by Mark Ashton and Peter Dixon
The recent spate of appeals that has gone down with costs awarded against the developer has focused attention on the inherent risks of the appeal process
This apparent hardening of attitude by Nicholas Ridley coincides with the anniversary of new government guidance on retail development. To celebrate the first year of a new regime in retail planning we have carried out research into appeal decisions issued in the past 12 months which shows that a developer who has regard to central government advice need not be afraid to become involved in the appeal system.
When the series of Planning Policy Guidance Notes (PPG) were first introduced in January 1988 by the DOE most practitioners, while welcoming the provision of concise planning guidance, considered that the notes said little new and were merely “old wine in new bottles”.
PPG6, dealing with “major retail development”, was an exception to this general rule. Its publication had been foreshadowed in the late summer of 1987, when a draft document had been circulated for consultation. Existing guidance dating from the mid-1970s had evolved in the period before the full implications of new forms of retailing had been appreciated. The guidance, which placed emphasis on a hierarchy of shopping facilities in regional, town and district centres, was ill-equipped to cater for proposals involving new forms of retailing usually on out-of-centre sites which have been experienced since the late 1970s. The emphasis given to protecting established centres, which found its way into numerous local planning policies, offered little assistance to developers, planners and inspectors when asked to address the cumulative consequences of competing shopping proposals. The weakness of this guidance led to criticism from all those involved in the development process, and the guidance became largely irrelevant to development control decisions, including those taken by the Secretary of State.
In this climate PPG6 set the scene for the new regime by declaring unequivocally that new forms of retailing were to be welcomed, and that the planning system should not stand in the way of developers seeking to respond to the rapidly changing retail scene. PPG6, as with other radical government policies, draws heavily upon the notions of efficiency, service and consumer choice, and restates the point made by Patrick Jenkin in 1985, that commercial competition is not a planning consideration.
Shopping impact
However, the Government postulates that competition in some cases can have adverse social as opposed to commercial consequences which can cause a valid planning objection. The central problem in most retail appeals is the assessment of the point at which intervention in the market, through the refusal of planning permission, may be justified on retail impact grounds. PPG6 relies upon the “vitality and viability” test, by indicating the circumstances in which the potential effects of competition will justify the refusal of planning permission:
Only in the case of developments which either individually or cumulatively are very large, relative to the size of nearby centres or where there is a succession of major developments over a short period, are the effects likely to be so substantial as to raise serious questions about the future of nearby town centres.
Just as intervention in withholding planning permission will only rarely be justified, the guidance also makes clear that detailed shopping impact assessments are of limited value in most cases. Furthermore, because retailing is a dynamic activity, local authorities are urged to avoid planning policies which apply rigid and inflexible floorspace allocations, often based on outdated technical shopping studies.
Existing town centres continue to be afforded some protection by PPG6, and local authorities and developers are urged to take a positive role in investing in town centres, both to strengthen their position against outside competition and in the wider interest of consumer choice.
Despite the favourable wind given to new forms of retail development, the guidance is not so slanted as to lose sight of more fundamental planning objectives which may be threatened by large-scale retail schemes. PPG6 states explicitly that new shopping proposals have no place in the green belt or on allocated industrial land where such land is in short supply and where there is an up-to-date local plan. These considerations are given considerable weight, and are sufficient to defeat otherwise well-founded retail proposals.
In essence the guidance is a natural extension of the deregulating approach of the present Government in which interference with the market process through the refusal of planning permission should be warranted only on planning policy grounds where:
(1) The proposal would have an unacceptable effect on the “viability and vitality” of established shopping centres.
(2) The development involves allocated industrial land in an area of shortage subject to an up-to-date local plan.
(3) The development is located in the green belt or other sensitive open countryside.
So much for the pedigree of PPG6. Since the advice was published the pressure for new retail development has continued largely unabated and our practice have been involved in many schemes in which the new guidance has been analysed and applied. Our retail planning team has recently carried out a detailed examination of appeal decisions issued in order to monitor the practical results.
