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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
[2023] CSIH 3
XA32/22
Lord President
Lord Woolman
Lord Pentland
OPINION OF THE COURT
delivered by LORD CARLOWAY, the LORD PRESIDENT
in the appeal under the Town and Country Planning (Scotland) Act 1997
by
WEST LOTHIAN COUNCIL
Appellants
against
THE SCOTTISH MINISTERS
Respondents
and
OGILVIE HOMES LIMITED
Interested Parties
______________
Appellants: Armstrong KC; Morton Fraser LLP
Respondents: Way; Scottish Government Legal Directorate
Interested Parties: A O Sutherland (sol adv); Burness Paull LLP
20 January 2023
Introduction
[1]
The appellants, as the local planning authority, refused an application by Ogilvie
Homes for planning permission to construct around 104 homes on a greenfield site at Hen's
Nest Road, East Whitburn, as outlined on the following plan:
2
Ogilvie Homes appealed that decision to the respondents, who appointed a reporter . The
reporter granted planning permission on 8 April 2022.
[2]
The planning authority now appeal that decision primarily on the basis that the
reporter failed to apply the correct national and local planning policies for the release of
greenfield land for housing. This issue involves a consideration of the correct trigger for
that release; a shortfall in the 5-year supply of effective housing land. The following
acronyms are occasionally used:
HLR
Housing Land Requirement
HLS
Housing Land Supply
HST
Housing Supply Target
LDP
Local Development Plan
PAN
Planning Advice Notice
SDP
Strategic Development Plan
SESplan
Edinburgh and South East
Scotland Strategic Development
Plan
SPP
Scottish Planning Policy
3
The relevant planning policies and plans
[3]
The court has set out the Government's Scottish Planning Policy and several
development plan provisions in relation to new housing in some detail in Gladman
Developments v Scottish Ministers 2020 SLT 898, Mactaggart and Mickel Homes v Inverclyde
the Town and Country Planning (Scotland) Act 1997 requires planning authorities to
prepare a Strategic Development Plan and a Local Development Plan. Any application for
planning permission must be determined in accordance with these plans unless material
considerations indicate otherwise (s 25). The relevant plans for Whitburn comprise the SDP
for Edinburgh and South East Scotland 2013, known as the SESplan, and the West Lothian
LDP 2018.
[4]
In terms of the SESplan, permission for housing development on greenfield sites can
be granted where there is a shortfall in the 5-year supply of effective housing land (policy 7),
but only if three criteria are satisfied. Those are that: (i) the development will be in keeping
with the character of the settlement and local area; (ii) the development will not undermine
green belt objectives; and (iii) any additional infrastructure will be funded by the developer.
[5]
Policy HOU 2 of the LDP is in the same terms, except that it specifies four criteria.
Criteria (i) and (iii) of SESplan policy 7 are reproduced as criteria (a) and (b) respectively.
Criterion (c) is that the development will contribute to sustainable development and (d) is
that the development is expected to deliver new housing within five years. There are
therefore six criteria which require to be met. None is directly relevant to this appeal.
[6]
Scottish Planning Policy 2014 is a material consideration when determining
applications. There is a presumption in favour of sustainable development (para 28). Where
a development plan contains no relevant policies, or they are out of date, the presumption
4
becomes a significant material consideration. It will be overcome only where adverse
impacts demonstrably outweigh the benefits (para 33). This is known as the "tilted
balance". SPP contains a section entitled "Enabling Delivery of New Homes". It provides
that the planning system should "identify a generous supply of land ... to support the
achievement of the housing land requirement ... maintaining at least a 5-year supply of
effective housing" (para 110). LDPs must set out the housing supply target, based on need
and demand (para 115). The HST is the number of houses which should be delivered over
the plan period (para 115). This figure is increased by between 10 and 20% (the generosity
margin) to establish the housing land requirement. Housing policies are deemed to be out
of date if there is a shortfall in the required five-year effective housing land supply
(para 125).
