Cala Homes vs Eric Pickles: Who will be the ultimate winner?

Cala Homes may have won its court battle against communities secretary Eric Pickles over his decision to scrap regional housing targets in England but will it be a pyrrhic victory?  

The Conservatives’ green paper trumpeted their intention to return planning powers back to local people - the so called localism agenda. As a consequence, Pickles upon the coalition government taking power used discretionary powers contained in the Local Democracy, Economic Development and Construction Act 2009 to abolish Regional Spatial Strategies. 

The decision caused uproar amongst the development community - regional housing targets were embodied in regional spatial strategies (RSSs) and were one of the key factors in determining the acceptability of housing development in England.  The vacuum created led to huge concerns about the basis upon which housing need should be assessed in the context of determining applications for housing, and a range of other strategic development schemes. 

In essence confidence in a system critical to the delivery of housing evaporated with few housebuilders being prepared to invest in planning applications for residential development given the great uncertainty in terms of outcome. Proposals for thousands of homes were abandoned.

Housing developer Cala Homes argued that Pickles was wrongly seeking to revoke RSS through discretionary powers and Mr Justice Sales agreed, saying that Cala Homes’s argument was “well founded”. 

The developer argued that primary legislation should have been introduced, giving MPs the opportunity to debate an issue crucial to future planning in England.  Pickles argued that regional strategies were made by regional assemblies, an undemocratic tier of regional government and this undermined directly elected authorities.

We believe it will take a great deal of time to bring this legislation onto the statute books and even longer for local authorities to act on its provisions.

Mr Justice Sales held that the secretary of state could not lawfully use his power under section 79(6) of the Local Democracy, Economic Development and Construction Act 2009 to revoke regional strategies as it would be an improper use of an Act, which was directed at putting regional strategies in place. As such, the power conferred by section 79(6) was never intended to be used to effect the abrogation of the regional tier of the development plan.

Importantly, the judge also held that the decision to revoke regional strategies was taken in breach of the Environmental Assessment of Plans and Programmes Regulations 2004. The judge held that such a significant change in the development plan as the revocation of regional strategies constituted a modification to a plan or programme for the purposes of the 2004 regulations.

As such, the secretary of state had acted unlawfully by seeking to revoke each regional strategy without first giving notice and then conducting a screening assessment under the 2004 regulations to consider whether the decision was likely to have significant environmental effects. RegNotably, the secretary of state has not sought leave to appeal.

Bob Neill, junior communities minister, has already said that the judgment “changes very little”. This is because the government is due to introduce the Localism Bill into Parliament on 22 November, which will provide the statutory basis for the scrapping of regional housing targets.  However, this misses the point. 

We believe it will take a great deal of time to bring this legislation onto the statute books and even longer for local authorities to act on its provisions. In the interim, the reintroduction of the regional strategies will ensure that their content will guide and direct development under the statutory requirements of s38 of the Town and Country Planning Act 1990 and no amount of government statements or policy making can unsettle that position.

The best the government can do will be to play down the function of regional guidance, but even this approach cannot overcome those circumstances where regional policy identifies a shortfall of housing land supply and a proposed scheme will remedy that position.

As was made clear by the legal team acting for Cala Homes, this challenge was not about an attack on localism.  It was about the way in which Pickles had reached his decision.  Although the government considers that the regional approach has been one of the fundamental causes of low housebuilding rates, the fact is that housing targets are needed whether they are driven at a local or regional level.  Pickles decision simply removed housing targets and put nothing back in their place, at a time when the need for more housing has never been more acute.

Paul Wootton is a planning partner at law firm Eversheds