Infrastructure Planning Blog

Today's entry looks at the Chancellor's Letter to his ministerial friends, Irish reforms, a Scottish wind decision, an English appeal decision and provides some musings on cost recovery for the DCO regime.

Scoop

The Chancellor has written to all Ministers in striking terms. The letter covers three matters: consultation, judicial review, and legal risk. All have potential implications for those advising in the public sector context.

First, on consultation, the Chancellor – presumably singing along to I Don’t Want to Wait by Paula Cole – says "Consultation culture has turned a sensible mechanism for sourcing external input into an industry of dither and delay" and that "Habitual, box-ticking consultation does not serve people or business and is a distraction to government." Strong words. He says that "we will end this trend by reasserting that there is no general duty of consultation, and that the default position should be that ministers reach decisions and proceed to act on them", and that "formal consultation should only take place where there is a statutory requirement to consult, where it would be conspicuously unfair not to consult, or where ministers believe there is a good case for seeking external input and that the right vehicle for doing so is a formal consultation."

While addressed to Ministers, the letter makes clear that the Government wants to see this approach applied "across the wider public sector." It is worth considering whether consultation requirements in the context of DCO requirements have sometimes extended further than is necessary, bearing in mind that in most cases requirements are underpinned by an approved outline design, outline documents and a series of controls. I'd hope that, in addition to fewer consultations, we took a more discerning approach to when consultation is genuinely necessary and proportionate.

On legal risks, the Attorney General's Legal Risk Classification is due for a revamp to make clear that "it is wholly proper for ministers to take decisions where there is a tenable legal argument even where there is a high legal risk, as well as encouraging lawyers proactively to suggest alternative options where there is a significant barrier or risk to a proposed policy". Wonderful.

On judicial review, this is the first confirmation that the proposed parliamentary route is intended to extend beyond energy projects, with the Chancellor stating that "transport, water and other types of major infrastructure can benefit from the parliamentary authorisation route once we have passed the necessary legislation". I think for that route to work, it must be designed so that the parliamentary process does not introduce unnecessary delay or complexity. Careful consideration will also need to be given to the scope of any carve-outs where any challenges could be brought. Otherwise, in most cases it may well be simply better to take the now improved (and to be further improved!) judicial review route.

Even more wonderfully, the Chancellor has confirmed that the Government remains committed to implementing all of the recommendations of the Nuclear Regulatory Taskforce.

Decline and High-ball

The recent expansion of the charging regime has created significant concern within the NSIP sector. The industry is seeing substantial and sometimes inconsistent range of financial requests, while local authorities have unclear guidance on what can be 'reasonably' charged.

Charging, whilst well-intentioned and responding to a real issue about resourcing, can create difficult incentives. It incentivises the identification of issues which otherwise would not have been issues. It has, in effect, become a tax on development which strongly militates against the use of the DCO regime. But the uncertainty is unhelpful, particularly for local authorities who have no formal obligations under the DCO regime.

My own personal view is that this should be a matter of general taxation: aligning the amount of investment with what elected officials are willing to fund and prioritise would heal some of the moral hazards here. In the absence of its removal, it is hoped that full-throated guidance that expressly says that external consultants are a matter of last resort, with more granular and clearer guidance about what is in fact "proportionate" will be published soon. Doing so would bring certainty for both local authorities and developers.

At the moment, there appears to be some reluctance to challenge proposed costs, with many electing to go down the costly path of least resistance. It is now inevitable that some costs are becoming so significant that it is only a matter of time before they are subject to greater public scrutiny (something which consultants in particular should be wary of).

Raeshaw Revisited

It may be a useful moment to re-evaluate the Raeshaw Farms judgment. Readers will recall the Scottish judgment held that the failure for the recorder in that case to consider – at all – whether a grid connection formed part of the wind farm project in EIA terms gave rise to an EIA deficiency. In truth, there was a risk of over-reading this judgment as making a claim that multi-phased project development in Scotland was prohibited – but that is not the case, as the judgment itself records.

Since then, the Energy Consents Unit in Scotland has been keeping a keen eye on how to deal with the issue. In a recent decision, they held that "the appellant submits that they are a single project, although does not explicitly refer to the Wingfield factors… On balance, I accept the appellant’s view, particularly given the high degree of functional interdependence, and I therefore treat the wind farm and grid connection as a single project, although the grid connection does not form part of the appeal proposal."

