When a council proposes to revoke or modify a planning permission already given, it faces a difficult situation. The developer that has been granted the permission may well have committed to considerable expenditure as a result and may be entitled to claim compensation for its losses.

When revisiting a planning decision, should the council take into consideration the compensation it will have to pay if the permission is withdrawn or modified?

A recent case dealt with this point. It involved a planning application for four blocks of student flats in Wolverhampton. Permission was initially given, but the decision was challenged on the basis of the proximity of the proposed flats to a liquefied petroleum gas facility, which it was felt should lead to a refusal of planning permission in respect of at least one of the blocks of flats.

Wolverhampton City Council declined to modify the planning permission and one of the reasons for its decision was the amount of compensation that would have to be paid to the developer.

Those opposed to the development appealed on the ground that the cost of compensation was not a ‘material consideration’ in the context of the Planning Acts.

The Supreme Court ruled that the Council was entitled, when using its discretionary power to modify the planning permission (or not), to take account of the cost to the ratepayer of its decision.