Oxford City Council v The First Secretary of State & Anor

The Claimant, Oxford City Council (“the Council”) is a local planning authority. Leafield Road, Cowley is in its area. The Second Defendant, J A Pye (Oxford) Estates Ltd (“Pye”) applied to the Council for planning permission for residential development, 38 dwellings, there (“the Site”). The Council refused permission. Pye appealed. There was an Inquiry. On 29 January 2002 the First Defendant’s Inspector dismissed Pye’s appeal (“the 2002 appeal decision”).

On 13 November 2003 Pye again applied to the Council for planning permission for residential development of the Site with 38 dwellings. The Council failed to make a decision. Pye appealed. There was another Inquiry. On 26 April 2004 the First Defendant’s Inspector allowed the appeal (“the 2004 appeal decision”).

The 2004 appeal decision is the subject matter of the Council’s challenge under Section 288 of the Town and Country Planning Act 1990 (“the Act”).

Pye seeks to uphold the 2004 appeal decision. The First Defendant, however, submits to judgment. He does so by a letter dated 10 September 2004 in the following terms:-

“The basis of this decision is twofold. First, it is accepted that the inspector in his decision did not explain adequately why he took a different view from the previous inspector on the first main issue. Secondly, it is accepted that the Inspector did not give adequate reasons for his conclusion on affordable housing.”

The first main issue is whether the residential development of the Site would be contrary to PPG 3, the national planning policy in relation to new housing, in particular paragraph 30, the sequential test. National planning policy in relation to affordable housing is the subject matter of Circular 6/98. An increase in the quantum of affordable housing was the main difference between Pye’s first and second applications. The affordable housing proposed in 2004 includes both rented accommodation, which was acknowledged by the Council to be affordable, and shared ownership accommodation, the affordability of which the Council disputed.

Both in relation to PPG 3 and in relation to affordable housing the Council seek to rely not only upon lack of adequate reasons, and therefore upon failures to comply with the relevant requirements of Regulation 19 of the Town and Country Planning Appeals (Determination by Inspectors) (Inquiries Procedure) (England) Rules 2000, Statutory Instrument 2000 No 1625, failures by which the Council allege they have been substantially prejudiced. The Council for its part also allege that the 2004 appeal decision is outwith the powers of the Act. They so allege in relation to paragraph 30 of PPG 3 on the basis that the 2004 appeal decision adopted an illogical and thereby irrational approach to paragraph 30 of PPG 3 and inexplicably departed from a previous appeal decision as to the proper approach to it. The Council allege that the 2004 appeal decision is outwith the powers of the Act in relation to affordable housing on the basis that the Inspector failed to resolve the issue of whether the proposed “affordable housing” was in fact (as regards the shared ownership element) such as defined in Circular 6/98, ie that the occupiers’ outgoings would not be greater than could be expected in the private market, and thereby failed to take an obviously relevant consideration into account.

In PPG 3 reference should be made in particular to paragraphs 1-3, 10, 12-13, 16-17, 22-24, 28-33, 36, 38, 53 and 57-58, and Annexes C and D. Paragraph 30 of PPG 3 states:-

“In identifying sites to be allocated for housing in local plans and UDPs, local planning authorities should follow a search sequence, starting with the re-use of previously-developed land and buildings within urban areas identified by the urban housing capacity study, then urban extensions, and finally new development around nodes in good public transport corridors. They should seek only to identify sufficient land to meet the housing requirement set as a result of the RPG and strategic planning processes. In doing so they do not need to consider all the land in their area: they should not extend the search further than required to provide sufficient capacity to meet the agreed housing requirement.”

The Site has never been contended to be an urban extension or a node on good public transport corridors. It is in the urban area of Oxford. It had been in issue at the First Inquiry whether it was previously developed land. By the Second Inquiry it had been definitely determined that it was not. (Moreover, it has not been identified in an urban capacity study.)

Paragraph 32 of PPG 3 provides:-

“In determining the order in which sites identified in accordance with the criteria set out in paragraphs 30 and 31 should be developed, the presumption will be that previously-developed sites (or buildings for re-use or conversion) should be developed before greenfield sites. The exception to this principle will be where previously-developed sites perform so poorly in relation to the criteria listed in paragraph 31 as to preclude their use for housing (within the relevant plan period or phase) before a particular greenfield site.”

Paragraph 38 begins:-

“In considering planning applications for housing development in the interim, before development plans can be reviewed, local authorities should have regard to the policy contained in this PPG as material considerations which may supersede the policies in their plan (see paragraph 54 of PPG 1).”

Paragraph 53 of PPG 3 states:-

“Local planning authorities should have clear policies for the protection and creation of open space and playing fields, and new housing developments should incorporate sufficient provision where such spaces are not already adequately provided within easy access of the new housing. Developing more housing within urban areas should not mean building on urban green spaces. PPG 17: Sport and Recreation gives further guidance on the provision of open space and playing fields.”

In Circular 6/98 reference should be made in particular to paragraphs 4, 9-10 and 15. Paragraph 4 of Circular 6/98 states (emphasis supplied):-

“Planning policy should not be expressed in favour of any particular form of tenure. Therefore, the terms “affordable housing” or “affordable homes” are used in this Circular to encompass both low-cost market and subsidised housing (irrespective of tenure, ownership - whether exclusive or shared - or financial arrangements) that will be available to people who cannot afford to rent or buy houses generally available on the open market (see also paragraphs 9[a] and 15). This document refers to other housing as general market housing.”

The 2002 appeal decision said in relation to PPG 3, at paragraphs 10 and 11 (emphasis added):-

“10.

