Vicarage Gate Ltd v First Secretary of State [2007] EWHC 768 (Admin)

“STRAT I6 To ensure the contribution of the Royal Borough to the dwelling stock of Greater London is not diminished and is increased wherever appropriate STRAT 17 To seek to maximise the residential capacity of the Borough in line with Strategic Guidance for London. STRAT 18 To encourage an adequate and continuing supply of land for new housing through the development of vacant and under-used land for residential use in appropriate locations. STRAT I9 To seek an increase in the amount and range of sizes and types of dwellings to meet the needs of those seeking permanent accommodation in the Royal Borough, whilst maintaining the overall quality of the residential environment. STRAT 17 STRAT 18 STRAT I9 (ii) The objectives are described thus 5.1 OBJECTIVES 5.1.1 There are four overall objectives for housing in the Borough:- (A) To protect permanent residential accommodation in order to maintain and enhance the residential function of the Borough. (B) To ensure that new residential development, including conversions and extensions, is of good quality in order to maintain and enhance the residential character of the Borough. (C) To increase the supply of housing in appropriate circumstances to help stem the decline of, and where possible to increase, the Borough’s permanent residential population, subject to other policies of the Plan. (D) To provide and retain a range of housing types and sizes, of a satisfactory standard, to meet the varied physical and economic needs of the Borough’s residents. (iii) The policies seek to “provide and maintain a wide range of housing” (paragraph 5.5). They include the following reasons and explanation and policies H17-H19 Housing Mix 5.5.1 The mix of accommodation in the Borough should be related to the range in household types existing or likely to exist and to deficiencies in the range of accommodation. Households are typically smaller than elsewhere in the capital. In response to market demand, the private sector already provides a substantial proportion of smaller units, mostly through conversion schemes and it is therefore important to retain existing provision. A large stock of small residential units is also important in order to: maintain the level of population by allowing a more intensive use of residential properties; maintain the number of adult households who through their spending power, help support the ancillary services which underpin the residential function; and meet the overall housing provision envisaged by RPG3 H17 To resist the loss of existing, small, self-contained flats of one or two habitable rooms. 5.5.2 However, it is important to ensure that a sufficiently wide range of dwellings is provided in terms of type and size in redevelopment, rehabilitation, extension and conversion schemes, to satisfy the needs of larger households and rising standards. H18 To seek the inclusion of smaller units (of one or two habitable rooms) and larger units (of three habitable rooms and more) in schemes for residential development. H19 To seek an appropriate mix of dwellings within a scheme, having regard to the following factors: a) the physical character of the site or building and its setting; b) the previous or existing use of the site or building; c) access to private gardens or communal garden squares for family units; d) the likely effect on demand for car parking within the area; e) the surrounding composition and density of population; f) the location of schools, shops and open spaces; g) provision of accommodation for special needs (see paragraphs 5.5.19 to 5.5.31); and h) busy roads or railway lines nearby. (iv) It will be noted that Policies H 18 and H 19 are expressed in terms of “to seek.”

“(A) To protect existing social and community uses and facilities in the Borough where an established local need exists. (B) To encourage the provision of new social and community uses and facilities in appropriate locations and according to the needs of the Borough’s population.” (iv) Paragraph 9.4 deals with “Protecting Existing Social and Community Uses and Facilities”

“3 The terms ‘residential care homes’ and ‘nursing homes’ were used variously throughout the inquiry both in written and oral evidence, although both have now been technically superseded by the provisions of the Care Standards Act 2000. In common with the various witnesses I have usedthese terms on occasions throughout my decision. However, for the avoidance of doubt, ‘residential care’ or ‘residential homes’ assumes a care home providing personal care with no nursing element, whereas ‘nursing care’ or ‘nursing homes’ assumes a care home providing nursing care. 4 The appellant submitted a unilateral undertaking under Section 106 of the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991. In the event of planning permission being granted for the appeal proposal, this undertaking would require either a commuted sum of £4m to be paid to the Council for the sole purpose of providing Affordable Elderly Persons Accommodation; or would require the appellant to secure an appropriate site and provide 20 affordable housing units. This undertaking is discussed in further detail in the appropriate sections below. Main Issues 5 The-Statement of Common Ground makes it clear that subject to the imposition of a number of conditions, many of the matters regarding the appeal proposal are not in dispute between the parties. These include the principle of a Class C3 residential use on this site (in the event of the appeals being successful); the design and form of the proposed building; landscaping and arboricultural matters; archaeological concerns, and matters of residential amenity for future occupiers and nearby residents. In the light of these points, I consider that for Appeal A (the planning permission), the main issues are the effect of the proposal firstly, on the provision of elderly persons accommodation within the Borough and, coupled with this, the viability of the continued provision of such accommodation on this site; secondly on the provision of affordable housing within the Borough; and finally, whether the proposal would provide an appropriate range and mix of housing units. 6 For Appeal B (the Conservation Area consent) I consider the main issue to be whether the proposed demolition of the existing building would preserve or enhance the character or appearance of the Kensington Palace Conservation Area, having regard to the detailed proposal for which planning permission is sought. Reasons The effect on the provision of elderly persons' accommodation Policy issues 12 In terms of policy protection for the existing lawful use of the appeal site, and the weight to be given to SPG7, the key difference between the parties is how nursing and residential care homes should be categorised. There is no. dispute that the UDP contains no specific policy resisting the loss of care homes, but this is not altogether surprising as neither the Housing Chapter, nor the Social and Community Uses (SCU) Chapter of the UDP contain any direct references to nursing homes or residential care homes. 