McCarthy and Stone Retirement Lifestyles Ltd & Ors, R (on the application of) v Greater London Authority

The claimants challenged the Mayor of London’s Supplementary Planning Guidance (Homes for Londoners: Affordable Housing and Viability Supplementary Guidance 2017) on three grounds: (1) that it amounted to policy which should have been in the London Plan or was inconsistent with the London Plan (notably policy 3.12 and the London Plan Glossary definition of “contingent obligations”), (2) that it was a "plan or programme" requiring a Strategic Environmental Assessment under the Environmental Assessment of Plans and Programmes Regulations 2004 (SI 2004 No.1633), and (3) that the Mayor failed to have due regard to the public sector equality duty in s149 Equality Act 2010.

The court held that the line between policy and guidance is not a bright line and that SPG may operate as policy in practice, but that issuing policy as SPG is not necessarily unlawful in the absence of statutory prohibition or an attempt to avoid plan review procedures. The judge found the SPG inconsistent with the London Plan in one material respect: it required early and late stage viability reviews on all developments below the 35% on-site threshold regardless of the likely implementation timescale, whereas the London Plan and the Glossary definition of "contingent obligations" confined re-appraisal to schemes likely to take many years or to address delayed starts. The judge refused permission on the SEA and PSED grounds as unarguable or not prospectively successful, and granted permission to pursue the limited inconsistency point and to address remedy.

The claimants were four developers of specialist housing for older people who challenged the Mayor’s Affordable Housing and Viability SPG. They said the SPG (i) amounted to policy that should have been included in the London Plan or was inconsistent with it (focusing on the 35% on-site threshold, the fast-track/viability-tested routes and the imposition of multiple viability reviews including a late-stage review), (ii) required a Strategic Environmental Assessment under the SEA Regulations 2004, and (iii) was adopted without proper compliance with the public sector equality duty in s149 of the Equality Act 2010.

Procedural posture: permission had been refused on all grounds by Supperstone J; Holgate J ordered a rolled-up hearing and the matter proceeded before Ouseley J on the merits.

Issues framed by the court included: the legal character of the SPG (policy or guidance) in light of s334 Greater London Authority Act 1999 and the relationship with the London Plan; whether the SPG was a "plan or programme" within the meaning of the SEA Regulations and if so whether the Mayor should have carried out an SEA; and whether the Mayor gave "due regard" to equality aims under s149 Equality Act 2010 in adopting the SPG.

The court’s reasoning in brief: (i) on policy v guidance the judge concluded that SPG can operate as policy and the judge accepted that the Mayor had in practice promoted the same approach in draft London Plan Policy H6, but emphasised that the mere fact that guidance is adopted in advance of plan review does not make it necessarily unlawful; (ii) on consistency with the London Plan the judge construed policy 3.12 and the Glossary definition of "contingent obligations" to confine re-appraisal to schemes likely to take many years or where there is a delayed start; the SPG’s requirement for multiple reviews on all schemes below the 35% threshold irrespective of timescale was inconsistent with that policy and therefore unlawful in that respect; the 35% threshold itself was not held to be inconsistent with the London Plan as a matter of principle; (iii) on SEA the judge concluded the claimants had not shown the SPG was likely to have significant environmental effects such that an SEA should have been carried out and refused permission on this ground as unarguable; (iv) on PSED the judge found that the Mayor had considered equality matters in the supporting reports and associated assessments (and related draft plan impact assessments), that the very particular financing-based point relied on by the claimants was an indirect and unforeseeable effect which did not render the duty unperformed, and refused permission on that ground.

The judge granted permission to pursue the single inconsistency point and invited submissions on remedy; Grounds 2 and 3 were refused.

This is a first-instance judicial review. The court granted permission to pursue Ground 1 insofar as the SPG is inconsistent with the London Plan by requiring early and late stage viability reviews on single-phase developments regardless of the likely timescale for implementation (contrary to policy 3.12 and the London Plan Glossary definition of “contingent obligations”). The court refused permission to pursue Ground 2 (Strategic Environmental Assessment) and Ground 3 (public sector equality duty). The judge explained that issuing SPG which operates as policy is not automatically unlawful and that the 35% threshold and fast-track/viability-tested distinction were not, in principle, incompatible with the London Plan; only the mandatory application of multiple reviews irrespective of timescale was inconsistent. The court will hear submissions on remedy for that inconsistency.

Permission to bring the claim had been refused on paper by Supperstone J. Holgate J ordered a rolled-up hearing on an application for permission. The substantive hearing and judgment were delivered by Ouseley J in the Administrative Court, Neutral Citation [2018] EWHC 1202 (Admin).