LOCAL PLAN VIABILITY Turning policy ambition into deliverable public outcomes
 | Alex is the head of the public sector land team at Savills and provides development strategies and disposal advice to clients across the UK. With over 20 years’ experience in the public sector development market, Alex joined Savills in 2016 to operate across the UK business, working with London and regional teams to deliver procurement, agency and consultancy services to a wide range of public sector bodies. Working closely with central government departments, delivery agencies, housing associations, local and combined authorities, the health service, defence and education bodies, our public sector experts provide strategic advice and delivery capability across the UK residential, commercial and rural land markets. To find out more, visit: www.savills.co.uk/sectors/public-sector.aspx |
Alex explains that the latest NPPF requires local plan policies to deliver the public outcomes expected of them over its lifetime, which requires viability assessments at the macro scale. He shows that this can be both an opportunity and a challenge for LPAs and other services within a council, with publicly owned land playing a part. |
Local plans must balance a wide range of competing objectives. They need to meet housing needs, deliver affordable homes and infrastructure, support economic growth, respond to climate and environmental priorities, and reflect the aspirations of local communities. At the same time, they must provide a realistic framework through which development can take place.
The latest National Planning Policy Framework brings the financial dimension of this balancing exercise into sharper focus.
For local planning authorities, viability is not simply a technical assessment or a matter to be addressed by developers at the planning application stage. It is central to whether the policies contained in a local plan can deliver the public outcomes expected of them over its lifetime.
Affordable housing requirements, infrastructure contributions, environmental standards and other policy obligations all need to be considered collectively. Individually, each may represent an important local priority. Cumulatively, however, they must allow sufficient development to come forward to meet the needs identified by the plan.
The objective should not be to lower policy ambition. It should be to ensure that ambition is supported by credible evidence and translated into a deliverable strategy for homes, infrastructure and place-making.
Viability as a public-sector responsibility
Planning Practice Guidance makes clear that viability assessment should primarily take place at the plan-making stage and that the cumulative cost of policies should not undermine delivery of the plan.
This presents both an opportunity and a challenge for local authorities. Establishing realistic requirements at the outset can create greater certainty for communities, developers, infrastructure providers and elected members. It can also reduce the need for repeated viability negotiations when individual planning applications are submitted.
However, preparing a robust evidence base requires resources and specialist expertise. Many authorities are operating with constrained planning budgets, while managing significant expectations around housing delivery, affordable housing, infrastructure provision, regeneration and environmental performance.
Viability work can also require coordination across several parts of an authority, including planning policy, development management, housing, regeneration, property, finance and infrastructure teams. Each may hold information or expertise that is important in understanding how policies will operate in practice.
A whole-authority approach can therefore be valuable. Viability should not be treated solely as a planning policy exercise. It should be connected to wider decisions about public investment, asset management, housing delivery and economic development.
Establishing a credible evidence base
Whole-plan viability assessments inevitably rely on assumptions. These can include sales values, development rates, construction and infrastructure costs, finance, professional fees, contingencies, abnormal costs, development programmes, affordable housing values, developer returns, and benchmark land values.
Relatively small differences in individual assumptions can become significant when applied across multiple allocations and windfall sites. Authorities therefore need evidence that is transparent, locally grounded, and capable of withstanding scrutiny at examination.
This requires meaningful engagement with organisations operating in the land, housing and development markets. Developers, housebuilders, landowners, registered providers, infrastructure bodies and professional advisers can all contribute information about current costs, values, delivery rates and investment decisions.
That engagement should not give individual interests undue influence over policy. Nor should market evidence be accepted without appropriate testing. Its purpose is to help authorities distinguish between unsupported assertions and genuine barriers to delivery.
A structured process can support this. Authorities can publish draft assumptions, explain the sources on which they are based, and invite evidence in a consistent format. Where assumptions are amended, there should be a clear record of what has changed and why.
This improves transparency and gives elected members, communities and other stakeholders greater confidence in the choices reflected in the final plan.
Maximising affordable housing and infrastructure delivery
Affordable housing and infrastructure are among the most important outcomes that local plans are expected to secure. Viability assessment should therefore support the delivery of these priorities, rather than simply presenting them as costs to development.
Realistic evidence can help authorities set affordable housing requirements that are ambitious but achievable. It can also reveal differences between locations, development types and tenure products, as well as the potential effect of grant funding or other forms of public investment.
The same applies to infrastructure. Local plans need to consider not only the overall cost of infrastructure but also when it will be required, how it will be funded, and whether early provision is needed to unlock development.
This is particularly important for strategic sites, where schools, transport improvements, utilities and community facilities may be required before significant numbers of homes can be delivered. A scheme may appear viable over its full lifetime, while still facing substantial short-term cashflow or infrastructure-funding challenges.
Identifying these issues through plan-making gives authorities and their partners more time to consider potential solutions. These might include forward funding, grant support, infrastructure sequencing or alternative delivery arrangements.
Public land as a tool for delivery
Public land can play an important role in addressing viability and supporting wider place-based objectives.
Where an authority or another public body owns land, the decision may not be limited to when and at what price an asset should be sold. Public land can be used to support regeneration, increase affordable housing delivery, enable infrastructure provision, or provide a foundation for partnerships with developers and registered providers.
Authorities may need to consider a range of options, including disposal, direct delivery, joint ventures, development agreements, or retaining an interest in the land to generate long-term income.
These choices require a rounded understanding of value. A higher immediate capital receipt may not always produce the greatest long-term public benefit. Equally, wider social and regeneration outcomes need to be supported by a realistic assessment of cost, risk and delivery capacity.
Bringing planning, property, housing, regeneration and finance expertise together at an early stage can help authorities assess these options coherently. It can also ensure that decisions about public assets are aligned with the assumptions and delivery expectations contained in the local plan
Collaboration can reduce later uncertainty
It is unrealistic to expect every developer, landowner or infrastructure provider to participate fully in every local plan examination. There may therefore be considerable value in coordinating evidence where several parties have relevant information or share concerns about particular assumptions.
For local authorities, a smaller amount of well-researched and properly tested evidence is likely to be more useful than numerous representations that repeat similar points without supporting analysis.
Effective engagement can also reduce friction later in the development process. Where policy requirements have been transparently tested through plan-making, authorities will be in a stronger position to apply them consistently. Developers and landowners will have greater certainty when making investment decisions, while communities will have a clearer understanding of the benefits that development is expected to provide.
Ultimately, robust viability evidence is not an end in itself. It is a tool for making informed and transparent choices about the future of a place.
Getting the evidence right at the outset can help local authorities create plans that are ambitious, credible and capable of implementation. It can support the delivery of homes, affordable housing, infrastructure and regeneration, while making the best use of public land and limited public resources.
That requires collaboration between authorities, communities, infrastructure providers and the development sector. All parties have a shared interest in ensuring that local plans do not simply express policy ambition but provide a practical route to achieving lasting public outcomes.
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