Inquiry held on 17 February, 5-8 May and 21 May 2009 Land off Lydney Bypass and Highfield Road, Lydney GL15 5ND File Ref: APP/P1615/A/08/2082407

Report to the Secretary of State for Communities and Local Government

The Planning Inspectorate Temple Quay House 2 The Square Temple Quay Bristol BS1 6PN

GTN 1371 8000

by Susan Holland MA DipTP MRTPI DipPollCon

an Inspector appointed by the Secretary of State for Communities and Local Government

Date 20 July 2009

THE TOWN AND COUNTRY PLANNING ACT 1990

FOREST OF DEAN DISTRICT COUNCIL

APPEAL BY

ROBERT HITCHINS LTD

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CONTENTS List of Abbreviations and Acronyms iii Procedural Matters 1 Site and Surroundings 2 The Proposal 2 Planning History 2 Planning Policy 3 The S106 Unilateral Undertakings 7 The Inspector’s Question 8 The Case for Robert Hitchins Ltd 9 The Case for Forest of Dean District Council 20 The Case for Interested Persons 31 Written Representations 32 Conditions 32 Planning Obligations 33 Conclusions 34 Recommendation 40 Annex – List of Conditions 41 List of Documents 46

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LIST OF ABBREVIATIONS and ACRONYMS ¶ paragraph (A); (C) Appellant’s witness; Council’s witness ADAS Agricultural Development and Advisory Service BCIS Building Construction Information Service FoDDC Forest of Dean District Council DCLG/CLG The Department for Communities and Local GOvernment GCC Gloucestershire County Council HMA Housing Market Area HNS Housing Needs Survey IOH Institute of Hydrology LDD Local Development Document LDF Local Development Framework LP Local Plan (the Forest of Dean District Local Plan Review Nov. 2005 psf per square foot Q1/2008 First quarter of the year 2008. Also shown as e.g. Q3/2010, etc. RHL Robert Hitchins Ltd (the Appellant) RICS Royal Institution of Chartered Surveyors RSL Registered Social Landlord RSS Regional Spatial Strategy (for the South West) SHLAA Strategic Housing Land Availability Assessment SHMA Strategic Housing Market Assessment SCG, SoCG Statement of Common Ground SPD Supplementary Planning Document U/U Unilateral Undertaking(s)

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File Ref: APP/P1615/A/08/2082407 Land off Lydney Bypass and Highfield Road, Lydney GL15 5ND

The appeal is made under section 78 of the Town and Country Planning Act 1990 against a failure to give notice within the prescribed period of a decision on an application for outline planning permission. The appeal is made by Robert Hitchins Ltd against Forest of Dean District Council. The application Ref P0472/08/OUT is dated 3 April 2008. The development proposed is residential development (up to 750 dwellings) and site reserved for a school including infrastructure, ancillary facilities, open space and landscaping.

Summary of Recommendation: That the appeal be dismissed.

Procedural Matters

1. The Inquiry was opened on 17 February 2009 by Inspector Colin Tyrrell, and was adjourned to 5 May 2009, before any evidence had been heard, for the posting of site notices. The Inquiry was resumed on 5 May 2009 by Inspector Susan Holland, sat on 5-8 May and on 21 May, and was closed (in writing) on 17 June. An accompanied site inspection was made on 20 May.

2. Applications for a partial award of costs were made by Forest of Dean District Council against Robert Hitchins Ltd, and by Robert Hitchins Ltd against Forest of Dean District Council. These applications are the subject of separate Reports.

3. The appeal proposal is made in outline with all matters other than access reserved for future consideration.

4. On 11 August 2008 the appeal was recovered for decision by the Secretary of State, for the following reason: that the appeal involves proposals for residential development of over 150 units or on sites of over 5 Hectares, which would significantly impact on the Government’s objective to secure a better balance between housing demand and supply and create high quality, sustainable, mixed and inclusive communities.

5. On 9 September 2008 the Council resolved that had it been in a position to determine the application it would have refused planning permission, for the following reasons:

(1) The proposal fails to secure the necessary contributions for Early Years, Primary and Secondary education, libraries, Lydney Youth Centre, Children’s Centre at Severnbanks Primary School, highways, maintenance and equipping of public open space, community facilities, drainage improvements and affordable housing via a S106 Legal Agreement where there are recognised shortfalls and as a consequence would be contrary to Policies (R)F.Lydney1, (R)FBE.3, (R)FBE.12, (R)FH.13 of the District Local Plan Review and Policies S.5, S.7, H.7, T.1, T.3, T.4, RE.1 and RE.2 of the Gloucestershire Structure Plan Review, Policies SS19, EN5, TCS2, HO3, TRAN4, TRAN7, TRAN10 and RE2 of RPG10 Regional Planning Guidance for the South West, and PPS1, PPS3, PPG13, PPG17, and PPS25.

(2) The proposal fails to demonstrate that it can adequately deal with surface water drainage to ensure that there will not be an adverse impact on

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known flooding problems in the area. As a consequence the proposal would be contrary to Policies (R)FBE.3 and (R)FBE.5 of the District Local Plan Review and PPS25 (Development and Flood Risk).

6. The application was accompanied by an Environmental Statement under the Town and Country Planning (Environmental Assessment) (England and Wales) Regulations 1999 (SI 1999 No. 293). Comments from statutory consultees have also been produced. I am satisfied that the requirements of the Regulations have been met.

The Site and Surroundings

7. The appeal site, known as ‘Lydney B’, measures 25.5 hectares according to the application and ‘approximately 24 hectares’ according to the Environmental Statement. The site lies immediately to the east of the existing settlement of Lydney, extending between Highfield Road (the ‘old’ A48) and the A48 Lydney Bypass. The site is almost entirely greenfield land, predominantly under grass with some arable. The ground falls away generally, on a variable but perceptible gradient, from north to south. The site is divided by 2 watercourses which flow in that direction within narrow and sharply-incised wooded valleys; a 3rd similar watercourse forms part of the western site boundary. To the immediate south lies the site known as ‘Lydney A’ (see planning history below).

The Proposal

8. The appeal proposal is as described in the application. The submitted Design and Access Statement (DAS) indicates that an area of 1.1 hectares against the northern boundary of the site is to be reserved as a school site. The DAS also shows the approximate position of noise bunding against the eastern site boundary with the A48 Bypass. Existing belts of trees to be retained are also shown, together with existing streams and ponds, and indicative locations of proposed storage ponds (these are shown in more detail in the Flood Risk Assessment included in the Environmental Statement). Access to the proposed development is from Highfield Road. Access connection is also made to the ‘Lydney A’ site to the south.

9. In a letter dated 21 November 2008 the Appellant made a number of amendments to the planning application, though the description of development remains the same. The amendments are, in summary: the exclusion of a thin strip of land to the rear of No.24a Bracken Close from the application site; revisions to the Master Plan LN-01 to show the demolition of the remains of Rodley Manor farm buildings, the correct 1.1ha site for the school, and amendments to the proposed SUDS system and to proposed landscaping; revisions to the Landscape Masterplan LL08/01; amendments to the Design and Access Statement; and consequent addendum to the Environmental Statement. At the opening of the Inquiry on 17 February 2009 it was confirmed that the amendments had been advertised; that they were not substantial; and that the LPA was content. Accordingly I take the view that the appeal proposal should be considered on the basis of the application as amended.

Planning History

10. The adjoining site (known as Lydney Site A: the appeal site is known as Lydney B) was the subject of a planning application (Ref.DF 12949 P0724/04/OUT) in outline for residential dwellings, neighbourhood centre, employment land, and

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school site, including infrastructure, ancillary facilities, open space and landscaping, and was the subject of an appeal (by the current Appellant) against the failure of the Council to determine the application. On 1 July 2008 the appeal was allowed by the Secretary of State, the residential development limited by condition to no more than 320 dwellings (along with up to 12 dwellings as part of the neighbourhood centre).

11. The SSCLG decision and ‘minded to’ letter of 19 February 2008 are at Document C2 Appendix 4. The letter states at ¶21 that Whilst noting that the proposed proportion of affordable housing falls short of the 40% that the Council would normally seek (IR6.31), and which she would normally expect to see in accordance with the requirements of the development plan, the Secretary of State notes that the Council accepts that 20% is the maximum provision reasonably achievable having regard to the site specific viability assessment. Therefore, having regard to the particular circumstances of this case, she agrees with the Inspector (IR6.33) that the proportion of affordable housing proposed would accord with PPS3.

Planning Policy

Regional Planning Policy

12. Regional Planning Guidance for the South West (issued in 2001 as RPG10) represents the current adopted Regional Spatial Strategy (RSS). RSS Policy HMA3 sets for the Gloucester and Cheltenham HMA growth of at least 56,400 homes: of these the figure of 6,200 is set for the Forest of Dean.

13. RSS Policy HO3: Affordable Housing states that Local authorities, social housing providers and other agencies in their relevant plans, policies and programmes should aim to ensure that sufficient affordable housing is provided in order to meet community needs in both urban and rural areas. This should involve1:

• The identification of targets in development plans indicating the level of affordable housing required in each area; these should be based on housing needs assessments undertaken to consistent standards across the region, which take into account both need and supply-side considerations.

14. The Draft Revised Regional Spatial Strategy (RSS) for the South West incorporating the Secretary of State’s Proposed Changes was issued for public consultation in July 2008. As proposed to be changed2, Policy H1 (Housing Affordability) states that provision will be made for at least 30 35% of all housing development annually across each Local Authority area and Housing Market Area to be affordable. Development Plan Documents should include policies to deliver a substantial increase in the amount of affordable [housing] in the region and reflect the outcome of joint working including Strategic Housing Market Area Assessments. These should:

• Specify targets for and proportions of affordable housing;

1 Bullet-point provisions concerning exceptions in rural areas, the setting of lower thresholds, encouraging partnership approaches, and using existing housing stock are omitted here, as are the provisions for monitoring. 2 Underlining indicates policy wording added by the Proposed Changes; strikethrough indicates wording so deleted.

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• Identify an appropriate division of affordable housing between social rented and intermediate tenures;

• Help to secure and maintain an appropriate supply of affordable housing in the wider context of maintaining an overall housing land supply.

15. At ¶6.1.8 of the supporting text, the RSS states that Local Authorities will need to … be realistic in their expectations of affordable housing delivery through S106, recognising the danger of stifling overall housing growth through over ambitious requirements. LDD policies should routinely require more than 30 35% of housing to be affordable….

16. Though the emerging RSS is not yet adopted, its imminent adoption continues to be expected.

The Structure Plan

17. The Gloucestershire Structure Plan Second Review was adopted in November 1999. Policy H.7 states that provision should be made to meet the needs of those unable to compete in the housing market. Such provision should meet a demonstrable local need and any housing so provided should be available to successive occupiers who need affordable accommodation.

The Local Plan

18. The Forest of Dean District Local Plan Review covers the plan period mid-1991 to mid-2011 and was adopted in November 2005. Saved LP Policy (R)FH.13 (Affordable Housing on New Housing Sites – Negotiated Share Basis) states that an element of affordable housing will be sought by negotiation on all housing sites which are of 15 units or more or are larger than 0.5ha in towns and villages of greater than 3000 population… The provision sought will be related to evidence of local need in the District, including housing need surveys, and to the suitability of the site in question.3

19. ¶2.52 and 2.53 of the supporting text to Policy (R)FH.13 together explain, with reference to the background of housing need, the amount of affordable housing to be sought. ¶2.53 states that [the] figure of 40% will therefore be used as the starting point in all negotiations for affordable housing, although the actual provision will depend on the suitability of the individual site concerned.

20. Saved LP Policy (R)F.Lydney1 allocates 65 hectares of land to the east of Lydney for a mixed development including 1250 dwellings …., 9 hectares of land for employment use, a neighbourhood centre and primary school accommodation. The appeal site is included in the allocation. (R)F.Lydney1 states that the development will be required to provide for (2) off-site highway improvement works...; (3) enhanced bus services ..and pedestrian and cycling routes…; (4) primary school accommodation within or adjoining the site…; (5) the allocation of a site within the development for a neighbourhood centre, and a phasing agreement for the construction of units suitable for accommodating local services; (6) strategic landscaping within the site…; (7) amenity open space and play provision within the site…; (8) an appropriate provision of affordable housing

3 Policy provisions of (R)FH.13 relating to off-site provision of affordable housing are omitted here.

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units; (9) appropriate measures to ensure that flooding does not occur as a result of the new development; (10) appropriate contributions to pre-school and secondary school provision…; (11) appropriate contribution to the provision of, or improvement of an existing, community building to meet the needs of the occupants of the site; (12) appropriate contribution to Lydney Library to meet the needs of site occupants; (13) appropriate contribution to improved passenger facilities at Lydney Railway Station; (14) appropriate contribution to the provision or improvement of playing pitch facilities in Lydney; (15) appropriate contribution to Health Care provision in Lydney.

21. Policy (R)FBE.11: Play Space Standards states that the overall standard of recreational open space provision required to meet the needs of the people of the District is 2.4 hectares per 1000 population…. The Council will seek to ensure that this area is provided in the following proportions:

Children’s Play Space: 0.8 hectares of Play Areas

Youth/Adult Use: 1.6 hectares of Pitches and Sports Facilities.

SPG on Play Area Provision

22. On 23 May 2000 the Council adopted its SPG on Play Area Provision [Documents I/C7 and C2 App’x 8]. At ¶5.12 under the heading Youth/Adult Outdoor Recreation the SPG includes, as a principle, the adequacy of facilities in relation to demand, their condition and suitability (e.g. drainage, levels) and the availability of ancillary facilities such as lighting, training areas and changing rooms. At ¶10.8 under the heading of The Calculation of Playspace Costs the guidance states that developments of 10 or more houses will be expected to contribute to the provision or enhancement of pitches and other facilities suitable for youth/adult recreation. Annex 13 provides a worked example based upon a standard provision of 40m2 per dwelling giving a play space area of 16,000m2 for a development of 400 homes. Within such an area it would be possible to construct a full size pitch and 2 multi-sports pitches, together with changing rooms. These can be equated to approximately £1,690 per dwelling (£676,000 ÷ 400).

Other Documents, Relating to Affordable Housing

The SHMA

23. On 13 February 2009 the Gloucestershire Strategic Housing Market Assessment Partnership issued its SHMA together with the associated documents ‘Finalising the Gloucestershire Strategic Housing Market Assessment’ and ‘Estimating Housing Need and Demand in Gloucestershire’ (the Technical Report by Peter Smith). [Document C15]. The latter document was prepared in order to address concerns about the SHMA identified (and explained in the ‘Finalising’ document) with respect to specific SHMA Practice Guidance Core Outputs (3, 6 and 7) on the future number of households, the size of affordable housing required, and tenure split. At ¶4.3 of the ‘Finalising’ document, under the heading ‘Updating the Assessment’, it is recommended that the Steering Group consider updating the SHMA in the 3rd quarter of 2009.

24. Under Section 6: ‘Housing Need – Bringing the Evidence Together’, the SHMA states at ¶6.35 that, for Gloucestershire as a whole, the housing needs calculation has concluded that annual unmet need … is almost identical to the net

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household growth projected, and at ¶6.36 that it is therefore clear that the amount of new affordable housing to be delivered needs to be maximised as far as possible. Whilst recognising (¶6.36) that 100% affordable housing is not practicable … nor desirable on larger sites … as it will not contribute to the creation of mixed sustainable communities, the document states that a careful balance needs to be struck between requirements for affordable housing on the one hand and project viability on the other. ¶6.40 identifies the current backlog of nearly 9000 households in need in Gloucestershire [as] the primary reason why net annual housing need is as large as the projected net annual increase in the number of households. The current number of households in housing need identified for Forest of Dean District is tabulated in the Statistical Appendix as 1473.