The emerging evidence demonstrates that the advice has had some effect in enabling the market to select and develop the best sites, especially in the case of retail warehousing. However, well-founded and robust local planning policies which safeguard industrial land or protect the countryside will stand up at appeal. So, like the curate’s egg, PPG6 appears to have been good in parts for developers and planners alike.
Prior to the new guidance, developers and retailers were often hamstrung by out-of-date and restrictive local planning policies, which did not recognise the benefits which flow from modern out-of-centre retailing. A developer could secure the best site in retail locational terms, but would watch powerless as planning permission was granted to operators on secondary sites often identified by the local planning authority themselves. Time and again the best sites from the consumers’ point of view were held up.
Even before the new guidance there was plenty of evidence that the best sites would be supported by the Secretary of State, even where there was an impact argument against them. At junction 21 of the M1 near Leicester our retail team acted (as it eventually emerged) for the only successful developer, obtaining outline planning permission for a 250,000-sq ft retail park. One of the factors in this case was that the site offered the best opportunity to secure a comprehensive retail park, integrated with an existing superstore and well related to the surrounding road network. Alternative and more modest proposals with limited shopping impact consequences in the same general location were dismissed on the basis that the better-quality LET scheme should take priority.
This same theme, in which qualitative factors overrode more general objections, also occurred in the pre-PPG6 decision to permit a subregional shopping centre at Lakeside, near Thurrock. Here, the uniqueness of the proposed development and the absence of comparable facilities within its catchment area were overriding, even though certain nearby shopping centres such as Grays were expected to be severely affected.
Post PPG6, the climate is even more favourable to well-conceived schemes and the Secretary of State is not afraid to grant planning permission for more floorspace than technical assessments might otherwise admit on the basis that the market will ultimately determine what is built and where.
In a recent example in Bedford the local authority opposed a large retail warehouse park, on the grounds that they had already allocated other sites to meet foreseeable demand and there was a real risk that some planning permissions would not be implemented. Bedford is a prime example of a town where a series of relatively poor sites have been approved, while better sites have been held back in the negotiation or appeal process. In this recent case, quality played a large part in the Secretary of State’s decision, and he concluded that the site represented a good opportunity to obtain a well-located, purpose-built retail warehouse park for the town. The consequences for other sites with permission obtained or in the pipeline were not material considerations in reaching his decision.
This market-led approach — which appears to be increasingly prevalent following PPG6 — is well illustrated by three recent appeal decisions for major retail warehouse parks in Basildon in which the Secretary of State, disagreeing with his inspector in one case, has disregarded arguments about the cumulative shopping impact of the schemes on the town centre. In particular the Secretary of State noted that “none of the sites (which were allocated) appear to be particularly attractive to potential operators or, indeed, available at the present time” and that “planning permission should not be withheld on grounds of economic impact on the town centre”.
The potential impact on town-centre redevelopment schemes is often at the nub of many cases. Most notoriously, at Cribbs Causeway, Bristol, the Secretary of State initially endorsed his inspector’s opinion that the proposed subregional shopping centre could prejudice long-term but not-yet-committed investment in the centre of Bristol. Following an appeal to the High Court, the Secretary of State has agreed to reopen the public inquiry and, by implication, has conceded that he had given insufficient reasons for accepting his inspector’s recommendations. While the outcome of a further public inquiry cannot be prejudged, there was surprise in planning circles that this radical decision should extend to the trading effect on hypothetical future investment in circumstances where it was generally common ground between the parties that existing and committed schemes would proceed.
Perhaps the correct approach has most recently been expressed in Torbay where our retail team acted on behalf of a superstore operator. The inspector, with whom the Secretary of State agreed, stated that:
there would have to be a high risk of damage to the vitality and viability of the town centre as a whole in order to justify refusing planning permission on impact grounds.
Furthermore, the inspector thought that although an impact on the existing centre of 20% might close an in-town superstore:
it is barely conceivable that the chain of undesirable consequences [ie loss of investors’ confidence in other town-centre schemes] would be completed. The town centre’s anticipated vitality might well not be achieved, but its viability would be in little doubt.
This risk to the vitality of existing centres:
would be offset by the presence of a new facility serving in particular the more southerly parts of Torbay.
