Plan of action

The government has placed planning changes at the heart of its aim to build more houses and expand infrastructure to kickstart economic growth. Here, we consider its proposals along with several high-profile cases that will affect property practitioners advising on planning matters.

Planning cases challenging development

R (Finch) v Surrey County Council

In June 2024, the Supreme Court handed down its much-awaited decision in R (on the application of Finch on behalf of Weald Action Group) v Surrey County Council [2024] UKSC 20.

Finch concerned a challenge to a development consent for an onshore oil and gas development on the basis that the relevant environmental impact assessment (EIA) did not consider indirect emissions (commonly referred to as ‘scope 3’ or ‘downstream’) from the combustion of eventually refined hydrocarbons produced by the development. The core issue in the course of the litigation concerned a developer’s obligation under the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (EIA Regulations) to prepare an environmental statement (ES) describing the likely significant effects of a development (both direct and indirect). The question was whether this extended to include an assessment of the scope 3 or downstream greenhouse gas emissions resulting from the use of the end product originating from the development, in this case the ultimate end use of the oil produced by the development.

In December 2018, Horse Hill Developments Ltd (HHDL) sought planning permission from Surrey County Council (the council) to retain and expand an existing onshore oil well site and to drill for new wells.

The EIA Regulations require that an EIA be carried out before planning permission can be given. This includes a requirement to prepare an ES regarding the likely significant effects of the development. The ES produced by HHDL considered the environmental impacts of emissions from the construction, production and decommissioning of the well site itself, but did not consider the downstream emissions arising from the end use of the oil to be produced from the site. Following the EIA process, the council granted planning permission for the development in September 2019.

The court decided, by a majority of 3–2, to allow the appeal. As a result, the council’s decision to grant planning permission was quashed.

To consider the “effects of a project”, the majority considered it “obvious”

that the question was one of causation. It was significant that the parties all agreed that it was not merely likely, but inevitable, that the oil produced at the site would be refined, combusted and result in greenhouse gas emissions. The court considered that this brought about “the strongest form of causal connection”, such that downstream emissions were plainly “effects of a project” to extract oil.

This is a significant case, particularly for the oil and gas industry, but also more widely given the focus on the proper interpretation of the EIA Regulations.

It is important to note that the EIA Regulations do not prevent a relevant authority from granting permission for a development that is likely to cause significant harm to the environment. The EIA Regulations do, however, require the authority to reach a reasoned conclusion on the environmental impact and to take this into account in making its decision.

Since the Supreme Court’s decision in Finch there have been the following key developments:

• In October, North Lincolnshire Council agreed to a quashing order in respect of its decision to grant planning permission for the expansion of operations at an oil and gas drilling site, after a High Court claim was launched following the Finch decision.
• In Friends of the Earth Ltd v Secretary of State [2024] EWHC 2349 (Admin), the court was concerned with a planning permission that had been granted for the extraction of coal at Whitehaven and whether an EIA had been carried out lawfully. The court found, applying Finch, that the decision to grant planning permission was unlawful and quashed it. One of the key issues that arose was where a case for substitution is made as part of the EIA process – here, that the coal mine in question would have a neutral or even beneficial effect on global emissions as its coal would replace coal imported from the US –robust evidence must be provided to support this.
• The Department for Energy Security and Net Zero launched a consultation on 30 October 2024 concerning updated environmental guidance for offshore oil and gas projects following the decision in Finch. Hopefully, the result will be robust guidance on how developers should approach Finch going forward.

Fry & Son Ltd v Secretary of State for Levelling up

In June 2024, the Court of Appeal handed down another much-awaited decision in CG Fry & Son Ltd v Secretary of State for Levelling up, Housing and Communities [2024] EWCA Civ 730. In Fry, the Court of Appeal grappled with whether it is lawful for a competent authority to undertake an appropriate assessment pursuant to the Conservation of Habitats and Species Regulations 2017 (the regulations) when considering an application for reserved matters or the discharge of planning conditions.

In 2015, the claimant received outline planning permission for its development and subsequently received reserved matter approval pursuant to that outline planning permission (subject to conditions) in 2020 for 190 dwellings. In 2021, the claimant sought discharge of the conditions attached to the reserved matter approval, but the local planning authority (LPA) withheld its approval on the basis that a habitats regulations assessment (HRA) pursuant to the regulations was required.

On appeal, the planning inspector agreed with the LPA, holding that an appropriate assessment under regulation 63 was required to discharge the conditions. The decision was reaffirmed by the High Court.

The Court of Appeal dismissed the developer’s claim on all three grounds. The Court of Appeal did not find any reason why an appropriate assessment under the regulations could not be required either for reserved matter approval or condition discharge. An appropriate assessment may be required by an appropriate authority before that authority determines “any consent, permission or other authorisation” (pursuant to regulation 63) for a plan or project if “the ‘authorisation’ in question is necessary to enable the project to be lawfully implemented” [paragraph 74 of the judgment].