Annex C to PPG 3 defines previously-developed land. In doing so it specifically excludes allotments - even though these may contain urban features and other buildings. It also specifically excludes land where the remains of any structure have blended into the landscape. I accept that the site is vacant urban land, unlikely to be used as allotments again and, as set out in Tapping the Potential, should be recognised as a potential source of urban housing land. Nonetheless, taken as a whole, I conclude that the appeal site does not meet the definition of previously-developed land in PPG 3.

11.

PPG 3 sets out a search sequence that should be followed in identifying sites to be allocated for housing, starting with the re-use of previously-developed land. In advance of a full assessment of land uses in the area I find that the use of previously-developed land for housing should retain priority. It follows that to allow the proposed development would be premature, inconsistent with the search sequence and therefore in conflict with PPG 3.”

The 2002 appeal decision said in relation to affordable housing, at paragraphs 14 and 15:-

“14.

Circular 6/98 advises local planning authorities to define what they regard as affordable. The Local Plan does not do this, but does aim to secure dwellings at a price or rent that can be afforded by people who are in housing need, and otherwise would be accommodated by the Council, in order to make the most effective use of housing land to meet housing need. It was acknowledged in evidence that the planning obligation could only provide houses for those some way up the housing scale. With limited evidence about relative housing need, I am not satisfied that the houses would be available to those most in need as envisaged by the Local Plan.

15.

In my view a reduction of 15% would only make the houses affordable to a small proportion of those people who are in housing need. The definition of a local connection is widely drawn, including a number of key workers. This would embrace a large number of potential purchasers. In my opinion there would be considerable competition for these houses that would be likely to make the restricted market value high as well. Consequently I find that neither alternative price mechanism would provide the level of discount necessary to meet the objectives of the circular or the Local Plan. In my view therefore the planning obligation would not meet the requirements of the Local Plan and so would not deliver affordable housing as envisaged by Circular 6/98. I therefore conclude that the planning obligation would not satisfy Local Plan Policy HO6 nor offer sufficient benefits to outweigh the conflict with PPG 3.”

The 2004 appeal decision states in relation to paragraph 30 of PPG 3, at paragraph 10, as follows (emphasis added):-

“10.

Paragraph 30 of PPG 3 identifies the order in which different types of site should be allocated in plans as being previously developed land (PDL), then urban extensions, and then nodes around public transport. Paragraph 32 of the PPG says that PDL should be developed before greenfield land. It is not disputed that the site is not previously developed land, as defined in Annex C of PPG 3, but its status in the context of greenfield is not so easy to define. It was suggested at the Inquiry that the site is greenfield. I have no information from evidence or examination as to the definition of the term “greenfield”. The previous appeal decision identified the site as vacant urban land, and it is of a type which Tapping the Potential says is a potential source of housing land. The site has not been identified for housing in the local plan process and therefore would be defined by paragraph 35 of PPG 3 as windfall, except that it is not PDL, nor can it be said that it has unexpectedly become available, given its history. I consider that the site does not fit any of the priority classifications of paragraph 30 of PPG 3, and therefore it cannot be said that development of it would conflict with the search sequence of the PPG.”

The 2004 appeal decision concluded in relation to affordable housing, at paragraph 19 (see also paragraphs 18 and 20), as follows:-

“I consider that there will always be a number, albeit small, of people in housing need who cannot afford to pay the smallest of rents. The developer must see the proposal as viable, otherwise he would not seek to develop. If a potential occupier can get a more attractive accommodation deal somewhere else then he will go elsewhere. The development might not meet the Council’s profile of the full range of priority needs, but it would provide opportunities for some of those in need of affordable housing. The Section 106 Obligation would, together with the associated Nomination Deeds, enable the Council to influence the appointment of occupiers of the affordable housing.”

As to the interpretation of policy, I gratefully adopt the formulation of Mr Pugh-Smith on behalf of Pye. The Court will not simply apply its own interpretation. The meaning of policy is primarily for the decision-maker, ie in this case the Inspector. However, it is for the Court to determine as a matter of law what the words are capable of meaning. If in all the circumstances the wording of the relevant policy is properly capable of more than one meaning, and the Inspector adopts and applies a meaning which it is capable as a matter of law of bearing, then he will not have gone wrong in law: see R v Derbyshire County Council ex parte Woods [1997] JPL 958 (Court of Appeal) and R v Hambleton District Council ex parte Somerfield [1999] PLCR 236 at 261. As a general principle of planning law, the Court will intervene only where it can be shown that the judgment of the decision-maker on the meaning of certain words is demonstrated to be perverse or otherwise bad in law. An Inspector is free to depart from an earlier appeal decision but before so doing he should have regard to the importance of ensuring consistent decisions and must give his reasons for departure from it: see North Wiltshire District Council v Secretary of State for the Environment [1992] 65 P&CR 137 at 145.

In my judgment, to state that, because the Site does not fit any of the priority classifications of paragraph 30 of PPG 3, therefore it cannot be said that development of it would conflict with the search sequence of the PPG is illogical and irrational and does not apply a meaning which it is capable of bearing in the context of the 2004 appeal decision or at all. I reject Mr Pugh-Smith’s submission that what was said about paragraph 30 was within the range of reasonable responses in the particular context in which the 2004 Inspector was having to address the matter.

Further, in my judgment, the 2004 appeal decision did fail to resolve the issue whether the shared ownership element was affordable.

I therefore find in favour of the Council on the points of substance. As regards reasons, it is elementary that the Inspector must deal clearly with the principal controversial issues before him, setting out the major steps in his reasoning, and setting out clearly a rational basis for departing from a previous appeal decision. In my judgment, he failed in this respect also, both as regards PPG 3, and as regards affordable housing, even assuming, as I do, an informed reader. I am satisfied that the Council has been substantially prejudiced by those failures.

I quash the 2004 appeal decision. It would not be an appropriate exercise of discretion to decline to do so.