The Affordable Housing Site Viability Study

25. The Gloucestershire and Districts Affordable Housing Site Viability Study [Document C16] was issued in April 2008 (as a Final Report). The Study based its appraisal upon an examination of 24 individual sites across Gloucestershire, identified by the 6 Gloucestershire councils. At ¶3.5 the document states that the six Councils currently operate policies seeking affordable housing proportions of between 30% (Stroud, Tewkesbury) and 50% (Cotswold). However higher proportions might be proposed in emerging Local Development Framework documents as a result of the [SHMA] for Gloucestershire of which the present study forms a part. At ¶3.6 the document states that all the six Councils currently seek a balance of social rented and intermediate housing, mostly as a majority of social rented housing [except Stroud & Tewkesbury at 50/50]. After discussion and consideration, all the affordable target options were tested as a 67/33 split between social rented and intermediate housing. Table 3.1 shows that the affordable housing options tested were 30%, 40%, 50% and 60% affordable.

26. At ¶6.24 under the heading Postscript: Changes in Market Conditions the Study states that it is likely that we have entered a period during which any given affordable requirement will be less viable than the study suggests, since the market prices used in appraisals appear to have been at an historic peak.

27. At ¶7.9, under the heading Implications of appraisal results, the Study states that the results from the individual site appraisals suggest that, under a Zero Grant default assumption, an affordable housing target of 30% (20% social rented; 10% shared ownership at 25% share) could apply across Gloucestershire generally. A higher 40% proportion could justifiably apply in many parts of the HMA. Such figures can be compared to the average for the region of 35%, proposed in the Panel’s Report on Draft RSS as work on the [Site Viability] Study neared completion; this latter figure of course allows for the availability of some degree of funding assistance.

28. Associated with the Affordable Housing Site Viability Study and included within the document is the Interim Affordable Housing Strategy [Document C16]. At ¶4 the Interim Strategy states that the present Forest of Dean policy on affordable housing is for an overall target of 40%, of which 70% should be social rented and 30% intermediate housing. While this level of target, and the split between social rented and intermediate housing are fully supported by the existing housing needs evidence, the issue of viability is much more strongly emphasised in recent Guidance. At ¶15-16, with reference to Table 2 (revised) showing

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Viability outcomes on sample sites in the Forest of Dean, the Interim Affordable Housing Strategy document states: (15) with the more generous 50/50 split, the affordable housing policy of seeking 40% is generally deliverable across the Forest of Dean area. There will always be some individual cases that cannot justifiably meet the requirement, and where site specific evaluations will be required. (16) Alternatively, either of the two other options, providing 35% affordable housing with a greater emphasis on social rented provision, would be possible.

The SPD on Affordable Housing

29. The Council’s Supplementary Planning Document (SPD) on Affordable Housing [Document C7 App’x 3] was adopted on 9 April 2009, following consultation during 23 December 2008 - 5 February 2009. (The Statement of Consultation and the List of Comments are at App’ces 4 & 4a to the document). Paragraph 1.1 of the SPD states that the document is designed to provide supplementary guidance on the FoDDC affordable housing policies adopted in the Local Plan, and while it does not in itself make it a policy it will be a material consideration in the determination of planning applications.

30. At ¶6.7 the SPD states that the Council’s Local Plan sets a target that 40% [of] the proposed dwellings will be sought as affordable housing on qualifying housing sites where Policy (R)FH.13 applies; and at ¶6.8 that Applicants will be expected to enter into a legal agreement to provide the 40% of the total number of dwellings that will be sought on site as affordable housing, unless there is a robust justification for reducing this proportion because of impact on economic viability or other acceptable reasons.

31. The Appellant has given notice [Document I/A39] that it intends to seek permission for the judicial review of the SPD, challenging the lawfulness of its adoption.

32. In a letter dated 12 June 2009 [Document I/C23] the Council stated that it had now withdrawn the Affordable Housing SPD and reissued it for consultation.

The S106 Unilateral Undertakings

33. References are made to the completed U/U dated 11 June 2009. Four separate U/U are submitted. Obligations are offered in respect of: affordable housing; public open space; community facilities (contribution); off-site public open space (contribution); education (contribution); highways; public transport.

34. 13% of the total number of residential units in the development are to be affordable. These units are to be distributed throughout the site in groups of not more than 15 affordable units, and are to be designed and constructed to no less a standard than the open market units. The tenure split is to be 50% for social rented and 50% for shared ownership. The obligation makes provision, in the event that grant funding is available and subject to time constraints on notification by the Council, for alteration of the tenure mix to a maximum of 70% social rented and/or for an increase in the proportion of affordable housing from 13% to a maximum of 20%, and/or for an increase in the average net floor area of the affordable housing units up to a maximum of 72.9m2. The obligation makes provision, in the event that a RSL does not elect to acquire the affordable housing or fails to complete the purchase, for sale to eligible persons at 60% of

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the open market value, subject to a covenant securing future similar discount against open market value.

35. In respect of Public Open Space within the site the obligation is to identify, in application for reserved matters, the nature, location and extent of POS to be included within each phase and to construct, lay out and to make available for its intended purpose the POS within each phase before 12 months from the completion date of that phase. The obligation provides for payment of a commuted sum to the Council for maintenance should the POS be vested in the Council, but provides alternatively for vesting in another public authority or statutory undertaker, or for arrangements for maintenance in the event that the Developer and Owner elect to manage the POS. In respect of off-site POS the obligation provides for the payment of a commuted sum up to a maximum of £125,000 for 2½ playing pitches.

36. In respect of Community Facilities the obligation is to pay £60,000 for the purposes of expanding youth facilities at Naas Lane Youth Centre.

37. In respect of education the obligation is to pay contributions of £17,875 annually for 6 years for the purposes of improving library facilities at Lydney Library to meet need generated by the development; to pay contributions to improving the capacity of Whitecross (secondary) School, Lydney so as to meet need generated by the development, following certification that the Council has incurred expenditure, on the basis of £3,133 per qualifying dwelling residentially occupied. The obligation is additionally to make to the Council 4 staged payments each of £27,500 and 1 payment of £25,215 (each payment in advance of the residential occupation of 50-100 dwellings) for the purpose of improving the early years capacity at the River Children’s Centre, Lydney, so as to meet need generated by the development. Additionally the obligation is alternatively that the developer and Owners shall construct a 1-form entry primary school on a specified site within the development; or make the specified site available, serviced, to the Council for construction of the primary school and on receiving a copy of the contract let by the Council for construction of the school, pay a sum equal to the first one third of the contract cost subject to a maximum of £1,083,667.

38. In respect of Highways, the obligation is to make staged payments totalling £62,500 as a sustainable transport contribution to specified footpath and cycleway works and cycle parking facilities; to make staged payments totalling £345,000 as a Public Transport Subsidy as a contribution towards increasing the frequency of specified bus services; to make staged payments totalling £487,500 as a Residential Off-Site Highway Contribution ; and to make staged payments totalling £30,000 for the purpose of monitoring such Travel Plan as may be required by condition attached to the planning permission.

The Inspector’s Question

39. At the Inquiry on 5 May, before the adjournment to 21 May, the Inspector asked for the Parties’ responses to the following question: if the costs and other abnormal expenditure of developing the site are such, at the present time, that the site could not be brought forward without sacrificing a large proportion of the affordable housing that would otherwise be expected, should the site be regarded, for the time being, as a ‘suitable’ site within the meaning of PPS3 ¶54?

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The Case for Robert Hitchins Ltd

Affordable Housing

Policy

40. The Council’s case is to suggest that the proposal should be assessed against a ‘requirement’ to provide 40% affordable housing. That is not supported in policy. Local Plan policy does not establish a requirement or a target for 40%. Policy (R)F.Lydney1 refers to “an appropriate provision” of affordable housing. There is no specified figure. Policy (R)FH.13 does not set a target either – an “element” is to be sought “by negotiation”. Neither policy states that planning permission should be refused if no affordable housing is proposed. The negotiation should relate to “evidence of local need … and to the suitability of the site in question”.

41. The supporting text [Document C2 App’x 14, pp27-30] is not policy, and makes it clear that there is no requirement or ‘target’ for 40% affordable housing. The figure is no more than a ‘starting point’ in negotiations. The supporting text at ¶2.52 explains that the figure of 40% derives from a county wide survey in 1999 which can only look forward 3 years (or 5 at the outside). The 40% figure in the supporting text is not supported by any viability assessment. In these circumstances it cannot be regarded as anything else but an historical claim without relevance to the current appeal and of zero weight.

42. The actual provision will depend on ‘the capabilities of the site concerned’. ¶2.59 of the LP supporting text states that ‘the key to securing the actual provision will be each site’s ability to provide the necessary subsidy and yet still be able to be developed’.

43. Though the Secretary of State in ¶21 of her letter dated 19 February 2008 [Document C2 App’x 4] referred to the figure of 40% and “the requirements of the development plan”, Mr Parker confirms that there was no argument at the Inquiry on that issue.

44. There is no support for a policy requirement of 40% in Policy HO3 of RPG10. Nor is there any such support in Policy H7 of the Structure Plan. Both these documents are of some age, pre-dating PPS3.

45. Nor is there any support for a requirement of 40% in the emerging RSS. Policy H1 of the Proposed Changes RSS, which includes a reference to 35% - not 40% - is still under review. The reference to the dangers of “over ambitious requirements” [at ¶6.1.8] is significant. The Council’s response to the Proposed Changes urges the Secretary of State to conclude that the policy as it stands with 40% is “not workable” [Document I/C21].

46. In any event, as the emerging RSS indicates, consistent with ¶29 of PPS3, it is for local planning authorities to set specific targets for their area. This has not yet been done in Forest of Dean District. The LDF process has a long way to go.

47. The onus in the plan making process is on the LPA to demonstrate that affordable housing targets in policies are both viable and practical. The Council has now adopted an SHMA and a SPD. Neither of these documents has yet been subject to scrutiny in the LDF process. Both have significant deficiencies and no weight should be attached to them.

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48. The Viability Study [Document C16] uses out of date cost and price data predating the SHMA by 12 months. The Executive Summary to the Viability Study states at ¶18 that the Study results were based on cost and price levels as at Q3 2007; as the Report was finalised, in mid-2008, it became clear that a ‘credit crunch’ .. had led to a significant market downturn, and to steadily falling prices. At ¶6.24 the Viability Study states that it is likely that we have entered a period during which any given affordable requirement will be less viable than the study suggests, since the market prices used in appraisals appear to have been at an historic peak. Mr Larkin accepted in cross-examination that the Viability Study could not be relied upon and is invalid for current market conditions and needs to be updated.

49. Similarly the SHMA is founded upon out of date information in relation to house prices and is in conflict with ¶4.37 of PPS12 in this respect. The minutes of the SHMA Partnership meeting on 13 February noted the need for up to date information on for example house prices and the need to update the viability work, but no date has been set for this exercise.

50. Mr Larkin suggests that in the FoDDC area renting is cheaper than buying by some 32%, and that as prices have only fallen by 16% since late 2007 they would need to fall by a further 20% to erode this differential. However, in the same period the Base rate has fallen from 5.75% to 0.5% and has dragged down mortgage rates in its wake. In commenting only on the headline purchase price, Mr Larkin (and/or Mr Smith) have omitted to recalculate the ‘average per week’ cost using the lower mortgage interest rates that prevail in 2009. Both prices and costs have fallen in respect of house purchase but there has been no suggestion that this applies to rental properties.

Site Viability

51. The viability assessment for Area B must have regard to the circumstances pertaining on Area A. The Secretary of State approved the offer of 20% affordable housing on Area A in the light of site specific circumstances and accepted that this was the maximum level of affordable housing that could be achieved on the site. This offer was made prior to current market conditions and moreover was premised on the Appellant accepting sub-optimal land values in order to enable funding for all of the required infrastructure and regeneration objectives for both Areas A & B. The provision of more affordable housing than the site itself could realistically otherwise sustain in terms of viability was offered only because of the ‘hope value’ attached to the potential release of Area B. It is apparent that whilst applications have been submitted separately for Areas A & B, the two sites are inextricably linked and their inclusion within the mixed use allocation land for the east of Lydney (Policy (R)F.Lydney1..) reflects this linkage. Any assessment of the viability of the provision of affordable housing upon Area B should therefore be considered with regard to the level of provision already agreed in respect of Area A, on the basis that the overall site needs to be viable before any part of it can proceed. [Document A3 pp6-7].

52. The original offer of 30% affordable housing that accompanied the Lydney B application (i.e. the current appeal application) was made based upon a relatively healthy economy. However, due to the deteriorating housing market conditions this offer was withdrawn on 17 July 2008. The reversal of the market in this period and the loss of confidence in the house building industry is now established economic history. Since July 2008 conditions have worsened.

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53. Mr Heal is an expert in the field [Document A7 Section]. His comprehensive viability assessment confirms the Appellant’s position that the scheme is only viable on the basis of an affordable housing contribution of 13%. The offer of 13% on Lydney B reflects the level of provision that can viably be delivered having regard to the 20% affordable housing contribution and infrastructure provision already agreed in respect of Area A. The obligation does allow for investment of grant monies which can be used in a number of ways including to increase the number of affordable dwellings up to a cap of 20%. This cap ensures consistency with Site A and is realistic in terms of what grant can be expected to achieve. It will therefore ensure the provision of at least 15% across Areas A and B and allow for the other planning obligations associated with the development. The delivery of the long-standing East Lydney allocation in the Local Plan will then be secured.

54. However, whilst viability assessments are necessary, their usefulness is limited because of inherent uncertainties, and constrained by the inputs. Assumptions must be reasonable and robust. Assessments provide no measure of confidence or risk in the development world, which remain the territory for the expert, the landowner and developer alone.

55. There is in fact much common ground between Mr Heal (A) and Mr Feltham (C) in terms of approach. The integrity of the form of the financial appraisal and the 2-stage approach is agreed. It is agreed that it is appropriate to consider Sites A and B together. Various inputs are agreed, such as the costs of some elements of infrastructure, sales rates and finance.

56. Mr Heal’s ‘final’ appraisals [Document I/A4] are made on the basis of the use of current costs with differences ‘halved down the middle’ and sales values of £190psf and £185psf. This analysis shows that, assuming an overall provision of affordable housing of 15%, there will only be a financial return to the landowner/developer of between 10.93% and 21.16% [Doc I/A4 ¶3.15-3.19 and Document I/A5]. On this basis Mr Heal concludes that any level of affordable housing provision over and above 15% is not achievable.

57. Differences between the Parties in relation to the costs of plot abnormals, infrastructure and build costs are not pivotal to the viability assessments – though the evidence of Mr Bell (A) is fully researched and demonstrated and to be preferred to that of Mr McLearon (C). Similarly, the differences between Mr Heal (A) and Mr Feltham (A) on the sales income to be derived from the Local Centre and the employment land are not pivotal.

58. However, there are fundamental differences between the Parties, firstly on the question of projecting forward costs and values, and on the financial return to the landowner/developer.

