The Court of Appeal’s decision in R (on the application of West Berkshire District Council) v Secretary of State for Communities and Local Government [2016] EWCA Civ 441; [2016] PLSCS 137 has been hailed by the government as vindication of its approach to planning reform. The decision reversed the High Court’s quashing of the Department for Communities and Local Government’s policy exempting small-scale development from affordable housing. The government wasted no time in bringing the policy back in full effect, even going as far as suggesting that West Berkshire District and Reading Borough Councils’ case was a waste of taxpayers’ money.
But look closer at the judgment and it is apparent that the court has provided a helpful and even-handed decision which clarifies and qualifies the scope for ministerial policy-making. It also, importantly, provides guidance as to how to apply (and, indeed, depart from) such policy, even if it is expressed in mandatory terms.
Planning reform
The government has been pursuing the housing agenda with some vigour. As soon as the Housing and Planning Act 2016 hit the statute books, the Queen’s Speech heralded the Neighbourhood Planning and Infrastructure Bill. Unlocking small-scale residential development was a key focus, and in 2014 the government consulted on and adopted new policy guidance by way of ministerial statement and the planning practice guidance (“PPG”) which required:
• sites of 10 or fewer units (five in rural areas), or no more than 1,000 sq m gross floor area, be exempt from affordable housing provision/levy and tariff-based contributions; and
• a vacant building credit for reused or redeveloped floorspace to be set against any such contribution or levy.
Policy quashed
Concerned about the impact on delivery of affordable housing, Reading and West Berkshire Councils challenged the policy in the High Court ([2015] EWHC 2222 (Admin); [2015] PLSCS 242). In quashing the policy Holgate J was highly critical of the government’s approach, finding that:
• the policy was inconsistent with the statutory planning regime, interfering with the plan-led system by imposing restrictions on local planning authority (LPA) policy and decision-making;
• the consultation was inadequate;
• the secretary of state had not taken into account material considerations.
The Department for Communites and Local Government removed the relevant paragraphs from the PPG but applied to the Court of Appeal.
Quashing reversed
In accepting all grounds of appeal the Court of Appeal made the following key points:
• The secretary of state’s power to make policy is by exercise of the Crown’s common law powers under the Royal Prerogative, not statute. Accordingly, the secretary of state is not under the same duties and requirements as when exercising statutory discretion and is not necessarily required to consider every last relevant matter when formulating policy;
• In accordance with the rule against fettering of discretion, there is a legal requirement that the exercise of a public discretionary power (eg on the part of a local planning authority (“LPA”) as decision-maker) required consideration of all relevant matters;
• A policy-maker is entitled to express policy in mandatory/unqualified terms because it is implicit and understood that any policy has to be applied in accordance with the rule against fettering discretion.
Accordingly, while policy can be expressed in mandatory or unequivocal terms, it must still be applied in accordance with the rule against fettering discretion and the relevant statutory framework. In other words, where local circumstance or the evidence base allows, the national policy can be set aside by a LPA in formulating new plan policy or deciding planning applications. The Court of Appeal found that Holgate J went wrong on this point, having “conflated what the policy says with how it may be lawfully deployed”.
The Court of Appeal pointed out that these principles are to be found in the statutory planning scheme, ie the starting point for decisions is the development plan, but that other material considerations must be taken in to account. The relative weight to be given to the plan and the other considerations (including government policy and guidance) is a matter for the decision-maker based on the present circumstances; the development plan should not automatically carry greater weight, not least because development plan policies can become out-of-date.
Interpreting policy
Notwithstanding the government’s view that the challenge was a waste of time and money, the fact that the High Court got it wrong highlights the importance of the original challenge being made. If Holgate J, a planning law expert, interpreted government policy in mandatory terms, then so could LPAs, inspectors and developers. For LPAs, that could have meant slavish application of the exemptions and vacant building credit to the detriment of affordable housing and infrastructure provision even where a local need was justified. Failure to do so would see developers, quite understandably, appealing every decision (with inspectors almost certain to follow the secretary of state’s unequivocal policy).
The Court of Appeal’s decision allows LPAs and inspectors to properly consider whether or not the policy is appropriate in the circumstances. Developers will be pleased to see the policy reinstated but cannot rely on its automatic application (and will need to put LPAs to proof if any departure is proposed).
The role of the secretary of state
A further point of interest arises in respect of the secretary of state’s position as both policy-maker and decision-taker: the Court of Appeal mentioned that the secretary of state can quite reasonably state his preferred policy approach and can even recommend the weight that the policy should be given, provided that when it comes to applying his own policy to plans or applications, he takes into account and properly balances all relevant considerations.
The policy has been reinstated in the PPG, albeit with reference to the appeal decision, which “should be taken into account”. A reference to the Supreme Court has not yet been ruled out but it is not immediately apparent as to the likely grounds or if anything would be gained. It should be noted that the Housing and Planning Act 2016 provides the secretary of state with a fallback option in any event: section 159 allows him to make regulations imposing a wide range of restrictions on the enforceability of affordable housing planning obligations. Watch this space.
Ian Green is legal director and Tom Thurlow is a trainee solicitor at DLA Piper LLP
