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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Gladman Developments Ltd v Stafford Borough Council [2015] EWHC 444 (Admin) (27 February 2015) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2015/444.html Cite as: [2015] EWHC 444 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
PLANNING COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		27 February 2015

Mr Justice Supperstone :

Introduction

1. This is an application by the Claimant, Gladman Developments Ltd, made under section 113 of the Planning and Compulsory Purchase Act 2004 ("the 2004 Act") to quash, alternatively remit to the Defendant, Stafford Borough Council ("SBC"), the following parts of the Plan for Stafford Borough ("the PSB"):

Policy SP2: Housing and Employment Requirements, and supporting text paragraphs 6.4-6.12.

Policy SP4: Housing Growth Distribution, and supporting paragraphs 6.45-6.54.

2. The PSB is a development plan document for the purposes of Part 2 ("Local Development") of the 2004 Act.
3. The Claimant is a developer of, amongst other forms of development, housing and specialises in the promotion of strategic land for residential development. It intends to seek planning permission for residential development of a site within the area of the Defendant, off Stowe Lane, Hixon. To that end, it made representations at all relevant stages of the evolution of the PSB, which was adopted on 19 June 2014.

Factual Background

4. The first witness statement of Mr Alex Yendole, the Defendant's Planning Policy Manager, sets out the evolution of the PSB, the most relevant history beginning with the publication of the NPPF in March 2012. Later that year, in September 2012, the Defendant published an updated Strategic Housing Market Assessment ("SHMA").
5. The PSB-Publication draft was published in November 2012. It was the subject of public consultation in January-February 2013. Following consideration of representations, and taking into account the publication in April 2013 by the Office of National Statistics ("ONS") of the 2011 interim household projections, the Publication draft was submitted to the Secretary of State in August 2013.
6. The Secretary of State appointed Mr Stephen J Pratt BA(Hons) MRTPI ("the Inspector") to conduct an examination in public and report on the PSB which had been submitted to him for examination on 20 August 2013. Examination hearings were held between 23 October and 1 November 2013. On 11 June 2014 the Inspector published a report ("the Report"), which concluded that with the recommended Main Modifications set out in the Appendix the PSB satisfies the requirements of section 20(5) of the 2004 Act and meets the criteria for soundness in the NPPF. The Defendant adopted the PSB with the main modifications recommended in the Report. The PSB as adopted on 19 June 2014 makes provision for the development in the Borough of Stafford of 500 dwellings per annum between 2011 and 2031.

The Legal Framework

The Planning and Compulsory Purchase Act 2004 ("the 2004 Act")

7. Part 2 of the 2004 Act provides for the preparation, examination and adoption of a development plan document such as the PSB. Section 19(2) provides:

"(2) In preparing a development plan document or any other local development document the local planning authority must have regard to—

(a) national policies and advice contained in guidance issued by the Secretary of State…"

8. Section 20 provides for independent examination of development plans by an Inspector appointed by the Secretary of State. Sub-section (5) states:

"The purpose of an independent examination is to determine in respect of the development plan document—

(a) whether it satisfies the requirements of sections 19 and 24(1), regulations under section 17(7) and any regulations under section 36 relating to the preparation of development plan documents;

(b) whether it is sound; and

(c) whether the local planning authority complied with any duty imposed on the authority by section 33A in relation to its preparation."

9. The PSB is a "relevant document" for the purposes of s.113. So far as relevant to this application, section 113 provides:

"(3) A person aggrieved by the relevant document may make an application to the High Court on the ground that—

(a) the document is not within the appropriate power;

(b) a procedural requirement has not been complied with…

(6) Sub-section (7) applies if the High Court is satisfied—

(a) that a relevant document is to any extent outside the appropriate power;

(b) that the interests of the Applicant have been substantially prejudiced by a failure to comply with a procedural requirement.

(7) The High Court may—

(a) quash the relevant document;

(b) remit the relevant document to a person or body with a function relating to its preparation, publication, adoption or approval.

(7C) The High Court's powers under sub-section (7) … are exercisable in relation to the relevant document—

(a) wholly or in part;"

National Policy

National Planning Policy Framework ("NPPF")

10. The NPPF published in March 2012 provides, inter alia, that:

"14. At the heart of the National Planning Policy Framework is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking.

For plan-making this means that:

local planning authorities should positively seek opportunities to meet the development needs of their area;

Local Plans should meet objectively assessed needs, with sufficient flexibility to adapt to rapid change, unless

- any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole;

Core planning principles

17. Within the overarching roles that the planning system ought to play, a set of core land-use planning principles should underpin both plan-making and decision-taking. …

... Every effort shall be made objectively to identify and then meet the housing … needs of an area, and respond positively to wider opportunities for growth. Plans should take account of market signals, such as land prices and housing affordability…

6. Delivering a wide choice of high quality homes

47. To boost significantly the supply of housing, local planning authorities should:

use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this Framework…

Plan-making

Local Plans

156. Local planning authorities should set out the strategic priorities for the area in the Local Plan. This should include strategic policies to deliver

the homes… needed in the area;

157. Crucially, Local Plans should:

plan positively for the development and infrastructure required in the area to meet the objectives, principles and policies of this Framework;

Using a proportionate evidence base

158. Each local planning authority should ensure that the Local Plan is based on adequate, up to date and relevant evidence about the economic, social and environmental characteristics and prospects for the area. Local planning authorities should ensure that their assessment of and strategies for housing, employment and other uses are integrated, and that they take full account of relevant market and economic signals.

