The government is asking the Court of Appeal to overturn a ruling that a new policy, excluding small developments from affordable housing levies, is unlawful.
Last July, Holgate J upheld a challenge by local authorities West Berkshire District Council and Reading Borough Council to the policy changes made in a ministerial statement in November 2014, which the High Court judge said had had “profound consequences” for planning authorities across the country in discharging their responsibilities under the planning system for the provision of affordable housing.
But today, Richard Drabble QC, representing the secretary of state for communities and local government said that the judge had erred in law in finding that creating a threshold for affordable housing was unlawful.
He is seeking a ruling restoring the policy, which was quashed by the High Court.
The two authorities, which argue that the decision should be upheld, 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.
The quashed policy excluded developments of 10 units or 1,000 sq m 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.
In his decision, 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”.
He said: “The purpose of ministers in their new national policy was to create exemptions from affordable house requirements by introducing blanket thresholds, irrespective of (a) whether those thresholds conflict with adopted local plan policies and (b) the weight to be attached to a specific local plan policy. To put it at its lowest, that purpose was not ‘calculated to promote the policy of the legislation’.”
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.
He said that ministers were informed in July 2014 that the “10 and below” threshold would result in 21% of affordable housing contributions being exempted – an annual value of £693m based on figures from 2011-2012. But he said that those figures painted only a broad picture for the country as a whole, and that the impact on particular local authorities would vary substantially, such as in Reading where the urban area is tightly bounded by development constraint policies and most development has to take place on brownfield sites.
The appeal hearing will last two days, with judgment expected to be reserved.
