[2025] UKUT 312 (LC)

Apart from their disagreement over the scale of permissible development, the parties’ most fundamental difference concerns the approach to be taken to the mix of uses on the Appeal Site.

To use a catering analogy, Quintain would like a buffet from which it may help itself to as much or as little of each of the available dishes, while the Secretary of State would have the Tribunal provide a set menu, with an emphasis on portion control and balance.

The contrast between the parties’ respective positions is clear from their statements of case. Quintain proposes development of up to 99,490 sqm and limits on each of the relevant uses to a maximum (by gross internal area) of:

The experts agreed that there were many ways in which the Appeal Site could be developed within the size constraints of their respective schemes. Quintain’s expert on townscape and heritage matters, Mr Coleman, modelled two illustrative scenarios in order to assess the compliance of the proposals against policy and to consider their impact on the listed buildings. The two scenarios produced buildings of slightly differing dimensions reflecting the optimum layouts for PBSA and conventional residential uses. Scenario 1 assumed PBSA use of the entirety of Blocks A and B above ground floor level, while scenario 2 assumed no PBSA and entirely residential use of the space not allocated to offices or retail. Hotel use could also be substituted in either scenario. Mr Coleman explained that other permutations were also possible within Quintain’s proposal.

The Secretary of State’s alternative proposal restricts the maximum total floorspace to 75,017 sqm. The maximum areas permitted for each use would be:

A separate condition would provide that the development must comprise not less than 60,014 sqm, with minimum space requirements for each use based on 80% of the maximum allowance (assuming full utilisation of the PBSA allocation) as follows:

If the Appeal Site were to be developed to the maximum extent permitted under the Secretary of State’s scheme, the minimum floor area requirements would equate to approximately 36% residential, 20% offices, and 4% retail. Up to 40% of the Site would remain undeveloped, allowing the whole of the PBSA allowance of 18,097 sqm (representing 24% of the maximum) to be accommodated and giving the developer some flexibility to respond to market circumstances.

Both schemes assumed the presence of the Fox and Grapes and with a consensus emerging over office and retail uses, the real disagreement between the parties was whether there should be any requirement for general residential use, or whether the whole of the area not assigned to offices or shops could be used for student housing at Quintain’s sole discretion.

In his closing submissions on behalf of the Secretary of State, Mr Williams KC framed this disagreement as a point of principle about the proper approach to the assessment and definition of schemes of development within the CAAD regime. He suggested that when section 14(3)(a) of the 1961 Act states that compensation should be assessed on the assumption that planning permission is in force at the relevant valuation date for any development that is appropriate alternative development, it contemplates a scheme of development which could be the subject of a grant of planning permission in the real world. At the valuation date section 17(3)(b)(i), LCA required a CAAD to “specify … each description of development” for which planning permission could reasonably have been expected to be granted. Mr Williams submitted that the development proposed in a CAAD application, and any development specified by the Tribunal in a Certificate must therefore be a development capable of obtaining planning permission. It must clear enough to enable all material considerations to be identified, and a proper assessment made of its consistency with the development plan. And it must be capable of forming the basis of a valuation. Quintain’s menu could accommodate a scheme which was 71% residential, or one with more than 50% PBSA with little or no residential. That, Mr Williams submitted, was not a real-world approach.

Mr Williams also suggested that the Council had fallen into error in granting its purported CAAD by assuming incorrectly that every permissible form of development should be lumped together in a single certificate. It also assumed, wrongly in the light of the decision of the Supreme Court, that there was no requirement or basis for considering the cumulative effects of the proposed development and development which might be expected to come forward on sites 2, 3 and 4 of which the CAAD applications for those sites provided an indication.

