Why we must get it right at the beginning
There has been a significant shift in the way in which viability is referred to in planning policy, which in turn reflects a wider change to the way in which viability assessments are considered within planning and most importantly how they can support the development process.
This shift, means that now more than ever, it is important that site promoters consider all site specific circumstances which may impact the viability of a development at the beginning of the planning process and not at the end. Otherwise they risk not having them considered at all.
What Has Changed?
If you compare the wording of the 2012 National Planning Policy Framework (NPPF) (specifically paragraph 173) to that of the 2019 edition (specifically paragraph 57), the difference in the language in relation to viability is stark.
Where previously the NPPF required “careful attention to viability” and ensuring that allocated sites were not overburden by “such a scale of obligations and policy burdens that their ability to be developed viably is threatened”. Today, the NPPF states that where “up-to-date policies have set out contributions expected from development, planning applications that comply with them should be assumed to be viable”.
Additionally, “it is up to the applicant to demonstrate whether particular circumstances justify the need for a viability at the application stage” and “the weight to be given to a viability assessment is a matter for the decision maker”. Viability assessments are now also required to be “made publicly available”.
What has taken place is a substantial shift, reflected very apparently by the changes in language within the NPPF. This shift not only requires viability to be undertaken in a more public and transparent manner, but also places much more onus on the applicant and far more power with the decision maker.
Why Is This Important?
The reason it is vital to be aware of this shift is to ensure that the opportunity to consider viability within a development proposal is not lost.
Take for example a strategic site which is being allocated through an emerging Local Plan. The promoter for that site may having secured their allocation, prepare an outline planning application and subsequently enter into a S106 Agreement with the Local Planning Authority (LPA).
However, what if the assumptions the site promoter made when securing the allocation and indeed preparing the outline planning application prove to be incorrect? What if the detail of the Reserved Matters identifies something unforeseen?
Under the 2012 NPPF, the developer for that site would have relied upon paragraph 173 to argue that the scale of obligations and policy burdens would lead to the development being unviable.
However, under the current Framework the position of the LPA has now been substantially bolstered. Indeed, under paragraph 57, it is for the decision maker to decide what weight to give to a viability assessment and for the applicant to demonstrate a need for such assessment and any change in circumstances since the Plan was brought into force. This is of course, all within the context of the assumption that planning applications which comply with up to date policies should be assumed viable.
There does of course remain options available to applicants in these circumstances. These could include negotiating with the LPA, amending existing planning permissions, applying for new planning permissions or even seeking to vary the existing legal obligations.
However, as a result of the Covid-19 pandemic the financial position of many Council’s has become precarious – take for example Croydon Council who declared themselves bankrupt in November. Many Council’s now face sharp falls in revenue and increasing demand for services such as social care. Within this context, it is perhaps to be expected that we may see many Council’s taking a much firmer stance in an attempt to retain any source of income, making such options more time consuming and complex than they may have been before the pandemic.
Accordingly, perhaps now more than ever, it is vital that site specific considerations are identified at the earliest stages and viability work more rigorously and robustly prepared to support Local Plan promotions. If not, applicants risk more complex negotiations, whereby the LPA has much greater control, set against a backdrop of diminished Council reserves and an ultimate risk that such arguments could be given no weight at all.