PURPOSE
1.
To approve the terms of a permanent alternative
solution to an unresolved recommendation of the Local Government Ombudsmen, by
way of voluntary discontinuance of the dairy operation at Prestwood Grange
Farm.
BACKGROUND
2.
This complex case has been outstanding for some time
as the Council has sought to find a permanent solution to the disturbance
experienced to local residents by the operation of the adjoining dairy
farm. As an aide-memoire to the background
of this case a history of key issues as far as the dealings with the landowner
is set out in the list of background papers in paragraphs 44 to 56 below.
3.
This dairy farm has a milking parlour situated
adjacent to housing on the south side of Ryde.
The proximity of the milking parlour to the housing is closer than
recommended under current guidance. The
authorisation of this use was granted following a public Planning Inquiry,
which considered the enforcement of the planning condition for the siting of
the slurry pit. The Inspector decided
to set aside the original planning condition and this led to the current
consent. Later, following this
decision, the Local Government Ombudsman decided that the Council was guilty of
maladministration.
4.
The Ombudsman’s recommendation provided for two levels
of compensation to local residents.
However these compensation payments currently estimated at £250,000 do
not represent a permanent solution to the level of disamenity that the local
residents have suffered and more importantly will continue to suffer. In accepting the Ombudsman’s findings the
Council decided to pursue all available options to obtain a permanent
arrangement that will end the disamenity forever.
5.
The possibility of bringing the dairy operation to an
end by agreement with the owner has been an on-going discussion and the door to
a settlement has always remained open.
However, when the prospect of an agreement seemed to have faded, the
Council decided that formal proceedings be considered including the pursuance
of a Discontinuance Order.
6.
Ever since the Ombudsman’s decision the Environmental
Health Manager and consultants have continued to monitor, investigate and
collect evidence in respect of the impact of the dairy operation on the
adjacent residential area. Since
13 February 2003 135 complaints have been received by Environmental Health and
80 visits have been made. Of these
visits officers were able to confirm disamenity due to odour and or flies on 29
occasions (36%). Two consultants’
reports have been commissioned by Environmental Health. In December 2002, a report based upon
theoretical modelling of odour suggests the extent of problem to local
residents which corroborates the complaints.
This is supported by another report dated January 2004 which suggests a
correlation between officer observations, received complaints and
meteorological data relating to wind speed and direction. The report supports the officer observations
that the occurrence of odour complaints is related to milking operations on the
farm combined with low wind speeds in the direction of the residential
premises. It suggests that these events
combine to produce complaints for 4% of the time ie 15 days per year or 1 hour
per day. (The report assumes that the
sources of odour, the yard/feeding troughs are kept clean and silage clamps are
kept covered.) No action under
Environmental Health legislation has been possible in relation to the odour
disamenity suffered due to a legal defence and infrequency/persistence of the
problem.
7.
Complaints continue to be received concerning odour and
most recently flies again with increasing temperature. (Two premises close to the farm are
particularly affected. One complaint is
from a person who has recently moved into the area). In relation to the odour complaints visits are made where
possible to the surrounding area to corroborate the complaint. No action has been taken with respect to the
flies pending the outcome of the negotiations taking place. However, it is likely that the responsible
person is still complying with the previous specialist pest control report, in
which case no action would be possible.
Environmental Health supports positive action to cease the dairy farm
use. Without the cessation of the use
in such close proximity to residential premises, complaints will very likely
continue to be made. Little if any
controlling or ameliorative action by Environmental Health will be possible,
resulting in substantial disamenity.
8.
Earlier this year discussions with the landowner’s
agent for a voluntary arrangement to close this dairy recommenced. These discussions had been dormant and
unresolved since the breakdown in negotiations in February 2002.
9.
More recently both the
Council and the landowner’s agents have been in detailed discussions. As a
result terms are now being put forward by both parties’ agents recommending a
Settlement Agreement.
PROPOSED TERMS
10.
It is proposed that by way of a Settlement Agreement,
which has two distinctly separate parts namely a planning agreement and a
compensation agreement, the dairy operation on this farm will stop on or before
30 April 2005 by the existing use no longer being a legal entitlement. The entry into a planning agreement, and the
terms thereof, is of course dependent on the outcome of any planning application. The Council, as local planning authority,
will need to decide such an application on its merits in accordance with
planning legislation. That is not a
decision for the Executive.
