Affordable housing exemptions and vacant building credit policies defeated

04 Aug 2015

NPPG policies exempting small developments from affordable housing contributions and the vacant building credit quashed by the High Court

In the awaited judgement of R (on the application of West Berkshire District Council and Reading Borough Council) v Secretary of State for Communities and Local Government [2015] EWHC 2222 (Admin), the High Court has quashed several of the Government’s new national policies imposed in the National Planning Practice Guidance (“NPPG”).

The relevant planning policies were introduced in a ministerial statement followed by changes to the NPPG in November 2014.  These were:

  • Developments of 10 units or 1000sqm or less (including annexes and extensions) would be excluded from affordable housing levies and tariff based contributions;
  • A lower threshold would apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty (as defined in section 157 of the Housing Act 1985), with developments of 5 units or less to be excluded from affordable housing levies and tariff based contributions. Development of between 6 and 10 units would be subject to a commuted sum payable on or after completion;
  • Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a "credit", equivalent to the floorspace of the vacant building, to be set against affordable housing contributions.

The policies have been successfully challenged by two local planning authorities, West Berkshire District Council and Reading Borough Council.  Both Councils argued that the new policy had the effect of reducing the supply of affordable housing.  West Berkshire, in its rural setting, argued that it was adversely affected by this policy because 23.5% of affordable housing units would be lost and 15% in the more urbanised Reading.

The Councils challenged the new national thresholds for affordable housing contributions on a number of grounds and including:

The Secretary of State failed to take into account material considerations Although it took into account the reduction in affordable housing contributions in monetary terms, the High Court found that the Secretary of State failed to take into account the reduction in the supply of land for affordable housing and alternatives to a blanket exemption.

The national policy is inconsistent with the statutory scheme in respect of local plans and its purposes The national policy was inconsistent with the statutory scheme because it provided a blanket national exemption overriding local policies in so far as they are inconsistent with it and did not distinguish between existing and future local plan policies.  Furthermore, the policy could have been implemented under the Secretary of State’s default powers under the Planning and Compulsory Purchase Act 2004 to alter local plans (subject to public examination).  Either in construction or purpose, the policies were intended to free developers from the requirements of planning policies; a purpose inconsistent with the statutory scheme

The consultation process carried out by the Secretary of State was unfair The Secretary of State’s consultation proposed the policies as a means of addressing “the disproportionate burden” placed on small-scale developers.  The consultation was unfair because it but did not explain what the disproportionately was or evidence how it had been determined. Consultees therefore did not have the opportunity to comment on the said disproportionately.

The Secretary of State failed to comply with the public sector equality duty in section 149 of the Equality Act 2010 The Secretary of State did not act in compliance with the Public Sector Equality Duty and the Equality Act 2010 – it did not undertake an Equalities Impact Assessment until early February 2015, when the London Borough of Islington raised this in its pre-action protocol letter (Islington had unsuccessfully tried to join their challenge to Reading and West Berkshire’s).  The Assessment did not assess any protected characteristics and did not contain any information on the ability of those with protected characteristics to obtain affordable housing.

In line with various grounds raised in the challenge the High Court quashed the affordable housing exemption policies, the thresholds to social infrastructure contributions and the vacant building credit.

The NPPG has been updated to remove these policies and the current position is that the relevant local planning policies will prevail, although it is reported that the Secretary of State intends to apply for permission to appeal the High Court judgment.

For more information, please speak to Katie Lamb, Assistant Director of Planning or:

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