Burbury Investments Ltd v First Secretary of State & Anor

The claimant in this case seeks to have quashed under section 288 of the Town and Country Planning Act 1990 a decision of the First Secretary of State refusing planning permission on a called-in application for development comprising a factory shopping centre, food supermarket, hotel, caravan park, 186 residential properties, garden centre, leisure facilities, parking areas and access road on land at the former Dairy Crest site, Ellesmere, Shropshire. An inspector appointed by the Secretary of State held an inquiry into the application and in her report she recommended that planning permission should be granted. The Secretary of State rejected that recommendation in a decision letter setting out his reasons, and the claimant contends that he erred in law and failed to give adequate reasons, to its substantial prejudice, in his consideration of a number of the issues that arose.

I should record that one ground of challenge was not pursued before me as it was the subject of agreement between the claimants and the Secretary of State. This ground related to the Secretary of State’s statement in the decision letter that he considered the proposal to be EIA development, the application for which should be accompanied by an environmental statement in accordance with the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999. Ms Nathalie Lieven for the Secretary of State accepted that, if the decision were to be quashed on the other grounds pursued, the claimants should have the opportunity to put in an environmental statement.

The site lies on the south-west edge of Ellesmere, a market town with a population of 3,200. The site is 20.2 hectares in area and a large part of it comprises land and buildings that were occupied by the Dairy Crest creamery works, which closed in 1988, and they have remained unused since then. The remaining parts of the site are undeveloped. The site is bounded to the south-east by the Llangollen branch of the Shropshire Union canal. A spur of the canal runs north eastwards for 300m to the town along the site, and at the canal head, where there is a small basin, the site extends round the canal to the north-east side. The site abuts the town centre shopping area and is within the development boundary, as defined in the adopted North Shropshire Local Plan 1991-2001 and the emerging local plan.

In January 1996 the Secretary of State issued a decision letter following an inquiry into a called-in application by the claimants for a mixed-use development of the site, comprising factory shopping centre, food supermarket, 86 residential properties, caravan park, indoor and outdoor recreational facilities, restaurant, wine bar and public house uses, and associated car park and access road. The application, which was supported by North Shropshire District Council, the second defendant, had been called in by the Secretary of State. In his decision letter the Secretary of State said that he accepted the recommendation of the inspector that planning permission should be granted and said that he was minded to grant planning permission subject to a section 106 agreement providing for the construction of the access road. In the event the owner of a parcel of land essential for the new link did not sign the s106 agreement, and the planning permission was therefore not granted. Following the decision letter, however, in August 1996, the local plan was adopted incorporating an allocation for mixed use development of the site that reflected the Secretary of State’s indication that he was minded to grant permission for the scheme.

The application that is the subject of the present proceedings was in outline, and was very similar to the earlier proposal. The principal differences were that the new application proposed 186 houses rather than 86 and incorporated a 60-bedroom hotel. An illustrative plan showed the various proposed uses, and in her report the inspector recommended the imposition of a number of conditions to reflect the proposals put forward by the claimant. There should be a limit of 929 sq m on the net sales area of the food supermarket. The total net retail floorspace of what was described as the factory outlet centre and craft workshops must not to exceed 9,144 sq m, and no retail unit was to exceed 930 sq m; and no part of these premises was to be used other than as a shop for the sale of discounted or discontinued goods from a single manufacturing and retailing company or as light industrial premises for the manufacture of goods and the sale of these within the unit. The principal public car park was to have no more than 620 spaces, and the illustrative plan showed 400 of these as being for the non-food retail part of the development. The factory outlet centre (FOC) thus represented a very substantial part of the development. The claimant’s estimate was that it would attract 1 million visitors a year, although of these 400,000 would be those who would in any event be visiting the town as tourists.

In his call-in letter the Secretary of State had identified as the matters on which he wished to be informed:

The inspector concluded that the proposal was in accordance with the development plan, and that it would either accord with or would not undermine Government advice contained in the relevant planning policy guidance notes. She expressed her overall conclusions as follows:

“10.91

Ellesmere is one of four market towns in the North Shropshire District. The town is an established tourist destination but local tourism strategies recognise a need for revitalisation of the town and further harnessing of the area’s tourism potentials. The proposed development would provide an opportunity to regenerate an area of land that has lain vacant for a number of years and is generally regarded as a poor gateway to the town, detracting from its historic interests.

10.92

The proposed food supermarket would address a current shortfall of convenience provision for the catchment area residents without adversely affecting the health or vitality of the centre. The FOC and leisure facilities would provide a high profile tourist attraction intended to attract additional visitors to the area and to assist in boosting the economy of the town. The drawback to the proposal in terms of increased, and mainly car borne, journeys needs to be balanced against the benefits that would flow from the proposal, and should be looked at against the sustainability and economic advantages of the development as a whole. The new housing would be well located to take advantage of local services and facilities; the numbers proposed would be in line with the strategic targets set out in the Structure Plan.”

In rejecting the inspector’s recommendation that permission should be granted the Secretary of State’s conclusion was expressed in these terms:

“47.

