The High Court has confirmed that financial viability assessments should be assessed objectively, with determinations relating to their content being unchallengeable unless at the Wednesbury unreasonableness threshold. This underlines the importance of ensuring viability assessments are watertight and properly evidenced.
In Hunter v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 1068 (Admin), the claimant applied for planning permission of a temporary mobile home siting on agricultural land for three years. Following a non-determination by Buckinghamshire Council, the planning inspector dismissed the claimant’s appeal for reasons relating to landscape impacts and a failure to meet the criteria for a temporary rural worker’s dwelling.
The claimant challenged the decision on five grounds, however, he only received permission to proceed in respect of one relating to the lawfulness of the inspector’s decision that the claimant had failed to demonstrate the following key part of the local plan policy that would be met: “The future economic viability of the enterprise, to which the proposed dwelling relates, can be demonstrated by a sound business plan. This should demonstrate that the proposed enterprise has been planned on a sound financial basis with a reasonable prospect of delivering a sustainable profit, before or by the expiry of the temporary period, that the proposal seeks to secure.”
The planning report submitted with the application contained financial projections for years one to three and predicted profits between £20,000-£25,000 for each year. This was criticised by the council, whose consultant found that not enough allowance had been made for labour costs and taking this into account, the business was not sustainable. Despite the claimant disagreeing with this, the inspector preferred this evidence.
The court reiterated the principles set out in St Modwen Developments Limited v Secretary of State for Communities and Local Government [2017] EWCA Civ 1643; [2017] PLSCS 196, surrounding the approach of the court when reviewing the inspectors’ decision letters. It confirmed that financial viability must be assessed objectively and the burden of proving a case at appeal falls on the appellant. While the claimant did not agree with the inspector’s determination, this amounted to nothing more than a challenge on planning merits. The inspector was entitled to find that the allowance for additional labour in the financial assessment was not sufficient and his conclusion was not irrational.
This left the court no room to interfere with the inspector’s decision and the challenge was dismissed.
Erica Ives is an associate solicitor in the planning & environmental team at Irwin Mitchell
