Wokingham Borough Council v Secretary of State for Communities and Local Government & Anor

This is an application made under section 288 of the Town and Country Planning Act 1990 (“the 1990 Act”) by the local planning authority, Wokingham Borough Council, with the permission of Lang J, to quash a decision of an Inspector who allowed an appeal brought under section 78 of the 1990 Act by the Second Defendant, Cooper Estates Strategic Land Limited.

The Inspector, Mr GD Jones, had been appointed to determine the appeal by the First Defendant, the Secretary of State for Communities and Local Government. He granted a conditional outline planning permission for the construction of up to 57 new homes on land at Stanbury House, Basingstoke Road, Spencers Wood (which is about 5 miles from Reading). He did so given inter alia his view that the Council had not demonstrated a five-year supply of deliverable housing sites as described in the National Planning Policy Framework (“NPPF”).

The grounds on which an application under section 288 of the 1990 Act may be made and the court’s powers under it are well-established. They were summarised by Lindblom J in Bloor Homes East Midlands Limited v Secretary of State for Communities and Local Government [2014] EWHC 754 (Admin) at [19].

The Council’s application concerns the “Full Objectively Assessed Need” (“FOAN”) for housing in Wokingham and the amount of homes the Inspector estimated would be delivered in the Borough over a five year period from October 2015. In particular it is concerned with the “buffer’ of 20% which is to be added to the FOAN (as contemplated in paragraph [47] of the NPPF) and with what is referred to, misleadingly, as a “lapse rate”.

The “buffer” of 20% of the FOAN (rather than one of 5%) falls to be added to it “to provide a realistic prospect of achieving the planned supply” in the five year period “where there has been a record of persistent under delivery of housing”.

In the sense in which it was used in this case, the so-called “lapse rate” does not describe the rate at which planning permissions in the supply may lapse. It represents the proportion of the number of dwellings in the supply of specific deliverable sites that will not be provided within the five-year period. It may be applied whether or not any site to which the rate is applied has permission and whether or not the reason why the dwellings are not provided on it is that planning permission for its development has lapsed.

On behalf of the Council, Ms Saira Kabir Sheikh QC, contended that (i) the Inspector unlawfully imposed both a 10% “lapse rate” to all the sites in the relevant housing land supply as well as a 20% “buffer” and (ii) that he made two objectively verifiable errors of fact, when considering whether or not there was a five year supply of land for housing. She also seeks permission to contend (iii) that the Inspector erred in law, having regard to the decision of the Supreme Court in Hopkins Homes Ltd v Secretary of State for Communities and Local Government [2017] UKSC 37, [2017] 1 WLR 1865 (“Hopkins Homes”), in treating two development plan policies for the location of new development in the Borough as not being up-to-date given the absence of a five year supply.

The Council’s application is not now opposed by the Secretary of State. But it is by the Second Defendant.

On behalf of the Second Defendant, Mr Gregory Jones QC, contended (i) that the Inspector was entitled to apply both a 10% “lapse rate” and the 20% “buffer” as he did in his calculations; (ii) that the Inspector made no material error of fact; and (iii) that it is irrelevant in any event whether or not the first two of the Council’s contentions are well founded: the “tilted balance” required by paragraph 14 of the NPPF, which the Inspector applied in determining the appeal, would have been applicable in any event, as the development plan policies for housing were in any event out-of-date. Mr Jones also opposed the grant of permission to enable the third of the Council’s contentions to be raised. He submitted that the challenge had not been made promptly and it was “absolutely hopeless”. The Inspector had correctly classified the two development plan policies in issue as being “out of date” but in any event their classification as such has no significance when considering the applicability of paragraph 14 of the NPPF or the weight to be given to them.

In dealing with any application for planning permission, planning authorities must have regard to “the provisions of the development plan, so far as material to the application” and to “other material considerations”: see section 70(2) of the 1990 Act. “If regard is to be had to the development plan for the purpose of any determination to be made under the planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise": see 38(6) of the Planning and Compulsory Purchase Act 2004.

As Lord Carnwath pointed out in Hopkins Homes supra at [21], the NPPF “ itself makes clear that as respects the determination of planning applications (by contrast with plan-making in which it has statutory recognition), it is no more than “guidance” and as such a “material consideration” for the purposes of section 70(2) of the 1990 Act.... It cannot, and does not purport to, displace the primacy given by the statute and policy to the statutory development plan. It must be exercised consistently with, and not so as to displace or distort, the statutory scheme.”

The NPPF is divided into three main parts: “Achieving sustainable development” (paragraphs [6] to [149]), “Plan-making” (paragraphs [150] to [185]) and “Decision-taking” (paragraphs [186] to [207]).

Paragraph [14] of the NPPF describes the “presumption in favour of sustainable development”, which is said to be “[at] the heart of” the NPPF and which should be seen as “a golden thread running through both plan-making and decision-taking”. It states that:

“For decision-taking this means [unless material considerations indicate otherwise]:

• approving development proposals that accord with the development plan without delay; and

• where the development plan is absent, silent or relevant policies are out-of-date, granting permission unless:

—

any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or

—

specific policies in this Framework indicate development should be restricted”.

The penultimate point (“any adverse impacts...”) is referred to as “the tilted balance”. It applies inter alia if relevant development plan polices are “out-of-date”.

Within the same part of the NPPF dealing with sustainable development, there is a section headed “Delivering a wide choice of quality homes”. Paragraph [47] in it states that:

“To boost significantly the supply of housing, local planning authorities should:

• use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this Framework, including identifying key sites which are critical to the delivery of the housing strategy over the plan period;

• identify and update annually a supply of specific deliverable {11} sites sufficient to provide five years worth of housing against their housing requirements with an additional buffer of 5% (moved forward from later in the plan period) to ensure choice and competition in the market for land. Where there has been a record of persistent under delivery of housing, local planning authorities should increase the buffer to 20% (moved forward from later in the plan period) to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land;

• identify a supply of specific, developable sites or broad locations for growth, for years 6–10 and, where possible, for years 11–15;

• for market and affordable housing, illustrate the expected rate of housing delivery through a housing trajectory for the plan period and set out a housing implementation strategy for the full range of housing describing how they will maintain delivery of a five-year supply of housing land to meet their housing target; and

• set out their own approach to housing density to reflect local circumstances.”

Footnote 11 states significantly that:

“To be considered deliverable, sites should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years and in particular that development of the site is viable. Sites with planning permission should be considered deliverable until permission expires, unless there is clear evidence that schemes will not be implemented within five years, for example they will not be viable, there is no longer a demand for the type of units or sites have long term phasing plans.”

Whereas paragraph [47] is directed at the making of Local Plans, paragraph [49] states:

“Housing applications should be considered in the context of the presumption in favour of sustainable development. Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites.”

I will return to the relationship between paragraphs [49] and [47].

In a later part of the NPPF relating to “Plan-making”, under the heading “Using a proportionate evidence base”, paragraph [158] enjoins local planning authorities to ensure that their local plans are “based on adequate, up-to-date and relevant evidence about the economic, social and environmental characteristics and prospects of the area”, and that “their assessment of and strategies for housing, employment and other uses are integrated, and that they take full account of relevant market and economic signals”.

Paragraph [159] in the same part relates specifically to “Housing”. It states:

“Local planning authorities should have a clear understanding of housing needs in their area. They should:

• prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which:

–

meets household and population projections, taking account of migration and demographic change;

–

addresses the need for all types of housing, including affordable housing and the needs of different groups in the community …; and

–

caters for housing demand and the scale of housing supply necessary to meet this demand;

• prepare a Strategic Housing Land Availability Assessment to establish realistic assumptions about the availability, suitability and the likely economic viability of land to meet the identified need for housing over the plan period.”

As Lindblom LJ (with whom Black and Tomlinson LJJ agreed) said in Oadby and Wigston Borough Council v Secretary of State for Communities and Local Government [2016] EWCA Civ 1040:

“34.