Housing

159. Local planning authorities should have a clear understanding of housing needs in their area. They should:

prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which:

- meets household and population projections, taking account of migration and demographic change;

- addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes); and

- caters for housing demand and the scale of housing supply necessary to meet this demand;

Examining Local Plans

182. The Local Plan will be examined by an independent inspector whose role is to assess whether the plan has been prepared in accordance with the Duty to Co-operate, legal and procedural requirements, and whether it is sound. A local planning authority should submit a plan for examination which it considers is 'sound' – namely that it is:

Positively Prepared – the plan should be prepared based on a strategy which seeks to meet objectively assessed development and infrastructure requirements, including unmet requirements from neighbouring authorities where it is reasonable to do so and consistent with achieving sustainable development;

Justified – the plan should be the most appropriate strategy, when considered against the reasonable alternatives, based on proportionate evidence;

Effective – the plan should be deliverable over its period and based on effective joint working on cross-boundary strategic priorities; and

Consistent with National Policy – the plan should enable the delivery of sustainable development in accordance with the policies in the Framework.

Annex 1: Implementation

218. Where it would be appropriate and assist the process of preparing or amending Local Plans, regional strategy policies can be reflected in Local Plans by undertaking a partial review focusing on the specific issues involved. Local planning authorities may also continue to draw on evidence that informed the preparation of regional strategies to support Local Plan policies; supplemented as needed by up to date, robust local evidence."

National Planning Policy Guidance ("PPG")

11. The PPG was published in March 2014. The following passages in the "Housing and economic development needs assessments" chapter are relevant:

"1. The approach to assessing need

The assessment of housing and economic development needs includes the Strategic Housing Market Assessment requirement as set out in the National Planning Policy Framework.

What is the primary objective of the assessment?

The primary objective of identifying need is to:

identify the future quantity of housing needed, including a breakdown by type, tenure and size;

What is the definition of need?

Need for housing in the context of the guidance refers to the scale and mix of housing and the range of tenures that is likely to be needed in the housing market area over the plan period – and should cater for the housing demand of the area and identify the scale of housing supply necessary to meet that demand.

Need for all land uses should address both the total number of homes or quantity of economic development floorspace needed based on quantitative assessments, but also on an understanding of the qualitative requirements of each market segment.

Assessing development needs should be proportionate and does not require local councils to consider purely hypothetical future scenarios, only future scenarios that could be reasonably expected to occur.

Can local planning authorities apply constraints to the assessment of development needs?

The assessment of development needs is an objective assessment of need based on facts and unbiased evidence. Plan-makers should not apply constraints to the overall assessment of need, such as limitations imposed by the supply of land for new development, historic under-performance, viability, infrastructure or environmental constraints. However, these considerations will need to be addressed when bringing evidence bases together to identify specific policies within the development plans.

2. Scope of assessments

Needs should be assessed in relation to the relevant functional area i.e. housing market area…

A housing market area is a geographical area defined by household demand and preferences for all types of housing, reflecting the key functional linkages between places where people live and work. It might be the case that housing market areas overlap.

3. Methodology: assessing housing need

What methodological approach should be used?

Establishing future need for housing is not an exact science. No single approach will provide a definitive answer. Plan-makers should avoid expending significant resources on primary research (information that is collected through surveys, focus groups or interviews etc. and analysed to produce a new set of findings) as this will in many cases be a disproportionate way of establishing an evidence base. They should instead look to rely predominantly on secondary data (e.g. Census, national surveys) to inform their assessment which are identified within the guidance.

What is the starting point to establish the need for housing?

Household projections published by the Department for Communities and Local Government should provide the starting point estimate of overall housing need.

The household projections are produced by applying projected household representative rates to the population projections published by the Office for National Statistics. Projected household representative rates are based on trends observed in Census and Labour Force Survey data.

The household projections are trend based, i.e. they provide the household levels and structures that would result if the assumptions based on previous demographic trends in the population and rates of household formation were to be realised in practice. They do not attempt to predict the impact that future government policies, changing economic circumstances or other factors might have on demographic behaviour.

How often are the projections updated?

The 2011-based Interim Household Projections only cover a ten year period up to 2021, so plan makers would need to assess likely trends after 2021 to align with their development plan periods.

How should market signals be taken into account?

The housing need number suggested by household projections (the starting point) should be adjusted to reflect appropriate market signals as well as other market indicators of the balance between the demand for and supply of dwellings. Prices or rents rising faster than the national/local average may well indicate particular market undersupply relative to demand. Relevant signals may include the following [land prices, house prices, rents, affordability, rate of development and overcrowding].

How should plan makers respond to market signals?

Appropriate comparisons of indicators should be made. This includes comparison with longer term trends (both in absolute levels and rates of change) in the: housing market area; similar demographic and economic areas; and nationally. A worsening trend in any of these indicators will require upward adjustment to planned housing numbers compared to ones based solely on household projections. Volatility in some indicators requires care to be taken: in these cases rolling average comparisons may be helpful to identify persistent changes in trends."

Legal principles

12. Where a development plan is adopted or revised it may be challenged on the basis of conventional public law principles (Blyth Valley Borough Council v Persimmon Homes (North East) Ltd [2008] EWCA Civ 861 at para 8, per Keene LJ).
13. Those involved in plan-making and decision-taking in a planning context must interpret relevant policy documents properly, the true interpretation of such documents being a matter of law for the court (see Tesco Stores Ltd v Dundee City Council [2012] UKSC 13, at paras 17-23, per Lord Reed).
14. The Inspector's Examination Report "must be read fairly as a whole, it being inappropriate to subject it to the close textual analysis that might be required when construing statutory provisions" (Gallagher, per Hickinbottom J at para 62). There is "the need to avoid exegetical analysis of Inspectors' reports" (ibid at para 81).
15. It is common ground that the NPPF requires the full, objectively assessed, housing need ("OAN") for the relevant area to be ascertained by the relevant local planning authority before it decides whether those needs (or a higher or lower figure) should be the housing requirement of the relevant plan (see City and District of St Albans v Hunston Properties Ltd and Secretary of State CLG [2013] EWCA Civ 1610; Gallagher Estates Ltd v Solihull Metropolitan Borough Council [2014] EWHC 1283 (Admin) at para 94; upheld by the Court of Appeal in Solihull Metropolitan Borough Council v Gallagher Estates Ltd [2014] EWCA Civ 1610, in particular at paras 10 and 16, per Laws LJ, with whom Patten and Floyd LJJ agreed at paras 42 and 43 respectively).
16. In Solihull MBC v Gallagher Estates Ltd Laws LJ said:

