Monthly Archives: June 2019

 

The Financial viability in planning: conduct and reporting 1st edition 2019

 

The Financial viability in planning: conduct and reporting professional statement (1st edition) sets out 14 mandatory requirements which chartered surveyors must comply to when carrying out financial viability assessments in planning. The effective date when those processes need to be conducted by will be the 1st of September 2019.

Download: The Financial viability in planning: conduct and reporting (28th May 2019)

What is the aim of the new professional statement?

  • To demonstrate how a reasonable, objective and impartial outcome without interference should be achieved
  • To support the statutory planning decision process
  • To support and complement the government’s reforms to the planning process announced in July 2018 and further updates. This will include an overhaul of the National Planning Policy Framework and Planning Practice Guidance on viability and related matters
  • To ensure that chartered surveyors and regulated firms recognise and adhere to their professional duties when working whilst working with significant public interest obligation mixed with commercial pressure

Surveyors and regulated firms

Surveyors and regulated firms will have to make sure that the terms and conditions of their instructions can accommodate compliance.

Chartered surveyors and viability

Chartered surveyors have had a key role in assessing viability in the planning system, most importantly, in negotiating planning obligations in planning applications.

The Royal Institution of Chartered Surveyors (RICS)

RICS created the  ‘Financial viability in planning’ guidance notes in 2012 to allow the viability policy contained in the National Planning Policy Framework 2012 to be applied in practice.

This guidance was extensively relied upon in the sector. Government has now revised its planning policy through the National Planning Policy Framework (NPPF) 2018 and Planning Practice Guidance (PPG) 2018 (and further updates in 2019). The RICS is in the process of revising their 2012 guidance to align with the new government planning policy and practice statements which seek to address viability much earlier in the process, at the plan-making stage.

Download the: National Planning Policy Framework (NPPF) 2018

Download the: Planning Practice Guidance (PPG) 2018

Delivering development

Delivering 300,000 dwellings a year is the government’s priority. However, it has proven to be a tough target to meet. This is creating pressure on local planning authorities to build more affordable housing. To make sure that the appropriate balance is achieved between the planning policy ambitions and retaining the business case for development, government policy requires a viability assessment to be carried out to ensure the cumulative impact of planning obligations does not restrict delivering the plan objectives.

Stakeholder engagement and concerns

The RICS engaged extensively with stakeholders in the sector and obtained some valuable feedback. Some were dissatisfied about the standards to which viability assessments are being produced. The concerns extend from public representatives, the development sector, community groups and decision makers all of whom rely on viability assessments in a key public interest area. Questions about objectivity, conflicts of interest, transparency and contingency fees among others have been raised about those working for both the private and public sectors.

Individual appeal cases

The professional statement does not reference individual appeal cases. This is because the issues relating to them are often specific to each case, which makes an objective analysis difficult and subject to caveats.

The new professional statement focuses on reporting and process requirements, more explicit detail on development viability in planning and providing greater clarity on reporting will be dealt with in the forthcoming second edition of the RICS guidance note Financial viability in planning.

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‘Land for the many’ – New Labour Party Report contemplates sweeping changes to land policy

 

A new report commissioned by the Labour Party has proposed a number of wide-ranging changes to the land policy in Britain. Authored by a range of academics, economists and land experts, the report argues that many of the problems this country faces are down to land ownership and the way land is controlled being central to many of the existing socio-economic problems in Britain such as economic inequality, ecological breakdown, the housing crisis and repeated financial crisis.

On land and planning, the report recommended:

Complete transparency and publication of all information on land ownership, planning and subsidies as open data with the following recommendations:

  • There should be free and open access to information on who owns land, including the identities of the beneficial owners
  • There should be a fully public register of charges and options over land titles and public databases of the prices paid for all property and of public subsidies paid on land
  • Land should be registered with the Land Registry as a prerequisite for receiving subsidies
  • Local Authority Asset Registers and sales should be published as open data. There should also be a full register of planning permissions, including developer’s commitments

The removal of permitted development rights

It is recommended that the removal of the right to apply for the conversion of officers and agricultural buildings via prior approval should occur with full planning permission being required. It is claimed that the current process often leads to poor quality housing without an affordable component, and restricts the ability of communities and their representatives to shape development also leading to the uncontrolled loss of workspace.

Reform of the planning system to ‘address imbalances of power’

A key measure would be allowing local authorities to determine and adjust planning fees in order to limit ‘deep-pocketed developers exert excessive influence over decision making’. It is suggested that fees could be increased where applications are submitted more than once, particularly where advice has been not been followed, or policy has been ignored.

LAND FOR THE MANY

A formal review of participation in the planning process, with the intention of increasing public and community participation in development. To energise community participation in decisions about land use the five steps that are recommended as follows:

  • A formal review of community participation in planning, with a mandate to move away from tick-box exercises towards genuine co-creation of policy and developments
  • Establish an independent body, the Community Participation Agency, with a mandate to involve communities and under-represented groups in planning at every level
  • Introduce jury service for planning to ensure a wide range of people can influence plan-making
  • Make information on land use and planning accessible to everyone
  • Introduce a new Future Generations Champion or Team in each local authority

The introduction of Compulsory Sale Orders – measures that would permit public authorities to acquire vacant or derelict land to then be sold at public auction.

CSOs are a proposed new statutory power, giving public authorities the power to acquire land that meets certain criteria – for example, left vacant or derelict for a defined period – to be sold by public auction to the highest bidder, with community groups offered the right of first refusal. This proposal is explored in detail in a recent Scottish Land Commission report. Unlike Compulsory Purchase Orders, CSOs have the advantage of not requiring up-front public investment, as public authorities would manage the auction process but not take ownership of land. If coupled with financial support, this could offer an efficient way to transfer land into community ownership.

The creation of Public Development Corporations that would manage the purchase and sale of land in the public interest.

These Development Corporations would not replace private developers altogether but would act as the prime mover in the land market, working with various stakeholders to prepare sites for new housing developments, new towns, garden cities and urban regeneration projects. Once land has been assembled, the Development Corporations would contract out construction to housebuilders, prioritising local small and medium-sized firms, who would compete with each other on the basis of quality and design of house building. This means that the success or failure of private developers would be determined by the quality of build rather than by their ability to navigate the speculative land market.

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