The policy in paragraph 47 of the NPPF relates principally to the business of plan-making. The policy in paragraph 49 relates principally to applications for planning permission; it deals with the way in which “[housing] applications” should be considered. But it must of course be read in the light of the policy requirement in paragraph 47 for local planning authorities to plan for a continuous and deliverable five-year supply of housing land. The policies in paragraphs 157, 158 and 159 all relate to plan-making. The requirement, in paragraph 159, to prepare a Strategic Housing Market Assessment as part of the “evidence base” for a local plan corresponds to the policy in the first bullet point in paragraph 47, which requires local planning authorities to “use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in [the NPPF] …”.... The “housing market area” is not necessarily co-extensive with a single local planning authority's administrative area...

36.

.... The policy for plan-making in paragraph 47 of the NPPF explicitly requires that in the preparation of local plans the “full, objectively assessed needs for market and affordable housing in the housing market area ” must be met, in so far as this can be done consistently with the policies of the NPPF as a whole (my emphasis). However, under the policy in paragraph 49, which relates specifically to development control decision-making, the effect of a local planning authority being unable to “demonstrate a five-year supply of deliverable housing sites” is that “[relevant] policies for the supply of housing” – which means relevant policies for the supply of housing in the development plan for that local planning authority's area – will not be considered up-to-date, with the potentially significant consequences for “decision-taking” under the policy in paragraph 14 of the NPPF.... Paragraph 49 does not prescribe a particular method, applicable in every case and in all circumstances, for the comparison of the five-year housing requirement and housing supply in the making of a decision on a planning application or appeal. And one must not read into the policy in that paragraph an approach that prevents a realistic and robust comparison of housing need and supply for the purposes of making a development control decision.”

The first and second bullet points in paragraph [47] of the NPPF (quoted in paragraph [14] above) are potentially relevant to decisions whether there is a five year supply of deliverable housing sites, for the purpose of paragraph [49] of the NPPF when determining planning appeals. But the difference between a planning appeal and a local plan inquiry has to be borne in mind and it requires, for example, a different approach to the first bullet point. As Sir David Keene (with the agreement of Maurice Kay and Ryder LJJ) said in Hunston Properties Ltd v St Albans City and District Council [2013] EWCA Civ 1610 at [26]:

“it is not for an inspector on a Section 78 appeal to seek to carry out some sort of local plan process as part of determining the appeal, so as to arrive at a constrained housing requirement figure. An inspector in that situation is not in a position to carry out such an exercise in a proper fashion, since it is impossible for any rounded assessment similar to the local plan process to be done. That process is an elaborate one involving many parties who are not present at or involved in the Section 78 appeal. … [It] seems to me to have been mistaken [on a section 78 appeal] to use a figure for housing requirements below the full objectively assessed needs figure until such time as the Local Plan process came up with a constrained figure.”

It follows that, where the housing policies of the development plan, have not been prepared in accordance with the requirements of the NPPF, it is for the Secretary of State or an Inspector on an appeal to evaluate for himself or herself the full, unconstrained requirement for housing against which to test the council's ability to “demonstrate a five-year supply of deliverable housing sites” under the policy in paragraph 49 of the NPPF: see Oadby and Wigston Borough Council v Secretary of State for Communities and Local Government supra per Lindblom LJ at [39].

Most of the land proposed for development by the Second Defendant (which is on the western side of Basingstoke Road), comprises semi-improved grassland used for grazing and lies outside the defined settlement limits of Spencers Wood. In his Decision Letter dated June 20^th 2016 (“the DL”), the Inspector found, therefore, that the proposed development would be in conflict with policies in the development plan for the location of new development within those limits that serve to protect the separate identify of settlements and to maintain the quality of the environment. The site is also within the Spencers Wood Settled and Farmed Clay landscape character area. The Inspector was not convinced that this was a “valued landscape” for the purpose of paragraph [109] of the NPPF. But in his view, although the Spencers Wood Settled and Farmed Clay is a landscape of overall moderate quality and the site is not a valued landscape, the proposed development would have a detrimental effect regarding landscape character and visual impact, including in respect to the loss of some on-site trees. Consequently in his view, while the harm in this regard would be somewhat limited, the development would be contrary to policies in the development plan and the NPPF.

However, the Inspector found that the housing requirement in the Wokingham Borough Core Strategy Development Plan Document (which forms part of the development plan) was not up-to-date in terms of the NPPF. Accordingly he considered whether there was a five year supply of deliverable housing sites. He concluded that there was not. He found, therefore, that, to the extent that the development plan policies on the location of new development concerned the supply of housing, they should not be considered up-to- date. His overall conclusion (applying the “tilted balance” in paragraph [14] of the NPPF) was that:

“Overall, therefore, notwithstanding the identified policy conflict and its effect on the location strategy for new development in the Borough, on landscape character and visual amenity and on trees, given the absence of a five-year housing land supply in the terms of the Framework and the status of relevant policies of the development plan for the supply of housing, I find that the considerations that weigh against the development collectively do not significantly and demonstrably outweigh those matters that are in its favour, particularly the delivery of housing. On this basis the proposals would be sustainable development and, consequently, the appeal is allowed subject to the identified conditions.”

The Inspector was provided at an Inquiry, which he held in March and April 2016, with (i) a Strategic Housing Market Assessment (“the SHMA”), published in January 2016 as part of the evidence base for a new local plan, and (ii) a Mid-Year Strategic Housing Land Availability Assessment as at October 2015 (“the Mid-Year SHLAA”), which had also been published by the Council in January 2016 and updated its Strategic Housing Land Availability Assessment as at April 2015 (“the SHLAA”).

the need for housing

The Inspector considered the FOAN for the Council’s area in paragraphs [30]-[42] of the DL. He had some concerns from what he had read and heard as part of the appeal process that led him to conclude that the SHMA was likely to understate the FOAN for Wokingham (Footnote: ¹). These concerns related to (i) the economic forecasts used, which appeared to him to be “rather conservative” (Footnote: ²) and to (ii) the “market signals uplift” used, which he thought should be in the range of 10%-14%, rather than the 9.1% used in the SHMA (Footnote: ³). It should be noted that, in reaching this conclusion about the “market signals uplift”, the Inspector reviewed the Council’s history of “persistent under delivery” which led him to conclude that it was likely that there was a fairly significant backlog of unmet housing need at the start of the SHMA period in 2013 and took that into account when deciding to adopt the higher range.

His conclusion (in the DL at [42]) was that:

“Applying a 13.5% uplift, as promoted by the appellant, would result in a FOAN of some 890 [dwellings per annum or dpa]. Alternatively, applying a flat rate uplift of 10%, as employed by other Inspectors, would result in a more conservative FOAN of some 862 dpa.”

the supply of sites for deliverable housing

The Inspector then considered housing delivery in the DL at [43]-[65]. At the Inquiry the Council contended that the housing supply would be 7504 homes over the five year period from 1 October 2015 (the five year period) as set out in the Mid-Year SHLAA, whereas the appellant maintained that it would be only 5731 homes. It should be noted that the Council’s estimate included an amount representing the shortfall in delivery since the start of the SHMA period in 2013 of 919 homes.

There had been an appeal decision given on June 9^th 2015 in respect of land at Beech Hill Road, Spencers Wood, in which the Council’s housing land supply had previously been considered, Like the Inspector on that appeal, the Inspector thought that the Council’s fairly poor past record in forecasting housing delivery did not necessarily lessen the weight to be given to the SHLAA but that the forecasts in it should be viewed with caution, as tending to present a ‘best case’ scenario (Footnote: ⁴). He also noted that, since that decision, the Council had amended its approach to the time likely to be taken between the submission of a planning application and the first home sale, which he welcomed. But he thought that the period between the submission of an application and the grant of planning permission of 3 months might well be an underestimate particularly for major applications (Footnote: ⁵).

The Inspector then considered the disputes that had arisen at the Inquiry about specific sites. Most of his discussion concerned four Strategic Development Locations (“SDLs”). These provided 4,739 (63%) of the Council’s estimated five year supply of 7,504 dwellings. His conclusions about each SDL, briefly stated, were:

In relation to the estimated 2,765 dwellings (some 37% of the Council’s estimated supply) on sites which were not SDLs, the Inspector only addressed four specific elements of that supply:

The result of his site specific consideration was a reduction in the Council’s estimated five-year supply from 7,504 to 6893 dwellings, a reduction of 611 dwellings.

