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Affordable Housing – Court Ruling Wraps Minister’s Knuckles and it’s “As You Were” (for now)

When Planning Minister Brandon Lewis issued a ministerial statement in November 2014 announcing that LPAs could not impose affordable housing or S106 commitments on housing schemes of fewer than ten units, it was seen as government help for small-scale buildiers for whom modest sites are their main business and who are potentially crippled by 30-50% affordable requirements. Some LPAs, especially those with tight boundaries and little housing land apart from windfall sites of fewer than ten units, saw this as depriving them of the limited opportunities available to secure affordable housing. Reading Borough Council and West Berkshire Council challenged the proposal.

In a ruling dated 31 July 2015 Mr Justice Holgate quashed the Secretary of State’s attempt to adopt national policy by way of a ministerial statement and with it those parts of the NPPG that introduced the changes. The DCLG has indicated that it will be seeking leave to appeal the decision.

The ruling effectively constrains the government in seeking to override adopted development plans by way of what is basically national guidance. Those development plans which already sought affordable housing or contributions thereto for sites of fewer than ten units have now been reinstated. Those plans which previously applied their policy to a greater number were unaffected by the ruling and are unaffected by the judgement. Those LPAs which have yet to adopt a development plan need to get a move on, but at least they are not, for now, constrained by the November 2014 statement.

The winner in the process are authorities, like Reading, who can continue to seek affordable housing from smaller sites, although, to do so, they are likely to have to deal with more claims for exemption based on reduced viability. The losers appear to be the small local buildings for whom the policy change was intended, especially those who, since November last year, have secured or promoted development sites based upon the presumption that there would be no affordable housing.

This is unlikely to be the end of the story. The High Court ruling does not pass judgement, one way or the other, on the need for a threshold below which affordable housing may not be sought. It simply rules on the process by which the Secretary of State chose to introduce that threshold. He will have to think twice before using a ministerial statement to change on-line planning guidance and in presuming that, in so doing, he has created or changed national policy. Rules is rules, Brandon.

The same challenge/ruling also dealt with the lesser-known matter of vacant building credit. Developers of sites in which vacant buildings were to be re-used or redeveloped as part of a larger scheme could discount those buildings against the requirements for affordable housing. This “policy” has also been quashed, so, while buildings that have been lawfully occupied for the requisite period may be exempt from CIL, affordable housing policies in adopted local plans will apply across the whole site.

A DCLG challenge to Holgate J’s ruling appears, on the face of it, to be a pointless reaction. If the government thinks a threshold is appropriate and necessary, then it needs to ensure that, in seeking to change policy, it does so through the proper channels and not in a manner described in the High Court as inconsistent with the statute, unfair and unlawful, failing to deal with obviously material considerations and a breach of its public sector equality duty. These strong words seem to undermine the government’s idea that changes to planning policy and practice can be introduced by periodic tweaking of the NPPG. Think again, chaps.

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