AC-2024-LON-001877 - [2025] EWHC 2132 (Admin)

I begin by considering the Claimant’s argument that the inspector’s conclusions in DL26 were reached in breach of his Tameside duty. Lord Diplock stated the duty in Tameside at page 1065 –

“The question for the court is, did the Secretary of State ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly?”

The general principles which govern the Tameside duty were summarised by the Court of Appeal in R (Balajigari) v Secretary of State for the Home Department [2019] 1 WLR 4647 at [70]. The duty on the inspector was only to take such steps to inform himself as were reasonable. It was for the inspector and not the court to decide upon the manner and intensity of the inquiry to be undertaken. The court should establish what material was before the inspector and should only strike down a decision not to make further enquiries if no reasonable inspector could have been satisfied on the basis of the inquiries made that they possessed the information necessary for the decision which they were required to make.

This ground of challenge is concerned with the inspector’s conclusion that the Scheme was funded and viable, and capable of being delivered within a reasonable timescale. Those were questions which arose from the decision making framework set as a matter of policy by the CPO Guidance. As I have set out earlier in this judgment, the CPO Guidance required the inspector to satisfy himself that the Second Defendant as acquiring authority was likely to have available to them the resources needed to deliver the Scheme within a reasonable timescale. The Second Defendant was required to provide evidence of the source of their funding both to meet the costs of compulsory purchase and of carrying out the Scheme. They were required to show that funding would be available now or early in the process of delivery. Where, as in the present case, the Scheme was not intended to be independently financially viable, the Second Defendant was required to indicate how any shortfall in funding was intended to be met.

In the case of a compulsory purchase order made under section 226(1)(a) of the 1990 Act, the CPO Guidance required the inspector to take the potential financial viability of the Scheme into account. In that context, a general indication of the acquiring authority’s funding intentions and any commitment from third parties would usually be sufficient to give reassurance that the scheme underlying compulsory acquisition will proceed. Where financial viability is uncertain, there will need to be other compelling grounds for confirmation of the compulsory purchase order.

In order to judge whether the inspector was in breach of his Tameside duty in addressing those questions, it is necessary to identify the information which was made available to him through the public inquiry proceedings.

The inspector received written proofs of evidence from Mr Mackin and Mr Clough. Both witnesses gave oral evidence at the public inquiry. Their evidence was subject to cross-examination on behalf of the Claimant. Mr Mackin stated the Second Defendant’s commitment to funding the Scheme as a standalone project and on the basis of the target costs budget and updated financial appraisal explained in the March report. He confirmed that the Second Defendant was no longer relying on GLA grant funding. The Scheme was to be funded through the Second Defendant’s capital programme, the principal source of funds being a loan from the PWLB borrowed via the housing revenue account. Both the March report and other relevant Cabinet reports were in evidence before the inspector. Mr Mackin confirmed that the Scheme was not expected to be commercially viable, although the Second Defendant would seek to recover costs in future through the wider Carpenters Estate redevelopment programme. He identified the Second Defendant’s strategic objectives in promoting the Scheme as the provision of a substantial number of affordable homes and to act as a catalyst for future investment in the masterplan for the Carpenters Estate. Mr Clough gave evidence of the progress with contractual procurement and the current programme for delivery of the Scheme to projected completion prior to the end of 2027.

The Claimant’s witness, Mr Rhead, called into question the viability of the Scheme in his expert report. He did not, however, seek to advance a positive case that, for example, the Second Defendant’s projected costs for the Scheme were significantly underestimated or unreliable; or that the Second Defendant’s reliance on securing loan funding from the PWLB was misplaced. The documents to which he referred in his report, the Target Cost Plan and the Updated Financial Appraisal mentioned in the March report, were disclosed to the Claimant shortly before the start of the public inquiry and accordingly in evidence before the inspector. I understand that Mr Rhead commented on that evidence during his oral testimony at that public inquiry.

In the light of this evidence, there was no doubt as to the Second Defendant’s funding intentions for the Scheme. The Second Defendant’s approved costs budget for the Scheme was in evidence before the inspector. The principal source of funding to meet the projected capital costs of delivering the Scheme had been clearly identified. There was no issue that, as a standalone refurbishment project, the Scheme was not expected to be financially viable, in the sense of providing a positive return on investment. The Second Defendant strategic objectives for promoting the Scheme as a standalone project were clearly stated in evidence. There was no evidence before the inspector which substantiated the Claimant’s main contentions that the costs budget approved by Cabinet in response to the March report was wrong or unreliable and that the requisite loan funding from PWLB was contingent upon a positive investment decision by the PWLB.

It is clear from the inspector’s reasoning in DL22 to DL26 that he asked himself whether the information which I have just summarised was sufficient to enable him to draw his conclusions on whether the Scheme was funded, viable and likely to be delivered within a reasonable timescale. He concluded that it was sufficient for that purpose. In doing so, he considered and rejected the Claimant’s argument that there was a clear need for independent assessment and scrutiny of the costs budget approved by Cabinet, that no reasonable conclusion could be drawn about the funding and delivery of the Scheme in the absence of such an independent assessment and that there was no proper basis for concluding that the requisite loan would be forthcoming from PWLB.