13 The appellant’s position on this matter is that care homes are not ‘social and community uses’ within the context of the UDP, and do not therefore benefit from protection under policy SC2. Rather, the appellant argues that they should be considered as ‘special needs accommodation’, to be dealt with in the Housing Chapter. This argument is primarily based on the contention that the reference to Social Services uses and facilities for the elderly in. UDP .paragraph 9.1.2(b) does not relate to residential accommodation, but to other uses such as day centres. In this regard the appellant points out that no social and community use policies were mentioned as being relevant for a planning proposal for the Ellesmere Elderly Persons Home within the Borough, which was considered by the Cabinet in March 2004 shortly after the proposal which now forms the subject of these appeals were submitted. In addition the appellant argues that as policy SC5makes an express exclusion for ‘special housing needs’, this demonstrates that there is a clear distinction between social and community uses and residential uses. 14 The Council takes a contrary view, arguing that although there is no specific UDP policy which safeguards care homes this does not mean that other, more general policies do not provide protection to such uses. It points out that ‘social and community facilities’ are specifically defined in the SCU Chapter as relating to social service uses and facilities for elderly people (amongst other groups), and contends that care homes qualify as such uses and are therefore protected under policy SC2. The Council further points out that as far back as September 2001, in relation to a proposal at Delves House for a change of use from nursing home to self-contained residential apartments, it was taking the view that a home for elderly persons represents accommodation for social and community use. Moreover, the Council maintains that there is no inconsistency between policies SC2 and SC5, arguing that policy SC5 simply reinforces the case for there being policy protection for care homes. 15 In considering these conflicting views, I acknowledge that policy H24 welcomes purpose-built accommodation which enables people with special needs to maintain an independent lifestyle. Moreover, I have noted that the supporting text to London Plan policy 3A.10 (which relates to special needs and specialist housing) indicates that such housing can include sheltered housing with care support and care homes. However, I have also been mindful of the fact that following the enactment of the Care Standards Act 2000, all establishments providing residential accommodation and personal care now have to register with the Commission for Social Care Inspection (CSCI). The Act explains that an establishment is a care home if it provides accommodation together with nursing or personal care for older people, but is not considered to be a care home unless the care which it provides includes assistance with bodily functions, where such assistance is required. 16 Looking again then at ‘Special Needs Accommodation’, as covered by policy H24, the supporting text explains that this relates to a wide range of people and it is clear to me that not all of these would have a need for nursing or personal care. Under this general heading the elderly are specifically covered by policy H27, which relates to Sheltered Housing, but there (are) many different types of sheltered housing, ranging from those which provide low levels of support, perhaps with a resident or visiting warden, to those providing higher levels of care and support. The key point is that not all forms of sheltered housing provide the type of personal care which would require the establishment to be registered with CSCI. Because of this I consider there to be a distinction between accommodation which is provided in association with personal or nursing care, and that which is not. In my opinion this indicates that whilst some forms of accommodation for the elderly can sit quite comfortably within this policy H24 Special Needs Accommodation category, others cannot. 17 For these reasons I conclude that it is both logical and reasonable to regard residential accommodation for the elderly which is provided together with nursing or personal care, as constituting a social and community use. Accordingly I consider that the appeal proposal falls to be assessed against policies in the SCU Chapter of the UDP, and because of this I -am satisfied that SPG7 is correctly rooted in UDP policies. I therefore accord it substantial weight. I have noted the appellant’s contention that at consultation stage the Council did not respond to its key points that the draft SPG did not refer to policy SC5, and that the UDP treats accommodation falling within policy H24 as being distinct from ‘social and community uses’. However, references to both of these policies now appear in the adopted version of SPG7, and in the light of my comments on this matter outlined above, I am not persuaded that this lessens the weight which should be attached to this SPG. 18 The UDP identifies two overall planning objectives for social and community developments, the most relevant in the current appeals being the need to protect existing social and community uses and facilities in the Borough where an established local need exists. This objective of protecting such existing uses is given policy backing in STRAT44 and SC2. In addition, it is my view that Policy 3A.14 of the London Plan is directly relevant to’ the current appeals, as it addresses the needs of London’s population, with o1der people’ forming one of the distinct groups referred to in the policy’s supporting text. This policy states that existing facilities that meet the needs of particular groups should be protected, and where shortfalls have been identified policies should seek measures to address them proactively. 19 Although the appellant argues that ‘existing facilities’ cannot apply to an existing building which is unsuitable for identified needs (as is claimed in the present case), or to redevelopment of a redundant building, it is my view that this policy can embrace the lawful use of a site, and can therefore be used to protect such a use where a continuing need for it exists. As a result of the foregoing points I take the view that the existing lawful use of the appeal site is one that has a basic UDP policy protection against its loss. However, UDP paragraph 9.4.2 indicates that properties which previously accommodated social or community uses may be considered for an alternative use in circumstances where the continued or future need for the use can no longer be established. It is, therefore necessary to investigate whether or not there is a continuing need for such a use to be retained. Demand 20-25 …………………………………………. 