"10. Hunston arose in the context of a planning application rather than a local development plan. But NPPF paragraph 47 is of course dealing with the production of Local Plans. Sir David Keene's observations are not obiter, and in my judgment offer a construction of paragraph 47 which cannot be distinguished for the purposes of the present case. The passage I have cited is binding authority for the proposition that the making of the OAN is an exercise which is prior to, and separate from, the application to that assessment of the impact of other relevant NPPF policies: the phrase 'as far as is consistent with the policies set out in this Framework' is not qualifying housing needs. It is qualifying the extent to which the Local Plan should go to meet those needs'. This conclusion is undiminished by references in paragraph 26 to a 'constrained housing requirement figure' and 'rounded assessment'. This, moreover, is exactly how Hickinbottom J understood NPPF paragraph 47—as with respect he was bound to do. He said this at paragraph 94 of his judgment:

'… [It] is clear that paragraph 47 of the NPPF requires full housing needs to be assessed in some way. It is insufficient, for NPPF purposes, for all material considerations (including need, demand and other relevant policies) simply to be weighed together. Nor is it sufficient simply to determine the maximum housing supply available, and constrain housing provision targets to that figure. Paragraph 47 requires full housing needs to be objectively assessed, and then a distinct assessment made as to whether (and if so, to what extent) other policies dictate or justify constraint. Here, numbers matter; because the larger the need the more pressure will or might be applied to infringe [sic: I apprehend 'impinge' is meant] on other inconsistent policies. The balancing exercise required by paragraph 47 cannot be performed without being informed by the actual full housing need'."

Laws LJ continued at paragraph 16:

"The NPPF indeed effected a radical change. It consisted in the two-step approach which paragraph 47 enjoined. The previous policy's methodology was essentially the striking of a balance. By contrast paragraph 47 required the OAN to be made first, and to be given effect in the Local Plan save only to the extent that that would be inconsistent with other NPPF policies. … The two-step approach is by no means barren or technical. It means the housing need is clearly and cleanly ascertained."

Laws LJ found the two-step approach to be "mandatory" (para 18).

17. Paragraph 182 of the NPPF gives advice as to what is meant in section 20 of the 2004 Act by a local plan being "sound". In Barratt Developments Plc v City of Wakefield MBC [2010] EWCA Civ 897 Carnwath LJ, as he then was, considered "soundness", then found in a similar context in the pre-NPPF Planning Policy Statements. He said at paragraph 11:

"I would emphasise that this guidance useful though it may be, is advisory only. Generally it appears to indicate the Department's view of what is required to make a strategy 'sound', as required by the statute. Authorities and inspectors must have regard to it, but it is not prescriptive. Ultimately it is they, not the Department, who are the judges of 'soundness'. Provided that they reach a conclusion which is not 'irrational' (meaning 'perverse'), their decision cannot be questioned in the courts. The mere fact that they may not have followed the policy guidance in every respect does not make the conclusion unlawful."

The Inspector's Report

18. The Inspector in the section of the Report headed "Assessment of Soundness" records in the preamble (at para 19) that "the PSB establishes the strategic planning framework for Stafford Borough for the period to 2031, setting out the overall future direction for the area to deliver the proposed strategic planning approach". He notes that "The Plan is accompanied by an extensive evidence base, including sustainability appraisals, supporting documents, background papers, technical reports and studies, along with further evidence and statements submitted to the examination".
19. The historical context of the PSB is set out at paragraph 20:

"Preparation of the PSB began in 2008, followed by consultation on key principles, Issues and Options, Preferred Options, Local Choices, Draft Core Policies and Strategic Policy Choices, leading to the pre-submission plan in 2013. A Planning Strategy Statement (2013) dealt with specific spatial options, including those not previously addressed. The PSB was originally prepared within the strategic context of the former West Midlands Regional Spatial Strategy (WMRSS), with which it needed to be in general conformity. When the PSB was being prepared, the WMRSS was subject to a Phase 2 Revision, with an examination and an EIP Panel Report. However, shortly after publishing the EIP Panel Report, further progress of the Phase 2 Revision was put on hold and was never formally approved by the Secretary of State; the WMRSS was formally revoked in May 2013. SBC made minor changes to the text of the PSB prior to submission, to address the implications of revocation."

20. The Report continues (at para 21):

"Although originally prepared in the context of the former WMRSS, the PSB is supported by its own locally-derived evidence base, with a justified strategy which addresses local issues and aspirations, in full knowledge of the future revocation of the WMRSS. The evidence base includes updated assessments of housing needs, employment land requirements, …"

21. The Inspector states that SBC has reviewed the Plan against the PPG published in March 2014, and that in assessing the soundness of the PSB he has "had regard to this latest guidance" (para 22).
22. The Inspector identifies the second main issue upon which the soundness of the PSB depends in the following terms:

"Issue 2 – is the Development Strategy for Stafford Borough soundly based, effective, appropriate, locally distinctive and justified by robust, proportionate and credible evidence, particularly in terms of delivering the proposed amount of housing, employment and other development, and is it positively prepared and consistent with national policy?"

23. At paragraph 29 the Inspector refers to Spatial Principle 2 which establishes the overall scale of housing and employment provision. The Report states:

"In order to boost significantly the supply of housing, the NPPF (paras 47, 50, 159, 178-182) requires authorities to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in the NPPF. They should also prepare a Strategic Housing Market Assessment (SHMA) to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The scale and mix of housing should meet household and population projections, taking account of migration and demographic change, addressing the need for all types of housing, including affordable housing, and catering for housing demand. Further guidance is given in the latest PPG, which confirms that DCLG household projections should provide the starting point when estimating future housing need."

