Changes to Scottish Planning Policy quashed

Brief Background

There has been a further twist in the long running saga of Scottish Planning Policy (“SPP”) and how it applies to housing developments. The Outer House of the Court of Session has issued its judgment in the judicial review of the December 2020 amendments to SPP and introduction of Planning Advice Note 1/2020 (the “PAN”). The judgment deals with two judicial reviews that were heard together, one brought by Graham’s the Family Dairy (Property) Limited and MacTaggart and Mickel Homes Limited and the other by Elan Homes Scotland Limited (together the “Petitioners”).

The changes to SPP were made in response to the Inner House judgment in the statutory appeal by Gladman Developments Limited in respect of their appeal in connection with residential development at Quarriers Village, Kilmacolm (“Gladman”), discussed in our previous article here. Gladman provided clarity on the approach to the SPP presumption in favour of development that contributes to sustainable development and the ‘tilted balance’. Prior to making the changes, the Scottish Ministers consulted on proposed changes, discussed in our previous article here, although the final changes made were different to those consulted upon.

Submissions by the Petitioners

The Petitioners raised seven grounds of challenge. The first was, in summary, that the consultation process was so unfair that it was unlawful due to misleading statements in the consultation documents, principally relating to statements that the proposed changes would not have an impact on planning decisions. Other grounds included submissions that the Scottish Ministers misconstrued the opinion of the court in Gladman, they failed to assess the impact of introducing the PAN and the average method of calculating the 5-year effective housing land supply, they undertook flawed impact assessments, and they were wrong to conclude that the proposed changes were not strategic.

Submissions by the Scottish Ministers

In response, the Scottish Ministers argued that the first ground was unfounded as there was nothing before the court to suggest that other parties may not have been able to properly respond to the consultation and the Petitioners were able to fully respond. They stated that the reasons for the proposed changes were clearly stated in the consultation documents and that the ‘tilted balance’ was not something they intended to be a feature of the planning system in Scotland.

The Scottish Ministers also argued that they properly directed themselves on the decision in Gladman and the practical consequences of the decision, they had discretion in the exercise of planning judgment in relation to preferred methodology and took account of various relevant matters in exercising that discretion including objections to the average method, the impact assessments were not flawed, and they were entitled to conclude that the impact of the changes would be minimal.

Decision

In relation to the consultation process, the court stated that the question was whether the process had been so unfair as to be unlawful. The question of fairness has to be determined in light of the individual circumstances of the consultation, e.g. the identity of who is being consulted and the extent to which they can be expected to understand the issues, and should be considered from the position of a reasonable member of the public or reader. It was stated that courts will not lightly find that a consultation process is unfair and “clear unfairness must be shown”.

Despite this, the court found that the consultation was unfair and the Petitioners succeeded on their first ground. The principal reason for this is that a reasonable reader would have been likely to rely upon the assurance that there would be no impact and not respond to the consultation, or base their comments on that assurance. The court found that it was incumbent upon the Scottish Ministers to make it clear that, when saying there would be no impact on decisions, they were comparing the proposed changes to how Reporters approached matters pre-Gladman.

Other matters contributed to the unfairness of the process. The court pointed out there was a lack of evidence or analysis supporting the proposals, there was doubt over whether there could be said to be a uniform approach pre-Gladman on which the lack of impact was predicated, the subsequent Housing Land Research Paper demonstrated the type of material that was missing at the time of the consultation and the changes could not properly be described as clarification, technical or procedural as they were.

The court did not accept the Petitioners’ submissions on the other grounds. While some errors were identified, such as a failure to recognise that the Scottish Government was changing its own policy and some failures in respect of assessing the implications of using the average method for calculating the 5-year effective housing land supply, they did not satisfy the “rigorous test for irrationality”.

Impact of this decision

This decision effectively returns planning policy for residential developments to the position it was in post-Gladman. Given their clearly stated position that Gladman did not reflect their policy intention, it seems certain that the Scottish Ministers will not wish to leave planning policy in this position for long, although it is not clear whether they will seek to appeal this decision or simply address the matter through National Planning Framework 4, or other policy changes.

In the meantime, those in the housebuilding industry will be buoyed by the return to Gladman and the ‘tilted balance’ in favour of any residential development where there is a shortfall in the 5-year effective housing land supply. The quashing of the PAN also means a return to arguments over the appropriate methodology for calculating the 5-year effective housing land supply, if they ever really went away. Landowners, developers and promoters will no doubt be pointing to the comments of the Lord President in Mactaggart and Mickel Homes Ltd and Others v Inverclyde Council and The Scottish Ministers [2020] CSIH 44 that the compound/residual methodology would seem to be the most sensible one.

Where planning authorities do have a shortfall, it is possible they will be faced with a range of ‘speculative’ applications or planning by appeal. They may therefore wish to be proactive to ensure that they can retain some control over the sites which might ultimately address any shortfall.

Article co-authored by Celine Skinner