The Hillside nightmare continues…

By now the nightmare scenario in the infamous Hillside Supreme Court judgement will be all too familiar to those involved in large-scale development projects (Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30). The implementation of a new planning permission for development, which was held to be “materially inconsistent” with the development authorised by an existing planning permission, had the effect of rendering further development under the original planning permission unlawful, on the basis that it would be “physically impossible” to complete the development authorised by the original planning permission as a whole alongside the new development.

This scenario is often quite unlikely to arise for a number of reasons, but there is nonetheless an ongoing Hillside nightmare for developers. It’s a nightmare made of the large number of hours and many thousands of pounds that must be spent trying to anticipate and avoid this sort of scenario. Complicated planning strategies and contractual arrangements are now often necessary to work around the Hillside rule which seems so inflexible and out of kilter with the real-world context of large-scale development.

But a rule that costs the development industry lots of money in advisors’ fees and slows down development for no benefit whatsoever would be ludicrous, so there must be some sort of issue which Hillside seeks to address for the benefit of someone. Surely?

• One issue could be the risk of inconsistent development. The risk that planning permission could be granted to authorise development of part of a site, which is inconsistent with planning permission for development of the rest of the site. But that can’t be it. Because if the council were worried about that, they could refuse to grant planning permission for the new development unless the inconsistency could be resolved in some way.
• So, maybe it’s that we need to ensure, when planning permission is granted for a development, the developer will go on to build out the whole thing. But that can’t be it either. Because, Hillside or no Hillside, planning permissions don’t do that. They're “permissive” rather than mandatory in nature. There's no requirement to build every part of a development authorised by planning permission after it’s begun. That’s why planning permissions are routinely subject to conditions and planning obligations to ensure that expensive supporting infrastructure and other community benefits are delivered alongside the more profitable elements of a development. In addition, councils can use completion notices (although that’s a whole separate Pandora’s box…!)
• It could be about making sure that supporting infrastructure comprising part of the original development is delivered alongside the new proposed development. But councils have all the powers they need to do that via planning conditions and planning obligations. The potential effect of Hillside only increases the risk that such supporting infrastructure would not be delivered.
• Or is the issue to do with ensuring that supporting infrastructure comprising part of the original development isn't removed and replaced by the new proposed development? If that’s the problem, the council could refuse to grant planning permission for the new development unless replacement infrastructure is provided elsewhere. Of course, the Hillside rule doesn’t only apply in this scenario, so it’s a blunt instrument if that’s the aim, and a rather bizarre way of tackling the problem, since the effect (if the new planning permission is granted) is to strike down the planning permission for any remaining development under the original consent including all remaining supporting infrastructure there too!
• Perhaps it’s about ensuring that all the impacts of a proposed scheme as a whole are assessed before the decision is made to approve or refuse the proposals. But the cumulative effects of development proposals alongside other existing development are already required to be assessed and taken into account, so that can’t be right either.

The list goes on. So, what’s the point of the rule created by Hillside? Well, the honest answer is: I can’t think of one. And it seems I’m not the only one.

Lord Banner, planning barrister-turned-Conservative peer and leading counsel in the Hillside case itself, recently made a similar argument during the committee stages for the Planning and Infrastructure Bill – well, with one exception. The only beneficiaries of Hillside he could think of? Lawyers. The specialist advisors that developers and others have been forced to consult in their attempts to de-risk their schemes. And yet, I don’t know a single planning lawyer who wouldn't be delighted if this rule were reversed.

Sadly, Lord Banner’s worthy attempt to tackle the problem via an amendment to the Planning and Infrastructure Bill has so far been unsuccessful, albeit Baroness Taylor of Stevenage pledged on behalf of MHCLG to work with Lord Banner and other stakeholders to try to find a solution. Lord Banner has put forward a second attempt for consideration, plus an alternative ‘enabling provision’ which would give the Secretary of State powers to resolve the problem under secondary legislation, and we must all hope that Parliament can agree on a solution, and soon, because the status quo is only resulting in added cost, delay, complexity and risk to development projects which the Government is relying on to achieve the economic growth that everyone wants.

The Planning and Infrastructure Bill returns to the House of Lords for the report stage from 20 October.