24. The Inspector refers at paragraph 30 to detailed evidence submitted by SBC in justification of its objective assessment of housing needs [K1:B; M3/1a]. The submitted Plan proposes new housing at the rate of 500 dwellings/year (totalling 10,000 between 2011-2031), reflecting the 2012 SHMA. A joint SHMA was undertaken in 2008, and was updated for Stafford Borough in 2012. The Report states that "the latest SHMA not only identifies the scale of need for affordable housing, but also includes estimates of the total number of future households using the latest available housing and population forecasts; it also addresses the need for all types of housing and caters for housing demand, in line with the NPPF" (para 30).
25. The Report continues:

"31. The proposed level of housing provision takes account of the additional households estimated to be formed in Stafford Borough between 2011-2031, (at 461 households/year based on the 2008 DCLG household projections); and includes an element of further growth (natural change accounts for only 30% of new households, with in-migration representing nearly 70% of the total). This level of provision exceeds that estimated in the 'What Homes Where' toolkit, (using both the 2008 and 2011-based projections) [D7A-B; D8] and recognises Stafford's role as a growth point. It also takes account of the difference between the projected number of new households and new homes required, whilst catering for in-migration and significantly boosting housing delivery compared with recent completion rates, in line with the NPPF (para 47). Unlike some local authorities, the proposed level of provision fully meets the objectively assessed housing needs, without any policy constraints and without relying on figures from the former WMRSS or on a single set of population/household projections.

32. Some parties are concerned about SBC's assessment of housing needs and the fact that a joint SHMA, covering a wider housing market area, has not been undertaken since 2008. However, SBC has established the overall housing needs afresh, and the 2012 SHMA [D5] identifies the total number of future households needing market and affordable housing, based on the 2008 household projections; later evidence refines this assessment to consider the implications of the 2011-based interim household projections and examines economic and social drivers of housing demand [K1: B; N2.17]. The SHMA confirms that Stafford has strong links with neighbouring areas and does not have a self-contained housing market, but it takes account of migration into and out of the Borough, considers the wider housing market and allows for a considerable amount of in-migration, taking account of demographic trends and movements in the housing market."

26. Paragraph 35 of the Report notes that some developers press for higher levels of housing growth, ranging from 550-700 dw/yr, in part reflecting the previous level of housing recommended in the former WMRSS Phase 2 Revision EIP Panel Report (550 dw/yr), and taking into account previous shortfalls in provision, the need to fully meet affordable housing needs and deliver the economic strategy. The Inspector comments:

"However, since the WMRSS has now been revoked and the EIP Panel recommendations were never formally endorsed, these previous figures have little relevance, particularly since the baseline evidence and household projections used have been overtaken by more recent evidence. Nevertheless, the PSB continues the approach of supporting sustainable growth, including promoting Stafford town as a growth point, as envisaged in previous plans. SBC also confirms that the level of proposed housing provision is not intended as a maximum figure, which might constrain other sustainable and acceptable developments from coming forward."

27. The Inspector observes at paragraph 36 that national guidance (NPPF, paras 158-159) indicates that plans should not only consider the housing needs of the area, but also that housing and employment strategies should be integrated and take full account of relevant market and economic signals. He states:

"Some parties argue for higher levels of housing to allow for the expected increase in employment as a result of economic growth and to take account of market demand. SBC has provided additional evidence [N2.17], addressing economic and social factors, using existing available information and research. Based on relatively cautious economic aspirations and more recent economic reviews [E15-E16], this demonstrates the proposed level of housing provision will enable the economic strategy to be delivered, including the economic objectives of the Sustainable Community Strategies and the SSLEP; it is also consistent with SSLEP's Economic Growth Strategy [E17]. Other assessments have been provided by others, which use more recent economic trends and indicators, with more optimistic assumptions giving more weight to economic drivers. However, I am satisfied that SBC's assessment has a sound basis and provides a reasonable balance between housing and economic factors."

28. The Report continues at paragraph 37:

"SBC has also considered market demand for housing; the proposed level of provision would be higher than the average rate of past completions (442 dw/yr (2001-2013)), and nearer to the pre-recession average rate of completions. As regards affordable housing, some 30-40% of new housing is anticipated to be affordable (150-200 dw/yr), which will go a long way towards meeting the current shortfall of affordable housing (210 dw/yr). It would not be appropriate to further increase the overall level of housing to fully meet the need for affordable housing as a proportion of market housing, since there are other means of making such provision, and increased levels of housing may not be sustainable or deliverable."

29. At paragraph 42 of the Report the Inspector concludes in relation to the overall housing requirement for Stafford as follows:

"When all the evidence on the overall housing requirement for Stafford is examined, I am satisfied that SBC has made an objective assessment of the need for market and affordable housing in the Borough in a thorough and proportionate manner, having regard to a wide variety of relevant factors and recent household/population projections, building on existing information sources and having regard to the wider housing market. Furthermore, it has expressly identified a proposed level of housing provision in the PSB which fully meets those needs."

30. At paragraphs 43 and 44 of the Report reference is made to the proposals in the Plan for employment land and the business and economic needs of the Borough. At paragraph 44 the Inspector concludes: "Further evidence confirms that the proposed level of housing provision will enable the economic strategy to be delivered [N2.17]". Paragraph 45 states:

"Consequently, the Plan provides an effective and positively prepared framework to fully meet the objectively assessed housing needs of the Borough for both market and affordable housing in a sustainable, viable and deliverable manner, consistent with the latest household projections and the NPPF and PPG. It caters not only for the housing needs of the existing local population, but also accommodates a significant amount of in-migration, consistent with Stafford's role as a focus for growth. The overall scale of provision will be reviewed as delivery progresses and future household forecasts are produced, but at present, it represents a robust, effective and justified figure which fully meets the latest household projections and guides the allocation of specific sites. The Plan also provides an effective framework to provide an appropriate amount of new employment land, consistent with the NPPF and PPG, which will contribute to the local and wider economy, and which is deliverable, justified and soundly based."

31. When considering, as he was required to do so (see para 8 above), whether the Defendant has complied with any duty imposed on it by s.33A of the 2004 Act, the Inspector observed:

"8. … the overall level of housing proposed in the PSB would continue Stafford [Borough]'s role as a relative growth location, including accepting a considerable amount of in-migration (70% of the total housing provision) from outside the Borough."