26 In view of all the above points I consider that there is a clear and strong demand for residential and nursing care facilities for self-funders, and in these circumstances I have no doubt that there is a need for the type of top-end care home which the Council contends could be established on the appeal site. Viability 27 Planning applications for this proposal were first submitted in August 2003, and in the light of these applications GVA Healthcare (GVAH) was commissioned by the appellant to investigate the viability of Vicarage Gate for a continued care use. The Care Standards Act 2000, and its introduction of National Minimum Standards (NMS), meant that if the existing building was to be refurbished, there would have to be a reduction in the number of bedspaces in order to comply with the NMS. Four different scenarios were investigated in a report dated July 2003. Scenario 1 was the reconfiguration and refurbishment of the existing property and building envelope to accommodate referrals solely from the Council at local authority fee rates. Scenario 2 was for the same general works, but to a standard appropriate for solely privately funded referrals at enhanced fee rates. Scenarios 3 and 4were both for a purpose-built elderly care home on the site, but again for local authority referrals and privately funded referrals respectively. 28 A further scenario was examined in a February 2004 report by GVAH, submitted in support of the duplicate planning applications now at appeal. This scenario considered a mixed-use development scheme comprising a care home on lower ground to second floors, with a total of four residential apartments on the third to fifth floors. The appellant concluded that none of the five schemes tested were viable. 29 For the purpose of this inquiry, the appellant assessed three schemes. Scheme 1 was based on a refurbishment of the existing structure to provide 47 bedrooms compliant with the NMS, along the lines of Scenario 2 above. The refurbishment assumes a high standard, sufficient to justify the high level of fees proposed, and for this scheme the appellant has relied on a design prepared for EFT in 2000. The NMS came into force after the existing care home had ceased trading, and the difficulties which the EFT envisaged would arise in trying to meet them was a contributory factor in the home’s closure. 30 Scheme 2 was based on a detailed development scheme for a 72 bed purpose-built care home, based on a design prepared for the appellant in May 2005. This proposed development would be accommodated within a building envelope to match that currently proposed for residential use through these appeals. Scheme 3 was for a mixed-use development comprising care home accommodation on three floors (ground to second), with three further floors of ‘close care’ apartments above. These are described as being for people over 55 years of age who can live independently, but who require some level of personal and/or nursing care in their apartments from time to time. Although such accommodation itself does not have to comply with the NMS, the care provided does. The Council made it clear that it was unaware of the existence of Schemes 2 and 3 until the receipt of the appellant’s proofs, and had had no input to their design or formulation. I understand that no potential care borne operators have had any input to the schemes either. The appellant concludes that none of the schemes discussed at the inquiry would be viable. 31 I accept that these assessments have been undertaken by experts who are very familiar with the complexities and requirements associated with the funding of privately run and financed projects. However, as pointed out by the Council, the fact remains that the underlying basis for these assessments was as support for a residential planning application for the site. A finding of viability for a care home use would, therefore, significantly undermine any case for residential use of the site. In these circumstances the Council makes the point that it is not surprising that the appellant maintains non-viability. Indeed the Council argues that because of the appellant’s clear desire to develop the site for purely residential purposes, the viability assessments should be treated with great caution. 32 In support of this view, the Council has produced its own assessments of versions of schemes 2 and 3 (which consider a 65 bedspace care home, in contrast to the 72 bedspaces assumed by the appellant), which it claims show clear viability. The methodology for these assessments differed from those used by the appellant, insofar as it looked at achieving minimum values for three financial criteria, namely a Developer’s Return of 15%; a figure for ‘Earnings before Tax, Interest, Depreciation and Amortisation’ (EBITDA) of between 25% and 30% of revenue; and a blended return to shareholders of 14.5%. However I have been mindful of the fact that the Council’s witness on this matter does not have direct personal experience of the assessment of privately run and funded care home projects, but that his expertise lies with Private Finance Initiative (PFI) projects. I have also had regard to the fact that banks and other investors look on these 2 types of projects differently, and that a greater level of risk with privately run and funded projects leads to the expectation of higher returns than would be the case where a certain level of income or return can be guaranteed, as is likely, to be the case with PFI projects. 33 Because of these points the appellant argues that the Council’s assessments are unrealistic, and do not reflect the financial realities of this type of project. Some of these points do, indeed, seem to me to be valid criticisms of the Council’s approach, and as a result they call into question the Council’s findings of viability for its versions of schemes 2 and 3. Unfortunately, I am therefore faced with polarised standpoints on the matter of viability, coupled with some doubts about the reliability and robustness of each party’s assessments. In view of these points, and because I have already concluded that there is both policy protection and demand for a Class C2 use on this site, I consider that it is vitally important for any assessments claiming non-viability to be demonstrably robust. However, as a result of the evidence presented and tested, I have formed the view that there are uncertainties surrounding the appellant’s assertions of non-viability, on two general counts. The first of these relates to the robustness of the assessments themselves, whilst the second is whether or not a full and appropriate range of options has been adequately and rigorously tested. 