The Secretary of State considers that this application is primarily for retail development. The Secretary of State concludes that although this application is in line with the Development Plan, the Development Plan does not accord with the current national policy relating to retail development contained in PPG6, as clarified, housing development contained in PPG3, or transport in PPG13. The Secretary of State concludes that the application fails to meet PPG6 tests. The Secretary of State also concludes that the proposed location of the FOC fails to comply with the advice in PPG13 because the public transport position at Ellesmere is poor, and the majority of visitors would travel by car. The Secretary of State considers that the housing element of the proposal is premature and should be considered through the Local Plan process. He has balanced the benefits of the proposal (the proposal would regenerate a derelict site, enhance the setting of the site, and the proposal would provide employment in the area), against the matters where the application does not accord with national policy. Notwithstanding the compliance with the Development Plan, the Secretary of State concludes that the benefits of the proposal, set out above, do not outweigh its failure to comply with PPG6, PPG13 and PPG1.”

Following the issues that he and the inspector had identified as being relevant, the Secretary of State expressed his conclusions under the headings: the relationship of the proposed development to the relevant policies and provisions of the development plan; PPG6 (town centre and retail development); PPG13 (transport); PPG1 and PPG15; PPG21; PPG3; and other material considerations. For the claimant Mr Christopher Lockhart-Mummery QC directed the claimant’s challenge at the Secretary of State’s conclusions on the development plan and the retail, transport, leisure and housing issues. I will deal with these in turn.

Mr Lockhart-Mummery relied on City of Edinburgh Council v Secretary of State for Scotland [1997] 1 WLR 1447 as establishing the correct approach to the requirement in section 54A of the 1990 Act that a determination must be made in accordance with the development plan unless material considerations indicate otherwise. In a well-known passage at 1459D-H Lord Clyde said:

“In the practical application of section [54A] it will obviously be necessary for the decision-maker to consider the development plan, identify any provisions in it which are relevant to the question before him and make a proper interpretation of them. His decision will be open to challenge if he fails to have regard to a policy in the development plan which is relevant to the application or fails properly to interpret it. He will also have to consider whether the development proposed in the application before him does or does not accord with the development plan. There may be some points in the plan which support the proposal but there may be some considerations pointing in the opposite direction. He will require to assess all of these and then decide whether in light of the whole plan the proposal does or does not accord with it. He will also have to identify all the other material considerations which are relevant to the application and to which he should have regard. He will then have to note which of them support the application and which of them do not, and he will have to assess the weight to be given to all of these considerations. He will have to decide whether there are considerations of such weight as to indicate that the development plan should not be accorded the priority which the statute has given to it. And having weighed these considerations and determined these matters he will require to form his opinion on the disposal of the application. If he fails to take account of some material consideration or takes account of some consideration which is irrelevant to the application his decision will be open to challenge. But the assessment of the considerations can only be challenged on the ground that it is irrational or perverse.”

The statutory development plan consists of the Shropshire and Telford and Wrekin Joint Structure Plan 1996-2011 and the North Shropshire Local Plan 1991-2001, adopted in 1996. Paragraph 10 of the decision letter identified as structure plan policies relevant to the proposal: “spatial strategy policies P1, P2, P3; retail and town centre policies P27, P28; tourism policy P29; built environment policy P24; employment policy P11; housing and affordable housing policies P10, P13; flooding policy P54.” Paragraph 11 identified the relevant local plan policies as: “retail and town centre policy S2; tourism policy T10; built environment policies D2, D14, D16, P19, G1; employment policy E1; housing and affordable housing policies H4, H12.” The inclusion of P19 among the local plan policies was evidently an error. It is a structure plan policy which, in particular, urges a mix of appropriate uses to further the objective of sustainability.

Mr Lockhart-Mummery pointed out that in the section of the decision letter dealing with the first issue on the called-in application, the relationship of the proposed development to the relevant policies and provisions of the development plan, the Secretary of State had confined his observations to the allocation of the site in the local plan and the provisions of structure plan policy P27. None of the other policies of the statutory development plan were mentioned either in this section or elsewhere in the decision letter, even though the inspector in her report had referred extensively to the development plan policies and had concluded in each instance that the development would accord with or largely meet their provisions. It was not sufficient, said Mr Lockhart-Mummery, for the Secretary of State to list all the relevant policies. He must interpret and assess them. So far from evaluating certain considerations by reference to development plan provisions, the Secretary of State had treated them as other material considerations. There were development plan policies dealing with regeneration, employment and tourism. But, in rejecting the inspector’s treatment of certain of the benefits of the development as aspects of retail need, the decision letter said at paragraph 25:

“…regeneration and net additional employment are not elements of retail need; these and other related benefits such as tourism benefits may however be material considerations to be considered separately.”

There is no doubt, as one reads the Secretary of State’s decision letter, that the main reason for his rejection of the inspector’s recommendation was his disagreement with her conclusions on the acceptability of the FOC in policy terms. The inspector had based her policy conclusions on the allocation of the site in the local plan and two structure plan retail policies, P27 and P28. In paragraphs 18 to 22 of the decision letter the Secretary of State addressed himself to these. He concluded, in relation to the allocation, that the local plan was not up to date because it did not reflect changes in policy, in particular PPG6. He concluded also that the inspector was wrong in treating the FOC for the purposes of the structure plan retail policies as primarily a tourist/leisure facility. The significance of this disagreement was that the inspector had treated the question of need for the FOC as having been established by the allocation and as not needing to be shown for the purposes of P27 and P28. The Secretary of State, on the other hand, was adamant that need required to be shown, that it had not been shown, and that the FOC was contrary to both PPG6 and PPG13, most importantly in the large number of car journeys that it would generate.

