Access to viability assessments: Holborn Studios 2

Richard Harwood OBE QC

In R (Holborn Studios) v London Borough of Hackney (No 2) the Planning Court quashed planning permission for a residential and commercial redevelopment of the Holborn Studios site at Eagle Wharf Road, London N1 for the second time. Mr Justice Dove's judgment establishes the public's right of access to viability assessments in planning decisions and right to write to councillors on planning and other matters. In this case, like Paddington 2 or The Empire Strikes Back, the sequel is even better than the original.

The first grant of permission in 2016 was challenged by Holborn Studios who run Europe's largest photographic studio complex at the site and who would not be accommodated by the scheme. In R (Holborn Studios) v London Borough of Hackney the permission was quashed because it was unfair not to consult on amendments to the application, including the complete removal of affordable housing; and because there was a legitimate expectation created by the Council's statement of community involvement that representations submitted by the applicant would be published.

A new application was made offering a £757,000 contribution to off-site affordable housing, a proposal which was well below the expectations of policy. This was justified by a viability assessment which went through at least two iterations and was commented on by consultants appointed by the Council. The first version was published with all of the numbers blanked out, and a summary document was produced for the later version. In their consultation response Holborn Studios asked for the viability assessment to be published in full. Having seen the committee report they reiterated those criticisms, saying it was not possible to understand from the published material how the contribution had been calculated, and asking for the viability documents, including the Council's assessment. They also pointed out that the Council's list of background papers was unlawful as it merely contained the development plan.

Local authorities are required to make available background papers to committee reports. By the Local Government Act 1972, s 100D(5):

"background papers for a report are those documents relating to the subject matter of the report which—

(a) disclose any facts or matters on which, in the opinion of the proper officer, the report or an important part of the report is based, and

(b) have, in his opinion, been relied on to a material extent in preparing the report, but do not include any published works."

Background papers do not have to be provided if they contain 'exempt information' which includes information relating to financial or business affairs of a person (Local Government Act 1972, Schedule 12A, Part 1, para 3) 'so long, as in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information' (Schedule 12A, Part 2, para 10). In previous cases, culminating in R(Perry) v Hackney London Borough Council [2014] EWHC 1721 (Admin) the High Court had backed non-disclosure of viability assessments on confidentiality grounds. That deferential approach was not taken by the First Tier Tribunal in information rights cases.[1]

Since then the National Planning Policy Framework had said that viability assessments should be 'publicly available' (para 57). The Planning Practice Guidance explained the need to publish the entire appraisals, other than in exceptional circumstances where an executive summary could be published, but still containing the 'benchmark land value including the landowner premium'.[2]

Dove J held that the Council had failed to provide a list of background papers as required. Some at least of the unpublished viability material constituted background papers. The NPPF and PPG had an important bearing on the consideration of whether or not there is a public interest in disclosing the information contained in a viability assessment (even if it is properly to be characterised as commercially sensitive). Mr Justice Dove said:

"save in exceptional circumstances the anticipation is that viability assessments, including their standardised inputs, will be placed in the public domain in order to ensure transparency, accountability and access to decision-taking for communities affected by development. The interests which placing viability assessments into the public domain serve are clearly public interests, which in my view support the contention that such assessments are not exempt information unless the exceptional circumstances spoken to by the PPG arise and solely an executive summary should be put in the public domain."

Perry had been decided in significantly different circumstances, before these changes in policy.

The Court went on to consider the material which had been published or included in the committee report, describing it as 'opaque and unexplained', 'incoherent', 'incapable of being reconciled' and 'None of these differences or inconsistencies are explained nor are they capable of being understood'. Dove J also said that the material should identify both the existing use value and the landowners' premium which has been used to derive the benchmark land value. These should be 'set out in a way which enables clear interpretation and interrogation of those figures'. Since Holborn Studios were the current tenants, there was much they could have said about the existing use value, if they had been given the viability material.

Dove J endorsed the views of Cranston J in R(Joicey) v Northumberland County Council [2014] EWHC 3657 (Admin), saying 'the purpose of having a legal obligation to confer a right to know in relation to material underpinning a democratic decision-taking process is to enable members of the public to make well-informed observations on the substance of the decision'.

Additionally the judge found a right for the public to write to councillors on planning and other matters. The Council's standard documents and practice which prohibited planning committee members from reading representations which had been sent directly to them was a breach of the right to freedom of expression under Article 10 of the European Convention on Human Rights. This aspect is considered by Richard Harwood QC in a separate article in 39 Essex Chambers' Local Government newsletter.

Richard Harwood QC appeared for Holborn Studios in both cases, instructed by Susan Ring of Harrison Grant.

You can find the judgment here.

[1] Royal Borough of Greenwich v Information Commissioner EA/2014/0122. See generally Planning Permission (Richard Harwood, Bloomsbury Professional), para 8.39-8.42. [2] Paragraphs 10-010, 10-020, 10-021.