We think Mr Williams KC made a little too much of the suggested difference in principle between the parties’ respective approaches. That difference does not give rise to any real question of interpretation of sections 14 or 17 of the 1961 Act. Section 14(3) requires the applicant to specify “each description of development” which it considers to be appropriate alternative development, and it is therefore obvious that an applicant may describe more than one form or combination of forms of development. There is no question of the development ever being implemented and the CAAD is relevant only as far as it contributes to the assessment of compensation. There is nothing illegitimate in an applicant hedging their bets, as the Supreme Court recognised, at [5]:

“In practice, a landowner will often apply for a CAAD which identifies every description of development for which planning permission could reasonably have been expected to be granted if the land had not been compulsorily acquired. The landowner can then rely on whichever happens to be the most valuable form of hypothetical development covered by the CAAD for the purposes of seeking compensation for the land in issue.”

It is for the decision maker, the planning authority or the Tribunal on appeal, to give a general indication of the conditions to which planning permission for the suggested development could reasonably have been expected to be subject (section 17(5)(b)). If the development described in the application is insufficiently specific, the decision maker may decide that planning permission could not reasonably have been expected to be granted for it. Alternatively, they may consider that an imprecise or general description of development would only obtain permission subject to conditions giving it a clearer form. If a number of different forms of development are specified, some conditions may apply to some forms but not to others. In some cases the Certificate may resemble a series of distinct planning permissions, each subject to its own conditions, but presented in a single document. None of this creates any real difficulty so long as it is remembered that the critical consideration is whether planning permission could reasonably have been expected to be granted for the development described. If it could, then the certificate should indicate in general terms the conditions which would reasonably be expected to apply to a permission granted for that form of development.

In determining these questions our two points of reference, which we consider with the assistance of the planning experts, are the development plan and permissions granted in the real world for similar developments to those proposed. We will address these in reverse order.

Both planning experts considered it relevant to refer to how previous permissions dealt with the balance of uses for the Appeal Site and neighbouring sites. Mr Rouse, Quintain’s planning expert, summarised the common features of the outline permissions granted before the valuation date for the Appeal Site, Curzon Park, Exchange Square, and Eastside Locks. All were large sites which were expected to be brought forward in a series of phased developments. In each case the permissions included a list of approved uses with flexibility at the reserved matters stage to combine uses up to a stated maximum for each use and within a total maximum floorspace. Each controlled the balance of uses through a masterplan by requiring development to be in substantial accordance with the general disposition of buildings and uses shown on parameter plans. None of the permissions required development to be brought forward in accordance with a particular phasing schedule or required phasing to be agreed as a reserved matter.

In his written evidence Mr Rouse described the outline planning permissions for the Appeal Site granted in 2007 and as amended under section 73 in April 2008 as “inherently flexible”. He drew attention to the fact that they contained no requirement for a minimum amount of floorspace in any use other than retail. Each phase of reserved matters was able to draw from a menu of uses up to the limit of floorspace within each use and floorspace overall. The distribution of uses across the site and the layout and height of buildings was flexible. These statements were not untrue, but they presented a distinctly one-sided picture of the effect of the permissions. In view of the clear division between the parties on this point, it was surprising that Mr Rouse did not think it relevant to refer to the content of the parameter plans which controlled the mix of uses. Had he done so he would have noted that they were quite unlike the plan relied on by Quintain. On the 2007 plan retail use was permitted at ground level in each of six separate blocks, but otherwise only one of the six could be used for more than one use (Block 4 could be either residential or a hotel). The only permitted non-retail use of the largest block was residential (up to 35,820 sqm). Even after additional flexibility was introduced into the 2008 permission, if the development was fully built out to include the maximum permitted hotel, office, and retail allowance, the completed scheme would necessarily include a minimum of 47,400 sqm of residential space (representing 84% of the maximum permitted residential allowance of 56,600 sqm). We do not think Mr Rouse failed to appreciate the effect of the previous permissions and we must therefore conclude that he chose to portray them in a partial light. This undermined our confidence in his objectivity and the weight we give to his evidence as a whole.

