Holborn Studios - What went wrong?

By Laurie Elks

Hackney Council has recently lost a second judicial review of its decision to grant permission for redevelopment of the Holborn Studios site in Hoxton.

This note summarises the issues arising in the first Planning Application (A1); the first Judicial Review case (JR1); the second Planning Application (A2); and the second Judicial Review Case (JR2).  We also add some reflections on the lessons to be learned for the future.

The Redevelopment Proposals – a very brief summary

Holborn Studios is the largest photographic studio complex in Europe. It is used for photography and film work, including fashion shoots and television programmes. It serves a wide range of users and is an important part of the creative cluster in the so-called “City Fringe”.  There are a number of sub-tenants and licensees in creative businesses and 300 jobs in all within the complex.  It also occupies a characterful locally listed building and has an extensive frontage on the Regents Canal.  The site is within the Wenlock Priority Employment Area (PEA) and the Core Growth Area of the City Fringe Opportunity Area.  The Core Strategy sets out that the main purpose of PEAs is to protect and promote business locations in the Borough especially where “clusters” are well established.  Hackney Council was at pains to point out that this did not equate with a duty to protect individual businesses.

The First Application 

The site owners, Gailliard Homes Limited (GHL), sought to redevelop.  GHL’s scheme (A1) was approved by the planning committee on 6th July 2016.  It included 50 new residential units and extensive (5644m2) employment work space including space said to be suitable for the business of a film and photographic studio, which is Holborn Studios’’ business.  None of the housing units were to be affordable, a point to which we will return. That decision was struck down by JR1 

The Second Application

GHL’s second application, A2, was approved by the planning committee on 9th January 2019. A2 contained the same number of housing units, and the same housing mix. As before, none of the units was to be affordable.  However, as part of A2, a £757,000 contribution was to be made by the developers to the Council for off-site affordable housing.  This proposal was well below the expectations of policy but was justified by a viability assessment which had been subject to negotiation between the developers and the Council but not shared in any meaningful form with Holborn Studios.  That decision was struck down by JR2. 

JR 1: The First Issue

The scheme which went to committee in July 2016 was not the scheme which had gone out for consultation. The original application, made in July 2015, had included substantially more housing units (64), including some affordable units, but less employment space.  Holborn Studios had been consulted and (along with 131 others) submitted objections to the original scheme. 

The developers put in a revised application in May 2016 after the consultation had closed.  They assured Hackney Council that they had supplied details of the new scheme to Holborn Studios but didn’t actually do so and Hackney Council apparently never checked whether they had. The Council appended details of the revised scheme on its website in June, four weeks before the planning committee but failed to draw attention to this or to re-consult on the revised scheme. As a result Holborn Studios and other objectors only found out about the changes after the agenda was published a few days before the committee hearing.  Holborn Studios asked for an adjournment to allow it to make representations against the revised scheme but this was refused.

The Council submitted that the changes were not significant and moreover “it was considered that the proposed revisions would not cause any significant adverse impacts and would create a positive change, with additional employment space provided”.  Hence, it argued, re-consultation was unnecessary. Indeed officers argued that the amendments to the scheme resolved the issues raised by Holborn Studios’’ objections to the original scheme (but without giving Holborn Studios the opportunity to say whether or not that was actually the case). 

Quashing the grant of planning permission, the judge ruled that the Council erred in failing to re-consult.  It was not for officers to make a unilateral decision that the changes were “insignificant” or “positive”.  Changes of this magnitude must be consulted upon before decisions are made.  Moreover the alterations included elements which were not “positive”, including the total exclusion of affordable housing and changes to the configuration of the studio space including the removal of structural columns in the basement studios. 

After its defeat at JR1, the Council made rather light of this omission to re-consult, characterising this as merely a “procedural reason”.  But the reality was that it was far from procedural.  The Consultation Institute, which champions openness in planning procedures commented as follows on this aspect of the case:

• Stripped of the legal technicalities, this case is really about transparency, and how public bodies cannot evade best practice by making it difficult for communities to find out what is happening. The case is surprising in that, given the trend towards openness and transparency in recent years, who could have imagined collusion between a developer and planning officers to make it difficult to detect important changes – including the abandonment of the entire ‘affordable homes’ element? 
• Given the pressures for rapid change throughout the public sector – and the tendency for some senior managers to try to force through their proposals with minimal or tokenistic dialogue, this is a timely reminder that Courts will defend the right to be consulted.