34 On the first point, the appellant relies on three different expert witnesses to deal with this topic. However, their evidence is inter-related, as the costings prepared by Mr Williams were used as the basis for the assessments undertaken by Mr Belcher, and figures produced by both Mr Williams and Mr Belcher were used as the inputs to Mr Jones’s assessments. The costing exercise undertaken by Mr Williams therefore forms a starting point in considering the robustness of the appellant’s assessments. 35 For the ‘all-care’ proposal (Scheme 2), the Council’s criticisms largely centre on three matters. These are firstly, the view that an unreasonably high value has been assumed for the superstructure costs; secondly, the view that fittings and fixtures are over-priced and inconsistent with costings accepted by the appellant in the context of the refurbishment option for the existing building (Scheme 1); and finally, the view that an unacceptably high figure of 22.54%has been assumed for Preliminaries. The Council levels these same criticisms at the ‘mixed-use’ scheme (Scheme 3), but in addition is critical of the scale of operation chosen for the care element as, at just 45 beds, it falls well below the figure of 60 which the appellant itself indicates is a minimum for achieving economies of scale. 36 In many respects I consider that the appellant’s figures are more reliable than the Council’s, as they relate to actual designs on an identified site, whereas the Council’s figures are based on standard rates, which are more appropriate where detailed site and. design considerations are not known. Nevertheless, I share the Council’s concerns that the costs for fittings and fixtures are significantly higher than figures which the appellant appeared quite happy to accept in the context of Scheme 1. Whilst the appellant argues that the agreement reached with the Council on the ‘cost per bedspace’ means that there is no real basis for criticising the appellant’s figures, I have noted that the Council has qualified its agreement somewhat, insofar as it indicates that its figures relate to a larger ‘floor area per bed allowance’ than do the appellant’s. As a result I have noted the Council’s comment that its figures would have to be considered as generous, if re-calculated using the same floor area per bed allowance as the appellant. I also consider that there is little firm or convincing justification to adopt the higher figure of 22.54% for Preliminaries, when a lower figure of 20% had been used by the same witness in assessments undertaken as recently as 2004. 37 With regard to the assessments undertaken by Mr Belcher, the Council has again been critical of a number of the inputs and assumptions, most notably the average weekly fees and a Contingency sum which the appellant acknowledges has been double-counted. The appellant argues that these assessments are robust because they have been based on high fee rates and high occupancy rates (£10l8 per week and 95%respectively), coupled with a high ‘Years Purchase’ of 10. I acknowledge that these could be viewed as optimistic assumptions which would tend to work to increase the case for viability. I also accept that there is likely to be a ceiling of some sort on fees, because at a certain level it is likely to be cheaper for prospective residents to employ a nurse to provide care in the resident’s own home. A figure of around £1000 per week was quoted in the RSMRR 2002 report, but what I understand are more recent figures, supplied by the appellant, indicate that at least one local nursing agency charges about £1475 per week for qualified nursing ‘live-in’ care. 38 In view of these points I consider there to be some merit in the Council’s assertions that as fees as high as £1300 per week are currently being charged for some rooms at the BUPA Kensington Nursing Home within the Borough, higher fees than £1018 could well be achievable here. A figure of £1100 per week was suggested as reasonable by the Council, which represents a less than 10% increase over the figure used in the appellant’s assessments. But because, of the multiplier used, I share the Council’s view that such a change in fee income could increase the operational business value by between £3m and £4m. Whether or not such fee levels would only be achievable with further increased staffing levels and costs, as maintained by the appellant, must remain debatable in the absence of firm evidence on this matter. Some of these matters would have become apparent by sensitivity testing, but this was not undertaken to any meaningful extent. 39 A further witness for the appellant, Mr Jones, uses the Discounted Cash Flow methodology to assess the commercial viability of the same three schemes considered for the inquiry by Mr Belcher, and similarly concludes that none of them would be commercially viable. However, as Mr Jones has adopted Mr Belcher’s assumptions regarding the costs and revenues of these schemes, the same criticisms and uncertainties detailed above also have to apply to these assessments. Overall I am left with the impression that relatively minor adjustments to various parameters can have a significant impact on the outcome of the assessments. In my opinion this points to the need for a focussed assessment by an operator with a genuine interest in running a Class C2 use on the site. Such an assessment would quite likely have been undertaken by prospective purchasers if the site had been seriously marketed for such a use, and the absence of any such marketing gives rise to my second broad area of uncertainty regarding the viability assessments before me, as outlined below. 40 There is no real dispute between the parties that in general terms, any care home use on this site would be expensive to re-establish, because of the somewhat restricted nature of the site, and other constraints such as the need to respect and respond to its conservation area setting. I also acknowledge that the need to avoid rooms with poor outlook, such as any at lower ground-floor levels would create additional constraints on design, as would the need to provide a ‘unitised’ design with appropriate dayspace, sanitary and dining facilities on each floor. In turn these factors are almost certain to point to a private ‘top-end’ care home charging high fees, for those who can afford to fund their own care. But ‘within that broad description, it seems to me that there ought to be a wide range of possible solutions, which can only really be rigorously tested through a serious marketing exercise which allows those with a genuine interest in pursuing a care home use for the site to consider and assess the viability of such options. 