59. The approach of Mr Feltham (C) is to project costs and values forward. Mr Heal (A) has not done this and considers that it is incorrect. Mr Heal’s original proof used a Q3 2010 figure from the BCIS index in relation to house build costs. But this was a ‘token’ adjustment of a fall in costs only for the year before construction starts. Mr Heal did not project forward in any other case and his approach to this issue has always been made clear: that projecting forward is completely wrong in principle. It is incorrect to assert that it was the Appellant’s ‘original intention’ to assess all costs at Q3 2010. Valuation assessments are to be carried out using current known costs and values. This is conventional

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practice and consistent with the RICS ‘red book’. The RICS Valuation Guidelines are clear that ‘market conditions prevailing’ at the date of the valuation should be used.

60. By way of illustration, the BCIS General Building Cost Index [Document I/A7 ¶1.2 & App’x 1] shows that building costs at Q3 2010 (the date Mr Feltham indexes to) are higher than at Q2 2009 by 4.5%. The Appellant might have sought to rely on this index but did not do so and stuck to current costs as this is the correct method.

61. In the Godalming appeal decision of 31 October 2008 [Document I/A13] the Secretary of State agreed with her Inspector that the viability of the scheme under consideration should be determined on the basis of current values.

62. It would be unwise to rely on predictions of house sales values and commercial land values, especially in the current unprecedented economic climate. Mr Feltham’s (C) approach depends upon an assumption of a significant, early and maintained market recovery. But he is not in a position to say whether, when or how this will happen. Mr Heal (A) explained that there is nothing to indicate a recovery and the available evidence suggests the opposite. The evidence of sales in Lydney [Document I/C14] does not show any meaningful recovery. This recession appears to be deep and sustained. The unpredictability of the future economy is emphasised.

63. It is precisely because of the uncertainties in future market conditions that the right approach is to base the assessment on current costs and values. It is important to point out [Document A7 ¶7.8] how sensitive the outcomes of the appraisals are to relatively small changes in the Residential Sales income: For example, if Housebuilder Appraisal 1 is run with a sales income reduced by just 5% (£1950/m2, £180/ft2), the effect is to reduce the Residual Serviced Land Value by 15% to £1,478,646 per hectare (£598,400 per acre) and in turn this reduces the Base Land Value in the corresponding Landowner/Developer Appraisal to -£1,239,663, a negative value as total expenditure exceeds the total sales income derived from the sales of serviced land.

64. Mr Heal’s assessments show results using an adopted £190psf, based on up to date estate agency information [Document A2, Appendix ‘Andrews Report’]. Mr Feltham accepts that £190 is a ‘fair/cautiously optimistic view’ of the market, but then he inflates this figure on the basis of his assumption that there will be an early and significant market recovery [Document C10 ¶4.4.2]. Mr Feltham takes £190 as the bottom of the market (which it is not) and then increases this figure by what he calls ‘modest’ amounts. There is no basis for this. Not only is it wrong in principle, but it is also inconsistent with Treasury (and other) forecasts [Document I/A2 ¶2.1(b)]. It is an attempt to increase the viability outcome of Mr Feltham’s assessments. This can readily be seen by comparing his incremental increases of 2.5%, 5% and 7.5% in his first rebuttal [Document C10 ¶4.4.2] with his incremental increases of 7.9%, 9.7% and 11.3% in his second rebuttal [Document I/C1 ¶Section 4]. There is no good reason for this.

65. It would be equally unwise to rely on forward projections of build and other costs. Available BCIS indices reflect current low levels of activity due to market conditions [Document I/A2 ¶3.2]. But if (as Mr Feltham suggests) there is to be a recovery soon, the trend will reverse and costs will in fact rise.

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66. Moreover, it is clear that Government policy to introduce increasingly challenging criteria for Codes for Sustainable Homes will have a significant upward effect on house build costs: at Code 6 these would be 43% over 2006 building costs for a detached house in the medium case [Document I/A2 ¶3.2].

67. Mr Feltham having expressed concern that Mr Heal’s assessment had based the house build costs on Q2 2009 figures, but had based the other costs at Q4 2008 figures - and that not all the figures had been updated in this respect - Mr Heal has produced Appraisals 16A and 19A [Document I/A5] which meet Mr Feltham’s concern. The outcome does not lead to a different conclusion about viability.

Landowner/Developer Return

68. There is a fundamental disagreement as to the interpretation of the base land value for the landowner/developer. A return against expenditure of 20% is very modest indeed [Document A7 ¶7.5, 7.6, 8.3]. It is a ‘bottom line’ which might encourage a landowner or developer to commence development. It is not a ‘target’ or ‘aspiration’ or benchmark for viability. Mr Heal would normally expect a landowner/developer client to require a higher level of return, especially having regard to the risks involved in such decisions.

69. The position of the landowner/developer is very different from that of the housebuilder. Whilst a housebuilder earns a return on a parcel of land over a relatively short period (here, a 20% return over a 2½ year period) the landowner/developer earns a return spread over the lifetime of the scheme, in this case about 14 years, and only about 1.5% per annum based on a total return of 20%. This level of return is very poor indeed, and is untenable. Site A has significant ‘upfront’ costs and there is no likelihood here of any positive balance sheet for several years. Indeed, Appraisals 16A and 19A [Document I/A5] show the scheme in deficit, having allowed for the receipt of income from land sales, for over 10 years and 7 years respectively. Mr Feltham ignores this matter.

70. Moreover, there is no separate allowance in the 20% figure for land acquisition costs, planning costs and other overheads [Document A7 ¶6.19, 7.4 and 8.3, and Document I/A2 ¶3.10-3.13]. These costs are significant. They must be taken into account when drawing conclusions on the base land value for the landowner/developer. Mr Feltham has chosen to ignore development industry economics, and his assessment is therefore fundamentally flawed.

71. Mr Feltham runs his appraisals on higher levels of affordable housing and seeks to take advantage of the ‘surplus’ coverage by simply increasing the size of the open market units and claiming additional revenue. This approach is fallacious. The Appellant has chosen the unit size and mix carefully with research into local demand, supply and prices. It is simply incorrect to assume, as Mr Feltham does, that an increase in size will increase the price. It ignores the fact that there will be competing housing developers at East Lydney. A prospective purchaser in this price sensitive area will look elsewhere for a house within budget rather than unnecessarily spend more for a house unnecessarily made larger. There could be no additional revenue here.

72. Mr Feltham also suggests [Document I/C1] that additional units could be provided for extra revenue. But this is a flawed argument based on speculation. The application is for 750 dwellings – any increase in the number of units will

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require a new application. There can be no certainty about densities and requests for legitimate planning gain.

73. Mr Feltham also suggested that the ‘fairest approach’ would be for some sort of review or clawback methodology. No evidence was put to demonstrate how this could work.

74. Mr Feltham’s assessment inflates sales prices, deflates construction costs, wrongly regards 20% as a target final output return, makes no comment about land acquisition costs and demonstrates a thorough lack of understanding of the development decision making process. Mr Heal’s assessment is robust and properly takes into account the issues and risks that the landowner/developer will have to consider before commencing development. The clear conclusion is that the development is unviable on the basis of more than 13% affordable housing.

75. The Council now proposes a 50% clawback on any earnings on the investment above £185/ft2 sales price: that is, before the landowner has recovered its land and planning costs and overheads, and before it has drawn anywhere near earning a reward appropriate for the risk – which at least must be equivalent to that which the Council considers it acceptable for the housebuilder to earn.

Housing Land Supply

76. Mr Dobson calculates [Document A6 App’x4 Table1] that there is only a 2.87-years’ supply of housing land in the District. Mr Dobson uses the residual Structure Plan requirement and the emerging RSS requirement for 3 years, and adjusts to reflect actual completions. Mr Dobson’s approach is entirely consistent with the advice in the DCLG Advice Note.

77. Mr Gibbons [Document C8] takes no account of actual completions. He agreed that the technically correct approach is that set out in the advice note. He appears to argue that LP Policy (R)FH.2 (inserted after intervention by the Secretary of State) somehow allows or obliges him simply to look to future years and emerging strategic figures. But there is nothing in the policy or supporting text that support his approach. Nor does it make sense to wipe out past build rate failures. In any event, LP Policy (R)FH.2 is not saved, and so this purported justification is removed.

78. The extent of the shortfall is surprising. There is a pressing need for more housing land to come forward. The proposal should be considered favourably having regard to PPS3 ¶71. The appeal proposal will obviously make a very significant contribution to land supply – effectively releasing that part of Site A in the control of the Appellant and the whole of Site B – and measures extremely well against all the considerations in PPS3 ¶69.

The Inspector’s Question

79. It is not proposed to sacrifice a large proportion of the affordable housing that would otherwise be expected. The level of affordable housing proposed is that which can be expected through a proper application of policy.

80. Regardless of the level of affordable housing proposed, the site is suitable to support a mixed community in terms of household size, family size and age of residents [Document A2 ¶5.4]. The provision of a significant amount of affordable housing as proposed will further broaden this community mix in terms of tenure and income levels.

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81. The site is identified in the adopted Local Plan and confirmed by the Local Plan Inspector as being a sustainable location for major mixed use. A refusal on the grounds that the site should not for the time being be regarded as suitable would inevitably prevent the delivery of any houses or employment land4 and other benefits from the largest development site in the District.

82. There is a clear need for additional housing (both affordable and open market) in the Forest of Dean and the Gloucester/Cheltenham Housing market Area. The Council accepts that the Lydney site is the most important site in the Local Plan for the delivery of both housing and employment. Any refusal of planning permission would undoubtedly contribute to delays in achieving the regeneration objectives, both for housing and for employment, in the Forest of Dean District. The absence of any clear evidence from the Council of sustainable alternative sites where this housing and employment could be provided at the present time is a factor which should be given considerable weight.

83. The proportion of affordable housing is highly dependent on viability and the Local Plan policy does not require that a scheme which produces less than a specified level of affordable housing should be refused. On the contrary, the Local Plan only requires an ‘appropriate’ level of affordable housing and in determining this viability is obviously relevant. Granting planning permission now will at least deliver 15% of the total dwellings constructed over the next few years as affordable housing on Sites A and B: whereas a refusal will deliver nothing across the whole site and no employment land either.

84. PPS3 ¶54 indicates that the main criterion in assessing ‘suitability’ at any point in time is to ensure that the site offers a suitable location for development now and would contribute to the creation of sustainable, mixed communities. In this context the site would be available to commence now and continue within the 5-year timeframe; and the mix of uses overall will contribute to the creation of Lydney as a sustainable community (as accepted by FoDDC and ratified by the Local Plan Inspector).

85. Any assessment of the suitability of a site should also have regard to the PINS guidance [Document A6 App’x3]. This indicates that where sites are allocated or have planning permission these can reasonably be regarded as being ‘suitable’ but it may be necessary to assess whether circumstances have changed since allocation or planning permission was granted that could alter the suitability of the site for housing. In this case the only change relates to the inclusion within the application of a lower proportion of affordable housing than is being sought by the Council.

86. On the question of timing, the recent letter of 12 May 2009 issued to Chief Planning Officers by CLG proposes some important changes to Housing and Planning Delivery Grants, connecting these more closely to adequate supplies of residential land (and the completion of a SHLAA with an identified 5-year supply of deliverable sites in place) to ensure that the grant continues to provide the strongest possible incentive to local authorities in significantly changed economic circumstances. The letter emphasises that the key issue is to ensure that the supply of land for housing is deliverable: (i) by reviewing existing sites to judge whether there are actions that can be taken to unlock sites and allow

4 Lydney B together with Lydney A.

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development to go ahead; and (ii) looking carefully at sites with the development industry and all new opportunities.

87. The Council, in its own response to the Inspector’s Question, does not demonstrate why a lower level of affordable housing than it might expect renders the site unsuitable for development in terms of PPS3 ¶54. The Council does not argue that the amount of affordable housing would be too low to achieve a mixed and balanced community at East Lydney.

88. A definition of a site as ‘suitable’ only if it can deliver the ‘expected’ level of provision of S106 obligations (including affordable housing) is unduly restrictive and does not bear scrutiny. Such a definition might be justifiable if the original policy requirement for various obligations was based on assessment of site viability but this is not the case.

89. PPS3 ¶29 and Circular 05/2005 ¶ B10 both contain the advice that planning authorities will need to look carefully at viability issues when seeking contributions for affordable housing and other physical or social infrastructure. If no site were ‘suitable’ unless it delivered policy expectations, that advice would be redundant.

Community Facilities

90. LP Policy (R)F.Lydney1 refers to an appropriate contribution to the provision of, or improvement of an existing community building to meet the needs of the occupants of the site. It is agreed that a financial contribution is appropriate to satisfy this policy [Document C1 ¶4.10]. The Appellant’s offer to pay £60,500 for the improvement of the Naas Lane Community Hall is accepted by the Council to be consistent with the policy. It is agreed that the contribution is consistent with the policy tests in the Circular, especially as it is nearby and convenient to the appeal site.

91. However, the LPA seeks an additional £175,000 to be spent on the existing Lydney Town Hall. The LPA’s purported justification is dependent upon the draft Business Plan [Document I/A15] which the Town Council provided on request from Mr Hillier. The contents of the draft had not been approved by the Town Council and had not been out on consultation: the methodology for consultation had not yet been decided. The objectives in the Business Plan make no reference to the proposed ‘Lydney B’ development and are all directed to existing deficiencies. It is clear that the ‘short term’ projects set out in Appendix 1 of the Business Plan are related not to the proposed development – to a need for expansion or extra capacity – but to repairs and ongoing maintenance. Advice in ¶ B5 and B19 of the Circular provides no support for such an approach. The LPA does not explain its approach in terms of contributions pro-rata with other developments in Lydney. The requirement is unreasonable.

Youth/Adult Off-Site Pitch Provision

92. The principle of a financial contribution to existing off-site pitch provision is in accordance with the Local Plan and is agreed with the Council (the topography of the appeal site is unsuitable for on-site provision). The Appellant has offered to make a significant contribution towards the improvement of off-site pitches at the Lydney Recreation Ground. The expected cost is around £125,000. The rationale for the proposal is explained in Mr Dobson’s proof [Document A5 pp49-50] and in the Appellant’s Position Statement [Document I/A18] on this topic.

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However, the LPA has persisted in its requirement for in excess of £1.7million in relation to off-site pitch provision.

93. Despite repeated requests, the LPA has never provided a proper justification for the requirement. This is evident from the correspondence [Document I/A16]. The LPA approach on this matter has been inconsistent and confused. The original figure of £1.9 million appears to derive from Mr Donovan based on what was referred to as an LPA SPG. The LPA was unaware of this document, or, if aware, did not consider that it should be applied. But early in 2008 the LPA agreed with the Appellant that the right approach was to examine the pitch provision in Lydney and to determine the requirement arising related to the standard in Policy (R)FBE.11. But notwithstanding this agreement, officers then continued to seek a contribution based upon the formula. The obligations table submitted by the LPA on 19 May 2009 states a requirement of £720,000 (reduced from £1.8 million) without reference to the formula. This appears to be, finally, an acceptance that reliance should not be placed on the formula.

94. The Local Plan raises further doubts about the document. ¶6.46 does not make it clear whether or not there was at the time of adoption any formal adopted (rather than just ‘prepared’) SPG. But whatever the case, it refers to a review of the document and forthcoming consultation. Mr Gibbons provided a minute [Document I/C7] showing adoption of a SPG in 2000. But this does nothing to explain ¶6.46 of the Local Plan or what has happened since adoption of the Local Plan. Certainly the 2000 SPG is out of date, because it was prepared before 2000 with reference to superseded national guidance. Any review of the document has not been provided to the Inquiry. The SPG was not used in the ‘Lydney A’ appeal. In these circumstances, the SPG can carry no weight at all, and so there is no basis for applying the formula.

