A New Tesco Case and Policy 28 of National Planning Framework 4

NPF4 forms part of the statutory development plan taking precedence where it postdates local development plans. Tesco argued that the local planning authority failed when considering whether the store was "small scale neighbourhood retail development".

Tesco has successfully challenged a decision by Perth and Kinross Council granting planning permission to Aldi for a store at Pitheavlis, Perth. The store was intended to be a direct replacement for Aldi's existing store at Glasgow Road. It may have evoked memories of past Tesco cases for some, but this one is concerned with the application of NPF4, adopted by the Scottish Government in February 2023. Following the adoption of NPF4 the statutory development plan comprised the relevant local development plan and NPF4, with NPF4 taking precedence where the adoption postdated the local development plan.

Policy 28 of NPF4 relates to retail development and paragraph c) provides support for “new small scale neighbourhood retail development” in specified circumstances.

A brief history and timeline

In 2021 Aldi applied for planning permission to replace an existing store with a larger store at a different location. The existing store had a gross floor area of 1,173 square metres, 760 net. The proposed store would have a gross floor area of 1,884 square metres and 1,315 net with 100 parking spaces. The application was supported by a retail statement and submissions that not only would the proposal address deficiencies in the catchment area but that no alternative locations were available or allocated in the local development plan (LDP).

In May 2022 the local planning authority (LPA) resolved to grant planning permission (subject to completion of a planning agreement covering various obligations).

In February 2023 NPF4 was adopted.

On 14 February 2023 the LPA prepared a supplementary report including reference to NPF4. It is understood that Tesco subsequently made representations to the LPA, in particular querying the reference in that supplementary report to the proposed development as “new small scale neighbourhood development”.

In May 2023 the LPA resolved to grant planning permission subject to a planning agreement. Tesco then sought reduction of the LPA’s decision.

Court of Session Decision

Lord Richardson considered:

1. the supplementary report of February 2023 to be of primary relevance as Policy 28 of NPF4 had not been considered in the earlier report, albeit he had some sympathy for the LPA having to revisit matters following the adoption of NPF4;
2. the LPA had failed to interpret “new small scale neighbourhood retail development” properly and, by alluding to the increase in floor area following extinguishment of the existing store floor area, the LPA had attributed a meaning to those words which they are not capable of bearing;
3. that the relevant paragraph of NPF4 could not be considered to apply to a small scale increase to a retail development which would not otherwise be considered small scale or relate to a neighbourhood, and
4. a proposal for an 1800 square metre development with 100 parking spaces with a catchment area of half the city could not be considered to comply with the critical words of Policy 28.

Fundamentally, he agreed with the point raised by Tesco “…that, looked at objectively, there is no way in which a proposal for an 1,800 square metre development, with 100 car parking spaces, having a catchment area of half of the city could be said to be a 'small scale neighbourhood retail development' as envisaged by paragraph (c) of Policy 28."

The particular circumstances of this case may limit the application of the decision. However, the majority of LDPs currently predate NPF4 and the case provides useful guidance to LPAs when it comes to understanding the relationship between NPF4 and LDP retail policies.