Deep Dive: Retrofit, embodied carbon and the M&S Decision – refusal and recrimination on Oxford Street
By Estelle Dehon KC and Rowan Clapp
On 20 July 2023, the Secretary of State for Levelling Up, Housing and Communities (“SoS”) published the much anticipated decision determining Marks & Spencer’s (“M&S”) application to demolish and redevelop its flagship Oxford Street store.
Below we take a deep dive into the decisions of the Inspector and SoS, including giving our commentary. In summary, from a climate perspective, the most crucial part of the decision is the way in which the SoS interpreted para 152 of the NPPF, which provides that the “planning system should support the transition to a low carbon future in a changing climate … [i]t should help to: shape places in ways that contribute to radical reductions in greenhouse gas emissions”.
The three big takeaways are:
- The SoS’s interpretation, based on the significant carbon impact of demolition and rebuilding, is that para 152 entails a general “strong presumption in favour of repurposing and reusing buildings”, meaning that “a strong reason would be needed to justify demolition and rebuilding” (DL24).
- This embeds a “RetroFirst” approach in national policy as a material planning consideration.
- The effect is to create a carbon-based obligation to consider alternatives, right at the start of the design process: full exploration of the viability and deliverability of repurposing and reusing existing buildings is required alongside any proposal to demolish.
Setting the scene
As many will know, Marks & Spencer occupy flagship premises in Central London at 456-472 Oxford Street. That address effectively covers three buildings: Orchard House, Neale House and some extensions at 23 Orchard Street (collectively “the Site”).
References to (DL) and [IR] below are to the paragraphs within the Secretary of State’s Decision Letter and to the Inspector’s Report respectively.
M&S believe the buildings at the Site (originally 1930s offices) are no longer fit for purpose for a leading UK retail store at the heart of the high street, arguing they are “inefficient and wasteful” [IR6.48]. On 30 June 2021 they applied to demolish the Site and to install a 2 basement plus 9 storey mixed use retail development there. The plan was in some ways very simple and very familiar. They wanted to demolish the old premises and build something new.
Application and outcome
That plan was supported by Westminster City Council and apparently by the Mayor of London, however the application was called in by the SoS for determination after leading figures in the built environment (including the Architect’s Journal, Grand Designs’ Kevin McCloud, and charity SAVE Britain’s Heritage) wrote an open letter criticising M&S. The objectors contended that demolition and total rebuild was wasteful and would result in unnecessary carbon emissions (roughly 40,000 tonnes of CO2). They proposed adaptation, reuse, and refurbishment instead.
After holding a public inquiry from 25 October – 4 November 2022, Inspector David Nicholson recommended the scheme for approval. On 20 July 2023, in a decision that has caused some controversy, the SoS disagreed and refused permission.
The M&S response was immediate and visceral. By a statement of 20 July 2023 their CEO informed readers that M&S would be “left with no choice but to review its future position on Oxford Street on the whim of one man” labelling the decision “utterly pathetic” and “nonsensical.” In his view, it was “unfathomable why M&S’s proposal to redevelop an aged and labyrinthian site that has been twice denied listed status has been singled out for refusal.”
Conversely, Henrietta Billings of SAVE Britain’s Heritage referred to the decision as “a watershed moment” which “challenges our laissez faire attitude to demolition and loss as simply being necessary for economic growth, and invites us to consider the townscape and environmental consequences […] as an example of how decisions relating to the built environment must be consistent with the reality of the climate emergency.” Stirling prize winning architect Steve Tompkins similarly hoped “the decision points to a wider realisation by our government that our whole industry needs to prioritise low carbon retrofitting to drive down construction emissions, particularly in this pivotal decade.”
In essence, the key issues in the inquiry were i.) impact on heritage, ii.) the extent to which the proposals were consistent with the UK’s transition to a zero-carbon economy, and iii.) whether the public benefits of the proposed development would outweigh heritage harm and any harm in terms of climate change/harm to the journey to zero-carbon.
The Secretary of State’s conclusion
In summary, the SoS found there was “overall conflict with development plan policies D3 and 38 which deal with design and partial conflict with heritage policies HC1 and 39” and as such, the key question for determining the appeal was whether there were material considerations which indicated the proposal should be determined other than in accordance with the development plan, applying s.38(6) of the Planning and Compulsory Purchase Act 2004 (DL51).
Advantages identified by the SoS included: concentrating development in a highly accessible location (afforded substantial weight), avoiding harm to the vitality and viability of the area by M&S leaving (limited weight), heritage benefits (moderate weight), the possibility of demolition (limited weight), the benefit to employment and regeneration through improved retail and office floorspace, and the benefit in terms of connectivity, safety and shopping experience for the public (significant weight) (all DL52).