95. All Parties are agreed that the contributions are best spent on improving the drainage at the Lydney Recreation Ground, where there is not only the potential to improve the drainage of the existing fields but also the possibility of a better arrangement of pitches. The grounds are in public ownership and are near the appeal site. The other site put forward by the LPA is south of the A48 Bypass, beyond the 1.2km Fields in Trust distance, and with no proven safe, convenient crossing point. Restoration of that site requires special costs which inflate the overall cost figure. The right approach, consistent with Circular 5/05, is to consider actual costs of improvement related to the chosen site. There is no requirement in the Local Plan for the provision of changing rooms. ‘Facilities’ in Policy (R)F.Lydney1 refers to open space – see ¶6.45 of the Local Plan. Pitch provision is what is required.

96. Mr O’Donovan produces no details for his figures, nor any contractor’s costs estimate. His costs estimates were based upon mere ‘discussions’ with the Deputy Monmouth Property Manager. The BCIS figures used by the Appellant are much more reliable. A changing room recently commissioned by RHL was based on a BCIS construction cost figure of £1300/m2, compared with Mr O’Donovan’s figure of £3400/m2.

Education

97. The financial contributions towards libraries, early years and secondary education are agreed between the Parties. However, the County Council criticises the S106 obligations, essentially on the basis that there is no bond to further secure the

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payment of the contributions, and argues that a S106 obligation is not sufficient. The S106 legislation, devised to allow for financial contributions to be made, specifically includes enforcement mechanisms and the law provides for injunctive relief if there is any breach of an obligation. Parliament did not consider it necessary to add to this a further requirement in the event of default. There is in this case no legitimate and powerful reason for a requirement for bonding. There is no evidence to justify such a requirement. The requirement is neither necessary nor reasonable in the terms of the Circular. Nor is there in this case any policy support for the imposition of bonds. The S106 obligations are in accordance with the Local Plan.

98. The LPA fails to acknowledge that there will be sufficient value in the land to cover funds committed in the S106 obligations. The LPA fails to address the Bishops Cleeve decision [Document I/A 10]. In that case, the Inspector and the Secretary of State acknowledged the potential difficulties that bonds create: obviously bonds would impose an even greater financial burden upon the Appellant. They referred to the available means by which authorities can obtain funds as needed. They also considered it significant that there was no SPD to provide support for the use of bonds. The mere possibility of insolvency – which in the case of the current Appellant is without foundation or any supporting evidence – is insufficient to pass the tests of Circular 5/05.

Highways

99. The only outstanding issue relates to the Highway Authority’s request for bonding. The Appellant’s case on bonding is set out above.

Flooding

100. Mr Ian Walton of Bureau Veritas appeared at the Inquiry in order to address concerns raised by residents in relation to flooding, and to confirm the outcome of the meeting between Bureau Veritas and the Environment Agency, which prompted the Agency to withdraw (in its letter dated 21 January 2009) its initial objection to the proposal.

101. As stated in its letter of 21 January, the Environment Agency is satisfied that the financial contribution from the ‘Lydney A’ application is intended to reduce flood risk at the offsite culvert at Lakeside Avenue that may arise from any residual surface water runoff within the wider catchment. Therefore we are satisfied that this proposal has played its part in reducing this offsite problem. This approach was endorsed by the Secretary of State in her decision relating to the ‘Lydney A’ appeal.

The revised surface water drainage scheme now shows that the vast majority of all surface water attenuation will be made up of SUDS systems, either above ground storage ponds or permeable paving. We welcome the changes made to the earlier drainage strategy in this regard.

102. The Environment Agency was initially concerned that Bureau Veritas had adopted the ADAS 345 Method in calculating the greenfield runoff rate, in preference to the IOH Report 124 Method which is the recognised equation for calculating greenfield surface water runoff rates from new development (there being significant discrepancies between the two). However, the Agency now recognises that the soil type used in the IOH equation does not represent the predominantly clay type nature of the soil, as well as not making any allowances

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for slopes. The Agency has therefore agreed with Bureau Veritas that the 10.2 l/s/h (litres per second per hectare) greenfield discharge rate can be used for this site on the basis that this will be used for all events up to and including the 1 in 100 year storm event plus 30% allowance for climate change rather than a variable discharge rate. This approach will mean that in bigger storm events the site will contribute to a reduction in surface water runoff. In consequence the Environment Agency withdraws its objection subject to the imposition of 2 conditions (recommended conditions 16 and 17).

103. With regard to the concerns expressed by Mr Walt Williams, analysis completed to inform the planning application for the ‘Lydney A’ development demonstrated that whilst the existing culvert did not have the capacity to pass the more extreme flood events, the flood risk arises primarily from the design and maintenance of the inlet screen at the entrance to the culvert. Improvements to the inlet to the culvert at Lakeside Avenue have been agreed as part of the ‘Lydney A’ planning permission and, subject to the implementation of that permission, there will be a reduced flood risk to vulnerable properties. This reduction in flood risk will also mitigate the residual risk of a failure of the surface water management system serving the development the subject of the current appeal. This principle has been agreed with the Environment Agency.

104. The 30% allowance for the impact of climate change on peak rainfall intensities is considered to be the best currently available information as published at PPS25: Development and Flood Risk, Table B2. The preliminary design of the surface water management system has been agreed with the Environment Agency. The strategy adopted will limit the runoff from the site to that equivalent to the runoff from the undeveloped site during a 1 in 2 year storm irrespective of the actual return period of the event. Therefore, the proposed development will effectively reduce runoff from the site for the more severe storms, reducing the flood risk downstream.

105. Mr Blake did not suggest, nor was it suggested during the Inquiry, that the proposed development would increase the risk of flooding either at Station Road or at the Recreation (Trust) Ground. Recreation is a ‘water-compatible development’ (PPS25 Table 2). The improvements proposed by the Appellant would reduce the time for the facilities to become playable again should flooding occur. However, the Recreation Ground lies within the flood plain.

Other Matters Raised by Interested Persons

106. The need to revitalise the area forms part of the current development plan, and is specifically highlighted in the RSS Proposed Modifications under Policy ADD1 – Priorities for Addressing Deprivation and Disadvantage. Recommended Condition 23 which has been agreed with the LPA and requires the phased servicing of the employment land permitted on the ‘Lydney A’ site addresses the point raised on the link between housing and employment. Mr Williams’s suggested condition would not be compliant with Circular 11/95 on the Use of Conditions in Planning Permissions. For example, “employment creation” depends on others’ actions and so would not meet the test of reasonableness.

107. On the access point made by Mr Blake, there are 2 accesses to the Recreation Trust Ground, via the car park off Hams Road: one near the skateboard park and one near the tennis club.

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The Case for the Forest of Dean District Council

The Housing Allocation

108. The allocation is on the terms of LP Policy (R)F.Lydney1 read with the strategic allocation policy (R)FH.1. It can be seen that the allocation for the land east of Lydney is the largest allocation by far in the Local Plan. It is strategic in that it makes the major provision for housing in the District.

109. However, while development for housing is important, the LP allocation is in no sense a ‘carte blanche’ for housing development. It is clear that the east of Lydney development – and this site – should only come forward if it can fulfil the terms of the policies, the site specific details of which are set out in (R)F.Lydney1. One of the most important features of that policy is the provision of affordable housing.

110. The Appellant has agreed with FoDDC and GCC that it will make appropriate contributions to various elements of infrastructure in accordance with the terms of LP policy. Subject to viability, the matters which remain at issue are affordable housing, bonding (for educational provision) and community benefits.

Affordable Housing

111. The expectation of affordable housing on the site is justified by policy: Local Plan Policy (R)F.Lydney1, (R)FH13, and the supporting text to those policies at ¶2.53. Mr Parker accepted that, as a matter of principle, affordable housing should be provided; that the Secretary of State attached considerable importance to it; and that there was a need for affordable housing in the District. The up-to-date SHMA shows that his acceptance of the need was both sensible and justified. It should be noted that Mr Parker’s evidence5 was to the effect that FoDDC had not demonstrated robust evidence in a form appropriate to satisfy the provisions of PPS3 and hence undermined its ‘aspiration’ to achieve 40% affordable housing. It will be noted that a properly produced and adopted SHMA has now been placed before the Inquiry [Document C15].

112. It must be remembered that although 20% affordable housing was agreed for Lydney A, on appeal, by the Secretary of State, neither the SHMA nor the Council’s SPD on Affordable Housing was available at that time. And it was accepted by FoDDC and endorsed by the Secretary of State that the heavy infrastructure costs placed on Lydney A (and to be supported by 300 dwellings as opposed to 750 for the current proposal on Lydney B) justified a provision of affordable housing of 20% which was half of what she would normally have expected (SoS letter 19/02/08, and IR para 3.22-3.23 and 6.31 [Document C2 App’x 4].

113. The Appellant disputes that the Council is justified in seeking 40% affordable housing on site, with a 70%/30% tenure (social rented/intermediate) split, and with the RSL paying 55% or 60% of Open Market Value of intermediate dwellings. There is a further dispute as to the percentage and tenure split

5 Mr Parker’s Proof and Appendices [Documents A3 & A4] were drafted and submitted by Mr Lacey, who in the event was unable to give evidence and was replaced by Mr Parker. Later Inquiry material was submitted by Mr Parker.

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deliverable by the site (the Viability issue). The Council’s position is justified as follows.

114. Under LP Policy (R)FH.13 the affordable housing provision sought will be related to evidence of local need in the District, including housing need surveys, and to the suitability of the site in question. According to supporting text ¶2.51, the most important way in which affordable housing is expected to be provided during the life of the Plan is by the provision of a share of affordable housing in conjunction with the development of the Plan’s larger sites. Having referred to the then Housing Needs Survey and the requirement for affordable housing disclosed by it, the Council concludes that the figure that can be justified given the housing numbers likely to come forward on appropriate sites is 40%. This figure will therefore be used as a starting point in all negotiations for affordable housing, though of course the actual provision will depend upon the capabities of the individual site concerned. According to ¶2.56 it is unlikely that all of the current supply of committed sites will in reality be able to provide the type of housing required. This would tend to increase the percentage that will be sought on eligible sites in order to compensate for those that are not.

115. At ¶2.186 and 2.196 of his Report the Local Plan Inspector endorsed the Council’s approach with a starting point of 40% for affordable housing contributions but recorded that, for various reasons, this was unlikely to be achieved on every site and that in any event the total provision of affordable housing was likely to undershoot the estimated total need [Document C2 App’x 13].

116. The Secretary of State’s ‘minded to approve’ letter of 19 February 2008, which forms part of her decision of 1 July 2008, makes clear at ¶21 and 32 that she would normally expect to see in accordance with the requirements of the development plan the provision of 40% affordable housing.

117. The SHMA provides evidence of need for a proportion of affordable housing much greater than the 40% required, and for at least a 70%/30% tenure split. It indicates in relation to the need for affordable housing that:

1) There remain significant levels of housing need, assessed to be a net need of 289 per annum;

2) Set against the projected RSS delivery (using the July 2008 draft Panel figures) of 310 new homes per annum there would be a requirement for 93% of new affordable housing;

3) There is a need for additional social rented dwellings of around 83% of the total need across all sectors of need, including a high level of need for family sized houses;

4) Based on what is submitted to be an up to date and robust assessment which has been carried out in accordance with PPS3 and the SHMA Practice Guidance, there is clear evidence of affordable housing need to support the Council’s in-principle approach of seeking 40% affordable housing and a 70%/30% tenure split.

118. Subject only to the issue of viability, the Appellant should be offering an obligation to secure the provision of affordable housing on that basis. Should viability be problematic on a particular site, then ‘levering’ in grant funding to

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support the provision should be sought and provided for in the planning agreement to retain the maximum opportunity to deliver affordable housing for eligible sites.

119. The Appellant’s approach, against the background that Mr Parker accepted that affordable housing should be provided and that there was a need for it in Lydney, is that the policies in RPG10 and the Structure Plan are not proportion- or tenure-specific.

120. However, RPG10 and the Structure Plan are both to be replaced by the emerging RSS which is likely to be adopted in June 2009. The RSS expects at least 35% of affordable housing across the region. Given that the LP threshold for affordable housing sites is for those of 15 units or more; or which are larger than 0.5 hectares in towns/villages of greater than 3000 population (or 5 units/0.2ha in other locations), it is likely that the flat rate 35% figure on all housing development in the emerging RSS will need to be exceeded on those sites to take account of the other sites which will not come forward.

121. The emerging RSS expects the 35% figure to be dealt with in LDDs as ‘targets’. In due course this will be done in the LDD for Forest of Dean District, and the use of the word ‘target’ will be entirely appropriate.

122. As a matter of fact, both the SHMA and the research done for the Local Plan Inquiry show that 40% (whether expressed as a target or as a starting point) was only a small part of the affordable housing need that was established. It should be no surprise therefore that FoDDC expect 40% and, given what is said above about the implementation of the 35% target in the emerging RSS, that the starting point may need to be exceeded.

123. It is now agreed that grant can be used to subsidise further volume of affordable housing, tenure split and/or increased quality. However, the Appellant’s draft unilateral undertakings place an unnecessary and unjustified restriction of 20% affordable housing on site, with grant. There is no sensible reason for artificially restricting the effect of any grant by a cap such as this. There is no policy justification for such a restriction (none was suggested by Mr Parker for the Appellant) and it runs counter to policy which provides for a 40% starting point and to the emerging RSS which expects at least 35%.

The Strategic Housing Market Assessment

124. The SHMA provides evidence of the housing need in the locality. The SHMA procedure followed that outlined by the SHMA Practice Guidance V2 August 2007. It was audited and this audit was considered and accepted by the Partnership on 13 February 2009. It therefore meets the criteria for a robust and credible SHMA. It is a material consideration which carries significant weight. It should not be confused with a SHLAA which relates to different issues, specifically constraints on development including lack of viability (PPS3 Annex C).

125. PPS3 nowhere states that reference to a properly constituted SHMA should not be a material consideration in any event (¶22, 29, 33 and Annex C). In PPS3 ¶33, information contained in SHMAs is cited as an example of evidence of current and future levels of need and demand for housing and affordability. It is not therefore contrary to policy to rely on the SHMA as evidence of the need for affordable housing.

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126. Three other points are relevant. Firstly, the phrasing of PPS3 ¶29 indicates that the SHMA would have been expected to be in place before the LDD was approved. Secondly, PPS3 does not identify a specific need for a viability assessment as part of a SHMA, but as part of a SHLAA. Mr Parker accepted this point when cross-examined.

127. Thirdly, the SHMA itself recognises the need for future updating (at Section 4 of the Management Summary to the SHMA). That the SHMA may need to be amended in the future does not alter its ability to provide evidence of need for affordable housing at present. Further, the fact that it may, in the future, require amendment does not alter the significant weight that should be given to it on the issue of need.

128. The Technical Report by Peter Smith for the SHMA (and included in Document C15) used Housing Register data showing that incomes of households on the Register were concentrated to a significant extent in the lower income bands. The Report did not use ‘gross figures irrespective of need’ as suggested (incorrectly) by Mr Parker. SHMA Practice Guidance Version 2 includes concealed households among those considered to be in housing need.

129. The Technical report by Peter Smith also contains (at ¶6.48-6.52) a price sensitivity analysis in line with the instruction given on p46 of the SHMA PG. This analysis focuses on the private rented sector because renting is cheaper (in Forest of Dean District, at Q1/2008, by 32%) than buying. The price sensitivity analysis examines the effect of a 10% fall in market rents on the levels of housing need.