41 Because of these points I do not agree with the appellant that only limited weight should be attached to the absence of market testing of the site for Class C2 uses. Rather, I share the Council’s concerns that the appellant’s clear desire to develop the site for purely residential purposes could well have compromised the objectivity of the viability assessments. Put simply, I cannot be certain, on the basis of the evidence, before me, either that the specific options tested conclusively demonstrate non-viability; or that other proposals, not yet considered or tested, would not be viable. 42 To reinforce the importance of serious marketing in a case such as this, I have noted the significant difference in the gross development value assumed for the residential element of the mixed-use scheme considered in GVAH’s February 2004 report (£12.6m including an allowance for car parking spaces) compared to the Scheme 3 proposal being promoted at the inquiry (£9.31m). The first of these related to four large residential units, whilst the second related to twenty close-care apartments. I acknowledge that this change was made largely on the advice of leading estate agents, and that all of these agents also expressed similar concerns about the likelihood of successful ‘off-plan’ selling. I have no reason to doubt the accuracy or sincerity of this advice, and I accept that the Council could have sought independent expert opinion on this matter. 43 Nevertheless, by the estate agents’ own admissions, a mix of residential uses and a separate care home would be a unique venture. Because of the untried nature of such a project, and the significant difference in potential development value between the four and twenty residential unit schemes detailed above, it is my view that a more rigorous and robust testing of such options, including an exercise to sell ‘off-plan’,should have been undertaken. Without such evidence, and in the light of the points already made, I consider that it is not possible to establish, beyond reasonable doubt, the viability or non-viability of a care home use, in whatever form, on this site. 44 Specific expressions of interest in operating a care home on the site were referred to both by the Council, and by a local Ward Councillor (who is also Chair of the Vicarage Gate Action Group which seeks to retain a care home use here). None of these amounts to a firm proposal, although this is not completely surprising as the previous owner’s desire to sell the site for purely residential purposes appears to have resulted in it actively discouraging interest from those wanting to continue a care home use. From the limited informationplaced before me regarding these proposals, I share the appellant’s view, that there is considerable uncertainty about the financial standing and relevant experience behind these expressions of interest. But this does not mean that I can reliably conclude that these parties, or others, could not put together a viable proposal in the context of serious marketing. 45 In this regard I have noted the appellant’s contention that the Council should have been able to find an interest in the site from an operator in this sector, if any such genuine interest existed. However, whilst I accept that it would have been open to the Council to produce such evidence, I do not consider that the onus for such investigations falls on the Council in view of the requirements of SPG7. Amongst other matters this expects applicants to have made genuine attempts to sell the building for use as a residential care or nursing home over an extended period of not less than 12 months. Rather, the reluctance of the previous owner and the appellant to contemplate or undertake such marketing weighs against the appeal proposal, as it introduces a significant element of real uncertainty into the viability exercise. 46 As noted previously, the appellant has offered a unilateral undertaking in this case. It seems to me that this is primarily to provide affordable housing, in the event that I find in the appellant’s favour on this first issue, but it also contains alternative clauses whereby a sum of £4m would be made available to the Council, in two tranches, for the purpose of providing Affordable Elderly Persons’ Accommodation. However, I am mindful of the fact that although UDP policy SC3 allows for the Council to negotiate planning obligations to replace essential social or community facilities lost through development, this is only in circumstances where their loss is unavoidable. I do not believe that to be the case here, in light of the reasons already discussed, and the uncertainties which still remain regarding the viability of a Class C2 use in some form on this site. Because of these points, and the clear conflict with policy which results, the unilateral undertaking is not appropriate in this case, and accordingly cannot make this proposal acceptable. Summary 47 To summarise the foregoing points, I am satisfied that there is a sound, UDP policy basis for SPG7 and that the protection of nursing or residential care homes for the elderly, where a need can be shown, is also an objective of the London Plan. I am also satisfied that there is a clear, identified demand for self-funded places in such homes within the Borough, including at the ‘top-end’ of the market. In these circumstances I consider that existing Class C2 land uses should be safeguarded, and that changes away from such uses should not be allowed, unless non-viability can be reliably demonstrated. I consider it reasonable to expect the guidance in SPG7 on assessing the commercial viability to be followed, including the undertaking of a genuine marketing exercise. In the absence of such an exercise in this case, and in 1ight of the uncertainties I have outlined, regarding the appellant’s viability assessments, I cannot be certain that a care home use would not be viable here. The offer of a unilateral undertaking is therefore not acceptable. Accordingly I have to conclude that the appeal proposal would have an adverse effect on the provision of elderly person’s accommodation within the Borough. It would therefore be at odds with the objectives of the relevant development plan policies to which I have already referred. 