On the Levels: Will a Landmark Ruling Frustrate Government Economic Goals?

By the time Rachel Reeves delivered her first Budget last year, she and her colleagues had already given forewarning of what might be in store with references to a £40 billion 'black hole' in public finances.

If the most recent calculations are anything to go by, the Treasury's predicament has become even more acute. Last week, the Institute for Fiscal Studies detailed how the UK government is getting deeper into debt, with greater borrowing meaning an elevated need to tighten belts.

Ms Reeves and her Cabinet colleagues remain convinced that one "driver for growth" is housing development.

Only last week, she promised to do what she could to realise the "full potential of the landmark Planning and Infrastructure Bill".

However, even as that communique was issued and with planning for next month's Budget at an advanced stage, she will doubtless have been aware of how her intentions might be affected by the outcome of a case which was then awaiting judgement by the Supreme Court.

That decision has now been handed down and, although it was a win for the developer in this case, I believe it will still be regarded in Whitehall as something of a check on the Government's ambitions.

The case concerns the decade-long attempt by a housing developer to progress a scheme for 650 homes, commercial and community facilities, and a school on farmland near Wellington, in Somerset.

The site is in the catchment area of the River Tone, which feeds into the Somerset Levels.

In December 2015, the local planning authority, Somerset West and Taunton Council (which now goes by the abbreviated title Somerset Council) granted outline permission enabling the project to proceed in a series of stages, subject to a series of conditions being met, including assessment of the impact on the local environment.

Nearly five years later, Natural England, which advises the Government on the natural environment in England, issued a guidance advice note regarding the potential impact of pollution on habitats attracting the highest level of protection in the UK, including wetlands of particular importance, known as Ramsar sites, named after the Iranian city where a convention on the matter was signed in 1971.

The Somerset Levels and moors is one such Ramsar site, renowned among other things for its significance to bird conservation efforts.

Natural England instructed that construction schemes should not be allowed to proceed if the developers responsible for them were unable to demonstrate that they would not lead to an increase in nutrient levels - a requirement known as 'nutrient neutrality'.

The advice followed a judgement handed down by the European Court of Justice - known as the 'Dutch Nitrogen' case - which stressed the imperative in abiding by a European Habitat Directive which came into force in 1992.

That ruling led to a number of smaller decsisions in the Nerherlands' which culminated in the country's Government this year being ordered to reduce nitrogen levels in it's most vulnerable environments in the next five years or face a €10 million penalty.

In the Somerset case, the developer, CG Fry, and the Home Builders' Federation - the representative body of the home building industry in England and Wales - maintained that many of the conditions attached to the Wellington scheme should be removed, claiming that there was only "very limited" scope for mitigation measures near the Levels.

Furthermore, it claimed that following Natural England’s advice would block development – a complaint that has been made consistently by developers since the advice was first issued.

When the Council withheld its approval, the developer appealed first to the Secretary of State. After an adverse outcome, it appealed again to the High Court, Court of Appeal and, finally, to the Supreme Court.

One of its arguments was that the effects of development on the Somerset Levels could only be assessed at the first stage of the planning process – when outline planning permission was granted. Assessment could not be required at a later stage in the process – in this case, when the develop applied to discharge planning conditions.

Five Supreme Court justices have now unanimously rejected such submissions.

"The protective purpose of the Habitats Regulations", the court said, "would be defeated, rather than promoted and respected", if an appropriate assessment of environmental impact could not be conducted at a later stage of a planning process staggered over various phases.

I should point out that the Supreme Court ruling does not amount to a free hand for local authorities to change their minds and reverse planning approval on the basis of new Government advice or policy.

The Court has also reiterated that, when planning permission is granted, it gives the developer a legal right which should not be thwarted retrospectively.

If a validly granted planning permission is to be withdrawn or amended, the developer is entitled to compensation. Otherwise, any change in approach should affect future decisions only.

In this case, the publication of a policy and new guidance relating to the protection of Ramsar sites did not allow the local authority to use the process for discharging planning conditions to, in effect, revisit the planning permission that had been granted in principle.

On the whole, I believe that the Government will interpret the ruling as something of a frustration. While house builders will no doubt celebrate the prohibition on revisiting matters of principle, concerns will remain that the current approach to impact assessment (at whatever stage in the planning process it may be required) will not aid the pace of the construction the government desires for economic growth.

I suspect that it will not, though, come entirely as a surprise, especially given testimony by Natural England to Parliament's Environment and Climate Change Committee in April.

The organisation's Chairman, Dr Tony Juniper, explained that 99 per cent of the nitrogen-sensitive habitats in the UK "are exceeding a critical load of nitrogen". When it comes to sites of special scientific interest like the Somerset Levels, two-thirds are in a similarly delicate condition.

With the Housing Secretary, Steve Reed, already admitting that his job is "on the line" if a target of building more than a million new homes is not met and Rachel Reeves looking for economic progress, delay - even for ecologically sound reasons - is the last thing the Government would welcome.

Please contact Emma to discuss any of the above further emmatattersdill@bexleybeaumont.com  |  07944371558