Housing Land Supply

130. When the RSS is adopted the approach and figures from the emerging RSS used by Mr Gibbons [Documents C8 & I/C9] will show that there is a 5-year housing land supply 2008-2013. There is no evidence that the Secretary of State is likely to use any different figures that could produce a different result from those figures in his tables. The number of completions in the first 2 years of the RSS period is 610, and the number so far recorded (1 April-31 Dec 2008) is 259. With no more completions in the final quarter this gives an average of 290 completions per year, against a requirement for 310, and overall over 3 years 93% of the RSS completions have been achieved. The Council assumes that during the 5-year period 150 completions will come from the ‘Lydney A’ site [Document C8 ¶6].

131. Mr Dobson’s calculation depends upon factoring in the figures from the Gloucestershire Structure Plan which is close to expiry. The Structure Plan strategy of providing housing in excess of the forecast was in effect taken out of the Local Plan by the modifications necessary to adopt it in 2005, following a holding direction from the Secretary of State. Mr Dobson calculates a 5-year requirement based on the need to provide for the remaining balance of the 1991-2011 Structure Plan requirement, and thus uses an annual requirement of 853 rather than 348 (6950÷20) – that is, the balance of the number of dwellings built mid-1991 to April 1 2008, deducted from the total SP requirement of 6950 [Document C8 ¶16]. This approach is wholly artificial, depending on a snapshot which bears no relation to the reality of housing land supply over the next 15 years. Whatever conclusion the Secretary of State reached in the Lydney A appeal is not now relevant. The RSS is now close to adoption, attracts

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substantial weight and makes a material difference to the provision. Mr Dobson’s approach depends on an advice note from The Planning Inspectorate. It is not a PPS, its status is not clear, it has not been consulted on.

Site Viability

132. The viability of the development is in dispute. The issue relates to the proportion of affordable housing and other S106 contributions that the site can viably deliver. The contributions that are sought are set out in Appendix 1 to Mr Hillier’s rebuttal Proof [Document C4] and are approximately £10 million on the latest figures.

133. Put simply, the lower the costs and the higher the sales values for the house builder, the higher the proportion of affordable housing that the site can support. One of the costs incurred by the house builder is that in relation to the land: the cost of the land is affected by the costs incurred (planning gain and infrastructure) and the sales income (for the local centre and employment land) achievable by the Appellant.

134. Consequently, any savings that the Appellant can make on the planning obligations (for example, building the primary school themselves may save around 35% of those costs, £1.138 million) would have the effect of increasing the available funds for other S106 obligations. This cost saving could be passed on to a housebuilder so that, for example, more affordable housing could be supported by the development.

135. Social housing grant may be available to increase the amount, tenure mix and/or quality of affordable housing. Mr Feltham has included the possible impact of social housing grant in his final valuation appraisals.

136. It is agreed that Lydney A and Lydney B should be assessed together. However it is appropriate to remember that, as the level of housing previously agreed on Lydney A is fixed, the level of affordable housing on Lydney B should take account of that fact to ensure that the correct level is reached overall. This is demonstrated by the table at ¶3.5.4 of Mr Feltham’s second rebuttal [Document I/C1] and appeared to be undisputed.

137. The programme for the development is set out by Mr Heal [Document I/A2 App’x 11]. Infrastructure development and S106 payments are set out in a phased programme running from April 2010 to March 2024. The programme indicates that the last unit of residential land sold from the Appellant to the housebuilder is scheduled to take place in 2022. The Appellant’s reliance on land supply can therefore be of only limited relevance.

138. It is possible to lessen the effect of any increased unit size of affordable housing through either altering density or size of dwellings: a successful application has already been made to alter density per hectare on Lydney A. This is therefore a reasonable approach to take, and bigger houses would, as stated by Mr Feltham, result in increased profits for those dwellings. This is fully explained in Mr Feltham’s second proof [Document I/C1 ¶3.6].

139. The Appellant’s current position on the appropriate date for costs indexation is significantly different from that in Mr Heal’s initial proof [Document A7 ¶5.2.3], where costs were to be indexed to Q3 2010. Mr Heal in his rebuttal proof provided current costs (Q2 2009). When questioned about this in the Inquiry, he

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stated that it would be incorrect to project values or costs where there were uncertainties about the future. It is submitted that, due to the inconsistency of this statement with Mr Heal’s earlier proof, it can and should be disregarded.

140. The Appellant relied upon a quotation from a Treasury document to support its pessimistic sales forecasts; however, the context of the quotation is that in a subsequent paragraph the Treasury stated [Document I/C15] that it expected house prices to recover and grow at rates above national earnings once normal lending resumed.

141. Costs should be indexed forward. It is standard practice to do so; this is indicated by the bottom 2 rows in the Appellant’s costs plans (providing values excluded) [Document A8 App’x 11]. These rows provide for indexation to start and to mid-point of construction.

142. Even if it were not standard practice to do so, costs should, in these circumstances, be indexed forward. Firstly, the construction is programmed to take place over a number of years; therefore the costs and values should be indexed to take account of the duration of the development. Secondly, the current market conditions are so unusual that it would not be a reasonable approach to take current costs and values only – taken as a kind of snapshot at the most favourable point of the development from the developer’s point of view when offering S106 obligations.

143. For the reasons given above, the appropriate BCIS date is that for Q3 2010. Development will not have started before this date. It is therefore inappropriate to use current costs.

144. Were the Appellant to have indexed costs as Mr Heal’s first proof stated, its projected costs would have been lower. There is no good reason why the suggestion, made by the Appellant initially, that costs be indexed to Q3 2010 should not be followed.

145. When external works are to be undertaken by the housebuilder, source data become an issue. The mid-1990s data used by the Appellant and then indexed up, are taken from the Appellant’s (i.e. RHL’s) own projects. RHL no longer undertakes such projects. The effect of using such source data is that it provides an unrealistic base value, given that the type of developer likely to undertake the schemes would have costs significantly different from those of RHL, not least due to the developer’s ability to buy in bulk. The external works, as well as the house build costs, should be based upon the BCIS index and not upon RHL’s historic data. Using figures indexed to Q3 2010 would, as demonstrated by Mr Feltham’s analysis in his Second Rebuttal Proof [Document I/C1], enable the site to support a great deal more affordable housing than that claimed by the Appellant.

146. The Appellant’s case that the build cost per house is increased by the effect of the Code for Sustainable Homes is based upon incomplete calculations. Neither the effects of the reduction in Stamp Duty, nor any costs savings made nor any benefits gained as a result of achieving Code 6 are taken into account. Moreover, the Appellant relies upon the costings for a detached house.

147. The Appellant’s calculation of its profits at 1.45% per annum is misleading: it implies all expenditure is incurred on the first day and all value is released on the last day of the development. This is not the case, as evidenced by the structured and phased programme of development undertaken by RHL and the input of

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value from sales [Document I/A2 App’x 11]. The actual period when money is not available is therefore considerably less significant than that assumed in the Appellant’s 1.45% calculation, and so that figure cannot be relied upon.

148. It was agreed between the Council and Mr Hill of RHL that land acquisition costs were included in the Base Land Value figures [Document 3 SCG – Landowner and Householder Appraisals]. The Appellant now appears to be attempting to add land acquisition costs into the appraisals. It is clearly inappropriate to do so following the formal and signed agreement in the SCG. The signed SCG should be taken as a clear indication that these costs are already included in the Base Land Values.

149. The sales value assumed by the Appellant does not take account of the fact that some recovery is likely over the life of the development (April 2010-March 2024). While Mr Heal demonstrates that the difference of £5psf has a considerable impact on viability, he demonstrates this only negatively. Mr Feltham pointed out that there would be a similar effect on viability, but in a positive direction, if the sales value were to increase by £5psf.

150. The 1990s recession was characteristically very different from the recession currently being experienced, and the Appellant’s reliance on 1990s figures is illogical.

151. The Appellant takes no account of the time lag between effects on the house price market and the effects on building costs. Mr Feltham [Document I/C1 App’x 11] shows previous experience to have been that house prices increase prior to building costs.

152. If house values were to maintain current values for the next 15 years, it is unlikely that a housebuilder would want to start building. It is reasonable to assume that a housebuilder might wait until some hints of market recovery were visible before commencing a development project. That being a reasonable assumption, it is consequently reasonable to follow Mr Feltham’s approach, and assume increased levels of house sales income.

153. Contrary to Mr Parker’s claim that only 1 house was sold in Lydney from 1 Jan 2009 – 29 April 2009, the figures provided from and used by the District Valuer’s Office [Document I/C14] indicate that many more properties were in fact sold in that period. Mr Feltham’s source, being used for the purposes of stamp duty land tax, is to be preferred over the Nethouseprices website used by Mr Parker. The greater number of houses sold indicates that the Appellant may be viewing the house sales situation in Lydney with particular and unnecessary pessimism. Mr Heal [Document I/A2 App’x 11] himself phases sales rates to reach maximum level per annum in Year 4 (they are at much reduced rates for the first 3 years), suggesting an acknowledgment that the market will improve.

154. Costing the work on estate roads at current level has the effect of unnecessarily inflating costs. The work will take place at some time in the future: the first sales are not programmed until Q3 2010. It is therefore reasonable that the base costs should be projected forward according to the approach of the 2 experienced professionals, Mr Feltham and Mr McClearon.

155. On plot abnormals, the diagrams [Document I/A9] produced by Mr Bell (A) are misleading as they do not show the effect on ground level from work that would have been done to level out the roads in between the houses, and make an

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allowance for additional cut and fill to the roads (under an item called ‘core frontage’). The Appellant relied upon NHBC Guidelines to justify the proposed use of a suspended slab floor for the garages but did not confirm the point by reference to any specific point in the Guidelines. Nor could the Appellant confirm by reference to any specific requirement of the Environment Agency that the number of silt traps (re permeable paving) needed to be increased to 1 per dwelling. The Council therefore reasonably assumed that 2 dwellings could share 1 silt trap.

156. In relation to the Landowner/Developer Appraisal, the Council’s position as set out in the SoCG is that the value of Crump Farmhouse, which is situated within the Local Centre for the combined development, should be included in the base figure: Mr Heal’s appraisal excludes it. It is unlikely that no value at all can be attributed to Crump Farmhouse, which is a Listed Building. Mr Feltham provided documentary evidence of the potential sales value of the local centre land. The prices ranged from £687,000 - £902,500 per acre which, even without Crump Farmhouse, indicates a likely sales value well in excess of £1.1 million.

157. On employment land, the District Valuer’s Office provides reports of land values. In Gloucester, industrial land as at 1 January 2009 had a typical price per hectare of £850,000. Mr Feltham’s calculations apply less than half of that value. It is highly relevant that although the market is currently low, the Appellant’s sales programme in relation to employment land is for sales in 5 tranches from 2011-2018. RHL’s prices appear to be based upon the market’s downturn. (RHL’s appraisal for Lydney A last year was for £250,000 per acre).

158. On the A48 roundabout, it is not reasonable to expect (as does the Appellant) the Lydney A and Lydney B developments to bear the whole cost of the A48 roundabout. Consequently it is not reasonable to include (as does the Appellant) the whole cost of the roundabout in the valuations for Lydney A and B. The cost attributable to the roundabout should be reduced by 25%.

159. On the costs attributable to earthworks, there is a dispute over the amount of earth that could be retained on site. Mr McClearon, an experienced quantity surveyor, takes the view that 300mm could be retained. RHL’s argument that there would be consequences to TPO trees was not based on any consideration of the areas on the site in which there are, or are not, trees, and so should not be relied upon.

160. On the costing of archaeological investigation, the quotations provided by the Appellant are for Lydney A site. No brief has been obtained from the County Archaeologist for Lydney B (the current appeal site), and so the requirements for Lydney B cannot be assumed.

161. On protective fencing for trees, RHL’s approach appears to miscalculate the length of fencing required by some 400m [Document C11 App’x B]. RHL’s approach is to provide protection for all trees at all times. It is clear, though, from the duration and phased programme of the proposed development, that not all trees would be subjected to risk at the same time; and so that approach would provide unnecessary protection generating excessive cost.

162. The views of Mr Feltham and Mr McClearon are those of fully independent and experienced professionals. Their calculations indicate that greater cost savings and greater profits can be achieved by the proposed development. There is no reasonable or sustainable reason not to prefer them over those of the Appellant.

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163. Mr Feltham’s final calculations are at ¶3.1 of his Final Valuation Appraisals [Document I/C2]. These show that if sales value were at £190 psf (£2045/m2) and housebuilder costs indexed to Q3 2010, Lydney A and B would be able to support 31.4% of affordable housing (35.42% on Lydney B). Social housing grant of £5,500 per unit would increase affordable housing.

164. Whatever conclusion the Secretary of State came to in Lydney A is not now relevant. The RSS is near to adoption, attracts substantial weight and makes a material difference to the position.

The Inspector’s Question

165. Without proposals to provide the Council’s requirements in relation to affordable housing, security for the education contribution, and community provision, the appeal site would not contribute sufficiently to the creation of a sustainable and/or mixed community and in their absence cannot be considered suitable, within the meaning of PPS3 ¶54, at the current time.

166. It is not possible when properly considering PPS3 ¶54 to consider it in isolation. It has to be considered in the light of the Government’s objectives spelled out elsewhere in PPS3 and in other policy areas including the development plan and emerging guidance.

167. At ¶9, PPS3 sets out the Government’s strategic housing policy objectives, which start by emphasising the key goal that everyone has the opportunity of living in a decent home, which they can afford, in a community where they want to live. Specifically, the planning system should deliver a wide choice of quality homes both affordable and market housing; high quality housing for those who cannot afford market housing, in particular those who are vulnerable or in need; improve[d] affordability across the housing market, including by increasing the supply of housing; [and] sustainable, inclusive, mixed communities in all areas.

168. Affordable housing is of fundamental importance for strategic housing objectives. In the absence of LDDs the Council suggests that the appropriate course is to look at both the LP and the emerging RSS with its target (in Policy H1) of at least 35% affordable housing across the region and the need to help to secure and maintain an appropriate supply of affordable housing in the wider context of maintaining an appropriate overall 5-year housing land supply.

169. RSS Policy H1 expects a substantial increase in the amount of affordable housing in the region. An appropriate division between social rented and intermediate tenures is to be identified, with the aid of SHMAs. Here, there is a properly adopted and robust SHMA which supports the Council’s approach to the sought-for provision of 40% affordable housing.

170. The appeal site Lydney B is deliverable in the sense that houses can be built. But use of the word suitable in PPS3 ¶54 must have regard to the overall objectives of the Secretary of State expressed in PPS3, and also the Development Plan objectives against which sites are delivered, including in particular the Council’s expectations in that Plan for the delivery of 40% affordable housing. This figure was backed by surveys when the Local Plan was adopted and is now backed by an up-to-date SHMA.

171. If, therefore, the level of affordable housing that the Appellant says can be delivered is accepted, then the Council considers that the site is not suitable in

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the terms of PPS3 ¶54. The Appellant has not taken into account the policy background and the importance of affordable housing.

172. The issue on viability is not that there are, for example, heavy remediation expenses which make the site unviable: that is, expenses which would be incurred whatever the financial climate and whenever the site was developed. The Appellant does not expect the present economic climate to be permanent: a recovery is foreseen. The present position is a snapshot and there is no basis for it to govern the development of the site over the next 10-15 years.

