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Government wins appeal over affordable housing and small sites policy

Words: Laura Edgar

The Department for Communities and Local Government has won its appeal over a ruling that a planning policy for affordable housing requirements for small-scale developments was unlawful.

In November 2014, housing minster Brandon Lewis announced in a written statement that for developments of 10 homes or fewer, local councils would not be able to impose affordable housing contributions through section 106 agreements.

West Berkshire Council and Reading Borough Council joined forces to challenge this proposal.

In July 2015, Mr Justice Holgate quashed the decision to adopt the new policy by way of written ministerial statement and the relevant parts of the relevant parts of the National Planning Practice Guidance (NPPG).

The challenge by the councils was upheld on four grounds:

  - The policy was inconsistent with the statutory planning regime.

  - The secretary of state had failed to take into account necessary material considerations.

  - The secretary of state’s consultation upon the proposals was legally inadequate.

  - The secretary of state had failed to properly assess the impact of the proposal upon persons with protect characteristics: Equally Act 2010 s.149.

The Court of Appeal yesterday (11 May) concluded, in a joint ruling from Lord Justice Laws and Lord Justice Treacy, with the Master of the Rolls agreeing, that all four grounds of appeal succeed and the appeal must be allowed.

Housing minister Brandon Lewis said the judgment “restores common sense to the system” and ensures that builders developing smaller sites don’t face costs that could stop them from building any homes at all.

He continued: “This case was a total waste of taxpayers’ money and the uncertainty the case created amongst house builders stalled new development from coming through.

“I hope councils focus their time and money on delivering the frontline service that their residents rely on and helping support new house building in their areas that is very much needed.”

In a joint statement, the councils said: “West Berkshire and Reading Council’s are naturally disappointed by this result. We are reviewing this verdict and currently considering our options as a matter of priority with regard to appeal. Until such time as we have determined how we intend to proceed, it would not be appropriate to comment further.”

The full report can be found here. 



“This is good news for small sites developers. The latest judgment is clearly positive in its consequences. The quashing of the former policies now has no effect and the government can once again amend the NPPG to bring them back into force, whether exactly the same or perhaps in a slightly amended form, as soon as it wants.

“The government has always stated its intention to reintroduce the small sites exemption and has even provided a statutory ‘hook’ to do so in the Housing and Planning Bill in case the appeal failed.”

Stuart Crickett, associate director, WYG

“It’s widely recognised that if we are to tackle the long-term undersupply of new homes in this country, then we will need to see renewed growth in output from SME house builders. This verdict will go a long way in backing these firms. It will make the economics of small-scale development that much easier and should increase the use of small sites in sustainable locations for the delivery of new homes.

“Nearly one-in-two SME house builders know of sites they would otherwise be interested in developing, but which they believe would be unviable because of the likely combination of s.106 and the Community Infrastructure Levy charges. These contributions are prohibitive for many smaller developers, killing off thousands of otherwise viable schemes, and acting as a serious barrier to expansion. The threshold’s reinstatement will protect the very smallest developments from being lumbered with unaffordable requirements, allowing them to bring forward small-scale, sustainable developments, which will ultimately be of huge benefit to everyone, local councils included."

Brian Berry, chief executive, Federation of Master Builders

“There is a possibility of a further appeal by the councils to the Supreme Court. Also, the minister’s original policy was withdrawn after the High Court order quashing it, so it is for the minister to decide whether to publish it again, and of course when to do so. For the moment, however, the policy does not exist in legal terms.

“If he did reissue the policy, there would be some significant ramifications. Shropshire was one of the local authorities which had been opposed to this part of the government’s affordable housing policy.

“Many councils, such as Shropshire, have now adopted development plan policies which are in conflict with the original policy. Indeed Shropshire’s delivery of affordable housing is underpinned by the expectation of contributions from all sites, not just those of 10 houses or more, and much of its housing will be on these smaller sites.

“Arguably their housing policies in the plan would then become out of date, and liable to be set to one side in planning decisions and appeals. It would be for the council to show why its development policies should prevail over any newly adopted national policy. There are many sites where developers have signed up to these contributions in planning agreements or undertakings, and may now wish to seek permissions which do not have those payments!”

Niall Blackie, senior partner, FBC Manby Bowdler

Image credit | Shuttershock