Small Site Affordable Housing Exemption – Latest Update

Many small scale housing developers will be all too familiar with the on-going saga regarding the need (or otherwise) to make an affordable housing contribution on developments of 10 units or less. The Planning Inspectorate (PINS) has now issued a letter in an attempt to clarify the approach which should be taken by Inspectors.

To re-cap, back in May 2016, the Government reinstated rules exempting small sites from affordable housing obligations following the Court of Appeal decision in the case of West Berkshire District Council and Reading Borough Council v Secretary of State for Communities and Local Government.

The reintroduction of the exemption was welcome news for small scale developers. However, the Court of Appeal decision made it clear that the exemption, originally introduced in a Written ministerial Statement (WMS) and subsequently translated into Planning Practice Guidance (PPG), does not automatically override development plan policy, which remains the starting point for the determination of applications.

This left the door open for a number of local authorities to continued to seek affordable housing contributions on small sites in line with their development plan policies. However, when tested at appeal, there has been a lack of consistency in Inspectors’ determination of the relative weight that should be afforded to local planning policy, where it conflicts with the WMS and PPG.

The London Borough of Richmond felt particularly aggrieved at this inconsistency, seeing three appeals in which the Inspectors’ decisions supported their requirement for affordable housing, and two in which Inspectors ruled in favour of the WMS exemption, with costs awarded against the Council in both cases. The Borough wrote to PINS in December 2016 highlighting the apparent lack of logic in determining why the Inspectors came to differing views.

PINS has now responded to Richmond’s letter.  The response states that of the five decisions Richmond refer to, the approaches taken by the Inspectors in respect of three of the cases are considered to be reasonable. However, PINS ‘fully accept that there are errors in approach and judgement in appeals 3148614 and 3156689’ and offer ‘sincere apologies…for the flaws in these decisions and for any consequent frustration or inconvenience that this may have caused’.

PINS letter states that:

In respect of the decisions for appeals 3148614 and 3156689, affording considerably lesser weight to relevant local policies because they are now, in part, inconsistent with national planning policy, is arguably not an appropriate one, as the effect of the WMS was not to reduce the weight that should be given to the statutory development plan, or automatically to outweigh relevant development plan policies. Local policies still have weight as the starting point from S.38(6) and the WMS comes into play as a material consideration which post-dates the plan, and which has to be balanced against the plan and the evidence base supporting the LPA’s application of the policy. The decision maker therefore has discretion in applying his or her judgment as to where the balance should lie, drawing on the evidence presented. [Our emphasis].

So, where does this statement from PINS leave small scale developers? It is helpful that PINS has clarified that the WMS does not automatically outweigh relevant development plan policies and will be updating their internal Inspector guidance accordingly. However, small scale developers remain in the uncertain position that it is up to the decision maker to make a judgment on whether or not the WMS exemption should apply. As such, in many instances, there will unfortunately be a continued need to take schemes to appeal to allow a Planning Inspector the opportunity to consider the relevant policy position and evidence base put forward.

If you have any queries regarding the provision of affordable housing, please feel free to contact one of the Firstplan team.