48 Before moving on to discuss affordable housing matters, I consider it appropriate to comment on the appellant’s contention that the Council’s deemed reasons for refusal give greater weight to the provision of a 65-72 bedspace top-end care home, than to a housing use which would generate, on the Council’s estimate, some 20 affordable housing units. Although the Council states that it has not explicitly considered this balance, I do not think it unreasonable for the appellant to summarise the issue in this way. But on the basis of the evidence before me, it is clear that there is a strong demand for both care bedspaces and affordable housing within the Borough. Because of this I consider that even if there was no policy protection afforded to social and community uses, as the appeal site has a lawful Class C2 use and as no significant residential amenity or other problems of operating a care home on this site have been brought to my attention, these matters would weigh in favour of the retention of such a use here. The effect on the provision of affordable housing 49 Both parties agree that this issue, and the one which follows, only have relevance if a care home use is found to not be viable on the appeal site. My adverse findings on the first main issue are sufficient to justify dismissing this appeal, and that is my overall decision. However, in the light of the evidence submitted and my view that the matter of viability needs to be revisited, I feel that consideration needs to be given to these other issues. 50 As a starting point on the issue of affordable housing, there is common ground between the parties that the appeal site would be suitable for residential use if a care home use could be shown to not be viable. However, the appellant maintains that the site would not give rise to a requirement for affordable housing. The appellant’s position appears to be that the current proposal for 12 large, family-sized flats represents the maximum number of units that can be accommodated on the site when other relevant matters are taken into account. These are the size of the site, a development mix which reflects the demographic profile of the Borough, and UDP residential density policies, all as set out in UDP paragraph 5.5.15. 51 As a result the appellant argues that although the site could physically accommodate up to 30 residential units, development at such a density would not be appropriate, in light of the matters listed above and other constraints such as design and form, the relationship to neighbouring properties, and car parking. I have no difficulty with this stance as a matter of principle, but I am not persuaded that it can be justified in the current case.Having said this, I accept the appellant’s view that the height and bulk of the currently proposed building is likely to be at or close to the maximum acceptable on this site, in the light of such matters as residential amenity and townscape. 52 1 have had regard to the 2001 Census information relating to the mix of dwelling types in the locality of the appeal site, submitted by the Council. I have also noted the appellant’s points that the majority of residential planning permissions over the last 5 years or so have provided smaller sized units, and that there is a clear demand for dwellings of the larger size proposed here. I discuss the matter of dwelling mix in more detail under the third main issue, but there does not seem to be any over-riding need or justification for the mix of dwelling units being pursued by the appellant. I consider it self-evident that a different mix of dwelling units, even using the same number of habitable rooms currently proposed, would result in a greater number of units than 12. 53 The Council has commissioned architects to produce an alternative internal layout for the proposed building, using the same envelope and window positions, and has concluded that it could easily accommodate 26 spacious units. The appellant has not seriously disputed this point and indeed, as noted earlier, has accepted that up to 30 units could be accommodated. As the external appearance of the building would be pre4ominantly the same whether it contained 12 units or 26, it is my view that either scheme would be appropriate to the local context. Based on minimum room sizes and with some degree of redesign, it is possible that the building could provide an even greater number of units, although as no drawings or other firm details have been submitted in this regard, I can only give limited weight to consideration of an even more intensive use of the site. However, for all the above reasons I am satisfied that a reasonable capacity for the site is about 30 units, having regard to its location and context. The site is therefore one which, if developed for residential purposes, would be required to provide affordable housing. 54 In terms of the amount which should be provided, UDP policy H22 contains no specific targets, but simply requires the provision and retention of ‘a significant proportion’ of affordable housing to be negotiated. From the supporting text, paragraph 5.5.11 indicates that the Council wishes to ensure that the present proportion of affordable housing in the Borough (one-third) is maintained, and paragraph 5.5.13makes it clear that for qualifying developments, a minimum proportion of one-third of the housing should be affordable. 55 Paragraph 3.30 of the London Plan indicates that one of the Mayor’s strategic objectives is to increase substantially London’s supply of affordable housing, whilst paragraph 3.37 explains that the Mayor has adopted a strategic target that 50% of all additional housing should be affordable. This is carried forwards in policy 3A.7, which states that UDP policies should set an overall target for the amount of affordable housing provision over the plan period in their area. Policy 3A.8 expects individual Boroughs to have regard to such targets when negotiating on individual private residential and mixed-use schemes, with the aim of seeking the maximum reasonable amount of affordable housing. 56 As the London Plan recognises that not all Boroughs will, as yet, have adopted new affordable housing targets, I accept the appellant’s argument that although the Mayor’s strategic target clearly exceeds the current UDP figure, this does not constitute a conflict which would result in the strategic figure of 50%superseding the UDP figure. Rather, individual Boroughs will need to set new targets through the Local Development Framework process. In this regard, submissions made to the Examination in Public for the London Plan show that the Council considers that a 50%target would be unrealistic for the Borough as it would have a deterrent effect on development, and harm the Borough’s environmental quality. Moreover, this same evidence makes it clear that the Council’s view of this 50%figure is that it should be an aspirational target, to be used as a benchmark of annual performance, rather than being rigidly applied through UDP and development control policies in every circumstance. 