The issue of shopping impact is taking a less prominent part in the case of straightforward retail warehouse and superstore schemes. Not only are much larger schemes or combinations of proposals being allowed, but increasingly flexible planning permissions are being granted. In the past, local planning authorities with some support from the Secretary of State have often imposed conditions restricting the range of goods sold from retail warehouses and superstores to control the trading consequences for existing shops. The Secretary of State is generally now unwilling to attach restrictive conditions unless there are sound reasons on impact grounds. This also applies to conditions sometimes regulating minimum unit size in order to prevent “trading up” on retail parks.
Even though this Government’s more relaxed attitude to the larger out-of-centre proposals might herald the demise of detailed technical analysis, the clear message from successive appeal decisions is that such assessments will continue to be required to allay fears and respond to objectors. Developers, who have relied on the cautious approach which PPG6 advocates towards shopping impact studies, have encountered a mixed response from inspectors who continue to find qualitative and technical assessments a valuable aid, especially where local planning policies based on statistical evidence predate the guidance.
Environmental issues
The softening in attitude to shopping impact is in sharp contrast to proposals in the open countryside or in green belt. The recent sub-regional shopping centre decisions at Bricket Wood, Watford, and Hewitts Farm, Orpington, where costs were awarded against the appellants, are just two of a number of recent decisions which have underlined Mr Ridley’s commitment to preserving approved green belt. PPG6 must be taken at face value when it proclaims that large-scale retail development has no place in the green belt. Developers should take note that local planning authorities who refuse permission cogently based on statutory policies designed to protect the open countryside are likely to have their decisions upheld and have the realistic prospect of obtaining costs on appeal.
This proposition has recently been reiterated with some vigour in PPG12, (Local Plans Guidance). The strength of commitment to the green belt is now such that, even where the notation is only tentative, the Secretary of State may still decide to refuse retail proposals in the interests of countryside conservation. A recent example of this comes from Chester where, despite the local authority’s support for the release of green belt land for retail development, the Secretary of State considered shopping to be wholly inconsistent with the purpose of green belt policy.
Employment considerations
Similarly, the enthusiastic support which PPG6 expresses for newer forms of shopping continues to be counterbalanced to a degree by the importance attached to industrial development and the employment benefits which it can bring. The Secretary of State has time and again protected the industrial allocation of land in local plans approved since the guidance. However, where the allocation is tentative or wholly unrealistic (for example, because the site cannot be developed economically) or there is an absence of demand, then the recognised employment benefits of retail development will normally outweigh industrial considerations.
There is conflicting evidence to show that the argument that retail proposals carry employment benefits sufficient to compensate for the loss of alternative industrial employment is looked at critically and generally fails to find favour in the absence of other benefits. There is some acceptance that new retail development will partially dislocate existing retail jobs as a result of competition and greater efficiency. The acceptance of this principle on appeal has filtered down to many planning authorities, who are not always persuaded of the apparent employment benefits attributed to the development itself.
Summary
From whatever side PPG6 is judged, some consistent themes are emerging as inspectors and planning authorities apply the guidance in practice. Developers who are lucky enough to have acquired a good site can have confidence that a well-conceived scheme is likely to find favour with the Secretary of State, even if in certain circumstances impact arguments would presume against it. Moreover, planning permission is now more likely to be granted for a good proposal, even if it is a latecomer in a series of schemes which between them would otherwise absorb the local demand.
Technical assessments are generally still required to assess the trading effect on existing centres, but their results may be treated with a measure of scepticism and they are unlikely to result in the application of some rigid or arbitrary floorspace allocation which would interfere with the market mechanism. In much the same way, planning permissions are increasingly unlikely to be limited by conditions to particular types of goods or particular sizes of unit, unless there are very strong reasons to suggest that the conditions are essential. All these positive points, from the retailers’ point of view, have to be set against the increasingly dogmatic support given by the Secretary of State to both green belt and countryside policies and industrial land allocations where they are up to date in statutory plans.
The balance has therefore tilted, under the new regime, in favour of the latest forms of retailing, unless proposals compromise other important planning objectives which are identified in up-to-date and relevant local plans. It may not be a radical change, but a change for the better from the developers’ point of view.
