Planning matters

The Town and Country Planning system in the UK has been subject to increasing scrutiny and criticism, both due to its lack of resources and the underlying philosophical tensions. On one hand, planning decisions are expected to be made based on objective legal and policy criteria; on the other, the decision-makers—elected councillors—are motivated by political pressures. Councillors are more responsive to the demands of current local residents than to future residents who might occupy housing developments but do not yet have a vote. This tension is increasingly causing failures in planning, leading to a rise in applications for costs against Local Planning Authorities (LPAs).

Elected councillors are expected to apply the objective criteria established by law and policy when deciding on planning applications. However, the reality is more complicated. Councillors are beholden to the local electorate, who often object to developments due to concerns such as overloaded roads, overcrowded schools, and insufficient infrastructure. Consequently, planning applications that meet policy requirements are frequently rejected for local political reasons. This leads to more appeals, often by developers, and an increase in applications for costs against LPAs when appeals are allowed and the LPAs are found to have acted unreasonably.

Costs Applications

Planning appeals and judicial reviews, particularly in cases where LPAs fail to follow through on policy or procedural obligations, have become increasingly common. One prominent example of this can be found in R v Secretary of State for Levelling Up Housing and Communities [2024] EWHC 20230 (Admin) which highlights how a planning inspector must assess claims for costs when an LPA withdraws support for a proposal. The High Court’s involvement in scrutinising costs decisions, in turn, reveals the limits of procedural and substantive assessments made by decision-makers.

This case demonstrates the complexity of costs awards and the conditions under which such awards may be granted. Under the Planning Practice Guidance (PPG), an award of costs can be made when a party behaves unreasonably, leading to wasted or unnecessary expenses for another party. This can occur even in situations where the LPA has changed its position during an inquiry, as happened with Halton Borough Council. The Council’s late withdrawal of support led to a collapse of the planning inquiry, which became the focal point of the costs applications brought by the Health and Safety Executive (HSE) and a third party, Viridor.

The Importance of Planning Policy Guidance (PPG) in Costs Decisions

In the Halton case, the Planning Practice Guidance (PPG) played a critical role. The relevant sections that were considered in the context of costs applications included:

• Paragraph 028: Encourages LPAs to ensure that reasons for refusal are well substantiated and capable of withstanding scrutiny in terms of planning merits​.
• Paragraph 030: Stresses that costs may be awarded if an LPA fails to produce evidence to substantiate a reason for refusing planning permission​.
• Paragraph 031: Details procedural behaviour, focusing on cases where an LPA’s withdrawal is found to be without good reason, which risks procedural awards​.
• Paragraph 034: Specifically relates to “abortive costs,” in cases where an inquiry collapses due to a party’s failure to adhere to procedural requirements, such as withdrawing support for an application without good reason​.
• Paragraph 042: Emphasises that awards of costs may be appropriate where appeals or enforcement actions are withdrawn without sound reason or are unnecessarily delayed​.
• Paragraph 047: Lists examples of procedural unreasonableness, such as withdrawing a reason for refusal late in the process or after substantial work has been done​.
• Paragraph 049: Refers to unreasonable substantive behaviour, such as failing to review an LPA’s position promptly​.
• Paragraph 054: Reiterates the need for parties to withdraw appeals or other planning challenges at the earliest opportunity when it becomes clear that they cannot be sustained​.
• Paragraph 056: Makes clear that procedural costs may be awarded where a party withdraws without good reason​.

The application of these guidelines was central to the High Court’s review of the costs decision in the Halton case, illustrating the fine line between procedural and substantive unreasonable behaviour.

Caselaw

In addition to the core principles set out in the Planning Practice Guidance (PPG), various important legal precedents help clarify the conditions under which costs may be awarded against Local Planning Authorities (LPAs) in planning inquiries. Paragraph 16 of the High Court judgment in Halton summarises several key cases that illustrate how courts have historically dealt with costs claims. 