11.
The Council will be able to enforce this cessation
both as Planning Authority should planning permission be granted subject to an
appropriate legal agreement and separately as the beneficiary of restrictive
covenants. In return for the latter undertakings the landowner will receive
compensation. The details of that compensation are set out in the attached
confidential paper.
12.
In the future the farm would be used for
arable/stock/summer grazing between March and November. One farm building will
be demolished the remaining farm buildings will be restricted in terms of the further
use to storage of hay straw or farm machinery with no animals except up to
three horses in the building specified.
Additionally, the slurry pit and dirty water are to be cleared. All to a
strict timetable.
13.
The Council will also be required to pay the
landowner’s proper costs in terms of professional fees incurred throughout the
case up to a maximum sum to be proven.
14.
The completely separate planning agreement is
envisaged to be part of a planning decision following an application by the
landowner at his discretion. Because the farmhouse is subject to an
agricultural occupancy condition as part of the dairy operation, the
application will seek the lifting of this condition so as to allow the house to
remain on site without the condition as explained in paragraph 10 above.
STRATEGIC CONTEXT
15.
By bringing forward this scheme for settlement, the
Council will be satisfying a number of operational priorities for the Council’s
Community Strategy, namely by protecting the Island’s physical environment and
ensuring the quality of the built environment, as well as improving the health,
housing and quality of life for all.
16.
Human Rights issues have been considered in this case
for both the landowner and the local residents, there being a balance to be
struck between both parties’ interests and the recommendation below aims to
achieve this result.
OTHER
MATTERS
17.
In considering Human Rights issues, the question
remains as to the payment of compensation to Non SEAGAP members having property
in the area of disamenity at the time of the Ombudsman’s decision.
18.
This is a group of unknown size who may consider
themselves entitled to a payment equivalent to the interim compensation paid to
SEAGAP members. Each application will
be judged by the Council on a case by case basis according to the applicant’s
ability to demonstrate that they have a legitimate expectation. Such applications should be limited to the
next six-month period. This cost can
only be estimated at up to £35,000.
19.
The question also arises as to the payment of costs
incurred by SEAGAP in promoting its case to the Ombudsman. This cost is understood to be about
£7,500. In making his recommendation,
the Ombudsman has already dealt with an award for these costs. Additionally, given the Council is being recommended
to secure a permanent end to the disamenity suffered by residents, and that
outcome will be superior to the prospects as would have been originally
envisaged by the group, payment of these costs is not recommended.
20.
The Council has also learnt from this case in that the
Ombudsman identified a need for refinement and improvements in terms of the
internal communications procedures as part of the Development Control process.
This refinement has been established for several years ensuring that the internal
communication channels for example with Environmental Health Services are in
place and well founded.
CONSULTATION
21.
Details set out in this report have been shared with
the landowner and residents as well as officers from Development Control,
Environmental Health, Finance and Legal and Democratic Services. No objections have been received.
22.
The farmers have accepted a package agreed between two
Chartered Surveyors with regard to the ceasing of milk production at Prestwood
Grange. Whilst the situation is not
what the farmers would prefer as they would like to continue to milk cows at
Prestwood in the modern dairy unit for many years to come, they have agreed to
cease milk production on terms set between the two valuers. The owners would therefore like to conclude
the agreement as soon as possible so they can plan their future farming
activities.
23.
SEAGAP endorse the proposed voluntary agreement
provided all covenants and agreements are fully incorporated. In sanctioning this proposal SEAGAP sincerely
hopes that the closing down of the dairy farming operation at Prestwood Grange
Farm will completely eradicate the odour and fly problems that have beset them
for the last 7½ years. SEAGAP members
are now looking forward to the spring of 2005 in the anticipation that they
will be able to resume the right to the quiet enjoyment of their homes and
gardens, but which they have been denied for far too long.
FINANCIAL/BUDGET
IMPLICATIONS
24.
Budget provision has been set aside for a settlement
that can be recommended to the Council and will meet the proposals set out in
this report.
LEGAL and PLANNING
IMPLICATIONS
25.
The Council would enter into a Settlement with the
landowner subject to the outcome of a planning application made at the
landowner’s discretion. Voluntary
agreements will bring about the material change of use, then the matter of this
dispute would be brought to an end. See
paragraph 10 above.
26.
