CA-2024-001754 - [2025] EWCA Civ 990

It is apparent from the ground of appeal (see [63] above) that much of the appellant’s focus is on the allegedly “rearguard” nature of the EPPS assessment carried out in February 2024 after the decision to publish the 2023 WMS. The appellant also contends the s.19 duty was not discharged because the assessment related to the draft FHS, an inchoate policy not yet in force and failed to make reasonable inquiries to assess the effect of not allowing LPAs to set higher energy efficiency standards.

Mr. Tromans for the OEP made it clear that the main focus of his submissions was to challenge [44] of the judgment in the High Court, where the judge appeared to accept that a failure to comply with the duty at one point, for example, the decision to adopt a policy, could be remedied by an assessment carried out subsequently. Likewise, he criticised the statement that a later assessment could satisfy the statutory duty.

I return to the EA 2021. Section 19(1) requires a Minister to have due regard to the EPPS when “making policy”. That expression “making policy” includes “developing, adopting or revising policy” (s.47).

Thus, the duty applies at a number of stages in the “making” of a policy. For example, the duty to have “due regard” to the EPPS applies when a policy is being developed and not simply at the point when a policy is adopted. It applies when a policy is being formulated and different policy options are being considered. Accordingly, it is necessary to be careful in the language used to deal with a situation where there was no regard to the EPPS at one material point but an EPPS assessment has been carried out subsequently.

Take the present type of case. No regard was had to the EPPS when the decision was taken to approve the 2023 WMS on 13 December 2023. Plainly, there was a breach of the s.19 duty at that stage. But if the court had declared that the decision to approve the policy was unlawful, no party suggests that the Secretary of State could not lawfully have considered afresh whether to approve the policy after having had due regard to the EPPS.

The position is not materially different where, as here, a Minister who has failed to have any regard to the EPPS when adopting a policy, reconsiders that decision with the benefit of an EPPS assessment before any challenge comes to a hearing before the court. The court’s focus will be on whether that assessment is legally adequate in order to comply with the s.19 duty.

Let us assume that a court finds that such an assessment is legally adequate, in the sense that due regard is had at that later stage to the EPPS. That does not alter the position that there was a breach of the s.19 duty when the policy was adopted initially. It would be wrong to say that a s.19 compliant EPPS assessment carried out subsequently has remedied the earlier breach of s.19 when the policy was adopted, or has retrospectively validated that decision. Instead, the court decides whether in the event of subsequent compliance with the s.19 duty, it would be appropriate to declare that the policy is unlawful or to quash the policy. “The focus should be on the adequacy and good faith of the later assessment”, although the court is also entitled to look at the overall circumstances in which the assessment was carried out (West Berkshire at [87]).

Here there is no suggestion that the EPPS assessment in February 2024 was not carried out in good faith.

Although the EPPS assessment in February 2024 was set out in more detail than the earlier one dated 5 October 2023, the topics addressed and the conclusions reached were substantially to the same effect. In those circumstances, it is inappropriate to describe the assessment in February 2024 as merely a “rearguard action” (Bracking at [26(4)]).

The EPPS was published on 23 January 2023, but the s.19 duty did not come into force until 1 November 2023. The legislation did not contain any transitional provisions. There was no retrospective requirement for policy-making decisions which had been reached before 1 November 2023 to be revisited so that the EPPS could be applied.

In fact, on 5 October 2023 a voluntary EPPS assessment was carried out which concluded that, on balance, the policy in the WMS did not have the potential for significant negative environmental impact. Officials had carried out an assessment of the carbon savings of LPA policies going beyond the FHS and concluded that they were marginal.

It is common ground, and I agree, that the duty in s.19 must be carried out in substance, with rigour and with an open mind. The duty is to have due regard to the matters specified in the EPPS that are relevant to the assessment. It is not a duty to achieve a particular result or outcome. It is for the Minister to decide how much weight to give to the relevant matters. Provided that there has been a proper focus on the relevant principles, the court cannot interfere simply because it would have given greater or less weight to particular matters. The weight and extent of the s.19 duty are highly fact-sensitive and dependent on individual judgment (Hotak at [73]-[75]).