Applying the principles stated by the court in Balajigari, I am unable to accept that the inspector acted Wednesbury unreasonably in reaching those conclusions. His reasons in DL24 and DL25 for rejecting the Claimant’s argument were proper and adequate. He acknowledged that the project costs and funding arrangements approved by Cabinet in response to the March report had not been independently scrutinised and verified. He was correct to say that there was no requirement for such independent scrutiny or verification. No such requirement is stated in the CPO Guidance. What is required is an indication of the acquiring authority’s funding intentions and evidence of the sources of funding, particularly in a case where, as here, the acquiring authority accepts that the Scheme will not achieve a financial return on the capital investment required to deliver it.

Whilst there may be cases in which the information provided by the acquiring authority is shown to be so questionable that independent scrutiny is clearly called for, it is very difficult to conceive of a case in which the inspector holding the public inquiry will fail to identify that fact. The very purpose of the public inquiry procedure is to enable inspectors to consider whether the acquiring authority has addressed the matters identified in the CPO Guidance to their satisfaction. It will be a rare case indeed in which the inspector can be shown to have failed to take reasonable steps to acquaint himself with the relevant information to enable him to do so, notwithstanding the public inquiry proceedings. Here, the inspector was well aware of the concerns which had been raised by the Overview and Scrutiny Committee; and that having considered those matters with the benefit of further advice from officers, including the finance and monitoring officers, Cabinet had re-affirmed its approval of the costs budget and funding and delivery arrangements for the Scheme. In my judgment, in this case the inspector was reasonably entitled to find as he did in DL24 and DL25, that those matters had been sufficiently addressed in the Second Defendant’s evidence and on the basis of the information contained in the March report.

The March report explained why the forecast cost of the Scheme had increased by £24M since July 2021. A substantial contingency had been priced into the target costs budget. It is relevant to note that, according to the March report, the projected construction costs had been checked by the Scheme’s appointed quantity surveyors. The March report itself had been prepared with input from the Second Defendant’s finance team and approved by Cabinet.

Mr Mackin’s evidence was that loan funding for capital projects such as the Scheme was routinely available to local authorities from the PWLB. HM Treasury had set up the PWLB to provide loan facilities exclusively to local authorities to fund capital projects such as the Scheme. PWLB loan funding was provided on a “non-discretionary” basis, with the judgment whether the given project justified the capital investment to be funded by the loan resting with the local authority. That evidence was consistent with the PWLB’s own explanation of its lending arrangements on its website, which was put into evidence during the course of the public inquiry. The PWLB stated that major local authorities such as borough councils may take out PWLB loans and, under current arrangements, are “free to finance capital projects by borrowing, provided they can afford to service their debts out of their revenues”, such decisions being the responsibility of the elected members of the local authority who are accountable to their electorates. In closing submissions, Mr Jones KC had relied upon the PWLB’s statement that a local authority’s freedom to borrow was subject to their finance director being “satisfied that they are acting in line which statute and can afford to repay the loan”. The inspector, however, was aware that the March report had been prepared with input from the Second Defendant’s finance team.

In summary, the inspector had sufficient information upon which to reach proper and reasonable conclusions, as he did in DL25, on the adequacy of funding arrangements for the Scheme. In particular, he was in a position on the basis of the evidence reasonably to decide whether the Scheme would be funded and how the required funds were to be sourced. Likewise, Mr Clough’s evidence provided the inspector with sufficient information upon which reasonably to judge whether the Scheme was likely to be delivered within a reasonable timescale.

In paragraphs 51 to 57 above I have rehearsed in some detail the closing submissions which were made to the inspector on behalf of the Claimant and the Second Defendant. It is clear that there was extensive disagreement between the parties as to whether the Second Defendant’s evidence justified the conclusions subsequently reached by the inspector on the funding, viability and deliverability of the Scheme. Whether the inspector was right to reach those conclusions is not a matter for me to decide on an application brought under section 23 of the 1981 Act. This is not an appeal from the inspector’s decision. By invoking the Tameside principle, the Claimant must establish both that the inspector lacked the information necessary reasonably to address the questions raised by the CPO Guidance and failed to take reasonable steps to address that deficiency. For these reasons I have given, the Claimant has failed to do so.

The next question is whether the inspector fell into error in failing to have regard to the Dagenham decision. Mr Jones KC criticised the inspector for stating in DL49 that he had not been provided with a full copy of the Dagenham decision. It was submitted that the inspector could readily have been provided with a full copy, had he but asked the Claimant to provide one to him. In any event, he would have been in a position to obtain one within the planning inspectorate.

In my view, that criticism misses the inspector’s point in DL49. The reason why the inspector was unable to give more than limited weight to the Dagenham decision was because the Claimant had given little if any real explanation as to why it was material to the decision whether to confirm the Order in the present case. In my judgment, the inspector was justified in taking that point. As Ms Ruchi Parekh submitted on behalf of the First Defendant, the Claimant’s reliance on the Dagenham decision in relation to the issue of viability was essentially limited to the quotation of two isolated, brief passages. Those passages appeared to reflect the judgment of the inspector in that case on the evidence, such as it may have been, which had been led by the acquiring authority on that topic.

