Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
Department delayed updated guidance for local planning authorities on viability challenges
Recommendation
The Department acknowledged that it originally intended to provide LPAs with updated guidance on how to handle financial viability challenges in Spring 2025. However, it explained that advising LPAs on how they should deliver value for local people while also allowing for some degree of local variation was complex, and it therefore now planned to issue the guidance “as soon as possible” in 2025. The Department added that it would include the use of late-stage viability reviews as part of this updated guidance.33 In its letter to us after the session, the Department clarified that it intended to use the guidance to ensure the viability system works to optimise developer contributions, allowing negotiation only where genuinely necessary.34 Unsold Section 106 affordable homes
Government Response Summary
The government agrees to 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, with a target implementation date of Summer 2026. They will be consulting on a revised National Planning Policy Framework before the end of this year and intends to publish updates to viability planning practice guidance (PPG) alongside the consultation.
Government Response
Accepted
HM Government
Accepted
5. PAC 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. 5. PAC 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. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2026 5.2 The government will be consulting on a revised National Planning Policy Framework 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. 5.3 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 21 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.