The Inspector then made a further adjustment to that estimated supply, reducing it by another 689 dwellings, by applying a so called “lapse rate”, which is the subject of the main focus of this application. He stated that:

“63.

Although the potential application of a lapse rate was discussed during the Inquiry and referred to in the evidence, one is not included in the SHLAA and nor does the appellant request the application of one. I also note that Beech Hill Road Inspector did not apply a lapse rate at that appeal. Nonetheless, for the reasons set out throughout this subsection I consider that a lapse rate of 10% is warranted on the evidence before me.

64.

In summary, these reasons include the potentially over-optimistic character of the Council’s projections for the sites discussed above, its record of tending to over-predict delivery and the likelihood that the lead-in times employed in the Mid-Year SHLAA are artificially constrained. Furthermore, while I note the wider evidence gathering and checking undertaken as part of the SHLAA process, given that the Council received only three written responses from developers/agents to its request for information, the degree of verification in this respect appears rather limited in the circumstances.

65.

On this basis the Council’s housing supply should be reduced by a further 689 units to 6204 dwellings.”

the inspector’s conclusion on whether there was a five year land supply

The Inspector’s conclusion on the five year land supply was as follows:

“66.

I have concluded that the FOAN lies in the range of 862 to 890 dpa which equates to some 4312 and 4449 homes respectively over five years. As identified above, there is a deficit of 919 homes in delivery against the Council’s preferred figure of 856 dpa since the start of the SHMA period. This rises to 935 and 1004 homes against a FOAN of 862 and 890 dpa respectively thus resulting in totals of 5247 and 5453 dwellings. When the undisputed 20% buffer is applied, and following the Sedgefield method, this results in five-year requirement figures of 6297 and 6544 dwellings respectively. Setting these figures against the projected housing delivery of 6204 dwellings results in a shortfall of some 93 and 340 homes respectively for the five year period in question.

67.

Therefore, even applying the more conservative FOAN figure of 862 dpa arising from the application of a 10% flat rate for market signals there would not be a Framework compliant supply of housing land. On this basis, while the shortfall would be only 93 homes it is, nonetheless, significant and exceeds the 56 net dwellings that the appeal scheme would potentially yield.”

It can be seen, therefore, that, but for the reduction of the revised estimate of the Council’s five year supply of deliverable housing sites by 689 dwellings as a result of the application of the so called “lapse rate” of 10%, the Inspector’s estimates would have shown that the Council did have a five year supply of deliverable housing sites.

submissions

On behalf of the Council, Ms Sheikh QC contended that the Inspector imposed both a 10% “lapse rate” and a 20% “buffer” unlawfully. Had the “lapse rate” not been applied, the Inspector would have found there to have been a five-year supply of deliverable housing sites.

Ms Sheikh contended that an Inquiry is a formal adversarial process: participants are entitled to know the case they have to meet and to adduce evidence and makes submissions in relation to it. If an Inspector is to take a line not explored at the Inquiry, fairness requires him to give a relevant party an opportunity to deal with it: see Hopkins Developments Ltd v Secretary of State for Communities and Local Government [2014] EWCA Civ 470, [2014] PTSR 1145 (“Hopkins Developments”); Castleford Homes v Secretary of State for the Environment [2001] EWHC Admin 77, [2001] PLCR 29; R (Poole) v Secretary of State for Communities and Local Government [2008] EWHC 676 (Admin), [2008] JPL 1774.

In this case, so she submitted, no party or witness at the Inquiry contended that a lapse rate of any description should be imposed: its imposition was not in issue. The Inspector had given no indication that he was planning to impose a “lapse rate”. What the Inspector had done was not even what Mr Gregory Jones QC had ultimately suggested at the Inquiry that he might appropriately do but the crucial feature of Mr Jones’s closing submissions was the statement that he Second Defendant was not seeking the imposition of a “lapse rate”. Ms Sheikh submitted that the Council were thus denied a reasonable opportunity to adduce evidence and make submissions on whether any lapse rate should be imposed, what any rate might be and to what it might be applied. She denied that there was any agreement that, if a “lapse rate” fell to be applied, it should be at a uniform rate of 10%. Given its significance in this case, the Inspector’s failure to inform the Council that he might impose one and give them an opportunity to respond was unfair.

But, in any event, so Ms Sheikh submitted, (i) the “lapse rate” and the “buffer” both serve the same purpose, namely to compensate for the risk of under-delivery evident as a result of previous poor predictions. A “lapse rate” approaches the delivery of sites from the supply perspective; the “buffer” seeks to ensure a realistic prospect of achieving the planned supply by increasing the requirement for supply. The “lapse rate” and the “buffer” deal with the same issue from different perspectives. By applying both the Inspector double-counted that factor. The “buffer” is not imposed as a penalty for past failures. (ii) The Council had explained why they considered any application of both would involve double counting, referring the Inspector inter alia to a decision of the Secretary of State about land in Malpas, Cheshire endorsing that view. Ms Sheikh submitted that, if the Inspector could have imposed a “lapse rate”, he had failed to give any reasons for rejecting that case or for not following that decision. (iii) Ms Sheikh further contended that the Inspector’s application of the “lapse rate” was unlawful. The only possible distinction between such a rate and a “buffer” would be if the “buffer” is applied in a blanket manner but a “lapse rate” is applied to specified sites. That the Inspector did not do. To apply it to sites whose estimated supply he had specifically concluded was deliverable was unlawful. She further developed this complaint at various points in her submissions, pointing out, for example, that the Inspector had applied the “lapse rate” to sites with planning permission, notwithstanding footnote 11 in the NPPF, and that one of the reasons he gave for its imposition only concerned sites without permission.

On behalf of the Second Defendant, Mr Jones QC contended that an Inquiry was an inquisitorial process. The applicability of a 10% “lapse rate” was a live issue at this Inquiry and that the Second Defendant’s expert witness, Mrs Jacqueline Mulliner, had stated that, although she had not relied on a lapse rate, the Inspector would be entitled to do so. In his closing submissions at the Inquiry he had suggested to the Inspector that it would be appropriate to add a non-implementation rate to those sites (or pools of sites) that had not been individually tested and that, although Mrs Mulliner had not introduced a lapse rate, she would have been entitled to do so. Its imposition, therefore, did not come ‘out of the blue’. But in any event, so he submitted, the Council has been unable to put forward anything that would have resulted in a different conclusion.

Mr Jones further contended that the Inspector that was entitled to apply both a “lapse rate” and the “buffer”. The “buffer” relates to the level at which the requirement is to be set. A 20% rate is used where there has been a record of persistent under delivery of housing. It operates regardless of the actual deliverability of any site. The 20% buffer has a penal element: it will apply even if an authority can show that the reasons why it has previously poorly predicted delivery have been rectified. By contrast, so he submitted, the application of a “lapse rate” involves removing from the estimated supply an element that should not be considered deliverable given persistent past under-delivery and which should not count towards meeting that requirement (regardless of the level at which any “buffer” is set). It would be illogical to include sites that were not considered deliverable within the “buffer” or to count them against the requirement. In this case the Inspector, having made a deduction for specific under-delivery on certain sites, also applied a general 10% “lapse rate” to include the failures to deliver which he considered were likely to occur based on general concerns that he expressed about the deliverability of sites. That was a planning judgment he was entitled to make. He gave adequate reasons for what he did.

what happened at the Inquiry

Before considering these submissions, and in particular those on fairness, it is necessary to make findings about what occurred at the Inquiry. The Inspector noted that the SHLAA did not include a “lapse rate” and that the Second Defendant did not request the application of one. But he also stated that “the potential application of a lapse rate was discussed during the Inquiry” (Footnote: ¹⁴). It is on the basis of that discussion that the Second Defendant relies in responding to the Council’s complaint of unfairness.

