The Health and Safety Executive v Wolverhampton City Council

When a public authority decides whether to exercise a discretionary power to achieve a public objective, it may, and generally must, consider the cost to the public. This includes whether the cost is proportionate and whether a more economical effective alternative exists.

Under section 97 of the Town and Country Planning Act 1990, a local planning authority may consider its potential compensation liability when deciding whether revocation or modification of planning permission is expedient. Its action must pursue a planning objective, but its choice whether and how to act is not confined to planning considerations. The weight given to cost depends on the circumstances. Cost alone will rarely justify inaction in the face of a serious threat to public safety.

The council granted planning permission for student accommodation near a liquefied petroleum gas facility despite advice from the Health and Safety Executive against the development on safety grounds. After discovering the permission, the Executive asked the council to revoke it, particularly in relation to the unbuilt block nearest the facility.

Collins J declined to quash the council's refusal to revoke. The Court of Appeal, [2010] EWCA Civ 892, unanimously held that the council had failed lawfully to consider revocation and ordered reconsideration. By a majority, it also held that potential compensation under section 107 of the Town and Country Planning Act 1990 could be considered.

The issue before the Supreme Court was whether, when considering under section 97 whether revocation or modification was expedient, a local planning authority could have regard to compensation which it might have to pay.

1. Appeal dismissed unanimously. Lord Carnwath, with whom Lord Hope, Lord Walker, Lord Dyson and Lord Sumption agreed, held that potential compensation was capable of being considered when the council decided whether revocation or modification under section 97 of the Town and Country Planning Act 1990 was expedient.

2. A public authority responsible for public funds may, and generally must, consider the financial consequences of exercising a discretionary power. It should consider whether the cost is proportionate to the public objective and whether that objective can be achieved more economically. The weight of cost varies with context. An imminent or serious public-safety threat will rarely permit an authority to do nothing merely because its budget faces other demands, although cost may affect the choice between effective alternatives.

3. “Material considerations” means considerations relevant to the particular statutory power, read in its context and according to its purpose. This produces no inconsistency between sections 70 and 97. Under section 70, the authority must grant or refuse an application and ordinarily bears no direct financial consequence. Under section 97, it has a discretion whether and how to act and must pay compensation if it acts.

4. Planning considerations and the development plan remain the starting point. Action under section 97 must be motivated by planning considerations and directed towards a planning objective. It does not follow that the authority's decision to take no action, or its choice between statutory means of achieving that objective, must exclude cost. The concept of expediency permits consideration of compensation and comparative value for money.

5. Alnwick District Council v Secretary of State for the Environment, Transport and the Regions (2000) 79 P & CR 130 reached a sustainable result on its facts, but Richards J's view that compensation unrelated to land use was legally irrelevant was too narrow. Potential liability does not become irrelevant merely because compensation is fixed and payable after revocation.

6. There is no universal requirement for a precise compensation estimate. The information and degree of certainty reasonably required depend on the circumstances, timing and subject matter. Uncertainty does not justify omitting cost from the assessment.

1. United Kingdom Supreme Court: The appeal was dismissed unanimously. The court affirmed the Court of Appeal majority's conclusion that potential compensation may be considered under section 97 of the Town and Country Planning Act 1990.
2. Court of Appeal: In [2010] EWCA Civ 892, the court unanimously held that the council's refusal to make a revocation order was unlawful and required reconsideration. By a majority, Longmore and Sullivan LJJ held that potential compensation was capable of being a material factor; Pill LJ dissented on that issue.
3. High Court: Collins J granted permission to seek judicial review and declared that the council had committed procedural breaches, but declined to quash the planning permission or the refusal to revoke it.