Weighing against the proposal was the finding in light of paragraph 152 NPPF that the proposal would fail to support the transition to a low carbon future and would fail to encourage reuse of existing resources including conversion of existing buildings (moderate weight). The SoS also found the harm arising from embodied carbon weighed against the proposal (moderate weight) as did the fact that the grid would be decarbonised in future (limited weight) (all DL53). The SoS also found that there was harm to the setting of heritage assets within the ‘less than substantial’ category per paragraph 202 of the NPPF: regarding the Selfridges and Stratford Place CA that harm was at the upper end of the category, regarding the Mayfair CA it was in the middle, and concerning the Portman Estate CA it was at the lower end. Drawing that together, the SoS found the harm to heritage assets carried very great weight and was not outweighed by public benefits. The SoS therefore found the proposal would fail to conserve the above heritage assets in a manner appropriate with their significance (all DL54). On balance, therefore, the conflict with the development plan was not overridden by material considerations identified (DL55) and that permission should be refused (DL55-DL56).
So, what of that conclusion? How did the SoS approach the substance of the application in light of the Inspector’s conclusions?
Reasons – Heritage
The SoS essentially agreed with the Inspector as to the level of harm caused to the identified heritage assets. The key difference between the SoS and Inspector on heritage was, in the exercise of his planning judgment, the weight that would be given to any harm (DL15): “he does not agree with the Inspector’s assessment that the harm to the setting and so to the significance of Selfridges, including with the additional harm to the settings of the Cas, carries only moderate weight” [cf. IR13.11 and IR13.78]. Instead, that harm was afforded “substantial weight” by the SoS (DL54). Although the SoS agreed there were some heritage benefits of the scheme (DL19) and ascribed moderate weight to them, he did not consider these benefits to outweigh the identified harms. As above, the SoS disagreed with the Inspector’s finding that the proposal was in general in accordance with heritage development plan policies, finding that “in suggesting that compliance with the framework would outweigh development plan policy conflict” the Inspector’s approach “did not reflect the statutory primacy of the development plan” (DL37).
Reasons – Carbon emissions and redevelopment/reuse
It was common ground between the parties that demolition and re-development would result in higher Carbon emissions than refurbishment [IR13.32], and that the proposals would result in the removal of structurally sound existing buildings [IR13.34] (DL21). Nevertheless, that consensus must be approached with some care as the Inspector (and SoS) did not reach a clear conclusion as to the whole life carbon comparison of refurbishment as against redevelopment: “the SoS has also taken into account the applicant’s argument that over the life of the building it would use less carbon than any refurbishment, which would have to rely on an inefficient building envelope [IR13.38].” Similarly, the SoS agreed that the understanding of whole life carbon assessments was still developing (DL21). Nevertheless, applying paragraph 152 of the NPPF the SoS found that “a strong reason would be needed to justify demolition and rebuilding” (DL24) – more on that below in the Comment section.
Perhaps the most important issue at the heart of the inquiry was whether there was a viable and deliverable alternative to demolishing and rebuilding at the Site. The onus was on the applicant to demonstrate that this was the case. The Inspector’s view was that consideration of potential refurbishment options was useless unless those options were actually viable and deliverable: he said that “in proposing a more comprehensive refurbishment, SAVE’s objection on sustainability grounds was reliant on there being a reasonable prospect of an alternative scheme going ahead” (IR13.43). If not, then it was highly unlikely that any commercial developer would realise any refurbishment option. The Inspector found, apparently with some confidence (see below), that there were no such options, and that as a result, if the Site were not redeveloped then M&S would likely close the store, harming the viability of Oxford Street generally [IR13.62-13.77].
The SoS’s key conclusion, however, was that “the evidence before him is not sufficient to allow a conclusion as to whether there is or is not a viable and deliverable alternative” and that “the Secretary of State does not consider that there has been an appropriately thorough exploration of the alternatives to demolition” by the applicant who had not “satisfied the SoS that options for retaining the buildings have been fully explored” (DL32). That arose, in part, from the SoS’s finding that “the Inspector could not draw clear conclusions on this matter” (DL31) and because “the Inspector did not analyse or assess [the applicant’s] evidence in relation to retrofitting existing buildings for new uses but instead focussed on the SAVE alternative” (DL20). It is this that motivated the SoS’s conclusion that the proposal was contrary to paragraph 152 of the NPPF: “a substantial amount of carbon would go into construction, and this would impede the UK’s transition to a zero-carbon economy” and there had not “been an appropriately thorough exploration of alternatives” meaning the proposal would “fail to support the transition to a low carbon future, and would fail to encourage the reuse of existing resources, including the conversion of existing buildings” (DL45).
This is an interesting element of the decision. Despite stating the Inspector did not draw appropriately clear conclusions, the actual thrust of the SoS’s reasoning appears to be that the SoS disagreed with the Inspector that there was sufficient evidence to reach any firm conclusion, and/or that faced with that evidence the SoS would have concluded otherwise. For example, the SoS records that “he finds the applicant’s evidence much less persuasive than the Inspector appears to have done in light of the gaps and limitations identified by the Inspector. He does not consider it appropriate to draw such firm and robust conclusions about this issue as the Inspector does” (DL31).
