The North Somerset Decision and ‘Latent Demand’

Heres the summary of this successful High Court challenge to a core strategy adoption from the Council web site.  Sorry did not post earlier hunting for full case reference which is here.

North Somerset High Court Challenge Summary of the judgment The challenge Following an examination conducted by an independent Inspector, the North Somerset Core Strategy was found ‘sound’ and was formally adopted in April 2012. Plan adoption is followed by a prescribed period during which an aggrieved party can lodge a legal challenge under S.113 of the Planning and Compulsory Purchase Act 2004.
Any legal challenge is not about the merits of the case, but whether the correct statutory processes had been complied with.
The claimants Bristol University challenged the adoption of the Core Strategy on three  grounds – all related to what they considered were defects in the Inspector’s Report.
Bristol University has aspirations to built approximately 1000 dwellings in the Green Belt to the south of the village of Long Ashton which is not supported by the local planning authority. They were aggrieved by the Inspector’s Report which endorsed the North Somerset dwelling requirement of a minimum of 14,000 dwellings 2006-2026 and which did not require the use of Green Belt land.

The three grounds of the challenge were as follows:
Ground 1: Failure to comply with its duty to co-operate and adopting the
failure of the Inspector who concluded that the duty to co-operate did not apply.
Ground 2: Relying upon an unsound evidence base in the calculation of numerical housing requirements and adopting the Inspector’s failure to provide adequate reasons as to why the council’s evidence was to be preferred over the Claimant’s evidence.

Ground 3: Failure to ensure conformity with RPG10 and adopting the
Inspector’s failure in respect of the same.

The Judgment
The Judgment is dated 14 February 2013. The main findings are summarised
as follows:
Ground 1: Failure to apply the duty to co-operate. Challenge failed. The duty to co-operate was not introduced until after the Core Strategy was submitted for examination and therefore the Inspector was right that he did not have to consider the duty retrospectively. [note from me- this confirms the BANES precedent – which did not go to court].
Ground 2: Reliance on an unsound evidence base in the calculation of the housing requirement and the Inspector’s failure to provide adequate reasons why the Council’s evidence was preferred. Challenge succeeded in part.
The Inspector gave clear reasons for rejecting the draft RSS housing requirement of 26,750 dwellings and concluding there should be a fresh appraisal of housing need. He explained his reasoning in respect of the use of household forecasts. However he failed to give ‘adequate or intelligible reasons’ for his conclusion that the Council’s housing target of 14,000
dwellings made sufficient allowance for latent demand (ie demand unrelated to the creation of new jobs).
Ground 3: Failure to ensure conformity with RPG10 in respect of a need for
Green Belt review. Challenge failed.
The Inspector was entitled to conclude that there was sufficient housing land supply, there was no need for an urban extension to meet the housing needs of Bristol and therefore a Green Belt review was not required.

Implications

The Core Strategy remains an adopted document. However, Policy CS13 (housing requirement) was found to be unlawful given that its adoption was as a consequence of the Inspector’s recommendation.
The Judge indicated that if the housing requirement was amended then it could have a knock on effect on other policies. “It is possible that an alternative housing requirement figure for North Somerset excluding an urban extension may necessitate the release of land in the Green Belt or otherwise affect spatial or area policies of the Core Strategy.”
The Order setting out the remedy was dated 4 March 2013. This required that  the following policies are remitted back to the Planning Inspectorate for reexamination:
CS13 Scale of new housing
CS14 Distribution of new housing
CS6 Green Belt
CS19 Strategic gaps
CS28 Weston-super-Mare
CS30 Weston Villages
CS31 Clevedon, Nailsea and Portishead
CS32 Service villages
CS33 Infill villages, smaller settlements and countrysideThe Judge is clear that while it is only CS13 which was found to be unlawful, because the re-examination of the total housing figure may result inconsequential alterations for other policies, then these policies are also remitted. However, “the policies can still be accorded appropriate weight in any decision making and housing can be brought forward through the development control process” (paragraph 20).
Consultation on the draft Sites and Policies Plan will take place as programmed. If necessary, any amendments resulting from the legal challenge will be taken into account through further consultation in the future.

Simon Berwin referenced the case at L is for Localism here.

From the Judges decision, North Somerset did not take part in a HMA wide SMA but commissioned their own study

the Council’s strategy was to focus on local employment led housing growth rather than to meet all housing demand which had in the past led to high levels of in-migration to North Somerset and out commuting from there into Bristol. Thus,
rather than relying on existing trends which it was said would perpetuate the unsustainable patterns of development hitherto, the number of homes would be linked  to the number of jobs created in North Somerset.