In considering what occurred there are some documents that assist, such as the written reports submitted by those who gave evidence at it or the written closing submissions by Ms Sheikh and Mr Jones. But, as will become apparent, what was said during oral evidence may be of significance. No cotemporaneous notes of such evidence, however, have been produced. Instead there are witness statements by Mr John Spurling (the Manager of the Council’s Land Use and Transport Team), Mr Paul Watson (a Planning Consultant retained by the Second Defendant) and Mrs Jacqueline Mulliner, each of which addresses aspects of what was said stating what they take to have been its effect in their own words. No application was made to cross-examine any of these individuals.

There is no suggestion that the Second Defendant included any contention in its Statement of Case which it was required to provide in advance of the Inquiry (Footnote: ¹⁵) that a “lapse rate” of any percentage should be applied to any estimate of housing land supply (in addition to a 20% “buffer”). One of the Second Defendant’s expert witnesses, Mrs Mulliner, stated in her written evidence (that was required to be provided before the Inquiry (Footnote: ¹⁶) that a 20% “buffer” should be added to the housing requirement, as in her view there had been persistent under-delivery of the Council’s estimated supply. In reaching her view that the five year supply of deliverable housing sites was insufficient in that evidence, she examined the deliverability of particular sites but she did not seek to rely on, nor did she even refer to, the potential application of any “lapse rate”.

The Council also provided in advance of the Inquiry a proof of evidence from a witness, Mr Manpreet Singh Kanda, that addressed housing land supply. In it Mr Kanda, among other things, explained that the SHLAA and the modified SHLAA applied a 20% “buffer” not merely to the housing requirement but also (to be cautious) to the previous shortfall on delivery. No deduction had been made in either for a “10% flexibility from its supply figures”, as the Inspector (who had examined the Managing Development Delivery (“MDD”) document associated with the Core Strategy) had considered that only the 20% “buffer” was required and as the Secretary of State had agreed with his Inspector (in a decision on a development in Malpas, Cheshire which he produced) that applying such a discount would not merely be arbitrary but would also “result in double counting with the 20% buffer” which allowed for any significant slippage or non-implementation.

That explanation of the contents of the SHLAA and Mid-Year SHLAA in Mr Kanda’s proof of evidence appears to have prompted the Second Defendant’s counsel, Mr Jones, to ask Mr Kanda a question on the topic (although it was no part of the Second Defendant’s case at this point that there should be such an additional allowance). It appears that Mr Kanda said that it was common ground that there had been persistent under-delivery but that the lapse rate added nothing to the buffer.

It appears that Mr Jones also asked Mr Kanda whether the local delivery record (referred to in National Planning Policy Guidance) had been taken into account in the SHLAA when considering the anticipated trajectory of housing delivery and whether it had been adjusted to take into account past over-optimism. Mr Kanda appears to have accepted that the advice on the local delivery record related to the trajectory rather than to the requirement. He is then said to have been asked a further question by Mr Jones about what information had been taken into account and where that could be seen in the SHLAA. Mr Watson asserts in one of his witness statements that “ultimately Mr Kanda did not answer the question.”

Mr Jones then appears to have raised the question of a “lapse rate” with Mrs Mulliner before she was cross-examined. It appears that she said that, although she had not sought to rely on a 10% lapse rate for delivery in this case, other Inspectors had applied lapse rates and the Inspector would be entitled to do so. This appears to have been on the basis that, while she had highlighted a series of specific site deductions providing examples of over-optimistic forecasting, she had not assessed each and every site. When she was cross-examined by Ms Sheikh, however, Ms Mulliner said that, giving the Council, the benefit of the doubt, she was not seeking a 10% lapse rate (Footnote: ¹⁷).

In her closing submissions for the Council Ms Sheikh did not address any question about a “lapse rate”, no doubt because she had been told by Mrs Mulliner that the application of one was not being sought. In his closing submissions at the Inquiry, Mr Jones stated that the 10% “lapse rate” had to be distinguished from the buffer, in that it related to deliverability, not to the requirement for, housing land. He submitted that, given past performance and consistent over-estimating of delivery from sites, it would be appropriate to apply a non-implementation rate to those sites (or pools of sites) that had not been individually tested. Nevertheless, he stated, Ms Mulliner had given the Council the benefit of the doubt (which there had been no requirement to do) and did not introduce a lapse rate into her calculations, although she would have been entitled to do so. The Inspector did not understand Mr Jones to have invited him to apply one, as he said in the DL that the Second Defendant did not request the application of one (Footnote: ¹⁸).

It is common ground that the Inspector never mentioned at the Inquiry the possibility that he might apply a “lapse rate” of any description or for any purpose.

discussion

In my judgment it is not correct to label the process that leads to a decision on a planning appeal simply as inquisitorial or simply as adversarial. It combines elements of both. The Secretary of State (or the person whom he appoints to take a decision on his behalf) is discharging a function that requires him to take reasonable steps to obtain information necessary to make his decision in the public interest. But he does within a framework of rules designed to enable such information to be obtained and to enable those participating to advance their case and criticise that of others in a fair manner. Although the application of those rules will normally achieve both objectives, their application does not necessarily exhaust the requirements of fairness nor does it necessarily secure all the information which the Secretary of State or appointed person may need to obtain in order to determine the appeal in accordance with the law and the public interest.

Thus, in Hopkins Developments supra, Jackson LJ (with whom Christopher Clarke LJ agreed) stated (at [47]) that the relevant principle governing procedural fairness was that “any participant in adversarial proceedings is entitled (1) to know the case which he has to meet and (2) to have a reasonable opportunity to adduce evidence and make submissions in relation to that opposing case.” He found (at [62]) that that principle was applicable to planning inquiries. He also observed (at [61]) that the Inquiry Procedure Rules “enable the inspector to focus the hearing without confining its scope at the outset. The Rules provide a framework, within which both the inspector and the parties operate. It remains the duty of the inspector to conduct the proceedings so that each party has a reasonable opportunity to adduce evidence and make submissions on the material issues, whether identified at the outset or emerging during the course of the hearing.”

In Castleford Homes v Secretary of State for Environment Transport and the Regions supra, Ouseley J stated (at [65]) that “Whilst an Inspector can reasonably expect parties at an inquiry to explore and clarify the position of their opponents, if an Inspector is to take a line which has not been explored, perhaps because a party has been under a misapprehension as to the true position of its opponents,...fairness means that an Inspector give the party an opportunity to deal with it. He need not do so where the party ought reasonably to have been aware on the material and arguments presented at the inquiry that a particular point could not be ignored or that a particular aspect needed to be addressed.” However, as Sullivan J stated in R (Poole) v Secretary of State for Communities and Local Government supra at [40], “it is most important when deciding whether the parties at an inquiry have had a fair opportunity to comment on an issue raised by an Inspector of his or her own motion, and whether they could reasonably have anticipated that an issue had to be addressed because it might be raised by an Inspector, to bear in mind the highly focussed nature of the modern public inquiry where the whole emphasis of the Rules and procedural guidance contained in Circulars is to encourage the parties to focus their evidence and submissions on those matters that are in dispute.”

As Beatson LJ pointed out Hopkins Developments (at [90]),”the authorities on planning inquiries considered by [Jackson LJ] show that in this context what is needed is knowledge of the issues in fact before the decision-maker, the inspector, and an opportunity to adduce evidence and make submissions on those issues” and, as he pointed out in his judgment (with which Christopher Clarke LJ also agreed) at [93], “what fairness requires is acutely fact-sensitive, and that, in determining what it requires in a particular case, all the circumstances of the case need to be considered.” All members of the court also agreed that it is for a claimant to show that any unfairness caused it material prejudice.

In this case neither the Council nor (more significantly) the Second Defendant contended that any “lapse rate” should be applied to reduce the estimated supply of deliverable dwellings. Ms Sheikh is thus correct insofar as she contends that there was no issue between the parties as to whether or not one should be applied. In my judgment Mr Jones’s suggestion that there was a “live issue” on this point between the parties is misguided. True it is that he explored to some extent with Mrs Mulliner, and made submissions about, whether the Inspector might be entitled to apply a “lapse rate” in certain circumstances in addition to a 20% buffer but that is not the same as a contention that one should be applied. But, at no stage, including Mr Jones’s closing submissions on its behalf, did the Second Defendant advance any contention that one should be (as the Inspector stated).

