St Modwen Development Limited v Secretary of State for Communities and Local Government and Others  EWCA Civ 1643
Paul Tucker QC and Freddie Humphreys
- The decision of the Court of Appeal in the St Modwen case has generated much speculation about what, if anything, it means for the calculation of 5 year housing land supply. Planning Resource summarised the position as being that it “should give councils a firmer basis for showing a five-year supply” and anecdotally it is now being increasingly relied upon at s.78 appeals, all too often to support the proposition that the threshold for calculating 5 YS has somehow been lowered.
- Our contention is that, properly understood, the case does no more than to re-emphasise that footnote 11 means exactly what it says, and the Court of Appeal did no more than reject a novel interpretation of NPPF.
- There is commonly a temptation to condense the decisions of the Courts in planning challenges to overly-simplified headline propositions. In reality the implications are all too often more nuanced than that. In this case it is especially important, in order to properly understand the judgment of the Court of Appeal, to go back to the beginning and understand how the case was argued before the original Inspector. For those treating this case as a “game changer” it is prudent to note the concluding lines of the opening paragraph of the judgment of Lindblom LJ:
“The appeal is by no means the first of its kind. It raises no new point of law.”
- The original planning appeal involved two schemes, the first scheme being for up to 510 dwellings, and the second for up to 390 dwellings with an element of employment development. The first scheme was the developers preferred choice and the second was put forward as an alternative to attempt to deal with the Council’s primary concern about the loss of allocated employment land.
- The Inquiry was somewhat of an epic event, ultimately taking around 5 weeks to be completed, and drawing a crowd on most days. Housing land supply was one of a number of key issues in the case, indeed, as noted above the Council’s central concern was the loss of employment land.
- Immediately prior to the Inquiry the East Riding of Yorkshire Local Plan (parts 1 and 2) had been submitted and consequently arguments about the extent of the HMA and the correct OAN were hotly debated. On the supply side whilst there was some argument on site specific delivery, compared to most inquiries that debate was limited; rather, the central dispute related to the treatment of those sites that did not benefit from permission. When the numbers were crunched it was the treatment of the allocated sites in the emerging plan that was the principal area of difference between ERYC and the Appellant. ERYC’s position was that inclusion within the SHLAA and the high level of assessment as to delivery was sufficient to justify the inclusion of many (but by no means all) of the SHLAA sites as components of supply, the Appellant argued the contrary. Necessarily, it was not the likely yield from those sites that was a central area of dispute, but rather whether they should be included in the assessment at all.
- Against this backdrop, in the closing submissions on behalf of the Council there was not a single reference to the Council’s published Housing Trajectory, which had been published as part of the submission documentation to the local plan in order to demonstrate that the Local Plan could provide for the backlog in delivery over the plan period. In the Appellants closing submissions the only reference to the trajectory was this:
“Another major problem with the credibility of the Council’s own housing supply figures is the trajectory in the Council’s own Housing Implementation Strategy (ERYC 32) published as part of the LP evidence base. Page 7 shows housing delivery in 2013- 2014 at less than 1,000 units (and closer to 800), followed by less than 1,400 for the following two years. The figure is 1,500 for 2016-17 and marginally higher than that in 2017-2018. That is a supply of about 6,500 to 7,000 in the next 5 years on the basis of their own evidence to the LP inquiry. Figures of 14,000 and 15,000 therefore have no place as evidence offered by the Council at this inquiry.”
- The reason for this was because, at the inquiry, the Council were not relying on the Housing Implementation Strategy (‘HIS’) trajectory in order to demonstrate what their 5 year housing land supply was. Rather the Council had produced detailed evidence upon the sources of supply and an assessment of their likely delivery within 5 years in the proof of its housing witness based upon its assessment of delivery in its SHLAA.
- The HIS trajectory was produced to inform the Council’s plan making role of expected delivery during the plan period and was part of the background documentation to the submission draft local plan, to inform the Council’s function of plan making and not its assessment of 5 year supply.
- The HIS trajectory also pre-dated the emphasis which is now placed upon the use of a trajectory to inform 5 year supply within PPG. However, the Appellant failed to acknowledge the different role between the HIS trajectory and the far more relevant assessment of delivery within the SHLAA. The distinction between the two types of predictive exercise has long been recognised by Government. Even so, it is important to note that the Appellant was only seeking to use the HIS trajectory as a means to attack the supposed credibility of including delivery from the draft allocations as part of the 5 year supply; arguing that to do so would result in higher rates of delivery than had ever previously been achieved in the Borough and would be in excess of the local plan trajectory. This point was essentially an allegation that the HIS trajectory was inconsistent with the claimed 5 year supply being contended for by ERYC at the inquiry and to then argue that this was another factor to undermine the components of supply that the Council were arguing should be included in the 5 year supply assessment.