Similarly, the permissions granted for the Curzon Park site (site 3) in January 2005 and June 2008, and for Martineau Galleries in December 2008 included either a parameters plan controlling the mix of uses or a condition specifying minimum and maximum floorspace allocations to different uses (or both). Site 3, if fully built out in accordance with the 2008 permission would have comprised between 55% and 65% office space and between 28% and 40% residential, with the option, but no requirement, to include a hotel. We were not shown the parameters plan for Eastside Locks (December 2008) but we infer from Mr Rouse’s description and from submissions that it also assigned specific uses to particular buildings. On that assumption, the net effect in all cases was a requirement that each development deliver substantial amounts of office and residential floorspace. In each case the reason given for the relevant condition was “to define the permission”.

As Mr Elvin KC pointed out, these historic permissions were all granted ten years or more before the valuation date, and pre-date the 2017 development plan; that did not deter Mr Rouse from relying on them, as did Mr Adams. It is also the case, as Mr Elvin observed, that Martineau Galleries is not in Eastside, but across the road in the City Centre, although the relevant policy difference between the two Quarters was not identified. More significantly, we are not aware of any permission having been granted for a large mixed use development site before or since the valuation date which adopted the approach advocated by Quintain. We note, however, that in their assessment of the CAAD application the Council’s officers described the flexibility proposed as “legitimate and typical under the regular planning regime when considering large multi-phase developments”. Had that statement been correct to the extent necessary to provide support for Quintain’s approach, we would have expected to be shown examples of permissions for large mixed schemes containing no condition or other requirement for a minimum space allocation for residential use. We were shown no such permissions. We do not doubt that with any large, phased development flexibility will be required in order to respond to changing market circumstances over an extended delivery period, but on the evidence we have seen we do not see how a permission which is effectively undefined as between major alternative uses can be described as “legitimate and typical under the regular planning regime”.

There is no indication in the officers’ report that they gave critical consideration to whether a scheme which included no housing provision would be acceptable. The possibility that “spatially” student accommodation could occupy all of Blocks A and B was mentioned when considering whether the principle of student housing had been satisfactorily demonstrated against the requirements of Policy TP33. The officers’ reference to the proposed flexibility being “legitimate and typical” came in a section describing the proposal and the issue was not revisited when consideration was given to relevant policies. At that later stage emphasis was placed on the potential to deliver housing, with officers noting that the maximum number of houses proposed in Quintain’s application was 21% greater than the previous 2008 consent on the Site and drawing attention to the City’s assessed need for 89,000 homes and its ability to provide only 51,100 in its own administrative area. Policy encouraged a mixture of uses in the area and the provision of up to 910 dwellings over 70,955 sqm “would not be disproportionate to the size of the Site and would be in keeping with other major city centre schemes”. As far as affordable housing was concerned, officers made the assumption that a full provision of 35% would be required.

Whatever view officers may have formed about the acceptability of a scheme delivering none of the 910 dwellings referred to in the application, and all of the 1,940 student bed spaces, we must decide for ourselves whether it would be compliant with relevant policies and would be likely to have obtained planning permission at the valuation date.

It is common ground between Mr Rouse and Mr Adams that the development plan is not prescriptive of a particular balance of uses at the Appeal Site, but they differ on whether a mix of uses is required to meet Policies PG3, GA1 and TP27.

At a strategic level, the development plan puts the promotion of sustainable neighbourhoods at the heart of a growth agenda, planning to provide as much of the City’s housing requirement as possible within its own administrative boundaries and prioritising the reuse of previously developed land. The growth agenda is explained in section 4 of the Plan and includes the provision by 2031 of 51,100 additional homes within the Plan area, leaving a shortfall of 37,900 to be provided by neighbouring authorities. Policy PG3 provides that all new development will be expected to contribute to a strong sense of place, including by supporting the creation of sustainable neighbourhoods (the subject of Policy TP27). TP27 in its turn requires that all new residential development must meet the requirements of creating sustainable neighbourhoods in specific respects, including providing a wide choice of housing sizes, types and tenures to ensure balanced communities.

