Dividing opinion: UK Secretary of State refuses M&S Oxford Street scheme against Inspector’s advice

The story so far

In November 2021, Westminster City Council resolved to grant planning permission for the M&S scheme, which involved the demolition of three interconnected buildings at the Marble Arch end of Oxford Street, including the art deco Orchard House,  to create a new ten-storey building with a revitalised flagship M&S store at ground and lower ground levels, and offices above.  Some five months later the Mayor of London confirmed that he would not seek to direct refusal or recover the application.  However, under the shadow of significant opposition to the scheme, spearheaded by SAVE Britain’s Heritage, the application was called-in for determination by the Secretary of State for Levelling Up, Housing and Local Communities on 29 June 2022.

Following a public inquiry in Autumn 2022, Inspector David Nicholson sent his report to the Secretary of State on 1 February 2023, recommending approval of the scheme. 

Over six months after the inquiry, and two years after M&S first submitted its planning application, the eagerly awaited decision was published on 20 July 2023. Michael Gove, the Secretary of State, rejected the Inspector’s recommendations and refused planning permission for the redevelopment.

Key takeaways from the decision:

This decision is about so much more than carbon, and applicants need to work out the balance between numerous conflicting issues.

Despite the noise around the carbon implications of the proposed development (and around any potential refurbishment), this decision isn't just about operational versus embodied carbon. Indeed, it can be argued that the decisive factor for the Secretary of State in this case was effects on heritage.  Gove's decision has highlighted that planning is, and always will be, a balancing act between numerous different factors, whether that be the public benefits of a scheme, its potential heritage impacts, its design, or its embodied carbon implications. It is then up to the applicant to try to prove which considerations should be given the greatest weight.  Having said this, there's no denying that politics (for better or for worse) can have a part to play in such cases and, as has been shown here, adds an element of uncertainty which can be hard to anticipate or accommodate. 

Just because a building isn’t listed does not mean that it isn’t part of our heritage

In November 2021, Historic England refused to list Orchard House on the basis that it was much altered and did not meet the statutory criteria for listing. The building also sits outside the long-established nearby conservation areas.  While neither listed nor in a conservation area, Orchard House was confirmed as a non-designated heritage asset, and the Inspector concluded that the loss of the building "would be a little sad to those whom it is a familiar sight’ adding that ‘in the context of the vast number of listed classical Portland Stone buildings in London, I find the harm would be no more than that." The Secretary of State opted to go further, citing that the loss of Orchard House resulted in less than substantial harm that should attract "substantial weight" in the planning balance. 

"Less than substantial" harm can cover a multitude of impacts

The Secretary of State accepted the findings of the Inspector that the height and appearance of the proposals would result in "less than substantial harm" to the setting, and therefore the significance, of various designated heritage assets. This harm was found to be at different levels across the spectrum of "less than substantial": at the upper end in respect of the setting of the grade II* Selfridges department store and the Stratford Place conservation area, but closer to the middle for the Mayfair conservation area, and even lower for the impact on the Portman Estate conservation area. 

Weighing up the balance on heritage harm is not a precise science

The Inspector concluded that the heritage harm, both in terms of the designated heritage assets and the loss of Orchard House, should carry only moderate weight, even taking into account the nature of the statutory tests, and that this was outweighed by the benefits of the scheme. The Secretary of State disagreed, asserting that the harm to the designated heritage assets (and in particular to the setting of Selfridges) must carry ‘very great weight’. 

Having heavily shifted the weight of the heritage harm, Gove acknowledged the various heritage benefits of the proposals, including avoiding the possibility of the building becoming derelict, and further recognised the wider benefits of the scheme through improved economic viability, accessibility and environmental quality. But, in disagreement with his Inspector, Gove found that ‘in his judgment, the public benefits of the proposal would not outweigh the less than substantial harm to the designated heritage assets, considered collectively’.  Looking beyond the NPPF tests, Gove further cited the lack of express reference in local plan policies that allowed for heritage harm to be outweighed by public benefits, resulting in the proposals being in part conflict with the relevant heritage development plan policies.

