Factual and Procedural Background
The Local Authority granted planning permission on 4 August 2008 for four blocks of student accommodation in The City. The nearest block (Block D) was approximately 95 metres from an existing liquefied-petroleum-gas (“LPG”) storage facility operated by Company B. Because LPG is a hazardous substance, the Local Authority was obliged to consult the Agency, whose on-line PADHI+ assessment advised “against” granting permission on safety grounds.
The Local Authority nevertheless issued permission without notifying the Agency and construction of Blocks A–C progressed. When the Agency became aware of the development in December 2008, it asked the Local Authority to make a revocation order under section 97 of the Town and Country Planning Act 1990 (“the 1990 Act”) in respect of Block D. The Local Authority declined, citing (among other matters) potential compensation liability. The Agency commenced judicial review proceedings challenging both the grant and the refusal to revoke. At first instance, Judge [Alpha] declined to quash the permission but declared several procedural breaches.
The Court of Appeal (Judges [Beta] and [Delta] in the majority, Judge [Gamma] dissenting) ordered the Local Authority to reconsider revocation and held—by majority—that potential compensation is a legally relevant consideration. Permission to appeal to the Supreme Court was granted to resolve that question of statutory construction.
Legal Issues Presented
- When a local planning authority considers under section 97 of the 1990 Act whether it is “expedient” to revoke or modify planning permission, may it always take into account the compensation that it would or might have to pay under section 107?
Arguments of the Parties
Agency’s Arguments
- The phrase “material considerations” has an established meaning confined to planning considerations; financial matters unconnected to land-use (such as compensation payable by the authority) are excluded.
- Consistency across the planning code requires “material considerations” to be interpreted identically in sections 70, 97 and 102; otherwise the primacy of the development plan is undermined.
- Allowing financial self-interest distorts the integrity of the planning system; planning permission cannot be “bought back” by reference to cost.
- If cost is a relevant factor, effective judicial supervision is weakened because courts are reluctant to review budgetary prioritisation.
Local Authority’s Arguments
The opinion does not contain a detailed account of the Local Authority’s legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Case A |
Adverse effects on individuals are relevant when exercising statutory powers. |
Illustrated that, in general, financial impacts may be material, but distinction drawn between private and public expenditure. |
| Case B |
Compensation liability viewed as irrelevant in earlier High Court decision on revocation orders. |
Supreme Court held this interpretation too narrow and declined to follow it. |
| Case C |
Financial consequences may be material where they relate to use and development of land. |
Cited as example supporting a nuanced approach to financial considerations. |
| Case D |
Need for a linkage between financial considerations and land-use impacts. |
Reinforced discussion of when cost can constitute a planning consideration. |
| Case E |
High Court authority favouring inclusion of cost when judging “expediency”. |
Supported the majority view that cost is relevant under section 97. |
| Case F |
Defines “planning considerations” broadly as matters relating to use and development of land. |
Referenced in analysing scope of “material considerations”. |
Court’s Reasoning and Analysis
The Court began with the “simple” principle that public authorities are generally obliged to consider the financial consequences of their actions. Section 97 requires a judgment on whether revocation is “expedient,” having regard to “the development plan and to any other material considerations.” The Court found no textual basis to exclude compensation from those considerations.
Distinguishing section 97 from section 70, the Court noted that:
- Under section 70 the authority must decide on an application initiated by others and typically bears no compensation liability.
- Under section 97 the authority decides whether to act at all, and if it does, compensation is payable from public funds.
Therefore, cost is inherently relevant to the discretionary choice under section 97. Treating compensation as irrelevant would inhibit a balanced assessment of alternative statutory mechanisms (revocation, hazardous-substance modification, compulsory purchase) where each carries differing financial implications.
The Court rejected the contrary reasoning in Case B, observing that the timing of when compensation becomes payable does not preclude its prospective relevance. It also dismissed concerns about judicial reviewability, noting that serious public-safety risks could render a refusal irrational even if based on budgetary pressures, and that the Secretary of State retains a reserve power to revoke.
Holding and Implications
APPEAL DISMISSED. The Supreme Court upheld the Court of Appeal’s majority view that potential compensation is a relevant “material consideration” when a local planning authority decides under section 97 whether it is expedient to revoke or modify a planning permission.
Implications: Local planning authorities may, and ordinarily should, assess the likely compensation liability alongside planning merits when contemplating revocation or modification. The decision clarifies statutory interpretation but does not establish a rigid rule; authorities must still give appropriate weight to safety and other planning considerations, and their reasoning remains subject to standard public-law review.