In a Written Ministerial Statement (WMS) on 28 November 2014, the Government introduced an alteration to national policy in respect of planning obligations for affordable housing and social infrastructure contributions and introduced the Vacant Building Credit (VBC). This led to subsequent changes to the National Planning Policy Guidance.
In summary, the alterations, inter alia:
- excluded developments of 10 units or 1000m2 or less from affordable housing levies and tariff based contributions in order to avoid a disproportionate burden on small scale developers; and
- offered a financial credit, equivalent to the existing gross floorspace of any vacant buildings brought back into any lawful use or demolished for re-development, to be deducted from the calculation of any affordable housing contributions.
This gave Local Planning Authorities (LPAs) cause for concern about the impact the alterations would have on the supply of affordable housing land in their areas, particularly those areas heavily reliant on small scale sites to meet identified housing needs.
However, in a High Court challenge brought by West Berkshire District Council and Reading Borough Council in April of this year against the Government’s alterations to national policy, Mr Justice Holgate quashed the WMS.
The decision means that LPAs can now go back to seeking affordable housing contributions from developments comprising 10 units or less where local policies set lower thresholds.
Just as importantly, the High Court judgement re-emphasises the role of the NPPF in both plan-making and decision taking as well as providing a timely reminder of the differences between planning policy and planning law. As the latter takes precedence and requires LPAs to determine applications for permission in accordance with the development plan for their area, there is no way that the changes to national policy could have lawfully gazumped local plan policies on affordable housing where these are supported by a sufficient evidence base.
It’ll be interesting to see how many LPAs now proceed to challenge those decisions made by Inspectors at appeal for proposals comprising 10 units or less where the requirement for affordable housing obligations fell away as a result of the WMS, yet where affordable housing policies were otherwise in place. In fact, at the time of writing, it was announced that a Northamptonshire council has launched legal challenges against appeal decisions made in its area and it will be interesting to see how these play out.
In terms of the tariff style contributions that LPAs can now go back to charging, it must be advised that this does not alter the requirements of regulation 123(3) of the Community Infrastructure Levy Regulations 2010 (as amended) (CIL). This prohibits LPAs from collecting financial contributions for infrastructure projects or a type of infrastructure where an authority has already collected 5 or more contributions through separate S106 obligations made on or after 6 April 2010.
Since its introduction in 2010, the number of LPAs that have adopted a CIL remains low and the limit of 5 contributions per infrastructure type or project introduced in April 2015 is designed to encourage LPAs to work faster to adopt a CIL for their areas or face losing out. While presenting developers with the opportunity to raise a glass in the short term, the party is not expected to last long once LPAs get round to adopting a CIL for their areas as the charges will be mandatory and not open to negotiation unlike current S106 obligations. Proposals for self-build homes, inter alia, are however exempt from any CIL charges and in our experience it is a housing model that is growing in popularity due to its potential to boost significantly the supply of housing.
The introduction of the VBC on the other hand received a mixed response with some of the more vocal objectors coming from within the private sector and many suggesting that this was perhaps a step too far by the Government. While undoubtedly benefiting developers, from a planning policy perspective, this was a clear contradiction of the Government’s objective for the creation of sustainable, inclusive and mixed communities. Again, it’ll be interesting to see how many legal challenges are now made to rectify those decisions for schemes where affordable housing provision or contributions were not required.
One thing we’ve learnt is that the judgement clearly magnifies the problems associated with Government trying to unilaterally change policy on the hoof. It also reaffirms the mantra that if it looks too good to be true, it probably is.
If you have any queries on the alterations and/or the judgement then please do not hesitate to contact either myself or any other member of the Iceni Projects team who will be happy to assist.