Quality Homes and further clarification of NPF4 following Miller Homes Ltd v Scottish Ministers

With Scotland having declared a national housing emergency, and the decision taken in Miller Homes Ltd v Scottish Ministers [2024] CSIH 11 (“Mossend”), the Scottish Government’s Chief Planner has issued a letter ‘Planning for Housing’ to provide clarification on the application of NPF4, including Policy 16 ‘Quality Homes’.

Background

On 3rd May 2024, the Court of Session upheld the Scottish Ministers’ decision to refuse Miller Homes Ltd planning permission for 250 homes in West Lothian. The Mossend decision was the first judicial interpretation of Policy 16 ‘Quality Homes’ of NPF4.

Subsequently, on 15th May 2024, Scotland declared a national housing emergency. The Chief Planner Letter provides that it is a key priority of the Scottish Government to engage constructively to expand housing supply to meet the need of the population and tackle homelessness. Whilst planning is just one of many factors that impact on the delivery of housing, it must play its part.

The Mossend judgement

In Mossend, Miller Homes argued that the Ministers’ interpretation of Policy 16(f) of NPF4 was inoperable as exceptional release of housing land under that policy could only take effect once a housing delivery programme was in place, and a deliverable housing land pipeline had come into existence upon a new-style LDP being implemented. It was not that Policy 16(f) of NPF4 was incompatible with policy HOU2 of the West Lothian Local Development Plan (‘WLLDP’), it was that Policy 16(f) was simply inoperable at this time. That being the case, the pre-existing policies of the WLLDP, to include HOU2, which permitted the exceptional release of greenfield sites where there was a shortfall in the five-year effective housing land supply would remain unaffected and applicable.

Further, the Ministers’ interpretation of policy 16(f) was contradictory to the overall purpose of the development plan. The established purpose of existing LDPs was to enable development to ensure that the housing need in the area was met, including through exceptional release of land for development. NPF4 had not altered that purpose. The Ministers’ interpretation had the opposite effect, it restricted those demands and needs being met, in circumstances where housing targets had been significantly missed.

The Ministers, on the other hand, submitted that NPF4 policy represented a change in policy direction from that in the previous, now superseded, Scottish Planning Policy (SPP). The clear intent of the new approach to exceptional land release being to encourage and prioritise the delivery of allocated housing. The new policy rewards success for beating targets, rather than rewarding failure to meet them.

The fact that Miller Homes was unable to derive support from the first bullet point of Policy 16(f)(iii) until a deliverable housing land pipeline was in place, did not mean that the policy was incapable of rational application. Policy 16(f) was capable of operating to permit release of unallocated land for housing in the context of old-style local development plans, including the WLLDP. An old-style LDP could be adopted and a delivery programme (which would specify and contain the delivery pipeline) could be published alongside it. Alternatively, the fact that a delivery pipeline had not yet been published could be presented as a material consideration to justify derogation from the development plan.

In the event that HOU2 was found to remain applicable, the Minimum All-Tenure Housing Land Requirement (“MATHLR”) formed part of the development plan, and the Ministers were entitled to take it into account when addressing the five-year effective housing land supply. Having established that there wasn’t a shortfall in supply, they were entitled to conclude that the proposal received no policy support for exceptional release under HOU2.

The Court ultimately rejected the arguments submitted by Miller Homes for the following reasons:

1. Housing policy has moved away from the requirement under the now superseded SPP to maintain an effective five-year housing land supply. The concepts of shortfalls in housing land supply and the tilted balance no longer apply. NPF4 brought in a new approach which seeks to provide housing in suitable locations. Bullet point 1 of Policy 16(f) (iii) is designed to bring forward more land where the supply of land to meet the target is being met more quickly than envisaged in the delivery programme. The operation of Policy 16 is not however contingent on a deliverable housing land pipeline being in place.
2. There is nothing to suggest that the operation of Policy 16, or any part of it, is postponed until “new-style” LDPs are in place.
3. The Planning (Scotland) Act 2019 (Commencement No. 12 and Saving and Transitional Provisions) Regulations 2023 make clear that a delivery programme may be provided under old-style LDPs. The requirement under s 21(9) of the Town and Country Planning (Scotland) Act 1997 to review, update and re-publish the action programme is to be treated as a requirement to review the action programme and to update and publish it as a delivery programme. The delivery programme establishes, in accordance with NPF4, a deliverable housing land pipeline.
4. The MATHLR forms part of the development plan. It is a target. A “new-style” LDP will not require to be implemented before it will apply.

Clarification of this decision provided by the Chief Planner’s letter.

In the wake of the Mossend decision and the national housing emergency, the Scottish Government has sought to provide further clarification on how to apply NPF4, including Policy 16 ‘Quality Homes’. The full letter can be found here: https://www.gov.scot/publications/planning-for-housing-chief-planner-letter-june-2024/

The key points to highlight from this letter in relation to Mossend are as follows:

1. The Mossend judgment confirms that the approach to planning for housing in NPF4 is different to that in SPP confirming that; ‘the changes to the development plan move housing policy away from disputes over numbers to an approach which seeks to provide homes in suitable locations’ and that ‘looking at the policies as a whole there is an emphasis on quality, diversity and sustainability’.
2. It is recognised that a significant element of Mossend related to Policy 16(f), which requires a deliverable housing land pipeline. At the same time as publishing the letter Scottish Ministers have written to Planning Authorities to require that action programmes associated with local development plans be reviewed, updated and republished as delivery programmes, and for this to be done by 31st March 2025. This is to ensure that, under transitional arrangements, they include the sequencing of, and timescale for, the delivery of housing sites allocated in local development plans.
3. NPF4 expects planning authorities and local development plans to take an ambitious approach, with Local Housing Land Requirements that exceed the MATHLR. This expectation is reinforced in published guidance supporting preparation of LDPs. The guidance indicates that the same evidence can be used to inform the MATHLR but that where more recent information is available it should be used. Information supporting plan preparation is expected to be robust. Taking this ambitious approach and providing land to accommodate a wide choice of homes across a range of scales of sites and locations, will support the intent of Policy 16. On land allocated for housing in local development plans there is support for development in principle from Policy 16(a) of NPF4. It is vitally important that these local development plans are brought forward timeously.

Following the judgement in Mossend, the clarification provided by the Chief Planner’s letter will be a welcome guide to Planning Authorities in interpreting the provisions of NPF4 as they relate to the delivery of housing in light of the national housing emergency.

For more information or to speak to a member of one of our planning, public sector, local government and dispute resolution lawyers, contact Peter Ferguson, Jennifer Jack, Calum Gee, Lesley Montague and Sandy Fowler.