Government wins legal challenge on small site affordable housing exemption

The Court of Appeal has today handed down judgement in the case of  West Berkshire District Council and Reading Borough Council v. Secretary of State for Communities and Local Government.   The case centred around the Government’s decision to  introduce a national affordable housing threshold and the Vacant Building Credit.

The controversial policy, set out in a Written Ministerial Statement back in November 2014, excluded housing developments of 10 units or 1,000sqm or less from the need to provide, or contribute towards, affordable housing – with a lower threshold introduced in rural areas.  The Vacant Building Credit (VBC) allowed local authorities to provide a ‘credit’ equivalent to the floorspace of any vacant building brought back into use or demolished for redevelopment, which could then be set against affordable housing contributions.

West Berkshire District Council and Reading Borough Council challenged the guidance on the basis that it would result in a loss of 21% of affordable housing contributions nationwide.  In July 2015 the High Court backed their arguments and quashed the policy, concluding that the national policy changes introduced in November 2014 were incompatible with the statutory planning framework. The decision also highlighted failure to have regard to material considerations, unlawful consultation and breach of the public sector equality duty (“PSED”). The Secretary of State appealed on all of these grounds.

Today, the Court of Appeal upheld all four appeal grounds brought by the Government, and reversed the High Court’s decision to quash the policy.  Subject to the local authorities not appealing to the Supreme Court, this decision paves the way for the policy to be reintroduced into Planning Practice Guidance.

This is an important case, particularly for many small scale developers, and we will be keeping a close eye on the implications of the judgement.  If you have any queries about this decision, please feel free to contact one of the Firstplan team.