173. It is incorrect to say that dismissal of the appeal would prevent delivery of any houses or any land. It might stop delivery now but the evidence before the Inquiry is that the market will recover and the site will come forward; and a proper provision of affordable housing can then be secured to accord with the Local Plan expectations or starting point, and the emerging RSS target. Unless it is secured, the site will not be suitable within the meaning of PPS3 ¶54.

Youth/Adult Offsite Recreation

174. Based upon its SPG on Play Areas, FoDDC indicated that a contribution for youth/adult off-site recreation would be the sum of £1,834,950 for playing pitches and facilities. The calculation is set out in Mr Hillier’s updated summary sheet of 1 May 2009 [Document I/C18]. That figure has been narrowed as a result of discussion between the Parties. It is now agreed that there is a requirement for pitch provision of 1.5 – 2 pitches (2.07 hectares), to be provided off-site. The dispute is over what is to be included in such requirement, and the costs.

175. The SPG on Playspace [Document C2 App’x 8] provides justification for FoDDC’s request. It would be within the policy justification (¶10.8) to request £2,600 per dwelling (now £2,900 per dwelling). What is being asked for is proportionate. FoDDC has tailored the requirements to the deficiency identified and related it to 2 sites that are potentially suitable. Mr O’Donovan has identified as possible sites the Lydney Bypass site and the Lydney Recreation Ground site, and has provided cost estimates for provision, based on his experience of installing 50-60 playing fields. He indicates that for the Bypass site the costs of its development for playing pitches would be in the region of £1,340,488, later reduced to £720,000. For the Recreation Ground site, which is the preferred site, costs for the improvement of drainage, the construction of additional pitches and the construction of changing rooms would be in the region of £835,000.

176. The general cost analysis provided by the Appellant is unsatisfactory. Its estimates are general and do not relate to the site; the person compiling the general estimate appears not to have visited the site; no witnesses have attended for cross-examination. The Appellant’s offer to provide a lower sum than that required by FoDDC is unacceptable being based upon an unsatisfactory estimate and as it does not take into account the provision of changing rooms. These are covered by the overall concept of ‘facilities’ as referred to in LP Policies (R)F.Lydney1, (R)FBE.11, (R)FBE.12 and the SPG on Playspace (which makes specific reference to changing rooms at ¶5.10, 5.13, 10.8 and 10.9). It would be contrary to common sense to provide pitches as a recreational amenity, but not to provide the facilities which will enable those pitches to be used to their best advantage and continually through the year in all kinds of weather.

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Community Facilities

177. The Appellant’s proposed contribution of £60,500 to the Naas Lane Youth Centre is agreed. However, this is insufficient as the Centre is (as its name makes clear) used only for youth provision and does not offer anything for the adult population. Rather than build new adult provision, the LP requirement or on-site community provision should be dealt with by way of off-site contributions to upgrading existing facilities where there are deficiencies or the development will put pressure on what exists.

178. RHL accepted a contribution to the Town Hall as part of the ‘Lydney A’ proposal. There is no clear reason why it now takes a different stance. While the Town Hall is not as close to the ‘Lydney B’ site as Naas Lane, it is well within walking or cycling distance, and has the further benefit of being within the town centre, and close to other facilities in the town. The town bus service is to be enhanced as part of the S106 obligations, thus improving access to the town centre. Additionally, the Dial-a-Ride service operates from the Town Hall.

179. The proposed development would result in approximately 1,725 more people using the existing facilities: so that its impact upon Lydney would be substantial, putting considerable pressure upon its facilities. The focus of the Business Plan for the Town Hall is upon the provision of leisure for all Lydney residents and the upgrading of facilities. It is quite clear that the works suggested in the Business Plan are necessary, in part due to the increased use that will be made of the facilities. There is no conflict with Circular 5/05 ¶B9 because the text indicates that obligations should not be used to resolve ‘solely’ existing deficiencies. Plainly this is not the case here. The money would be used to upgrade facilities upon which the expansion of use arising from the development will impact. Therefore the request for a sum to provide for enhancements to the Town Hall bears a clear correlation to the impact of the proposed development, and the requirement for £175,000 is justified.

Education

180. Education contributions principally raise an issue of bonding. The education contributions are substantial and will be paid over a period of time. The County Council seeks a bond as part of the S106 obligation, to guarantee payment of the sums set out in the obligations. The Appellant is not prepared to enter into any bond for the whole or any part of the sums referred to in the obligation.

181. The DCLG Planning Obligations: Practice Guide (July 2006) indicates that performance bonds … in the context of obligations, can be an effective tool for LPAs to transfer the risk of under- or non-delivery of obligations. LPAs can use performance bonds to ensure that in the event that agreed obligations are not delivered (for example in the case of underperformance or financial default) they are provided with the necessary finances to compensate where the terms of the S106 provide for this.

182. Monies to cover extensions and spending on schools, libraries and buses are put into programmes geared to the development. If contributions are not paid on time it leaves the County Council in difficulties in undertaking the works – either they will not be undertaken, or the money will have to be found at the expense of some other part of the budget. The position is worse if construction has started and there is then a failure, so that buildings must be completed from the public budget.

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183. Bonds guarantee due performance. The County can bring an action when monies fall due for payment, but there are inevitable delays and costs in this course. Injunctions can be used but also cause complications and delays. Bonds are also a guard against financial failure – which may not be insolvency but merely the difficulty, for the developer or landowner, in raising money at a given point. The position in a year or more cannot be predicted, especially if a site is sold on. The appeal site will not be developed by RHL. Who the ultimate developers will be, their status and standing and ability to meet financial obligations, are wholly unknown. A bond would be cheaper than providing the money ‘up front’ and would provide both sides with proper security.

Highways

184. The remaining issue in relation to highways relates to bonding, which is dealt with above.

The Cases for Interested Persons

Mr Gordon Blake

185. Photographic evidence [Document IP1] shows that residents of Lakeside Avenue, Lydney have suffered terrible flooding problems, most recently on 6 September 2008. Station Road, Lydney is also susceptible to flooding, and a scheme costing £750,000 has been put in place to endeavour to solve that specific problem; though it will not solve the problem of flooding in Lakeside Avenue, or on the Lydney Recreation Trust Ground which is in close proximity to Lakeside Avenue and is on a flood plain.

186. Under the heading Residual Risks, ¶9.1.1 of the RHL Flood Risk Assessment [Document A1] states that the principal residual risk that will remain after the implementation of the measures to ensure the proposed development will not exacerbate the flood risk to the properties in Lakeside Avenue is a failure or blockage of the surface water management system. That statement obviously acknowledges the fact that there is an ongoing problem with flooding in this area. If after a period of excessive rain the 15 sub-catchments (in the plans) fill up, runoff will have no alternative but to cascade into Lakeside Avenue.

187. During investigation into the Station Road flood relief scheme, it appeared that Lydney is a part of the country being investigated as an area of risk where the terrible events that occurred in Boscastle a few years ago might be repeated. Before any future developments are given the go-ahead in Lydney, in particular this development of 750 houses, the existing serious flood problem must be redressed.

188. With regard to the proposals for additional playing pitches at the Lydney Recreation Trust Ground, there are already 2 cricket pitches, 2 football pitches, 1 rugby pitch, 1 rugby training area, 4 tennis courts and a skateboard park on the Trust Ground. There is only 1 entrance into the Ground, and this is narrow, busy and dangerous, being the entrance to both the Cricket and Football Clubs and the main entrance to Lydney Rugby Club.

189. Any permission for work or alterations to be carried out on the Trust Ground would need to be granted by the Trustees (currently all the Councillors of Lydney Town Council) and not by the Forest of Dean District Council. Permission could not be guaranteed.

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Mr Walt Williams

190. The problems with flooding in the low-lying areas of Lydney are well known, and occur at quite frequent severe storm conditions (as opposed to the exceptional storm conditions of the 1:100 year return variety). The +30% for Climate Change is a temporary figure until all the data is upgraded. The proposed RHL Drainage Strategy is intending to use the existing watercourses which are culverted through Lakeside Avenue, a main flooding point. Proposed Condition 16 may not adequately cover the necessary degree of testing. To be viable in the long term, the full determination of hydrological and hydrogeological conditions must be of the full area over a period of time covering a sufficient range of weather conditions to assess the capabilities of the SUDS where used, and models of the retention tanks and ponds, where used.

191. On affordable housing, 40% has to be seen as a starting point, and not an upper limit. Concessions made now, at the bottom of the market, will give rise to greater profits for the developer later on, when recovery and development proceed, and would be won at the expense of the area and the taxpayer. The extreme fall in the market makes it most important to exercise great caution in the use of current values. A common-sense long-term approach is to use evaluations at future dates based upon current indices at the time (this was later suggested by FoDDC as a possibility).

192. For sustainability, population growth should be tied to employment growth and not just employment land provision. This proposed development is the largest that this area will ever see, making it doubly important to ensure that the future area is not burdened further with out-commuting. A condition should be imposed to link and tie the staged development to local levels of employment creation on a year by year assessment by the LPA.

Written Representations

193. Many written representations repeat objections, previously aired and considered at earlier Inquiries (Local Plan; ‘Lydney A’), aimed against the principle and against the scale of residential development on the combined East of Lydney allocation site of which the current appeal site forms part. In effect, through previous decisions these matters have been determined.

194. Related representations specific to the current appeal argue that existing employment land remains available, that bringing forward more new employment land (via ‘Lydney A’) will not in itself guarantee new jobs, and that in the absence of local jobs the addition of up to 750 further dwellings would be likely to create an imbalance between housing and employment and lead to unsustainable out-commuting.

195. Other representations concern flooding and drainage; affordable housing; impact on leisure infrastructure; and the over-stretching of existing facilities.

Conditions

196. The conditions recommended in the event that the Secretary of State allows the appeal are set out in Annex 1 to this Report.

197. Condition 1 relates the development to the Masterplan and to the Design and Access Statement as amended in the Appellant’s letter dated 21 November 2008.

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Conditions 2-4 are standard time conditions controlling the submission of reserved matters and the commencement of the development. In response to the difficulties for developers posed by the current recession, and in accordance with the letter dated 30 April 2009 from the DCLG Chief Planner to LPAs, Condition 3 extends the standard time period for submission of reserved matters, from 3 years to 5 years. A longer extension to 10 years, as requested by the Appellant, would unacceptably increase uncertainty for the local community and for the implementation of the development plan; and on the evidence is not justified by any problems of land assembly or remediation.

198. Condition 5 controls the phasing of the development through the submission for approval of a phasing plan before reserved matters stage, and is made necessary by the scale of the proposed development and its relationship with the existing urban area and with the adjoining site ‘Lydney A’ for which planning permission has already been granted. Condition 6 relates the details of the development to each phase via an urban design and landscape framework which will define Framework Areas, and also via specified details to be submitted for each Framework Area. Conditions 7-9 specifically control levels, parking and landscaping. The conditions are necessary in the interests of high quality urban design.

199. Conditions 10 – 14 are necessary in the interests of highway safety and convenience, both within the site and on the roads in the immediate vicinity. Condition 15 secures the implementation of a residential travel plan, in the interests of sustainability.

200. Conditions 16-19 are recommended following consultation with the Environment Agency, and as a condition of the withdrawal of the EA objection to the proposal. The conditions are necessary in the interests of satisfactory drainage of the site and in order to minimise flood risk.

201. Condition 20 is necessary in the interests of visual amenity; Condition 21 in the interests of residential amenity and noise protection; Condition 22 in order to deal satisfactorily with waste arising from all stages of the development; and Condition 23 in the interests of public safety and fire protection.

202. Condition 24 links the proposed development to the availability of serviced employment land on the adjoining ‘Lydney A’ site for which planning permission has already been granted, and is necessary in the interests of achieving a balance between housing and employment. To go further, as representations (including those of Mr Walt Williams) suggest, would not be enforceable or reasonable and so would fail the tests of conditions set out in Circular 11/95.

203. Condition 25 is necessary in order to secure the use of renewable and/or low-carbon energy sources in accordance with Government policy on planning and climate change.

Planning Obligations

204. The LPA extensively criticised the detailed drafting of the S106 obligations [Document I/C4]. Consideration of the obligations at the Inquiry concentrated upon the substantive provisions of the U/U. These are dealt with in my Conclusions below. The executed Planning Obligations contain a number of typographical errors which impair their clarity.

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Conclusions

Italicised numbers in brackets refer to paragraphs in the text of the Report

205. Those matters which have not been satisfactorily resolved between the Parties in the course of the Inquiry and which remain at issue are:

(i) Whether the proportion of affordable housing proposed in response to viability considerations would result in a development which would comply with the development plan, and with PPS3 in contributing to the creation of sustainable, mixed communities;

(ii) Whether the contributions proposed via the executed planning obligations would provide adequately for education and community infrastructure to serve the development.

Affordable Housing

206. The appeal site, whether considered alone as Lydney B or as part of the overall East Lydney site which also includes Lydney A, is a major housing site of strategic importance to Forest of Dean District (108). Given that many other housing sites within the District are small enough to fall below the threshold size for affordable housing (18, 114), the appeal site represents the principal opportunity to achieve affordable housing in the District under the adopted Local Plan.

207. The adopted Local Plan does not contain a policy target for 40% of housing on a new development to be affordable housing (40, 41, 42) – though to have set a target would not in itself have been inconsistent with Policy HO3 of adopted RPG10 (now RSS) (13). Saved LP Policy (R)FH.13 states, quite properly, that an element of affordable housing is to be sought by negotiation on all housing sites above a defined threshold (18). Its supporting text derives, explains and sets a figure to be used as a starting point in all negotiations. That figure is stated as 40% (19). The separation of the 40% figure from the policy is properly done, given that it is not explicitly stated in the policy itself as a target.

208. As explained in the text, the 40% figure is derived using measured housing need in 1999 (19). Such derivation is in accordance with RPG 10 (now RSS) Policy HO3 which requires affordable housing to be based upon housing needs assessments (13). Clearly, given the timespan of the Local Plan (1991-2011) it could be expected that housing needs information would be updated at intervals, e.g. via Housing Needs Survey (HNS).

209. The 2004 Gloucestershire HNS has been used as a basis for the SHMA, with more recent work done using other data for 2007/8 to produce the Housing Needs and Demand Technical report which forms part of the SHMA. The SHMA was issued in February 2009 following procedure outlined by the SHMA Practice Guidance V2 August 2007, and appropriate audit accepted by the SHMA Partnership (124). The SHMA together with related documents indicates that there is evidence of need for a proportion of affordable housing much greater than the Council’s ‘starting point’ of 40%, and for at least a 70%/30% social rented/intermediate tenure split (24, 28). The SHMA is therefore broadly consistent with earlier HNS documentation on housing need and contains no indication that the need for affordable housing has in any way diminished.

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210. The evidence of the SHMA is also consistent with the emerging RSS which in its Proposed Modifications raised from 30% to 35% the proportion of affordable housing which ¶6.1.8 of its supporting text indicated that LDD policies should routinely exceed (i.e., routinely require more than 35%...). The cautionary statement of ¶6.1.8 that Local Authorities will need to … be realistic in their requirements immediately precedes the reference to the 35% figure (and its increase from 30%) and thus indicates, or at least strongly implies, that a requirement of little more than 35% would not be regarded as unrealistic.

211. In the context of the current case, therefore, a figure of 40% affordable housing as a starting point for negotiation is neither unrealistic nor unreasonable, and is justified. The Secretary of State’s decision of 2008 on the Lydney A appeal does not indicate that the figure of 40% is unrealistic but, on the contrary, that it is ‘expected’ (11).

