Articles

If in-depth analysis is what you need, the chances are that you will find it here. Our experts regularly produce articles on legal issues and upcoming changes and you will find them all here.
Gavel & Book

11/05/2017

Breaking News: Supreme Court rules on five year land supply provisions

Introduction

Those promoting or deciding planning applications will be all too aware of the “presumption of sustainable development” and the concept of “five year housing land supply” in the National Planning Policy Framework (“NPPF”). The approach to decision making in planning applications for residential sites also has a wider social importance in a week in which it was stated that housebuilding has fallen to its lowest levels since the 1920s. In summary:

1. Local Planning Authorities (“LPAs”) are required to “identify and update annually a supply of specific deliverable sites sufficient to provide five years’ worth of housing against their housing requirements”. This is subject to an additional 5% or 20% buffer dependant on whether there has been persistent under delivery. (Paragraph 47).

2. Paragraph 49 provides: “Housing applications should be considered in the context of the presumption in favour of sustainable development.  Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five- year supply of deliverable housing sites” (our emphasis).

3. The “presumption” is contained in paragraph 14 and includes:

a. approving development proposals that accord with the development plan without delay. This is in line with the usual section 38 (6) statutory presumption in favour of the development plan.

b. where the development plan is absent, silent or relevant policies are out of date, granting permission unless:

i. any adverse impacts “would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework as a whole”. This is known as the “tilted balance” in favour of granting permission; or

ii. specific policies in the NPPF indicate development should be restricted, which include those policies under footnote 9, e.g. SSSIs, Green Belt or AONBs (“Footnote 9 Policies”).

Issues before the Supreme Court

Over many years developers and local authorities (and indeed lawyers), have become increasingly frustrated as to the lack of consistency in the application of the NPPF, in particular paragraph 49. In recognition of this, the Supreme Court grappled with three key issues to bring “much needed clarity to the meaning of the policy”:

1. The interpretation of paragraph 49 and what is meant by a “relevant policy for the supply of housing” and which of the following interpretations apply:

a. “Narrow”, i.e. only those policies limited to numbers and distribution of new housing, such as policies which specifically support development within settlement boundaries.

b. “Wider”, i.e. including both policies for the supply of new housing and other “counterpart” policies, whose effect is to restrain the supply by restricting housing in certain parts of the LPA’s area. Such “counterpart” policies may include those policies which restrict development in the countryside or other areas. 

c. “Intermediate”, i.e. as per the “Wider” interpretation, but excluding policies designed to protect specific areas or features such as green gap polices or those that protect a particular landscape designation.

2. The legal status of the NPPF.

3. The relationship of the NPPF with the development plan.

The Supreme Court’s Conclusions

In a decision spanning 30 pages, their Lordships conclusions may be summarised as follows - to some extent taking the above issues in reverse order.

1. The primacy of the development plan is emphasised and the section 38 (6) exercise remains the starting point, i.e. planning applications should be determined in accordance with the development plan unless “material considerations” indicate otherwise.

2. Case law has correctly established that the Court may rule upon the interpretation of planning policies, but the application of planning policies is a matter of planning judgement for the decision maker, whether LPA or Secretary of State on appeal. The Court will not interfere with such judgements unless irrational or perverse.

3. The NPPF is to be treated as a “material consideration”.  

4. The “narrow” interpretation was to be preferred in the context of paragraph 49. The Court of Appeal was wrong to conclude that a “relevant policy for the supply of housing” meant a policy “affecting” the supply and was wrong to interpret the word “for” in such a manner. The Supreme Court - much to our initial disappointment - disagreed with the Court of Appeal’s view that a relevant paragraph 49 housing policy could even extend to any policies which restrict where new housing may be development, e.g. Green Belt, AONB and general countryside protection policies.

5. However, the question as to whether a policy is or is not a relevant policy for the supply of housing is irrelevant and “unnecessary”. The “important question” is whether the LPA has a five year land supply in accordance with paragraph 47 of the NPPF and “it matters not whether [a failure to have a five year land supply] 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”

6. With regards to the Footnote 9 Policies under paragraph 14 that restrict development, this is not an exhaustive list and is read to include related development plan policies and those policies to which the NPPF refers, e.g. Green Belt. This should be seen in the context of the proposals in the Housing White Paper to limit the application of footnote 9 to those policies currently listed there (with the addition of Ancient Woodland and aged or veteran trees).  

7. Both appeals brought by Suffolk Coastal and Cheshire East were dismissed, albeit on narrower grounds that the Court of Appeal; the key issue being the approach taken to the application of paragraph 49 and 14.  

Implications and the inevitable question…what now?