Parliament’s intention in relation to the s.19 duty is that the principles in s.17(5) be applied “proportionately” (s.17(2)). In the same vein, s.19(2) provides that s.19(1) does not require that a Minister should do or not do anything if that “would have no significant environmental benefit” or “would be in any other way disproportionate to the environmental benefit”. It is therefore relevant to identify the nature of the policy in question and its environmental effects. These matters in turn affect which parts of the EPPS are relevant.

The 2023 WMS is concerned with reducing carbon emissions from residential development because of its impact on climate change and the UK’s ability to meet its net zero target for 2050. The Government’s view is that the forthcoming FHS will set national standards for residential development in line with the Climate Change Act 2008 (see EPPS assessment dated 5 October 2023). Similarly, the October 2023 version of the WMS, as well as the December 2023 version, stated that the FHS will result in the building of homes that are “net zero ready” and should require no significant work to ensure that they have zero carbon emissions as the electricity grid continues to be decarbonised. It is not a matter for the court in an application for judicial review to say whether those conclusions are right or wrong. No party has argued that, as a matter of law, the Secretary of State could not rationally hold those views.

The Government has taken the view that the increase in energy efficiency standards should be phased so that the development industry can prepare for the change to the FHS. As an interim measure the Government decided to increase the standards imposed by the Building Regulations 2010 with effect from June 2022, so that new homes will be required to produce 31% less CO₂ emissions compared to the 2013 standards.

The 2023 WMS is also an interim measure providing planning guidance until the FHS comes into force. During that period the 2023 WMS allows LPAs to set a more onerous standard than the current Building Regulations up to the level of the draft FHS. For the purposes of the challenge brought by the appellant, the issue relevant to the s.19 duty, and the assessment required, concerned the potential for achieving a greater reduction in carbon emissions if LPAs are able to set more onerous standards for new housing development.

It is also relevant to take into account the nature of the changes between the October 2023 version of the WMS approved by Mr. Rowley and the version approved in December 2023 by Baroness Penn and confirmed by Mr. Rowley in March 2024 (see the italicised text in [52] above). The differences are relatively minor. The first was simply a cross-reference. The second made a point about the impact of differing local standards on efficiency in delivering new homes, a matter previously identified in the Government’s response to consultation issued in January 2021 (40]-[41] above). Third, the December 2023 version added a passage dealing with DPDs previously adopted that set standards higher than the draft FHS. The WMS does not purport to override such policies. They form part of the statutory development plan. Instead, it indicates what a developer will need to show in order to justify a flexible application of such policies on a case-specific basis. Fourth, the December 2023 version stated that the Secretary of State would monitor the implementation of the policy in the WMS and has powers to intervene in relation to development plans and development control decisions. That statement did not alter the substance of the WMS.

The relatively narrow scope of the issue defined in [97] above, also affects the extent of the EPPS to which the Secretary of State needed to have “due regard” and the assessment required. In his oral submissions, Mr. Goodman focused on two of the five principles in s.17(5) of the EA 2021: the integration principle and the prevention principle.

Under the integration principle the EPPS states:

“Description: As set out in the Environment Act, integration is the principle that environmental protection should be integrated into the making of policies. This means that policymakers should look for opportunities to embed environmental protection and/or enhancement across fields of policy – not just those directly related to the environment.

When to use the integration principle: The integration principle applies to all policy in scope of the legal duty.

Application of the integration principle: Applying the integration principle involves considering whether the policy has the potential to cause a negative environmental effect which could be avoided, minimised, or reduced through alterations to the policy in proportion to other policy aims.

Integration may also present an opportunity for policymakers to build environmental protection, maintenance, restoration or enhancement into policies from the outset and throughout the development of policies.”

Under the prevention principle the EPPS states:

“Description: The prevention principle means that government policy should aim to prevent environmental harm. This principle underpins many aspects of environmental policy to ensure that environmental damage, such as CO₂ emissions, pollution or biodiversity loss, [footnote 6] is avoided.

The prevention principle should promote policy design options that prevent environmental damage either before it has occurred (through policy design), or to contain existing damage. This can have economic benefits as it prevents additional costs and complexities that arise when environmental damage occurs.”

