UK: M&S Oxford Street – Why Refused And What Does It Mean For The Future Development Of Existing Buildings

The long-awaited decision in respect of the proposals to demolish the M&S store on Oxford Street and in its place site a new building has been issued, and Michael Gove (Secretary of State for Department for Levelling Up, Housing & Communities) (the "SoS") has refused planning permission. The application, and its call-in and inquiry, has received significant attention in the press, and the decision is being reported in some publications as a 'watershed' moment. The reason for this is the way in which the decision considers the impacts associated with the whole life-cycle carbon of the redevelopment, and in particular the associated embodied carbon emissions. So, what was the decision on carbon, was it lawful, and where does that leave the industry when looking at the repurposing of existing buildings which are no longer fit for purpose, but which are chock-full of embodied carbon emissions?

Non-compliance with the development plan and heritage harm

First things first, the decision to refuse was not made in respect of carbon impacts alone. In fact, whilst noted as carrying moderate adverse weight in the planning balance (which I come to further below), it was determined that the redevelopment was in overall conflict with the development plan, due to non-compliance with design policies and partial non-compliance with heritage policies, and when taking into account the centrality of those policies to the determination. Moreover, the proposals were identified to give rise to less than substantial harm to designated heritage assets, of varying degrees and at the upper end in terms of the impacts on Selfridges and the Stratford Place CA. The public benefits of the proposal were identified to not outweigh the harm to the significance of the designated heritage assets. The SoS also made a further finding that harm from the loss of the non-designated heritage asset of Orchard House (the existing store proposed for demolition) attracted substantial weight. Accordingly, the SoS determined that "the proposal would overall fail to conserve the heritage assets in a manner appropriate to their significance, so that they can be enjoyed for their contribution to the quality of life of existing and future generations".

Assessment of carbon impacts

In addition to those reasons for refusal (so non-compliance with the development plan and less substantial heritage harm, both relatively clear reasons for refusal in their own right), the decision turned to consider the carbon impacts of the development. From a perspective of the development plan, remembering that the National Planning Policy Framework (the "NPPF") is not a document which forms part of that and is a material consideration only (though with an eye to proposed development management policies and the status they may attain), the proposals were found to be policy compliant (so compliant with London Plan Policies SI2 and SI7 and Westminster City Plan Policy 36, overall).

And so we move to paragraph 152 of the NPPF, which for reference states as follows:

Against this overarching aim for the planning system stated in the NPPF, the SoS determined that a substantial amount of carbon would go into construction, and "this would impede the UK's transition to a zero-carbon economy". Further, it was determined that there had not been an appropriately thorough exploration of alternatives to demolition. As such, having taken into account that carbon impacts would be mitigated by the carbon offset payments secured via the s.106 Agreement and the sustainability credentials of the new building (there was no dispute that the proposals would use the latest techniques for energy efficiency or that the building could achieve a rating of BREEAM Outstanding, and arguments were put forward that over the life of the building it would use less carbon than any refurbishment, which would have to rely on an inefficient building envelope), the SoS exercised his planning judgment to decide that, in terms of paragraph 152, the "proposal would in part fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings". This "failure" carried moderate weight against the scheme in the planning balance.

That is, in my view, a rather bold decision. Not just because of what this may signal to the planning system, but also because it elevates paragraph 152 to be an independent broad policy test, rather than as setting the context for the more detailed policies setting out how climate change should be planned for. In that regard, paragraph 153 sets out the approach to take in local plans, paragraph 154 sets out how new development should be planned for, and paragraph 157 sets out what local authorities should expect new development to achieve when determining planning applications. In respect of each of those paragraphs it is difficult to see a conflict, as the proposal (in addition to being policy compliant in respect of relevant policies) had been planned to result in reduced greenhouse gas emissions and to meet the regional and local sustainability requirements. One may understand those paragraphs to be delivering on paragraph 152 and establishing what is required from the planning system, and therefore relevant to determining whether there was any 'conflict' with paragraph 152, but that is not what we see in the decision.

Setting a precedent?

And so, what does this signal to the planning system? Well, in the first instance, this is one decision by one decision maker exercising their planning judgment in relation to the merits of one particular scheme. On that basis, one can argue that a precedent is not set. Within the decision letter the SoS is keen to stress that it does not set a precedent, as "any future decision-maker would pay attention to the whole decision and the detailed reasoning and not just to the outcome of the decision", and "In any event, the decision turns on its own very specific facts". And, also of note, the Inspector came to a different judgment, stating that "the extreme complications of the three connected buildings mean that refurbishment is not an achievable option and therefore granting permission would not undermine the growing principle that reducing climate change should generally trump other matters". As such, there was scope for the balance to go either way.

But it is somewhat unavoidable that this decision will set a precedent, which at the least will mean that the manner in which existing buildings are intervened with and the extent of this intervention will be subject to a higher level of scrutiny and justification, with any proposals for significant interventions or demolition requiring a very robust level of justification (including a robust assessment of alternatives). Indeed, this type of focus, and what we see as a sequential approach to the assessment of the carbon options for the proposed redevelopment of land, is already becoming commonplace in some locations. In addition, and given the reliance on paragraph 152 to provide a carbon based adverse material consideration for the planning balance, it is also apparent that planning policy itself may not be equipped to tackle the issue of refurbishment v redevelopment, and so there is the very real potential that we will see developed policies in the NPPF (or elsewhere) which identify more clearly how local plans should consider embodied carbon, and how embodied carbon associated with development options should be considered for the purpose of planning decisions.

And lastly, we should not lose sight of the fact that the issue of carbon was as prominent as it was in the case of M&S because of the way it was raised by an objector, SAVE Britain's Heritage. Unsurprisingly most interested in the heritage impacts of the development, they fielded no less than two sustainability witnesses at the inquiry. It is therefore likely we can expect objector groups, who may have a range of agendas and reasons for not wanting development proposals to come forward, to see the carbon impacts of development as furtive ground on which to object to applications and challenge planning permissions where granted. This in the face of ever-increasing climate focused litigation, in a context of global warming and amid attempts to rapidly reduce carbon emissions to combat this and achieve Net Zero.

And so, it seems clear that embodied carbon in the built environment and the importance of reducing whole life-cycle carbon emissions will continue to be a prominent issue in connection with development, requiring very careful consideration and management in the consenting process.

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