The question is whether, nonetheless, on the material and arguments presented at the Inquiry, the Council ought reasonably to have been aware that the application of a “lapse rate” by the Inspector could not be ignored or that it needed to be addressed even if the Second Defendant was not contending that it should be. In my judgment, bearing in mind what Sullivan J said about the highly focussed nature of public inquiries on matters that are actually in dispute, the Council could not reasonably have been expected in the circumstances of this case to anticipate the application by the Inspector of a “lapse rate” or what the Inspector actually did, in the absence of any indication from him that it was matter that the Council should address.

When considering housing applications, relevant policies for the supply of housing should not be considered up to date (as paragraph 49 of the NPPF states) “if the local planning authority cannot demonstrate a five-year supply of deliverable sites”. Determination of a FOAN and of a supply of deliverable sites for a five-year period are not purely matters of mathematical calculation. They are inevitably technical matters of some complexity that potentially involve many planning and other types of judgments in their determination. There will always be different approaches and different judgments that may reasonably be made in determining the FOAN and the supply of deliverable sites. In this case the Council relied on the SHMA, the SHLAA and the Mid-Year SHLAA. These are all substantial documents containing considerable amounts of information and analysis. This Inquiry took 6 days in March 2016 and closed on April 11^th 2016. The determination of planning appeals would be yet more protracted and expensive than it is if those parts of the local planning authority’s assessments that are in dispute and may be material to whether or not a five-year supply exists, and if any changes that it is contended should be made to them, are not clearly identified and if the parties do not focus on those items that are actually in dispute. If the local planning authority is required to address in evidence and submissions possible changes to its assessments that other parties are not themselves advocating, the additional time and costs involved will not be negligible and it may distract those involved from what is in issue. If an Inspector considers that an adjustment is one that ought to be, or might be, considered by him even if no party is advocating it, it is not unreasonable for the parties to expect him or her to indicate that to them. In the context of a focussed Inquiry fairness requires an Inspector to do so.

In my judgment the fact that a party may have told an Inspector that he or she is entitled to make a particular adjustment to the assessments that are the subject of the appeal, but without suggesting that the Inspector should do so, does not alter that conclusion. Far from such conduct advancing the focussed nature of a planning inquiry, it undermines it. The other party will not know, if the Inspector says nothing, whether or not it is something that it needs to address in evidence and submission. In this case the matter is aggravated by the manner in which the possibility of making an adjustment for a “lapse rate” emerged. Mrs Mulliner’s suggestion in chief appears to have been that, while she had highlighted a series of specific site deductions providing examples of over-optimistic forecasting, she had not assessed each and every site and that a lapse rate could be applied to those other sites. This appears to be what Mr Jones reflecting in his closing submissions when stated that “given past performance and consistent over-estimating of delivery from sites, it would be appropriate to add a non-implementation rate to those sites, or pools of sites, that have not been individually tested.” In other words the possibility being discussed by Mrs Mulliner prompted by Mr Jones was a reduction in the estimate of deliverable units from the sites that she had not examined given the persistent under-delivery (or constant over-estimating of delivery) of housing in Wokingham. Had this been something that the Second Defendant been advocating from the outset or had it been made clear that it was in the cross-examination of Mr Kanda, the Council may have decided to adduce more evidence and have made submissions specifically to address it. But in any event, when she was cross-examined, Ms Mulliner said that, giving the Council, the benefit of the doubt, she was not seeking a 10% lapse rate. The Council was entitled to conclude that the application of such a lapse rate to such sites, much less to others, was not an issue it had to address.

For these reasons in my judgment the Inspector’s use of a “lapse rate” was unfair to the Council.

In case I am wrong in that conclusion, however, it is also necessary to consider whether his use of a “lapse rate” of 10% was unfair, given what he applied it to and the reasons he gave for its use, and whether his decision was otherwise flawed.

As I have indicated what the Second Defendant indicated that the Inspector would be entitled to do was to apply a “lapse rate” (a) to those sites that Mrs Mulliner had not specifically examined (b) on the ground of persistent under-delivery (or constant over-estimating of delivery) of housing in Wokingham. What the Inspector did (in the DL at [63] and [64] quoted in paragraph [33] above), however, was to apply a uniform 10% “lapse rate” (a) to all sites in the supply and (b) to do so on the basis principally of four grounds, only one of which, the Council’s “record of tending to over-predict delivery” (Footnote: ¹⁹), was specifically the reason for its use contemplated by the Second Defendant.

I accept, of course, that fairness does not require a decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his proposed reasoning before he reaches a final decision. But, even if it would not have been unfair for him to consider applying a “lapse rate” for the reason and to the part of the supply indicated by the Second Defendant, in my judgment it was unfair to apply it to the whole supply and for reasons other than those the Second Defendant suggested without giving the Council the opportunity to address that matter in evidence and submissions.

It is true that Mr Kanda had been asked some questions by Mr Jones about the decision not to include a 10% flexibility allowance in the SHLAA and the Mid-Year SHLAA. The explanation in those documents was that applying a 10% deduction to all sites in the estimated supply as well as a 20% “buffer” to the housing need would be double counting the effect of persistent under-delivery, or as Mr Jones later put it, consistent over-estimation of delivery. The Council contends that the Inspector did just that or failed to give any reason for rejecting the Council’s explanation that it would do that.

In considering the Council’s case on this point it is important to understand how past under-delivery may be reflected in determining whether there is a five year supply of deliverable housing sites. The starting point in the Inspector’s consideration of the FOAN for Wokingham was the Berkshire SHMA Objectively Assessed Need from 2013 to 2016 of 856 dwellings per annum in the Borough. As the Inspector recognised (in the DL at [37]), any backlog at the start of that period should have been taken into account as part of the housing need data when determining the FOAN and that to add the backlog to it “would be double counting”. Given what he considered would have been a fairly significant backlog of unmet housing need at the start of the SHMA period, however, he increased the “market signals uplift” used in the SHMA (of 9.1%) to 10% or 13.5% when revising the FOAN in terms of dwellings required per annum. The Inspector also added to the calculated housing need (for the five years from October 2015) the shortfall in delivery against this revised FOAN over the period since 2013 (before applying the 20% buffer): see the DL at [66] quoted in paragraph [34] above. The “lapse rate” was thus not intended to reflect any past actual shortfall against housing need (which was addressed in other ways). It was concerned with whether the number of dwellings that the Council considered would be delivered in the relevant five-year period would in fact be delivered.

Whether the application of a “lapse rate” and the 20% buffer involved “double counting” (as the Council contend) may be thought to depend on what each is designed to achieve and why they are to be applied.

What has to be compared with the housing requirement is the “supply of specific deliverable sites”. As footnote 11 in the NPPF states, “to be considered deliverable, sites should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years and in particular that development of the site is viable.” The estimated supply is thus one that should be realistic.

The object that the “buffer” is intended to achieve is stated in paragraph 47 of the NPPF. Paragraph 47 indicates that in all cases the relevant housing requirement should be increased by a “buffer of 5% (moved forward from later in the plan period) to ensure choice and competition in the market for land”. It also indicates that the “buffer” should be increased “to 20% (moved forward from later in the plan period) to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land”. In each case the buffer does not add to overall requirement for dwellings in the plan period. The identified additional purpose that a “buffer” of 20% (rather than 5%) serves in the immediate five year period is “to provide a realistic prospect of achieving the planned supply”. An increased buffer for that purpose is to be applied “where there has been a record of persistent under delivery of housing”.