In the section on “proportionality” the EPPS states that environmental effects will differ for each policy and will need to be assessed relative to the likelihood and/or significance of the potential effect on the environment. “In cases where the potential effect is limited, this allows policy makers to apply the policy statement in a lighter touch way”. The EPPS also states:

“Policymakers should take a proportionate approach in the application of the policy statement. They should balance social, economic, and environmental considerations in making policy. They should consider the potential environmental effects of a policy and any mitigating actions. They should consider this in the context of the associated costs and benefits.”

Section 1 of the EPPS assessment carried out in February 2024 summarised the policy objectives of the 2023 WMS:

“Plan-makers have the power to set energy efficiency standards for housing which are stricter than existing national regulatory standards. The policy contained in the December 2023 Written Ministerial Statement (WMS) aims to improve the consistency of application of any such locally mandated energy efficiency standards in new homes.

In responses to the Future Homes Standard consultation of 2019, we heard that disparate energy efficiency standards across local authority boundaries can create inefficiencies in supply chains and labour. Ministers are concerned that these effects would impact adversely on much-needed housing delivery. Concerns about housing delivery also contributed to the Future Homes Standard, in effect, being introduced in two stages. The 2021 “uplift” to Parts L and F and the creation of Part O provided a steppingstone for industry ahead of the FHS coming into force. The policy objective of the WMS is to mitigate adverse effects on delivery before the Future Homes Standard is introduced.

When considering the environmental principles in relation to the WMS, we considered the policy alongside the plans to introduce the Future Homes Standard (FHS). Homes constructed to the FHS, due to be implemented form 2025, will be zero-carbon ready. No further retrofit work will be necessary to ensure they have zero carbon emissions as the electricity grid continues to decarbonise.

The Future Homes Standard will set national standards in line with the objectives and provisions of the Climate Change Act 2008.”

Thus, the assessment confirms that the WMS is intended to be only an interim policy.

Section 2 of the assessment identified environmental effects:

“2.

Is the environmental effect positive or negative?

There is the potential for further positive environmental effects if LPAs set higher standards than those mandated by the Building Regulations. Any potential benefits would be further reductions in carbon emissions occurring largely in the period between now and the time the FHS is implemented. However, this should be balanced against the potential for disrupted housing supply caused by differing standards across the country. Such disruption could lead to the environmental benefits of the FHS not being met if fewer zero-carbon ready homes are built as a result of development not coming forward.

3.

Are there primary effects (an intended result or an effect directly attributed to the proposed action) or secondary effects (indirect or induced changes)?

The FHS will have primary effects relating to reducing carbon emissions in new buildings, as well as secondary effects through the possible stimulation of the green economy (encouraging the creation of new green technologies and ‘green’ employment opportunities), increasing consumer familiarity with green technologies, especially heat pumps of relevance to decarbonising existing buildings, and more widely by reducing emissions over time.

The policy contained in the December 2023 Written Ministerial Statement (WMS) aims to improve the consistency of application of any such locally mandated energy efficiency standards in new homes. The potential effect of this could be to help secure more robust housing supply, as developers and housebuilders are given more certainty of standards.”

As the judge rightly said at [47], the assessment acknowledged that there was a potential for greater environmental benefits if LPAs could set higher environmental standards in DPDs. In substance that involved accepting a possible negative impact of the Secretary of State’s preferred approach in the WMS relative to those higher standards. However, the Secretary of State considered that that should be balanced against potential disruption to the delivery of housing caused by differing standards across the country. Ultimately that was a policy choice for the Secretary of State, informed by the EPPS assessment. In my judgment that policy choice cannot be impugned applying principles of public law.

I also agree with the judge’s rejection at [50] of the appellant’s criticism that the EPPS assessment wrongly assessed the policy impacts of the 2023 WMS by taking into account an inchoate policy, the FHS, which was not due to be in force until 2025. As I have explained, the WMS is an interim policy intended to apply until the FHS is finally approved and operative. This interim policy allows a LPA to adopt a local energy efficiency standard up to the level of the draft FHS, referred to in the WMS as a planned building regulation. The appellant has not suggested that as a matter of law the Secretary of State was not entitled to specify a draft policy such as the FHS as an energy efficiency standard. Accordingly, it was appropriate, if not necessary, for the EPPS assessment to take the draft FHS into account.