The latter analysis certainly chimes with the relatively clear conclusion the Inspector appeared to reach upon summarising the evidence before him at [IR13.70]: “While many interested parties, including some of the most renowned and capable UK architects, gave evidence on the benefits of their experience of retrofitting existing buildings for new uses, and of the substantial savings in embodied carbon, only SAVE put forward a considered example. On the evidence before the Inquiry, I consider that the only remaining refurbishment scheme for the site is so deeply problematic.” In the same paragraph the Inspector also found that “in my view the likelihood is that the inescapable structural issues and the awkward combination of the three buildings would deter investment in any meaningful refurbishment for office use.” It is possible that the SoS’s reluctance to accept these conclusions stemmed from the relatively few options fully ventilated before the Inspector, and partially due to his hesitance to draw any definitive conclusion concerning the comparative whole life carbon assessments of the competing approaches (see analysis re: DL21 above).
It is noted that the SoS recorded the argument that if redevelopment were delayed until the decarbonisation of the grid, the extent of any embodied energy emissions from manufacturing and vehicles would be much lower or eliminated. Equally, he found that the evidence indicated a need to determine the proposals now: the evidence was that the present M&S store was failing, and that M&S would seek to move unless permission was granted (DL22). He afforded the consideration of delay in light of future grid decarbonisation limited weight (DL22).
Reasons – public benefits and harms
The SoS agreed with the Inspector as to the benefits afforded to employment and regeneration, and to those regarding connectivity, safety and shopping experience. He afforded those benefits significant weight (DL25). The SoS also agreed that the scheme attracted some support from development plan policies concerning the design of the proposal and those which provided new and improved floorspace, alongside policies concerning density of development and infrastructure (DL26). Nevertheless, as above, the SoS did not agree with the Inspector’s conclusion that there were no viable alternatives to demolition (DL31). His overall conclusion was, as above, that there was conflict with the development plan and material considerations did not indicate that permission should be granted notwithstanding that conflict (DL55).
Comment – A strong presumption in favour of repurpose and reuse of buildings
The decision highlights (coupled with the Tulip decision) the increased prominence and force of para 152 of the NPPF. The SoS’s interpretation of para 152 is of wide importance: he understands the policy to entail a general “strong presumption in favour of repurposing and reusing buildings”, meaning that “a strong reason would be needed to justify demolition and rebuilding” (DL24). It will be for the applicant/appellant to demonstrate that they have, credibly and cogently, considered refurbishment options as part of their design process, and to explain in detail why those options are not being pursued.
From a climate perspective, this interpretation of para 152 of the NPPF is the most crucial part of the Decision. It embeds a Retrofirst approach in national policy as a material planning consideration.
In legal terms, the strong presumption in favour of repurposing and reusing buildings triggers a requirement on developers to produce evidence to a high standard which meets the objective of showing that demolition and rebuilding is evidentially justified: see Satnam Millenium Ltd  EWHC 2613 (Admin) at §108, per Ouseley J.
The SoS’s decision letter demonstrates how this operates: he found the Applicant’s evidence on the need for demolition and the lack of a viable and deliverable retrofit alternative “much less persuasive than the Inspector appears to have done in light of the gaps and limitations identified by the Inspector (DL31), and overall decided that the evidence before him was “not sufficient to allow a conclusion as to whether there is or is not a viable and deliverable alternative”, meaning he could not be satisfied that “options for retaining the buildings have been fully explored, or that there is compelling justification for demolition and rebuilding.” (DL32).
Some may think this goes very far in climate terms, but the SoS declined an opportunity to go even further. The Inspector suggested the SoS may find that the climate impact of proposed development is so crucial an issue that there is a “growing principle that reducing climate change should generally trump other matters” [IR13.94]. The SoS stepped back from this. Tantalisingly, he stated that “[p]olicy in this area will continue to develop and in due course further changes may well be made to statute, policy or guidance.” (DL47) One wonders what the SoS had in mind? Perhaps the Climate Change Committee’s advice that the planning system should have an overarching requirement that all planning decisions must be taken giving full regard to the imperative of Net Zero?
Both the Inspector and the SoS accepted that the precedent-setting or signal-sending nature of a decision (including either climate-harmful or climate positive precedent) could be a material consideration sufficiently weighty to justify dismissing the application (IR13.94; DL48). However, the SoS emphasised that this was not the reason he took the decision: “the decision turns on its own very specific facts, including the relevant development plan policy matrix, the Inspector’s report and the evidence which was before the inquiry” (DL48).
Nevertheless, it is likely that the decision will be influential on future large-scale projects which propose extensive redevelopment and eschew the re-use of existing buildings without appropriate justification. It will encourage architects and planning consultants seriously to consider the alternative of refurbishment, which may prove a surprisingly attractive and pragmatic alternative. If not, at the very least, having fully considered potential alternatives, it will be much clearer why demolition and redevelopment is essential for any site.
The full DL and IR may be accessed here.
- Estelle and Rowan are both members of Cornerstone Climate, our centre of excellence for climate litigation and advice. Find more news, articles and resources in our climate hub.
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