Allocated “Housing” in City Plan 2030 Means Mainstream Housing, Not PBSA: PBSA Treated as Commercial Development on Housing Allocations

Court: Scottish Court of Session, Inner House (First Division)
Citation: [2026] CSIH 25
Date: 29 May 2026
Procedure: Appeal under s 239 of the Town and Country Planning (Scotland) Act 1997

1. Introduction

The appellant company sought planning permission from the City of Edinburgh Council (“the planning authority”) to redevelop a long-standing scrap metal recycling and processing yard at Salamander Street, Leith. The proposal was a mixed-use scheme dominated by purpose-built student accommodation (“PBSA”), alongside a smaller quantum of build-to-rent (BtR) dwellings and a discrete affordable housing block.

The planning authority refused permission as contrary to its local development plan (“LDP”), City Plan 2030, on the basis that the scheme did not deliver the plan-led housing quantum for the allocated site and that PBSA did not count as “housing” for those purposes. A Scottish Ministers’ reporter dismissed the appeal. The appellant then appealed to the Court of Session on alleged errors of law, principally the interpretation of the development plan framework (NPF4 + City Plan 2030).

The central legal issue was whether, within City Plan 2030 (and in light of National Planning Framework 4 (“NPF4”)), PBSA could be treated as “housing” so as to satisfy an LDP housing allocation requiring delivery of a specified number of “homes”.

2. Summary of the Judgment

• The court refused the appeal and upheld the reporter’s interpretation of the development plan.
• Properly construed, City Plan 2030 draws a “clear distinction” between mainstream housing and PBSA; PBSA is treated as a form of commercial development rather than “housing” for the purposes of housing allocations (Policy Hou 1 and Table 2 allocations).
• NPF4 Policy 16(c) does not rank or prioritise different “homes” (including “homes for people undertaking further and higher education”); it merely indicates potentially supported forms of provision. That does not override the LDP’s plan-led allocation requirements.
• The reporter’s mistaken categorisation of PBSA as a Class 8 use (instead of sui generis) was immaterial and did not vitiate the decision.
• The reporter’s conclusion that the appellant failed to justify a departure from the 50/50 housing-to-PBSA expectation in the relevant commercial policy framework (Policy Econ 2, where applicable) was a planning judgment the court would not interfere with.

3. Analysis

3.1 Statutory and plan-led context

The court situated the dispute within the familiar statutory scheme:

• s 37(2) Town and Country Planning (Scotland) Act 1997: applications must have regard to the development plan and material considerations;
• s 25(1): determinations are to be made in accordance with the development plan unless material considerations indicate otherwise;
• s 24(3): where NPF4 and the LDP are incompatible, the later plan (here, the LDP) prevails.

The development plan comprised NPF4 (13 February 2023) and City Plan 2030 (7 November 2024). The appeal site was expressly allocated in City Plan 2030 as a housing proposal (H35) with an identified capacity of 113 housing units and specific development principles in Appendix D, including Class 4 business space requirements.

3.2 Precedents cited

(a) Tesco Stores v Dundee City Council [2012] UKSC 13; 2012 SC (UKSC) 278

The court relied on the interpretive discipline articulated by Lord Reed: plan policies are interpreted objectively, in context, and as planning documents (not like statutes or contracts). While planning authorities exercise judgment in applying policy, they cannot “make the development plan mean whatever they would like it to mean” (the “Humpty Dumpty” warning).

In this appeal, that framework was deployed to separate:

• questions of law (what “housing” means in City Plan 2030); from
• planning judgment (whether any justified flexibility existed on mix, viability, and site design).

(b) E v Home Secretary [2004] EWCA Civ 49, [2004] 2 WLR 1351

The appellant invoked procedural fairness (“fair crack of the whip”) in relation to the reporter’s mistaken use-class categorisation of PBSA. The Inner House rejected the complaint on materiality: the use-class point was an inconsequential aside and played no significant role in the operative policy reasoning.

(c) Reporter appeal decisions: PPA-230-2557 and PPA-230-2558 (Pitt Street); and Ashley Place appeal

The appellant argued inconsistency with other reporter decisions that had permitted PBSA in a housing allocation context. The court treated these as fact-sensitive decisions and found no inconsistency in principle:

• In the Pitt Street appeals, the PBSA did not exhaust the whole allocated site, and there was evidence that additional mainstream housing could still be delivered within the wider allocation, resulting only in a modest reduction.
• In the Ashley Place appeal, the reporter considered there remained scope on the allocation to deliver sufficient mainstream homes notwithstanding the proposal.
• Here, by contrast, the scheme occupied the entirety of site H35 and produced a shortfall of 67 units against the allocation, plus it failed to deliver required Class 4 business space.

