The ability to deliver much-needed new homes across Scotland was dealt a major blow in the Court of Session last week.

In a long-anticipated decision, the court ruled against housebuilder Miller Homes, who had appealed against a Scottish Government refusal to grant planning permission for a 250-home development at Mossend in West Lothian.

Housing developments are refused permission on a regular basis for a myriad of reasons. However, this case carries added significance and has huge ramifications for Scotland’s housebuilding sector – not least because numerous other live planning appeals for housing on unallocated sites had been paused pending its outcome.

The main issue at stake is the conflict between local and national planning frameworks regarding so-called “exceptional release” policies, which govern when planning permission can be granted for developments on land not allocated in local development plans (‘LDPs’).

Under West Lothian Council’s ‘old-style’ LDP (i.e., adopted pre-NPF4), unallocated sites can be released for housing and other infrastructure where the local authority is failing to maintain a five-year effective housing land supply.

However, under the Fourth National Planning Framework (NPF4), this approach is done away with. Policy 16(f) requires that unallocated sites can only be released in very limited circumstances. One of these is where the delivery of sites is happening earlier than identified in the deliverable housing pipeline – the antithesis of the exceptional release policy under the LDP.

Therefore, there is an apparent tension between national and local planning policy. But which one prevails?

Miller Homes, having first sought planning permission for the Mossend development, an unallocated site, in 2022 (prior to NPF4 being adopted) argued that provisions in NPF4 should not apply until West Lothian Council issues a ‘new-style’ LDP. Their argument was supported by the fact that parts of Policy 16 could not apply without a ‘new-style’ LDP in place – for example, establishing whether the delivery of sites was happening earlier than anticipated requires reference to two consecutive years of the Housing Land Audit evidencing substantial delivery earlier than pipeline timescales. However, without a ‘new-style’ LDP, a housing pipeline will not have been established.

The Scottish Government’s position was that NPF4 supersedes the local development plan, and that the new-style housing policy applies, regardless of transitional issues.

Ultimately the court found in the government’s favour.

Many existing LDPs were adopted with exceptional release policies on the basis that there was a recognised shortfall in land allocated for housing. Those policies provided the mechanism through which the planning authority could ensure housing need would be met.  That mechanism has now been removed and will not effectively be replaced until new LDPs come forward.  The court’s decision will inevitably lead to an under supply in the availability of effective housing land, which in turn will mean a shortfall in the delivery of new homes.

The court recognised that its decision could lead to a transitional issue but commented that it would be short-lived and could be overcome with reference to other material considerations.  That downplays the chilling effect its decision will have on housing delivery.

Does the court’s decision completely put the brakes on housing development until the new LDPs are in place? The court suggested otherwise and held that whilst Policy 16(f)(iii) first bullet point cannot operate without the provision of a housing pipeline, and that can only be established with a delivery programme, it does not mean that Policy 16 cannot operate at all in the absence of a pipeline. The Transitional Provisions Regulations make clear that action programmes which have been prepared for ‘old-style’ LDPs can be reviewed and subsequently published as delivery programmes. What is more, the court suggested that a material consideration might arise where there was a perceived “lacuna in the development plan”, the development plan being out of date or the planning authority failing to update its delivery programme, and that this might justify determination of a planning application otherwise than in accordance with the development plan.

All of that is correct, but the reality is that most local authorities will now face a policy vacuum, in some cases for up to five years, prior to the new LDPs beings adopted. Planning authorities will be left to grapple with the application of Policy 16f(iii) to each individual case and will face pressures to update policy documents to keep abreast with housing needs. All of this at a time when the planning system is already stretched and under resourced. Meanwhile, the road ahead for developers looking to develop unallocated land is difficult and uncertain.

A further blow to the longer-term delivery of housing is the court’s comments around the policy position on housing targets in local development plans. In its decision, the court stated that whilst the local housing land requirement (the number of homes required under the Housing Land Audit) is “expected” to exceed the minimum all tenure housing land requirement (the minimum number of houses to be provided for within new local development plans), it is not a “requirement” of the development plan that it does so.  This may be correct as a matter of law, but it cuts across the spirit of NPF4 and the promises made by the planning minister and others ahead of NPF4’s adoption. The court’s statement will likely have a dampening effect on housing numbers in new LDPs.

The consequences are clear: fewer new homes at a time when we need to be accelerating housebuilding in order to address the housing crisis.

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