It is well-established that a previous decision is capable of being a material consideration in planning appeal proceedings, for reasons of consistency: see Baroness Cumberledge of Newark v Secretary of State for Communities and Local Government [2018] PTSR 2063 at [29] and the cases there cited. However, in order to be material on that basis, it is necessary to show that the previous decision is not distinguishable on its facts from the instant case. In North Wiltshire District Council v Secretary of State for the Environment (1992) 65 P&CR 137, 145 Mann LJ said –

“To state that like cases should be decided alike presupposes that the earlier case is alike and is not distinguishable in some relevant respect. If it is distinguishable then it usually will lack materiality by reference to consistency although it may be material in some other way”.

Although the principle has typically been applied in the context of planning appeal decisions under section 78 of the 1990 Act, I can see no good reason why it should not also apply in the context of decisions whether to confirm compulsory purchase orders made under section 226(1)(a) of the 1990 Act. In this case, however, the Claimant appears simply to have assumed that the Dagenham decision was indistinguishable in any relevant respect from the case before the inspector. No attempt was made to explain why the Dagenham decision should be taken to be a like case to the present one, insofar as the issue of viability of the scheme underlying compulsory purchase was concerned.

In closing submissions for the Second Defendant, Mr Edwards KC pointed out that the brief extract from the Dagenham decision relied upon by the Claimant indicated that in that earlier case, the scheme was intended to be commercially viable. That was in clear contrast to the Second Defendant’s case in support of confirmation in the present case, which acknowledged that the Scheme was not intended to produce a positive return on investment and would be fully funded by the Second Defendant via a capital loan.

That being the position before the inspector, he was indisputably justified in questioning how the Dagenham decision related to the Order before him for confirmation. It is entirely unsurprising, in those circumstances, that he should decide that he was able to give the Dagenham decision only limited weight.

The parties have since provided a full copy of the Dagenham decision to the court, which enabled me to hear argument about its potential relevance to the decision under challenge and to form my own provisional view as to whether it could reasonably be said to be indistinguishable from the decision which the inspector had to make on the question of viability. In the Dagenham case, the scheme of development underlying the compulsory purchase order was to be delivered by a single purpose private company which sought a positive return on its investment. Evidence before the public inquiry indicated that the development scheme was substantially lacking in financial viability. That evidence consisted of a financial viability appraisal and review carried out over five years prior to the public inquiry. The acquiring authority did not rely on those appraisals, but had not submitted an up-to-date assessment of the scheme’s financial viability to the inspector. The inspector found the financial viability of the scheme to be uncertain; and that the private investors who were funding the scheme via the acquiring authority’s development partner would be unlikely to continue to do so in such circumstances. It is clear that the issues on viability raised for determination in the Dagenham decision were quite different from those arising in the present case.

There is no substance in the Claimant’s argument that the inspector misinterpreted the CPO Guidance. The overarching policy to which the CPO Guidance is directed is that a compulsory purchase order should not be confirmed unless there has been shown to be a compelling case in the public interest for compulsory acquisition of the land included in the order. The question whether the scheme underlying compulsory acquisition is funded, viable and capable of being delivered is self-evidently material to the decision whether a compelling case for compulsory purchase has been made out. As the CPO Guidance states, if the acquiring authority cannot show that all the necessary resources are likely to be available to deliver the scheme for which the land is said to be required, it will be difficult to establish a compelling case for its compulsory purchase in the public interest. That is why acquiring authorities are advised to provide substantive information about the sources and timing of funding for both land acquisition and implementation of the scheme. The absence of such information would raise a real doubt as to whether the expropriation of the land included in the compulsory purchase order was justified in the public interest. Essentially similar advice is given to acquiring authorities who are seeking to justify confirmation by the First Defendant of a compulsory purchase order made under section 226(1)(a) of the 1990 Act. Perhaps reflecting the fact that many such orders are made to assemble the land required to deliver development projects promoted by local planning authorities in partnership with a private developer seeking a commercial rate of return on their investment, the advice in paragraph 106 of the CPO Guidance focuses on the financial viability of such schemes. The Dagenham decision concern such a scheme. Nevertheless, the essential guidance is that the acquiring authority should provide evidence of funding intentions, sources and timing of funding, so that the confirming minister or the appointed inspector is able to make an informed judgment on the prospects of the scheme being delivered, in the event that compulsory purchase of the requisite land is authorised.

Insofar as Mr Jones KC’s submission was that the inspector’s informed judgment on the prospects of delivery of the Scheme must also inform his overall determination of the overarching question whether confirmation of the Order was compellingly justified in the public interest, I would accept it. However, I have no doubt that the inspector was well aware of the need ultimately to address that overarching question. It is clear from DL52 that his conclusions in DL26 did inform his determination of that question. Nor, finally, is there any merit in the Claimant’s complaint that the inspector failed to give proper, adequate and intelligible reasons for his conclusions in DL26. The explanation he gave in DL22 to DL25 was unarguably sufficient for that purpose.

For these reasons, ground 1 must be rejected.