In that case, there was sufficient information to provide an indicative assessment. That will not always be the case (and where no information is required, then the principles established in London Borough of Sutton v Khan will mean that no meaningful assessment can be carried out). In this case, the decision was that because "there is a possibility that the grid connection might ultimately be different from what has been assessed", the recorder decided to impose a condition (Condition 25) which sets out that details of the grid connection must be in place before development commences.

The position in England benefits from very clear policy and consistent case law that doesn't encounter these issues (see Blog 52 for an example), and expressly support a multi-phased and disaggregated planning strategy for grid and generation assets, without requiring applicants to engage in speculation or conjecture for EIA purposes (something which is clearly contrary to the EIA regulations themselves). Indeed, on the subject of the condition, it's worth comparing this to the Secretary of State's practice on offshore wind farms, in one case commenting that "the risk of the wind farm becoming a stranded asset is unrealistic and no Requirement or condition is necessary within the DCO".

Trial Bodies

“What’s the craic with the Irish planning system?” I hear you ask. We previously highlighted a pretty cool report into the Irish planning and environmental system, which identified many issues that will sound familiar to those working in the UK. One of those was the unpredictability and scale of the legal costs associated with environmental judicial review.

The report found that the average payment to the winning side in cases proceeding to a High Court hearing was €179,537, rising to €270,295 where a case was appealed or referred to the Court of Justice of the European Union. The Irish Government concluded that this was generating unpredictable costs for taxpayers and, in some cases, negative environmental outcomes through delays to projects such as renewable energy schemes.

The Irish were not micking around. Darragh O’Brien, the Irish Minister rather than the comedian, introduced regulations fixing the maximum legal costs recoverable by a successful applicant in certain environmental judicial-review proceedings. The regulations divide proceedings into phases and prescribe separate amounts for solicitors, junior counsel and senior counsel, with higher amounts where a court certifies a case as complex or very complex. For an ordinary, non-modularised High Court judicial review, the combined legal costs recoverable are €33,250 for a standard case, €44,875 for a complex case and €56,500 for a very complex case. Expert costs are separately capped at €2,500, taking the respective totals to €35,750, €47,375 and €59,000 where the full expert allowance is recovered.

This is not quite the same as the English Aarhus costs regime. In England and Wales, the familiar £5,000 individual and £10,000 organisational caps principally limit the costs an unsuccessful claimant can be ordered to pay, while the defendant’s liability to a successful claimant is ordinarily capped at £35,000. However, unlike the English regime, which principally caps adverse costs exposure, the Irish regulations cap the legal costs recoverable by a successful applicant. In that sense, the Irish reforms go further than the English Aarhus model.

Ironically, a legal challenge has now been launched, arguing that the regime breaches the requirement under the Aarhus Convention and EU law that environmental proceedings must not be prohibitively expensive. We applaud the ambition, and the willingness to demonstrate that something can indeed be done about the cost of judicial review. At the end of the rainbow, the Irish may be showing us that you can.

A Handful of Lead

Meanwhile, the Secretary of State has refused permission for the proposed redevelopment of land around Ebbsfleet Football Club. It was an ambitious scheme: up to 3,500 homes, an 8,000-seat stadium, around 1,500 new jobs, community and health facilities, public open space and biodiversity net gain. Those benefits were not enough.

The most interesting part of the decision may be its treatment of lead pollution from the neighbouring lead refinery (the largest in Europe, apparently). The applicant relied in part on the fact that there was no breach of the Air Quality Objectives, and the risk arose from a neighbouring facility.  The Inspector and Secretary of State were not satisfied that this answered the planning question.

This brings us to the “agent of change” principle (i.e., a developer introducing a new use is responsible for managing its relationship with established/existing uses). If housing is proposed next to a music venue, wharf, railway, waste facility or factory, it is for a housing developer to demonstrate that its (new) residents will enjoy acceptable living conditions. In this case, the applicant could not simply point to the existence of a lawful neighbouring use without demonstrating how future residents would be protected from its effects. This concern worked in both directions: future residents had not been shown to be adequately protected from existing industrial activity, while the arrival of those residents could create pressure to restrict lawful and strategically important businesses.

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