Rights Community Action Ltd, R (on the application of) v Secretary of State for Levelling Up

This is an application for judicial review of a Written Ministerial Statement (“WMS”) dated 13 December 2023 titled “Planning – Local Energy Efficiency Standards Update” (“the 2023 WMS”).

The Claimant was represented by Alex Goodman KC and Alex Shattock, and the Defendant was represented by Ned Westaway.

There are three Grounds of Challenge:

The Claimant is a non-governmental organisation incorporated as a limited company in January 2019 with social and environmental objectives, and is involved in community planning, particularly the formation of local development plans. There is no dispute about the Claimant’s standing to bring this challenge.

The 2023 WMS replaced policy in a 2015 WMS, which was subject to a successful judicial review brought by the Claimant (R (Rights Community Action) v SSLUHC [2024] EWHC 359. It covers similar territory, namely the setting of energy efficiency standards for new homes. The WMS provides, as most relevant, as follows:

It is relevant to note at the outset that it is accepted by the Defendant that the Minister (Baroness Penn) did not have express regard to the EPPS before promulgating the WMS. However, there was consideration of it in February 2024 when the Government was considering what action to take in respect of the Claimant’s threatened challenge.

The 2023 WMS replaced an earlier 2015 WMS, that covered the same subject matter of the scope of local authorities’ powers to set standards for new buildings above the building regulations, in circumstances where the 2015 WMS had become outdated after 2021. The 2013 WMS was the subject of my decision in R (Rights Community Action Ltd) v SSHLUC [2024] EWHC 259.

In October 2019 the Government carried out a consultation on a document called “the Future Homes Standard” (“FHS”), which was intended to provide for stricter standards in relation to newly built homes, in order to reduce their CO2 impact and move towards “net zero” new homes. As I understand it, the FHS lies in part in changes to the building regulations and in part in changes to relevant standards. The FHS is intended to make changes to the building regulations to ensure that new homes produce at least 75% lower CO2 emissions than those built to the earlier 2013 standards.

In response to the 2019 consultation the Government said it would take two separate steps. Firstly, in 2021 it brought in an uplift to the building regulations, with effect from June 2022. This required new homes to deliver around 30% lower CO2 emissions compared to the standard in 2013. This is described by Mr Palmer, the Defendant’s Deputy Director for Building Performance, in his witness statement as a “stepping stone” to the FHS. Secondly, the Government indicated an intention to introduce the FHS in 2025.

There was a further consultation on the FHS in December 2023 that was published at the same time as the 2023 WMS. Although this is perhaps rather less than clear in the document itself, Mr Westaway told the Court that the reference in the WMS to not going beyond “current or planned building regulations” is a reference to the consultation draft of the FHS, as set out in the December consultation document, or as subsequently amended before any formal adoption. Mr Westaway was clear in oral argument that Local Planning Authorities (“LPAs”), acting in accordance with the WMS, can apply standards that go up to those in the draft FHS, at whatever relevant date such a draft has been issued.

There is disagreement between the Claimant, together with at least some LPAs, and the Defendant about whether or not LPAs should be able to set their own different standards. Mr Palmer explains the Defendant’s position, which is reflected in the documentation, that to allow different standards causes difficulties for housebuilders. This in turn may lead to less new houses being delivered, which potentially results in less lower carbon housing being built. The Claimant (and some local authorities) wish to impose higher carbon efficiency standards or requirements in order to ensure that future housing has lower carbon impacts. Dr Ellis, the Claimant’s witness and Director of Policy at the Town and Country Planning Association, sets out the benefits in terms of achieving net zero, of the LPAs being able to set different standards from those in the WMS and the emerging FHS.

One difference between the policy in the WMS and that which some LPAs wish to adopt is the approach of national policy in the WMS and FHS to rely on Target Emission Rate (“TER”), which is a measure or metric of the energy performance of the home dependent on the level of decarbonisation of the national electricity grid; as opposed to the metric preferred by some local authorities, London Energy Transformation Initiative (“LETI”), which focuses on the carbon efficiency of the home itself. The impact of the WMS is to prevent local authorities relying on LETI and thus will lead, according to Dr Ellis, to higher carbon emissions from homes built than would be the case if local authorities were free to set their own standards.

Mr Palmer summarises the Defendant’s position in his witness statement as follows:

The process of consideration of the WMS 2023, and the draft FHS for consultation, was as follows. On 26 April 2023 there was a submission to Ministers on an “Optional Framework” for plan-makers and housebuilders wanting to build to higher standards than the building regulations.