JR 1: The Second Issue

An important issue at the first committee was whether the reconfigured studio space in the redeveloped building was suitable for the existing photographic studio use.  The Committee paper contained the following rather convoluted paragraph.

• 6.5.3. At basement level, the studio space has been designed with a 5m high ceiling height and with limited access to natural light in an effort to purposefully design this for the intended film / photographic use which currently operates at the site. Despite this, Holborn Studios have objected to the proposals for a number of reasons, one of which relates to the quality of this studio space. More specifically Holborn Studios consider that the studio space is not acceptable for the intended film and photographic use given the insufficient height, location of structural poles and general sizes of the studios (among others). In response to this, the applicant has provided letters of interest from two photographic / film studios, both of which state that the proposed studio spaces are workable and that the layout is acceptable. As such, while Holborn Studios’ objections are acknowledged, the letters of interest provided suggest that the studio space is of a quality which would support the retention of the existing photographic / film studios use on the site. The quality of the proposed studio floorspace is therefore considered to be acceptable as it would appear to lend itself to the retention of the existing photographic / film studios use (even if through a different occupier).

The wording is carefully considered – “the studio space is of a quality which would support the existing photographic/film studios use on the site…even if through a different occupier. 

But what of these “letters of interest” evidencing that this was the case?  Holborn knew nothing of these letters until the planning committee papers were circulated a few days before the meeting and were finally given redacted copies 2½ hours before the meeting.  The identity of the writers was concealed, on the grounds that the letters had been written “in confidence” (although the judge could see no indication that the letters had been marked as confidential).

It was only at the Judicial Review proceedings that the letters came out through the process of discovery and the weight to be attached to them could be assessed.  To cut a long story short, the letters both came from businesses whose businesses were completely different from Holborn Studios and neither was in a position to say whether the reconfigured building would be suitable for Holborn Studios’ business or not.  Holborn Studios never saw these unredacted letters at the Committee stage and had therefore been deprived of the opportunity of making representations at the planning meeting.  In the circumstances it is hardly surprising that the judge concluded that  

• the failure to enable Holborn Studios to inspect the two letters from the date they were submitted to the Council and in an un-redacted form substantially prejudiced Holborn Studios and was unfair and unlawful. 

JR2: The First Issue

The matter came back to the planning committee in January 2019. The scheme was substantially the same save that the Developer had now agreed to pay £757,000 as a contribution to off-site affordable housing, a figure justified by a viability assessment.

This viability assessment had gone through at least two iterations, and was commented on by consultants appointed by the Council, but was not shared with Holborn Studios. The first version was published with all of the numbers blanked out making it unintelligible, and a summary document was produced for the second version. In their consultation response Holborn Studios asked for the viability assessment to be published in full. At the committee they argued that it was not possible to understand from the published material how the contribution had been calculated, and that the documents underlying the viability assessment were legally required to be published as “background documents”.

Hackney Council’s practice of withholding such documents on confidentiality grounds had previously been upheld by the Court in 2014 in R (Perry) v Hackney London Borough Council, a case bought by Stokey Local and our very own chairman involving the development of Wilmer Place, Stoke Newington.  Since then there have been changes of planning practice and the latest iteration of the National Planning Policy Framework specifically states that viability assessments should be ‘publicly available’.  Moreover published Government guidance on the NPPF explains the need to publish the entire appraisals, other than in exceptional circumstances where an executive summary could be published, but still containing the ‘benchmark land value including the landowner premium’.

The Judge said that the material disclosed in the committee report in A2 fell far short of legal requirements.  He described it as ‘opaque and unexplained’, and ‘incoherent’. The judge added that the material should identify both the existing use value and the landowners’ premium which has been used to derive the benchmark land value. These should be ‘set out in a way which enables clear interpretation and interrogation of those figures’. Since Holborn Studios were the current tenants, there was much they could have said about the existing use value, if they had been given the viability material.

