Finance & Viability

22-Mar-12

Development to meet economic, social and environmental objectives can only take place if proposals are affordable and viable, and finance is available to support them.

Latest news

The Chancellors 2012 Budget Statement was growth focussed and included a number of Government commitments:

Transport investment in the north of England to unlock £1.2bn of infrastructure investment across the city region;
Remove duplication in the consenting regime for major infrastructure development by bringing forward legislation to adjust the scope of Special Parliamentary Procedure;
To take forward many of Alan Cook’s recommendations for the roads, including developing a national roads strategy;
To make Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle super-connected cities. The Government will also provide an additional £50 million to fund a second wave of ten smaller super- connected cities;
A new Pension Infrastructure Platform owned and run by UK pension funds, which will make the first wave of its initial £2 billion investment in UK infrastructure by early 2013;
To make up to £150 million available from 2013–14, including through additional funding, for larger scale projects in core cities to be financed through Tax Increment Financing (TIF 2);

Community Infrastrucure Levy: Planning (09.03.12) carries an article noting that the first Council to begin charging a new developer tariff has warned that a number of emerging CIL plans could be open to legal challenge unless the Planning Inspectorate ensures that statutory guidance is complied with.

The Local Authorities (Contracting Out of Community Infrastructure Levy Functions) Order 2011 came into force on 7 December 2011 and allows local authorities and those public bodies authorised to collect or charge the Community Infrastructure Levy to contract out, or ‘outsource’, their levy functions to other organisations.

The National Audit Office is to launch a study, The financial viability of the social housing sector, that will look at the role of the Department for Communities and Local Government, Tenant Services Authority and Homes and Communities Agency in relation to the financial viability of social housing providers participating in the affordable housing programme.

The Government's Housing Strategy - Laying the Foundations - includes a £400m Get Britain Building Investment Fund and a commitment to open a consultation on a proposal to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled.

Finance and viability The Potential of Development Charges in The Scottish Planning System: The financing of infrastructure is currently a key constraint to development and this report explores the potential of development charges to assist this situation.

Policy changes and consultations

Financial Viability in Planning – RICS Guidance Note “The draft guidance is intended to provide an effective framework within which financial viability may be assessed, regardless of the regulatory regime in place, or the stage of the economic cycle in which the evaluation is being carried out. The publication seeks to provide a rigorous approach to evaluating financial viability and reaching an appropriate professional judgement in the context of assessing the introduction of planning obligations and planning policy, rather than specifying a prescriptive tool or financial model.” The RTPI has now sumitted its response.
View all RTPI Open consultations and make a contribution.

Practice

Localism & Growth: A new practitioners' guide to growth and localism titled 'Working together. Delivering growth through localism', claims to be “the first comprehensive guide to the new policy landscape”. It recognises the challenges and concerns, while offering a way for practitioners to navigate this new environment and practical examples of success from around the UK.
Economic Growth - The Deputy Prime Minister talks about the green economic growth the Green Investment Bank
Section 75 Planning Obligations (Scotland): A letter to planning authorities from the Scottish Government has clarified that an application for modification or discharge can be made in respect of an agreement entered into before 1st February 2011.
The impact of publics sector cuts in rural areas
PFI is criticised by National Audit Office
Impact of Public Sector Cuts on Rural Scotland
Development Delivery and Viability (pdf) - published by the Scottish Government, December 2010.
The BIS Select Committee report on Rebalancing the Economy: Trade and Investment says the Government had provided scant detail on the role that LEPs will play in supporting inward investment following the abolition of the RDAs. "Without clarity on the role, extent and cost of this activity, the involvement of LEPs will be seriously undermined."
Signposting to more practice advice.

Networks

The RTPI has 14 Networks, all committed to representing and supporting those who work in planning. Find out more about the RTPI Networks.

RTPI Projects and research

Section 106 Agreements
The RTPI Networks have been compiling a webpage of experience and evidence on revisiting Section 106 Agreements in the face of changed economic circumstances. If you have experience or examples to share please email the RTPI Development Management Network

Our viewpoint

We live in uncertain economic times and the impacts on the development sector have been profound. We encourage multidisciplinary debate and practical measures and financial options available to the sector, including measures to ease cash-flow in development schemes, to help bring forward development.

More information/CPD/Events

RTPI events calendar
Get involved: email andrew.matheson@rtpi.org.uk