On 17 July 2023 the Minister and the Secretary of State were advised to publish a new WMS. This included the following:

On 5 October 2023 the Minister was sent draft text for the WMS together with an EPPS assessment. On 12 September 2023 he had been sent an EPPS assessment of the FHS. This does not purport to be an assessment of the WMS itself, but is part of the process of relevant policy development. The October 2023 draft WMS has the same key sentence as appears in the final version: “…the Government does not expect plan-makers to set local energy efficiency standards for buildings that go beyond current or planned building regulations.” However it did not have the sentence about flexibility being applied around existing plan policies; or the reference to the Secretary of State’s intervention powers.

On 9 October collective agreement across government was sought for the WMS simultaneously with the FHS consultation. This is important because it was part of the process of policy development indicating that the two actions were approached as part of one package of measures.

On 14 November 2023 Baroness Penn joined the Department for Levelling Up, Housing and Communities (“DLHUC”) and energy efficiency in new buildings became part of her brief. On 13 December 2023, after some changes had been made to the WMS, Baroness Penn’s office requested DLHUC to publish the WMS. It is accepted that she had no EPPS assessment when that decision was made. The WMS was published on that day.

After pre-action correspondence with the Claimant, the Defendant accepted that the relevant Minister had not had an EPPS assessment when the decision was made to publish the WMS. Officials then prepared an EPPS assessment of the WMS on 22 February 2024. This went to the Minister, who was then Mr Rowley MP again. The relevant parts of the assessment are set out below at paragraph 46.

The February 2024 assessment considers the WMS as against the EPPS. The EPPS was drawn up pursuant to s.17 EA and is dated 21 January 2023. It is necessary to set out the key parts of the EPPS before considering the assessment. It starts by setting out five principles; integration, prevent, rectification at source, polluter pays and precautionary, which are themselves in s.17(5) EA.

Under the heading of the Integration Principle the document states:

Under both the Prevention Principle and the Rectification at Source principle there is reference to understanding the potential environmental harm of the policy. The Rectification at Source section refers to understanding where the damage originates from and considering the feasibility of rectifying the issue at source.

The Claimant submits that the Defendant failed in its duty under s.19 EA to have due regard to the EPPS. Sections 19(1) and 19(2) provide:

Section 17 sets out the duty to prepare a policy statement on environmental principles, the “EPPS”:

The issues under this Ground fall into two parts. Firstly, establishing what the correct legal approach to the “due regard” duty is; and secondly, submissions as to whether the Defendant met that duty on the facts of the case. However, the answer to the first issue can only be tested by considering the application of the due regard duty in the context of specific factual issues raised.

The Claimant submits that the duty to “have due regard” in s.19 EA should be interpreted analogously to the duty to have “due regard” in s.149 of the Equality Act (the Public Sector Equality Duty (“PSED”) and that the caselaw on PSED should be applied to s.19 EA. Apparently, there is no previous caselaw on the approach to the duty in s.19 EA or the degree of analogy of approach with the PSED. Section 19 came into force on 1 November 2023.

Mr Goodman relies in particular on Bracking v Secretary of State for Work and Pensions [2014] EqLR 60 at [26], and some at least of the very extensive caselaw that follows. Mr Westaway submits that considerable caution needs to be applied in adopted case on s.149 to the wholly different statutory context of s.19 EA.

At [26] of Bracking the Court of Appeal said:

There are a number of subsequent cases that have emphasised that whether or not the s.149 duty has been met is a highly context and fact specific question. Lord Neuberger in the Supreme Court in Hotak v London Borough of Southwark [2016] AC 811 said at [74] to [75]:

Mr Goodman submits that the Defendant failed in his duty to have due regard to the EPPS in a number of respects. Firstly, he focuses on the fact that it is accepted that the Minister, who on 13 December 2023 was Baroness Penn, was not given any assessment of the WMS against the EPPS at the time she approved the WMS. There had been an assessment of the October 2023 draft of the WMS, but that was given to a different Minister (Mr Rowley MP) and the draft as at that date was materially different.

Subsequent to the promulgation of the WMS in February 2024, the Minister (by then again Mr Rowley MP because Baroness Penn was on maternity leave) an assessment of the WMS was produced, but Mr Goodman submits that that was an illegitimate “rearguard action” of the sort deprecated in Bracking at [26(4)]. He submits the due regard duty must be met before and at the time that a particular policy is being considered, see R (Brown) v Secretary of State for Work and Pensions [2008] EWHC 3158. He also submits that the due regard has to be given by the Minister personally, and here the Minister when making the WMS had no knowledge of the earlier assessment.

