Ministerial Statement on reduced affordable housing requirements for small developments lawful

The Secretary of State for Communities and Local Government made a decision on 28 November 2014 to alter national policy in respect of planning obligations for affordable housing and social infrastructure contributions.

This was done using a Written Ministerial Statement (“WMS”) in the House of Commons.

On 10 February 2015 the Secretary of State decided to keep those policy changes following an Equalities Impact Assessment.

The Ministerial Statement policy changes were accompanied by changes to the National Planning Practice Guidance.

No amendments were made to the National Planning Policy Framework.

The WMS said:

(1) Developments of 10 units or 1000 sq m or less (including annexes and extensions) would be excluded from affordable housing levies and tariff based contributions;

(2) 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;

(3) 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.

In the case of West Berkshire District Council Reading Borough Council v Department for Communities And Local Government [2015] the High Court said a prerogative power cannot be exercised incompatibly with, or so as to frustrate, the relevant statutory scheme. The Secretary of State’s common law powers to promulgate planning policies cannot be used incompatibly with the statutory code.

In breach of these principle the WMS purported to create immediate exemptions from affordable housing requirements in adopted local plans. It claimed to do so for all small housing developments in England, without making any distinction between existing or future local plan policies.

The national policy changes introduced on 28 November 2014 were inconsistent with certain core principles of the statutory scheme.

So, it was not surprising that officials had advised Ministers on the possible need for primary legislation in order to create the exemptions they wanted to achieve.

The purported effect of the new national policy on exemptions from affordable housing contributions was incompatible with the statutory framework of the Town and Country Planning Act 1990 and Planning and Compulsory Purchase Act 2004 and therefore unlawful.

On appeal the Court of Appeal, allowing the appeal on all counts, said the new national policy on exemptions from affordable housing contributions was not incompatible with the statutory framework of the Town and Country Planning Act 1990 and Planning and Compulsory Purchase Act 2004 and was therefore lawful based on two principles:

1. “The exercise of public discretionary power requires the decision-maker to bring his mind to bear on every case; he cannot blindly follow a pre-existing policy without considering anything said to persuade him that the case in hand is an exception.” But:

2 “a policy-maker (notably central government) is entitled to express his policy in unqualified terms. He is not required to spell out the legal fact that the application of the policy must allow for the possibility of exceptions.”

The policy stated in the WMS was not to be faulted because it did not say that it was not to be applied in a blanket fashion, or that its place in the statutory scheme of things was no more than a material consideration for the purposes of s.38(6) of the Planning and Compulsory Purchase Act 2004 and s.70(2) of the Town and Country Planning Act 1990, to be viewed alongside adopted development plan policies. It did not countermand or frustrate the effective operation of those provisions. The High Court Judge had conflated what the policy in the WMS said with how it could be lawfully deployed.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.