Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Ensure revised viability guidance balances negotiation flexibility with preventing developers from gaming the system.
Conclusion
Without updated guidance, local planning authorities will still struggle to challenge financial viability assessments submitted by developers and may fail to receive the amount of developer contributions they are entitled to. Viability assessments are an important tool to ensure that sites are financially feasible for developers and to make sure development takes place. However, there is an asymmetry of skills, capacity and resources between LPAs and developers which means that LPAs often struggle to challenge developers’ claims in viability assessments. The Department acknowledges that existing planning practice guidance on viability needs updating, and states that it will publish reforms to the guidance in 2025. The Department promises that the use of late- stage viability reviews will be considered as part of the wider update of viability guidance. recommendation The Department should ensure that its revised guidance on viability balances the need for site-by-site flexibility in negotiations with the need to dissuade developers from gaming the system. The Department should provide an update on its progress in its Treasury Minute response. 4
Government Response Summary
The government agrees and intends to publish updates to its viability planning practice guidance (PPG) alongside a consultation before the end of the year, seeking further views on proposed changes. It also reiterates the existing PPG clarifies viability assessment's primary role at the plan-making stage.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. before the end of this year. The government intends to publish updates to viability planning practice guidance (PPG) alongside the consultation and seek views on where further changes should be made to support revised policy. The government’s existing PPG on viability is already clear that the role for viability assessment is primarily at the plan making stage. It is up to applicants to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. Such circumstances could include, for example, where development is proposed on unallocated sites of a wholly different type to those used in viability assessment that informed the plan; where further information on infrastructure or site costs is required; where particular types of development are proposed that may significantly vary from standard models of development for sale (for example build to rent or housing for older people); or where a recession or similar significant economic changes have occurred since the plan was brought into force.