Legal Report - Downturn carries weight when opportunity knocks

Is the credit crunch a development control matter?

The real question here is whether the current economic situation can amount to a material consideration in determining a planning application and, if so, how much weight it should carry.

The development industry has been hit hard by the downturn, leading to the loss of opportunities across the spectrum. The housing, retail, office and leisure sectors are all experiencing cancellations and cutbacks and sites are being mothballed. The amount of new development commenced or envisaged has dropped considerably, but it has not come to a complete halt.

Developers and landowners may face a situation in which an empty building could be converted into a new use and this could be implemented quickly. Equally, they may have a vacant site on which a development could be built and brought into use just as quickly. The problem could be that the relevant development plan does not support the change of use or development and the land is designated for a different use.

Credit crunch triggers debate

If the provisions of the development plan were to prevail, developers and landowners could argue that the land would remain undeveloped and hence become derelict. The developer or landowner would also be able to cite the current economic situation as evidence that there are no prospects of the designated use commencing in the short term. In that case, is it not better to have some development than no development at all?

Section 70(2) of the Town and Country Planning Act 1990 stipulates that the determination of a planning application necessitates having regard to the provisions of the development plan, so far as material to the application, and to any other material considerations. There is no statutory definition as to what constitutes a material consideration, so guidance has to be obtained from cases where the courts have considered its meaning.

Because planning permission runs with the land and the planning system is development plan-led, the scope for pleading the circumstances of individuals is somewhat limited. However, most local authorities have adopted a policy or objective stating that one of their primary aims is to help regeneration and to achieve economic prosperity for their areas. A change of use application could be supported in principle by relying on these broad objectives.

In Westminster City Council v Great Portland Estates [1985], the House of Lords held that personal circumstance can be taken into account. "Personal circumstances of an occupier, personal hardship or the difficulties of businesses which are of value to the character of a community are not to be ignored in the administration of planning control," the law lords concluded.

Applicants need specific cases

Such circumstances are clearly an exception to a general rule. A specific case has to be made by the applicant and the planning authority has to follow that through and give reasons for accepting it. However, there have been further helpful judicial comments dealing with financial issues as material considerations.

The High Court has held that local planning authorities must be entitled to bear in mind the likelihood of the proposed development being carried into effect. So it must be a planning consideration that a consequence of refusing planning permission would be an existing building being left unoccupied and derelict.

The implementation of such a permission can be argued to be a planning gain, particularly if a building is already derelict. But while a landowner might argue personal hardship by claiming that he would be in dire financial straits without a potential sale to a developer, such an argument is unlikely to be persuasive.

To be successful, any departure application needs to be thoroughly prepared to show that it will not undermine the council's existing strategies. Detailed evidence will be required to show why there is little or no interest in development on the site for its safeguarded uses. A temporary use in an existing building would probably be more likely to be approved than the construction of a new building for a different use on a vacant site.

However, local authorities will continue to give way to their development plan and land-use allocations. Despite the downturn, they are likely to assert that the only development should be that which is in accordance with the development plan.

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