Grounds of Challenge

32. The Claimant contends:

(1) That the Defendant, and the Inspector who conducted the Examination in Public into the PSB failed to have regard to the requirements of national guidance in relation to the objective assessment of full housing needs in the Borough (and in the housing market area).

(2) That the Defendant and the Inspector failed to consider the requirement in national guidance that any assessment of the market demand for housing should be informed by market signals/market indicators, and thus failed lawfully to define the market demand element of objectively assessed needs.

Discussion

Ground 1: failure to assess the full OAN for housing

33. Mr Christopher Lockhart-Mummery QC, for the Claimant, submits that as successfully submitted in the Gallagher case (when Mr Pratt was also the Inspector) "nowhere is the full housing need [of the Defendant] in fact objectively assessed", "the Inspector erred in his approach to this issue", and "failed to have proper regard to the policy requirements of the NPPF" (per Hickinbottom J at para 100) and to the PPG. It is, Mr Lockhart-Mummery suggests, extraordinary that nowhere in the Report does the Inspector refer to, let alone grapple with, the law and, in particular, the Gallagher decision which was handed down in the High Court in April 2014 and sets out in detail the correct approach to be adopted when assessing housing need. Further Mr Lockhart-Mummery contends that the Inspector's statement (at para 22) that he had regard to PPG is a bare assertion.
34. Having proper regard to national guidance, and understanding it, Mr Lockhart-Mummery submits, requires (1) an objective, unconstrained assessment of full housing needs, followed by (2) that assessment being set as the housing requirement of the Plan "unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in [the NPPF] taken as a whole" (see NPPF, para 14 at para 10 above). Mr Lockhart-Mummery submits that while regard was had by the Defendant and the Inspector to population and household projections (equivalent to "steering forwards by using a rear-view mirror"), the Plan figure of 500 dwellings per annum was assessed as a single step as an appropriate scale of housing for which provision should be made which is consistent with the emerging RSS Review, and as an explicit policy choice.
35. The Defendant, and the Inspector, relied on two documents for the "detailed evidence and justification of [the Defendant's] objective assessment of housing needs" (Inspector's Report, para 30 at para 24 above). The first document (K1:B) is Topic Paper B ("Establishing the Borough Housing Requirement), to the Defendant's Background Statement dated September 2013. The second (M3/1a) is the Defendant's "Examination Statement – Development Strategy" dated October 2013.
36. In August 2013 the Inspector asked the Defendant to produce a background paper covering, inter alia, "overall housing provision, including establishing and meeting the objective assessment of housing requirements for the district and the relevant housing market area" (Initial Questions, para 16). Topic Paper B was produced in response to that request by the Inspector. However it fails, Mr Lockhart-Mummery submits, to identify the OAN and then apply the test in paragraph 14 of the NPPF as to the extent to which the OAN should be met. At the outset in B1 ("Scope and Purpose") it falls into error. It is expressly cast in terms of "the appropriate scale of housing for which provision should be made", but that is not with what OAN is concerned. Paragraph B1.1 continues by stating that the level of 500 dwellings per annum "is consistent with national guidance, and more appropriate than any reasonable alternative". Mr Lockhart-Mummery criticises this as being a policy assessment. He contends that the conclusion to Topic Paper B (see B7.1) is again pure assertion.
37. At paragraph B3.3iv the Paper rejects reliance on national population and household projections as a full basis for future planning and at B3.4 states that:

"It now falls to the Local Plan to determine what levels are appropriate. This means taking account of all the ingredients mentioned above – likely future local demographic change, migration pressures and demand for housing – and two further considerations:

(i) local scope for and desirability of growth, recognising other planning factors, including environmental constraints, as NPPF (F1) para 14 (above) advises. This would include the availability of sufficient sustainable and viable locations for development; and

(ii) consistency of the proposals with those being advanced by other plans being produced (e.g. by neighbouring authorities)…"

Here, Mr Lockhart-Mummery submits, one finds the identification of housing need inextricably linked to environmental and policy factors, contrary to national guidance.

