The Secretary of State (“SoS”), Michael Gove, has refused Marks and Spencer's application for planning permission for the redevelopment of their Oxford Street department store.
M&S submitted a planning application in June 2021 for the “demolition of the three existing buildings on site and for the construction of a 2-basement, ground plus 9 storey mixed use development (Use Class E) comprising retail, café/restaurant, office and gym as well as a new pedestrian arcade, public realm works and associated works”.
The application was supported by Westminster City Council but was called-in for determination by the SoS in June 2022, meaning that an inquiry was convened in Autumn 2022 to consider the application and the SoS would have the final say in whether permission would be granted.
The application has been the focus of heated debate for several years, particularly given objections to the scheme made on heritage grounds.
Environmental criticisms also centred around whether it is appropriate to demolish structurally sound buildings and the extent to which greenhouse gas emissions embodied in the proposed redevelopment would exceed the emissions associated with a refurbishment and reuse of the existing building. These issues came to the fore relatively late in the process as objection grew.
The Planning Inspector appointed to oversee the inquiry issued his report to the SoS in February. His recommendation was that the SoS should grant planning permission. The SoS originally intended to issue his decision in March 2023, but this was delayed to 20 July. Unfortunately, in our experience on other current call-ins such delays are a common trend across the industry.
The decision was at pains to emphasise that the SoS’ conclusions were fact specific and in our view, it is important to bear this in mind when considering the wider implications.
The decision does, however, contain some pointers on how decision-makers assess the sustainability credentials of proposed redevelopments.
It is also a further illustration of the tension between urban regeneration and conserving the historic environment, which has been a key theme in SoS decision-making in recent years. In simple terms, the M&S case also underlines his willingness to go against the recommendations of his appointed Planning Inspectors.
Heritage and design
The proposed redevelopment would impact a number of heritage assets in the north Oxford Street area, including Selfridges (which is Grade II* listed) and several other listed buildings and Conservation Areas, mainly through harm caused to the significance those assets derive from their settings.
The SoS agreed with the Inspector that the level of harm would differ from asset to asset, although the degree of harm would in all cases be “less than substantial”. The SoS considered that the heritage harm should be given “very great weight”, whereas the Inspector only attributed it “moderate weight”.
Where a proposal would harm heritage assets, listed buildings legislation puts in place a presumption against granting planning permission, although in planning policy terms if the harm is “less than substantial” the public benefits of the proposal should be assessed to consider whether they outweigh its harm. The SoS concluded that the public benefits of the scheme would not outweigh the harm in respect of designated heritage assets and other matters when applying the planning balance. His view of the particular designated heritage impacts did however form the mainstay of his decision.
The proposal also involved the loss of Orchard House, which was not listed.[1] The SoS agreed with Historic England’s position that Orchard House contributed positively to the surrounding streetscape and historic environment. Unlike the Inspector, the SoS considered that the loss of this non-listed building should attract “substantial weight”.
In London, developments must optimise site capacity through the design-led approach required by London Plan Policy D3. This is achieved by proposals which “best deliver” the sometimes conflicting requirements set out in Part D of D3. The SoS reached the view that although the M&S proposal complied with elements of Part D, his conclusions on heritage harm meant that “it cannot be said that this is the right approach for this particular location”. In the SoS’ view the proposed development would not optimise the site and was not in overall compliance with Policy D3.
Sustainability and embodied carbon
The redevelopment would involve the demolition and replacement of structurally sound buildings and this would entail greater “embodied carbon” than simply refurbishing the existing building.[2]
Both the Inspector and SoS agreed that there should “generally be a strong presumption in favour of repurposing and reusing buildings”. In the SoS’ view, this presumption “is reflected” in paragraph 152 of the NPPF, which states that “the planning system should support the transition to a low carbon future in a changing climate […] it should help to: shape places in way that contribute to radical reductions in greenhouse gas emissions […]; encourage the reuse of existing resources, including the conversion of existing buildings…”.
On the other hand, the redevelopment would achieve the highest BREEAM rating (“Outstanding”). M&S also argued at the inquiry that redevelopment would be less carbon intensive over its whole life cycle compared to retaining the current, energy-inefficient building.
