The Court of Appeal has backed a new government policy excluding some small developments from affordable housing levies.
In a judgment today, written by Lord Dyson, the Master of the Rolls and approved by two other Lord Justices, all four of the findings made by the lower court judge were rejected.
However the government has not been given the green light to implement its policy just yet: speaking after the judgment Dyson MR said that the panel of judges had not yet decided whether to send the case to the Supreme Court for a further appeal. He said he would give their decision in writing at a later date.
The case pits local authorities, who are concerned about their development budgets, against a central government that argues that obligations on developers to fund affordable housing is making some small developments unviable and therefore exacerbating the UK’s housing shortage.
The claim was brought by local authorities West Berkshire District Council and Reading Borough Council. In a series of hearings they said that the policy changes made in a ministerial statement in November 2014, were unlawful.
The policy excluded developments of 10 units or 1,000 sq m (10,800 sq ft) or less from affordable housing levies and tariff-based contributions, with a lower threshold of five units in rural areas, national parks and areas of outstanding natural beauty.
It also provided that, where a vacant building is brought back into use, or demolished for redevelopment, local authorities will provide a “credit” for that floorspace to be set against affordable housing contributions.
The two authorities who brought the claim say that the policy change would exempt some smaller sites from any obligation to provide or contribute financially towards affordable housing, resulting in a windfall for landowners or developers, as well as reducing overall affordable housing provision throughout the UK.
They won the first round in July when High Court judge Holgate J said that he reached the “firm conclusion” that the purported effect of the new national policy on exemptions from affordable housing contributions was “incompatible” with the statutory framework of the Town and Country Planning Act 1990 and the Planning and Compulsory Purchase Act 2004, and was therefore “unlawful”.
In addition, he ruled that the consultation process was unfair, that the secretary of state failed to take into account material considerations and failed to comply with the public sector equality duty under the Equality Act 2010.
However, the judges in today’s ruling rejected all of those points. The assertion that the new national policy was “incompatible” with the statutory framework was a “legal mistake” Dyson MR said, because the Secretary of State didn’t need to remind readers of his statement that “policy must be applied consistently.”
The Secretary of State did not fail to take into account material considerations and did not give an inadequate consultation, Dyson said. He said the lower-court judge had expected the Secretary of State to go into an unnecessary level of detail.
Finally, Dyson said that the secretary of state had complied with the Equality Act of 2010. Even if it had not, however, “we have strong reservations about the proposition that the court should necessarily exercise its decision to quash a decision as a form of disciplinary measure”.
Secretary of State for Communities and Local Government v West Berkshire District Council and Reading Borough Council. Court of Appeal (Dyson MR, Laws LJ, Treacy LJ) 11 May 2016.
Mr R Drabble and Mr D Blundell (instructed by the Treasury Solicitor) for the appellant.
Mr D Forsdick QC and Mr A Mills (instructed by Legal Services at West Berkshire District Council) for the respondents.