38. The second document, the Defendant's "Examination Statement – Development Strategy" relies in its essentials, Mr Lockhart-Mummery suggests, on Topic Paper B. At paragraph 3.3 Topic Paper B is referred to as "[setting] out the justification for the housing provision of 500 new homes per year over the Plan period for Stafford Borough, which meets both local need and in-migration demands based on evidence within the Stafford Borough Interim 2011 Household Projections (D7 A and B), within the context of the Population and Household Projections for Stafford Borough (D8)". Mr Lockhart-Mummery submits that the material paragraphs (paras 3.1-3.4) in Section 3 on Spatial Principle 2 in the Examination Statement add nothing to what is said in Topic Paper B on the OAN issue.
39. Mr Lockhart-Mummery contends that whilst there is a number of other potential places to look for an objective, unconstrained assessment of full housing needs, none in fact qualifies. It is common ground that the West Midlands RSS is of no current relevance, and that the approach in the RSS Revision Phase 2 did not comply with NPPF requirements (although Mr Lockhart-Mummery suggests that what is now accepted by the Defendant is difficult to reconcile with the contemporary documentation, see, in particular, Topic Paper G to the Background Statement at para G4.1); nor does the Defendant suggest that the proper assessment is to be found in the Local Plan documents which were produced prior to the publication of the NPPF in March 2012 and prior to the publication of the SHMA in September 2012. Paragraph 6.7 identifies a number of factors that should be taken into account when establishing future housing requirements for the Borough. Only one in the list (population and household projections over the Plan period) could, Mr Lockhart-Mummery submits, be relevant as a starting point for the OAN analysis; the remainder are 'supply-side' not 'needs-side' factors. Paragraph 6.8 takes the matter no further. Paragraph 6.11 is concerned with future demand for new housing, but the figures, Mr Lockhart-Mummery observes, relate to the period 2008-2033, not the relevant 20-year period 2011-2031. As a whole Mr Lockhart-Mummery submits statements in the Local Plan which touch upon how the OAN is derived are inadequate.
40. Further the DCLG household projections do not assist the Claimant. In Gallagher Hickinbottom J (at para 37(i)) observed that "they are not reliable as household growth estimates for particular years", and in the Court of Appeal Laws LJ (at para 27) stated that "the DCLG projections were clearly not an OAN". Household projections "provide the starting point estimate of overall housing need" (see PPG at para 3 of PPG at para 11 above).
41. Mr Lockhart-Mummery observes that the SHMA 2012 might suggest by its title that it provides the proper assessment required by the NPPF. However, he submits, it in fact contains no assessment of full OAN, and in particular no assessment of future market demand. It does contain an assessment of a net need of 210 affordable dwellings each year over the Plan period to 2031, but otherwise it simply reports the DCLG household projection of 2008 of an increase "of around 500 each year which equates with the target for new housing delivery" (at page 6). In other words, Mr Lockhart-Mummery observes, it assumes a target of 500, but does not seek to justify it. Moreover Mr Lockhart-Mummery comments, the figure of 500 first appeared in 2010 and has been unchanged for four years despite the raft of radically different policies that have been brought forward over that time.
42. In so far as the Defendant relies on passages in the Inspector's report, in particular paragraphs 30 and 42 (see paras 24 and 29 above), as recording evidence of a "proper assessment" Mr Lockhart-Mummery contends that the assertions in these and other paragraphs are not borne out by inspection of the relevant material. An example, Mr Lockhart-Mummery gives, of the alleged deficiencies in the process is in relation to affordable housing. As a result of policy requirements, some 150-200 dpa are anticipated to be affordable dwellings. The Inspector states that this provision "will go a long way towards meeting the current shortfall of affordable housing (210 dw/yr)" (para 37). Mr Lockhart-Mummery submits that this approach does not comply with the requirements of the NPPF for the quantified figure of affordable housing need, together with that for market housing, to be included in the initial OAN.
43. Mr Richard Humphreys QC, for the Defendant, submits, by reference to the findings made by the Inspector, that the proposed level of provision referred to was clearly 500 dpa, this was considered by the Inspector fully to meet the OAN, unconstrained by policy considerations. This, Mr Humphreys submits, fulfils the requirement of the "two-stage approach" in Gallagher.
44. The figure of 500 dpa included the figure of 210 dpa in respect of affordable housing which was based on evidence before the Inspector, namely the SHMA 2012.
45. Mr Humphreys relies on paragraphs 30 and 31 of the Report where the Inspector refers to the Defendant's Background Statement prepared at his request to help inform the Examination. Section B5(i) of Topic Paper B ("Demographic change – natural change and migration") includes the following:

"B5.3 During the latter stages of the preparation of the Plan for Stafford Borough (A1), its proposals took account of the 2008 based household forecasts (D8), which projected a need for 461 dwellings p.a. (totalling 11,523 over the 25 years; 2008-2033).

B5.5 The latest available projections (supplied in April 2013), are the 2011 based interim household projections, (D9) which project a need for 400 dwellings p.a. (totalling 4,000 for the 10 years 2011-2021). More detailed 2011 projections covering the period to 2036 are not expected to be available before November 2014, following production of further sub-national population projections.

B5.8 One helpful toolkit guide, which has apparently proved useful to some Examinations, is that produced by The Local Housing Requirement Assessment Working Group (LHRAWG) – an informal grouping of major professional and representative bodies with an interest in planning for housing in England, formed in 2011. The latest version of this is a spreadsheet entitled 'What Homes Where' (J14). This synthesises population and household projections to provide contextual figures, including numbers of new households expected for each Local Planning Authority. Based on the 2008 projections, it indicates for Stafford Borough a total number of extra households of 11,855 between 2006 and 2031, i.e. an average of 474 dwellings p.a.. This is simply a more precise version of the rounded figure contained in the SHMA 2012 (D5). The LHRAWG is currently considering the 2011 interim household projections, and is expected shortly to announce the implications for its toolkit. Based on the conclusions in para 5.5 above, it might be anticipated that the toolkit's annual average figure will fall slightly if the latest interim projections are taken into account.

B5.9 As has been evident from both this section and that preceding, annual requirements based on population and household projections change frequently and often by significant amounts. The Plan for Stafford Borough (A1) proposes a level of 500 dwellings p.a., which is slightly in excess of that suggested by current (and recent) projections, provides a clear and understandable benchmark, and co-incidentally is similar to that proposed by the RSS Phase 2 Revision (550 p.a.), even though based on much later information."

46. At the Examination Hearing Session on 23 October (attended by Mr Yendole and Mr Smethurst of the Defendant and Ms Penfold and Mr Lucas of the Claimant) the Inspector

"…made reference to the evidence base and to the Council's position as set out in Topic Papers B and C (K1), the Examination Statement (M3/1A) and its responses to Further Statements (N1d). He also made reference to the positions of other participants as set out in their original submissions and Further Statements. He summarised the different figures put forward for 'dwellings per annum' (dpa) (1.1)"

and during the session the participants made submissions. In the Examination Statement (October 2013) (M3/1A) the Defendant had set out their response to the question the Inspector had identified for this topic (see in particular paras 3.1-3.4). At para 3.3 the Defendant stated that it considered that

"the Plan fully meets the objectively assessed needs for market and affordable housing within Stafford Borough along with any unmet housing requirements from neighbouring authorities, based on the latest evidence, through the Plan's provision for 500 new homes per year over the Plan period. Background Statement (K1) Topic Paper B sets out the justification for the housing provision of 500 new homes per year over the Plan period for Stafford Borough, which meets both local need and in-migration demands based on evidence within the Stafford Borough Interim 2011 Household Projections (D7 A & B), within the context of the Population and Household Projections for Stafford Borough (D8)."

