Milton Keynes Council & Ors, R (on the application of) v Secretary of State for Communities & Local Government

This is an appeal against a decision of Sir Michael Harrison, sitting as a Deputy High Court Judge, on 11 April 2011. Milton Keynes Council (“the council”), Oxford City Council and Newcastle City Council sought to quash a decision of the Secretary of State for Communities & Local Government (“the Secretary of State”), dated 1 September 2010, to make two statutory instruments, the Town & Country Planning (General Permitted Development) (Amendment) (No.2) (England) Order 2010 (“the GPDAO”) and the Town & Country Planning (Compensation) (No.3) (England) Regulations 2010 (“the compensation regulations”). The councils sought to quash certain provisions of those statutory instruments which relate to houses in multiple occupation (“HMOs”). The judge refused the application and the council appeal to this court. The council’s claim before the judge and in this court is that the Secretary of State erred in law, in July 2010, in failing sufficiently to consult, before making the orders, local planning authorities. The judge held that “the failure of the [Secretary of State] to consult [councils] directly, rather than through their representative bodies, was not so unfair in the circumstances as to render the consultation exercise unlawful.”

The judge helpfully described the legislative changes effected by the Orders at paragraphs 2 to 7 of his judgment:

The council made two article 4 directions. The first affects the entire Borough and was made on 22 December 2010 and comes into effect on 23 December 2011. The second, affecting only a part of the Borough, was made on 29 December 2010 and came into effect on following day.

As the Local Planning Authority (“LPA”) for its area, the council has for many years suffered problems as a result of the conversion of single dwelling houses into HMOs. Conditions have been imposed on grants of permission limiting the number of lettable rooms and dealing with such questions as cycle storage, parking, on-site clothes drying facilities, bin storage, and sound insulation. Mr Nicholas Fenwick, the council’s Assistant Director of Planning said in his statement of 22 September 2010 that HMOs “can have negative effects to the community in terms of social cohesion, parking, character, noise and litter”. At the date of the statement, prepared for the present litigation, there were about 160 HMOs in the Borough with planning permission. Conditions have been imposed relating, for example, to noise mitigation, parking and waste management. Mr Fenwick acknowledged the difficulty of enforcing planning control stating that, as of September 2010, “there are still in excess of 400 existing unauthorised HMOs . . . operating without planning permission today in Milton Keynes.” I assume the figures reflect a situation which had existed for some time.

Mr Fenwick’s concerns were shared nationally and on 13 May 2009, the Government published a consultation paper entitled ‘Houses in Multiple Occupation and Possible Planning Responses’. In a comprehensive consultation exercise, three options were canvassed:

Sixteen specific questions were posed in the consultation. A total of 948 responses were received and a summary of them was published in January 2010. It revealed:

In the event, statutory instruments which entered into force on 6 April 2010 gave effect to a form of option 2. It amended the Use Clause Order (“UCO”) to introduce a new HMO use class (C4) together with a definition of HMO along the lines of the Housing Act 2004 and amended the GPDO to permit a change of use from an HMO to a dwelling house without the need for planning permission. Planning permission would continue to be required to change the use of a dwelling house to use as a small HMO, the basic requirement supported by the great majority, over 90%, of the consultees.

Following the general election of May 2010, the new government took the view that the level of regulation provided in the 2010 Orders, the ‘blanket requirement’ for planning permission, was not justified. The Government was concerned that the requirements would deter prospective landlords from entering the market, leading to inadequate supplies of low-cost housing in many areas. The draft Ministerial statement provided:

The question arose whether further consultation was required before the new policy was implemented. Ministers were advised that there was no formal requirement to consult but that it would be helpful to seek the views of key stakeholders. If significant issues arose there could, it was contemplated, be a return to the possibility of a formal consultation.

Explaining the Government’s position in a statement dated 17 February 2011, Ms S.G. Turner, Team Leader with policy responsibility for the UCO at the Department for Communities and Local Government stated, at paragraph 28:

Ms Turner’s approach is reflected in advice given to Ministers on 21 May 2010. It was noted that the Minister had “envisaged an early announcement and looked for implementation as soon as possible.” The proposed change “would in effect restore flexibility between family housing and shared housing.” Reference was made to the previous consultation and to option 3 which, in something of an understatement, was stated to be “not well supported when it was put forward in the consultation.” Ministers were advised that “it would be helpful to seek the views of key stakeholders and to work with them to develop the proposals and achieve a workable solution.” “Unless discussions with key stakeholders raised significant new problems, we will aim to introduce the necessary legislative changes before the summer recess.”

At paragraph 27, Ms Turner stated that Ministers agreed that a further consultation was not necessary. There had already been “detailed analysis of views” on Option 3.