In terms of the content of the assessment that was carried out in February 2024, Mr Goodman submits that it fails to meet the test of being carried out in substance, with rigour and with an open mind, see Hotak. The EPPS requires consideration of whether the environmental harm could be “avoided, minimised or reduced”, but the 2024 assessment fails to address those questions. The document does not “with rigour” grasp the nettle of the environmental harm caused by the WMS through mandating a lower level of energy efficiency than would be the case if local authorities could apply higher standards. He focuses on two complaints about the February 2024 assessment. It fails to address properly or at all the negative environmental impact of the WMS, against the Principles in the EPPS set out above. Further, the assessment wrongly conflates the FHS, which is only a draft with no certainty as to when and if it will come into legal effect, with the effect of the WMS.

Thirdly, the s.19 duty, by analogy with the s.149 Equality Act duty, includes a duty of inquiry, see Bracking [26(8)]. Mr Goodman submits that the assessment fails to make any, or any proper inquiries into the scale of environmental harm caused by the WMS. He focuses on, as but one example, the difference between the approach of national policy to rely on TER, as opposed to the metric preferred by some local authorities (LETI), which controls the carbon efficiency of the home itself. Mr Goodman focuses on this because he says this is a “standard” imposed by the WMS which will necessarily reduce the carbon efficiency of homes, but the impact of which the Defendant has not properly investigated.

Mr Goodman submits that the assessment fails to consider, or inquire into, these important points about the environmental harm which will flow from the WMS. Therefore he submits that the applicable approach, as set out in Bracking, and adopted by analogy from the PSED cases, has not been followed.

Mr Westaway accepts that the s.19 duty has to be applied “in substance, with rigour and with an open mind”, which is in effect the tests set out by Lord Neuberger in Hotak. However, he submits that the caselaw in respect of s.149 Equality Act 2010 cannot simply be applied to the “due regard” duty in s.19 EA. The nature of the two duties, both in terms of the statutory schemes and the interests being protected are very different.

Firstly, he submits that the focus of the s.149 duty, in both s.149(1) and (3) is very clearly defined:

By contrast, the duty in s.19 is to a policy statement produced under s.17(1) Environment Act 2021, which will necessarily be a great deal more diffuse, and the balances and issues in play are very different in their nature from those in consideration in the Equality Act.

Secondly, the very nature of s.17 EA is to apply principles of proportionality, see s.17(2) and 19(2), which make the objectives much less clear-cut than is the case under s.149.

Thirdly, the s.19 duty applies to the “making” of policy, and s.47 EA defines “making” as including “developing, adopting or revising policy”. Mr Westaway therefore says that the statute provides for a later consideration of the EPPS than would necessarily be the case under the s.149 duty.

Fourthly, the caselaw on s.149, itself sets out considerable caveats on the application of [26] of Bracking. In R (Sheakh) v Lambeth LBC [2022] PTSR 1315 at [57] the Court of Appeal said that the guidance in Bracking although useful must not be read as a statute, and will apply differently in different contexts. In R (Prichard) v Secretary of State for Work and Pensions [2020] EWHC 1495 at [120] Mrs Justice Elisabeth Laing said that [26(4)] of Bracking should be treated with caution.

In R (West Berkshire DC) v SSCLG [2016] 1 WLR 3923 the Court of Appeal at [83] said that s.149 did not require a precise mathematical exercise.

I agree with Mr Westaway on the extent to which the caselaw on s.149 is applicable to the s.19 duty. The two duties are very different, both in terms of the statutory provisions (save for the broad words “have due regard”) and the aims to be achieved. Whereas the impact on those with protected characteristics may generally be relatively straightforward to set out, the environmental issues as set out in the EPPS will often be very multifaceted and complex. This case is a good example of that complexity. Although setting higher CO2 standards for new homes may appear to be more environmentally positive, it might have consequences that lead to an environmentally less good ultimate outcome. Environmental impacts are rarely linear and binary, but rather frequently involved complex and multifaceted impacts which need to be assessed in a holistic manner. The nature of the two statutory schemes, and therefore the due regard duties are very different.

The test set out in Hotak of the need to consider the EPPS with substance, rigour and an open mind, is plainly applicable to the s.19 duty. However, beyond that the approach is necessarily one that turns both on the individual facts, but also the broader purposes of the Environment Act 2021

In terms of Mr Goodman’s specific complaints about the Defendant’s compliance with s.19, the first point is the acknowledged failure of the Minister to have regard to an assessment of the EPPS at the time she made the WMS. However, the caselaw even on s.149 is clear that such failures can, in appropriate cases, be remedied later. This may be described as a rearguard action, but it is apparent from cases such as R (Rowley) v Minister for the Cabinet Office [2021] EWHC 2108 at [43] that a later assessment can meet the statutory duty. The question is whether it is done conscientiously. In my view when there is a retrospective assessment, as here, the Court should apply the tests set out in Hotak, whether the assessment was done in substance, with rigour and an open mind. It is not appropriate to make a declaration of unlawfulness simply because the assessment was done after the adoption of the policy.