47. The Claimant in its EIP Hearing Statement (October 2013) stated at paragraph 6.8:

"We consider that a blended average of the last three series of household projections (i.e. 2006-, 2008- and 2011 based) might provide a more realistic assessment of the likely future longer term trajectory of household formation in Stafford Borough. These are 500 dpa, 472 dpa and 420 dpa respectively. The average of these three trajectories is 464 dpa."

The Claimant's figure of 600-650 dpa noted by the Inspector at the Examination Hearing Session on 23 October 2013 was based on an economic analysis with which the Defendant did not agree and which the Claimant now concedes the Defendant was not bound to accept.

48. I agree with Mr Humphreys that it was not necessary for the Inspector to refer expressly to the Gallagher decision. In the Report at paragraph 31 the Inspector states:

"Unlike some other local authorities, the proposed level of provision fully meets the objectively assessed housing needs, without any policy constraints and without relying on figures from the former WMRSS or on a single set of population/household projections."

I accept Mr Humphreys' submission that by that sentence the Inspector is showing that he is aware of the impact of the decision in Gallagher.

49. I reject the Claimant's contention that the Defendant and the Inspector failed to have proper regard to the requirements of national guidance in relation to the objective assessment of full housing needs in the Borough and in the housing market area. In my judgment the Inspector was entitled on the evidence to find that the full housing need of the Defendant had been objectively assessed in accordance with the NPPF and the PPG. In my view it is clear, in particular, from the content of the two documents, Topic Paper B and the Defendant's Examination Statement, and all the material considered by the Inspector at the Examination Hearing Session on 23 October 2013 that he was justified in finding that the figure of 500 dpa fully met the OAN, unconstrained by policy considerations.

Ground 2: failure to have regard to national guidance in relation to market demand.

50. Having regard to paragraphs 17, 47 and 159, in particular, of the NPPF and the PPG Mr Lockhart-Mummery submits that the critical question is whether the documentation prior to adoption of the Plan provides an assessment of market demand for housing, informed by market signals, to demonstrate compliance with national guidance.
51. Mr Lockhart-Mummery submits that while both the Defendant and the Inspector asserted that regard had been had to the PPG, neither had proper regard to, let alone addressed, the need to consider "market signals" and "other market indicators". The only evidence relied on by the Defendant and the Inspector related to past housing completions, accepted by the Defendant to be inadequate for these purposes.
52. At paragraph 36 the Report notes that "National guidance (NPPF; paras 158-159) indicates that plans should not only consider the housing needs of the area, but also that housing and employment strategies should be integrated and take full account of relevant market and economic signals". However thereafter in relation specifically to market demand for housing, Mr Lockhart-Mummery submits that the Report contains just one sentence on the point:

"SBC has also considered market demand for housing; the proposed level of provision would be higher than the average rate of past completions (442 dw/yr (2001-2013)), and nearer to the pre-recession average rate of completions." (Paragraph 37)

As for "market signals", the Report contains no evidence or indicator in relation to them. Further Mr Lockhart-Mummery submits there is no reference to market demand or market signals in the PSB itself.

53. The only document, Mr Lockhart-Mummery suggests, that purports to deal with market demand is Topic Paper B. Paragraph B5.14 states:

"Planning for future provision based on recent market evidence, in the current economic climate, is clearly not a sensible and sustainable basis for determining the appropriate scale of housing. The scale proposed (500 dwellings p.a.), based on demographic forecasting, and an approach towards growth within the Borough, should nonetheless adequately provide for demand similar to that experienced over the last 12 years or so, which averages 442 dwellings p.a."

Paragraph B3.3(iii) contains the comment:

"As the NPPF indicates, the Plan needs to cater for housing demand. But market demand is an imprecise and complicated basis for future planning. Particularly at the current time, recent demand levels have been influenced by the difficult economic conditions, and potentially by other factors such as the availability and timing of land releases."

54. However this document preceded the PPG, and therefore, Mr Lockhart-Mummery submits, does not (and could not) address the range of market signals which are there indicated. Further it post-dates, by some three years, the first identification of the figure of 500 dpa in the PSB.
55. Mr Lockhart-Mummery additionally submits that it was unfair of the Inspector simply to endorse the PSB as compliant with the national guidance, without inviting representations as to whether this could now be the case in the light of guidance explicitly advising on a range of key relevant factors, including market signals.
56. In my view this ground of challenge, as Mr Humphreys points out, fails to have regard to the written evidence submitted by the Claimant to the Inspector and the evidence given at the Examination Hearing Sessions which enabled him to reach his conclusion set out at paragraph 42 of the Report "having [had] regard to a wide variety of relevant factors" (see para 29 above).
57. Paragraph B5.10 of the Defendant's Background Statement (September 2013) sets out the data on recent completions for the period 2001/2-2012/13 that averaged 442 dwellings p.a. This figure was noted by the Inspector at paragraph 37 of the Report (see para 28 above).
58. The Claimant's EiP Hearing Statement dated October 2013 referred to paragraphs 158 and 159 of the NPPF (see chapter 2 "Policy and Strategy Context" at paras 2.4 and 2.6 respectively), and then set out the Claimant's evidence and views in respect of relevant market and economic signals. Appendix 1 to the Statement is an "Assessment of Future Housing Requirements in Stafford", prepared by Development Economics. Chapter 3 of the report (at pages 11-16) is entitled "Demographic Drivers of Demand". It covers population change, population projections, and household numbers and projections. The last bullet point in the "Key Conclusions" (at page 16) states:

…we advise that the 2011-based interim projections should not be relied on in isolation. Instead, it would be more robust to take averages across recent series of population and household projections produced from 2006 onwards."

59. Chapter 4 of the report (at pages 17-24) is concerned with "Economic Drivers of Demand". Paragraph 4.2 states:

"The analysis in this chapter draws from the latest available economic, labour market and other relevant data sets from the Office for National Statistics and other sources. It also draws from data and analysis found in a number of documents and reports prepared by or on behalf of the local authority and its partners."