1. R v Environment Secretary, ex parte Chichester District Council [1993] 2 PLR 1

• Court: High Court (Hutchison J)
• Date: 27 October 1992
• Facts: The case involved a judicial review of a costs award against Chichester District Council after it failed to make a timely decision on a reserved matters approval, leading the developer to appeal.
• Issue: The local planning authority (LPA) challenged the decision to award costs on the grounds that the planning inspector had made minor factual errors in their decision.
• Holding: The High Court dismissed the LPA’s challenge, ruling that the inspector had asked the correct questions and had not materially misdirected themselves, even though there was a minor factual inaccuracy in the decision letter.

2. R v Environment Secretary, ex parte North Norfolk District Council [1994] 2 PLR 78

• Court: High Court (Auld J)
• Date: 12 July 1994
• Facts: The case concerned a judicial review of a costs award against North Norfolk District Council, which had failed to determine a planning application within the statutory time limits.
• Issue: The costs award was based on the inspector’s view that the council had not provided sufficient evidence to support its position during the appeal.
• Holding: The High Court quashed the costs award, concluding that the inspector had failed to provide adequate reasoning for his decision. The inspector’s failure to explain why the council’s evidence was not considered substantial was a material legal error, warranting reconsideration of the decision.

3. R v Environment Secretary, ex parte Wakefield Metropolitan Borough Council (1998) 75 P & CR 78

• Court: High Court (Jowitt J)
• Date: 16 October 1996
• Facts: Wakefield Metropolitan Borough Council sought judicial review of a costs award made against it following its refusal to grant planning permission for opencast coal extraction.
• Issue: The council argued that the planning inspector had wrongly concluded that they lacked sufficient evidence to justify their refusal of permission.
• Holding: The High Court upheld the inspector’s decision, ruling that there was no material error of law. The inspector was entitled to conclude that the council had failed to meet the required evidentiary threshold, which justified the award of costs against them.

4. R (Golding) v Secretary of State for Communities [2012] EWHC 1656 (Admin)

• Court: High Court (HHJ Waksman QC)
• Date: 27 April 2012
• Facts: The case involved a challenge by a developer against costs awards made in favour of both the LPA and an objector, following a successful planning appeal.
• Issue: The costs arose from an adjournment caused by late evidence submitted by the developer, which led to unnecessary expense for the other parties.
• Holding: The High Court upheld the costs awards, finding no material error of law in the planning inspector’s decision. The court found that the developer’s conduct—providing late evidence—justified the costs orders.

5. R (Swale Borough Council) v Secretary of State for Housing [2020] EWHC 3482 (Admin)

• Court: High Court (Sir Ross Cranston)
• Date: 17 December 2020
• Facts: Swale Borough Council challenged a costs award made against it after a developer successfully appealed against the council’s refusal of planning permission.
• Issue: The council claimed that the inspector had misinterpreted the Planning Practice Guidance in awarding costs.
• Holding: The High Court dismissed the council’s claim, finding that the inspector had applied the PPG correctly and that the costs award was justified.

The Facts of the Halton Case

The case in question concerned an inquiry that had been “called in” by the Secretary of State due to national security concerns. Halton Borough Council had initially supported a planning application from a developer but later withdrew their support after their expert witness, Mr. Hopwood, failed to maintain his position under cross-examination during a closed session of the inquiry​. The collapse of this expert evidence triggered the Council’s decision to abandon its previous support for the application, ultimately leading to the withdrawal of the application itself​.

As a result of the Council’s sudden volte-face, the inquiry was halted, and both HSE and Viridor submitted claims for costs, arguing that the Council’s late withdrawal constituted unreasonable behaviour. The Planning Inspectorate’s Costs and Decisions team awarded costs against Halton Borough Council on the grounds that the late withdrawal had wasted significant resources and time, contrary to the procedural guidelines in the PPG​​.

The Court’s Reasoning

The key issue in this case revolved around whether the Council had acted unreasonably in withdrawing its support and whether this warranted an award of costs under the PPG. The High Court found that Halton Borough Council had, indeed, acted unreasonably by not ensuring that its expert witness’s evidence was robust enough to withstand scrutiny. It was not sufficient for the Council to claim that their change of position was due to the expert’s performance at the inquiry​​.