Under the current version of PPG6 as clarified by ministerial statements an applicant for such development as the proposed FOC has to show need. At the time of the 1996 “minded-to-grant” letter the version of PPG6 then applying did not require need to be demonstrated. A draft of the replacement PPG6 had, however, been published, and the inspector in her decision at paragraph 10.34 made reference to this fact, assuming, wrongly, that the draft contained the new requirement as to need. In fact the draft then in existence did not contain the requirement, nor, explicitly, did the current version itself, which was issued in June 1996. It was only the statement of 11 February 1999 by the Minister of Planning, Mr Richard Caborn, that made clear that need had to be shown for edge-of-centre and out-of-centre proposals where the development plan was inconsistent with national policy guidance. The inspector concluded that in 1996 the need for the development had been “demonstrated, accepted and then incorporated as part of the development plan strategy.” In his decision letter, however, the Secretary of State, having referred in paragraph 18 to the absence in 1996 of a requirement to show need, said in paragraph 19:

“Neither the minded to approve letter nor the allocation of the site for mixed use, including retail, reflect the current national policy on retail set out in PPG6 as clarified. The Secretary of State considers that the Local Plan is not up to date because there have been significant changes in policy since the issuing of the ‘minded to approve’ letter and the adoption of the Local Plan.”

The inspector, as I have said, referred to two structure plan retail policies. Policy P27 (Town centres and retailing) set out an “established hierarchy” of centres. The market towns, of which Ellesmere is one, formed the second tier in this hierarchy, and the policy made provision for them as follows:

“The market towns play an important role in the rural area. Town centre developments within market towns should be aimed primarily at satisfying needs which arise within their catchment area.”

The other policy is P28 (Assessing retail and town centre development). That policy included the following:

“In assessing proposals for retail and town centre development local planning authorities should ensure that:

the need for a propose scheme of retail and other key town centre development, and the sequential approach to site selection, should be demonstrated where a planning application relates to a site not identified in an adopted local plan.”

In relation to these two policies the inspector concluded as follows:

“10.10

Given that the application site is identified in the adopted local plan for mixed use development, in accordance with the ‘minded to approve’ scheme, there is no requirement to demonstrate a need for the retail and other town centre elements of the proposed development (hotel, restaurant, public house), under policy P28. The new food store is intended to meet the needs of local residents but the FOC would attract shoppers and visitors from beyond the catchment area of Ellesmere and is therefore contrary to policy P27, which requires town centre developments to be aimed primarily at serving local needs. However, in this case the FOC is a tourist/leisure facility that would provide more than just a day to day service to local people. It is aimed at a wider market and catchment and is intended to provide a high profile attraction and to add to the range of attractions that already draw tourists to Ellesmere. In my view, the FOC element of the proposed development must be regarded as falling beyond the remit of policy 27 and needs to be considered in terms of tourist and regeneration objectives.”

The Secretary of State expressed his disagreement with this conclusion of the inspector in this way:

“20.

The Secretary of State disagrees with the Inspector’s conclusion about the Factory Outlet Centre (FOC) being outside the remit of Structure Plan policy P27 (IR 10.10). This policy indicates that retail development should serve purely local needs. The Inspector argues that this policy should not apply to the FOC because it should be considered as a tourist attraction. For the reasons given in paragraph 21 below, the Secretary of State does not agree that a FOC is primarily a tourist attraction.

21.

The Secretary of State considers that the FOC should be considered as primarily a retail proposal (IR 10.41). As defined in Annex A of PPG6 a FOC is a ‘a group of shops usually away from the town centre, specialising in selling seconds and end of line goods at discount prices.’ The Secretary of State agrees with the Inspector that the FOC would be used by tourists visiting the area (IR 10.42), but the primary reason for visiting the FOC will be shop. The Secretary of State does not accept that a FOC is primarily a tourist attraction; he regards it as a retail development, albeit one that is attractive to tourists.

22.

The Secretary of State concludes that although the site is allocated in the adopted Local Plan for mixed use development based on the ‘minded to approve’ letter, for the reasons given in paragraph 19 above, this plan is not consistent with up-to-date PPG6 guidance, in particular the requirement to demonstrate the need for individual retail developments set out in the Caborn statement of 11 February 1999. PPG6, as clarified, says that ‘…proposals which would be located at an edge-of-centre or out-of-centre location and which: are not in accordance with an up-to-date development plan strategy; or are in accordance with the development plan but that plan is out date, is inconsistent with national planning policy guidance, or otherwise fails to establish adequately the need for new retail and leisure development and other development to which PPG6 applies, should be required to demonstrate both the need for additional facilities and that a sequential approach has been applied in selecting the location or the site.’ The Secretary of State concludes that this application must be measured against the test in PPG6, as clarified.”