The Council’s explanation of why it had not applied a 10% flexibility allowance as well as a “buffer” of 20% was that to do so would be to increase the housing requirement and to reduce the estimated supply for the same reason, namely to ensure that the estimated supply would in fact be realistic given persistent under-delivery (or consistent over-prediction of delivery). It referred to a decision of the Secretary of State in respect of a proposed development in Malpas, Cheshire in which he agreed with the Inspector’s reasoning on certain points including these. The Inspector considered the objective of the 20% “buffer” was to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market and that “the buffer figure thereby allows for some uncertainty and slippage in the delivery of some sites”. He added:

“there is no evidence to support the arbitrary 6 month or 12 month slippage rate assumed by the Appellant across all developments. To apply such an assumption, or the alternative 10% discount (which is equally arbitrary), would result in double counting in that the 20% buffer would also allow significant slippage or non-implementation.”

It is for the decision-maker to determine in the first instance whether or not the application of a “lapse rate” to the estimated five-year supply of deliverable housing to reflect the Council’s “record of tending to over-predict delivery” (Footnote: ²⁰) involves an unwarranted adjustment, given an increase in the housing requirement by 20% “where there has been a record of persistent under delivery of housing”, in each case in order “to provide a realistic prospect of achieving the planned supply”. Assuming that the Inspector thought it did not involve any such “double counting”, he has failed to provide any reasons for his rejection of the Council’s case on that point. If he thought it would have involved “double counting”, he failed to explain why he thought that the Council’s “record of tending to over-predict delivery” could still be a reason for applying a “lapse rate” to the whole of estimated supply as well as applying a 20% “buffer”. In my judgment, therefore, the Inspector failed to give reasons why the Council’s “record of tending to over-predict delivery” was a reason for applying a “lapse rate” to the total estimated five-year supply, given that a 20% “buffer” was also to be applied to the estimated housing need, notwithstanding the Council’s case supported by a decision of the Secretary of State that it involved “double counting”.

It may be noted that, although the arguments were by no means identical, a similar failure to explain why the combination of a discount of 10% to certain large sites and a 20% buffer did, or did not, involve double counting was one of the bases on which the appeal decision, which was the subject of Lindblom J’s judgment in Bloor Homes East Midlands Limited v Secretary of State for Communities and Local Government supra, was quashed: see at [128]-[130].

Mr Jones sought to suggest in his submissions to this court that the 20% “buffer” served not merely “to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land” (as stated in paragraph 47 of the NPPF) but also to impose a penalty for past under-delivery. There is no statement in the NPPF that supports that submission nor, if any past under-delivery is taken into account when determining the FOAN, is there any apparent reason why a local authority (or more accurately the public) should be “penalised” for poor previous predictions by the authority. I was unimpressed by the example he gave of an authority which can show that the reasons for their previous persistently poor predictions have been rectified but to whose requirements a 20% buffer is still added. In such a case, he suggested, it can only be as a penalty. Mr Jones’s example assumes that all the reasons for the record of previous persistent under-delivery can be identified and have been shown to be rectified. How realistic a case that may be is a matter for speculation. But, assuming it occurred, Mr Jones treats the advice in paragraph 47 as if it were an enactment requiring the imposition of a 20% “buffer” regardless, rather than treating it as guidance, on how to provide for a realistic prospect of achieving the planned supply, from which it is possible to depart for good reason (for example that an increased “buffer” has been shown to be unnecessary). As Lindblom J pointed out in Bloor Homes East Midlands Limited v Secretary of State for Communities and Local Government supra at [121], the NPPF “does not preclude the use of a buffer of less than 5% or more than 20% or somewhere between those two levels.” Ultimately it is a matter of planning judgment having regard to the guidance in paragraph 47 of the NPPF. Be that as it may be, however, the significant point is that in this case the Inspector did not suggest that the application of a “lapse rate” and a 20% buffer was intended to penalise the Council.

The Inspector gave three other reasons (Footnote: ²¹), however, in addition to the Council’s “record of tending to over-predict delivery”, for applying a 10% “lapse rate” generally. There are obvious points that the Council could have made about whether each provided any justification for an application of a 10% “lapse rate” to the whole of its estimated supply of deliverable housing had it been given the opportunity.

The first reason the Inspector gave was “the potentially over-optimistic character of the Council’s projections for the sites [specifically] discussed” in his decision letter. This is a reference to the 3 sites or collection of sites (referred to in paragraphs [30] and [31] above) where the Inspector had found the estimated supply to be ”somewhat optimistic” (Footnote: ²²) ,”reasonably optimistic” or “very optimistic” but “not unfeasible” but where he had not reduced the Council’s estimated supply. It is obvious that the Council would have said that, whatever the merits of a uniform reduction in those 3 cases, that reason could not apply to those specific sites that the Inspector had examined and had concluded that the estimated number of units was deliverable without any such qualification. In developing her submissions on unlawfulness, Ms Sheikh understandably pointed, for example, to the South of the M4 SDL where the Inspector had concluded that he did “not see any justification to alter the Council’s projected delivery” (Footnote: ²³) and to the South Wokingham SDL where the Inspector specifically adjusted the Council’s estimate to reflect what he thought realistic (Footnote: ²⁴).

The next reason the Inspector gave for applying a 10% “lapse rate” was his view that “the likelihood that the lead-in times employed in the Mid-Year SHLAA are artificially constrained”. This reason concerned the Inspector’s view that the Council had underestimated the time that would elapse between an application for planning permission and the grant of permission (Footnote: ²⁵). This reason provided no ground for reducing the estimated supply for those sites which already had planning permission. Leaving aside the supply from the SDL sites (which the Inspector considered specifically and much of which already had planning permission), the estimated supply from non SDL sites was 2,765 dwellings. Of these 2,370 already had planning permission.

The other identified reason for applying a 10% “lapse rate was that “given that the Council received only three written responses from developers/agents to its request for information, the degree of verification in this respect appears rather limited in the circumstances”. This reason contains, as I shall explain, what the Council considers to be a material error of fact since it is common ground that the three responses referred to related only to SDL sites (which the Inspector considered specifically) and that the Council had in fact received more in relation to all the sites within its estimated supply. The Second Defendant contends that the Inspector was merely referring to verification in respect of the SDL sites. Assuming for present purposes that the Inspector made no error, this reason would also not be directed at the non SDL sites and it would merely reinforce the Inspector’s view in relation to over-optimism on some of those sites and have attracted the same potential response in relation to the others.

For these reasons in my judgment the Inspector’s use of a 10% “lapse rate” applied to whole of the estimated supply for the reasons he gave was unlawful, even if it would not have been unfair for him to have considered the application of a “lapse rate” (as Mr Jones had suggested was possible) to those sites that Mrs Mulliner had not specifically examined on the ground of persistent under-delivery (or constant over-estimating of delivery) of housing in Wokingham. In my judgment he failed to give reasons explaining why he rejected the Council’s case that application of a “lapse rate” to the whole of the supply for that reason was unwarranted given the application of a 20% “buffer” for the same reason. Had the Council been given the opportunity it could also have produced arguments why the other three reasons relied on by the Inspector (not suggested by Mr Jones) did not justify an application of a 10% “lapse rate” across the whole of its estimated supply.

In my judgment the Council suffered material prejudice as a result of the manner in which the Inspector dealt, unfairly in my judgment, with the application of a 10% “lapse rate”. In this case a “lapse rate” of 10% of the total adjusted estimated supply was not an immaterial or even a marginal adjustment. It made the difference between whether or not the Council had demonstrated a five-year supply of deliverable housing sites.

In these circumstances it is unnecessary to consider whether Ms Sheik’s other contentions why the Inspector’s decision was unlawful. Some, such as the contention that the application of a “lapse rate” involved double counting or that it could not lawfully be applied to sites where the Inspector had specifically concluded that their estimated supply was deliverable, I have referred to as arguments that the Council could have adduced given the opportunity.

In my judgment, for the reasons I have given, the Inspector’s application of a 10% “lapse rate” was unlawful.

submissions

Ms Sheikh QC contended that the Inspector had made two material errors of fact. (i) He thought that only one developer appeared likely to be involved with the development at Hatch Farm Dairies when in fact two, Bovis and Persimmon Homes, are, as the SHLAA had made clear. This error caused him to remove 220 dwellings from the Council’s supply figures. (ii) He also thought that the Council had received only three written responses to its requests for information from developers/agents, whereas it had in fact received 13, a mistake that was central to his view that the Council’s projections were over-optimistic and that a 10% “lapse rate” should be applied.

