Changing Horses

The force of a proverb can often long outlive the metaphor on which it sits. For instance, we’re still advised not to change horses in midstream’ (in other words: don’t alter a plan during its implementation). But this remains a useful cautionary, even though horses haven’t for many years been mainstream transport. And we generally use bridges to cross rivers.

The proverb does in fact seem applicable to Basingstoke and Deane Borough Council (the Council) which acquired a plot of land for housing development and subsequently took decisions inconsistent with this purpose. For the Administrative Court recently found that the Council sought to use its control of a particular site ‘as a means of delaying the development of land that was acquired, with public money, for the express purpose of promoting development’. And that, said Lindblom J on 17 April 2012 in R (Manydown Company Ltd) v. Basingstoke and Deane Borough Council ([2012] EWHC 977 (Admin)), was not lawful.

Background

The Council had acquired the land in question (the Manydown Site) under section 226(1)(b) of the Town and Country Planning Act 1990. This enables relevant local authorities on being so authorised by the Secretary of State to acquire compulsorily any land in their area which ‘is required for a purpose which it necessary to achieve in the interests of the proper planning of an area in which the land is situated’. As the Judge noted, the purpose of the Council’s acquisition of this site was to promote on it a high quality comprehensive housing development. The Claimant (Manydown Company Limited) was entitled to receive from the Council half the proceeds of development, provided the development takes place before 2050, but not if it takes place afterwards.

However, following a change of administration in 2006, the Council decided to suspend its involvement in actively promoting the site for development. And as landowner it decided not to review this position until after the Core Strategy (the central development plan document in the local development framework) had been formally adopted. As local planning authority the Council also decided that the Manydown Site was not available for development and should not therefore be identified for development in the Core Strategy. 

The Claimant complained (amongst other things) that by refusing even to reconsider its position the Council had prevented itself from considering present circumstances and had excluded the possibility of the Manydown land being allocated for development to fulfil the purpose for which it was acquired. That, the Claimant argued, was directly contrary to the objectives of the relevant statutory power.

Court’s view

The Court agreed. Lindblom J noted that the Manydown Site was required ‘for a purpose which it is necessary to achieve in the interests of the proper planning’ of the area. The necessary purpose was to promote housing development on the land which was (and remained) the fundamental objective of the Council’s acquisition of the land. The Judge noted that the land had never been appropriated by the Council for any other purpose either under section 232(1) of the 1990 Act or section 122(1) of the Local Government Act 1972.

Whilst the Council had sought counsel’s advice as to how to separate its landholding functions from its plan-making and development control functions (and the relevant decision-making structures were set up on this basis) nevertheless, this functional separation did not affect the underlying legal reality. For, as the Judge accepted:
‘. . .the structure of decision-making created by the Council to ensure that it would discharge its responsibilities both efficiently and properly could never displace the basic fact that it acquired this land, in the public interest, for a planning purpose.’

And this ‘underlying purpose remains the basis for the Council's ownership of the land’ which ‘endures in spite of, and has not been extinguished by, any of the various resolutions the Council has made since the last development plan process came to an end, by which it has suspended its active promotion of development on the site’. Consequently, given the statutory power under which the land in question was acquired and continued to be held, the notion that the site is not available for development was found to lack any evidential or logical basis.

Public Law

The Court also found various public law flaws in the Council’s approach.  One was that it offended the Padfield principle. This refers to the decision of the House of Lords in Padfield v. Minister of Agriculture Fisheries and Food [1968] AC 997 which held that an authority must discharge its functions so as to promote – and not so as to thwart or act contrary to – the policy and objects of the empowering statute in question.

It also appeared that the Council had acted irrationally since the ‘site’s unavailability was, in reality, no more than a self-fulfilling prophecy’. For if the site in question was regarded by the Council as being unavailable for development ‘this was only because the Council itself had decided to treat it as if it were’. This was an impediment the Council could remove.
Competence power cannot rescue pre-existing unlawful action

The Council submitted that under the new competence power in section 1 of the Localism Act 2011, the Council enjoys the general power to do anything that individuals generally may do. There being no relevant pre-commencement limitation, since a company or individual may choose whether, when and how to promote land for development, the Council argued that on a broad view of the scope of the new power, this would extend to the functions of a local authority as landowner. On this basis, the Council contended that it was no less free to act as it wished than a company or an individual would have been.

However, in the view of Lindblom J, this was misplaced. Section 1 of the Localism Act was neither the power under which the Manydown Site had been acquired, nor the power under which the Council had been managing the land. And the Council had not been purporting to act under section 1 of the Localism Act when reaching either of the two decisions challenged in these proceedings.  The Judge added that the competence power:
‘. . . is not available to rescue an authority from the consequences of unlawful actions taken before it came into effect. And in my judgment it would not be right for this new power to be relied upon to justify an authority's use or management of land inconsistently with the statutory purpose for which that land was acquired.’

In the circumstances, the Court upheld the claim for judicial review.

Comment

This case is a good reminder that local authorities, although empowered under section 1 of the Localism Act ‘to do anything that individuals generally may do’, are not in fact individuals but remain statutory public authorities, subject to applicable statutory requirements and restrictions. So whilst the competence power does considerably increase the scope for functional creativity, it will not be a ‘get out of jail free’ card if the authority has been found to act in breach of statutory requirements or relevant public law principles.  And whilst political and officer pressure can sometimes feel irresistible, if this happens at any point to be pushing in the wrong direction, ways must clearly be found of navigating matters onto a safe and proper course.

Dr. Nicholas Dobson is a Senior Consultant with Pannone LLP specialising in local and public law is also Communications Officer for ACSeS. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it.;

© Nicholas Dobson  May 2012.