The University Hospitals of Leicester NHS Trust, R (on the application of) v Harborough District Council

A planning obligation seeking money for public services must satisfy the statutory tests in regulation 122 of the Community Infrastructure Levy Regulations 2010. Where the claimed planning harm depends on a funding shortfall, the local planning authority may investigate whether that shortfall exists and whether alternative public funding arrangements address it.

A development’s impact on healthcare services may be a material planning consideration. However, a financial contribution is not justified merely because additional patients may increase pressure on services. The applicant must provide sufficient evidence of a funding gap, its connection with the development, and the scale of mitigation required. The court dismissed the challenge because the authority rationally concluded that the alleged funding gap had not been demonstrated.

The claimant NHS trust sought judicial review of Harborough District Council’s grant of planning permission for a strategic development area comprising up to 2,750 dwellings and associated employment, education, community and infrastructure uses.

The Trust argued that the Council had misunderstood national planning policy, treated NHS funding arrangements as irrelevant or wrongly relevant, failed to consider financial and healthcare impacts, and failed to refer later representations back to the Planning Committee.

The central issue was whether the Council acted unlawfully in refusing to require a financial contribution under section 106 of the Town and Country Planning Act 1990 towards the Trust’s alleged first-year funding gap for treating residents new to its area.

1. Claim dismissed. The Council had not erred in law in refusing to require the requested contribution.
2. Healthcare impacts, including effects on treatment capacity and waiting times, could in principle be material planning considerations. The officers’ report, read fairly and as a whole, did not exclude treatment of illness from the scope of relevant health policies.
3. The Trust’s alleged funding gap was integral to its case. Without a shortfall in funding for treating new residents during their first year of occupation, there would be no relevant harm requiring mitigation. The Council was therefore entitled to investigate the NHS funding arrangements and ask whether population growth could be reflected in annual negotiations for block contracts.
4. Under regulation 122(2) of the Community Infrastructure Levy Regulations 2010, the contribution had to be necessary to make the development acceptable in planning terms, directly related to it, and fairly and reasonably related in scale and kind. The Council rationally concluded that the Trust had not supplied sufficient evidence of any funding gap or its amount. That was sufficient to dispose of the challenge.
5. The passage in Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759 concerning external costs did not establish a general principle that public funding arrangements were legally irrelevant. The passage was not necessary to the decision in Tesco and did not govern the present issue.
6. The post-resolution material did not identify a new material consideration or remedy the central evidential deficiency. The guidance in R (Kides) v South Cambridgeshire District Council (2003) 1 P & CR 19 did not require the matter to be referred back to the Committee.
7. The court declined to determine the wider legal question whether a contribution of this kind could ever lawfully be required where a demonstrable NHS funding gap existed. The claim was dismissed on the basis that no funding gap had been established in this case.