Viability under the spotlight in the revised NPPF

9 August 2018

Among some of the publicised changes within the revised NPPF (NPPF) is a renewed focus on viability assessments, with new National Planning Practice Guidance (NPPG) emphasising the need for transparency and greater accountability on the part of developers.

Paragraph 21 of the NPPG states that any viability assessment should be prepared on the basis that it will be made publicly available other than in exceptional circumstances; and even in those circumstances, an executive summary should be made publicly available. The Government has outlined its intention to publish a template for executive summaries in Autumn 2018 with the aim of making the findings of viability assessments clearer and more easily accessible to stakeholders.

The revised NPPF also includes a new paragraph 57, which states that “where up-to-date policies have set out the contributions expected from development, planning applications that comply with them should be assumed to be viable”, inferring that viability evidence is not required for policy-compliant schemes. We are also advised that “the weight to be given to a viability assessment is a matter for the decision maker, having regard to all the circumstances in the case”.

Importantly, paragraph 57 also advocates a standardised approach to inputs used in preparing viability assessments, including any undertaken at the plan-making stage. Indeed, as a recurring theme, the NPPG places an onus on proactive engagement in the plan-making process by developers, who are asked to take into account their own profit expectations and risks, to ensure that development proposals are policy-compliant. Further, the NPPG is explicit that the price paid for land is not a relevant justification for failing to accord with relevant development plan policies.

The streamlining of viability testing reflects wider themes in the NPPF of requiring Local Planning Authorities, developers and stakeholders to take on responsibility for the delivery of sustainable development, and in particular delivering the houses that the country needs. We have seen the introduction of more stringent testing of Local Authorities’ housing delivery rates, and strict penalties for those that fail to hit their targets; and the strengthening of Neighbourhood Planning as a core facet of local development. The need for developers to be open about the costs of development can similarly be categorised as a “cards on the table” measure to stimulate a more efficient and effective planning system.