Mr Jones QC submitted that it was open to the Inspector to find that it was likely that there would only be one developer at Hatch Farm given Mrs Mulliner’s unchallenged evidence and that, in any event, even if any mistake had been made, it would not have altered the fact that there was no five year supply of housing land. Mr Jones further submitted that everyone knew that the three responses related only to SDL developers, not to all of them, and the Inspector could not have been mistaken about that fact. But, if he was, it was as a result of the closing submissions of Ms Sheikh at the Inquiry.

Hatch Farm Dairies

When considering what development was achievable at Hatch Farm Dairies, the SHLAA had stated that “applicants were Bovis and Persimmon Homes which emphasises ability to deliver homes. Information from applicant indicates that a reserved matters application due later this year.”

In her witness statement Mrs Mulliner stated that a reserved matters application had been submitted (producing relevant documentation) and that the Council’s estimate was unrealistic “on the basis that only one developer will be involved (as suggested by the RM application documentation)”. Mr Jones told me that she had not been cross-examined on that evidence.

In his DL the Inspector stated (in the DL at [60]) that:

“Land at Hatch Farm Dairies, Winnersh is allocated in the MDD and has outline planning permission for 433 homes dating from November 2014. While I note that a pursuant reserved matters application recently went to the Council’s Planning Committee for approval, given the evidence regarding pre-commencement conditions and on the basis that only one developer appears likely to be involved, I agree with the appellant that the first year is unlikely to yield 100 dwellings nor subsequent years 120 units. Accordingly, the Council’s supply figure should be further reduced by 220 homes to 6973 dwellings.”

In my judgment Ms Sheikh has not shown that the Inspector’s view, that “only one developer was likely to be involved”, was not one that he was entitled to hold. That is what the unchallenged evidence from Mrs Mulliner said. Nor has Ms Sheikh sought to show that the inference Mrs Mulliner had drawn from the documentation (which is not in evidence) was flawed in any respect.

Instead Ms Sheikh complained that it was a mistake as to an established and objectively verifiable fact based simply on what was in the SHLAA (as Mr Spurling also contended in his witness statement). In my judgment that it does not follow that the Inspector made any error even if the statement in the SHLAA was true. Even if two developers were likely to be involved when the planning application for the site was submitted, it does not follow that they will remain likely to be involved. Mrs Mulliner’s evidence, based on subsequent documentation, was that they were not. The evidence simply does not show that, when the Inspector was considering the matter, two developers were likely to be involved. Even if that can be described as a “fact”, it has not been established and objectively verified by the evidence in this claim.

responses to enquiries

The background to this second complaint is that the Council had sent developers e-mails asking them to confirm the Council’s estimates of delivery on sites with which they were involved. The Second Defendant asked to be given the responses to those sent to developers of the SDL sites and it was eventually supplied with three. Mr Watson accepts in one of his witness statements that the three responses related only to the SDL sites and not to others. Those had not been requested. He also emphasises these responses were referred to during the Inquiry as being only those from SDL developers. The evidence is that the Council had in fact received 13 responses, more than four times that number.

In his DL the Inspector stated:

“56.

In her proof of evidence Mrs Mulliner identifies that there was an increase in projected delivery from the North Wokingham SDL from the Main SHLAA to the Mid-Year SHLAA. While this was unexplained at that stage, during the Inquiry the Council shared the three responses it had had from developers/agents regarding its projections for the Mid-Year SHLAA. One of these was from the agent for the Matthews Green Section of this SDL who estimates different projected completion rates for this land that result in a net increase of 77 homes. That correspondence also indicates that the site has two developers rather than one as Mrs Mulliner appears to have assumed. On this basis the Council’s projections for the Matthews Green Sector appear reasonable.

64......Furthermore, while I note the wider evidence gathering and checking undertaken as part of the SHLAA process, given that the Council received only three written responses from developers/agents to its request for information, the degree of verification in this respect appears rather limited in the circumstances.”

Both references to the three responses in the Inspector’s decision are not described as being limited to the responses from developers in the SDLs. Moreover paragraph [64] is the paragraph that summarises the reasons why the Inspector thought the application of a lapse rate across all the sites (not merely those in the SDLs) was appropriate. In my judgment the natural reading of these passages is that the Inspector thought, erroneously and contrary to what he had been told during the Inquiry, that the Council had only received three responses.

That error is not one for which the council can fairly be said to have been responsible. What Ms Sheikh said in closing was not that the Council had only received three responses. She said that it had not merely relied on silence from developers as approval of its trajectories (as it appears that Mrs Mulliner had suggested) as was evident from the three letters produced from the developers which had informed the Council that they would not be able to meet those trajectories.

In reaching my conclusions on the Inspector’s use of the “lapse rate” I assumed that the Inspector had made no error and was only referring to the SDLs in paragraph [64]. In fact he did make an error that cannot be shown to have been immaterial. That serves only to reinforce the conclusion that his decision was flawed.

The Inspector found in the DL that the Core Strategy housing framework contained in Policy CP17 was formulated well before the publication of the NPPF and stemmed from the now revoked Regional Spatial Strategy. In those circumstances he concluded that the housing requirement of the Core Strategy “cannot be said to be up to date in terms of the Framework”. That was a conclusion that Ms Sheikh QC did not challenge.

Mr Jones QC submitted that it is irrelevant in any event, therefore, whether or not the Inspector erred in relation to the 10% “lapse rate” or made a material error of fact: the “tilted balance” required by paragraph 14 of the NPPF, which the Inspector applied in determining the appeal, would have been applied in any event, as the development plan policies for housing were (as the Inspector found) in any event out-of-date. That, he maintained, was “the end of the claim”.

The logic of Mr Jones’s submissions is that the “tilted balance” prescribed in paragraph 14 of the NPPF must be applied if development plan policy specifying the number of dwellings required is “out of date” in this sense, notwithstanding the fact that the local planning authority can demonstrate that it has a supply of specific deliverable sites sufficient to provide five years worth of housing against their FOAN with an appropriate additional buffer.

I prefer to express no view on the merits of such a construction of the NPPF, particularly as I have not had the benefit of submissions from the Secretary of State. It is sufficient for the purpose of dealing with Mr Jones’s submission, however, to find, that, even if his construction of the NPPF were correct, it cannot be said that that is the end of the case. When considering the application of the “tilted balance” to any application for planning permission that includes housing on that assumption, it cannot be legally irrelevant whether or not the local planning authority can demonstrate that it has such a five year supply and, if it cannot do so, how great any shortfall may be. Accordingly, if the decision of the Secretary of State or one of his Inspectors assessing what the housing land supply may be is flawed materially, the mere fact that the “tilted balance” is applicable (on this assumption) will not render such an error irrelevant.

submissions

Ms Sheikh QC sought permission to amend the Council’s grounds to contend that the Inspector erred in law, having regard to the decision of the Supreme Court in Hopkins Homes, in treating the two development plan policies for the location of new development, CP11 of the Core Strategy and Policy CC02 of the MDD, as not being up-to-date given the absence of a five year supply. She submitted that, in so classifying them , he had adopted the “wider interpretation” of the phrase “relevant policies for the supply of housing” in paragraph 49 of the NPPF that the Supreme Court had rejected. Had he correctly treated them as being up-to-date in accordance with the “narrow approach” to the construction of that phrase endorsed by the Supreme Court, the Inspector (so she contended) would have undertaken a different balancing exercise and it cannot be said that the outcome would have been (or was highly likely to have been) the same. The decision of the Supreme Court had only been delivered on May 10^th 2017 and she had raised the ground in her skeleton argument dated June 19^th 2017. The Second Defendant had had the opportunity to respond to it on its merits as it had done in its skeleton argument.