It was clearly necessary for the Secretary of State to deal as he did with the relationship of the local plan allocation and PPG6 as clarified and with the inspector’s view on the application of structure plan policy P27. The unacceptability of the FOC in terms of PPG6 and PPG13 was the fundamental element in his decision, and the provisions of the local plan and the structure plan that had led the inspector to conclude that the proposal was acceptable in policy terms thus needed to be addressed. While it may seem at first blush surprising that he did not also refer specifically to other provisions of the statutory development plan, I do not think that the fact that he did not do so, when considered in relation to the issues arising and the content of the policies, suggests that he has failed properly to apply section 54A. In City of Edinburgh ([1997] 1 WLR 1447 at 1459H) Lord Clyde rejected a submission that the application of section 54A in all cases required a two-stage approach on the part of the decision-maker – firstly a decision on whether the statutory development plan should be accorded its statutory priority and secondly, if it was not to be accorded that priority, a concentration on the other material factors. He said that it was undesirable to devise any universal prescription for the method to be adopted. He went on (at 1460A-C):

“Different cases will invite different methods in the details of the approach to be taken and it should be left to the good sense of the decision-maker, acting within his powers, to decide how to go about the task before him in the particular circumstances of each case…In many cases it would be perfectly proper for the decision-maker to assemble all the relevant material including the provisions of the development plan and proceed at once to the process of assessment, paying of course due regard to the priority of the latter, but reaching his decision after a general study of all the material before him. The precise procedure followed by the decision-maker is so much a matter of personal preference or inclination in the light of the nature and detail of the particular case that neither universal prescription nor even general guidance are useful or appropriate.”

Mr Lockhart-Mummery identified four groups of policies which, he suggested, should have received explicit evaluation for the purposes of section 54A but did not. Firstly the spatial strategy of the structure plan (policy P1) and local plan (policy G1) was to concentrate development in or on the edge of market towns, including Ellesmere, and to promote mixed use development (structure plan policy P19), using previously developed land and buildings (structure plan policies P2 and P3). While the Secretary of State agreed with the inspector’s conclusions on regeneration of the derelict site, there was, said Mr Lockhart-Mummery, no recognition anywhere in the decision letter that development plan policy sought to concentrate development in or on the edge of Ellesmere. For my part, I cannot see that there was in reality any material omission in this respect. Policy P1 contained certain qualifying elements, including in particular accessibility and the need for the scale of development to take account of the size of the town. The decision letter dealt with accessibility, a matter to which, as the Secretary of State made clear, he attached considerable importance, in the context of PPG6 and PPG13. At paragraph 36 it said:

“One of the purposes of PPG6 is to ensure that sites are accessible by a choice of means of transport. The Secretary of State considers this to be a matter of considerable importance in his consideration of this case. He notes that the public transport position in Ellesmere is not good…and that the FOC would attract an extra 600,000 visitors annually, a substantial proportion of whom would travel by car…He therefore concludes that this is not a good location for this proposal in PPG6 terms.”

His rejection of the FOC was expressly related to the scale of the development and the size of the town. He said (at paragraph 30) that national policy made clear that:

“…the relevant centres in which to search for sites will depend on the nature and scale of the proposed development and the catchment it seeks to serve – development that would serve a wide catchment area should be located in a centre that serves a similar catchment. As the proposed FOC would serve a wide catchment area,…attracting residents from such centres as Oswestry, Wrexham and Shrewsbury, as well as visitors from more distant destinations, the Secretary of State considers that the sequential test should have considered other centres in the FOC’s catchment area.”

That the Secretary of State chose to deal with accessibility and the scale of the development and the size of the town in the context of PPG6 was, it seems to me, entirely understandable, and it was not necessary for him to make the same points specifically by reference to policy P1. I am satisfied also that the elements of policy P2 were similarly dealt with in the decision letter, but I do not think that it is necessary to burden this judgment with a detailed analysis of this. As far as policy P19, the mixed use policy, is concerned, it is sufficient to note that the Secretary of State found one particular element of the proposed mix of uses to be fundamentally unacceptable, so that the absence of a discussion of the application of this policy is unsurprising.

The other three groups of policies to which Mr Lockhart-Mummery referred were those concerned with employment (structure plan policy P11, local plan policy E1), tourism (structure plan policy P11, local plan policy T10) and design and conservation (structure plan policy P24, local plan policies D2, D14 and D16). Policy P11 gave encouragement to the creation of employment and identified the transport network and accessibility for the workforce as key factors to be taken into account in locating employment sites. The decision letter at paragraph 47 said that the Secretary of State had balanced the benefits of the proposal, including the fact that it would provide employment, against the matters where the application did not accord with national policy. In paragraph 41, after referring to the inadequacies of the public transport facilities, it said that he concluded that “the FOC would be contrary to the objectives of PPG13 which seek to promote accessibility to jobs, shopping, leisure facilities and services by public transport, walking and cycling.” This, in my judgment, dealt with the substance of the matters arising on the employment policies. Policy P29 sought to direct new tourist facilities and large scale tourist developments to locations with sufficient infrastructure and accessibility by a range of means of transport to service the development in a sustainable manner. Again, that matter was addressed in paragraph 41. Design and conservation matters were dealt with in paragraph 42 in the context of PPG15, where the Secretary of State agreed with the inspector’s conclusions in paragraph 10.59 of her report that “the proposed mixed use development would bring forward considerable scope for enhancement of the nearby conservation area and opportunities for revitalising and achieving long term protection of listed buildings and their settings,” so that there would be “a significant improvement over the run-down, derelict appearance that currently detracts from this historic environment.” Since structure plan policy P24 provided for the protection of listed buildings and conservation areas and the local plan policies made similar provision, the Secretary of State’s conclusions on these matters are, in my judgment, clear without there being any need for a specific reference back to the policies themselves.

