Major infrastructure and proportionality of contributions, the role of indemnities and delays in the appeal process

09 Aug 2018

Planning and Environment

On 6 August 2018, the Secretary of State rejected his Inspector’s recommendation and granted outline planning permission for the development of a new mixed-use neighbourhood with up to 800 dwellings, commercial and community development within a local centre, spine road, estate roads and other ancillary elements near Herne Bay in Kent.

The decision is notable for the approach taken by the Secretary of State to the proportionality of infrastructure contributions sought by the local planning authority.

The recently adopted local plan required a new relief road to serve three major strategic housing sites in the Herne area, to be provided by the developers of those sites. Prior to the adoption of the local plan, the site owners had entered into a memorandum of understanding between themselves, the local planning authority and the highway authority that identified proportionate contributions towards the relief road. A site-specific contribution was secured from the first site to be released.

The appeal site was the second site and offered a proportionate contribution (£2m+) consistent with the memorandum. This was deemed inadequate by the highway authority and local planning authority on the basis that the third site, which did not have planning permission, had not yet entered into a s.106 obligation to pay its share (a further £2m+), giving rise to a risk that the third site (allocated by the same local plan as the appeal site) would not come forward and the highway authority would have to bear the cost of its contribution to secure the relief road.

The highway authority demanded that the appeal site provide both its and the third site’s contribution, and in return offered to pay over to the developers of the appeal site any contribution it might eventually receive from the third site. The Secretary of State rejected this solution, primarily because it was not proportionate to the needs arising from the appeal scheme and, secondly, because he doubted that the highway authority’s proposed indemnity was within the powers of s.106.

Although the result was that the scheme was not in accordance with the development plan, the Secretary of State considered that the combination of public benefits in the form of market and affordable housing and the accommodation and potential early delivery of the relief road outweighed any harmful aspects.

The decision is also notable for the time taken to determine the appeal. The planning application was made in June 2015 and determined in March 2016. The appeal commenced in January 2017 and closed in July 2017. The Inspector’s report was issued in September 2017. The Secretary of State sent out a minded to grant letter in March 2018 and made his final decision in August 2018, 3 years 3 months from application, 2 years 5 months from determination and 19 months from the opening of the inquiry.

Mark Lowe QC and Robin Green acted for the appellant.

Richard Ground QC and Ben Du Feu acted for the local planning authority.