Planning related matters have had considerable prominence recently, the much publicised Planning (Scotland) Act 2006 having been passed this month, and two high profile House of Lords decisions being reported in the last few weeks.

Regeneration of Ravenscraig

The first of these, Land Securities Group plc v Scottish Ministers and Others, concerned the proposals for regeneration of the vast site of the former Lanarkshire and Ravenscraig steel works, which had lain derelict for many years. It was a prominent feature in a number of aspects of the Glasgow and Clyde Valley Joint Structure Plan 2000, and the Ravenscraig-Motherwell-Wishaw area was identified as a "Metropolitan Flagship Initiative," which meant it was considered to be an area for which priority was to be given to the joint promotion of its regeneration.

Structure Plan v planning permission

Prior to the final approval of the Joint Structure Plan by Scottish Ministers in 2002, a Partnership of Wilson Bowden Developments Ltd, Scottish Enterprise Lanarkshire and Ravenscraig's owners, Corus, had lodged a planning application with North Lanarkshire Council for a mixed-use development to provide around three million square feet of mixed-use space and 3,500 homes at the 1,151-acre site.  The amount of proposed retail space was considerably more than that required to meet the needs of the proposed new homes covered by the application, and it was apparent that the development was designed to create a new town centre which would attract shoppers from surrounding neighbourhoods.

North Lanarkshire Council and the Structure Plan Joint Committee sought amendment to the Structure Plan, to include Ravenscraig in the list of town centres to be safeguarded through structure and local plans, which already included Motherwell and Wishaw.  Having previously identified Ravenscraig as an area which provided the opportunity for redevelopment, the nature and extent of which would stimulate regeneration across a much larger area, the Scottish Ministers agreed to amend the Structure Plan so that it provided that the proposed development would help remedy identified deficiencies in the existing retail provision.

The Partnership's planning application for Ravenscraig was then considered by the Council, which resolved to approve it.  However, the Scottish Ministers' decision to alter the Structure Plan was at the time being challenged by a number of companies, including the appellants in this case, Land Securities. Separate proceedings resulted in the Council's decision to grant the planning permission for Ravenscraig being reduced.

National Planning Policy Guidance 8 on Town Centres and Retailing

Land Securities had already received planning permission for an unconnected retail development in Motherwell Town Centre, and they argued that the amendment to the Structure Plan and the proposed development at Ravenscraig were at odds with Scottish Ministers, own National Planning Policy Guidance 8 on Town Centres and Retailing (now superseded by Scottish Planning Policy 8 – Town Centres and Retailing), which required preference to be given to developments in existing town centres.

The House of Lords confirmed that NPPG 8 was designed to give support to existing town centres, rather than encourage developments in other areas, and laid out a sequential approach for new retail, commercial leisure sites, which afforded preference first to town centre developments, then edge-of-centre site, and lastly out-of-town developments.

That said, the retail element of the proposed development at Ravenscraig was just one component of a much larger, multi-faceted scheme, which would have unifying effect throughout the area, develop a local identity and deliver significant land renewal, as well as improving the quality of life within the region.  The retail element of the proposals could not be separated out for the purposes of NPPG 8 and it would be unrealistic to apply a sequential approach that gave existing town centres greater priority for investment to the creation of an entirely new town centre.

In refusing the appeal by Land Securities, the House of Lords indicated that it was appropriate to add the Ravenscraig development to the list of town centres to be safeguarded, and that the Structure Plan was capable of incorporating sites on which a town centre would one day be created.

What is the impact of this decision likely to be?

Although this is an important decision, the facts of the case are such that this issue is unlikely to come up again. NPPG 8 was at the heart of this challenge and although it has been replaced recently by SPP 8 the thrust of National Guidance remains very much on the protection of town centres.

The full House of Lords decision in Land Securities Group plc v Scottish Ministers and Others is available from the UK Parliament website at: www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd061025/land.pdf

City Centre Re-development

The second of the House of Lords' decisions - Standard Commercial Property Securities Limited v Glasgow City Council - takes us to the centre of Glasgow, to an area at the junction of Buchanan Street and Bath Street, which was badly in need of redevelopment. Any proposed regeneration was hindered by the fact that Glasgow City Council had insufficient resources to fund any redevelopment, and, the site being in multiple ownership, it had proved impossible to co-ordinate the different interests of the various proprietors.

Proposals for compulsory purchase

The Council decided to promote a compulsory purchase order in respect of the site and in conjunction with that, had entered into a back-to-back agreement with the owner of a major portion of the site, Atlas Investments Limited. The site would be made over to Atlas, in exchange for its undertaking to develop the site at its own expense and to indemnify the Council for the costs associated with bringing together the site and making it available, the Council receiving only what was due under the indemnity. This put Atlas, in effect, into the position as if it had power to acquire the site itself compulsorily, and also would mean that the Council would achieve its planning purpose at no cost to it or the taxpayer.

Rival developer

However another proprietor at the site, Standard Commercial Property Securities Limited (SCPS) was also eager to redevelop the site and sought to challenge the Council's agreement on the basis that it fell outwith the Council's powers to acquire and appropriate land for development purposes, under the Town and Country Planning (Scotland) Act 1997.

SCPS asserted that the agreement contravened the provisions relating to such powers, which provide that land should only be disposed of "on the best terms that can reasonably be obtained", since the Council appeared to have assumed that reimbursement of their costs constituted the best price that could be obtained, no consideration having being given to the actual value of the site or what a developer might be prepared to offer for it. The Council appeared to have proceeded on the basis that a back-to-back agreement for the whole site, with a single developer was the best way of dealing with it, without considering other options.

Best terms that can reasonably be obtained

The view taken by the House of Lords however, was that the Council had been acting within its powers when it entered into the back-to-back agreement.  It was self-evident that the site was in urgent need of redevelopment, and that the Council did not have the resources to carry out the project itself. There were major economic and social benefits to be gained, including larger business rate revenues for the Council, in redevelopment of the site.

The statutory provisions seek to ensure that any transaction secures the best use of the land and the proper planning of the area, while at the same time protecting against any loss of public funds through the disposal of the assets of a public body at an undervalue.

"Best terms" should be interpreted as requiring the best commercial terms, rather than the terms best designed to achieve the overall planning purpose. Since the Council simply could not afford to acquire the site without a full indemnity both as to its outlay on compensation and its legal costs, the redevelopment had a fixed price, and factors such as the developer's experience of redevelopment or the proposed timescale for commencement, and completion of the development were therefore relevant in assessing whether the agreement was on the "best terms", neither had there in fact been any suggestion that SCPS or any other developer had been willing to pay more for the right to acquire the site than the amount of the indemnity.

How does this decision affect the development process?

A Council can transfer land to a developer on a simple indemnity basis. To be able to do so it will however weigh up the commercial aspects of doing so and demonstrate how this has been done. The facts of this case are unusual but not unique and the courts' judgement emphasises that what amounts to "best terms" is something that Councils will have to assess carefully in the actual circumstances of each case.

The full text of the decision in Standard Commercial Property Securities Limited and others v Glasgow City Council and others is available from the UK Parliament website at:
www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd071116/stand.pdf

 

 

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