Section 3 of the assessment identified which environmental principles are relevant to the WMS and in what respects. In relation to the integration principle, it was stated that at each stage of the policy development process, the proposals had been designed with environmental protection as their central objective. The FHS, complemented by the WMS, is intended to reduce significantly the generation of carbon from new development. In relation to the prevention principle, the assessment stated:

“Construction and the use of homes generates carbon emissions and other environmental harms. The Government’s work to increase the energy efficiency of new buildings already aims to prevent environmental damage. Taking the prevention principle to its extreme, we would immediately make all housing net zero ready, but we have chosen not to do that for social and economic reasons with a particularly focus on housing viability in the short term.”

The document continued:

“Prevention of environmental harm is possible through the policies we are proposing. The reduction of carbon emissions will have a positive net zero effect. The WMS encourages local policies to be consistent with national standards, but still provides an opportunity to implement higher standards where those standards are found to be viable and not impact on housing delivery.”

The last part of the assessment considered “further analysis”. Reference was made again to the cost-benefit assessment which the department had carried out and to the policy balance which lay at the heart of the decision to approve the WMS:

“Our assessment is that any energy efficiency improvements above these standards would return marginal carbon saving benefits compared to the cost uplift of doing so. The policy contained in the WMS, which sets out the requirements that plan-makers must meet in setting higher standards, may limit wider counterfactual environmental improvements from e.g., reducing energy consumption through the setting of better local fabric, compared to the FHS, however these again have diminishing returns.

Any environmental impacts of the policy need to be balanced against the potential positive impacts on housing affordability and availability. The policy in the WMS could also support a smoother and more cost-effective transition for the construction industry to higher standards. Furthermore, the counterfactual of varying standards across local plans could have viability impacts that reduce or delay the supply of newer, more energy efficient and lower emission homes.”

It is apparent that the February 2024 assessment did work through the relevant principles of the EPPS and apply them to the difference between the WMS approach to the setting of local standards based on the FHS during the interim period as opposed to the setting of yet higher standards. An important consideration was the marginal environmental benefits which would result from higher standards as demonstrated by the modelling work carried out by the Department (see the description in para. 43 of Mr. Palmer’s written statement of the Department’s marginal abatement costs curve (“MACC”) analysis). A further important consideration was the need to weigh in the balance the potential adverse effects of higher LPA standards on maintaining and increasing the delivery of new housing, in terms of the supply chain, availability and affordability.

Accordingly, I accept the submission of Mr. Westaway that the February 2024 assessment complied with the duty in s.19. That conclusion is reinforced by the proportionality principle in ss.17(2) and 19(2) and in the EPPS itself. The assessment was appropriate and proportionate to the issues raised by the 2023 WMS, the environmental effects involved and the environmental principles engaged.

It is apparent that the essential reasoning in the February 2024 assessment was also neatly summarised in the October 2023 assessment. The earlier document included, for example, a reference to the modelling or MACC work which the Department had carried out. The differences between the October 2023 draft WMS and the December 2023 WMS are insignificant in the context of the appellant’s challenge. In all the circumstances, the failure to comply with the s.19 duty when the 2023 WMS was approved and published in December 2023 did not justify the grant of any relief by the court.

When the documents are read fairly and as a whole, the appellant’s suggestions that the February 2024 assessment was simply a rearguard action or an after-the-event assessment which was “striving to defend an earlier decision in the context of adversarial litigation” are wholly without foundation. Similarly, no fair-minded member of the public, sufficiently informed of the circumstances of the case and the contents of the documents, would consider that the preparation of the February 2024 assessment “was improperly tainted by the respondent’s concern about a judicial review challenge”.

It is a matter of judgment for the policy-maker to decide whether to pursue any further line of inquiry in order to comply with s.19 of the EA 2021, subject to challenge on the grounds of irrationality (R (Khatun) v Newham London Borough Council [2004] EWCA Civ 55; [2005] QB 37). The Secretary of State’s assessment that the adoption by LPAs of higher standards than envisaged by the 2023 WMS would yield only marginal benefits rightly is not the subject of challenge in this judicial review. In those circumstances, it cannot be said that the Secretary of State failed to comply with any legal obligation to inquire further into any other matter relevant to the s.19 duty.

Accordingly, I would reject ground 1.