The Issues
[7]
The development site was part of a larger area which had been considered during
the consultation process which led to the adoption of the LDP. It had been rejected because
it would have conjoined settlements; specifically East Whitburn and Whitburn. An
application for permission for 250 houses was refused in May 2017 and an appeal against
that decision was rejected in January 2019. In the present application the size of the site has
been reduced in order to address the coalescence problem.
[8]
A central issue before the reporter was whether there was a shortfall in the 5-year
HLS. If so, the tilted balance would come into play. In their submission to the reporter, the
local planning authority were critical of the way in which a shortfall is generally calculated.
They described it as a mathematic equation which failed adequately to "capture the reality
5
and complexity of the development process, housing need and demand, and environmental
and place based local considerations" (Hearing Statement para 3.3).
[9]
It was accepted that the West Lothian HST for the years 2009-2024 was a minimum of
18,010, to which a generosity allowance added a further 10% to produce an HLR of 19,811
units. The number of completions from 2009 to 2020 had been 7,317; an average of 665 per
annum. The planning authority noted that the court (a) had interpreted SPP as involving a
tilted balance, and (b) quashed the Government's attempt to change the policies with SPP
2020 and PAN 1/2020 (see Graham's The Family Dairy (Property) v Scottish Ministers 2021
SCLR 569).
[10]
Having set out their critique of the system, the planning authority nevertheless
argued, in line with other local planning authorities, for the use of the average method of
calculating whether there was a shortfall. This involves dividing the HLR by the number of
years in the plan and then multiplying the result by five (19,811÷ 15 = 1,321 x 5). This
produces a future five year requirement of 6,605. When set against the undisputed existing
effective supply of 8,157 units, there is no shortfall; there is rather a 6.17 year supply
available (8,157 ÷ 1,321).
[11]
This method does not take into account the shortfall of 7,214 in HLR completions in
the 11 years to 2020 (1,321 x 11 years less actual completions of 7,317). The housebuilding
industry argue that the correct method of calculation (the residual approach) is for the
annual HLR to be multiplied by 5 and any under delivery of completions ought to be added
to that figure. This would produce a total of 14,531, which is well above the available
effective supply. This, the planning authority argued, produces an unrealistic figure given
the actual predicted demand.
6
The reporter
[12]
The reporter first addressed whether the proposal complied with the provisions of
the development plan. This was heavily dependent upon whether the "exceptional release"
provisions applied; that is whether there was a shortfall in the 5-year HLS. The reporter
noted the previous disputes about the average and residual methods and how these could
produce radically different results. He determined that a debate about how to calculate an
effective HLS for the next five years was unhelpful, as there were less than two and a half
years of the development plan period left. A straightforward approach could be adopted.
The SESplan had provided that about 18,000 homes were to be built and occupied by
31 March 2024. The 2020 housing land audit had concluded that only about 14,000 houses
would be built by that date. There was therefore a significant shortfall in the HLS. On that
basis, the exceptional release policies were engaged.
[13]
In making his determination, the reporter took cognisance of the planning
authority's arguments; describing them as "perfectly reasonable and logical". However,
they were in part based on the contention that SPP 2020 and PAN1/2020 should be followed
despite being quashed. They also failed to have regard to the fact that the adoption of
planning policies, and their alteration, required to go through a formal plan ning process. It
was not appropriate to argue the merits of existing policies in individual planning
applications. The reporter had to apply the framework provided for in the approved
development plan.
[14]
The reporter then looked at each criterion, so far as applicable, in policies 7 and
HOU 2 and made the following findings. First, the development would change the
character of East Whitburn, but not in a manner which was sufficiently harmful. The
development would be opposite other modern housing and was a proportionate expansion
7
of East Whitburn. Secondly, the proposal would contribute to sustainable development.
Although the development would be located on the outer limits of pedestrian accessibility, it
would help to meet the housing shortfall and might improve the natural habitat. The
planning authority's concerns regarding the design and layout of the development were
minor and could be resolved by means of appropriate conditions.
[15]
Thirdly, in terms of the 1997 Act, the reporter looked at whether material
considerations indicated otherwise than to grant. The proposal complied with the SPP. The
tilted balance applied. There was no demonstrably harmful impact to justify refusal. As
there was a shortfall and there were no such harmful impacts, that was a significant material
consideration in favour of granting planning permission, which the reporter then did.
