Government's Planning Obligations and Affordable Housing Policy Quashed

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Government's Planning Obligations and Affordable Housing Policy Quashed

August 2015

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The Planning Court has issued a key judgment, quashing the Government's policy on affordable housing requirements and planning obligations for small scale housing sites. The practical implications are of immediate effect to developers’ negotiations.
 
Reading Borough Council/West Berkshire District Council have been successful in their challenge of the Government’s alterations to national policy in respect of affordable housing and social infrastructure contributions, which removed the need for the provision of affordable housing to schemes of less than 10 units or 1000 sq metres and to not seek financial contributions from such schemes. 
 
The claimants challenged the policy on the grounds that the Government failed to take into account material considerations; that the national policy is inconsistent with the statutory scheme and its purposes; that the consultation process carried out by the Secretary of State was unfair; that in deciding to adopt the new national policy the Secretary of State failed to comply with the public sector equality duty in section 149 of the Equality Act 2010; and that the decision to introduce the new national exemptions from affordable housing requirements was irrational.
 
In allowing the claim the Court has quashed (i) the relevant parts of the National Planning Practice Guidance, (ii) the Secretary of State’s decision to adopt the new policy by way of Written Ministerial Statement and (iii) the Secretary of State’s decision on 10 February 2015 to maintain the policy, with immediate effect.  The National Planning Policy Guidance has been amended to remove said policy. 
 
Cllr Tony Page, Reading's lead councillor for strategic environment, planning and transport, said: "There is an acute and increasing need for affordable homes in Reading, which is demonstrated by the fact there are around 10,000 people on our housing waiting list, and the changes to the planning system would have made matters worse.”
 
Alan Law, West Berkshire's Executive Member for Planning, said: "The judgment... confirms that the council were fully justified in challenging this policy change in order to deliver much needed affordable housing and safeguard funding for critical infrastructure such as education. This was a concern for council and by joining with Reading it was demonstrated that this issue was a cross party concern.”
 
So where does this leave planning obligations and affordable housing policy in England? 

The simple answer is, back where we started. 
The policy was introduced in November 2014 following the issue of a Ministerial Statement.  For many small and medium sized developers it removed many of the viability issues on sites especially in Authorities such as Harborough District Council and Derbyshire Dales District Council where the threshold for the provision of affordable housing is one unit net gain.  As previously, local plan policy should be used as a starting point on all small-scale housing projects.
 
What happens next?

The NPPG has been immediately changed which means many applications currently being considered by Local Planning Authorities will be caught by the change in the threshold and developers will now be unable to rely on those paragraphs in negotiations as to affordable housing and tariff style infrastructure contributions.  Whilst the two councils believe this will assist in the delivery of much needed affordable homes, it is likely to impact directly on the viability and therefore delivery of any housing from sites of less than 10 units in those authorities where the NPPG ‘trumped’ local planning policy, thereby reducing overall delivery of such small sites and not boosting significantly the supply of housing as directed by the NPPF.     
 
The Government has not yet issued a statement on what they will do next but with the Treasury’s increasing interest in planning, it is expected that the Government will appeal against the decision in which all 5 grounds of challenge were upheld.
 
If you would like to discuss how these planning reforms may affect your interests, please click here to contact a member of your local planning team. 
 
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