I do not think that the way that the Secretary of State dealt with the issues relevant to the provisions of the development plan discloses any error of law on his part in relation to the requirements of section 54A. He approached the application on the basis that it complied with the provisions of the development plan. It was clearly right that he should do so because the local plan specifically allocated the site for a mixed development of the sort proposed. He concluded, however, that that provision was in conflict with his policy, which post-dated the 1996 decision and the adoption of the local plan, on retail development. In his decision letter he addressed that conflict. He also considered the inspector’s conclusion on the application of structure plan policy P27, and he expressed his disagreement with it. It was appropriate that he should deal directly with that matter since it was of significance in policy terms whether the FOC element was to be treated primarily as a tourist attraction, as the inspector thought, or as a retail development. Having concluded that the proposal was in accordance with the development plan, the Secretary of State then addressed the considerations that he thought should be weighed in the balance in reaching a decision. He had identified the relevant development plan policies in paragraphs 10 and 11 of his decision letter. Mr Lockhart-Mummery says that he should specifically have evaluated the proposal in terms of 7 of the structure plan policies and 6 of the local plan policies. I cannot accept this. It is evident that those policies related to considerations some of which were in favour of the proposal and others of which were not. The Secretary of State acknowledged the benefits of the proposal in terms of regeneration, enhancement of the setting of the site and employment, and he discussed the considerations that suggested that permission should not be granted, notably accessibility and transport and the provisions of PPG6. He dealt with the substance of the relevant matters, and it was in my judgment a matter for him to decide how he should deal with them: see the passage cited above from the speech of Lord Clyde in City of Edinburgh Council.

In relation to the Secretary of State’s consideration of the retail issues Mr Lockhart-Mummery drew attention to what he said were inconsistencies between the conclusions reached by the Secretary of State on the earlier application in 1996 and his conclusions on the present application. He said that there were three particular inconsistencies. Firstly, in 1996 the Secretary of State accepted the inspector’s conclusions that described the FOC as being in an edge-of-centre location (para 9.7) and the application site as adjoining or being adjacent to the town centre (paras 9.8 and 9.16). By contrast, in his 2004 decision letter (at para 23) the Secretary of State said that, while the inspector had concluded that the development was edge-of-centre (para 10.49), he was not persuaded that the entire site should be regarded as edge-of-centre. Secondly, in 1996 the Secretary of State accepted the inspector’s conclusion that the site was only a short walk from the town centre and the proposal would give rise to linked trips between the supermarket and the FOC and the town centre (paras 9.3, 9.5 and 9.7). He also said that the retail element was within reasonable walking distance of the town centre (para 7) and that he attached great importance to that factor (para 8). In his 2004 decision letter, on the other hand, the Secretary of State said (in para 32) that he considered that few people would be making linked trips between the foodstore and the town centre.

The third inconsistency to which Mr Lockhart-Mummery pointed was in relation to retail impact. The minded-to-grant letter in 1996 had agreed with the inspector’s conclusion that the proposed food supermarket, with an expected trade diversion of 35%, would not damage the vitality and viability of the town centre to an unacceptable degree, whereas in his 2004 decision letter (at para 32) the Secretary of State said that he considered an expected trade diversion of 11-13% to be a significant impact that would harm the vitality and viability of Ellesmere. Because the two proposals were similar in size, location and nature, and consideration of the effect of the retail proposals on the vitality and viability of a nearby town centre was required by each of the successive versions of PPG6, Mr Lockhart-Mummery said that these inconsistencies required explanation. He referred to North Wiltshire District Council v Secretary of State for the Environment [1992] 3 PLR 113. The Secretary of State had, however, failed to give any reasons for his disagreement with the conclusions he had reached in 1996.

At para 10.50 the inspector considered the impact of the proposed food supermarket. She said:

“Perhaps the most significant effect of the new foodstore would be to retain and recapture a larger proportion of locally generated expenditure. Instead of travelling to more distant centres, the catchment area residents are more likely to shop locally with the prospect of increased expenditure within Ellesmere itself. The existing Co-op and the Spar would be the likely victims of the new foodstore with trade diversions in the order of 11-13%. The most likely scenario is the closure of one of the stores and the surviving store would then continue its top-up role but with an element of turnover captured from the casualty store…”

The inspector went on to say in para 10.51 that she considered the outcomes predicted to be insignificant in an environment where a large proportion of trade was already being attracted to stores outside Ellesmere. The Secretary of State disagreed with this conclusion. The decision letter said:

“32.

The Secretary of State accepts that there would be some increased retention of locally generated expenditure as a result of the new foodstore (IR10.50). However, he is not persuaded that this would result in an overall benefit to Ellesmere town centre because he considers that few people would be making linked trips, for the reasons set out in para 34 below. The Secretary of State notes that the trade diversion from the existing Co-op and Spar would be in the region of 11 to 13%. He also notes that the Inspector concludes that one of the stores would be likely to close (IR10.50). The Secretary of State disagrees with the Inspector that this is insignificant (IR10.51). He considers that this is a significant impact that would harm the vitality and viability of Ellesmere.”

The food supermarket in the earlier proposal was the same size as the one in the current proposals, and the inspector on the earlier application had recorded the applicant’s case to be that the Spar and Co-op shops would experience a trade diversion in the region of 35% (para 4.12). He had concluded (at para 9.3) that the proposed supermarket “would be likely to complement the overall shopping function of the town and not damage its vitality and viability to an unacceptable degree, even though it would be likely to have a dramatic effect on the 2 remaining supermarkets in the town.” In his minded-to-grant letter the Secretary of State said that, with the exception of one matter that is not relevant for present purposes, he agreed with the inspector’s conclusions. Mr Lockhart-Mummery said that the difference in the conclusions reached – in the one case treating as acceptable the “dramatic effect” of the 35% diversion and in the other concluding that the diversion of 11 to 13% would be a significant impact that would harm the vitality and viability of Ellesmere – was unexplained. No reasons at all were given for it.

