Tesco Stores Ltd v Secretary of State for Communities and Local Government

In determining a planning appeal, an inspector may use a reasonably certain alternative scheme as a benchmark for assessing the timing and regeneration benefits of a competing proposal. Delay required to assemble land, renegotiate arrangements and undertake procurement may properly count against a proposal where redevelopment is urgent. An inspector may also conclude that wider regeneration is uncertain where the proposal contains no binding mechanism to secure it, even though a local authority owns land needed for the development. Under Planning and Compulsory Purchase Act 2004, s.38(6), the decision-maker must assess the proposal against the existing development plan. Emerging policy may attract some weight, but it does not displace the current plan. A proposal may fail against both the existing and emerging policies.

Tesco applied to Liverpool City Council for permission for a superstore, markets and associated development at Great Homer Street. The council failed to determine the application, so Tesco appealed to the Secretary of State. Following a public inquiry, the Inspector dismissed the appeal, principally because the proposal might prejudice the comprehensive regeneration of the area, cause delay, and become an isolated stand-alone superstore.

The area was subject to an existing policy identifying Great Homer Street as a Local Centre, while emerging policy contemplated its upgrade to a District Centre. A competing Project Jennifer scheme already had outline permission and was considered reasonably likely to proceed. Tesco challenged the Inspector’s decision on irrationality, inadequate reasoning and unlawful reliance on existing retail policy.

1. The claim was dismissed. The Inspector’s decision was lawful and adequately reasoned.
2. The Inspector was entitled to treat the competing St Modwen scheme as a benchmark. He had found a reasonable degree of certainty that its first phase would proceed, and the redevelopment of the wider area was urgent. It was therefore lawful to regard the additional two-to-four-year period required for the Tesco scheme, including procurement, renegotiation and land assembly, as a negative factor.
3. The Inspector was entitled to find a very real risk that the Tesco proposal would remain a stand-alone superstore and markets. Tesco had offered no sufficiently broad binding obligation for wider regeneration. Negotiations over the council’s land interests were commercial negotiations with an uncertain outcome and did not provide a mechanism capable of securing cross-subsidy or further development. The council’s land ownership did not compel a different conclusion because its bargaining position might weaken if the existing scheme failed.
4. Under s.38(6) of the Planning and Compulsory Purchase Act 2004, the Inspector had to measure the proposal against the existing development plan. The existing retail policy was therefore a relevant consideration. The emerging proposal to upgrade the centre to District Centre status was only draft policy, although it could attract some weight. The Tesco proposal conflicted with the current policy because of its scale and location beside a Local Centre, and also failed to accord with the emerging policy because it was not itself a District Centre and was unlikely to catalyse wider development.
5. The application was accordingly dismissed.

Tesco’s planning application was not determined by Liverpool City Council. Tesco appealed to the Secretary of State, whose Inspector held an inquiry and dismissed the appeal on 1 December 2009. The High Court dismissed Tesco’s statutory challenge to that decision.