Lancaster City Council v Secretary of State for Housing, Communities and Local Government & Anor

Section 73 of the Town and Country Planning Act 1990 may be used to vary a planning condition controlling affordable housing, even where an existing planning obligation also addresses that subject, provided the permission and obligation are capable of being brought into conformity. A section 106A application is not required where the obligation is modified by agreement under section 106A(1)(a). A signed, contingent deed of variation may therefore be a material consideration in determining the section 73 appeal. The court will be slow to entertain an argument not clearly advanced before the Inspector, particularly where the party’s own conduct and documents supported the course taken.

Wilson appealed against the Council’s refusal of permission under section 73 of the Town and Country Planning Act 1990 to vary a condition relating to housing mix on a permission for 24 dwellings. The proposed variation would remove the affordable-housing requirement. The Inspector allowed the appeal and awarded Wilson part of its appeal costs.

The Council sought statutory review of both decisions. It argued that the Inspector had applied the wrong statutory test, misunderstood the Council’s position when treating a signed deed of variation as an agreement, and erred in having regard to that deed. The central issues were whether section 106A governed the variation, whether the Council’s position had been misunderstood, and whether the deed could properly be taken into account.

The claim was dismissed.

1. The Inspector correctly found that Condition 11 controlled affordable housing to some extent. A section 73 application was therefore capable of producing a new permission without the previous affordable-housing requirement. That conclusion was not challenged.

2. Planning obligations are freestanding legal instruments. Section 73 does not itself vary or discharge a section 106 obligation. However, section 106A(1)(a) permits modification by agreement. No application under section 106A(3), and therefore no application of the useful-purpose test in section 106A(6), was required because the Council had signed the deed of variation.

3. The Inspector was entitled to determine the appeal as presented. The deed was signed by all relevant parties, was contingent on permission being granted, and addressed the consequence of the Inspector’s planning conclusion. The Inspector therefore made no legal error in treating it as effective and legally sound, or in having regard to it.

4. The Inspector understood that the Council continued to oppose removing affordable housing and that its participation in the deed was without prejudice. The Council’s later contention that the Principal Agreement remained enforceable had not been clearly advanced before the Inspector. The court was slow to admit that new point, applying the approach in West v First Secretary of State [2005] EWHC 729 (Admin) and Mead Realisations Limited v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 279 (Admin).

5. The judgment did not decide that section 73 is effective or appropriate in every case. Different considerations may arise where no planning condition controls affordable housing and all controls are contained in a legal agreement.

The judgment itself records no prior court decision in the same litigation. It concerned a statutory review of two Inspector’s decisions dated 25 June 2025: the substantive appeal decision and the costs decision.