And Bristols Us case

Alternative modelling undertaken by Hardisty Jones Associates (HJA) suggests that there is a latent demand for at least 14,100 units before employment drivers are considered.

Therefore if the Council were to satisfy Core Strategy
employment targets or those set by the Local Enterprise
Partnership. The housing requirement would total at least
22,100 units and 23,200 units respectively.

…a paper prepared by Hardisty Jones Associates, Economic Development Consultants,show[ed] how the 14,100 dwellings had been calculated, being the number they asserted were
required to meet latent demand. This concluded that, if one adopted a homes to jobs ratio approach, the ratio increased the fewer jobs were created. If a ratio were to be adopted, the constant non employment related housing need of about 14,100 should be the starting point to which should be added a further figure for dwellings of 0.84 multiplied by the number of jobs to be created:

The issue being (according to the Uni)

The assumption adopted within the North Somerset evidence base of 1.33 homes per job would only hold for one specific level of employment, rather than across an extended range

On the Housing Multiplier issue which even the judge found difficulty understanding at the hearing she came to a devastating conclusion.

The report not only fails to grapple with the key issue but leaves
the reader in clear doubt as to whether the Inspector understood the objections.

It took me a SHMA expert several reads to understand the nub of the technical objection however it is obvious from reading the report that the inspector simply ducked a difficult issue he didn’t properly understand.

the Inspector explicitly recognises that the Council’s approach is a departure from the dRSS and PPS3 but considers that the unprecedented economic uncertainty means there is no ‘right’ answer to the question how many jobs and homes should be provided. Although highly subjective he considers that the Council’s figures are justified despite being substantially below the dRSS figures and ONS data PPS3 advises should be taken into account…

The key criticisms of the Council’s approach were these. First, that there is a demand for housing generated by changes in household structure, changes in population structure and non economic migration that have nothing to do with whether or not jobs are created and to provide only for housing generated by jobs fails to make appropriate provision for that latent demand. …

The Inspector dealt with the issues relating to the Councils jobs/homes ratio in paragraphs 25 and 26 of his report. In the first sentence of paragraph 25 he refers to the criticism of use of the West of England figures in preference to those for North Somerset. In the next sentence he responds to that point by effectively accepting the Council’s case that use of North Somerset’s figures would continue the previous trend towards out commuting contrary to the employment led approach to housing. However, that does not deal with the University’s case that, as a result, the increase in households has been underestimated….

he does reach a conclusion on the main controversial issue, namely whether the use of the 1.38 ratio produced an insufficient housing requirement. However, he does not say why. That is not to say that the Inspector was required to go into the same level of  detail as the BANES’ Inspector, but the shortness of his reasons contrasts sharply with the reasons this Inspector gave for accepting the Council’s jobs growth figure of 10,100 in paragraphs 17 to 23 of the report. …the Inspector has not found that the underlying characteristics of the North Somerset justify use of the ratio

The Council’s housing requirement figure depended wholly on the ratio applied to the figure for jobs growth. Policy CS13 adopts the ratio recommended by the Inspector as sound. The legal validity of that policy depends upon the Inspector having reached conclusions that were lawful. For the reasons I have given I consider the Inspector failed to give adequate or intelligible reasons for accepting that the Council’s housing figure made sufficient allowance for latent demand

The term latent demand is not defined in the 2007 SHMA guidance and only referred to obliquely once there.  Its use here is confusing, however the key issue is the triggers to when and how people will form a home based on life events, some of those occurring whether or not people have a job (such as the retired) and others being job related and so emerging when jobs become available – so ‘latent’ – emerging like crocuses in spring when the weather warms.  This is a difficult issue as the notion of ‘objectively assessed need’ requires some assumptions about job growth, but this can dwell into non objective political/planning assumptions on strategy in terms of where houses and jobs are provided across a sub-region.  Should a purely objective assessment simply assume ‘trend’ and then provide the technical basis for making a decision on where depending on what strategy you adopt on  job growth and commuting ratios?  This decision points amongst several others (Eips like BANES)  in that direction but in the absence of up to date national guidance on these tough issues we are in difficult territory.   It implies that SHMAs by themselves cannot come up with a magic single figure (except perhaps at whole HMA level) simply the technical wherewithal, data for formulas,  for making a decision on the housing levels by district.   Of course if an authority carries out its own study it becomes difficult to argue then for an implied apportionment that stretches across a sub-region.

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