The breakthrough came in at the high court in London on Friday. Mr Justice Holgate ruled that a coalition government policy to exempt many housing developments of ten or fewer homes from paying a contribution towards affordable housing is incompatible with planning law. That law says the local development plan should guide development but ministers had ignored that.
In doing so, they went too far. It has been the case for decades that national laws, policy and guidance give the framework for planning. Councils then draw up local plans that must comply with the national rules before they are approved by the planning inspectorate. (In our case, the local plans are the Core Strategy and SAMDev.) If the law or national policy changes, local plans will need to change. But what ministers can’t do is issue diktats that override local plans. Well, they thought they could, but this judgement shows that they can’t.
As a result of Mr Justice Holgate’s ruling, the government has announced that it will delete the nine paragraphs of national planning guidance that direct councils not to seek affordable housing contributions from small developments or from developments that bring empty buildings, such as offices, back into use.
This is seriously good news. Much of the affordable housing built in Shropshire is delivered through S106 payments that are levied on developers building houses for sale. More than 90% of the developments in our county are for ten homes or fewer. The impact of the government’s exemption policy was expected to be huge. That’s why Shropshire Council has opposed this from the outset and it has been right to do so. It is a tribute to portfolio holder Mal Price that the council has stuck to its guns despite strong pressure from developers and their agents, and despite a planning inspector’s ruling that the government edict on affordable housing trumped our local policies.
The court action heard by Justice Holgate had been brought by West Berkshire and Reading councils. It was supported by councils around the country, including in Shropshire.
In the judgement delivered on Friday, the judge revealed that ministers had been told in July 2014 that the policy could reduce funding for affordable housing by £693 million at 2011 prices across England. He said that in West Berkshire alone: “It is estimated that because of the new national thresholds 23.5% of affordable housing units will be lost when sites for 10 or less dwellings are granted planning permission.” He continued:
In some areas the proportion of housing provided on smaller sites is very much higher. In its response to the [Communities] Department’s consultation exercise in Spring 2014, Shropshire stated that over 80% of its annual housing delivery takes place on sites of 5 units or less.
Justice Holgate’s judgement reveals that ministers drove the changes in policy through in defiance of advice and in ignorance of the consequences. Ministers ignored advice from their civil servants on how exemptions for S106 contributions towards affordable housing should be implemented. They seem to have misunderstood or misinterpreted survey evidence about the impact of affordable housing levies on small builders. They also ignored advice about the consequences exempting conversions of empty offices from affordable housing contributions.[1]
This judgement is a major blow for Brandon Lewis, the housing and planning minister. His former boss, Eric Pickles, has been castigated by the courts over his treatment of gypsies and travellers. The courts also threw out the vetoes Mr Pickles placed on developments that went against draft neighbourhood plans. Many felt that in the run up to the general election, his growing rejection of wind farms was politically motivated. In my view, Eric Pickles will be remembered as a communities secretary that politicised planning without ever understanding it. Brandon Lewis must have hoped that he would not be tainted by his former boss’s reputation. But it was Lewis that championed the policy to exempt small developments from S106 payments for affordable housing. He has now been tarred with the same political brush.
We see time and time again that ministers rarely understand the impact of their planning policies on the ground. They continually feel the need to launch initiatives, often in response to lobbyists for the development industry or attacks in the media. It is easy for politicians to proclaim, “this will help solve the housing crisis”. But far too often, their actions make things worse.
This judgement said ministers must pay more attention to the letter of the law. It said they cannot ignore the outcomes of consultations. And they must ensure that their policies do not breach the statutory duty that everyone in government has to equality.
This is a judgement that has stormed the bastions of the communities department. It has weakened its power to shape development by ministerial whim and returned power to local communities and councils to shape their own destinies.
I am sure that is why the communities department said this morning that it will seek leave to appeal Mr Justice Holgate’s decision. Let’s hope that appeal will not succeed.
Meanwhile, councils across the country, Shropshire Council included, can get on with what we have done for years – raising a levy on market housing to pay for the affordable housing we so desperately need.
Notes
[1]. This is known as the Vacant Building Credit. It has almost no impact in Shropshire. London boroughs are most affected. Lambeth council has said the credit could lead to a reduction of one third in new affordable homes in its area.
All that this judgement does is ensure that housing development becomes the preserve an oligarchy of big developers with pockets deep enough to leverage cosy affordable housing deals with councils. The only way to make housing more affordable in the long run is more houses or less people.