High Court quashes 10-unit threshold for affordable housing contributions

Thursday, 24th September 2015

In West Berkshire District Council and another v Department for Communities and Local Government [2015] EWHC 2222 (Admin) the High Court quashed planning guidance that exempted affordable housing contributions for small developments and vacant buildings brought back into a lawful use.

The New Policy

Regular readers of the public sector bulletin may well remember our 'December 2014 edition', in which we discussed the revised planning guidance published by Department for Communities and Local Government ("DCLG") in respect of obligations for affordable housing. The new guidance provided that:

  • Contributions should not be sought from developments comprising 10-units or less
  • In "designated rural areas", local planning authorities could choose to apply a lower threshold of 5-units or less
  • A financial credit (known as the "vacant building credit"), equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, should be deducted from the calculation of any affordable housing contributions sought from relevant development schemes.

Indeed, at the time we remarked that local authorities, operating in tightly constrained areas that rely heavily on small site developments, would likely suffer under the new guidance. Well, it seems that West Berkshire District Council and Reading Borough Council, the claimants in this case, shared these concerns and subsequently brought a legal challenge against the policy changes. Reading Council estimated the new policy would result in a loss of least 15% of expected affordable housing whilst West Berkshire, a more rural area, estimated a loss of 23.5%.

The Grounds of Challenge

The main grounds under which the councils successfully challenged the new policy were:

  • Inconsistency with the statutory framework

Unlike other national policies, the new policy was not to be considered alongside local plan policies but instead provided immediate uniform thresholds for every planning application in England. The policy changes therefore unlawfully displaced all local plan policies on affordable housing requirements.

  • Unfairness in the consultation process

The government's Consultation Paper had referred to a "disproportionate burden" placed on small-scale developers; however, there was nothing in the consultation paper that explained what that burden was, nor any supporting evidence of such a burden. Consequently this ill-defined policy did not allow local authorities the chance to provide a "meaningful, intelligent response."

  • The Secretary of State's failure to take into account material considerations

Although the reduction in affordable housing contributions in monetary terms had been considered, the government had not properly considered the scale of the reduction in the supply of land for affordable housing across the country, nor the implications of the action that local authorities would need to take in order to redress the shortfalls. The government also failed to have regard to the benefits and disadvantages of the new policy. This failure to take account of considerations that were obviously material therefore made the new policy unlawful. 

  • In deciding to adopt the new policy, the Secretary of State had failed to comply with the public sector equality duty ("PSED")

Public authorities must comply with their PSED. In the government's consultation paper no reference was made to the PSED and indeed even when the equalities impact assessment was carried out, it lacked the "rigour necessary" to assess the extent and risk of adverse effects on members of protected groups.

The High Court agreed with the councils' main grounds of challenge and quashed the new policy. 

Comment

This landmark judgement by the High Court clearly has implications for local authorities across the country, especially those that place more reliance on contributions from smaller sites. There is naturally some uncertainty following the decision though local authority's development plan policies will presumably take precedence as they did prior to the introduction of the new policy.

Following the High Court judgement, DCLG removed the policy from the National Planning Practice Guidance. However, it is perhaps worth noting that the Secretary of State reportedly intends to seek permission to appeal against the High Court's decision. 

To read the full case click here.

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