The contribution to the growth agenda expected of the City Centre, the Quarters, and the wider areas of change (including Eastside) is considered in detail in Policy GA1. New development, including residential development, which will continue to be supported in the City Centre, should make a positive contribution to improving the vitality of the City Centre “and should aim to improve the overall mix of uses” (GA1.1). The wider areas of change are to be the focus of the proposed growth of the City Centre to accommodate 12,800 new homes, 700,000 sqm of office space and 160,000 sqm of retail space. One of those areas is Eastside, where the City Centre core will expand eastwards through the provision of “well-designed mixed-use developments including office, technology, residential, learning and leisure” (GA1.2). The role of Eastside as an area for learning and technology is to be maximised and its extensive development opportunities realised (GA1.3).

Mr Adams considered that these policies would require such a large area as the Appeal Site to deliver a mix of uses, including residential, and that an over concentration of a single use such as PBSA would be inconsistent with the expectation of the development plan as a whole. Mr Rouse disputed that interpretation and considered there was nothing in the development plan or the specific policies to which Mr Adams referred which would justify a requirement for a particular mix of uses. The experts focussed to some extent on semantics, debating, for example, whether a mix of uses in the City Centre would be “improved” by a development dominated by a single use, or whether it would be sufficient if Eastside as a whole featured a mix of uses, even if individual developments did not. We did not find these debates particularly illuminating and we think the better approach is to consider the development plan as a whole.

We are satisfied that, read as a whole, the development plan places considerable emphasis on the importance of mixed-use development and of “diversifying the overall offer”, as it was put in the text accompanying Policy GA1.3. It is not prescriptive of any particular mix and does not define what it means by mixed-use, but the thrust of the relevant policies leans away from uniformity or the dominance of a particular use to the exclusion of others and towards variety. The application of policy will depend on the context and the nature of the site. There is no requirement for every development to include a mix of uses, irrespective of its scale, and no necessity for every development to include every one of the uses identified as appropriate for Eastside. But, in our judgment and in the context of this appeal, the domination of a significant part of a large area by a single use would not be consistent with the requirement of mixed-use development; it would not diversify the overall offer and would not contribute to sustainable neighbourhoods.

We appreciate that Quintain’s proposal would incorporate a mix of uses, because public facing areas on the ground floor would be used as retail space and Block C would be dedicated to offices. Even if the whole of Blocks A and B were given over to PBSA, the Appeal Site as a whole would be a mixed-use development. PBSA would be a particularly appropriate use for a site in Eastside, because of its distinctive character as an area of learning and its proximity to the two universities. So the real question is not whether a large proportion of PBSA should be permitted, as clearly it should, but whether there should be a positive requirement for a residential component.

It is significant in this context that the Appeal Site is one of four vacant and largely levelled sites which, taken together, comprised a significant tract of undeveloped land on the City Centre fringe. As previously discussed, the expectation of the market at the valuation date would have been that they would all come forward in short order for substantial development. A reasonable planning authority would see those circumstances as an opportunity and as a challenge. It would be concerned to ensure that the eventual shape of the CAAD areas (meaning all four sites) contributed to the vision of Eastside as an eastward extension of the City Centre having a distinctive character as an area for learning and technology, and able to make a significant contribution to the growth agenda in all its relevant aspects.

The decision maker would also be conscious of the need for consistency in its decision making as between the adjoining sites which it would reasonably expect to deal with in the immediate future. If it determined one application for planning permission on the basis that the developer would be free to choose the most profitable form of development, with no minimum requirement for less profitable uses which had previously been consented on the same site, it would find it difficult to treat a neighbouring site, of comparable size and potential, any differently. The Supreme Court identified the principle of consistency in public law decision making as a relevant factor for the decision maker to bear in mind (at [68]) when dealing with any single application for one of the adjoining sites. The principle is of particular relevance here since, as we have already decided, there was a sufficient demand for PBSA in the City Centre to accommodate at least as much development for that purpose as all four sites could hold. If more than half of the Appeal Site was permitted to be developed for student housing, and none of it for residential use, as Quintain’s proposal would allow, it would be a relevant consideration that a similar balance of uses would have to be permitted on sites 2, 3 and 4. In that context a reasonable decision maker would consider whether development of the area stretching from Moor Street Queensway to Eastside Lock would meet the requirements of Policies GA 1, PG3 and TP27 if the predominant use was for PBSA. In our judgment, it would not, because it would not deliver a vibrant and sustainable neighbourhood or a balanced community, but would tend towards a monoculture, dominated by a single type of user. Nor do we consider such dominance would be consistent with Policy TP33 which favours PBSA where it will not have an unacceptable impact on the local neighbourhood and residential amenity.