The following topics are covered in this chapter: the business base and enterprise; employment base and business structure; labour force characteristics; travel to work patterns; and future employment growth. Key conclusions (at page 24) include the following:

"The economy influences future housing demand through productivity, the supply of jobs and household income. The Local Plan needs to ensure that it can create and sustain quality places to live, work, visit and do business in Stafford Borough as a key economic objective." [First bullet point]

"… any policy restricting future housing delivery below the levels required to meet future needs would likely result in a constraint to future economic growth and prosperity, and would be in direct conflict with the sustainable development and economic growth objective of the NPPF, as specified in paragraph 19 of that document." [Last bullet point]

60. Chapter 5 of the report (at pages 25-30) is concerned with "Housing Affordability". It covers relative affordability, local authority waiting list data, and the SHMA assessment of affordable housing need.
61. Chapter 6 of the report (at pages 28-30) is concerned with the adequacy of the proposed housing target. Paragraph 6.1 states:

"The purpose of this Chapter is to analyse the available demographic, economic and housing affordability evidence in order to assess the adequacy of the currently proposed housing delivery target for Stafford Borough and, if determined to be inadequate, to provide comment on what a more appropriate future housing target for the Borough is likely to be. This assessment reflects the issues and drivers of future housing requirements as set out in the NPPF, and the evidence discussed in the previous Chapters of the report."

62. The Defendant submitted a paper (N2.17) entitled "Possible housing drivers, economic and social factors" in response to the Inspector's request made on 24 October 2013. In that paper the Defendant recognised that the consideration of future economic performance is one of the necessary stages identified in determining an overall view (para 2); and the major economic difficulties of the recession are noted (para 3). Further the Paper stated, the update of the Defendant's Local Economic Forecasting Model in 2010 has presented "a still more pessimistic picture of the future of the Staffordshire economy" (para 7); and that it is very likely that public sector employment will decline further (para 11); hence the PSB is "founded on relatively cautious economic aspirations, which is sensible in the current climate" (para 8). The Paper added, "it cannot easily be concluded that significantly greater in-migration, over that projected by demographic forecasts, will result… growth is not likely to be significant to overcome weaknesses, and amount to justification in itself for further housing provision to cater for incoming workers" (para 16).
63. The Claimant responded to that document in November 2013, again referring specifically to paragraphs 158 and 159, concluding that "the housing delivery target proposed by Stafford Borough Council is unsound as it is based on out of date economic forecasts and other dated economic evidence that substantially underestimates the future employment growth prospects for Stafford" (see paragraphs 1.31 and 1.32).
64. In a document dated 17 December 2013 the Inspector set out his "recommendations for further main modifications". At paragraph 1 he stated:

"Following the hearing sessions of the examination, Stafford Borough Council (SBC) has drawn up Schedules of Main and Minor Modifications considered necessary to make the submitted Plan for Stafford Borough sound and capable of adoption."

He continued at paragraph 7:

"Having considered all the points made in the representations, statements and at the hearing sessions, I am satisfied that the proposed level of housing provision proposed in Spatial Principle 2 (500 dwellings/year; 10,000 dwellings 2011-2031) is sufficient to meet the objective assessment of market and affordable housing requirements for Stafford Borough, based on recent household projections and other evidence."

65. In March 2014 the Claimant made representations on the proposed modifications to the PSB and referred to the PPG that had recently been issued, and stated (at para 2.1.4):

"Whilst understanding that the submission of the Plan pre-dates the publication of the Government's final National Planning Practice Guidance (PPG) on the Assessment of Housing and Economic Needs, this now provides further guidance on how the requirements of the Framework should be interpreted when objectively assessing housing needs and further emphasises the inadequacy of the Council's approach. In particular the PPG sets out that housing numbers should be aligned with jobs growth, plan makers should assess the need for uplift in housing requirements taking account of market signals of housing demand and affordability, and that the total affordable housing need should be considered in the context of its delivery as a proportion of mixed market and affordable housing developments – an increase in the total housing figures should be considered where this would deliver the required number of affordable homes."

The representations continued (at para 2.1.5):

"Whilst acknowledging the Inspector's initial conclusions provided to the Council in December 2013, in light of the above we strongly question the ability to find that the Council's housing requirement is sound."

66. In April 2014 the Defendant made further written representations.
67. In my view it is clear that the Inspector had before him evidence submitted by both the Claimant and the Defendant, together with their representations, in relation to "market signals" and "other market indicators". Mr Humphreys points out that not only did the Inspector refer to market signals at paragraphs 36 and 37 of the Report, but that he had already done so at paragraph 32 (see references in para 25 above to K1:B and N2:17). He took the view that the Defendant's approach was justified, and it is not suggested that that view was perverse.
68. As Mr Humphreys observes the requirement to have regard to "market signals" and "market indicators" was not introduced for the first time with the PPG in March 2014. The NPPF (March 2012) required local planning authorities to "take full account of relevant market and economic signals" (para 158); and indeed, Mr Humphreys submits, the Defendant had done that in the SHMA (September 2012) (see paras 1.7; items 2, 5 and 6 in Table 1.1 and Table 1.2 and C1 in Technical Appendix C). He accepts that regard must be had to the PPG guidance but observes that it is advisory only (see para 17 above). The evidence shows, he submits, that the Defendant referred to the PPG in its representations in April 2014 and contended that the PPG was "broadly consistent with the approach subsequently recommended by the [PPG]" (para 2).
69. I reject the Claimant's contention that the Inspector endorsed the PSB as compliant with national guidance without inviting representations as to whether this was the case after the issue of the PPG in March 2014. Not only did the Claimant have an opportunity to make representations but it did so in its March 2014 representations on proposed modifications to the PSB (see para 66 above).
70. In my judgment both the Defendant and the Inspector considered "market signals" and "other market indicators", as they were required to do by national guidance. I am satisfied that the Inspector properly reached the conclusions that he did in respect of these matters based on the evidence and representations put forward by both the Claimant and the Defendant.

Conclusion

71. For the reasons I have given this claim fails.