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  • Overview

    Following a High Court ruling on 31 July 2015, the planning policy guidance exempting small developments from affordable housing contributions and introducing a vacant building credit has been immediately removed.

    The policy was originally introduced in November 2014 when the Minister for Communities and Local Government issued a statement in the Commons to introduce changes relating to affordable housing contributions.  The intention was to assist small scale developments by absolving them from the need to provide affordable housing contributions.  The costs associated with affordable housing for small schemes were seen as a block on the viability of such schemes, and a reason for the decline in small schemes contributing to the supply of much needed new housing. 

    This change was not introduced as primary legislation, but rather as a ministerial statement having the status of planning guidance.  As a result the Planning Policy Guidance (PPG) was amended.

    Under the new PPG provisions, rural sites of less than 10 units or 1,000 sq-metres did not have to offer either on-site affordable housing or financial contributions in lieu (paragraphs 012 - 020).  The guidance also provided for a vacant building credit, where the gross floor space of vacant buildings renewed or demolished as part of a residential development could be deducted from the affordable housing contribution (paragraphs 021 - 023). The PPG is a material consideration to be taken into account by planning authorities in determining planning applications.

    Whilst central Government took this decision from a national perspective, certain planning authorities saw it, from their local perspective, as a blow to their adopted policies, claiming in some cases it could reduce the amount of affordable housing by almost 25%.  As a result, several authorities applied for leave to challenge the policy in the High Court, on the grounds that it was unlawful. 

    The validity of the Government’s proposals was tested in the case of West Berkshire District Council and Reading Borough Council v Department for Communities and Local Government.  The case was heard in April and Mr Justice Holgate published his judgement on 31 July.

    Mr Justice Holgate upheld the challenge.  Although he did not, for reasons associated with Article 9 of the Bill of Rights 1689 (the judiciary should not interfere with Parliamentary proceedings), quash the Ministerial Statement the judge ruled that paragraphs 12-23 would not be treated as “material considerations” in determining planning applications.  As a result, as from 1 August paragraphs 12 – 23 of the PPG have been removed.

    The Government has stated that it intends to appeal the decision, which leaves a large number of landowners and housebuilders in a position of uncertainty, until we know whether an appeal is lodged, the outcome of that appeal or whether the Minister intends to deal with this in a different manner.  Those whose applications have been deferred pending the outcome of this judgement will, unless and until the Government re-introduces this policy in a different, lawful, fashion, unfortunately lose the benefit of those sections of the PPG.

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