Whilst the industry was hoping for immediate clarity from the Supreme Court, the decision may be seen as somewhat of a “curveball” by the development industry. The arguments by the parties in the Supreme Court focussed on what should and should not be a relevant policy for the supply of housing for the purposes of paragraph 49, and the industry was anticipating a wider interpretation in line with the Court of Appeal’s judgment.

Instead, the Supreme Court has largely cast this consideration to one side, and instead shifted focus to the lack of five year housing land supply under paragraph 47 which the Court found automatically triggers the paragraph 14 presumption.

Therefore - in some sense - the fact that the Supreme Court applied a narrow interpretation to paragraph 49 policies (i.e. that only those policies that specifically allocate housing or deal with numbers may be considered out-of-date under paragraph 49) is less important. The key consideration is whether or not the paragraph 14 presumption or “tilted balance” (which is found to automatically apply) is sufficient enough to outweigh any development plan conflicts. The weight to be applied in this “tilted balance” should be decided after careful consideration including the extent a particular policy is the cause of the under supply of housing.

Developers progressing planning applications - or indeed LPAs in the process of writing their committee reports - need to take note of the Supreme Court’s decision and act accordingly. Quite apart from the consideration a developer shall need to give this process in order to secure a grant of planning permission, both developers and LPAs need to give real consideration to this to avoid the real risk of a judicial review founded on the basis that the LPA’s decision making was flawed as a result of getting this procedure wrong.  The practical approach in our view for robust decision making is that planning applications should be determined by following the approach below:

1. Consideration of the development plan. A planning statement or committee report for example should work through each relevant policy, consider compliance with each policy and identify the extent of any conflicts. As it is not usually necessary to comply with each and every strand of each and every policy, can it be argued that the development plan is complied with on the whole?

2. Where there is no five-year housing land supply, the Court seems to indicate that paragraph 14 is automatically triggered. The question to be considered is whether or not the adverse impacts of granting of planning permission would “significantly and demonstrably” outweigh the benefits, with the weight to be applied a matter of planning judgement. This may be in light of relevant material considerations or indeed on the extent a particular policy is the cause of the deficit in five year supply.

3. Are any Footnote 9 Policies relevant (including the corresponding policies in the development plan) that may restrict development and prevent the application of the paragraph 14 presumption?

4. Assuming following 2 and 3 above the presumption in paragraph 14 is met and applies, does this outweigh any conflicts with the development plan identified following the assessment at paragraph 1 above?

5. Finally, are there any other material considerations that need to be weighed in the balance? This could, for example, include the recent Ministerial Statement concerning neighbourhood plans - a summary of which may be found here: https://www.howespercival.com/resources- and-events/articles/housing-white-paper-and-legal-update--neighbourhood-planning 

In summary, whilst the Supreme Court’s decision appears to have moved the goal-posts for housing proposals where the LPA has a lack of five-year housing land supply, the decision will inevitably be welcomed and should be seen as a positive step forwards.

The application (including the weight to be attached) to development plan policies, NPPF and the presumption of sustainable development remain matters of planning judgement for the decision maker, who retain an extremely wide discretion.  Developers must therefore try and ensure that their applications are drafted robustly and planning statements are prepared to properly deal with the conclusions of the Supreme Court which make detailed submissions as to the weight that should be applied to development plan policies in the context of paragraph 14.

This may cause developers to revisit planning applications in the system and supplement their planning statements with a short addendum to guide LPAs through the implications of the Supreme Court’s decision and how this affects the assessment exercise. The intention of this would of course be to emphasise why permission should still be granted, despite the change in approach to the NPPF application. 

Whilst it is inevitable that fewer policies could be argued as having less weight under paragraph 49, it may still be possible to argue less weight should be afforded to those policies depending on whether they are a cause of the lack of five year supply. Policies which simply state no development outside development boundaries or in the countryside may be a prime example, and therefore the ultimate balancing exercise and outcome as to whether permission should be granted may remain the same.

It will also never be more important for developers to add and emphasise any planning benefits of the scheme to help ensure that the “tilted balance” remains tilted in favour of granting approval by the LPA or inspectors on appeal. Given the wide discretion LPAs will continue to have in determining planning applications (irrespective of a lack of five year housing supply), applications should continue to be drafted carefully with one eye on an appeal to ensure the planning arguments can withstand the scrutiny of an Inspector and maximise the prospects of securing permission against LPA refusal.

Should you wish to discuss the implications of the Supreme Court’s decision further, please do not hesitate to contact a member of our specialist planning team.  

A link to the Supreme Court’s judgment can be found here: https://www.supremecourt.uk/cases/uksc-2016-0078.html