- After losing on a raft of other points in the High Court, when the case came before the Court of Appeal the Appellant required the court to deal with three issues. The second issue that the Court were invited to deal with was “Did the Secretary of State misdirect himself, or fail to provide clear and adequate reasons, in his conclusions on the council’s housing trajectory?”. That is a context specific ground of challenge. It was concerned with how the Council’s HIS trajectory had been treated in the context of the arguments being put in this particular planning appeal and all of the findings of the Court of Appeal necessarily have to be considered to be case specific.
- This case specificity is illustrated in the four reasons Lord Justice Lindblom gave in dismissing this ground of challenge:
- The relevance of the Councils housing implementation strategy trajectory was not a “principal important issue” in the planning inquiry;
- The Inspector had understood the Appellant’s argument about the trajectory, its utility was as a “reality check” for the councils housing land supply figure;
- “it is not open to St Modwen now to go behind the inspector’s conclusions on the credibility and reliability of the parties’ respective cases on housing land supply” (at para 51 of the decision), that is a classic application of the planning law principle that questions of planning judgment are for the discretion of the decision maker; and
- Rehearsing the evidential arguments on this issue before the court does not amount to an argument that there was a legal error by the Inspector in the exercise of her planning judgment.
- It is therefore somewhat surprising that the status of housing trajectories has become such a hot topic following this decision. Nonetheless, following the updating of guidance in PPG in relation to the relevance of trajectories to demonstration of a 5 year supply it is unlikely if in future many authorities would produce a trajectory which is solely to demonstrate the credibility of discharging a backlog over the plan period. The apparent misunderstanding of the role of a trajectory in plan preparation (ie in the HIS) and the demonstration of 5 year supply (ie based upon the SHLAA) that occurred in this appeal in the East Riding is unlikely to be repeated but is the crucial context to the debate in this case. We anticipate that local planning authorities will in future be far more attuned to explaining what it considers is likely to be delivered overall in the plan period when compared to assessing the likely yield of individual sites.
- Indeed this distinction is perhaps most obviously explained in consideration of the buffer. The 5 year supply requires the demonstration of deliverable sites whose assessed yield will comprise at least 5 years of the LPA’s requirement plus the buffer, but the expectation is that it is the requirement and not the requirement plus buffer that will physically be delivered.
- The Court of Appeal framed the third issue in the case as “Did the Secretary of State err in law in his conclusions on the council’s record of housing delivery?”. Again, as with the second issue this was dealt with succinctly. And again, the council’s record of housing delivery was contended to be one that went to the question of credibility of the supply figure. The inspector had correctly recorded the appellant’s case, she had considered the evidence, exercised her planning judgment and provided reasons for reaching the conclusions that she did. The appellant had not identified any legal error in her approach. There is nothing new in the decision on this issue that is of general utility to practitioners.
- So, it is only in the first issue in the case which has potential implications beyond the confines of this decision. The Court phrased the first issue as “Did the Secretary of State misinterpret or misapply government policy for the supply of housing in paragraph 47 of the NPPF, and, in particular, the concepts of “supply” and “delivery”, and were his relevant reasons clear and adequate?”.
- In exploring this issue the Court of Appeal quotes at length from the Inspectors decision letter, however, in actuality this element of the Appellants challenge really only arose on the basis of one paragraph in the decision letter:
“13.56. Whilst the Council’s supply figure has fluctuated over the period of the inquiry, a fair reading of Mr Hunt’s first proof shows that the discussion of a 12 year supply took place in the context of the weight which could be attached to sites in the emerging local plan (StM16). In a situation where a Local Plan is under preparation, it is not surprising that data will be subject to revision. As such, the fluctuations of themselves should not be seen as indicative of a lack of reliability. It is also suggested that the 15,000 figure should be seen as absurd in comparison with the housing trajectory. However, the assessment of supply is distinct from that for delivery.”
- It was the appellants argument that that final sentence gave rise to an error of law. They sought to argue that under the housing section of the NPPF the assessment of supply was not distinct from that of delivery and that the Inspector and Secretary of State had misunderstood national policy.
- In our view the court’s decision on this issue has to be read in the context of paras  to  of the judgment of Lord Justice Lindblom (and in fact this is what he himself says at para ). Those paragraphs are the first stanza of the courts response to this ground of challenge and frame what it then goes on to say in the detailed part of the reasoning. In short these paragraphs state:
- It would be “most surprising” if the Secretary of State had made an error on such fundamental principles of the NPPF;
- It was similarly unlikely that an experienced Inspector would make such a basic error;
- “the court should approach arguments like this with great hesitation”; and
- Properly considered this was a linguistic challenge rather than a substantive challenge to the conclusions reached by the inspector on housing land supply.