212. Whilst the SHMA acknowledges the need for its own early updating (23), that does not disqualify the document from current recognition as an element of a robust and credible evidence base (125, 127). It is in the nature of a document as large and complex as the SHMA in its prescribed form that it cannot be automatically and instantaneously updated to the situation at any given moment: though relevant evidence which itself is more up to date should nevertheless be treated as a material consideration.

213. However, the evidence of current reduction in rental levels and mortgage interest rates (50, 129) is not, on its own, sufficient to support a view that such reduction must necessarily produce a reduction in levels of housing need: nor that it represents an increase in ability to pay for market housing to the point at which the proportion of affordable housing within the new residential development now proposed – or the percentage of social rented housing within that proportion - should be reduced. Nor is there evidence that any such reduction in rental or mortgage interest levels will be maintained for any length of time that might be significant in relation to the timespan of the development process on the appeal site.

214. The emerging RSS covers the period to 2026 (14). The proposed development the subject of this appeal is projected to cover a similar period – to 2024 (137). In the context of such a lengthy timespan, the downturn represented by the ‘credit crunch’, even though severe, can be regarded as a temporary and relatively short-term element. No evidence demonstrates otherwise. Though at the time of writing the RSS remains at Modifications stage, the Secretary of State has proposed no further modifications to RSS policy as a reflection of the ‘credit crunch’. RSS policy is intended to provide continuity and certainty over a lengthy period, and it is not to be expected that such policy should itself be hastily amended to reflect sudden and/or temporary changes in circumstances.

215. The requirements of PPS3 ¶29 in relation to the assessment of the likely economic viability of land for housing, and of the likely levels of finance available for affordable housing relate in particular to the formulation of Local Development Documents. The Gloucestershire and Districts Affordable Housing Site Viability Study (25) has been produced in that context. Nevertheless, site viability is a material consideration in applications for the development of specific sites.

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216. Initially, in 2008 the Appellant offered 30% affordable housing on the Lydney B site (52), a proportion which reflected the specification of the emerging (pre-Modification) RSS (14). This initially offered proportion could also be seen as having reflected the view then taken of overall site viability including the detailed site development costs which the Appellant now argues are ‘abnormal’ but which were apparently not so regarded at the earlier application stage. The Council puts forward various ways in which the balance of such costs might be reduced (144-163). The Appellant helpfully acknowledges that differences between the Parties in relation to the costs of plot abnormals are not pivotal to the viability assessments (57).

217. However, in seeking to justify its revised proposed proportion of affordable housing (and its resistance to the levels of other contributions sought by the Council) the Appellant bases (59-66) its calculation of viability on data very precisely located chronologically to emphasise the effects of the ‘credit crunch’. The Appellant does so on the grounds of its witness Mr Heal’s professional view that valuation assessments are to be carried out using current known costs and values, and that the RICS Valuation Guidelines are clear that ‘market conditions prevailing’ at the date of the valuation should be used (59). The Appellant’s criticism of the Council’s evidence on site viability concentrates upon the Council’s use of forward projections, which the Appellant regards as fundamentally incorrect in principle.

218. That may be so. In the Godalming decision to which the Appellant drew attention (61), the Inspector (and the Secretary of State) accepted that the viability of the scheme should be determined on the basis of current values. However, that proposal concerned a site of only 1.6 hectares on the edge of the town centre, and on which residential development was to be concentrated in the form of 225 flats, together with commercial floorspace, car parking and a replacement police station. To phase development on so small a site in such a way that affordable housing would be triggered on a notional increase in market value depending on the timing and completion of the development (IR ¶402) would be impractical, and so it is not surprising that the Inspector considered that the wait for a time when values could possibly support the inclusion of affordable housing could be long and uncertain. That he did so was not wholly dependent upon his acceptance of the ‘current values’ basis of valuation, but encompassed wider circumstances. The Godalming site contained a former gas works and so its development involved the remediation costs of dealing with contaminated land, which represented a particular benefit to be brought by the scheme.

219. Nothing in PPS3 or elsewhere in national or regional policy guidance concerning site viability suggests that viability considerations attributable to the general economic situation (as opposed to specific characteristics of the sites themselves, as in the Godalming case) should be used to justify significant reduction in the proportion of affordable housing to be delivered by a site above the threshold.

220. In the current case, the Appellant’s own evidence shows that the development of the Lydney B site is scheduled to take place over many years (137). The effect of omitting forward projections is therefore to exclude entirely any future benefit to the balance sheet of an upturn in the housing market and in receipts. Over such a period of time it is possible, not only that receipts would be improved by an upturn, but that the need for affordable housing might itself

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increase. The Appellant seeks to lengthen to 10 years (and if that is not accepted, to 5 years) the period within which application may be made for the determination of reserved matters (197). This would enable a delay to the start of development on Lydney B (whatever may occur on Lydney A) and thus would lengthen the overall period of development on this extensive site, increasing the probability that development would coincide with an upturn in the housing market. Over such a long period it is likely that viability data would change significantly in comparison with the current circumstances.

221. Development of the Lydney A site was allowed on appeal with a 20% proportion of affordable housing in recognition of its heavy infrastructure costs which contribute to the overall east of Lydney site (Lydney A+B) (51). The residential element of the Lydney A scheme was limited by condition to no more than 320 dwellings: so at the 20% already permitted the development would yield 64 affordable dwellings. At Lydney B, 750 dwellings, more than double that number, are proposed: so that, at the 13% envisaged by the Appellant, Lydney B would yield 97 affordable dwellings, less than a third of the number sought by the Council. And there would be no further opportunity to achieve any more affordable dwellings in significant numbers through the development of sites allocated in the development plan, and certainly no opportunity to recoup elsewhere within the District, within the Plan period, the numbers of affordable units that would be forfeited on the East of Lydney sites.

222. The evidence of the SHMA is that affordable housing is needed, both as a proportion of overall dwellings and in terms of numbers, in far greater quantity than could be achieved in any event (24). In these circumstances, the degree to which the current appeal proposal falls short of the proportion sought by the Council represents a highly significant disadvantage.

223. It is clear, from the paragraph read as a whole, that PPS3 ¶9 intends it to be understood that affordable housing (which it mentions both as part of the key housing policy goal to which it refers, and in 3 of the 4 subsequent bullet-points) represents an essential element of the sustainable, inclusive, mixed communities to which it also refers under the heading of strategic housing policy objectives. It is also clear that when PPS3 ¶54 defines suitable as that the site …would contribute to the creation of sustainable, mixed communities, the term sustainable, mixed communities should be understood in the same sense in which it is used in ¶9.

224. In requiring local planning authorities, in setting targets for affordable housing in their Local Development Documents, to draw on informed assessments of the likely levels of finance available for affordable housing, including public subsidy and the level of developer contribution that can reasonably be secured, PPS3 ¶29 implicitly recognises that there may be circumstances in which, for valid reasons, developer contributions may not be capable of supporting the desired proportion of affordable housing. But in the current case, the financial considerations limiting the viability of the appeal site are essentially temporary.

225. The evidence is that the appeal site can be developed only by forfeiting a significant proportion of the affordable housing which has been justified in effect at all levels of policy and via a recent SHMA, leaving the overall need defined to a large extent unsatisfied, and with no opportunity to recoup affordable housing from another allocated site. I consider that if developed according to the current proposal the site would not contribute adequately to the creation of sustainable,

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inclusive mixed communities in the terms of PPS3; would not be suitable in those terms; and in those circumstances would not comply with the development plan, or with PPS3.

Housing Land Availability

226. The appeal proposal is for a very substantial housing development. Taken together with the ‘Lydney A’ site, which has already received planning permission but which according to the evidence is essentially linked to the current site and will not be developed in isolation from it (81, 83), the proposal represents by far the largest housing allocation in the Local Plan (81, 108). The Appellant’s calculation of housing land availability depends upon the inclusion of an element of a Structure Plan requirement which was set at a high aspirational level. However, in the context of the housing figures set out in the emerging RSS, the requirement is substantially less. Notwithstanding the lesser requirement, it would not be possible to achieve a 5-year housing land supply without the inclusion of an element, assumed by the Council at 150, from the Lydney A site (130). The Appellant regards development of the Lydney A site as dependant upon a planning permission for the Lydney B site on the terms set out in the current appeal proposal (53, 81). To that extent, therefore, rejection of the current proposal would mean a deficiency in the housing land supply, though by a relatively small amount. On balance, the resulting deficiency in the housing land supply is not a factor of decisive weight.

S106 Obligations (other than Affordable Housing)

227. Apart from a contribution to the Lydney Library (which is dealt with under the heading of Education) the sole contribution that the proposal would make to community facilities is £60,000 in respect of the Naas Lane Youth Centre (36). The appeal scheme is for a development of 750 dwellings which in itself could be expected to yield an addition of around 1,725 people to the population of Lydney (179). It is to be expected that these would collectively place significant demands upon the existing community infrastructure, and that these demands would result in the need for additional or expanded community infrastructure in the terms of Circular 05/2005 ¶B15, beyond those to be met by the Library and the Youth Centre.

228. I do not accept the Appellant’s interpretation of the word expanded as used in ¶B15 as necessarily confined to projects entailing the physical enlargement of premises (91). I consider that the term encompasses works aimed at enabling the premises to accommodate the increased numbers of people arising from the development by providing for, for example, a wider range of facilities, functions, classes and events without adding to physical space. The current draft Business Plan for Lydney Town Hall includes items which could be understood largely to involve maintenance and other current expenditure (Circular 05/2005 ¶B19). The current ‘Business Plan’ does not specifically address the demands likely to be placed upon it by the proposed 750 dwellings in addition to those (at ‘Lydney A’) for which a contribution is already the subject of an obligation (178). However, the absence of such a specific document does not mean that a contribution in respect of ‘Lydney B’ is not required. The currently proposed contribution towards community facilities is inadequate.

229. On Youth/Adult off-site provision for recreation, the picture is confused. The evidence of FoDDC changed repeatedly as the Inquiry proceeded (93), but

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without leading to a clear calculation of the LPA requirement. The weight to be attributed to the SPG is reduced by its lack of updating in step with guidance (94). The basis on which the LPA calculated the costs of providing the facilities which it considered to be most necessary was and remains unclear. By the end of the Inquiry there appeared to be agreement between the Parties that the essential provision included additional pitch provision at the Lydney Recreation Trust Ground (95). Beyond that, the LPA requires the provision of changing rooms, which the Appellant resists, proposing a contribution of up to a maximum of £125,000 towards the additional playing pitch provision (35).

230. I do not accept that the term sports facilities as used in LP Policy (R)FBE.11 necessarily excludes changing rooms. It is clear from the SPG that, during its currency in the run-up to the Local Plan Review, it included changing rooms among the ancillary facilities associated with sports pitches (22). Moreover, it seems to me that where additional pitches are proposed in order to accommodate more players within the same overall space, the provision of changing rooms would add considerably to the efficiency of the sports ground in absorbing the reasonable recreational needs and demands of additional players, and would add ultimately to its capacity. The evidence on the costs of changing rooms is conflicting; but it is clear that with only £125,000 at most to cover future needs, no changing room could be provided from the proposed contribution. The currently proposed contribution towards youth/adult public open space is therefore inadequate.

231. Both on education and on highways, the issue between the Parties relates primarily to the provision of financial bonding (180). The County Council seeks it: the Appellant resists it (97). Having read the Bishops Cleeve decision and extract from the Inspector’s Report to which the Appellant refers (98), I am not persuaded that the absence, on the part of FoDDC, of specific Supplementary Planning Guidance on the use of performance bonds (as set out in the Case Study 10.1 in the CLG Practice Guidance 2006) should be a deciding factor in the current case. Firstly, the current appeal site is for 750 dwellings, and linked to an adjoining site (‘Lydney A’) for around half that number, requiring very substantial infrastructure provision including a school, and to be developed as a whole over a lengthy period of up to 15 years. In the Bishops Cleeve case, the overall proposal was for 450 dwellings on a much smaller site, and did not apparently include or require the provision of a school. Secondly, the current Appellant is not itself a housebuilder but a development company which operates on the basis of providing serviced sites for future development by others, and which in this case will progressively dispose of its interest in the site over time. In the Bishops Cleeve case, the appellant company was one of the largest housebuilding companies in the UK, and the evidence was that it did not intend to dispose of its interest.

232. Whilst the S106 legislation contains provision for enforcement, the delays and difficulties of enforcement in the context of the potential commitment required of the County Council in the event of financial failure on the part of a developer together increase the risk of substantial and sudden demand upon the public budget if the development is to be satisfactorily and sustainably completed (182). The current unilateral undertakings on Education and on Highways are inadequate in that they fail to provide bonding to guarantee the relevant payments.

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233. On flooding, the concerns of local residents about existing flood problems in Lakeside Avenue and about the risk of further flooding as a consequence of the proposed development (185-6, 190) would be addressed partly through works already secured through the ‘Lydney A’ planning permission, and partly through the use of SUDS surface water drainage systems on the proposed ‘Lydney B’ site (101). If, for the time being, neither the existing permission nor the current appeal proposal were implemented, the Appellant’s implication is that in the absence of such development no remedial work would be carried out (103-4). However, the flood risk arises primarily from the design and maintenance of the inlet screen at the front of the culvert (103). No evidence was put to the Inquiry that the implementation of the Lydney A/Lydney B developments represents the only possible means of improving the design and/or maintenance of the inlet screen.

234. Though the proposed contribution towards Public Open Space would enable some improvement of drainage at the Lydney Recreation Ground (95), flooding of the Ground could not be entirely prevented, since it lies within the flood plain (105).

Recommendation

235. I recommend that the appeal be dismissed.

S Holland

INSPECTOR

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ANNEX 1

Recommended conditions, should the Secretary of State for Communities and Local Government allow the appeal:

1. The development shall not take place other than substantially in accordance with the Master Plan Ref. LN-01 Revision B dated September 2008 and Design and Access Statement dated November 2008 and with the phasing plans required to be submitted under Condition 5.

2. Approval of the details of the siting, design and external appearance of the buildings, the means of access thereto (other than the access onto Highfield Road) and the landscaping of the site within each of the phases as identified pursuant to Condition 5 below (hereinafter called the ‘reserved matters’) shall be obtained from the Local Planning Authority in writing before any development is commenced within that phase except as provided for by other conditions relating to access and drainage. The development shall be carried out in accordance with the approved details.

3. Applications for the approval of the reserved matters shall be made to the Local Planning Authority before the expiration of 5 years from the date of this permission.

4. The development hereby permitted shall be begun either on or before the expiration of 5 years from the date of this permission or before the expiration of 2 years from the date of approval of the last of the reserved matters to be approved, whichever is the later.

5. Prior to the submission of reserved matters a detailed plan showing the phasing of development to ensure appropriate linkages to the land to the south and the provision and servicing of the school site shall be submitted to and approved in writing by the Local Planning Authority. The development shall be carried out in accordance with the approved phasing scheme.

6. No development within a particular phase (approved under Condition 5 above) shall commence until an urban design and landscape framework for that phase has been submitted to and approved in writing by the Local Planning Authority. The Framework Plan for each area shall be substantially in accordance with the approved Master Plan referred to in Condition 1 and shall include details relating to:

(i) the approximate number, location, orientation and heights of dwellings within each Area;

(ii) the appropriate size, type, tenure and number of affordable housing units in each Area;

(iii) all areas of landscaping, public open space, play areas, sustainable drainage system features and nature conservation/biodiversity areas, indicating the facilities to be provided where appropriate. Precise details of a management scheme for the areas shall be approved, in writing, by the Local Planning Authority, prior to the completion of the first house within that Framework Area, and the facilities shall be managed in accordance with the approved scheme;

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(iv) the routes of cycleways and footways within the phase;

(v) the layout of principal roads defining their status and function; and

(vi) the trees to be retained.

