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Social Housing Speed Read – affordable housing regulations

We look at the recent Court of Appeal reversal of a High Court decision to exempt sites of fewer than 10 homes from affordable housing agreements.

In the case of Secretary of State for Communities & Local Government v (1) West Berkshire District Council (2) Reading Borough Council (2016) EWCA Civ 441 it was determined that the previous decision of the Department of Communities and Local Government (DCLG), to alter national policy in respect of planning guidance (NPPG) for affordable housing by introducing exemptions to provide affordable housing for small sites, was lawful.

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Last year, the High Court ruled that the Government’s guidance was unlawful, to the relief of many registered providers.

The initial application was brought by West Berkshire District Council and Reading Borough Council. The aforementioned councils strongly disagreed with the NPPG issued by the DCLG on 28 November 2014 which stated that, no matter what planning policies had been adopted by a local authority:

  • Developments of 10 units or 1000 sq m or fewer (including annexes and extensions) would be excluded from affordable housing levies and tariff-based contributions;
  • A lower threshold would apply in designated rural areas, National Parks and Areas of Outstanding Natural Beauty (as defined in section 157 of the Housing Act 1985), with developments of 5 units or fewer to be excluded from affordable housing levies and tariff based contributions. Development of between 6 and 10 units would be subject to a commuted sum payable on or after completion;
  • Where a vacant building is brought back into use or demolished for redevelopment, local authorities will provide a ‘credit’, equivalent to the floorspace of the vacant building, to be set against affordable housing contributions. (Judge’s emphasis).

Mr Justice Holgate upheld a challenge to the written ministerial statement brought by West Berkshire and Reading Councils on four grounds:

  • It was inconsistent with the statutory planning regime.
  • The Secretary of State had failed to take into account necessary material considerations.
  • The Secretary of State’s consultation upon the proposals was legally inadequate.
  • The Secretary of State had failed properly to assess the impact of the proposal upon persons with protected characteristics: Equality Act 2010 s.149.

The decision

The Court of Appeal (in a joint ruling from Lord Justice Laws and Lord Justice Treacy) on 12th May 2016 concluded that all four grounds of appeal should succeed.

In a statement the two local authorities said: “West Berkshire and Reading Councils are naturally disappointed by this result. We are reviewing this verdict and currently considering our options as a matter of priority with regard to appeal. Until such time as we have determined how we intend to proceed, it would not be appropriate to comment further.”


It is expected that the NPPG will be updated and the previously deleted paragraphs that reflected the ministerial statement of 28 November 2014 reinstated.

This will undoubtedly have far-reaching implications for how planning guidance may be introduced in the future which will affect both local planning authorities and registered providers.

The obvious concern is that the potential opportunities will be reduced as some schemes will now be out of reach.

In our experience, a number of Local Authorities have been requiring affordable housing contributions on small sites and at times have been unwilling to take account of the re-use of vacant buildings in the interim. Following the Court of Appeal ruling, this approach may no longer be sustainable.

Another issue is that it is not yet clear whether the respondent planning authorities seek to appeal the Court of Appeal decision to the Supreme Court.

Therefore, there remains some uncertainty about how the policy of the Written Ministerial Statement should be applied by local planning authorities.

This decision acts as a stark reminder of the oppositional nature between national and local policy imperatives.

Ward Hadaway would encourage caution to be adopted when interpreting the Written Ministerial Statement policy in their negotiations with local planning authorities. Should you seek any clarification please contact a member of our planning team.

Alternatively, should you have any questions regarding this article and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or another member of our expert Social Housing Team.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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