The “key partners” selected were:

Universities UK

The consultation questions were posed in a letter of 17 June 2010. Responses were required within three weeks:

Do you consider that the proposals will allow local areas to take action without imposing unnecessary burdens on unaffected areas?

If not, why not? What do you think could be done, within the constraints of the current planning framework, instead?

Do you think there will be unintended consequences as a result of the proposed changes? If so what will they be and how do you think they could be mitigated?

Do you think there are any other changes which need to be made to make this approach work more effectively e.g. to HMO definition?

Do you have any information on costs/benefits which would be relevant to impact assessment?

Do you think LPAs will choose to issue Article 4 directions with immediate effect or less than 12 months notice?

How should we monitor the impact of these proposals and assess their success? What is the best review approach?

Do you have any comments on the legislation as drafted?

The Royal Town Planning Institute (“RTPI”) discovered the consultation through its members and asked to be consulted. The council found out via the RTPI when 17 days of the consultation period remained. The council made representations, to which I will refer, by letter dated 9 July 2010.

In an Impact Assessment dated September 2010, the Government acknowledged that, under the proposed Orders, “where directions have been made with less than 12 months notice local authorities may be liable to pay compensation.” Under the heading “Key assumptions/sensitivities/risks” it was stated:

For the council, Mr Mould QC acknowledged that the Secretary of State was not under a statutory duty to consult. For his part, Mr Morshead QC, for the Secretary of State, accepted that if he did consult, a proper consultation was required. In R v North and East Devon Health Authorityex parteCoughlan [2001] QB 213, Lord Woolf MR, giving the judgment of this court, stated, at paragraph 108:

As between the April 2010 and the September 2010 Orders, the Government had gone from one end of the spectrum to the other. Before that was done, a fuller consultation was required. The fairness of a consultation, it was submitted, necessarily included a fair approach as to what parties should, in the circumstances, be consulted. All local planning authorities should have been consulted and given an appropriate time to respond.

The questions posed in 2010 were different from those posed in 2009, it was submitted. They plainly required a response from LPAs. Only LPAs, for example, could state whether article 4 directions with immediate effect would be chosen. If further information was needed by the Secretary of State, LPAs were the obvious entities to provide it.

Further consultation would have permitted consideration of a range of intermediate measures and better ways of achieving the Secretary of State’s objectives. Further opportunity should have been given to consider what the Secretary of State had raised. In his third statement, Mr Fenwick has set out a list of matters which might have been raised with the Secretary of State by the council, and by other LPAs. Their input as to the practical effects of the proposal was essential, it was submitted.

In its response of 9 July 2010, the council stated that it was “outraged at the narrowness and shortness of the consultation.” “The scope of the consultation is too narrow.” It was hoped that the Department would “reflect on their error of judgment on this and delay the implementation of these changes until the impacts have been considered in full which can only happen after a full consultation.” It was requested that the Department “rejects the proposed amendment in terms of the lack of evidence provided to justify its conception and the lasting damage which will be caused to communities, if implemented.”

While including specific answers to some of the questions posed, a fundamental objection to the proposal was expressed by the council. “The evidence gathered during the previous 2 year long consultation provided proof that this is the least popular option.” “No evidence has been provided that there is a need for a further change other than landlords being opposed to the extra regulation.”

The RTPI’s response stated:

The Planning Officers’ Society considered “that there should be a formal consultation with local authorities and other organisations before making this change.” It was stated that the earlier consultation “showed an overwhelming preference for managing problems associated with high concentrations of HMOs through planning control, in the way which was introduced in April.” The present very limited informal consultations did not give “the opportunity for all parties to give their views.” The Local Government Group responded in a similar way.

In R v Secretary of State for the Home Department ex parte Doody [1994] 1 AC 531, Lord Mustill, at page 560, considered the concept of fairness in a different context, that of affording a prisoner serving a mandatory life sentence the opportunity to submit in writing representations as to the period he should serve for the purposes of retribution and deterrence. Amongst the principles stated, which are of more general application, were:

Mr Morshead submitted that, in making the order, the Secretary of State clearly had a political agenda and the decision to make the statutory instruments was overtly political. The Secretary of State was entitled to inject a degree of urgency into the perceived need. Mr Morshead relies on the approval by Laws LJ in R v Secretary of State for Education and Employment ex parte Begbie [2000] 1 WLR 1115, at 1130, of the statement in Wade and Forsyth Administrative Law, 7th edn (1994), p.404:

In that context, reliance was placed on the statement of Lord Bridge in Re Westminster City Council[1986] AC 668, at 692H, when considering the doctrine of legitimate expectation:

In the Queen (on the Application of Greenpeace Limited) v Secretary of State for Trade & Industry[2007] Env. L.R. 623, Sullivan J, at paragraph 62, stated:

On the strength of those authorities, Mr Morshead first argued that the decision-maker can decide whom to consult. The council was not the object of consultation. The council was outside the process and could not complain of unfairness. Reliance was placed on the decision of this court in Buckinghamshire County Council v Royal Borough of Kingston-upon-Thames [2011] EWCA Civ 457. It was held, in a quite different context, that the decision-maker’s duty, in the particular statutory context, was to the patient SL and not to another local authority upon whom a financial burden might fall as a result of the decision. In a judgment with which Patten LJ and Munby LJ agreed, I stated, at paragraph 34:

In general submissions, Mr Morshead stated that this was a decision in the macro-political field. It was made in a context in which the statutory instrument would be subject to Parliamentary scrutiny by the negative resolution procedure. In this particular context, the council had had a full opportunity to express its views on HMOs in 2009. Any detailed concerns could have been expressed then. In 2010, the Secretary of State was entitled to consult on a more limited basis and to impose a strict timetable. In making his decision, the Secretary of State was aware of the downside of his proposals for local planning authorities, possible degrading of some areas and a liability to pay compensation in some circumstances.

In a respondent’s notice, the Secretary of State submitted, as a freestanding ground, that because the statutory instruments were subject to Parliamentary scrutiny, and because the attempt to annul failed in Parliament, the court should in any event defer to the Parliamentary decision.

I do not accept the submission that a decision-maker can routinely pick and choose whom he will consult. A fair consultation requires fairness in deciding whom to consult as well as fairness in deciding the subject matter of the consultation and its timing. The Buckinghamshire case was in a different statutory context in which it was decided that the local authority need not be consulted. No general principle that it is for the decision-maker alone to decide whom to consult can be extracted from that decision.

The particular context must, however, be considered. The fairness of the 2010 consultation must be considered in the context of a very full consultation having been conducted in 2009. In that consultation, over a longer period, the council and all local planning authorities were given an opportunity to make representations upon a series of options, which included Option 3 subsequently adopted by the Secretary of State in September 2010. Option 3 was placed before them in 2009 and detailed submissions as to its adverse impact, and as to specific problems likely to arise, could have been, and probably were, made. I do not accept that, upon a change of Government policy, the entire process needed to be repeated. In 2010, the Government was entitled to conduct a more limited consultation, both as to the identity of consultees and the content and duration of the consultation.

The council became aware of the 2010 consultation, as might be expected given the parties consulted. Having worked on the issue during the previous year, it could be expected to have relevant information available and to react promptly. The council did make representations, though directed primarily to the fundamental question whether the political decision was a sound one.

As I see it, the appellants’ best point is that it was local planning authorities who were best able to answer the questions actually posed in the letter of 17 June 2010. There is force in the submission that, if the Government wanted answers to those questions, it should have turned to local authorities to provide them. However, I am not persuaded that the consultation is rendered unfair by the failure to consult them directly.

The central issue to be decided by the Secretary of State was whether to permit a change of use from a dwelling house to a HMO without the need for planning permission. That required what was, adopting the expression of Laws LJ, a macro-political decision. It was to be taken and implemented, it was stated, unless “significant issues” or “significant new problems”, the expressions used in the Ministerial briefing, arose during discussions with key stakeholders. It appears to me from Ms Turner’s evidence, and the questions posed, that the consultation was conducted mainly as a public relations exercise because implementation of Option 3 “would have to be sensitively handled.” It was still capable of being fair. The possibility was left open, in the framing of the questions, that significant issues would arise which required further consultation. The council has been unable to identify any such matters and I am not persuaded that they existed.

In a statement submitted shortly before the hearing before the judge, Mr Fenwick valiantly attempted to identify points which should have been addressed more fully but they appear to me to be matters inherent in the situation as it existed in 2009. The Secretary of State was well aware of the strongly held views of local authorities, and other bodies, as a result of the 2009 consultation.

That recent and comprehensive consultation in 2009 is in my judgment the key to the decision in the present situation. The Secretary of State was minded to make the orders challenged notwithstanding the strong, articulated objections to them by local planning authorities, of which he was aware. The decision to make them was a political decision which the Secretary of State was entitled to make. In the circumstances, he was then entitled, first, to make the consultation a limited one and, secondly, to decide that there was no evidence of significant new issues arising, which required fuller consultation.

If that is right, there is no need to consider the interesting issue raised as to the effect of the existence of a Parliamentary procedure upon the duty to consult.

For these reasons, which are essentially the same as those of the judge, I would dismiss this appeal.

I agree.

I also agree.