The development of each phase shall be carried out in accordance with the Framework Plan for that Area.

7. The details to be submitted under Condition 2 shall include existing and proposed site and finished floor levels and sections through the site.

8. The details submitted under Condition 2 shall include provision for properly consolidated and surfaced car parking and manoeuvring facilities (including provision for people with disabilities). Such facilities shall be provided prior to occupation of the dwellings and school buildings served by them and shall be kept permanently available for such use with the car parking spaces retained for parking and manoeuvring only.

9. Any landscaping details submitted for a Framework Plan Area under Condition 2 shall be carried out in accordance with the approved scheme not later than the first planting season following the erection of the buildings hereby permitted within that Area and thereafter retained. If at any time during the subsequent 5 years any tree, shrub or hedge forming part f the scheme shall for any reason die, be removed or felled it shall be replaced with another tree, shrub or hedge of the same species during the next planting season.

10. Within 1 month of construction and completion of the vehicular access to the site from Highfield Road, all existing vehicular accesses to the site from Highfield Road shall be permanently stopped up.

11. No more than 300 dwellings shall be occupied prior to the establishment of an emergency access, the form and layout of which shall be submitted to and approved in writing by the Local Planning Authority. No more than 300 dwellings shall be occupied prior to a link or links being made available for buses, cyclists and pedestrians to the ‘Lydney A’ site permitted by the Secretary of State on 1 July 2008 under ref. DF.12949, P0724/08/OUT, the form of which shall be submitted to and agreed in writing by the Local Planning Authority. Prior to the occupation of the 500th dwelling, the principal access road between the access on Highfield Road and the site’s common boundary with the ‘Lydney A’ development permitted by the Secretary of State on 1 July 2008 under ref. DF.12949, P0724/08/OUT shall be established and open to vehicular traffic.

12. Prior to commencement of a particular phase of any site construction works a construction traffic strategy shall be submitted to and approved in writing by the Local Planning Authority. The strategy shall include the routing and signing of construction traffic, the provision of wheel washing facilities on each development phase, and measures to clean existing highways regularly of any construction deposits arising from the site. Provision shall also be made for vehicles to turn so as to be able to enter and leave the site in forward gear at all times, and such provision shall be maintained for the duration of construction operations.

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13. No development on a particular phase shall take place until details of any temporary car parking and site operative accommodation have been submitted to and approved in writing by the Local Planning Authority. All temporary buildings and car parks shall be provided in accordance with the approved details and shall be removed and the land reinstated within 6 months of the date of completion of that particular phase, unless required for a further phase of construction.

14. No dwelling shall be occupied, and no non-residential building shall be brought into beneficial use, until the access road to that dwelling or building has been completed to at least binder course level, including associated footways and turning heads, in accordance with the details submitted and approved under reserved matters.

15. Prior to the occupation of any dwelling a residential travel plan shall be submitted to and approved in writing by the Local Planning Authority and thereafter shall be implemented in accordance with the approved implementation and monitoring strategies contained in the approved travel plan.

16. No development shall commence until a comprehensive surface water drainage and foul drainage strategy for the development, based on sustainable drainage principles and an assessment of the hydrological and hydrogeological context of the development, has been submitted to and approved in writing by the Local Planning Authority. The detailed surface water drainage strategy shall be based upon the principles contained in the outline Flood Risk Assessment and drainage strategy Ref.EMAX0110 dated November 2008 and the letter from Bureau Veritas forming an addendum to that document dated 12 January 2009. The scheme shall contain the following details:

(i) details of how the scheme shall be maintained and managed after completion;

(ii) the timing and phasing of the drainage works;

(iii) site investigation results identifying the extent to which the site is suitable for infiltration techniques.

17. No development within a particular phase (approved under Condition 5 above) shall commence until comprehensive surface water and foul drainage schemes for that phase, based on the strategy approved under Condition 16, has been submitted to and approved in writing by the Local Planning Authority. The scheme shall be fully implemented in accordance with the approved details.

18. There shall be no new buildings, structures (including gates, walls or fences) or raised ground levels within:

(i) 5m of the top of any bank of a watercourse;

(ii) 5m of the side of any existing culverted watercourse either inside or along the boundary of the site.

19. Prior to the development of a Framework Plan Area details of enhancements to and/or works on watercourses and any other ditches, swales, ponds and attenuation features in or along the boundary of the site shall be submitted to and approved in writing by the Local Planning Authority. The details shall

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include details of any culverting for access purposes. Enhancement and works shall be designed to protect and enhance biodiversity and shall be completed in accordance with the approved details.

20. All services required to be connected to the development hereby approved shall be laid underground, with the exception of substations and gas governors.

21. Prior to the commencement of development of any Framework Area alongside the A48 Bypass, a scheme for protecting the proposed dwellings from noise from the A48 Bypass shall be submitted to and approved in writing by the Local Planning Authority. All works which form part of the scheme shall be implemented before any dwellings so affected are occupied.

22. A detailed Waste Minimisation Statement shall be submitted as part of the reserved matters applications of each phase of the development agreed under Condition 5 of this permission. The Detailed Waste Minimisation Statement shall form part of any subsequent approval and shall include details of the types and volumes of construction and demolition waste likely to be generated including measures to minimise, re-use and recycle that waste, and to minimise the use of raw materials. All construction and demolition waste shall be re-used on site unless it can be demonstrated to the Local Planning Authority that this is not the most sustainable option. Where waste is generated that cannot be re-used/recycled either on or off site the Waste Minimisation Statement shall set out proposed measures for the disposal of this waste in an environmentally acceptable manner. The Waste Minimisation Statement shall also include:

(i) provision within the residential development of ‘on-site’ storage receptacles for recycling a range of materials as specified by the Waste Collection Authority, at identified locations and appropriate to the number of residential units;

(ii) suitable accessing arrangements for recyclate/waste collection vehicles.

Thereafter, all provisions of the Waste Minimisation Statement shall be implemented as approved.

23. No dwelling within a Framework Plan Area shall be occupied until fire hydrants served by a mains water supply have been installed in accordance with a phased scheme to be submitted to and approved in writing by the Local Planning Authority.

24. Within 18 months of the commencement of the development hereby approved, half the employment land on the ‘Lydney A’ site to the south permitted by the Secretary of State on 1 July 2008 under ref. DF.12949, P0724/08/OUT shall be serviced and all the employment areas so permitted shall be serviced prior to the occupation of more than 200 dwellings (on either this ‘Lydney B’ site or when combined with the ‘Lydney A’ site permitted under ref. DF.12949, P0724/08/OUT).

25. No development shall commence until a scheme for generating 10% of the predicted energy requirement of the development from decentralised renewable and/or low carbon sources (as defined in the glossary of Planning

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Policy Statement: Planning and Climate Change (December 2007) or any subsequent version) for the first 200 dwellings rising to 20% by the 300th dwelling and thereafter, shall be submitted to and approved in writing by the Local Planning Authority. The approved scheme shall be implemented before the development is first occupied and shall remain operational for the lifetime of the development.

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DOCUMENTS

General Inquiry Documents Doc 1 Council’s Letter of Notification and list of persons notified Doc 2 Written representations from Interested Persons Doc 3 Statements of Common Ground Doc 4 List of Suggested Conditions (annotated) Doc 5 Appellant’s Opening Submissions Doc 6 Council’s Opening Submissions Doc 7 Appellant’s Closing Submissions Doc 8 Council’s Closing Submissions Doc 9 Council’s Application for Costs Doc 10 Appellant’s Response to Council’s Costs Application Doc 11 Council’s Final Response Doc 12 Appellant’s Application for Costs Doc 13 Council’s Response to Appellant’s Costs Application Doc 14 Appellant’s Final Response

Documents submitted before the Inquiry Documents submitted by the Appellant

Doc A1 Environmental Statement inc Non-Technical Summary Doc A2 Design & Access Statement Doc A3 David Parker’s Proof of Evidence Doc A4 Appendices to David Parker’s Proof Doc A5 Mervyn Dobson’s Proof of Evidence Doc A6 Appendices to Mervyn Dobson’s Proof Doc A7 Timothy Heal’s Proof of Evidence Doc A8 Appendices to Timothy Heal’s Proof Doc A9 Position Statement on Financial Appraisals (T Heal) Doc A10 Peter Finlayson’s Proof of Evidence Doc A11 Appendices to Peter Finlayson’s Proof

Documents submitted by the Council Doc C1 Martin Hillier’s Proof of Evidence Doc C2 Appendices to Martin Hillier’s Proof (2 vols) Doc C3 Martin Hillier’s Rebuttal Proof of Evidence Doc C4 Appendices to Martin Hillier’s Rebuttal Doc C5 Stuart Larkin’s Proof of Evidence Doc C6 Stuart Larkin’s Rebuttal Proof of Evidence Doc C7 Appendices to Stuart Larkin’s Rebuttal Proof NB App’x 3 (Aff Hsg SPD) now W/D Doc C8 Nigel Gibbons’s (Rebuttal) Proof of Evidence Doc C9 Tim O’Donovan’s Proof of Evidence Doc C10 James Feltham’s (Rebuttal) Proof of Evidence Doc C11 James MacLearon’s (Rebuttal) Proof of Evidence Doc C12 John Seddon’s Proof of Evidence Doc C13 Nicholas Stewart’s Proof of Evidence Doc C14 Appendices to Nicholas Stewart’s Proof Doc C15 Strategic Housing Market Assessment (bound with associated documents) Doc C16 Gloucestershire & Districts Affordable Housing Viability Study Doc C17 Affordable Housing Site Viability Appraisal March 2008

Documents submitted during the Inquiry Documents submitted by the Appellant

Doc I/A1 Stuart Bell’s (Rebuttal) Proof of Evidence Doc I/A2 Timothy Heal’s Position Statement: Financial Appraisals Doc I/A3 Addendum to Timothy Heal’s Position Statement: Financial Appraisals

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Doc I/A4 Suggested Viability Issues for Round Table Session on 8 May 2009 Doc I/A5 Note on Adjusted Financial Appraisals 16 & 19 (Heal) Doc I/A6 Housebuilder Appraisals: RHL Final Position Doc I/A7 Heal Comments on Council’s Final Valuation Appraisals (inc. App’x1 BICS Index) Doc I/A8 Statement of Qualifications & Experience: Stuart Bell Doc I/A9 Annotated Cross-Sections: 375 Dwellings parallel with contour Doc I/A10 Sec of State Appeal Decision on APP/G1630/A/07/2053255, Bishops Cleeve Doc I/A11 Sec of State Appeal Decision on APP/T0355/A/08/2073713, Maidenhead PRINT Doc I/A12 Inspector’s Report on APP/T0355/A/08/2073713, Maidenhead (extract) PRINT Doc I/A13 Sec of State Appeal Decision on APP/R3650/A/08/2063055, Godalming PRINT Doc I/A14 Inspector’s Report on APP/R3650/A/08/2063055, Godalming (extract) PRINT Doc I/A15 Lydney Town Hall Draft Business Plan Doc I/A16 Schedule of Correspondence on Public Open Space Doc I/A17 Summary of Agreed Position re Value and phasing of Transport contributions Doc I/A18 Position Statement : Youth/Adult Recreation Doc I/A19 S106 Draft Unilaterals Doc I/A20 S106 Revised Unilaterals Doc I/A21 RHL Comments on S106 Unilaterals and Revised Unilaterals Doc I/A22 Statement of Qualifications & Experience: Ian Walton (Bureau Veritas) Doc I/A23 Review of 3rd-Party representations re Flooding and Drainage issues (Ian

Walton6) Doc I/A24 Env Agency Indicative Floodplain Map (re Lydney Recreation Ground – Walton) Doc I/A25 Statement on flooding at Lakeside Avenue, Lydney (Walton) Doc I/A26 FoDDC Housing Land Supply Provisional Figs for 1/04/09 (amended by Dobson) Doc I/A27 Housing Land Supply Figures re Options 1, 2, 3 (Dobson) Doc I/A28 FoDDC Report on RSS, Minutes of Cabinet Mtg 9/10/08, confirmation 13/10/08 Doc I/A29 Affordable Housing Provision Note dated 6/05/09 (Parker) Doc I/A30 Response (19/05/09) to Council’s Response to Mr Parker’s Note (6/05/09) Doc I/A31 Letter dated 12 May 2009 from DCLG to Chief Planning Officers Doc I/A32 CLG Report: Land Supply Assessment Checks (Roger Tym) May 2009 Doc I/A33 Residential and Planning News Update (Savills) 5/05/09 Doc I/A34 RHL Comments on Inspector’s Question Doc I/A35 RHL Comments Appendix A to above (Dobson) Doc I/A36 RHL Comments on Council’s Response to Inspector’s Question Doc I/A37 RHL Notes on Response of FoDDC & GCC to submitted Planning Obligations Doc I/A38 Bundle of 4 Executed S106 Planning Obligations; Title; and Power of Attorney re.

John Biddle Doc I/A39 RHL Letter of intent to seek judicial review of SPD on Affordable Housing

Documents submitted by the Council Doc I/C1 James Feltham’s Second Rebuttal Proof of Evidence Doc I/C2 James Feltham’s Final Valuation Appraisals Doc I/C3 Letter dated 27/03/09 from PFA Consulting to John Seddon, GCC Doc I/C4 Summary of Council’s Issues on S106 Draft Unilaterals Doc I/C5 Response to David Parker’s Affordable Housing Note dated 6/05/09 Doc I/C6 Suggested amendment to S106 re ‘Additional Affordable Housing Contribution’ Doc I/C7 Minutes of FoDDC Planning & Leisure Services Cttee 22/05/2000 confirming

adoption of Play Area SPG Doc I/C8 Flood Plain Map – Lydney Bypass area Doc I/C9 Housing Land Supply provisional Figures (Gibbons) Doc I/C10 SWRA Regional Housing Group Affordable Hsg Programme Outturn Report 08/09 Doc I/C11 Savills UK Residential Forecast November 2008 Doc I/C12 Savills Housing Market Report March 2009

6 Mr Ian Walton BSc(Hons)MSc DIC MICE CEng of Bureau Veritas appeared on behalf of the Appellant to answer questions relating to flooding. He submitted no proof of evidence.

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Doc I/C13 Land Sales Enquiries (retail & hotel) 6/05/09 Doc I/C14 Sales in/around Lydney Jan-April 2009 Doc I/C15 House Prices: What the Government Thinks will Happen (Treasury Forecast

11/08) Doc I/C16 CLG Cost Analysis of the Code for Sustainable Homes Doc I/C17 New Tree Preservation Order April 2009 Doc I/C18 Updated Hillier Appendix 1/05/09 re. Youth/Adult S106 Contributions Doc I/C19 Updated Hillier Appendix 19/05/09 re.Youth/Adult S106 contributions Doc I/C20 Updated 19/05/09 Hillier Table of Youth/Adult Projects (Lydney) Doc I/C21 FoDDC Response to RSS Proposed Changes Doc I/C22 Council’s Comments on Inspector’s Question Doc I/C23 Council’s Response to RHL Letter re Judicial Review of Aff Hsg SPD

Documents submitted by Interested Persons Doc IP1 Submissions by Mr Gordon Blake Doc IP2 Submissions by Mr Walt Williams