In continued pursuit of the "Big Society", the Coalition Government has taken its first steps towards sweeping away regional policy and empowering local communities to exert increased influence on planning decisions. In doing so, it has stumbled over the Administrative Court.

On 10 November 2010, the case of Cala Homes (South) Limited v Secretary of State for Communities and Local Government and Winchester City Council [2010] EWHC 2688 (Admin) held that the abolition of Regional Spatial Strategies by the Secretary of State for Communities and Local Government in July was unlawful. This decision casts doubt over the regulatory basis for deciding extant planning applications and appeals in England. The position is to be crystallised only once the law is changed late next year, so what are developers to do in the meantime?

Revocation

RSSs were introduced in 2004 to provide a regional tier of the planning framework in England (outside London) to assist local planning authorities (LPAs) in implementing policies and deciding planning applications.

As foreshadowed by a series of letters and announcements issued from May this year, on 6 July 2010 Rt Hon Eric Pickles MP issued a written statement in Parliament revoking RSSs with immediate effect. He relied on the discretionary power provided under Section 79(6) of the Local Democracy, Economic Development and Construction Act 2009 which allows the Secretary of State to "at any time revoke all or any part of a regional strategy" where he thinks it necessary or expedient to do so.

This revocation was followed by written advice to LPAs advising that, in determining applications, they should no longer have regard to RSSs as part of the development plan. It further suggested that where applications had been made but not yet determined, LPAs "may wish to review" them in light of the policy change.

Reaction

The Secretary of State's actions alarmed a number of house-builders who had applied for planning permission by reference to RSS housing targets. Cala Homes was the first of several applicants for judicial review to have its case heard. It had intended to appeal against a refusal of an application for planning permission to build 2,000 homes in Winchester on the basis of housing targets set out in the South East Regional Strategy. However, following the purported revocation of RSSs, no reliance could be placed on these targets, adversely affecting Cala Homes' prospects of a successful appeal.

Judicial review proceedings were brought on two procedural grounds. Firstly, it was argued that the revocation of RSSs constituted an abuse of power (in which respect see R v Minister of Agriculture and Fisheries ex p. Padfield [1968] APP.L.R). Sales J adopted a purposive approach and upheld this ground, stating that ministerial powers should be exercised to promote the objects of the enabling statute, and that the attempted erasure of the entire regional strategy system frustrated the underlying policy of the 2009 Act – to establish a planning strategy for each region. He said that the Secretary of State did not have the power to "...denude primary legislation, without having to seek the approval of Parliament for such a course.…".

Secondly, it was argued that the Secretary of State had acted unlawfully by omitting to undertake a Strategic Environmental Assessment (SEA) or at least conducting a screening exercise to assess whether SEA would be required. SEA is the process of appraising impacts of proposed Government plans and programmes on environmental protection and sustainable development aims. It reflects requirements of the European SEA Directive (2001/42/EC) incorporated into UK law in 2004, which might require, in relation to the RSSs, the preparation of an environmental report to identify and evaluate the likely significant environmental effects of a revocation. Sales J highlighted that SEA was undertaken when the RSSs were adopted, so it was inconsistent not to apply the same approach in seeking to revoke them.

Deciding in favour of Cala Homes, Sales J held that the Secretary of State's actions had been unlawful, resulting in the quashing of the revocation and, effectively, reinstating RSSs for the time being.

Response

The Government's reaction to this decision was mixed. It announced that it had no intention to appeal, yet it also advised LPAs to minimise the weight they attached to RSSs in deciding planning applications. In line with its latest White Paper entitled "Local Growth: Realising Every Place's Potential" and on the same day as the publication of the Cala Homes decision, the Government issued an open letter to LPAs reiterating its intention to abolish RSSs under the imminent Decentralisation and Localism Bill. It again stated that the upcoming revocation should be a "material consideration" in planning decisions, until the provisions of the Bill are brought into force in late 2011. The Planning Inspectorate also attempted to clarify the situation by producing guidance for Inspectors on appeal decisions involving RSSs.

Repeat?

Despite this recent proliferation of advice, clarity on the RSS position remains elusive.

On 29 November 2010, industry press reported that Cala Homes had been successful in a second action against the Government's approach to RSSs. There may well have been a sense of déjà vu in the Court, as Cala Homes once more claimed that the Government had acted unlawfully - this time in guiding LPAs to treat the future revocation of RSSs as a material consideration in planning decisions after the ruling on 10 November 2010.

Finding that it was not appropriate to base planning decisions on an intention to amend the law in the future, the Court held that a full hearing would be necessary to determine the legality of the Secretary of State's most recent actions. Until this hearing takes place, RSSs will continue in full force and effect, and all advice relating to the revocation of RSSs should be disregarded.

Result

RSSs should be treated as part of the development plan until the outcome of the further hearing is known. It would be open to developers seeking to rely on RSSs to apply for consent or lodge appeals in the meantime, but there is no guarantee that this will preserve RSS targets for submissions after 10 November 2010. If the Court holds that the future abolition should not be a material consideration until RSSs are formally revoked by primary legislation, there will be a meaningful effect on only a small number of planning cases. It will only be those applications or appeals submitted prior to May 2010 (when first advice about the RSS revocation was issued) and prejudiced by the July revocation, that will benefit from the initial Cala Homes decision in practice.

Regardless of how the Government fares in the legal battle over the coming months, it looks likely to win the war of wider regulatory reform. It will ultimately be the delayed Decentralisation and Localism Bill that determines how the planning regime will confront the many socio-economic challenges ahead - Cala Homes is likely to represent a mere bump in the long road towards localism.

To view the Government's White Paper "Local Growth: Realising Every Place's Potential" issued on 28 October 2010, please click here

To read the decision in Cala Homes (South) Limited v Secretary of State for Communities and Local Government and Winchester City Council, please click here