[16]
In reaching his view on the shortfall, the reporter had regard to a decision by a
different reporter on an application to develop 65 houses at Mossend, West Calder (PPA-400-
2118), which involved similar considerations. Broadly, the same arguments were presented,
and the same figures produced, using both the average and residual methods. The reporter
considered that it was a matter for her discretion to decide which method to use. She noted
that the reporter who had examined the LDP had concluded that there was a considerable
shortfall. There was no evidence about how that shortfall had been addressed. The Mossend
reporter (at para 25) considered that the residual method ought to be used and that a
significant shortfall existed. The reporter in this case considered that this reinforced his
view on the engagement of Policies 7 and HOU 2 (para 32).
Submissions
Planning authority
[17]
The appellants maintained that the reporter failed to set out a proper basis for his
8
decision and reached unreasonable conclusions . A reporter must apply policy, but its
interpretation was a matter of law for the court (Tesco Stores v Dundee City Council 2012 SC
(UKSC) 278 at paras 17 to 23). According to the development plan, it was not an HST
shortfall that was relevant, but whether there would be a shortfall in the next 5-years'
supply. There was no penalty for not meeting the HST because it was envisaged that there
would be a never-ending roll out of development plans. The reporter failed to consider
whether there was a 5-year supply and how that should be calculated. He asked himself the
wrong question.
[18]
The trigger mechanism was intended to avoid developments which would impact on
the delivery of planned sites, infrastructure and the environment It had not been suggested
to the reporter that the failure to meet the HST operated as the trigger for the release of land.
The reporter had identified the advantages of his approach, but not the disadvantages. He
did not decide whether the average or residual approach should be adopted. He did not
decide on which figure to use or what to do with the post 2024 supply. He did not decide on
whether there was a significant shortfall in the 5-year supply.
[19]
The Mossend reporter had asked the correct question and determined which
approach to take. Had this reporter followed the same course, there was a real possibility
that he would have reached a different view.
Scottish Ministers
[20]
The respondents submitted that there was a distinction between questions of law,
that is the identification of the correct question, and matters of planning judgement, that
being how to answer that question (Cairngorms Campaign v Cairngorms National Park
Authority [2012] CSOH 153 at para [75]). The reporter had directed himself to the correct
9
question; whether there was a shortfall in the 5-year supply. The answer was a matter for
his planning judgement. There was no agreed or prescribed methodology. There was no
guidance in the development plan policies or the SPP about how to deal with a situation in
which there were no established 5-year targets. The reporter recognised that there were
difficulties with applying either of the two customary methods of calculation in those
circumstances. He was entitled to adopt a flexible and purposive approach (West
Dunbartonshire Council v Scottish Ministers [2021] CSIH 49 at para [37]). He had not erred in
his interpretation of the policies, which he had done in a pragmatic fashion.
[21]
Even if the reporter had misinterpreted the policies, and ought to have applied one
of the two recognised methods, there was no real possibility that his determination would
have been different. It was clear that he did not consider that past shortfall ought to be left
out of account. He was therefore unlikely to have adopted the average method of
calculation, which did just that. He had used the Mossend decision as a cross check; it having
used the residual approach.
Interested party
[22]
Ogilvie Homes contended that the planning authority's grounds of challenge
proceeded upon an inappropriately strict approach. It was wrong to address policies 7 and
HOU 2 as though they were statutory or contractual provisions (Hopkins Homes v
Communities Secretary [2017] PTSR 623). The rationale was that land, which would otherwise
be protected, would be used to develop new housing to address any shortfall. Neither
policy explained how to approach the issue of a possible shortfall where there were fewer
than five years left of the plan period. There ought always to be a known target, but there
was nothing beyond 2024. If the reporter had taken a literal approach to the policies, as
10
opposed to a flexible and purposive approach, he would have become stuck. He had to be
pragmatic.
[23]
The reporter had to apply the policy to the facts in order to calculate whether there
was a shortfall. The methodology he used to calculate it was a matter of planning
judgement within his exclusive province (Tesco Stores v Environment Secretary [1995] 1 WLR 759 at 780).