The judge added that

• “the purpose of having a legal obligation to confer a right to know in relation to material underpinning a democratic decision-taking process is to enable members of the public to make well-informed observations on the substance of the decision’.

JR2: The Second Issue

Hackney has operated a very strict system of “planning purdah” which has precluded planning committee members from considering, or even reading, any lobbying material sent by applicants or objectors.  The practical effect is that anyone seeking to persuade committee members to go against planning officers’ recommendations is limited to the 5 minutes (very rarely extended) allowed at committee meetings.  This practice was followed when A2 was considered.  A letter went from Holborn Studios’ solicitors to the Planning Subcommittee members outlining Holborn Studios’ objections to the officer’s report but, as one committee member (Councillor Snell) replied, on the advice of officers these representations had been passed, unread, to officers. This long-standing practice is well known to planning practitioners in Hackney.

Holborn Studios argued in JR2 that this prohibition was an unlawful restriction of Freedom of Expression both under the Human Rights Act and at Common Law.

Hackney Council made the strange submission that in fact it operated a Code of Conduct for councillors (latest version July 2018) which did not preclude councillors from considering representations made to them.  The problem was that Councillors and officers were apparently unaware that this updated Code of Conduct existed!  As the judge remarked:

• The difficulty for the defendant is that in my view it does not appear that that approach set out in the defendant's Code was followed by two members of the planning committee or in the defendant's standard correspondence in relation to notification. The standard correspondence clearly advised against members of the public writing directly to members of the committee; there was no warrant for that advice or discouragement and it impeded the freedom of expression of a member of the public who was entitled to write to a member of the planning committee setting out in his or her own terms the points they wish to be considered in respect of an application and expect that the member would have the opportunity to read it. It appears that Councillor Stops [Chairman of the Planning Subcommittee] was under the impression that he was to resist being lobbied by either an applicant or member of the public, and Councillor Snell had apparently taken legal advice to the effect that he should refrain from reading any lobbying letter and forward it on to officers. Neither of these approaches reflects the defendant's Code, nor does it reflect the entitlement to freedom of expression in accordance with the legal principles set out above. 

Having concluded that the Council’s actual practice had been to preclude any lobbying, the judge found in favour of Holborn Studios on the point of principle.

• “bearing in mind the importance of the decisions which the members of the planning committee are making, and the fact that they are acting in the context of a democratically representative role, the need for the communication of views and opinions between councillors and the public whom they represent must be afforded significant weight. … Receiving communications from objectors to an application for planning permission is an important feature of freedom of expression in connection with democratic decision-taking and in undertaking this aspect of local authority business.” 

Having said that, in this particular case, Holborn Studios had been represented by leading counsel, Richard Harwood, at the planning meeting and there was only one substantive item on the agenda.  Mr Harwood had been allowed several come backs and answered a number of questions after his initial 5 minutes.  In these very unusual circumstances, the Court found that Mr Harwood had been able to put across Holborn Studios’’ objections to councillors. In this case therefore, the application of planning purdah did not make the decision unlawful. 

The Council was somewhat fortunate to win this point.  Councillor Stops twice threatened to eject Mr Harwood from the committee meeting after Mr Harwood pressed his right to answer points arising in the Committee’s discussion.  Had Mr Harwood not successfully stood his ground the Council would in all probability have lost on this issue. 

In any event, the previous practice of planning purdah is clearly unlawful and will have to change.

A Pattern of Behaviour?

It is worth noting, cumulatively, the procedural steps adopted by Hackney Council over the two applications:

• They failed to ensure that Holborn Studios and other objectors were aware of amendments to the original scheme.
• They failed to consult on those amendments.
• They failed to disclose the authors of the two letters of support with the result that planning committee members were misled about the weight that should be given to them.
• They refused to adjourn the first committee hearing notwithstanding that Holborn Studios were very clearly caught short by the late disclosure of information.
• They failed to disclose sufficient information about the viability assessments contrary to National Planning Policy Guidance.
• By operating the system of Planning Purdah they sought to prevent Holborn Studios’ arguments against the officers’ recommendations being available for consideration by councillors.