In reaching this conclusion we do not assume knowledge of the particular proposals of the other CAAD applicants, as these were unknown to the market at the valuation date. But the condition of the adjoining sites and the expectation that they would come forward imminently for development intended to maximise their value are nevertheless material considerations. They are material to the flexibility appropriate to any permission for the Appeal Site, and therefore to the conditions which would reasonably be expected to be included in such a permission.

As an additional strand of his argument, Mr Elvin KC submitted that there was no pressing need for residential development at the valuation date, and that there would therefore be no need to prioritise residential use over other uses of the Appeal Site, specifically PBSA. The development plan required 51,100 new homes to be delivered during the plan period, and the evidence at the valuation date was that the Council was on track to meet that requirement. Annual targets had been met or slightly exceeded in each of the two preceding years and the housing land supply was a healthy 6.79 years.

On the other hand, as Mr Elvin KC acknowledged, the target of 51,100 was a target rather than a maximum. The target figure also included a “windfall allowance” of 7,600 dwellings, meaning new houses which were expected to be provided somewhere in the city but for which no identified site had yet been found. Additionally, Policy PG1 recognised that a shortfall of 37,900 new homes would need to be met through cooperation with other local authorities to find capacity outside its own administrative area. The premise on which that policy was expressly based was that “it is not possible to deliver all of the additional houses within the city boundary.”

We cannot rewrite the development plan or revisit the assumptions which it contains; they are part of the real world context which we are required to assume. But so too is the fact that the Appeal Site, and the adjoining CAAD sites, had not been taken into account in determining the Council’s ability to meet its own needs without relying on others. We are not entitled to assume that their absence from consideration was for any reason other than that the sites were safeguarded for HS2. Once that obstacle is assumed no longer to exist there is no justification for continuing to treat the sites as off limits. The Appeal Site had previously been granted permission for up to 538 apartments in the 2008 revision. In all of these circumstances we have no doubt that both the shortfall of 37,900 homes and the need to find space for 7,600 homes on windfall sites which had not yet been identified, would be material considerations when determining an application for substantial development on the Appeal Site.

We bear in mind that the needs of student households contribute to the overall assessment of housing need, and that the provision of PBSA on the Appeal Site would therefore be a contribution to the target of 51,100 new homes. There was disagreement between Mr Adams and Mr Rouse as to whether greater weight should nevertheless be given to the delivery of general market and affordable housing than to PBSA. In Mr Adams’ view the most pressing need was for affordable housing, to which the provision of PBSA made no relevant contribution; nor did PBSA contribute to the choice of type or size of tenure which was an objective of policy. Mr Rouse disagreed and considered that PBSA should be treated as being of equal value and as a recognised contributor to housing supply.

It seems to us that the development plan can fairly be said to favour the provision of general needs housing of different sizes, styles and tenures. That does not mean that a decision maker would refuse a proposal to provide PBSA or would insist on a general residential use for every site (especially in Eastside). But where permission is sought for a very large site including both residential and PBSA uses, Policy TP27 is engaged, and the proposal will need to demonstrate how it contributes to creating a sustainable residential neighbourhood. Such a neighbourhood is characterised by variety and balance and caters for all incomes and ages. In the assumed circumstances at the valuation date, and especially with large neighbouring sites ready for development being at least as suitable for PBSA, it would not be an answer to say that the desired variety and balance should be insisted on elsewhere in the neighbourhood. A dominance of PBSA on one site, to the complete or substantial exclusion of general residential provision, would risk its dominance of the newly emerging neighbourhood as a whole, and that would be inconsistent with the development plan.