The concession by secretary of state Robert Jenrick, concerning a four-home scheme in East Northamptonshire, is likely to mean that local authorities find it easier to satisfy their five-year housing land supply targets, according to experts.
Before the case was heard in court, Jenrick accepted in a High Court consent order that a planning inspector applied the wrong test when deciding whether East Northamptonshire Council had a "deliverable" five-year housing land supply.
Lourett Developments Limited applied to the council to build four new homes to the rear of 7-11 The Willows, in Thrapston.
Outline planning permission was refused by the authority but Lourett's appeal was upheld and permission granted by planning inspector, Graham Chamberlain, in January.
The inspector found that the development, although not inherently harmful to the area's character and appearance, would not be in a suitable location. The decisive factor in his decision, however, was his finding that the council did not have a five-year supply in hand.
East Northamptonshire said it had a housing land supply of 2,660 homes, sufficient to last 6.03 years and comfortably above the NPPF's five-year target. Lourett, however, contended that the supply was just 1,269 homes, or only around 2.88 years.
In consequently applying the NPPF's presumption in favour of sustainable development, or 'tilted balance', due to the absence of a five-year supply, the inspector said: "Much of the discrepancy can be put down to the council not adhering to the definition of what constitutes a deliverable site in the Framework.
"At least 744 homes can immediately be removed from the council's housing land supply. This alone means the council is unable to demonstrate a five-year housing land supply, the supply being in the region of 4.28 years."
Representing the council, planning barrister Josef Cannon, of Cornerstone Barristers, lodged a High Court challenge to the inspector's decision on the basis that he had fundamentally misunderstood the NPPF definition of deliverable.
The glossary to the NPPF states that, to be considered deliverable, housing sites "should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years".
The NPPF then lists certain types of sites that can be considered deliverable if there is clear evidence that housing completions will begin within five years. Together with sites with the benefit of full planning permission, it lists sites with outline consent for major development, sites allocated in a development plan, sites with permission in principle or sites identified on a brownfield register.
Challenging the inspector's approach, Cannon argued that, in treating that as an exhaustive - or 'closed' list, he misunderstood the deliverability test and removed from the council's supply figures sites which, as a matter of planning judgement, were deliverable.
Emphasising that the correct test is whether there is a realistic prospect of housing being delivered on a site within five years, Cannon submitted that the inspector should have gone on to consider whether sites which did not fall within one of the specific listed categories were "deliverable anyway".
Prior to the council's challenge coming to court, Jenrick conceded the point and agreed that the planning permission should be quashed and that Lourett's appeal should be heard afresh. He also agreed to pay the council's £8,616 legal costs.
Giving reasons for the climb down, the secretary of state's legal advisers said: "He concedes that he erred in his interpretation of the definition of deliverable within the glossary of the NPPF as a 'closed list.' It is not.
"The proper interpretation of the definition is that any site which can be shown to be 'available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site will meet the definition.
"The examples given (in the NPPF glossary) are not exhaustive of all the categories of site which are capable of meeting that definition. Whether a site does or does not meet the definition is a mater of planning judgement on the evidence available."
In a statement following the secretary of state's concession, Cornerstone Barristers said the case was likely to have major implications for the way in which local planning authorities go about calculating their five-year supply of housing land.
The debate within the planning community as to the correct definition of 'deliverable' would now hopefully be 'put to bed.'
The statement adds: "The secretary of state has explicitly accepted that the definition is not to be taken as a 'closed list' and site types not listed within the definition - for example, sites with a resolution to grant planning permission subject to the execution of a section 106 agreement, or draft allocations in an emerging plan - are capable of being deliverable if the evidence shows that they are "available now, offer a suitable location for development now, and are achievable with a realistic prospect that housing will be delivered on the site within five years". That will be a matter for planning judgment on the evidence available."