Judge rules in favour of retirement consortium’s judicial review of the Mayor of London’s SPG

The High Court today ruled in favour of ground one of the judicial review of the Mayor’s Supplementary Planning Guidance (SPG), which is therefore not lawful in one respect.  A spokesperson on behalf of the retirement developers’ consortium, which brought the review, said:

“We’re delighted to have been successful on ground one of the judicial review.  Today’s judgement shows the extent to which planning policy at the national and local level is not sufficiently supportive of the housing needs of older people.  The Mayor’s new policy would exacerbate the situation by effectively making it economically impossible to bring forward private retirement development in London. Older people are the fastest growing demographic in the capital and the London Plan calls for around 4,000 new retirement housing units to be built each year.  However, supply is currently in the low hundreds.”  

“If the Mayor’s target is to be met, a proper planning and affordable housing policy is required that fully recognises the unique viability model of specialist retirement housing. This was why we brought this case to the Court.  We need a positive planning policy for London’s elderly population and the Mayor now has the opportunity to review his approach.  We look forward to working closely with him and his team to agree a resolution and increase much-needed housing options for older Londoners.”

Paragraph 56 of today’s judgement notes that “On that point, I find that the SPG is not consistent with the London Plan in one respect, and is to that extent not lawful. I give permission for the point to be argued. I will hear submissions on the appropriate remedy, if any, for the inconsistency I have found to exist.”

Ground one noted that the SPG represents a substantive new policy, which should have been subject to an independent examination.

Background:

The challenge was submitted by a consortium of retirement housebuilders made up of McCarthy & Stone, Churchill Retirement Living, PegasusLife and Renaissance Retirement in November 2017.  The oral hearing took place between 1-2 May 2018 at the Royal Courts of Justice. The consortium was represented by Lester Aldridge LLP who instructed Rupert Warren QC. 

The Mayor’s Affordable Housing and Viability Supplementary Planning Guidance was adopted in August 2017, and introduced a ‘fast-track’ process for dealing with housing proposals in which developers offer at least 35 percent on-site affordable housing.  Specialist housing for the elderly would, in effect, be excluded from the fast-track process under the SPG, because it is not feasible to provide on-site affordable housing on schemes for older people due to the need for a single management regime within the development. The target would then rise to 50% and the process that would then apply is the ‘Viability Tested Route’ to agree a financial contribution in lieu of the on-site provision, but with a ‘Late Stage Review’ to be undertaken once the development has been completed and substantially sold, so that the Mayor can capture an increasing contribution from any additional profit. The judge found this latter provision in the SPG to be inconsistent with the London Plan and thus unlawful.

The consortium believes that review mechanisms should only be used to provide periodic reviews of changes in the circumstances of large scale, long-term, phased development. They should not be used retrospectively, as a second opportunity for a Local Planning Authority to capture a share in the profits of a specific developer undertaking small, single phase developments.

The consortium challenged the SPG in November, arguing that the following three grounds meant that the SPG should be quashed:

Ground 1: The SPG represents a substantive new policy, which should have been subject to an independent examination.

Ground 2: The effects of the SPG’s ‘two-speed’ system on the delivery of affordable housing and critically, of specialist housing for the elderly should have been considered within a strategic environmental assessment (“SEA”).

Ground 3: The SPG was unlawfully in breach of the Mayor’s obligations under the Equality Act and the European Convention on Human Rights, since it introduces an unjustified and disproportionate new regulatory hurdle which leads to differential treatment for the elderly and women seeking to have their housing needs met in London.

The judge found in favour of Ground 1.