Council justified in seeking £800k price tag for retirement scheme

24 Jul 2018

Planning and Environment

An Inspector has upheld Braintree District Council’s decision to refuse permission for a retirement scheme, partly on the basis that the developer had failed to provide a policy driven affordable housing requirement totaling £789,462 (in addition to the £49,320 open space contribution).

The appeal site was a demolished sports centre owned by the Council, which it had agreed to sell to the developer (subject to planning permission) for £1,250,000. The developer argued the Benchmark Land Value (“BLV”) for planning purposes, was the Alternative Use Value (“AUV”) of the site for a 14-unit residential scheme, a retail scheme or an office use. Those being the three alternative uses the Council had considered when determining £1.25 million was the best value for which the site could be sold. The Council argued that AUV was inappropriate in these circumstances and that an Existing Use Value + (“EUV”) should instead be used. The “+” representing an uplift to incentivize the landowner to sell. It was agreed the EUV was around £100,000.

The Planning Practice Guidance does not presently prescribe either AUV or EUV as the appropriate BLV. The Inspector accepted the Council’s submissions that the AUV was not appropriate in this instance. The site was not allocated for any alternative use, nor did it have planning permission for any other use. In the absence of evidence demonstrating the alternative uses would comply with planning policy, the AUV was neither “realistic” nor would “comply with planning policy” in accordance with the PPG (see DL,52). The Council’s decision to sell the land for an AUV figure was not relevant. The Council’s duty when disposing of the land is simply to obtain the best value, not to verify that the prospective use complied with planning policy (see DL, 53).

The decision underscores the importance of demonstrating that any BLV based on an alternative use is realistic and complies with planning policy. It also follows the important judgment by Holgate J in Parkhurst Road Ltd v SSCLG [2018] EWHC 991 (Admin.) which upheld an Inspector’s approach to BLV (coincidently the same Inspector) and, in particular, cautioned against using purely market based approaches which fail to pay due regard to planning policy.

The Inspector’s decision letter can be found here.

Ashley Bowes and Sam Fowles (currently a pupil at Cornerstone Barristers) appeared for the successful Council.