Ms Lieven said that the categorisation of the site – as edge-of-centre or out-of-centre – was immaterial in policy terms. Either way need had to be shown. As far as linked trips and impact were concerned, the Secretary of State had explained what he had concluded and why. There was no need for him to refer back to the 1996 decision letter in order to explain the view that he took.

I cannot accept Ms Lieven’s submission on this point. The Secretary of State’s conclusions both on linked trips and impact are on the face of it so clearly at odds with his conclusions in 1996 that some explanation is required on his part. The matters concerned may be matters of judgment, but the reasons for his now taking a different view from the one that he expressed on the earlier application need to be given. If the subject matter of the application had been the food supermarket alone I would have held that this failure of explanation had substantially prejudiced the claimant so as to entitle it to relief. However, the supermarket was but one element in the mixed use development that was the subject of the application, and the question whether the claimant has been substantially prejudiced by this defect of reasoning needs to be considered in relation to the decision as a whole. I return to this matter in my conclusions below, after considering the other grounds of challenge.

The proposal includes the 86 houses proposed in the earlier scheme and a further 100 houses. Local plan policy H4 allocated the site for mixed use development including 86 houses. The emerging local plan allocates the site for mixed use development including 86 dwellings and as a reserve site for a further 100 dwellings. The inspector identified as an additional issue to those identified by the Secretary of State the extent to which the housing element complied with Government policy in PPG3. In paragraph 10.63 of her report she said that the proposal “would go a long way towards meeting the Ellesmere total allocation of 256 identified in the emerging plan.” She went on:

“Not only does this raise issues about pre-empting the local plan process but the remaining 100 dwellings (F4 on plan D) would occupy areas of green field land to the south west of the creamery works. This would mean an extension of Ellesmere into the undeveloped land and is not, in PPG3 terms, the sort of sequentially preferential site.”

The inspector noted (in paragraph 10.64) that the site in its entirety fell within the town’s development boundary, thus indicating a long established expectation of development on this undeveloped land. She said that she could not comment on the adequacy of the sequential searches undertaken when allocating the application site or 100 dwellings in the emerging local plan. However (paragraph 10.65), the additional housing units would greatly assist in meeting the current structure plan target, the site would be within easy reach of the town centre and other facilities, and the housing would facilitate development of the commercial parts of the application scheme. Moreover (paragraph 10.67) at the density proposed there would be effective use of land, and the proposed provision of 60 affordable units would accord with PPG3. On balance, the inspector thought (paragraph 10.66) that the benefits from the 100 dwellings would outweigh the concerns about prematurity and development of green field land.

The decision letter said that the Secretary of State agreed with the inspector that the site was not sequentially preferable (paragraph 44) and with the inspector’s conclusion about the viability of the site and the efficient use of land (paragraph 45). It then went on:

“However, the Secretary of State disagrees with the Inspector that these benefits outweigh concerns about prematurity (10.66). The Local Plan inquiry started in October 2003 and is due to finish in February 2004. Paragraphs 47 and 48 of PPG1 set out the policy in relation to prematurity. PPG1 advises that where the effects of the development proposal would be so significant that to grant planning permission may prejudice the outcome of the plan process by predetermining decisions scale, local or phasing of new development, it may be justifiable to refuse consent. The housing allocation for Ellesmere identified in the emerging plan is 256 dwellings, this application provides for 186, approximately 70% of the allocation. There are a number of outstanding objections to the allocation of the 100 houses arguing that there are other sites which will be more sequentially preferable. The Secretary of State considers that as the plan process is at such an advance stage, these issues should be considered through the Local Plan process and that to reach a decision to grant permission for 186 dwellings on the allocation of this site through this planning application would pre-empt the Local Plan inquiry.”

Mr Lockhart-Mummery submitted that in reaching this conclusion the Secretary of State misconstrued or failed to have proper regard to paragraph 47 of PPG1, which refers to proposals that are individually so substantial that to grant planning permission would prejudice the outcome of the local plan process by pre-determining questions about the scale, location or phasing of development. The contention was that the Secretary of State failed to have regard to the fact that the structure plan requirement for the district as a whole was for 2,525 dwellings plus reserved sites for 1,000, besides which totals the 86 and 100 dwellings on the application site were not substantial.

There is, in my judgment, nothing in this contention. It is clear, as the Secretary of State said, that to give permission on the application site for 186 out of the 256 houses to be allocated in Ellesmere would prejudge the location of about 70% of the allocation without the merits of other sites being considered in circumstances where there were outstanding objections to the local plan allocation. I can see no basis on which it could be said that the Secretary of State was not able to treat paragraph 47 of PPG1 as applying. It was reasonably capable of doing so and whether it did was a matter for his judgment.

