Wed, 15 Feb 2012
By Satnam Choongh
Regulation 122(2) of the Community Infrastructure Levy Regulations 2010 contains the three tests which were hitherto set out in ODPM Circular 05/05, namely that planning obligations must be necessary to make the development acceptable in planning terms, directly related to the development and fairly and reasonably related in scale and kind. There has been considerable loose talk in planning circles that the Regulations have wrought some dramatic change in the law and practice of planning obligations. It has now become routine practice for planning inspectors at inquiry to seek a statement from the LPA and appellant explaining how and why the CIL tests are met.
Earlier this month the High Court in R (on the application of) Welcome Break Group Ltd and others v Stroud District Council and Gloucestershire Gateway Ltd (2012) EWHC 140 (Admin) considered for the first time how the tests should be approached now that they are incorporated in law as opposed to being policy guidance only. The LPA had taken into account a planning obligation committing the operator of a motorway service area to locally sourced produce and labour.
The Claimants argued that whether the obligation met the CIL tests was a matter of law; the court’s role was not merely to review the Council’s rationale for taking such obligation into account, and that absent a specific development plan policy mandating the provision of such an obligation it could not be ‘necessary’ to make the development acceptable. The Claimant further argued that the CIL regulations required an assessment in the officer’s report to committee as to why the obligations were so directly related to the development that without it the development should not proceed, and such report had to make specific reference to reg.122 otherwise there would be a failure to have regard to a material consideration.
The Court rejected each of these arguments. Bean J ruled that ‘(t)here is nothing novel in regulation 122 except the fact that it is contained in a statutory instrument’. The judge went onto hold that the seminal case of Tesco Stores Limited v SSE  2 All E.R. 636, in which the House of Lords had ruled that whether an obligation was ‘necessary’ (and, by implication, whether it was directly, fairly and reasonably related to the development) was a matter of planning judgment for the decision-maker, remained good law under the 2010 regulations. If an obligation ‘has some connection with the proposed development which is more than de minimis then regard must be had to it. The extent, if any, to which it affects the decision is a matter entirely within the discretion of the decision-maker.’