The actual settlement will be voluntary but with the
principles of Section 102 as read with 115 of the Town and County Planning Act
1990 applying. The Council also has
power under Section 111 of the Local Government Act 1972, to do anything
(whether or not involving the expenditure, borrowing or lending of money or the
acquisition or disposal of any property rights) which is calculated to
facilitate or is conducive or incidental to, the discharge of any of their
functions.
27.
The power of first resort is, however, the power to do
anything which the local authority considers is likely to achieve the economic,
social or environmental well being of all, or part of the Island, or of any
persons resident in the area. In relying on this power, regard has to be given
to the Community Strategy, consideration of the strategic context is at
paragraph 15.
28.
The Local Government Ombudsman shall be informed of
this progress and proposals. Because of
the specialist nature of this case, the Council is taking advice from
specialist planning and property lawyers Sharpe Pritchard.
EVALUATION/RISK
MANAGEMENT
29.
Given the proposal represents a voluntary agreement,
whilst the Council does have some discretion, the rules governing the
assessment of compensation are in the Land Compensation Act 1961 the power
being pursued, in this case a Discontinuance Order and Section 115 of the Town
and Country Planning Act 1990 applies.
These rules are intended to ensure that an owner receives no more and no
less than the sum that would be payable in the open market, assuming a willing
seller. Compensation is also payable
for the effects of severance where only part of an owner’s land is acquired and
a dispossessed owner may also claim disturbance compensation in respect of
losses and expenses he incurs in having to move from or give up part of the
enjoyment of his property, including business losses, as in this case
30.
More compensation details are given in the
confidential appendix.
31.
Changes to
the compensation system will be introduced by the Planning and Compulsory
Purchase Act 2004, which received the Royal Assent on 13 May 2004. The new provisions will come into effect
following a commencement order. This is
likely to occur around September 2004.
The Act is most concerned with changes to the planning system, however
there are some proposed changes to the compulsory purchase process.
32.
Enhancement
of compensation provisions through the introduction of “loss payments” for
commercial owners and occupiers. This
will be based upon 7.5% and 2.5% of the value of the land interest for owners
and occupiers respectively. These payments will be capped at £75,000 and
£25,000 respectively.
33.
Market value
to be retained as the basis for calculating compensation for land taken.
34.
Introduction
of “consequential damage” as a head of claim to replace disturbance. This is recognition that compensation is not
confined to losses suffered by reason of disturbance to occupation.
35.
This voluntary settlement would operate by way of the
landowner moving out of dairy production over a period of time. He would sell his existing animals to be
replaced by new grazing animals and also sell on part of his milk quota. He could of course relocate to produce milk
on another site. As this phased
cessation progresses, then the changes to building and land use will take
place.
36.
The management of these phased changes will be
monitored by the Council with the payments of compensation only being released
as each step is completed.
37.
In the absence of a
negotiated agreement, the Council has power to make an order under Section 102
of the Town and Country Planning Act 1990 requiring the discontinuance of use
of the land or the alteration or removal of buildings. Such an order may be made if the Council
considers it expedient in the proper planning of their area, including the
interests of amenity and having regard to the development plan and to any other
material considerations. Such an order
would need to be confirmed by the Secretary of State, with or without
modification and may include a grant of planning permission. The landowner is entitled to oppose the
order and to be given the opportunity to be heard. This is likely to result in
a public inquiry with additional delay and cost to the Council (including
representation). If the order is set
aside or modified in such a way that the effect on disamenity is not overcome,
the Council would still need to resolve the issue of payment of compensation to
residents in line with the Ombudsman's recommendations. It is also likely that,
should the landowner be successful, the Council would be required to pay his
costs (DoE Circular 8/93, paragraph 5).
If the Executive refers the matter to Development Control Committee for
issue of such an order, it would be for that Committee to satisfy itself that
it would be expedient to do so, having taken account fully of the matters
referred to in this paragraph.
38.
Under Section 115 of the above Act, the Council must pay
compensation to a party who is able to show that he/she has suffered damage as
a consequence of such an order. This covers depreciation of an interest in the
land or by being disturbed in enjoyment of the land, or the carrying out of
works in order to comply with the order.
39.