This is a material case for all sectors, but notably for the housing industry where issues such as nutrient neutrality have led to significant constraints on development. The case has led to further calls for legislative intervention to address this issue. On 1 November, the Supreme Court granted permission for an appeal.

Policy developments

National Planning Policy Framework

On 30 July 2024, the government issued an updated draft National Planning Policy Framework (NPPF) for consultation. The NPPF is the primary national planning policy document for town and country planning in England and how these policies should be applied.

The headline grabber has been the reintroduction of mandatory housing targets, which reflects the new government’s approach of putting housing and planning at the forefront of its growth agenda. The aim of this amendment is to build 370,000 homes per year and achieve the government’s commitment of 1.5m homes over this parliamentary term.

Beyond this, the government’s promise to build on ‘poor quality’ land in the green belt has the potential to bring thousands of neglected sites around cities into consideration. The draft NPPF seeks to do this by reclassifying parts of the green belt as ‘grey belt’ land.

The Conservative government amended the NPPF in December 2023, and the new government’s consultation draft unpicks a number of those amendments. The current consultation ended on 24 September 2024.

The government will need to review the responses, which will likely take a few months. Stakeholders are hopeful that a revised NPPF will be published before the end of the year.

Onshore wind and energy

The government’s first major policy statement on 8 July 2024 was to remove the planning barriers that had acted as a de facto ban on new onshore wind development in England over the past decade.

The current NPPF sets out two policy tests that only apply to onshore wind. The effect of the government’s policy statement is that these policy tests no longer apply. The removal of these tests from planning policy means that onshore wind applications will be treated in the same way as other energy development proposals. This move has been unanimously welcomed by the onshore wind and clean energy industries, and is likely to open up a significant amount of land to assembly and development work.

The government is currently consulting on bringing large onshore proposals into the Nationally Significant Infrastructure Projects (NSIPs) regime pursuant to the Planning Act 2008. The proposed threshold is for schemes over 100megawatts (mw).

It is also consulting on amending the threshold for solar schemes from 50mw to 150mw for solar projects. This would mean that projects falling below these revised thresholds could be determined at a local level, rather than through the NSIPs regime. The rationale for this is to keep up to date with changing technology so that projects “follow a proportionate process to secure consent”. This, and the proposal with respect to onshore wind, will require amendments to the Planning Act 2008.

Legislation

Planning and Infrastructure Bill

It was announced in the King’s speech that a Planning and Infrastructure Bill will be introduced to reform planning and accelerate the delivery of high-quality infrastructure and housing. The bill has five key aims:

1. Streamline the delivery process for critical infrastructure by simplifying the development consent regime and enable new and improved national policy statements to come forward. The hope is this will fast-track certain infrastructure projects through the planning system, but it hasn’t been decided if any new sectors (such as housing) will fall under the NSIPs regime.
2. Reform compulsory purchase compensation rules to ensure landowners are paid fair (but not excessive) compensation where important social and physical infrastructure and affordable housing are being delivered. The Levelling-up and Regeneration Act 2023 (LURA) already allows the secretary of state to direct that hope value will be ignored for certain compulsory purchase order schemes; this may now be extended.
3. Improve local planning decision-making by modernising planning committees. While this is light on detail, anything that helps depoliticise the decision-making process will be welcome news to developers.
4. Increase LPAs’ capacity to improve performance and decision-making. The resourcing issues experienced by planning departments across the country are one of the biggest obstacles to development, and while Labour’s recent commitment to appoint 300 new planning officers is good news it may not go far enough.
5. Use development to fund nature recovery – where both are stalled – to deliver positive environmental outcomes.

Improvements to the planning regime itself can only be a good thing, but the proposal to achieve this through yet more primary legislation is concerning, given how long it took the last government to get major planning legislation on to the statute books.

Great British Energy Bill

The King’s speech also outlined proposals for a Great British Energy Bill. This will help to achieve energy independence and unlock investment in energy infrastructure by establishing a publicly owned clean power company, headquartered in Scotland, which will invest in renewable energy projects across the UK. The government will also support the development of nuclear power, sustainable aviation fuel, carbon capture, and green hydrogen.

This, coupled with the proposed amendments to the NPPF, will likely increase planning applications for renewable energy projects, potentially requiring planning authorities to adapt their policies and expertise.

Looking ahead

The government’s focus on planning reform, house building, and energy and infrastructure development is a strategy to get Britain building again. By taking a collaborative approach, breaking down well-established barriers to development and prioritising sustainable development, the response to the proposed reforms has been largely positive. Despite this, we will still have to wait for the proposed policy to address the fallout from Finch and to find out if the claimant in Fry is successful in the Supreme Court.