It involved a strategic development plan identifying four growth areas needing significant new infrastructure to accommodate the impact of development. The court considered the legality of a development plan policy requiring developers to enter into planning obligations to make financial contributions to a pooled infrastructure fund, including payments where individual developments had only a trivial impact on wider infrastructure needs.
The unanimous judgment, dismissing the authority’s appeal, looked at the tests of lawfulness for conditions and obligations, the role of planning obligations in granting or refusing permission and the crossover between law and policy. Lord Hodge reaffirmed the "threefold test" that conditions must serve a planning purpose, must be fairly and reasonably related to the development and must not be otherwise unreasonable in the terms set by Associated Provincial Picture Houses Ltd v Wednesbury Corporation .
The fundamental difference between conditions and obligations is that the latter are not required to relate to a development; one can enter into a section 106 agreement without a planning application. But the obligation must be for a planning purpose, must restrict or regulate the development or use of land and must not be unreasonable in the Wednesbury sense.
The issue for the court was whether it is lawful for an obligation to restrict commencement of development until payment of a financial contribution towards infrastructure unconnected to development of a site, or whether it can require such a payment through a Grampian-style condition. It found that the restriction must serve a purpose related to the site and cannot be for an ulterior purpose – even a broader purpose like new infrastructure.
To be a material consideration, the court held, the obligation must have more than a de minimis connection to the development. Just because a development plan policy says an obligation would be sought does not make it a material consideration. The court warned that if a planning obligation has nothing to do with the scheme, it is not a material consideration in decision-making. As stated by Lord Hodge, a planning authority’s failure to have regard to relevant guidance as a material planning consideration would be an error of law. However, an authority’s decision, having considered the guidance, not to follow it "would be a matter of planning judgement, in which the courts have no role".
Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Company Ltd; Date: 25 October 2017; Ref:  UKSC 66.
Philip Robson is a barrister at Kings Chambers
The above article was first published here: http://www.planningresource.co.uk/article/1451675/legal-viewpoint-pooled-fund-held-unlawful
Winckworth Sherwood in conversation with Kings Chambers
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