Mr Lockhart-Mummery went on to argue that prematurity was not among the issues identified by the call-in letter (or as one of the additional issues referred to by the inspector) and that, as a result, the Secretary of State acted unfairly in determining this issue without giving the claimant a proper opportunity to deal with it. Although it might be thought that the issue of prematurity was a self evident one in the circumstances of the proposal, I incline to the view that the Secretary of State ought to have identified it as an issue for the purpose of enabling the claimant to deal with it. However I do not think that the claimant has suffered any substantial prejudice by his failure to do so. Mr Lockhart-Mummery did not point to any particular matters that, had the issue of prematurity been identified, the claimant would have wished to have drawn to the Secretary of State’s attention. I can seen no reason for thinking that if the claimant had sought to argue before the inspector that the proposal was not substantial enough to bring paragraph 47 of PPG1 into operation the Secretary of State would have taken a different view from the one he did as to the application of that paragraph. The Secretary of State, accepting the view of the inspector in this respect, concluded that the site was not a sequentially preferable one in terms of PPG3 and the location was not a sustainable one in terms of PPG13. I go on to consider the challenge to this latter conclusion under “Transport issues” below. The claimant says that, if there was a shortcoming in terms of the site’s location, that was one that was shared by other potential housing sites in Ellesmere. If that is right, the other comparative merits of the candidate sites would still have required consideration, and the Secretary of State was not in error in concluding as he did that the proper forum for that consideration was the local plan inquiry that had started in October 2003 and was due to finish shortly, in February 2003. Accordingly, to the extent to which the challenge is directed at the Secretary of State’s conclusions on the housing issue, it must in my judgment fail.

In addressing himself to PPG13 the Secretary of State noted (at paragraph 39) that there was a lack of public transport in the area. The claimant had told the inspector (paragraph 6.1.15) that buses ran between Ellesmere and Shrewsbury at intervals of two hours and between Ellesmere and Oswestry at generally hourly intervals. The Secretary of State said that although £60,000 was secured through a planning obligation for the improvement of public transport he did not consider that that was enough to improve bus services to encourage residents and visitors to travel to the proposed development by public transport rather than by car. As far as the proposed housing was concerned the inspector concluded (at paragraph 10.20) that it would be within 2 km walking distance of the town centre, local schools and medical facilities, as well as being close to the proposed food store and well placed to take advantage of local jobs. She said (at paragraph 10.22) that the housing would be sufficiently close to local services and jobs, to the point where residents’ day to day needs could be met without having to travel outside the area. The Secretary of State, however (at paragraph 40), said that he did not agree with the inspector’s conclusions on the accessibility of the housing. The location was not and was not likely to be well served by public transport, and the housing was accordingly not in a sustainable location as PPG13 advised that it should be. As far as the FOC was concerned the Secretary of State (at paragraph 41) reiterated that it was a matter of considerable importance that the public transport position at Ellesmere was not good, and that the FOC would attract an extra 600,000 visitors a year, a substantial proportion of them by car. He thought that there would be few linked trips between the proposal and the town centre. He concluded, therefore, that the location of the FOC would be contrary to the objectives of PPG13.

Mr Lockhart-Mummery said that the Secretary of State had failed to have regard to the fact that it was Ellesmere, rather than the particular location of the housing, that was lacking in public transport. If the proposed housing was not in a sustainable location, neither were other parts of Ellesmere; but it was the spatial strategy of the structure and local plans to concentrate development in the market towns, of which Ellesmere was one. It does not seem to me that this point has any force once it is linked to the prematurity consideration, which the Secretary of State, as I read his decision, found to be the crucial consideration on the housing element. The draft local plan, applying the spatial strategy of the structure plan, identifies an allocation for Ellesmere of 256 houses. It was no part of the claimants' case to show that the housing proposed on the application site was in a more sustainable location that other potential sites in Ellesmere. It was for the local plan process to identify which particular sites should be allocated. If, in advance of this process, the claimant sought to put forward its own site without claiming that it was preferable to other potential sites in Ellesmere, the lack of public transport would be a factor that counted against it, and it would not count against it any the less because that deficiency was shared by the other sites.

Mr Lockhart-Mummery contended that the Secretary of State’s conclusions on the transport aspects of the proposed housing contained two further errors. Firstly in paragraph 34 he had treated the lack of bus services as a basis for his conclusion that there would be few linked trips between the proposed development and the town centre; but the bus services, which were from Shrewsbury and Oswestry to Ellesmere, would not in any event have provided a transport link with the town centre. Secondly the Secretary of State had ignored the conclusions of the inspector on the proximity of the housing to local services and jobs. It does not seem to me to be possible to elevate both these matters into errors of law, because it does not appear that either of these matters, the nature of the bus services and the proximity of houses to local services, were left out of account by the Secretary of State. However, given these considerations, I think it is difficult to discern why it is that the Secretary of State is differing from the inspector on the accessibility of the housing in relation to local facilities and services, so that the reasons are, in my view, in this respect inadequate. Nevertheless this lack of reasoning has not, in my judgment, been such as to materially prejudice the claimant in view, on the one hand, of the Secretary of State’s basic objection to the housing – prematurity. There is no reason to believe that, had he taken a different view on accessibility, this basis objection would not still have prevailed.

Further contentions were raised on detailed aspects of the transport considerations as they affected the FOC. It was said that the Secretary of State left out of account evidence that the FOC would induce tourists to spend longer in Ellesmere and thus disperse the traffic on the network and that many of the extra visitors would be ones who would be visiting North Shropshire anyway and so would not be making new long distance journeys. It is not possible, in my judgment, in respect of detailed points such as these, to conclude that the Secretary of State left them out of account simply because he did not refer to them. Nor does it seem to me, in the context of all the matters that were before him, that he needed to address these particular matters. His principal concern, that the FOC would attract an extra 600,000 visitors a year to Ellesmere, a substantial proportion of them by car, would clearly remain whatever view he took of these particular pieces of evidence.