That is reinforced by the fact that s.19, read with s.47, expressly defines the “making” of the policy as including the “reviewing” of the policy.

In my view, largely adopting Mr Westaway’s submissions, the assessment does meet these tests. The February 2024 assessment does address whether the impact of the WMS is negative in environmental terms. It states:

The first paragraph is an acknowledgement that it might be said greater environmental benefits would flow if the LPAs could set higher standards. That is in substance an acceptance of the possible “negative” impacts or harm of the policy, in accordance with the EPPS. However, the Defendant has chosen to put considerable weight on the impact that might have on the supply of new housing, over the potential benefits of imposing higher standards. This is a policy choice for the Minister and is explained in the assessment, and does not disclose any error of law. There is nothing irrational in terms of the negative/positive environmental impacts the assessment refers to. Experts might disagree on the issue, but that is a matter for policy makers and not the Court.

This also covers Mr Goodman’s criticism of the assessment for not meeting a duty of inquiry. The extract set out above, does albeit in summary form show a proper inquiry into the environmental impacts of the policy choice.

Mr Goodman criticises the reliance placed on the FHS, and submits that the Defendant erred by considering the WMS and the FHS together. He said the effect of the FHS would be to “raise the floor” in the standards but the effect of the WMS was to “lower the ceiling”, and by conflating them the assessment failed to explain these differences.

There is some potential confusion because the FHS does not come in until 2025 and may not end up in its current form. However, the WMS when it refers to not imposing standards that go beyond “planned” building regulations is, according to Mr Westaway, referring to standards in the FHS, whatever draft form it is in at the appropriate moment. Given that the WMS is intended to cover the position up to the bringing in of the FHS, I do not think it is unreasonable for the assessment to take into account the FHS. Indeed not to do so would have made it very difficult for the Minister to understand the holistic policy approach. It is clear from the policy development set out above, that the WMS and the FHS are very much inter-related in policy terms, and it is therefore reasonable to consider them together.

For these reasons I reject Ground One.

Ground Two raises an entirely different issue. The Claimant submits that the WMS unlawfully purports to restrict the local authorities’ powers, granted by statute and Regulation. This Ground relies on s.1 Planning and Energy Act 2008 (PEA):

This provision is by no means easy to understand. The Act was a Private Members Bill and it was introduced by Mr Fallon MP in order to provide a clear statutory framework for what had come to be known as the “Merton Rule”. This was a policy adopted by some local authorities, including the London Borough of Merton, to require a percentage of energy in their areas to be sourced from renewable sources. It is clear that that is the purpose and effect of s.1(1)(a) of the Act.

The present case however concerns s.1(1)(c). This allows the LPA to have development plan policies imposing reasonable requirements for development to comply with “energy efficiency” standards that exceed the requirements of the building regulations. Energy efficiency standards and energy requirements are defined in s.1(2)(b).

Mr Goodman submits that “standards” here means the metrics or measures used in assessing energy efficiency, whereas requirements are the substantive energy outputs. Therefore he says that it is open to the LPA to set a standard which is different and more onerous than that in the building regulations. The critical distinction on the facts, is that referred to above between TER and LETI. TER relies upon grid decarbonisation to achieve the relevant emissions reductions. LETI sets absolute energy metrics, covering energy use intensity and space heating demand, for the building. According to Dr Ellis some local authorities are choosing to use LETI because TER and the approach in Part L of the building regulations and FHS do not achieve zero carbon homes, because of the reliance on decarbonisation of the grid, which is wholly outside their control and may not happen/be happening at the speed assumed.

Mr Goodman submits that the WMS unlawfully emasculates the power in s.1 EA, because it in practice prevents LPAs from setting higher standards than in the building regulations or FHS, despite the terms of s.1 PEA. He relies upon R (Gujra) v Crown Prosecution Service [2013] 1 AC 484, which concerned the power to pursue private prosecutions, where Lord Neuberger said at [49]:

It is to be noted that in that case the Supreme Court held that the policy in question was lawful.

