A view from the high street

A number of recent court cases have looked at various aspects of retail planning policy. The courts have considered how planning policies encourage siting of retail in town centres and whether competition between rival retailers can be seen as “planning harm”. Case law has also reviewed the legality of a condition which restricted established retailers moving to a new shopping centre. Two cases, Warners Retail (Moreton) Ltd) v Cotswold District Council and others [2016] EWCA Civ 606; [2016] PLSCS 186 and Aldergate Properties Ltd v Mansfield District Council [2016] EWHC 1670 (Admin); [2016] PLSCS 202 considered two different approaches to location of main town centre uses, including retail, and “the sequential test” set out in the National Planning Policy Framework (NPPF). Need and the sequential test Warners was a challenge to an outline planning permission for the development of a food store 500m outside a commercial centre. The judgment considered the approach to the sequential test in paragraph 24 of the NPPF, and the need to demonstrate that town centre sites were considered before edge-of-centre or out-of-centre sites. It highlighted that the NPPF had removed the requirement set out in earlier national policies for an application for retail planning permission outside a town centre to demonstrate a need for it. It also reviewed the extent to which an applicant’s preferred format and scale of development should be taken into account. Paragraph 24 requires both applicant and local planning authority to be flexible on these issues, and the circumstances of the particular case will have a bearing. The court found that the authority had approached the sequential test correctly in this case. Identity of applicant/proposed occupier In contrast, Aldergate found the local authority had gone too far in tailoring the sequential test to the needs of the intended supermarket operator. The case related to an application for a new store (intended for Aldi) over three miles outside a town centre. Aldi already owned another store about one mile away from the town centre. A sequential test exercise was undertaken, but town centre sites were ignored on the basis that Aldi would not locate there due to the proximity of its other store. The court found that while the sequential test requires suitability and availability of sites to be considered, these factors must be judged according to the type of retail permission being sought, not purely from the retailer’s perspective. The identity of the applicant or proposed occupier is generally irrelevant to the correct application of the sequential test. Competition and harm In R (on the application of Hawksworth Securities plc) v Peterborough City Council [2016] EWHC 1870 (Admin), two retail schemes were considered by the planning committee one after another during the same meeting. It was argued that they should have been dealt with together, as competition from a rival scheme might jeopardise delivery of retail-led regeneration. The court held that competition between schemes may be a material planning consideration, but this was when only one scheme could comply with the terms of a development plan. In this case, both schemes could comply. One scheme was in an area identified in the development plan for regeneration, but the plan did not require proposals for that site to take priority over other retail proposals. The court considered whether competition and the potential threat to the regeneration site could be characterised as “planning harm”, which would trigger a requirement to consider the two sites together as alternative developments. As both schemes could come forward, competition was not “planning harm” in this case; the authority had acted correctly in considering each scheme in turn. Use of a condition to restrict relocation In a case involving an application for new town centre retail-led development, West Lancashire Borough Council had attached a condition to the planning permission for a new shopping centre stating that a retailer occupying more than 250 sq m in the old centre was permitted to occupy a unit in the new development only if it “submit[ted] a scheme which commits to retaining their presence as a retailer” in the existing shopping centre for a minimum period of five years. The enforceability of this condition was considered by the Court of Appeal in R (on the application of Skelmersdale Limited Partnership) v West Lancashire Borough Council [2016] EWCA Civ 1260; [2016] PLSCS 346, where the owner of the existing shopping centre was concerned that the condition was ineffective and would not provide adequate protection. It was noted that use of the condition was in accordance with the local plan, which, while encouraging retail development within the town centre, required that new development should not harm the viability and vitality of the existing mall. The judgment considered the terms of the condition in detail and found that the requirement to “commit” to retaining a presence in the original shopping centre was sufficient to connote a requirement for a legally binding commitment to be provided by existing significant retailers when looking to occupy the new development. It was precise, enforceable in practice and achieved its purpose. Useful guidance These four cases provide guidance on how retail applications should be approached, emphasising that care should be taken in applying the sequential test contained in paragraph 24 of the NPPF. Issues where there are competing retail sites are not uncommon, and the possibility of the use of a condition to ensure existing occupiers remain in existing locations, rather than abandon them in favour of new development, may assist local authorities. Amy Truman is a senior associate in the real estate group in Birmingham at DLA Piper