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13th May 2016

Ruling on national affordable housing exemption overturned

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The Court of Appeal has overturned the High Court decision in July last year which held that the Government’s national planning policy exempting small developments from affordable housing contributions, and providing for the vacant building credit, was unlawful.

The relevant policy provided that developments of ten homes or fewer, or 1,000 square metres or less, would be exempt from the requirement to contribute to affordable housing. A lower threshold applied in designated rural areas, National Parks and Areas of Outstanding Natural Beauty, with developments of 5 units or less to be excluded. The policy also provided for a vacant building credit to be set against affordable housing contributions where a vacant building is brought back into use or demolished for redevelopment.

The High Court had determined that the policy was inconsistent with the statutory framework for the delivery of housing through the local plan system, that the consultation process carried out by the Secretary of State in introducing the policy was legally inadequate, and that they had failed to take into account material considerations and satisfy the public sector equality duty. As a result of that decision, the Government removed the policy from the national planning practice guidance.

However, the Court of Appeal overturned this decision on all four grounds. The major focus of the case was the alleged inconsistency with the statutory framework for planning decision making. The Court determined that the policy did not countermand or frustrate the effective operation of section 38(6) of the Planning & Compulsory Purchase Act 2004 and section 70(2) of the Town & Country Planning Act 1990, which require planning decisions to be made in accordance with the development plan unless material considerations indicate otherwise. The fact that the policy was expressed in unqualified and absolute terms, and did not indicate that it was not to be applied in a blanket fashion, did not make it objectionable. In other words, whilst the policy says that it should be applied in all cases, the decision maker will in fact also take into account the policies of the development plan, in accordance with the statutory framework.

In addition, the Court of Appeal held that the Secretary of State was not to be faulted for a failure to have regard to relevant considerations in formulating the policy; his policy choices were for him and he was not obliged to go further than he did into the specifics. It also found that the consultation process was fair, and that appropriate consideration was given to the consultation responses. The Court also felt that, whilst the public sector equality duty had not been satisfied at the time the policy was made, it was subsequently, and it did not warrant the quashing of the decision; the Court said that the Equality Act 2010 does not require a precise mathematical exercise to be carried out in relation to particular affected groups.

The Government has since reinstated the policy to the planning practice guidance as a result of this decision, although many authorities will continue to require affordable housing notwithstanding the national policy position.

It seems likely that we can expect to see the Government policy reinstated to the planning practice guidance as a result of this decision. In the meantime, the original ministerial statement will be a material consideration, although many authorities will continue to require affordable housing notwithstanding the national policy position.

For more information please visit our Planning Services Page or click here to email Gemma Dudley.