Out-Law News 2 min. read

"Unreasonable" council ordered to pay costs after refusing to remove affordable housing requirement from planning obligation

A planning inspector has decided that the affordable homes requirement in a planning obligation for a stalled residential development in Lancashire should be entirely removed, and awarded costs against a local authority that "acted unreasonably" in refusing to delete it.

Planning permission was granted in 2007 for the demolition of the Swallowfield Hotel in Horwich and the construction of 42 apartments on its former site. A planning agreement relating to the permission required four affordable homes to be provided as part of the proposed development. House builder Redrow Homes Lancashire bought the site following the negotiation of the planning agreement, and proceeded to demolish the hotel, but development stalled in 2008 due to the economic downturn.

The Growth and Infrastructure Act introduced a procedure enabling developers to apply for affordable housing requirements in planning obligations to be modified, removed or replaced where they render a development economically unviable. Redrow applied to Bolton Metropolitan Borough Council to remove the obligation under the new procedure in October 2013, and appealed to the Planning Inspectorate when the Council refused the application.

In a decision dated 2 October (5-page / 82 KB PDF), planning inspector Phillip Ware noted that the Council agreed with the developer's estimations of the build cost, land value and capital values of the proposed development and did not dispute Redrow's conclusion that proceeding with the scheme including four affordable homes would result in a financial loss of 3%. However, although a planning officer had recommended to the Council's planning committee that Redrow's application be accepted and the planning obligation be removed, the committee had refused the application.

Ware was critical of the lack of evidence presented by the Council in support of the committee's decision. While decisions against an officer's recommendation "must be on clear planning grounds supported by evidence", said Ware, "the Council's appeal statement simply stated that the debate at the Committee referred to (unspecific) government statements that ' ... the economy is on the up and how [the committee was] concerned that approval of this modification could set a precedent for other developments'".

Allowing the appeal, and deleting reference to affordable housing from the planning obligation, the inspector said: "The appellant's viability evidence is uncontested by the Council, and persuasively demonstrates that the removal of the affordable housing element would be likely to result in the development progressing."

Ware was unconvinced by the Council's fears that allowing the appeal would set a precedent. "Nothing to substantiate this concern was submitted," said the inspector, "and in any event each application and appeal must be decided on their own merits."

In his costs decision (2-page / 61 KB PDF) on the same date, Ware returned to the lack of evidence provided by the Council in support of its refusal of the developer's application. Ware said that the single, unspecific sentence in the planning committee's minute relating to the decision, which was not added to by the Council at the appeal hearing, "falls woefully short of substantiating the reason for refusal". Deciding that the Council's behaviour had been "unreasonable", the inspector awarded full costs in Redrow's favour.

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