Whether or not one agrees with the conclusions reached, this is a valuable reminder that the decision maker can apply its own planning judgment in choosing the degree of weight to material considerations associated with heritage harm, something the courts are extremely reluctant to touch. Arguably, it is the very subjectiveness of this approach which enabled the Secretary of State to reach his conclusions, and this could prove very difficult to challenge.

Failing to mitigate heritage harm can also be a failure of design

Gove further relied on the very great weight he attached to the heritage harm to conclude that the proposals were not in overall compliance with specific design policies – in particular  London Plan policy D3 which encourages optimising site capacity through a design-led approach.  Despite appearing in parts to praise many of the design elements of the scheme, Gove found that ‘it cannot be said that this is the right approach for this particular location’ as a result of the level of harm to heritage assets. 

Should full redevelopment wait until we have reached a zero-carbon economy?

As well as the expected considerations around whether the whole-life carbon assessment of the proposals were consistent with current and emerging policy considerations, Gove explored an interesting point raised by the Inspector about the carbon implications of redevelopment once the grid has been decarbonised which suggested that, once we reach that point, embodied carbon (ie. the potential one-off carbon costs associated with demolition and rebuild) will be much less of a concern as construction methods, materials and their transport will benefit from renewable energy sources. Limited weight was given to this argument in this case, but it does give food for thought for the future. Could demolition become a more favoured option as time goes on? Is there a risk that development involving demolition will be postponed while the UK works towards a zero-carbon future? It will certainly be interesting to see whether this point is raised again in other cases (and indeed what weight it is given).

This decision is fact-specific, but could it still set a precedent?

It is important to remember that this is a Secretary of State planning decision, and while it can prove a potentially useful reference, it doesn’t create precedent like court decisions. Gove also sought to make clear that this decision is not intended to become a fixed precedent, stressing that the decision turned on very specific facts, and that climate change and embodied carbon policies ‘will continue to develop and in due course further changes may well be made in statute, policy or guidance’. However, many will look to this decision as setting a clear direction of travel in which there will be an increasing pressure on developers to exhaustively demonstrate the non-viability of the retention or retrofitting of existing buildings before being able to bring forward full redevelopment schemes, even where such schemes embrace environmental sustainability, and can be seen to offer a clear and valuable range of benefits to both the local and wider community. 

What next for M&S?

M&S has six weeks in which to decide whether to file a s288 statutory challenge against Michael Gove’s decision. While there has been no confirmation one way or the other, Stuart Machin, chief executive of M&S, wasted no time in condemning the refusal against the Inspector’s recommendation as ‘utterly pathetic’. He reiterated the company’s assertion that there is no other viable scheme and that ‘after almost a century at Marble Arch, M&S is now left with no choice but to review its future position on Oxford Street on the whim of one man’. 

In the absence of a challenge, new proposals may come forward, but there seems to be a real chance this site will become yet another empty retail space on one of the nation’s most high-profile shopping streets at a time when regeneration and growth is essential to economic recovery and, somewhat ironically, while the government continue to suggest amendments to planning law to supposedly reinvigorate the high street. 

…And how might these takeaways impact future development? 

The subjectiveness of assessing heritage harm, which was clearly decisive in this case, is not a new challenge facing developments involving historic sites and buildings, but it does reinforce the inherent uncertainty of how effects of development on the historic environment are characterised, and the way in which decision makers can reach different conclusions on the level of harm.

In considering the implications of embedded carbon, the UK government, the Mayor of London and Westminster City Council have all declared a climate emergency, and it is widely accepted that efforts must be made to reduce carbon consumption and improve energy efficiency. What is also becoming increasingly hard to deny is that our planning system is struggling with planning policies that are still developing, and this dynamic creates continuing uncertainty and inconsistency in decision-making. It makes it harder for developers to bring forward meaningful and sustainable development with any confidence that it will be fairly and objectively considered, coupled with the potential that the policy ‘goal posts’ may continue to move – even during the determination period. 

Authored by Robert Gowing and Rosie Shields