Councils can consider costs when deciding on changes to planning permissions

Councils can consider the compensation payable to developers when they decide to modify or revoke planning permissions, the Supreme Court ruled this morning.

The court upheld a majority judgment by the Court of Appeal on the issue in 2010.

Delivering judgment on behalf of the court in The Health and Safety Executive v Wolverhampton City Council [2012] UKSC 34, Lord Carnwarth said planning permissions could not be bought or sold.

However, he said that under Section 97 of the Town and Country Planning Act 1990 created a specific statutory power to “buy back” a planning permission previously granted.

“Cost, or value for money, is naturally relevant to the purchaser’s consideration. To speak of the ‘self-interest’ of the authority in this context is unhelpful. A public authority has no self-interest distinct from that of the public which it serves.”

He went on: “It is not possible in the abstract to say what kind of information, or what degree of precision, may be required by, or available to, the authority when making a decision of this kind. It will depend on the circumstances.

“That is neither unusual nor a cause for concern. The same issues may arise, for example, whenever an authority is considering a major compulsory purchase project.

“It will need at the planning stage to form a general view of the overall cost, including the cost of compensation, and of the resources available to meet it. Initially, this view will need to be based largely on the advice and estimates of its expert advisers, the precision and certainty of which will depend on the timing and subject-matter.

“That uncertainty is not a reason for not conducting the exercise, still less for leaving cost considerations out of account altogether.”

The court heard that Wolverhampton City Council, in its capacity as local planning authority, had granted planning permission for four blocks of student accommodation in proximity to a site used for storage of liquefied petroleum gas.

Three of the four blocks of student accommodation had been completed, but work on the fourth had not started.

Concerned that the gas storage facility in the vicinity constituted a danger to life, the Health and Safety Executive (HSE) applied for an order to revoke or modify the planning permission under section 97 of the Town and Country Planning Act 1990. Refusing the application, the council took into account its liability to pay compensation under section 107 of the Act were it to revoke planning permission.

The Supreme dismissed the HSE’s appeal. Lords Hope, Walker, Dyson and Sumption contributed to the judgment.