In Paragraph 30, the court highlighted three key features of the Council’s behaviour that contributed to the finding of unreasonableness:

1. The Council had failed to ensure the strength of its evidence and that it would hold up under cross-examination.
2. The Council had responsibilities to prosecute its case and to continuously appraise the situation, ensuring that its grounds for approving the development remained strong.
3. There had been no substantive changes in the objections raised by the HSE or in the planning context. Therefore, the Council’s withdrawal was not justified​​.

In Paragraph 31, it was further noted that the Council’s withdrawal came at a point where substantial work had already been done, rendering the inquiry process largely wasteful​.

The court further emphasised in Paragraph 34 that the collapse of the Council’s case was not due to any material change in the planning context or the HSE’s position, but rather due to internal failings—specifically, the inadequacy of the expert witness testimony that the Council should have been prepared to support​.

In Paragraph 41, the High Court drew general conclusions about how LPAs must be more diligent in appraising the strength of their evidence before embarking on a planning inquiry. The case demonstrated that even procedural missteps, such as a late withdrawal, can result in significant costs awards if they result in wasted efforts by other parties involved​.

The court reiterated the importance of withdrawing support for an application as soon as it becomes clear that the case cannot be maintained, thereby avoiding unnecessary costs. It also noted that failure to do so in a timely manner, as occurred in this case, would likely be seen as unreasonable behaviour, leading to a costs award​​.

When an award of costs is made in the planning context, it is not an “order” so it is not possible to proceed directly to an assessment of costs, if the amount of costs that are payable under it are disputed. It also has a shelf life for implementation and if agreement cannot be reached, then an order for costs should be applied for in the Administrative Court office.

Such orders are routinely made, and usually by simple letter, rather than a more formal process. On an assessment of costs which will take place in the Senior Courts Costs Office, the usual principles and procedures set out in the Civil Procedure Rules will apply and the usual issues will arise: hourly rates, counsel’s fees, expert fees, and the quantification of time. 

One complicating factor, not present in the Halton case is that Planning Inspectors seem far more willing to make “issues based” costs awards, which can be trickier to unpick, than awards of costs which are either full awards, or which run from a certain date. To this extent there is a clear divergence of practice in the world of inquiries and appeals, to the approach that a judge sitting in a civil case would take, mindful that issues based costs orders are to be avoided where possible, and instead a percentage based order, might on the one hand constitute somewhat rougher justice, yet on the other hand potentially save a great deal of time and money in the assessment process, unpicking what is included in the scope of the award.

Keypoints

1. Procedural Unreasonableness Can Lead to Costs Awards: The case illustrates that an LPA can be held accountable for procedural unreasonableness, particularly when it withdraws support for an application at a late stage without good reason.

2. Failure to Ensure Robust Evidence is Costly: LPAs must ensure that their evidence, especially from expert witnesses, is capable of withstanding cross-examination. The collapse of expert evidence in this case was central to the costs award.

3. Timeliness of Withdrawal is Crucial: Withdrawing from an inquiry late in the process, especially after significant resources have already been committed, is likely to result in a costs award. LPAs must review and adjust their positions as early as possible.

4. Costs Awards Are Increasing: As LPAs face growing political pressure and shrinking resources, costs claims will likely continue to rise, especially when planning applications are refused or withdrawn without substantive reasons.

5. The Planning System Needs Reform: The tensions between policy compliance and political motivations will likely continue to cause friction in planning decisions, exacerbating the need for reform. Without such reform, the increase in costs claims is expected to persist.

The Halton case serves as a detailed example of how costs applications fall to be considered judged against guidance and the requirements of the caselaw. It has useful lessons for the increasing number of applications which take place against a backdrop of refusals against officer advice, or refusal of applications made in respect of allocated sites.

LPAs are frequently caught between the political motivations of their electorate and the objective legal criteria they must follow. When these tensions result in procedural missteps or poor decision-making, such as late withdrawals of support for planning applications, it is the taxpayer who ultimately bears the cost. As demonstrated in this case, unless significant reforms are enacted to reconcile these issues, the number of costs applications is likely to continue rising, placing further strain on an already overburdened system.