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Flexibility over small sites’ s106 affordable housing contributions here to stay - and vacant building credit stages a comeback
Judgement has been handed down in Secretary of State for Communities and Local Government (SoS) v (1) West Berkshire District Council (2) Reading Borough Council.  The Master of the Rolls Lord Dyson, and Lord Justices Laws and Treacy allowed the SoS’ appeal and all four grounds succeeded.  The local authorities could appeal to the Supreme Court, but for the foreseeable future, there is flexibility over how local planning authorities (LPAs) might apply government policy regarding small site affordable housing contributions and the vacant building credit (VBC). Both have made a comeback, with national Planning Practice Guidance (PPG) having just been updated to refer to the ruling. Background The SoS had appealed against West Berkshire DC (WBDC) and Reading BC’s (RBC) successful challenge (in 2015) of national policy introduced in 2014 for a ‘vacant building credit’ and which outlined the circumstances in which contributions for affordable housing and tariff-style planning obligations should not be sought from small scale and self-build development.  The Planning Court judgement led to the removal of guidance from the PPG (see para 24 of the 2015 judgement, and revisions to the PPG, for the wording of the deleted paragraphs). The policy changes had been introduced in November 2014 by Ministerial Statement, and added into the PPG in 2015.  Following the 2015 judgement, ‘policies’ related to small sites not having to make affordable housing contributions and VBC were removed from the PPG; only paragraph 31 of the ‘Planning Obligations’ PPG regarding starter homes exceptions in rural situations continued to refer to the Ministerial Statement. The judges’ conclusions Points 1-4 below summarise the judges’ conclusions on each ground of appeal: Inconsistency with the statutory scheme. The judgement makes clear that a policy does not need to express its openness to exceptions (e.g. where a development plan might be inconsistent with it), and to not do so does not demonstrate that a policy was intended to frustrate the effective operation of the statute (in this case being s38(6) of the Planning and Compulsory purchase Act 2004 and s70(2) of the Town and Country Planning Act 1990).  A decision-maker should ‘bring his mind to bear on every case, he cannot blindly follow a pre-existing policy’ without considering exceptions.  Furthermore, the Court agreed with the SoS’ Counsel that the SoS may express his view as to the weight to be given to his policy, ‘…But he cannot, so to speak, lay down the law about it’.  However, it is not in law that greater weight is to be attached to the development plan than other considerations. Failure to take into account material considerations when policy making. Whilst the statutory planning context prohibits the SoS from making policy that would frustrate the effective operation of s38(6) or s70 (2), and introducing policy matters that are not planning considerations, ‘… his policy choices are for him’.  The planning legislation does not lay down merits’ criteria for planning policy, nor establish what the policy-maker should or should not regard as relevant to the exercise of policy-making.  The SoS did not need to take into account the matters Holgate J considered to be ‘obviously material’ considerations in the 2015 judgement. Inadequate consultation. The judges considered whether the consultation process was so unfair as to be unlawful, and concluded that it was not unfair and the Minister was entitled to consider the range of responses (and relevant information), and form his own conclusion. Breach of the public sector equality duty. The judges acknowledged that the February 2015 Equality Statement takes a ‘relatively broad brush approach’ but concluded that compliance with the terms of s149 of the Equality Act 2010 was achieved. Has national policy/ guidance been restored? If so, how should it be interpreted? Before amending the PPG on 19 May, the government issued a press release indicating that, following the judgement, the policy relating to vacant building credit and small sites not having to make affordable housing contributions in planning obligations had been 'restored'. The PPG’s 19 May updates now provide guidance on self-build and small sites not making affordable housing and tariff-style contributions via s106 obligations, whilst acknowledging that some planning obligations may be necessary to make development acceptable in planning terms.In our view, restoring the PPG was not essential, because the Ministerial Statement still existed and still applied.  While the ‘policy’ in the PPG was being challenged, the weight to be given to the Ministerial Statement as a material consideration was limited - but it remained a matter for the decision-taker to decide how much weight to attach to it.In addition, prior to this judgement, the general interpretation was that the PPG required LPAs not to seek affordable housing contributions for small sites and to apply VBC in certain defined circumstances - which is why the local authorities (LAs) involved challenged the PPG paragraphs and the Ministerial Statement.  Our view is that the judgement indicates that the statement of policy and the PPG paragraphs did not and cannot have this effect because government policy and guidance are no more than ‘other material considerations’ in planning law. This was a key reason for the SoS’ appeal succeeding.  Accordingly, LPAs may continue to seek affordable housing contributions where development sites are for less than ten units, if their development plan has an up-to-date evidence base in support of this approach. Does a ‘blanket approach’ to interpretation of the Ministerial Statement/ the reinstated PPG paragraphs apply? Our view is that the judgement explains that a ‘blanket approach’ to these policies/ PPG paragraphs (or any government planning policy or guidance) is not correct, and that the weight to attach to the PPG’s approach to small sites not having to make s106 affordable housing contributions, and to VBC, would be for the decision-taker to decide.  In this respect, where LPAs’ development plan policies are supported by up-to-date evidence, they will be able to continue to seek affordable housing in relation to small sites.  And as regards VBC, an LPA might demonstrate, for example, that the credit should not be applied because the LPA’s housing requirement is heavily reliant on the re-use of brownfield sites for the delivery of affordable housing. Have Reading BC or West Berkshire DC publically indicated whether or not they intend to appeal? The Councils have issued a joint statement saying that they are ‘considering their options’ in light of the decision, and defending their decision to appeal on the basis of the number of affordable homes secured between the two judgements (they have 28 days from the date of the judgement to decide).  We consider an appeal unlikely. And in any event, NLP’s view is that the decision can be seen in effect as a success for the LPAs concerned, and others, because it makes it clear that there is no ‘blanket approach’ to the application of government policy to decision-taking (see above), or plan-making.