Medway Council v Secretary of State for Communities and Local Government & Ors

For the statutory affordable-housing review procedure, “the development” means the development authorised by the planning permission to which the planning obligation relates. In a mixed-use scheme, that includes both residential and commercial elements. The fact that an affordable-housing obligation is enforceable only against land used for housing does not alter that definition. The relevant question is whether the authorised development as a whole remains incomplete and economically unviable. Planning guidance cannot narrow or alter the statutory test. A challenge to a Secretary of State determination under section 106 BC is brought by judicial review, because such a determination is not within the statutory review route under section 288.

A developer applied under section 106 BA of the Town and Country Planning Act 1990 to remove a substantial affordable-housing contribution from a planning obligation concerning a mixed residential and commercial development. The Council did not determine the application in time, and the developer appealed under section 106 BC. An Inspector allowed the appeal for three years, finding that the scheme was economically unviable and incomplete because ten commercial units remained incapable of occupation.

The Council challenged the decision, initially under section 288 and subsequently by judicial review. It argued that the residential element was complete, that the relevant development was confined to the housing element, and that the statutory procedure was unavailable. The central issues were the meaning of “development” and whether the Inspector had lawfully assessed completion and viability.

1. Procedure. The Secretary of State’s determination under section 106 BC is final under that section, but it is not an order or action listed in section 284(2) or (3). The specialised challenge under section 288 therefore does not apply. The proper route is judicial review. In this exceptional case, time was extended because the claim had been issued within six weeks under the mistaken route, the parties had known the case from the outset, and no party maintained an objection.
2. Meaning of development. Section 106 BA(13) defines “the development” as the development authorised by the planning permission to which the obligation relates. That definition required the Inspector to consider the whole mixed-use scheme, including the commercial units. The Council’s proposed housing-only approach was incompatible with the statutory wording and with the commercial reality of assessing the viability of the scheme as a whole.
3. Enforceability. The fact that the obligation was drafted so that the payment obligation bound only land on which housing was constructed concerned enforcement, not the statutory meaning of development. It did not justify excluding the commercial elements from the viability assessment.
4. Completion and viability. The commercial units remained unfinished and incapable of occupation. They could not generate receipts or return for the developer. The Inspector was therefore entitled to treat the authorised development as incomplete and to find that the scheme was not viable. The Council had agreed the material facts in the Statement of Common Ground, so it suffered no procedural prejudice from the Inspector’s description of the scheme.
5. The policy guidance was directed principally to housing schemes, but any omission or assumption in the guidance could not alter the statutory test. The court did not decide whether an application could be made after the development had been completed, as the Act appeared silent on that issue and the Secretary of State was not represented.
6. The claim for judicial review was dismissed. Judgment was entered for the Defendant. Costs were left for submissions.

The claim was a first-instance judicial review of an Inspector’s decision letter dated 8 September 2015. The Council had first issued a section 288 claim, but the proceedings were treated as an application for judicial review following procedural directions.