However, the SoS agreed with the Inspector that the tools for calculating whole life carbon impacts, and the means of understanding whole life carbon assessments, are still developing, such that they apparently felt unable to accept M&S’ argument. The Inspector and SoS did not feel capable of reaching a conclusion on whether the proposed development would be less carbon intensive across its lifetime than a refurbishment of the existing building.
There would be some environmental benefits arising from the scheme, such as concentrating development in a highly-accessible location which, due in part to the Elizabeth line, was described by the SoS as “one of the most sustainable locations in the country”. However, as this benefit was not assessed empirically, the SoS gave no weight to it in reaching his decision.
At the inquiry, it was also argued that the redevelopment would be more sustainable if it were delayed to an unspecified point in the future when the UK’s electricity grid was fully decarbonised. However, M&S insisted throughout the planning process, and indeed following the publication of the SoS’ decision,[3] that unless this redevelopment comes forward it will need to consider giving up its failing Oxford Street store. The SoS gave only limited weight to the argument in favour of delaying the redevelopment and, in any event, considered that if the site were to become vacant the degree of harm this would probably cause would be limited.
The M&S scheme would secure a payment into Westminster’s established carbon offset fund, which would help reduce its net environmental impact. In terms of overall policy compliance, the SoS concluded that the scheme would conflict with elements of Westminster’s adopted planning policies, but there would be overall compliance with the policies when viewed in the round. Although there was lengthy discussion at the inquiry of potential alternative schemes, the SoS concluded that there had not been an “appropriately thorough exploration of alternatives to demolition”. Whilst the Inspector had been satisfied that there was no viable and deliverable alternative to the redevelopment, the SoS was not persuaded.
Therefore, with reference once more to paragraph 152 of the NPPF (see above), the SoS concluded that the proposed development would fail, in part, to support the transition to a low carbon economy and would fail overall to encourage the reuse of existing resources and the refurbishment of the built environment. The SoS ascribed moderate weight to these disbenefits.
There is a tension between, on the one hand, the SoS’ reluctance to rely on whole life carbon assessments in order to form a view on whether M&S’ proposed development would be less carbon intensive, and on the other, his readiness to conclude that it would fail to support the transition to a low carbon future.
Commentators have highlighted the difficulties faced by businesses, who have pressed the Government for greater clarity on the role of embodied carbon in planning, whilst the Government is being accused of treading water on environmental policymaking.[4]
The Inspector had concluded that the embodied carbon impacts of the scheme were the single largest factor weighing against the grant of planning permission, but the SoS gave this factor moderate weight.
The SoS was keen to emphasise that the conclusions that decision-makers must reach on the sustainability of a proposed development will be highly fact-specific. The decision makes it clear that the SoS’ conclusion is circumstantial and the same approach should not necessarily be read across to different planning applications. However, media attention has already focussed on the implications of the decision for the “retrofit first” movement.
Overall Conclusion
Following his conclusion on heritage impacts through to the question of compliance with planning policy, the SoS found that M&S’ planning application conflicted with Westminster’s adopted planning policies on design and heritage. “Given the centrality” of these issues, this led the SoS to the overall conclusion that the scheme would not accord with Westminster’s plan.
It is also key to the consideration of the carbon issues that they were viewed in the light of the conclusion that the development did not appropriately optimise the site’s potential on the basis of the heritage harm.
The Inspector reached a different view, identifying aspects of compliance and non-compliance but reaching the view that there was policy compliance in overall terms and this was a crucial difference.
Planning legislation gives primacy to the adopted development plan, meaning that if there is non-compliance with planning policy, the decision-maker must then reach a judgment on whether there are justifiable reasons to grant permission even though it fails to comply with the plan.
The factors counting in favour of the scheme included the benefits of focussing redevelopment in a highly sustainable location, the employment and economic impacts, and improvements to public realm.
On the other hand, the SoS considered that the failure to encourage re-use of resources and the embodied carbon impacts weighed against the scheme, as did the heritage impacts. This led him to refuse to grant planning permission.
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