Housebuilder launches legal challenge to Government’s abolition of the Regional Strategies

Last month, I wrote that the abolition of the Regional Strategies in May and the general uncertainty over the Government’s planning policy had left housebuilders ‘in limbo’, with a number of development projects either being cancelled or put on hold.

Well, one housebuilder has now launched a legal challenge against the Government.

CALA Homes has asked the High Court for a judicial review of the Government’s decision to abolish the Regional Strategies, claiming it was unlawful because (1) the move required primary legislation to be laid down in Parliament, and (2) no transitional arrangements were put in place, which, in the words of Graham Cunningham, managing director of CALA Homes (South), has created a “policy vacuum.”

CALA Homes’ legal challenge centres on a long-running development dispute. Its application for planning permission to build 2,000 homes in Winchester was rejected by the local council in June (following the abolition of the Regional Strategies), but it argues that its appeal against the refusal cannot take place while there is an absence of government planning policy.

CALA Homes is not alone. The number of development schemes being abandoned or put on hold by local councils since the abolition of the Regional Strategies is growing; in fact, according to research published by Tetlow King Planning on behalf of the National Housing Federation in July, plans for 85,000 homes in England have been dropped since the abolition. In a further development, an alliance of nearly 30 organisations, including property groups, engineering bodies and environmental charities, have all signed a letter this month calling for an urgent meeting with Eric Pickles, Secretary of State for Communities and Local Government, to discuss how to replace the Regional Strategies. Pressure on the Government is mounting.

Coincidentally, the Government has now announced details of its ‘New Homes Bonus Scheme’, whereby local councils will be given extra money for every new home built in their area. For the next six years, the Government will match the council tax revenue raised on each new house, thus encouraging local councils to build more homes. Housebuilders, though, who are still unhappy at the decision to abolish the Regional Strategies, urgently require more details of the Scheme. However, with a consultation on the Scheme not due to be published until after the Government’s Spending Review on 20 October, housebuilders may unfortunately have to wait a bit longer.

UPDATE (Feb 2011): Cala Homes (South) Ltd has lost its High Court challenge against the Government’s claim that its intention to abolish the Regional Strategies should be considered by local planning authorities when ruling on planning applications. Click here for full details.