Planning permission – Residential development – Affordable housing – First respondents refusing permission for conversion of hotel into nine dwellings without affordable housing element – Appellant’s appeal focusing on economic viability of affordable housing provision – Inspector finding evidence unreliable in light of differences between parties – Inspector granting planning permission – Inspector’s decision set aside for failure to deal with main controversial issue – Appeal allowed
The respondent council refused the appellant’s application for planning permission for a change of use of premises in Knightsbridge from a hotel to nine residential units. The appellant appealed to the respondent secretary of state and an inquiry was held before a planning inspector. A key issue on the appeal related to the provision of affordable housing. Planning policies in the London Plan set targets for affordable housing to be applied flexibly having regard to matters such as economic viability. The appellant’s scheme did not include any element of affordable housing and the parties differed as to whether its provision on the site, or a financial contribution to its provision elsewhere would render the development financially unviable. The appellant and the second respondent analysed that matter using a “Toolkit” programme, which the plan policies referred to as a helpful mechanism for analysing the economic viability of affordable housing provision. The two analyses produced widely differing results since each party had used different input figures: the appellant’s analysis produced a positive figure of £11.8m for the development and that of the second respondent produced a £7m deficit.
The inspector considered the evidence of the parties’ experts as to the appropriate input figures and economic viability, but felt unable to reach a conclusion given the extent of the dispute between them. He concluded that the Toolkit analyses were not sufficiently robust to render them reliable; he therefore attached little weight to them and gave greater credence to other factors, including the mayor’s policy of encouraging residential development and the practical difficulties of incorporating affordable housing into the development. He concluded that it would not be reasonable to require an affordable housing provision and allowed the appeal.
In proceedings brought by the respondents, under section 288 of the Town and Country Planning Act 1990, the inspector’s decision was quashed on the ground that he had failed to deal with the issue of economic viability, which was a principal and important controversial issue: see [2010] PLSCS 113. The appellant appealed.
Held: The appeal was allowed.
The inspector had not been obliged, as a matter of law, to determine which “input” figures he preferred in respect of the various aspects of the economic viability of the proposed scheme. The London Plan policies, to which he was required to have regard, raised the question of whether affordable housing should be provided. Although economic viability was a part of the question, it was only one of the elements that had to be taken into account when considering whether affordable housing should be provided; under the plan policies, regard had also to be given to the need to encourage residential development and the circumstances of a particular site. Accordingly, the principal controversial issue for the inspector’s consideration was the overall question of whether the provision of affordable housing should be required in the proposed scheme. Although the inspector had to give careful consideration to the evidence on economic viability and decide whether he could place any, and if so how much, reliance on the input figures that the parties had produced, that did not mean that he had to choose one or other of the figures proposed as input values and then follow through to a conclusion that the development was or was not economically viable. If he concluded that none of the rival input figures could be regarded as reliable or likely to produce a useful result, then he was duty-bound to say so. In such circumstances, to choose the “less unreliable” figure and use it to produce a conclusion on economic viability that would also, by definition, be unreliable would have been irrational and would have provided an unsound basis for any conclusion on the affordable housing issue. The inspector, having grappled with the evidence on economic viability and concluded that the input figures were unreliable and would lead to unreliable results, had acted lawfully in deciding that he could not use any of those figures with the Toolkit software to reach a conclusion on the economic viability of the proposal.
Having validly concluded that the economic viability of the proposed scheme could not reliably be determined, it had been reasonable for the inspector to decide that he could not place significant weight on the factor of economic viability when determining whether affordable housing should be provided. It was difficult to see what other weight could have been placed on that factor. Moreover, questions of weight were a matter for the inspector and not the court. The way the inspector dealt with other policy factors when deciding the affordable housing issue had not been erroneous in law. Moreover, he had been entitled to take into account the appellant’s stated position that the scheme would be unlikely to proceed were affordable housing to be required, since that position did not depend on any finding as to the correctness of its input figures and therefore its case on economic viability. Accordingly, the inspector’s decision could not be impugned for any error of law.
Daniel Kolinsky (instructed by David Cooper & Co) appeared for the appellant; Thomas Cosgrove (instructed by the legal department of Kensington and Chelsea Royal London Borough Council) appeared for the respondents; the secretary of state for communities and local government did not appear and was not represented.
Sally Dobson, barrister