3.3 Legal reasoning (why “housing” excluded PBSA in this LDP context)

The court’s reasoning was anchored in the internal structure and repeated textual signals of City Plan 2030:

• Policy architecture: the LDP distinguishes “Housing Development” (Policy Hou 1) from “Student Accommodation” (Policy Hou 5). The separation matters: it reflects different planning objectives (settled communities and affordable housing delivery versus student-linked accommodation in appropriate locations).
• Express categorisation of PBSA: City Plan 2030 groups PBSA with “retail, leisure, hotels and other commercial developments” (para 2.88) and frames PBSA as a commercial pressure potentially built “at the expense” of sustainable communities—language inconsistent with treating PBSA as substitutable for mainstream housing on housing land.
• Mix requirement on larger sites: supporting text to Policy Hou 5 (para 3.196) states that on sites over 0.25 ha, a mix of “student accommodation and housing” is required and “at least 50 per cent” of the site is to be “housing”. The court held that, in context, “housing” there can only sensibly mean mainstream housing (as distinct from PBSA).
• Affordable housing treatment: Policy Hou 2 applies affordable housing requirements to residential units but the plan text states it “does not apply to student accommodation”. The court treated this as further confirmation that PBSA and “housing” are not synonymous within the LDP’s housing delivery strategy.
• Open space policy split: student accommodation is routed through non-residential open space policy (Env 31), while private/affordable housing including BtR is routed through Env 32—again reinforcing the LDP’s categorical separation.
• Economic policy confirmation: Policy Econ 2 applies to “commercial uses including student housing” and requires, on larger commercial sites, at least 50% housing (where compatible/appropriate), but expressly does not apply to sites allocated for housing—reflecting that a housing allocation is not to be treated as a commercial-led site where PBSA can dominate.

Against that, NPF4 Policy 16(c) was treated as non-hierarchical and enabling rather than a mandate that PBSA counts as “housing” for all LDP allocation purposes. The court accepted the reporter’s view that NPF4 can offer support for PBSA proposals where they improve affordability/choice and address gaps, but that does not dissolve the LDP’s allocation-specific requirements—particularly where the later LDP prevails under s 24(3) in case of incompatibility.

3.4 Impact (why this matters)

• Clarifies substitution limits on housing allocations: in City Plan 2030, PBSA cannot be treated as “housing” to satisfy an allocated housing site’s specified mainstream housing quantum, particularly where PBSA would materially displace allocated mainstream (and affordable) units.
• Reinforces plan text and policy “signals” approach: courts will read an LDP holistically—policy headings, supporting text, cross-references (e.g., open space policies), and economic policy framing can decisively determine category boundaries.
• Materiality discipline for “error of law” challenges: even where a reporter makes a conceded technical mistake (here, use-class categorisation), the appeal will fail if the error is not material to the operative reasoning.
• Limits reliance on other reporter decisions: Pitt Street and Ashley Place illustrate that PBSA may be permissible within or alongside housing allocations where there is credible scope to still deliver the allocated mainstream housing; but those decisions do not establish that PBSA generally “counts” as housing for allocation numbers.

4. Complex Concepts Simplified

• “Interpretation is for the court” vs “planning judgment”: deciding what a policy means (e.g., whether “housing” includes PBSA in City Plan 2030) is a legal question; deciding whether a justified departure is acceptable on design/viability/amenity grounds is usually a planning judgment reviewable only on limited public-law grounds.
• NPF4 vs LDP priority (s 24(3)): NPF4 sets national policy; the later-in-date local plan prevails if incompatible. Here, even though NPF4 mentions student-related “homes”, the local plan’s allocation mechanics and definitions controlled how housing delivery was counted on a specific site.
• PBSA as “commercial development” in this plan: “commercial” here does not mean “shops”; it reflects the plan’s treatment of PBSA as a non-mainstream, institution-linked accommodation product that is planned for differently from settled community housing (including affordable housing).
• Materiality: not every error leads to the decision being quashed; the court asks whether the mistake actually affected the reasoning or outcome.

5. Conclusion

[2026] CSIH 25 confirms that, under Edinburgh’s City Plan 2030, “housing” in a housing allocation (Policy Hou 1 and Table 2 allocations such as H35) means mainstream housing and does not include PBSA. NPF4 Policy 16(c) may support PBSA in principle, but it does not convert PBSA into mainstream housing for the purposes of meeting an LDP housing allocation’s unit requirement—especially where PBSA would materially displace plan-led housing and affordable housing delivery. The decision also exemplifies the court’s insistence on objective plan interpretation (per Tesco Stores v Dundee City Council [2012] UKSC 13; 2012 SC (UKSC) 278) and its reluctance to intervene in planning judgments absent legal error or material unfairness.