Scottish ministers' refusal of planning permission to dairy overturned

The decision (17-page / 453KB PDF) by a panel of three Inner House judges is a rare example of a successful challenge to a planning decision, according to planning law expert Craig Connal QC of Pinsent Masons, the law firm behind Out-Law.com.

The court found that ministers had taken irrelevant information into account when they refused permission for the £40 million Airthrey Kerse project, which is due to combine a £20m Graham's Dairy facility with 600 new homes and community facilities. Ministers had called the appeal in for their own decision. The reporter who heard the appeal found that the presumption in favour of development was not sufficient to outweigh the effect the project would have on the green belt, as a new local development plan (LDP) which was under production by Stirling Council would address the housing shortfall in the local area.

By the time the Scottish ministers decided the appeal, there had been a "material change in circumstances" as defined by the Town and Country Planning Act, in that the LDP had been published. That LDP still left a housing shortfall. However, the ministers adopted "wholescale" the reporter's reasoning without reconsidering the housing figures, in a way which "betrays a somewhat careless approach to decision making or at least the provision of adequate reasons", according to the court.

"The parties to the appeal are entitled to reasons for the decision which 'leave them in no real and substantial doubt' as to what the reasons for it were and what were the material considerations', said Lord Carloway, the Lord President, giving the judgment of the court.

"The respondents cannot be expected 'to address, line by line, every nuance of every matter raised'. They must, however, in this case address how they have approached the 'tilted' balancing exercise which the housing land shortage requires. In particular, they must make it clear whether and how, in accordance with SPP [the Scottish Planning Policy], they regarded the shortage as a 'significant material consideration' ...and the extent to which they regarded the green belt as 'significantly and demonstrably' outweighing or otherwise the benefits of the development," he said.

"The [Scottish ministers] ...failed to take into account a relevant material consideration; that the LDP process had been practically completed and produced a housing land supply shortage for which no solution was offered. They purported to take into account an irrelevant consideration; that there was an ongoing LDP process which would resolve the shortage in the relatively short term. For both of these reasons, the appeal must be allowed," he said.

The application will now be returned to the Scottish ministers for their reconsideration. In particular, the ministers will be required to consider whether the LDP will sufficiently address the local housing shortfall over a longer term.

"One of the controversial areas in planning is the extent to which appeals should be refused because of an upcoming local plan process and the argument that dealing with the appeal would prejudice that process," said Connal.

"There are some unusual features in this case. When the reporter decided he should refuse the appeal to allow the LDP to go ahead, he assumed that this would sort the housing supply shortage. By the time the Scottish government got around to deciding the appeal, the LDP had been and gone - and did not remove the housing shortage, just reduced it, contrary to the reporter's assumption. One might have expected these issues to dictate a re-think, rather than for the Scottish government to simply adopt the reporter's decision," he said.

"By not discussing what the ongoing shortfall in housing meant, or that the prematurity argument was now gone, the Scottish ministers' decision was flawed. However, this does not mean that the case is over: it may still be possible, notwithstanding the shortage, for a planning judgment to be made that the impact on the green belt, for example, outweighs the other material considerations. Such a judgement call may be more difficult to challenge," he said.