The Supreme Court has given its judgment on the proper meaning of a key paragraph in the National Planning Policy Framework in relation to local authorities’ obligations to demonstrate a five-year supply of housing.
Local authorities Cheshire East Council and Suffolk Coastal District Council had challenged a March 2016 Court of Appeal decision on the meaning and scope of paragraph 49 of the NPPF.
However, the Supreme Court unanimously dismissed the appeal, and Lord Carnwath stressed that courts should not adopt an overly “legalistic” approach to the application of the paragraph. He said: “The important question is not how to define individual policies, but whether the result is a five-year supply.”
Unusually, the judgment has been welcomed by lawyers acting on both sides as one which provides key clarification on the approach to be taken to five-year housing supply.
Paragraph 49 says that “relevant policies for the supply of housing should not be considered up to date if the local authority cannot demonstrate a five-year supply of housing sites”, but argument centred on what “relevant policies for the supply of housing” actually means.
Announcing the decision, Lord Carnwath said that appeal concerned the interpretation of “one sentence” of the NPPF, on which there have been conflicting High Court authorities. But he said that paragraph 49 did not require “legalistic analysis”.
Simon Ricketts, partner at Town Legal, which acted for one of the respondents in the case, said: “The issue at stake is subtle but crucial for promoters of residential development in areas that cannot show five years’ supply of deliverable housing sites.”
Describing Lord Carnwath’s analysis of the issue as “vital stuff”, he said that it changes what has been the orthodox approach to the “paragraph 49/14 conundrum”.
He added: “This is the highest court in the land telling us to be less legalistic about the way we frame our arguments as to the application of national and local policies to development proposals. The exercise is not so much a close technical examination as to whether policies are ‘relevant policies’ for the purposes of paragraph 49 but a weighing up of the consequences of a housing supply deficit against policies which are restricting that supply.
“We have all perhaps been guilty, spurred on particularly by the Supreme Court itself in Tesco v Dundee, of seeking too often to reduce matters of planning judgment to narrow points of legal interpretation. It is a habit we need to break.”
Jonathan Clay of Cornerstone Barristers, who was instructed by Suffolk Coastal District Council throughout the proceedings, said that while the appeals were dismissed, the local authorities had in fact been successful on its main argument that local plan policies restricting development in the countryside and seeking to encourage new development only within settlement boundaries are not “policies for the supply of housing”. He said that this is seen as a very important protection of the environment in his client’s district.
Clay said: “This is a welcome decision not only for the clarity that it brings to a complex and much fought over area of planning law and policy, but also because it asserts in the clearest terms the primacy of the development plan and the policies of the Local Plan through which local people can shape and protect their own environment while accommodating the development they need.”
In his written judgment, Lord Carnwath said that the primary purpose of paragraph 49 is simply to act as a trigger to the operation of the “tilted balance” in respect of the presumption in favour of sustainable development under paragraph 14.
He said: “It is important to understand how that is intended to work in practice. The general effect is reasonably clear. In the absence of relevant or up-to-date development plan policies, the balance is tilted in favour of the grant of permission, except where the benefits are ‘significantly and demonstrably’ outweighed by the adverse effects, or where ‘specific policies’ indicate otherwise.”
He did not see any justification for substituting the word “affecting” for “for”, so as to catch any out-of-date policy affecting housing as within the definition.
But he added: “This may be regarded as adopting the ‘narrow’ meaning, contrary to the conclusion of the Court of Appeal. However, this should not be seen as leading, as the lower courts seem to have thought, to the need for a legalistic exercise to decide whether individual policies do or do not come within the expression. The important question is not how to define individual policies, but whether the result is a five-year supply in accordance with the objectives set by paragraph 47. If there is a failure in that respect, it matters not whether the failure is because of the inadequacies of the policies specifically concerned with housing provision, or because of the over-restrictive nature of other non-housing policies. The shortfall is enough to trigger the operation of the second part of paragraph 14.”
The authorities argued throughout in favour of a narrower definition of paragraph 49, limiting it to policies dealing only with the numbers and distribution of new housing, and excluding any other policies of the development plan dealing generally with the disposition or restriction of new development in the authority’s area.
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