Lord’s on Viability

I have been getting behind on developments in the world of viability tests in the planning system. John Wacher at Islington LBC recently drew my attention to the House of Lord’s Select Committee on National Policy for the Built Environment’s report published in February.

They have a very good chapter summing up some of the issues involved in increasing housing supply. The data on council house building are pretty shocking – if unsurprising.  Council house completions bottomed out at about an average of one fifth of a house per council at the beginning of the century.  This has climbed hugely in percentage terms (David Cameron usually states the percentage) but in 2014/15 worked out at approximately just over four council house completions per local authority on average.

The Lords also allocate some space to the use of viability tests in development management. They see lots of problems and offer some solutions.  The Select Committee identify…

 …a compelling case to revise national planning policy and guidance to ensure that individual viability assessments do not systematically undermine the delivery of affordable housing and other planning obligations.

I probably wouldn’t have written it as fluently and I’d struggle to improve on their suggestions.

Such revisions to planning policy could include a requirement for the full public disclosure of viability assessments; standardised guidance on the calculation of land values and other inputs; a requirement to use independent consultants to determine scheme viability where agreement cannot be reached; and a stipulation that new development should, as a general rule, seek to fulfil development plan objectives including the delivery of affordable housing and infrastructure.

 The Government should revise the NPPF and NPPG to make clear that the process of viability assessment should not be used to compromise the ability of local authorities to meet housing need, including affordable housing need, as determined through development plans. This will reduce the unreasonable use of viability assessments to avoid funding of affordable housing and infrastructure.

 The Government should also publish a nationally consistent methodology for viability assessment. This methodology should include standardised guidance on calculation of land values and other inputs, and a recommendation for full disclosure of viability assessments. Local authorities and developers should also have the right to seek arbitration from independent viability consultants where agreement on scheme viability cannot be reached.

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