M&S decision brings embodied carbon impacts to fore in re-development v refurbishment debate

While the decision does not confirm that the principle of reducing carbon impact of development proposals should trump all other matters, it will result in developers needing to have strong evidence to demonstrate why planning permission for demolition and re-development should be granted against the alternative of retaining and refurbishing existing premises.

The ruling in brief

On Thursday, Michael Gove, the secretary of state for levelling up, housing and communities, refused planning permission to demolish and re-develop the Marks & Spencer (M&S) Oxford Street store in London.

Gove’s decision went against not only the planning inspector’s recommendation but also earlier decisions by Westminster Council and the Greater London Authority (GLA) that planning permission could be granted.

• the decision was based on consideration of three main issues: whether the proposed development would have an adverse impact on heritage assets;
• the significant embodied carbon emissions that would result from the demolition and re-development compared to any alternative retention and refurbishment option;
• whether the public benefits of the proposed development would outweigh any adverse impact on heritage assets or the adverse carbon consequences.

The heritage issue

On the first issue, Gove found that the proposed development would cause harm to some designated heritage assets and that this should be accorded “very great” and “significant weight”.

Basing his decision on the applicable policies in the London Plan and the Westminster City Plan Policy (the development plans) he disagreed with the planning inspector, concluding that the development conflicted with the National Planning Policy Framework (the NPPF) and the development plan policies on the conservation of heritage assets. He found that the inspector’s approach did not reflect “the statutory primacy of the development plan” and that while the development would bring significant public benefits which should be accorded substantial weight – most notably the advantages of concentrating development in a highly accessible location, employment provision and public realm benefits – he concluded that those benefits did not outweigh the harm to heritage assets.

The embodied carbon issue

On the question of carbon impact, in particular the embodied carbon emissions, there was consensus that demolition and re-development would result in greater carbon emissions than refurbishment and that the existing buildings were structurally sound. Gove found that while the development proposals were in general compliance with the development plan policies, the development would “fail to support the transition to a low carbon future” and would fail to “encourage the reuse of existing resources, including the conversion of existing buildings”, contrary to paragraph 152 of the NPPF.

In addition, Gove disagreed with the planning inspector and concluded that there was insufficient evidence that there were no viable or deliverable alternatives to demolition and redevelopment. Gove reached that view despite M&S providing evidence in support of its assertion that various alternatives were either not viable or deliverable or provided material carbon savings and the conclusions reached by the planning inspector – he had concluded, having heard all the evidence, that consideration of possible refurbishment options was academic unless they were viable and deliverable and that the refurbishment option which retained the combination of the three existing buildings would be unlikely to be viable and that it was unlikely M&S or anyone else would refurbish the buildings.

The inspector had considered that, in the absence of viable alternatives, refusal of the application would probably lead to closure of the store, the loss of M&S from the area and substantial harm to the vitality and viability of the area. In the light of this, he concluded on balance that the public benefits of the development outweighed the harm the development would do the UK’s transition to a net zero economy –  the factor he found weighed most heavily against the scheme.

Gove disagreed with this reasoning, however, noting gaps in M&S’ evidence before the inquiry and the inspector’s difficulty in reaching conclusions on viability. Gove considered it was inappropriate for the inspector to have drawn such firm conclusions on the viability of the alternative to redevelopment and that M&S had not adequately shown that it had fully explored alternatives or that they would not be viable. He also did not accord such weight to the risk of the building becoming vacant or underused or of substantial harm to the area were M&S to leave. The fact M&S had agreed to make carbon offset payments as a condition of obtaining planning permission was not sufficient to sway the decision in its favour.

Another issue that was raised in the inquiry was that the impact from embodied carbon emissions will be far higher now than they will be when the UK electricity grid has been decarbonised – a stated target the government has set for delivery by 2035. This raises the prospect that the issue will diminish in importance at that point. However, there are well-publicised concerns about the current capacity of the grid to incorporate renewable energy provision with projects facing long delays in obtaining connection to the grid. In its June 2023 progress report, the Climate Change Committee found that “the government has not yet published an overarching standalone plan or strategy for delivering a decarbonised and reliable electricity system by 2035”.

There is little doubt that the importance of embodied carbon impacts as a factor in planning decisions is likely to continue to increase. In its response to an Environmental Audit Committee report, the government stated it would review the NPPF to ensure it contributes to climate change mitigation “as fully as possible”, which will include consideration of incentives for retrofits and the role of circular economy statements. One of the 27 “priority” recommendations in the Climate Change Committee’s report this June was to “review and update the National Planning Policy Framework to ensure that net zero outcomes are consistently prioritised through the planning system, making clear that these should work in conjunction with, rather than being over-ridden by other outcomes such as development viability”.

In its net zero roadmap work, the UK Green Building Council calculated that, by 2035, 50% of building environment emissions would come from embodied carbon. Industry bodies have been calling for regulation of embodied carbon and the UK is now behind several other countries on this. In response to an Environmental Audit Committee report last year, the government committed to consult this year on measures to “mainstream the measurement and reduction of embodied carbon in the built environment”, which may include ratcheted carbon targets. Suggestions have been made that this should be required at the planning stage and/or at building regulation stage.

One of the government’s other commitments in that response has been honoured with the consultation on minimum product standards. If implemented, this will lead to lower carbon UK-produced building products and a carbon tax on higher carbon imported products.

Many developers and their supply chains, including architects and contractors, are embracing the challenge of retaining and reusing existing buildings, recognising our planet’s resources are finite.  It is not necessarily always the case that, in carbon terms, an existing building refurbishment will be able to perform as well as a new development on a whole life carbon basis, but in many if not most instances it will, given the huge savings in embodied carbon. It is right to require very strong reasons to justify demolition and re-development.

Gove’s decision

In conclusion, Gove refused permission largely based on heritage reasons, to which he gave significant weight, and embodied carbon impacts, to which he gave moderate weight. However, it is the latter issue that is the focus for wider implications on the development. In summary:

• NPPF para 152 means that there should be a strong presumption in favour of repurposing and reusing buildings. Where buildings are structurally sound and in a location with the highest accessibility levels, a strong reason would be needed to justify demolition and rebuilding;
• the importance of optimising the use of the site and what alternatives are realistically available will be relevant factors in applying the presumption.

Where the London Plan policies relating to circular economy statements and whole life carbon assessments apply, the onus will be on the applicant to consider refurbishment options and demonstrate they would not be deliverable or appropriate and that it has considered all reasonable alternatives to demolition.

The question prospective developers will have after this ruling is where it leaves the debate about demolition and redevelopment as against reuse whether after a refurbishment or a repurposing.

There is nothing in Gove’s decision which states that the principle of reducing carbon impact of development proposals should trump all other matters. However, it is clear that applicants will now need to work much harder to obtain permission for demolition and re-development with an increased focus on embodied carbon comparisons and whether there are viable and deliverable alternatives.

What the ruling does demonstrate, however, is that better data is needed to more accurately calculate whole life carbon assessments. The government has a role to play here. It should set what the minimum or parameters are for whole life carbon assessment to help developers determine the case for demolition and re-build projects versus refurbishments. The design for planning submissions will likely need to be more detailed – going beyond the current requirements of concept design at RIBA stage 2, to spatial coordination at RIBA stage 3 or even technical design at RIBA stage 4 – to better assess the whole carbon impact. Developers will need to procure contractors much sooner, so they input into these more detailed designs to ensure the low carbon solutions are deliverable during construction and to commit to any net zero targets set by a developer. This will have cost implications, however.

Co-written by Jonathan Vickers of Pinsent Masons.