

The WMS described the requirement for affordable housing or tariff style contributions to be made in respect of small housing sites as a “disproportionate burden” on small scale developers. It introduced a change to the national policy on section 106 planning obligations. This was regarded as an important strand in the Conservative party’s commitment to build 200,000 starter homes exclusively for first time buyers.

The change concerned an exemption to the need to provide affordable housing or tariff style contributions in respect of sites of 10 dwellings or less and which have a maximum gross floorspace of 1,000 square metres. For sites located within a designated rural area, it gave local authorities discretion to set the lower threshold of 5 dwellings or less. Associated changes to national planning practice guidance (NPPG) were also introduced.

West Berkshire District Council and Reading Borough Council brought a judicial review of the Secretary of State’s decision to alter national policy. They contended that the change would result in a loss of 23.5% and 15% of affordable homes per year within their area respectively.

The High Court decision

The challenge was upheld on four of the five grounds, which resulted in the Secretary of State’s decision to adopt the new policy and the changes to the NPPG being quashed. The successful ground with the most far reaching implications relates to the inconsistency of the policy with the statutory code.

Mr Justice Holgate outlined a number of core principles of the statutory code. In preparing local planning policies, a local planning authority (LPA) must have regard to a number of considerations, including national policies and guidance, but statute does not require policies to be in conformity with national policies. An LPA is entitled to put forward, justify and adopt policies that depart from national policies. Such policies must nevertheless be supported by a sufficient evidence base and they are subject to independent examination and tested for soundness.

The Secretary of State has power to intervene through making plan modifications where he considers policies to be unsatisfactory. However, statute does not give the Secretary of State a power to make policies outside of the plan making process which override a local plan. Following adoption of local plan policies, statute requires the determination of planning applications to be led by the development plan.

Mr Justice Holgate referred to the judgment in Alconbury² where the Court of Appeal described the remit of the Secretary of State in policy making as one of influencing local development plans and policies which planning authorities would use in resolving their own local problems.

The affordable housing policy did not purport to give guidance to LPAs to be considered alongside local plan policies. Mr Justice Holgate found that the policy gave thresholds below which affordable housing and tariff style contributions should not be sought. Those thresholds were to be applied directly and with immediate effect notwithstanding any local plan policy with which the national policy was inconsistent.

Mr Justice Holgate concluded that the national policy and related NPPG were intended to displace adopted local plan policies on affordable housing requirements and were accordingly unlawful.

Comment

Mr Justice Holgate reiterates that his legal conclusions contained in the judgment are concerned with the specific circumstances of this case.

Nevertheless, the case reinforces an established legal principle that the role of the Secretary of State in policy making is to provide guidance to LPAs for the preparation of local plans in order to ensure a degree of consistency in plan making and decision taking.

It the light of the decision, it seems likely that closer scrutiny will be given to the lawfulness of the adoption and application of national policy, particularly where this is introduced through a WMS. Where national policy or guidance purports to direct how planning applications should be determined regardless of development plan policies, then that approach is likely to be unlawful.

¹ West Berkshire District Council and another v Department for Communities and Local Government [2015] EWHC 2222 (Admin)
² R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295