- This final point is particularly important. The reality of the challenge wasn’t that there had been some error in approach by the Inspector but that it was more akin to a reasons challenge, that the Inspector hadn’t properly recorded in her decision why she had reached the conclusions that she had reached. As Lord Justice Lindblom at  of the judgment said this “lends an air of inconsequence, even unreality, to the argument put forward”. Thus, this limits the extent to which this case establishes points of general principle as it was a case concerned really with how an Inspector had written her decision letter. That is not to say there is nothing of broader utility in this case but it is to say that when looking at it and considering what bearing it has on another case one has to look at the facts of the two and assess the extent to which they are comparable.
- When this is understood, in our view, the wider implications of the case are fairly limited. It confirms the obvious point that the concepts of “deliverability” and “actual delivery” are distinct. That is plainly right as a matter of ordinary English and should not come as a surprise to anyone involved in planning. “Deliverable” means what footnote 11 of NPPF says it means (as per  of the judgment):
“first, that the sites in question should be “available now”; second, that they should “offer a suitable location for development now”; third, that they should be “achievable with a realistic prospect that housing will be delivered on the site within five years”; and fourth, that “development of the site is viable””
The underlined words being the key issues that need to be assessed when determining whether a site is “deliverable”. A site does not have to have planning permission to be considered “deliverable” nor is certainty required to establish “deliverability” all that is needed is a “realistic prospect” of delivery. Whether or not a given site is “deliverable” is then a question of planning judgment.
- The Court of Appeal’s judgment is essentially saying that the footnote means what it says – for a site to be included in the supply then it has to be capable of delivery – but that does not then mean that there is any lowering of the bar as to what the actual yield from the site might be. That requires a separate judgment having decided to include the site, upon which the Court of Appeal provides no guidance, since that wasn’t the point of the challenge.
- We suspect that some of those who may have sought to gain comfort from the decision have wrongly thought that the decision “lowers the bar” when assessing the amount that it can be concluded sites will actually yield within 5 years. It does no such thing, once a site has been determined to be deliverable in accordance with the footnote then the decision maker still has to form a realistic view as to what the site is likely to deliver in 5 years.
- In this case the council’s housing trajectory in its Housing Implementation Strategy was not produced for the purposes of development control decisions. It was not assessing the yield from individual sites – that was the role of the SHLAA. Rather it was produced solely for the purposes of plan making, monitoring and strategising. Accordingly, contrary to the Appellant’s case it was not produced to act as a “sense check” as to what the Council’s 5 year supply was. And accordingly the attack based upon using it as a means of testing the credibility of a council’s 5 year land supply failed before the Inspector, which was held to be lawfully impeccable before the Courts.
- Where an LPA seeks to produce trajectory for the purpose of assisting in evidencing a 5 year supply (as the PPG advises can be a relevant factor, and is often now the case) then the position will plainly be quite different and the scrutiny of such trajectory will no doubt be a central issue for the decision maker, whether as a means of “sense checking” or otherwise. Thus, to take an obvious example it may assist in looking at past trajectories to assess the realism of a Council’s claimed future delivery rates where the arguments relate to the degree of reliability of a Council’s predictive ability.
- Accordingly, if one wants to draw some real lessons from the decision they are perhaps these: – matters of planning judgment are matters of planning judgment that are the responsibility of the decision maker;
– the courts should not be used to elevate planning merits challenges to challenges of law; and
– policy (in this case the infamous footnote) should be give its plain and ordinary meaning.
The case doesn’t lower the bar on site yield nor does it establish any wider principle other than that the footnote means what it says.
 Prior to the introduction of the PPG in March 2014 which advised that “the development potential of all sites can be collected to produce an indicative trajectory”, previous guidance published in 2009 (replacing a 2007 version) advised that when assessing the supply of sites:
“Once the initial survey of sites and the assessment of their deliverability/developability has been made, the housing potential of all sites can be collected to produce an indicative housing trajectory that sets out how much housing can be provided, and at what point in the future.”
(Strategic Housing Land Availability Assessments, Practice Guidance, CLG, 2009)
In respect of delivery and plan making, the NPPF repeated the earlier guidance and requires LPAs to: “illustrate the expected rate of housing delivery through a trajectory for the plan period” (bullet 4 of para 47, NPPF) which is similar to the requirement in PPS3 (2006) bullet 4 of para 55.
Thus, a trajectory can relate to the indicative delivery of sites identified in a SHLAA or to the plan making role of assessing the “expected rate” of delivery “for the plan period”. The former relates to identified supply, the latter to plan making and plainly has a much wider compass. The reference in the Appellant’s closing related to attempted to the latter (ie that set out in our HIS and related to delivery and plan making), rather than the former trajectory (which was set out in the SHLAA and related to supply), in support of their argument. The Court of Appeal addressed this distinction at para.39 of the judgement.