Summary

The recent judicial review in R (Holborn Studios) v London Borough of Hackney raises important considerations for developers and planning authorities in terms of  financial details to be disclosed in viability assessments that accompany certain planning applications. The case also contains some useful guidance on the lobbying of committee members on planning applications. In this blog we discuss the details and implications of this case.

Background

In R (Holborn Studios) v London Borough of Hackney^[1], the Planning Court quashed a planning permission granted in August 2019 for a mixed used scheme comprising commercial and residential uses at Holborn Studios in Hackney, on the basis of the poor quality of the publicly available viability information and the council’s failure to list, and provide for inspection, related background papers.

An off-site affordable housing contribution had been agreed between the applicant and the planning authority on the basis of a redacted viability assessment, although later revised to provide more information to the local planning authority.

The Claimant, Holborn Studios Limited, judicially reviewed the planning permission on three grounds, of which the following two are highlighted in this blog:

(i) that it was not possible to understand the scheme’s viability from the applicant’s redacted viability assessment and that the information submitted was not correctly listed and did not meet national or local policy requirements; and
(ii) the planning authority’s guidance to the planning committee prevented members from reading lobbying materials.

Decision

Viability information

The planning permission was quashed on the first ground, firstly, because the planning authority had not complied with its obligations under the Local Government Act 1972^[2] (“LGA 1972”) to list the background papers in the committee report and provide them for inspection. It was ‘inconceivable’ the Judge^[3] said, that none of the significant quantity of documents relating to the viability assessment qualified for inclusion in the public papers made available for the committee meeting under LGA 1972 provisions.

The planning authority’s argument that the missing information from the viability assessment was “exempt information” under LGA 1972 was rejected and the Judge considered that the NPPF and PPG weighed in favour of the public interest in disclosing the information, particularly as it was anticipated by policy that, save in exceptional circumstances, viability assessments should be made publicly available.

The Judge also rejected the argument that the material that was publicly available was comprehensive enough to cure the Council’s non-compliance. The Judge stated that critical elements of the material were “opaque and unexplained”, including that key figures were inconsistent and not “capable of being understood”.

It was particularly noted that any viability assessment or executive summary should specifically identify the existing use value and the landowners’ premium used to derive the benchmark land value. The objective of the PPG, frustrated in this case, was that inputs and findings should be “set out in a way which enables clear interpretation and interrogation of those figures”.

In conclusion, it was held that the “opaque and incoherent” nature of the available materials and the defaults in relation to provision of background information were together sufficient for this ground of challenge to succeed and, accordingly, the planning permission should be quashed.

Lobbying materials

Although the challenge was not ultimately successful on this ground and the ground was dismissed, it is notable that the Judge said that the freedom of expression under the ECHR^[4] was engaged in communications between planning committee members and members of the public.

On the facts, rather than the Council’s code of conduct precluding members from reading lobbying materials from members of the public as alleged by the Claimant, the ‘difficulty’ was the approach of certain members and the Council’s standard correspondence. Attempts to prevent lobbying materials being sent to committee members did not reflect the entitlement to freedom of expression as set out.

Nevertheless, the Judge considered that, in this case, the Claimant’s oral presentation rectified any interference with Article 10^[5], as the Claimant was able to communicate its objections directly to the committee.

Comment

The amendments to the NPPF and PPG in 2018 introduced a standard approach to the preparation of viability assessments and new guidance. The PPG provides that it is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage and that any viability assessment should be prepared on the basis that it will be made publicly available other than in exceptional circumstances, and even in those circumstances an executive summary should be made publicly available.

This decision will be seen to advance the understanding of how financial viability assessments should be treated and, going forward, applicants and local planning authorities should give careful consideration to their preparation and submission to ensure that they follows the principles and approach set out in the NPPF and PPG.

Where parties seek to rely on the exemption from public inspection and instead produce just an executive summary, careful consideration will need to be given to the public interest and whether the information provided is enough to comply with the requirements under the NPPF and PPG. Any executive summary must be comprehensive and allow an assessment of the key propositions and standardised inputs from the main report.

This case shows a strong preference for full viability information to be produced rather than just a summary of it, so applicants will need to consider this when balancing the commercial risks and consequences of full disclosure and mitigation of the risk of judicial review.

^[1] - [2020] EWHC 1509 (Admin).
^[2] - S100D LGA 1972
^[3] - Dove J
^[4] - European Convention of Human Rights
^[5] - Article 10 ECHR – Freedom of Expression