Mr Goodman also relies on R (Palestine Solidarity Campaign) v SSHLUC [2020] 1 WLR 1774 where the Supreme Court held that the Secretary of State’s direction did unlawfully interfere with the fiduciary duties of the administering authorities of the pension funds. Lord Carnwath said at [44]:

Mr Goodman submits that the WMS in its final form effectively prevents the LPAs from using their power under s.1(1)(c) to set standards above those in the building regulations. In particular, he submits it stops the LPAs from relying on LETI standards, because the FHS relies on TER standards.

He further submits that the WMS frustrates the fulfilment by local authorities of their duty under s.19(1A) PCPA:

He makes the same point with regard to s.38(6) PCPA, which sets out the primacy of the Development Plan:

Mr Goodman also relies on R (Burch v Worthing Borough Council (1985) 59 P&CR 53. In that case a planning circular was held to be unlawful. The reasoning in the case is not particularly clear, but it is obvious that the vice in the circular was that it excluded the public from any say in the view as to whether planning permission would have been granted. The issues in the case were totally different from those before me.

In respect of Ground Three, which is very closely related to Ground Two, Mr Goodman submits that the WMS misstates the true legal position and is therefore unlawful. Both parties rely on R (A) v SSHD [2021] 1 WLR 3931. The Supreme Court set out at [46] three categories of case where there could be a successful challenge to a policy statement. The third category is:

Mr Westaway submits that the WMS takes a wholly conventional approach to the relationship between national policy and the powers given to LPAs. Section 1(1)(c) PEA is constrained by s.1(2) and (5), with (2) defining the standards that can be set and (5) being a conventional approach to local policies needing to be consistent with national policies. He does not accept Mr Goodman’s analysis that s.1 PEA is drawing a distinction between standards and requirements, it being intended that “standards” was referring to the metrics or measurements, and “requirements” to the ultimate energy outputs. Mr Westaway submits that the standards can exceed building regulations, as is allowed by the WMS by reference to the emerging FHS, but cannot exceed national policy, which approach entirely accords with s.1(5) PEA.

Both parties agree that s.1 PEA is somewhat ambiguous, or at least unclear, and therefore reference can appropriately be had, pursuant to Pepper v Hart [1993] AC 593, to what was said by the Minister in Parliament. At the final debate on the Bill, Sadiq Khan MP, then Parliamentary Under-Secretary of State for Communities and Local Government, confirmed that the Government had sought to amend the Bill to make it effective in practice. With respect to the current section 1(1)(c) specifically, the Minister confirmed councils “can go further and faster than building regulations, but within the national framework”. The Minister also addressed the overall intention of clause 1(2) in the following terms:

Mr Westaway submits that the WMS does not in any terms frustrate or emasculate the statutory purpose, indeed it is entirely in line with the purpose and effect of s.1, as explained above.

In relation to the consideration of already adopted policies that go beyond current or planned building regulations, the WMS refers to applying these flexibly within certain specific criteria, e.g. technical feasibility and access to alternative supply chains. This is not prohibiting the exceedance of the building regulations or planned extensions to them (i.e. the FHS), but making clear that national policy requires certain things to be taken into consideration. The same principles apply under s.19 PCPA and s.38(6) PCPA.

In respect of Ground Three, Mr Westaway submits that it adds nothing to the issue under Ground Two. The WMS does not misdirect on the legal position for the same reasons as arise under Ground Two, and the test in Re A is not met.

In my view the WMS does not unlawfully state the law or undermine the purpose of s.1 PEA or s.19 and s.38(6) PCPA. The purpose of s.1(2) PEA and the section as a whole, was clearly explained by the Minister, Mr Khan MP as set out above. It was to prevent inconsistency of standards, which is precisely what the WMS is also seeking to avoid. Section 1(5) makes it clear that the Government can constrain the setting of standards in development plans through the use of national policy. The WMS accords with this approach.

The distinction which Mr Goodman seeks to draw between standards and requirements, and the narrow approach to standards, is not one reflected in the language of the statute. I note in any event that s.1(5) refers to policies, and therefore does not differentiate between standards or requirements in those policies. I do not therefore accept Mr Goodman’s interpretation of s.1(1)(c) and (2) as drawing this distinction.

In relation to the policies that have already been adopted and the WMS statement that these should be applied “flexibly”, again that is in accordance with the legal position. National policy can state that decision makers should take specified matters into consideration and that is not inconsistent with the primacy of the development plan under s.38(6) PCPA.

For these reasons I do not consider that the WMS attenuates or emasculates the LPAs statutory powers or mis-states the law, contrary to R (A) v SSHD. Therefore Grounds Two and Three are dismissed.