57 Against this backdrop it is my view that a rigid 50% of affordable housing should not be sought here, especially as the London Plan policy 3A.8 states that targets should be applied flexibly, taking account of individual site costs, the availability of public subsidy and other scheme requirements. I accept that the absence of any newly adopted Council targets, in line with policy 3A.7, does not mean that the maximum reasonable amount of affordable housing should not be sought in this case, and if this topic had formed the subject of meaningful discussions between the parties I would have been better placed to assess this matter. However, because the appellant has insisted that the site does not give rise to the requirement for affordable housing no such discussions have taken place. In the absence of firm information to the contrary I therefore do not feel able to conclude that a higher proportion of on-site affordable housing than one-third would be appropriate in this case. 58 There is a general expectation that affordable housing will be provided on site, unless there are exceptional circumstances which make this impossible. Where such circumstances do exist, UDP paragraph explains that the Council will require the developer to identify and supply a suitable site, capable of accommodating the affordable housing. It is only when neither of these options can be achieved that the Council will seek a commuted payment to provide affordable housing elsewhere in the Borough. No firm reason has been put before me to justify or explain why on-site provision could not be pursued here. Nor does it appear that any serious attempt has been made to identify and supply a suitable alternative site. The 12 large residential units proposed in the current scheme would not be appropriate for affordable housing, and it would appear that the appellant has simply decided not to pursue any on-site provision or seek an alternative site, but has, as a first choice, offered a commuted payment through the unilateral undertaking discussed above. Taken at this basic level there is a clear conflict with the objectives of the UDP and London Plan policies referred to earlier. 59 In support of this option for off-site affordable housing provision, the appellant draws attention to a number of other schemes where such provision was considered acceptable by the Council, and where the appellant states that in each case it would have been physically possible to provide affordable housing on site. The appellant also points out that a substantial increase in the amount of affordable housing to be provided has, in other cases, been treated as an exceptional circumstance to justify off-site rather than on-site provision. 60 I consider that any departure from the requirement to provide affordable housing on-site should be clearly justified, and share the appellant’s view that such reasons should appear in the relevant Committee Reports. However, I cannot find any such justification in the Committee Reports relating to the other schemes to which I have been referred, although I am unaware whether or not such matters were discussed at the Committee meetings themselves. It appears to be the case, however, that for these other proposals there had been the opportunity for the Council to discuss both the matter of site capacity and the acceptability and practicability of on-site provision with the relevant applicants. This has not been possible in the current case because of the appellant’s insistence that the site does not give rise to a requirement to provide affordable housing. 61 Nevertheless, on the basis of the evidence before me I can discern no material difference between the offer of a commuted payment to provide off-site affordable housing at an enhanced rate in this case, and similar offers accepted by the Council in these other cases. But whilst I consider these other examples to be material considerations in the current appeal I am not persuaded, in view of the absence of convincing reasons, that they are of sufficient importance and relevance to outweigh the strong policy objective for on-site provision. In reaching this view I have placed great importance on the fact that on-site provision of affordable housing is a key method of achieving mixed and balanced communities, in line with Government guidance in PPG3 and Circular 06/98, in addition to the objectives of UDP policy H22. 62 On this second issue I conclude that if the site was to be developed for residential purposes, it would give rise to a requirement to provide a minimum of 10 affordable housing units. However, by not allowing for this affordable housing provision on site the appeal proposal would work against the Council’s objective of achieving mixed and balanced communities, as detailed above. Accordingly it would have an adverse impact on the provision of affordable housing within the. Borough, and would be in conflict with the relevant objectives of UDP policy H22 and London Plan policy 3A.7. The proposed range and mix of housing units 63 I turn now to the issue of housing mix, which in many ways is linked to the previous affordable housing issue. The Council maintains that as the proposed development would not provide an adequate range and choice of accommodation, it would fail to maximise the potential of the site and would constitute a type of development which would hinder social inclusion. As a result it would run counter to the objectives of UDP policies H18 and H19. The appellant has pointed out that paragraph 1.2.4(c) of the UDP explains that ‘to seek’ types of policies, such as H18 and H19, cannot, in themselves, provide reasons for refusal. However, the paragraph goes on to explain that if a proposal is in accordance with such apolicy, this factor may be taken into account when considering the application. Because of this, I see no reason why the fact that a particular proposal would not further the objectives of specific UDP policies should not be similarly taken into account. 64 In addition to these policies themselves, I have also had regard to UDP paragraph 5.5.1, which states that the mix of accommodation in the Borough should be related to the range in household types existing or likely to exist, and to deficiencies in the range of accommodation. The paragraph goes on to give a number of reasons why it is important to retain a large stock of small residential units, whilst paragraph 5.5.2also points out that it is important that a sufficiently wide range of dwellings is provided, in terms of type and size, to satisfy the needs of larger households and rising standards. 