If a Discontinuance Order is formally pursued and were
to be unsuccessful then the Council already knows that the compensation payable
to local residents as recommended by the Ombudsman is estimated at up to
£250,000, dependent on the timing and level of interest payments to be
made. The pursuance of a Discontinuance
Order will undoubtedly involve a local inquiry and it would be for the
Secretary of State to decide whether or not to confirm the Order. There would be a substantial cost in terms
of Barrister’s fees and Consultant’s fees and likely to be up to eighteen
months. A cost estimate is put at
£40,000.
OPTIONS
(a)
That the
Strategic Director of Environment Services, in consultation with the
Portfolio Holders for Sustainable Development, Planning Policy and the
Environment and for Resources, enter into an agreement:
·
enforceable by restrictive covenants which run with
the land
·
for the permanent cessation of the dairy farming
operation by 30 April 2005
·
for the removal of associated buildings
·
for the cessation of prescribed agricultural activity
in certain areas
·
for the payment of consideration and costs
·
conditional on the removal of planning restrictions
and make such other payments, within
a budget of £35,000 and no later than 31 December 2004, as are necessary to
deliver to the interim recommendation of the ombudsman.
(b)
That the matter be referred to Development Control
Committee to consider the issue of a discontinuance order under Section 102 of
the Town and Country Planning Act 1990.
(c)
That the Council does nothing.
(d)
That the Council pays residents compensation as
recommended by the Ombudsman.
OPTION
ANALYSIS
Option
|
Financial Implication
|
Benefit to Council
|
Cost/Benefit to Householders
|
Cost/Benefit to Farmer
|
|
(a)
|
Voluntary Solution
|
£600,000 to £700,000
|
Council fulfils its aim to secure a permanent
cessation of the dairying.
|
Disamenity brought to an end permanently and
enforceable.
|
Compensation for loss settled by agreement by both
parties through professional advice.
Farmer continues with different farming operation.
|
|
(b)
|
Discontinuance Order
|
Dependent on outcome of an Inspector’s Report in 18
months’ time and dependent upon a potential Lands Tribunal award with additional
costs and interest then assuming success cost of acquisition plus fees
£600,000 to £700,000
|
Outcome through robust public process.
However there is a risk.
|
A successful outcome would provide a permanent
solution to disamenity. Not an
absolute and will take time.
If unsuccessful, then option (d) still arises if the
Council loses at an inquiry.
|
Farmer dispossessed of his dairy through operation
of law which he will fight.
|
|
(c)
|
Do nothing
|
Possibly nil, although potentially high risk of
challenge
|
This would be a U turn in terms of the Council’s
stated aim. The Council would need to advertise such a decision and the
reasons.
|
None
|
None
|
|
(d)
|
Pay compensation to residents
|
Estimated £250,000
|
Minimises cost
|
No permanent solution to disamenity.
|
Farmer or successor can continue dairying.
|
CONCLUDING
ANALYSIS
40.
The disturbance and loss of amenity experienced by
residents by the continued operation of Prestwood Grange Farm as a dairy unit
is clear. Whilst the farmer has worked
with Environmental Health Officer to mitigate the effects of the dairy unit
using best practice guidance, the disturbance continues at an unacceptable
level to residents due to the distance from normal farming operations. The appeal process was the trigger to this
proximity being established and the Ombudsman found that the Council was
complicit in the appeal being allowed due to a flaw in communications which has
been addressed for applications generally.
41.
When each of the external decisions were made the
Council explored the opportunity for legal challenge and whilst there was a
potential case to seek redress there was a risk that these actions could be
unsuccessful and would merely increase the overall liability to the
Council. In view of this long-standing
analysis, funds have been set aside to find a permanent solution which would
satisfy the Ombudsman’s concerns and those of local residents.
42.
The options set out in the previous section of this
report stem from a detailed analysis of legislation available for the Council
to achieve a permanent solution through discontinuance. The use of formal powers will be challenged
by the farmer, supported by the Farmers Union, and as a result may not be
successful and will involve substantial legal fees. In the event that the action is unsuccessful, full compensation
liabilities for the loss of amenity will still be payable with the risk of
longer term claims in the future. In
view of these risks, this Option B if not recommended for approval.
43.
In monetary terms, Option D may seem initially attractive,
however this will not produce the intended permanent solution. The figure quoted is an assessment of the
compensation payment up to the current point and there is a risk of further
compensation. In addition there will be
a need for continued investigations to address complaints which will require
significant ongoing resources to be allocated by the Council, and therefore
Option D is not recommended.
44.