It was wrong to say that he erred because he did not adopt either of the parties'
methodologies. The ultimate aim was to ensure that housing demand was met throughout
the plan period. For the policy to apply, there did not need to be a penalty for failing to
meet the HST. The reporter was correct that the HLR was established through a formal
process and could only be changed by that same process.
Decision
[24]
In NLEI v Scottish Ministers [2022] CSIH 39 (LP (Carloway), delivering the opinion of
the court, at paras [54]), the court emphasised the desirability of reporters expressing their
decisions in an intelligible yet succinct manner. Reporters are not lawyers. Neither are many
of those who have to read and implement their decisions. The reporter requires to identify
the live issues and to frame a determination in a manner which leaves the reader in no doubt
about what the reasons for the decision were and what considerations were taken into
account. Within these bounds of legality, a reporter is generally free to apply his or her
planning judgement to the live issues and to express the decision in a manner which will be
easily understood by its potential readership.
[25]
The report here readily meets that standard. It is both intelligible and succinct. The
reporter asked himself the correct question of whether there was a shortfall in the 5-years'
effective housing land supply (SESplan policy 7; LDP policy HOU 2; SPP para 125). It is
11
clear that he was well aware of the alternative methods of calculation, average or residual,
which had customarily been advanced by, respectively, planning authorities and house
builders. He was conscious also of the recent history of this topic, with changes in
Government policy (ie SPP 2020 and PAN1/2020) and successful challenges to those changes
in the court (see Graham's The Family Dairy (Property) v Scottish Ministers 2021 SCLR 569).
[26]
Against that background, he made two decisions, neither of which can be faulted.
First, no matter how unsatisfactory the planning system may be at present in relation to, for
example, an up to date assessment of the demand for housing, he was legally bound to
follow existing planning policy, including the figures which were contained in the
development plans. Secondly, having been given a figure for the likely number of
completions during the plan period to 2024, as a matter of fact there was a shortfall in the 5-
year HLS. The court could only interfere with his finding on that matter if it amounted to an
error in law; ie that there was no material before the reporter to support his view. It is
apparent that there was such material.
[27]
The reporter cut through the customary methodological debate by taking the number
of houses, which ought, according to the development plans, to have been built during the
plan period and subtracting the figure for the houses, which the housing land audit
predicted would be built during that period. This produced a shortfall of 4,000 houses to
2024. His conclusion was not that the existence of this difference in numbers in itself
triggered the exceptional release provisions, but that it demonstrated the existence of a
significant shortfall in the effective HLS presently available. An adequate land supply
should be available at all times. The figures before the reporter were more than sufficient to
support his conclusion that the current supply was inadequate and that accordingly the
trigger contained in the relevant policies was activated.
12
[28]
Whether there is a shortfall in the effective HLS in any LDP area is a matter of
planning judgement. Development plan policies, which provide a mechanism for the
exceptional release of greenfield land, such as policies 7 and HOU 2, are a means to an end
and not an end in themselves. That end is the fulfilment of the overall purpose of a
development plan, which is to ensure that the housing need in the area is met. The policies
do not provide a specific direction on how to check whether there is any shortfall once there
are fewer than five years left of the plan period. The plan fixes no effective HST, and hence
an HLR, to which the reporter could have had regard, beyond 2024. The reporter's
approach in the circumstances was realistic and accorded with common sense. In that
regard it is consistent with the recommended broad assessment approach (Gladman
Developments v Scottish Ministers 2020 SLT 898, LP (Carloway), delivering the opinion of the
court, at para [49]). It was clear from the level of disparity identified between the HST and
the number of houses actually built, and estimated to be built, that the planning authority
had fallen far behind the HLR. There is no error in the reporter's solution to that problem,
which included a useful cross-check with the Mossend decision (see Gladman Developments v
Scottish Ministers [2019] CSIH 34, Lord Menzies, delivering the opinion of the court, at
para [29]). On the contrary, his reasoning is entirely coherent.
[29]
The appeal is refused.
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