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Marks and Spencer case: Demolish and re-build, or retrofit, that is the question

On 1 March 2024 the High Court decided that the Secretary of State for Levelling Up, Housing and Communities, Michael Gove’s (‘SoS’), decision to block Marks and Spencer PLC’s planning application to demolish and rebuild their flagship London store, was unlawful. 

M&S sought planning permission from Westminster City Council in June 2021, to demolish the existing building and construct a new nine-storey mixed office and retail store on Oxford Street. The application was successful and planning permission was granted in November that year. However, following numerous objections on heritage and environmental grounds, an inquiry took place and the SoS subsequently refused the application in July 2023. The SoS’s argument heavily weighted around the UK’s target of achieving a zero-carbon economy.

The planning inspector’s report, following the inquiry, considered the impact of the proposed works on: designated and non-designated heritage assets; the transition to a zero-carbon economy; public benefit; public benefit in relation to harm to heritage issues; Government policy; the development plan and the National Planning Policy Framework (‘Framework’). 

The report stated that redevelopment of the site, as opposed to refurbishment, would “involve much greater embodied carbon” and that it would hinder the zero-carbon target. Nonetheless, the planning inspector concluded that the benefits of the proposal outweighed the harm and thus planning permission should be granted. The SoS’ interpretation of the report, however, as well as government policies, resulted in his refusal of the planning permission, nearly two years later.   

M&S contested the refusal and set out six grounds of challenge against the SoS’ decision. One ground being that the SoS was mistaken regarding paragraph 152 of the Framework when he stated that there was a “strong presumption in favour of repurposing and reusing buildings” and another that he was also mistaken in respect of the embodied carbon argument. 

Under the first ground M&S claimed that the SoS required them to show that there was “compelling justification” for demolition and rebuilding due to the claimed “strong presumption” of refurbishment over redevelopment. The Judge agreed with M&S and confirmed that it was clear that the SoS had misinterpreted the Framework, which only provided an encouragement to reuse buildings and not a presumption to do so. The Judge advised that “The SoS has not applied the policy, he has rewritten it.” M&S therefore succeeded on that ground. 

The second, third and fourth grounds were in relation to the consideration of alternatives and the balance of benefit and harm to the locality. The planning inspector’s report concluded that there was “no viable and deliverable alternative” and that if planning was refused the store would most likely close, creating harm to the “vitality and viability of the area”. The Judge allowed these grounds on the basis that the SoS had failed to explain why he disagreed with the planning inspector. 

Ground five covered the review of embodied carbon. The parties had accepted that a “light-touch refurbishment” would be inadequate, so it had to either be a full rebuild or a deep refurbishment. The carbon consequences of the two options caused much disagreement. The Judge held that the SoS had interpreted the London Plan inaccurately, confusing the embodied carbon outputs from the actual construction works with those from the operation of the development. The Judge noted that it was clear that the London Plan addressed operational carbon, and not construction carbon outputs. 

Quashing the SoS’ decision to refuse the permission, the Judge noted that this hearing was not about whether it was right or not to have a policy in place relating to the carbon outputs of construction works. The Judge was to consider solely whether or not the SoS had inaccurately interpreted the inspector’s report and the various policies, which she found that he had.  Given the importance of the impact of embodied carbon, the Judge observed that the SoS may have reached a different conclusion had he properly understood them. 

This decision leaves more uncertainty as to the best way to move forward with stranded assets. The Framework only encourages refurbishment over redevelopment and the London Plan deals with operational carbon and not that created by construction works. To be able to accurately assess the best option for the environment, surely all carbon outputs need to be taken into account, and more detailed guidance, and support for refurbishment, could be of benefit.