Paragraph 204 of the National Planning Policy Framework states that a planning obligation should only be sought where it meets all of the followings tests, namely it is (1) necessary to make the development acceptable in planning terms (2) directly related to the development, and (3) fairly and reasonably related in scale and kind to the development.
Additionally, and even more importantly, regulation 122(2) of the Community Infrastructure Levy Regulations 2010 provides that a planning obligation may only constitute a reason for granting planning permission where identical tests to those above are satisfied. (Policy guidance and statutory requirements exist side by side.)
Therefore, where it can be shown that a local planning authority (“LPA”), for instance, took the view that a proposed development was unacceptable in planning terms in the absence of a specific planning obligation – but nevertheless granted planning permission on that specific planning obligation being entered into – its decision will inevitably be liable to quashing without the tests in regulation 122(2) being clearly satisfied.
But, where the benefits secured through a planning obligation are not necessary to render the development acceptable in planning terms, it is a different matter. As the Court of Appeal made clear in R (on the application of Derwent Holdings Ltd) v Trafford Borough Council [2011] EWCA Civ 832, in such an instance the securing of additional benefits by means of a planning obligation is not unlawful. (In other words, regulation 122(2) is not engaged.)
This was very much the situation in R (on the application of Savage) v Mansfield District Council [2015] EWCA Civ 4; [2015] PLSCS 7. There, the appellant had applied to quash the grant of planning permission by the LPA for a large mixed use development on the edge of Sherwood Forest. One of her grounds related to a planning obligation entered into by the developer with the LPA. Its intention was to indemnify the LPA in respect of any compensation that would be payable in the event that the planning permission was modified or revoked, pursuant to the review provisions in regulation 69 of the Conservation of Habitat and Species Regulations 2010. She contended that the planning obligation was unlawful in that it did not meet the requirements of regulation 122(2).
The Court of Appeal dismissed the appeal, holding that regulation 122(2) did not apply. The planning obligation had not been used to overcome a planning objection, nor had the LPA taken the view that the development was unacceptable in planning terms without it.
John Martin is a planning law consultant
