Development plan – Core strategy – Affordable housing policy – Policy requiring 30% affordable housing provision for developments over specified size– Policy providing for contrary agreement in respect of particular development by negotiation with respondent council taking into account abnormal costs and economic viability – Court dismissing application for judicial review of policy on affordable housing – Court of Appeal upholding refusal to quash policy – Appeal dismissed
In April 2009, the first respondent council adopted, as part of their development plan, a core strategy that set out their development policy until 2026, including that relating to affordable housing. Prior to its adoption, the strategy had been submitted for independent examination by an inspector of the second respondent secretary of state, pursuant to section 20 of the Planning and Compulsory Purchase Act 2004, to assess its compliance with national and regional policy. The policy, which was formulated when market conditions were favourable, required a 30% quota of affordable housing. However, when it was being considered by the inspector, the market had slumped and no new housing was being constructed. The policy as finally adopted on the inspector’s recommendation provided that all proposals for new housing above specified size thresholds should provide for 30% affordable housing unless otherwise agreed with the first respondents. The policy envisaged that the actual level of affordable housing on a site would be negotiated at the time of the planning application, having regard to abnormal costs, economic viability and any other requirements associated with the development. However, that all except the smallest sites had to contribute to the affordable housing provision.
The appellant developer brought proceedings, under section 113 of the 2004 Act, to quash the affordable housing policy as having insufficient regard to and failing to conform with national policy and the regional spatial strategy (RSS), contrary to sections 19 and 24 of the Act. It claimed that the policy, with its requirement for 30% affordable housing, did not reflect an assessment of the likely economic viability of land for housing within the area, contrary to
The appellant appealed, arguing that: (i) the 30% target was unsupported by adequate economic evidence; (ii) the defect was not cured by providing negotiations on individual sites and; (iii) the policy was in other respects unclear and unsupported.
Held: The appeal was dismissed.
It was incumbent on applicants in such cases to specify precisely the grounds on which they alleged that the relevant decision was beyond the powers of the Act or was procedurally defective. It was not suggested that the policy failed to conform to the RSS, nor that there had been a failure to comply with any other specific substantive or procedural requirement. The only other potentially relevant statutory requirements were that the strategy should be sound, taking account of the relevant policy guidance, and that the inspector’s recommendations should be adequately reasoned.
“Soundness” was a matter to be judged by the inspector and the first respondent; it raised no issue of law, unless it could be shown that their decision was irrational or they had ignored the relevant guidance or other considerations that were necessarily material in law. Reasons would be adequate if they were intelligible and enabled the reader to understand why the matter had been so decided and what conclusions had been reached on the principal controversial issues. If the only failure was one of reasoning (a procedural requirement), the applicant also had to show that it was substantially prejudiced by the failure. The appellant’s case had to be judged according to those criteria.
Persimmon Homes (North East) Ltd v Blyth Valley Borough Council [2008] EWCA Civ 861, [2008] JPL 335, on which the appellant sought to rely, did not suggest that it would be illegal or irrational, following such an economic evaluation, to adopt a percentage target at the top of the expected range, having regard to the circumstances of individual sites. If the inspector had recommended the adoption of a policy that was irretrievably incompatible with her own reasoning, there would have been a failure of both rationality and reasoning. However, that is not a conclusion that the court would readily accept in the event of a realistic alternative. Furthermore, in interpreting the policy, the court and the public were entitled to have regard to the reasons given by the inspector for the approving policy.
The evidence was sufficient for the inspector to conclude that a 30% target was realistic in favourable conditions. The requirement to compare the proposed policy with reasonable alternatives was not a legal requirement, although it would have been appropriate for the inspector to have considered any serious approaches that were submitted. However, because market conditions were continually changing it was not possible or appropriate for the policy to contain varying thresholds and/or lower affordable housing targets. In addition, there was no indication that the appellant or other party had advocated an alternative model, even though it had the resources and expertise to make such proposals. It could not therefore rely on the inspector’s inquisitorial duty to mount a retrospective challenge in the courts.
Peter Village QC and David Loveday (instructed by Macfarlanes LLP) appeared for the appellant; Vincent Fraser QC (instructed by the legal department of Wakefield Metropolitan District Council) appeared for the first respondents; the second respondent did not appear and was not represented.
Eileen O’Grady, barrister