Readers may agree that a pattern of behaviour is apparent.  It is a pattern where officers honestly and sincerely consider that their recommendations are given fair wind to ensure that policies and targets are met, most particularly with respect to housing; and do not get snagged up by democratic procedures.  To be fair, the pressures on planning officers are not unique to Hackney but rather a construct of the 'pro-development' statutes and policy issued by Government, and guidance which only really pays lip service to communities having their say (but not really influencing decisions). 

Democratic procedures in planning were last reviewed by the Living in Hackney Scrutiny Commission, whose report: Resident Involvement in Planning Applications was approved by Cabinet in 2012, but is not visible anywhere on Hackney’s website. The Commission broadly endorsed the Committee procedures (broadly the same as the procedures in force for A1 and A2) whilst making some useful recommendations for improving procedures, many of which remain unimplemented. 

The two Holborn Studios cases point to the need for a new and fundamental review of the way Hackney does its democratic business in planning matters.  Officers and members are going to have to live in a different world, particularly in dealing with major applications, where objectors can interrogate the financial projections relied upon by developers and councillors may (heaven forfend) be exposed to a different view of the merits of the case from that presented by officers.  And consideration is also clearly needed whether, in this altered world, a single planning committee sitting once per month can give sufficient consideration to the many major applications before it.  

Another Future for Holborn Studios?

Planning practitioners are well aware that relevant planning policies can accommodate very different analyses and narratives as to how and where development should proceed.  Differing outcomes can be justified within relevant policy frameworks, provided fair and reasonable procedures are followed.

Holborn Studios’ case against redevelopment lies in the importance of a location which offers world class (a much abused term) facilities to film makers, advertisers and others as well as an ambience which epitomises the attraction of the Shoreditch City Fringe to creative businesses.  It is an anchor which supports the clustering of creative businesses as well as a creative community of businesses within the site itself.

Relevant planning policy frameworks, most particularly the Mayor of London’s City Fringe Opportunity Area Planning Framework are replete with the importance of policies to support creative clusters.  (The word “cluster” appears 89 times in the City Fringe Planning Framework.)  It would have been perfectly within relevant planning frameworks to have charted an outcome for the site which recognised Holborn Studios’ specific and unique contribution to the economic dynamism of the Shoreditch City Fringe.

Officers chose instead to adopt a generic approach – stressing that the development could accommodate business(es) within the same category of planning use, whilst dispensing with Holborn Studios itself.  There is no analysis as to what such businesses will contribute to the creative economy or whether they will come at all.

This issue was the subject of a third, and unsuccessful ground of appeal by Holborn Studios who contended that the Council’s officers failed in the committee report to properly interpret development plan policies in relation to the retention of the existing use as an important component of the creative industries in the area.  On this point the judge concluded:

• As recorded in paragraph 6.5 of the committee report the conclusion that was reached by the officers measured against the policies set out above was that the benefits of the proposal in terms of the employment it proposed weighed against the loss of the claimant's use, and rendered the application on balance acceptable. That was a conclusion which was reached based upon the correct interpretation of the policies that there was no policy requirement to retain the specific type of use operated and required by the claimant, but that nonetheless the loss of the claimant's use was relevant to the considerations comprised in the policies related more generally to employment activity. Whilst as a matter of planning merit that balance might be struck in different ways, there was in my judgement nothing unlawful in the way in which the policies were interpreted or the considerations taken into account in the balance set out in the committee report. (Emphasis added).

Hackney Council’s spokesman is quoted in the Hackney Gazette as saying:

• The council welcomes the court’s ruling … that the council’s officers reached a correct interpretation of policies relating to creative industries in their report on the planning application.

The rub is the carefully chosen indefinite article – “a correct interpretation”.  The judge did not say “the correct interpretation” and the passage we have emphasised confirms that “as a matter of planning merit that balance might be struck in different ways”.

Hackney needs to take care. The City Fringe’s future as a creative hub is subject to many competitors both within and (post Brexit) outside the UK.  To take out a beacon of creativity to be replaced with a housing led development is not a light matter.  It is not likely, but it is just possible, that the ray of light shone by these two decisions, and the greater democratic scrutiny there will be in the future, could take this site in another direction.