Mr Jones QC objected to the Council being granted permission to make the amendment proposed. There had been unjustified delay before the argument was raised in the Council’s skeleton argument and a proposed amendment had only been put forward at the hearing. The Council had not even produced the text of the relevant policies. But in any event Mr Jones submitted the proposed ground was devoid of merit. The Inspector’s classification had in any event been correct but, even if it had been wrong, it would have made no difference. The Inspector only regarded these policies as out of date “to the extent that they concern the supply of housing”. The difference between the “narrow” and “wider” interpretation has no specific consequences for the weight to be attached to the development plan policies in the “tilted balance” which is applicable in any event in the absence of a five year housing land supply.

discussion

The proposed ground is one that only became available with the decision of the Supreme Court when it rejected the approach of the Court of Appeal in Hopkins Homes. It is true that the Council could have raised this proposed ground with the Second Defendant somewhat earlier than it did. But I am satisfied that the Second Defendant has suffered no prejudice as a result of any delay. It was able to address the merits of the argument in its own skeleton argument and at the hearing. The draft of the proposed amendment added nothing of real substance to the case that the Second Defendant was aware that the Council was seeking permission to advance and it attracted no specific comment in Mr Jones’s submissions. There is also no suggestion that the Inspector’s description of the two policies in question was inaccurate or in any way insufficient to enable the proposed ground to be dealt with. No further evidence is required to deal with it. In all the circumstances and, having had regard to the overriding objective, I grant permission for the Council’s grounds to be amended to include, and for its application to be made on, the additional ground set out in Ms Sheikh’s draft.

The practical significance of this additional ground, even if correct, however, is limited. It would only be significant if the Inspector was entitled to proceed on the basis that the Council had not demonstrated a five year supply of housing land, so that paragraph [49] of the NPPF was applicable. As in my judgment he was not, I shall indicate shortly why I do not consider this additional ground well founded.

The Inspector had described the two policies in question in these terms:

“Policy CP11 states that, in order to protect the separate identity of settlements and maintain the quality of the environment, proposals outside the defined development limits of settlements will not normally be permitted.”

“MDD Policy C002 refers to development limits for settlements and states, among other things, that proposals at the edge of settlements will only be approved where they can demonstrate that the development, including boundary treatments, is within development limits and respects the transition between the built up area and the open countryside by taking account of the character of the adjacent countryside and landscape.”

In the DL at [101], the Inspector stated that:

“Since Core Strategy Policy CP11 seeks to direct development, including residential uses, toward locations within the development limits, and to restrict the amount that takes place outside those limits, it is a policy that is of relevance for the supply of housing. Policy CC02 of the MDD has similar objectives and consequences. To the extent that they concern the supply of housing, then, neither of these Policies should be considered up-to-date given the absence of a five-year housing land supply.”

In Hopkins Homes supra the Supreme Court had to consider which were the “relevant policies for the supply of housing” (referred to in paragraph 49 of the NPPF) that should not be considered up-to-date if the local planning authority cannot demonstrate a five year supply of deliverable housing sites. It held that they did not include “both policies providing positively for the supply of new housing and other policies, or “counterpart” policies, whose effect is to restrain the supply by restricting housing development in certain parts of the authority's area”. In rejecting this “wider interpretation” that the Court of Appeal had adopted, the Supreme Court in practice adopted the “narrow interpretation” it identified: only those policies dealing with the numbers and distribution of new housing, to the exclusion of those dealing generally with the disposition or restriction of new development in the authority’s area, are “the relevant policies for the supply of housing”: see at [48], [59] and [82].

In this case it is clear that the Inspector applied the wider interpretation rejected by the Supreme Court. In doing so, he cannot be blamed. His approach was that of the Court of Appeal in Hopkins Homes given three months before the date of his decision.

I do not accept that the classification of a policy as being, or as not being, “up to date” cannot as a matter of law, or in fact, make any difference to the weight to be, or in fact, attached to it in the application of the “tilted balance”.

As Lord Carnwath JSC stated in Hopkins Homes Ltd v Secretary of State for Communities and Local Government supra at [29]:

“[At one time] it seems to have been assumed that if a policy were deemed to be “out-of-date” under paragraph 49, it was in practice to be given minimal weight, in effect “disapplied”: see eg Cotswold District Council v Secretary of State for Communities and Local Government [2013] EWHC 3719 (Admin) at [72], per Lewis J. In other words, it was treated for the purposes of paragraph 14 as non-policy, in the same way as if the development plan were “absent” or “silent”. On that view, it was clearly important to establish which policies were or were not to be treated as out-of-date in that sense. Later cases (after the date of the present decisions) introduced a greater degree of flexibility, by suggesting that paragraph 14 did not take away the ordinary discretion of the decision-maker to determine the weight to be given even to an “out-of-date” policy; depending, for example, on the extent of the shortfall and the prospect of development coming forward to make it up: see eg Crane v Secretary of State for Communities and Local Government [2015] EWHC 425 (Admin) at [71], per Lindblom J. As will be seen, this idea was further developed in Lindblom LJ's judgment in the present case.”

In it Lindblom LJ had stated in the Court of Appeal (at [46]), as Lord Carnwath later pointed out, that

“Neither of those paragraphs of the NPPF [ie paragraphs 14 and 49] says that a development plan policy for the supply of housing that is ‘out-of-date’ should be given no weight, or minimal weight, or, indeed, any specific amount of weight. They do not say that such a policy should simply be ignored or disapplied …”

In this case there is no reason to assume that the Inspector was not following what Lindblom LJ had stated was the consequence of a finding that a development plan policy was not up-to-date on the wider interpretation of paragraph 49. Its weight was accordingly a matter for him.

“To the extent that [the two policies in question] concern the supply of housing” (which was the extent to which he found that they were out of date on this interpretation of paragraph [49]), it is possible that the policies might attract less weight than they might otherwise have done as there was no five-year supply of deliverable housing sites. But so equally they might have done so had he applied the “narrow interpretation”.

In my judgment the Inspector’s classification of these two development plan policies plainly did not affect the basis of his reasoning in this case (any more than it did in the Willaston appeal considered by the Supreme Court in Hopkins Homes). As the Inspector put it in paragraph [109] of the DL, in which he recognised the importance of the two policies when applying the “tilted balance”,

“In summary, the appeal scheme would conflict with the location strategy for new development in the Borough contrary to Core Strategy Policy CP11 and MDD Policy CC02. It would also cause some harm to the landscape character and visual amenity of the area contrary, in those respects, to Core Strategy Policies CP1, CP3 and CP11 of the Core Strategy and Policies CC01, CC03 and TB21 of the MDD. However, in the current circumstances these important considerations, along with the other factors identified that weigh against the appeal scheme, do not significantly and demonstrably outweigh the matters that are in favour of the proposals, particularly the delivery of housing. Overall, therefore, the appeal development would represent sustainable development in the terms of Core Strategy Policy CP1 and of the Framework.”

For the reasons I have given above, the Inspector unfairly applied a 10% “lapse rate” to the estimated supply of deliverable housing sites in Wokingham when he had not been invited to do so without first giving the Council an opportunity to address evidence and/or submissions to him on whether or not he should do so.

In any event the Inspector’s use of a 10% “lapse rate” applied to whole of the estimated supply for the reasons he gave was unlawful, even if it would not have been unfair for him to have considered the application of a “lapse rate” (as Mr Jones QC had suggested was possible at the Inquiry) on the ground of persistent under-delivery (or constant over-estimating of delivery) of housing in Wokingham to those sites that Mrs Mulliner had not specifically examined. He failed to give reasons explaining why he rejected the Council’s case that the application of a “lapse rate” to the whole of the supply for that reason was unwarranted given the application of a 20% “buffer” for the same reason. Had the Council been given the opportunity it could also have produced arguments why the other three reasons that he relied on (which had not been put forward by Mr Jones even in respect of a more limited application of a “lapse rate”) did not justify an application of a 10% “lapse rate” across the whole of its estimated supply.

The Council has suffered material prejudice as a result of the manner in which the Inspector dealt, unfairly in my judgment, with the application of a 10% “lapse rate”. In this case a “lapse rate” of 10% of the total adjusted estimated supply was not an immaterial or even a marginal adjustment. It made the difference between whether or not the Council had demonstrated a five year supply of deliverable housing.

For these reasons the Inspector’s decision must be quashed.