Small sites exemption policy: how is it playing out in practice?

The path followed by the Government’s ‘small sites exemption policy’ in relation to affordable housing obligations has not been a smooth one.

However, once endorsed by the courts, many took that to signal that any local requirements for affordable housing below the stated threshold would be trumped by the national guidance. Nash Partnership’s Graduate Planner, Elise Power, asks: how is it playing out in practice?

The ‘policy’ was introduced in a written ministerial statement in November 2014, but was quashed in August 2015 following a successful High Court Challenge by Reading Borough Council and West Berkshire District Council. A subsequent Court of Appeal decision in the Government’s favour resulted in the policy being reinstated in May 2016.

Its provisions are set out in National Planning Practice Guidance (NPPG), which states that affordable housing contributions should not be sought on developments of 10 units or fewer and comprising no more than a total of 1,000sqm of floor space. In designated rural areas, such as National Parks and Areas of Outstanding Natural Beauty, local councils can choose to lower the threshold to five dwellings or fewer.

It appears that most local planning authorities are following the guidance and not seeking affordable housing on schemes at or below the threshold. However, an important feature of the Appeal Court judgement was the finding that the policy is not a blanket one that countermands the need for planning decisions to be made in accordance with the Development Plan unless material considerations indicate otherwise. The provisions set out in NPPG are therefore material considerations to be weighed in the balance in determining planning applications. This suggest that local planning authorities have the ability to depart from these national policy provisions where they consider that local plan policy and local evidence weighs in favour of doing so.

Recent appeal decisions appear to show that where there is adopted policy requiring affordable housing on sites below the threshold, that is backed by evidence of an acute need and the importance of small sites in helping to meet this need, then the local policy will prevail. An appeal against a refusal of permission by Richmond Council for a single dwelling, on the grounds of an absence of a contribution to affordable housing was, for example, dismissed for these reasons in 2016.

But, the picture is not an entirely clear one. In Brighton and Hove, the adopted Local Plan requires affordable housing provision on sites of five or more dwellings. Here, in one appeal case in 2016, the Inspector concluded that the local policy was outweighed by the national guidance and that the lower threshold for requiring affordable housing provision could not be applied to the proposal for nine flats. In the same local authority area however, an appeal decision in January 2017 was dismissed, with the Inspector finding that a scheme, again comprising nine homes, should make an affordable housing contribution. The provisions of NPPG were found to be a ‘material consideration of considerable importance and weight’. However, the Inspector considered evidence of ‘high house prices, average costs of housing and household incomes’, and that ‘small sites make up 50% of all completions in the city’, to outweigh national guidance.

In light of these apparently contradictory appeal decisions, the London Borough of Richmond has written to the Planning Inspectorate and this may bring some clarification.

However, the broad message is that the guidance in NPPG will tend to prevail unless there is a local policy requiring affordable housing provision for developments below the national threshold which is backed by strong evidence. Where this is the case, the plan-led system is likely to lead to determinations in accordance with local policy. Whilst the Brighton and Hove cases are a cause for some uncertainty, it is important to regard the NPPG provisions as a material consideration of considerable weight and to also carefully consider local circumstances, the content of adopted policy and the evidence that supports this.

– Elise Power, Graduate Planner

If you would like further information or wish to discuss this or other planning matters please contact the Planning Team at Nash Partnership.