The significant progress in negotiations to secure a
voluntary discontinuance of the dairy unit gives the Council its first
opportunity to achieve a permanent solution.
Expert advice has been used to progress negotiations in this specialist
area of valuation and this forms the basis of the confidential report elsewhere
on the agenda. On the basis of this
expert advice and the ability to achieve certainly both in terms of cost and
timescale, Option A is recommended for approval.
|
RECOMMENDATIONS
That the Strategic
Director of Environment Services, in consultation with the Portfolio Holders
for Sustainable Development, Planning Policy and the Environment and for
Resources, enter into an agreement with the landowner:
·
enforceable by restrictive covenants which run with
the land
·
for the permanent cessation of the dairy farming
operation by 30 April 2005
·
for the removal of associated buildings
·
for the cessation of prescribed agricultural
activity in certain areas
·
for the payment of consideration and costs
·
conditional on the removal of planning restrictions
and
make such other payments, within a budget of £35,000 and no later than 31
December 2004, as are necessary to deliver to the interim recommendation of
the ombudsman.
|
BACKGROUND
PAPERS
45.
Property Services working papers including land agents
advice – exempt for the purposes of s100D Local Government Act 1972 (public
access) by virtue of paragraph 7 Schedule 12A of that Act – as likely to
disclose information relating to the financial or business affairs of a person
other than the local authority.
46.
18 February 2000 – Report to Planning and Countryside
(Policy) Committee as to the findings of maladministration by the Council
causing injustice due to livestock operations sited too close to neighbouring
residents. The report cited the
possibility of a challenge to the Ombudsman’s decision, but that it would be
necessary to show that the conclusions reached were either on the basis of a
clear mistake of facts or are perverse.
Counsel’s advice was that there are insufficient grounds to reach that
high a threshold.
47.
3 April 2000 – Report to Policy Committee. This interim report identified the potential
liability for the payment of compensation.
48.
25 May 2000 – Report to Executive. This was a comprehensive report in response
to the Ombudsman’s decision. It agreed
to pay the first award of compensation to the Residents’ Committee, obtain
advice from the District Valuer and negotiate with the landowner to secure a
permanent cessation of the dairy operation.
49.
6 and 20 July 2000 – Executive reports. These reports updated the work by the
District Valuer in agreeing with the Ombudsman the approach to be taken in
terms of value and that the Council’s agent should progress negotiations with
the landowner.
50.
31 August 2000 – Executive report. Accepted the District Valuer’s report as to
compensation to SEAGAP members of £62,000 and raised the question of payments
to non-SEAGAP members.
51.
2 November 2000 – Report to the Executive. This was a comprehensive options appraisal
report. It admitted new claimants. It confirmed that a buy to sell option for
the whole farm was not available and that a voluntary discontinuance of the
dairy farm could not be agreed, that Reading Agricultural Consultants say the
relocation of the dairy would cost £700,000.
It was agreed that a further report should be brought back as to the
value of the entire farm and to pay SEAGAP members the interim compensation.
52.
25 September 2001 – Executive report. This detailed that officers were unable to
recommend payment of £700,000 to give up the dairy and therefore compulsory
purchase for a buy and sell of the farm at a potential cost of £560,000 should
be considered.
53.
12 February 2002 – Executive report. Confirmed that negotiations with the
landowner had stalled and that the resolution for a compulsory purchase order
should be made.
54.
3 July 2002 – Executive report. This agreed that Counsel’s opinion as to the
use of a compulsory purchase order should be obtained.
55.
13 August 2002 – Executive report. Confirmed that the Council should proceed on
the basis of a Discontinuance Order resolution made by the Development Control
Committee.
56.
3 September 2002 – Executive Committee report. This considered the call-in by the Resources
Select Committee of the previous Executive decision. The Executive considered the call-in and reaffirmed its earlier
decision to the Development Control Committee.
57.
20 April 2004 – Development Control Committee advised
to resolve a Discontinuance Order and deferred a decision.
58.
15 June 2004 – Development Control Committee deferred.
Contact
Point : Tony Flower, Head of
Property Services, ' 823263
e-mail [email protected]
Rob Owen,
Head of Consumer Protection, ' 828388
e-mail [email protected]
|
TONY
FLOWER
Head
of Property Services
|
TERRY
BUTCHERS
Portfolio
Holder for Sustainable Development, Environment and Planning Policy
|
