CASEBOOK: Factory outlet rejected despite council support

The deputy prime minister has refused permission for a factory outlet centre in a Cumbrian town following a call-in inquiry, despite the local authority's strong support for the development.

Kendals FOC Ltd proposed to build the scheme approximately 665m south of the town centre on land that already contained a smaller factory outlet centre. The proposal included 7,400 sq m gross of retail floorspace together with a 455 sq m restaurant and 533 car parking spaces. The largest unit would be occupied by Clark's Shoes, while other retailers would sell pottery, clothes, glass and household goods.

In giving strong backing for the scheme, the council claimed that it would support and enhance the quality of shopping in Kendal because it would be attractive to shoppers and generate linked trips to and from the town centre. Kendal itself, the council argued, was robust and at worse would lose only six per cent of its turnover to the outlet, a loss that would be offset by expenditure made by shoppers who would otherwise go elsewhere.

The deputy prime minister agreed with his inspector that the site was suitable for a factory outlet centre. While there was a quantitative need for additional comparison goods floorspace, he found the qualitative case less clear-cut. In particular, he judged that many of the qualitative arguments put forward by the applicant related to the regeneration of the site and the benefits of the factory outlet format, whereas the government's policy statement in April stated that these are not aspects of need.

In applying the sequential approach, the deputy prime minister concluded that insufficient flexibility had been applied since the scheme had not been examined on a disaggregated basis. While agreeing that it would be unhealthy for all the vacant town centre units to be occupied by retailers seeking space in the outlet centre because it would severely affect their turnover, he felt that a number of town centre sites presented suitable and sequentially preferable opportunities.

Although he accepted that trade diversion from the town centre would be limited, he was not convinced that the applicant had assessed the likely trading effects against paragraph 4.3 of PPG6. This advice takes a broader view of impact on a centre's vitality and viability than monetary diversion, he pointed out. While accepting that the scheme would have regenerative benefits, he decided that the out-of-centre location and the availability of sequentially preferable alternatives were overriding and justified refusing permission.

DCS No: 33941562; Inspector: Mary O'Rourke; Inquiry.

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