65 With regards to the London Plan, policy 4B.3 states that the Mayor will, and Boroughs should, ensure that development proposals achieve the highest possible intensity; of use compatible with, amongst other matters, local context. I agree with the Council that this objective is relevant and operative in the current case. The policy goes on to indicate that Boroughs should develop residential and commercial density policies in their UDPs in line with this policy, and adopt the residential density ranges set out in Table 4B.1. However, as the appellant rightly points out, the policy does not state that Boroughs must slavishly adhere to the table, or that the table should be taken to apply already within the Borough. 66 Notwithstanding this latter point the appellant maintains that the dwelling types proposed in the current scheme are appropriate for the context of this site, and would comply with this density table in any event. It was agreed that the appeal site lies within an ‘urban zone’ as shown on the Character Map which accompanies the matrix. It was further agreed that in UDP terms (which allow for half of the road width to be included in the site area), the appeal proposal would represent a density of 422 habitable rooms per hectare (hrha), or 66.6 units per hectare (uha). The London Plan relies on ‘net’ site density, which excludes any allowance for the width of the surrounding roads, and in these terms the proposal would represent a density of 447 hrha or 70.6 uha. As the local area largely comprises terraced houses and flats, and as the proposed dwellings are described by the appellant as large lateral flats, equivalent to houses, then the appropriate density figures from Table 4B.1 are 200-450 hrha and 55-175uha, and on the basis of the above figures the appeal proposal would fall within both of these ranges. 67 However, this table is based on the assumption that dwellings of this type would have an average of 3.1 habitable rooms per unit and for a development with 447 hrha, such as is proposed here, this would equate to some 144 uha. As this is more than twice the number of units per hectare currently proposed, it seems to me that when considered in terms of dwellings or residential units, the proposal could not be said to be achieving the highest possible intensity of use, as sought by London Plan policy 4B.3 Using the column for ‘mostly flats’ from the matrix, as advocated by the Council, leads me to a similar conclusion. 68 To further support the view that the form of dwellings proposed would be appropriate here, the appellant points out that the majority of schemes for developments of between 5 and 25 dwellings, approved over the last 5 years, made provision for smaller units. But that only about 23% of the schemes provided larger units such as 4, 5 and 6 bedroom dwellings. In this regard the Council agrees that the appeal proposal would not upset the overall balance of housing provision indicated by policies H18 and H19. 69 However, in terms of a regional framework against which to consider housing mix, I have had regard to the GLA Housing Requirements Study of December 2004, referred to in the Mayor of London’s draft SPG on Housing Provision. This estimates that the London-wide housing requirement over the next 15 years is for 32% of 1 bedroom households; 38% of 2/3 bedroom households; and 30% of 4 bedroom or larger households. I have also been mindful of information from the 2001 Census, which shows that for the Campden ward and for the 2 smaller census zones within which the appeal site lies, some 57% of all households occupy dwellings with 1-4 rooms. Taken together these data indicate that not only is there likely to be a continuing demand for smaller residential units throughout the capital as a whole, but that any smaller units provided as part of a development on the appeal site would not be out of keeping with other dwellings in the immediate locality. 70 In addition, I have noted that all of the examples which the appellant has drawn my attention to, which provide 1 units or more, provided an element of smaller accommodation in the form of 1 or 2 bedroom units as well as larger units, thereby providing a mix of dwelling units in accord with policies H18 and H19. In view of the above points I see no good reason why the appeal proposal should not do similarly. I acknowledge that ground floor units on this site, which would have access to garden areas, would be suitable for family accommodation. But I am not persuaded, on the evidence before me that such units should exclusively be provided here. I also accept that the overall objective of providing a mix of dwelling types need not necessarily preclude developments exclusively of one type of dwelling. But it is my view that such an approach here would make it harder, to achieve the Council’s and Government’s objective of creating mixed and balanced communities. 71 In summary, I have taken account of all the above information, but it does not persuade me that there is an over-riding need for these larger units in this location to the total exclusion of smaller units. Although a number of local estate agents have indicated there is a high demand for such large units, other evidence, outlined above, clearly points to there being a high demand for smaller units as well As a result I conclude that the appeal proposal would not provide an appropriate range and mix of housing units and would not, therefore, achieve the highest possible intensity of use, compatible with local context. Because of this it would be in conflict with the objectives of UDP policies H18 and H19, and with London Plan policy 4B.3. The Conservation Area Consent 72 I have already indicated, in paragraph 5 above, that the Council does not raise objection to the proposed building from a design point of view, as it considers that any outstanding matters in the design as currently proposed could be satisfactorilyaddressed by the imposition of planning conditions. I share this view, and agree that the proposed building would be a visual improvement over the current building, and more in keeping with the design of other buildings in the locality. However, as I have found against the appellant on the main issues in this case, it follows that at the present time there is no satisfactory scheme for redevelopment of this site. In these circumstances it would not be appropriate to grant Conservation Area Consent, as to do so would conflict with UDP policy CD 60. Conclusion 73 My adverse findings on the first main issue are, in my judgement, sufficient to cause the appeals to fail. But even if I had found in the appellant’s favour on this issue, I have concluded that the proposal is also unacceptable with regards to the issues of affordable housing provision and housing mix. For the reasons given above I therefore conclude that both appeals should be dismissed. I have had regard to all other matters raised, but they are not sufficient to outweigh the considerations which have led me to my conclusion.”