Mr Lockhart-Mummery submitted that the Secretary of State had failed to take into account the nature of the FOC as a tourist attraction and to relate these to the other tourist/leisure elements of the proposal, the 120 space touring caravan site, the 60 bedroom hotel, the public house and the wine bar/restaurant. He had, in paragraphs 21 and 43, expressed his view that the FOC was primarily a retail development rather than a tourist attraction. In reaching this view, it was said, he had left out of account evidence that the FOC would contain a range of craft workshops as well as a visitor centre in the form of a wharf master’s cottage; and, as a result of this, he had failed to have any regard to the tourist benefits of the proposal, omitting any reference to them in paragraph 47. In my judgment, however, it is not possible to say that the Secretary of State left these tourist elements out of account. In the context of PPG21 he made specific reference in paragraph 43 to the inspector’s report (paragraphs 10.60 and 10.61) on the benefits that the inspector saw the development as promising in terms of the enhancement of the town as a tourist attraction. There was no need for him, in my judgment, for the purpose of enabling the informed reader to understand why he had reached his decision, to say more about the claimed tourism benefits than this.

It is clear from a reading of the decision letter as a whole that he Secretary of State’s fundamental objection to the proposal lay in the FOC element of the mixed use scheme. He took the view that the FOC was properly to be regarded as primarily a retail development. That was a judgment that it was not unreasonable for him to form. With a floorspace of over 9,000 sq m in a small market town poorly served by public transport, it was expected to attract an extra 600,000 visitors a year, most of whom would travel by car. He concluded that it would be contrary to current policy contained in PPG6 as clarified and PPG13. In relation to the housing element he failed to identify prematurity as an issue to be addressed and he failed adequately to explain why he differed from the inspector on accessibility. I do not think, however, for the reasons I have stated above, that the claimant was substantially prejudiced by this. In relation to the food supermarket, he failed to explain why, in contrast to his 1996 decision, he thought that few people would make linked trips to the town centre or why the store would have an unacceptable impact. In other respects the decision is in my view unchallengeable, both in terms of the considerations that needed to be taken into account and the reasoning; and the question is whether the claimant has been substantially prejudiced by the defective reasoning in relation to the food supermarket.

The significance of a reasons challenge such as this lies in the possibility that, if the reasons had been adequately set out, they might have revealed an error of law, for instance in the omission of a material consideration, and that, if the error had been corrected, a different decision might have been reached. Taking account of the decision as a whole, it does not seem to me that, if the Secretary of State had taken a different view on the impact of the foodstore and linked trips, there was any realistic possibility that his decision on the application would have been different. The foodstore was one element in the mixed use development, and the Secretary of State clearly considered that the FOC element was fundamentally objectionable and the housing element was premature. The application is refused.

After I had handed down judgment in this case, Mr Guy Williams, appearing on behalf of the claimant, asked for permission to appeal. The second of the two grounds that he advanced was that there was a material factual error in paragraph 36 of the judgment, where on the housing prematurity point, I said that Mr Lockhart-Mummery had not pointed to any particular matters that, had the issue of prematurity been identified, the claimant would have wished to have drawn to the Secretary of State’s attention. Mr Williams said that Mr Lockhart-Mummery recalled having said in answer to a question from me that, if the issue had been raised, the claimant would have wished to have advanced the merits of the site in terms of its proximity to the town centre and the contribution it would make in meeting housing need. My judgment had been provided to the parties 2 days in advance, so that the suggested error should have been brought to my attention and to the first defendant’s in advance of the handing-down of the judgment. None of the counsel who had appeared at the substantive hearing were present when judgment was handed down. Having heard Mr Williams’s submissions on both grounds, I adjourned the application so that the first defendant could provide me with a note on the suggested error. It seemed to me right that I should seek to determine what had actually been said, to avoid the possibility of the Court of Appeal being unnecessarily troubled on the point.

A note has been provided on behalf of the first defendant. It says that neither Ms Lieven nor those instructing her have any specific recollection of the two particular matters referred to by Mr Williams – proximity to the town centre and contribution to meeting housing need – having been identified in answer to the question I asked on the question of prejudice.

A note has also been provided on behalf of the claimant. It says that their noteboooks show that Mr Lockhart-Mummery’s response to me was that it was not possible to predict what the prejudice would be in relation to specific matters as this would have been a matter for the claimant’s agent; the prejudice was that the agent was not given the opportunity to identify relevant considerations to draw to the Secretary of State’s attention with a view to establishing that other factors such as the need for affordable housing outweighed the prematurity objection. It follows, the note says, that paragraph 36 of the judgment is accurate in that no specific factors were raised.

The second ground on which permission to appeal was sought accordingly goes. The first ground was that the failure of the Secretary of State to evaluate the relevant policies for the purposes of section 54A made it impossible to know what weight he attached to the particular policy considerations, so that I was wrong to reject the contention that the Secretary of State had failed to comply with section 54A. I dealt with this matter by reference to Lord Clyde’s speech in City of Edinburgh Council, and I do not think that an appeal on this ground would have any real prospect of success. Permission is therefore refused.

I ordered the claimant to pay the costs of the first defendant, to be the subject of detailed assessment if not agreed. Those costs are to include the costs of the application for permission to appeal.