Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Company Limited

A planning obligation under section 75 of the Town and Country Planning (Scotland) Act 1997 need not relate to a particular permitted development. It must, however, restrict or regulate the burdened land and serve a purpose relating to its development or use.

A contribution towards infrastructure addressing cumulative effects is permissible only where the burdened development contributes sufficiently to those effects. A pooled charge funding interventions with no more than a trivial connection to that development is outside section 75. Such an obligation is also material to a planning application only where its connection with the proposed development is more than trivial.

Ministerial planning guidance is a material consideration rather than law. An authority must consider it, but the weight assigned to it is a matter of planning judgment.

The appellant planning authority adopted supplementary guidance establishing a Strategic Transport Fund. Developers in designated growth areas were expected to pay fixed contributions towards a pooled £86.6m programme of transport interventions. The respondent had entered into a section 75 planning obligation to contribute in connection with its proposed development of approximately 4,000 houses and associated facilities.

The First Division of the Inner House allowed the respondent's statutory appeal and quashed the guidance: [2016] CSIH 28. It found that several developments had no impact, or only a minimal impact, on some of the interventions funded by the scheme.

The authority appealed. The central questions were the legal tests governing planning conditions and planning obligations, the relevance of an obligation when deciding a planning application, and the distinction between legal requirements and ministerial planning policy.

1. Appeal dismissed unanimously. Lord Hodge delivered the judgment, with which Lord Neuberger, Lady Hale, Lord Mance and Lord Reed agreed. The supplementary guidance and the planning obligations which it promoted were unlawful.

2. A planning condition must serve a planning purpose, fairly and reasonably relate to the permitted development, and satisfy the standard of reasonableness in administrative law. The relationship must be reasonably close, recognised and real. These constraints arise from the statutory context of the power to grant permission subject to conditions.

3. A planning obligation is governed by section 75 of the Town and Country Planning (Scotland) Act 1997 and the ordinary rules of administrative law. It need not relate to a particular permitted development, because it may be entered into outside a planning application or regulate other uses of the burdened land. It must nevertheless restrict or regulate the development or use of that land. A financial contribution towards cumulative infrastructure may satisfy that requirement where the burdened development contributes to the cumulative effect and a sufficient relationship therefore exists.

   A monetary obligation unconnected with the burdened land falls outside section 75. A negative suspensive obligation requiring such a payment would also be unlawful. The statute implicitly requires the restriction to serve a purpose relating to the development or use of the burdened site. Otherwise, planning authorities or developers could use extraneous benefits to buy or sell planning permission.

4. Following Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759, an obligation is material to a planning application only if it has a more than trivial connection with the proposed development. A development-plan policy cannot make an otherwise irrelevant obligation relevant. Whether an obligation regulates the burdened land is a separate question from whether its benefit is material to an application concerning another site.

   Relevant ministerial guidance must be considered. Its relevance is a question of law, but its weight is a matter of planning judgment. A reasoned departure from the guidance is not, without another public-law error, unlawful.

5. The pooled scheme required contributions towards interventions with which particular developments had no more than a trivial connection. It therefore lacked the relationship to the burdened land required by section 75. The respondent's agreement also imposed no restriction preventing development until payment; the council had merely withheld issue of permission until the agreement was executed. The obligation consequently neither restricted nor regulated the site.

   The obligation could not be a material consideration in granting permission, and the authority could not require it as a precondition. Legislative authority would be needed to establish a local development land levy of this kind.

• United Kingdom Supreme Court: The court unanimously dismissed the authority's appeal in [2017] UKSC 66 . The supplementary guidance remained quashed.
• First Division of the Inner House of the Court of Session: The court allowed the developer's statutory appeal and quashed the supplementary guidance in [2016] CSIH 28.