DD2121 London Plan Viability Assessment

Type of decision: 
Director's decision
Code: 
DD2121
Date signed: 
15 May 2017
Decision by: 
Fiona Fletcher-Smith, Executive Director of Development, Enterprise and Environment

Executive summary

This decision seeks approval to commission a viability study which will provide a robust evidence base to support the new London Plan at Examination in Public. This will assess the cumulative viability impact of the proposed policies and standards in the London Plan as required by the National Planning Policy Framework and Planning Practice Guidance, including affordable housing requirements, together with other standards and policy requirements applicable to various development types across London.

Decision

That the Executive Director of Development, Enterprise and Environment approves expenditure of up to £120,000 to procure and appoint a team of consultants to undertake a viability study and related work during the consultation and Examination in Public of the London Plan.

Part 1: Non-confidential facts and advice

Introduction and background

1.1 The Mayor has set out his intention to bring forward a replacement London Plan (the “Plan”) which will provide a framework for more inclusive growth in the City. The Plan policies will cover a range of issues including land use, housing, transport, economic development, infrastructure, heritage, culture and health. This viability study will inform the policies within the revised plan and will form part of the evidence base provided to support its examination and adoption.

1.2 The National Planning Policy Framework requires plan makers to consider whether the scale of planning policy obligations would be achievable and viable and to what extent policy requirements would risk undermining the viability and deliverability of the quantum of development proposed . This requires a degree of planning judgement, informed by robust and proportionate evidence. Planning requirements and costs should be assessed collectively in order to understand their cumulative impact . Planning Practice Guidance sets out further principles for considering viability and guidance for testing local plans.

1.3 This Viability study will form part of the evidence base which supports the Full Review of the Plan. This will test the policies of the Plan and identify the approach which best achieves the Mayor’s objectives whilst being deliverable and supported at Examination in Public (EIP). The GLA proposes to appoint a consultant team to undertake the study drawing on expert evidence relating to assumptions and inputs for different development types, including development values, build costs, benchmark land values and developer’s return. 

1.4 Quotations are limited to a total budget of up to £120,000 for a suitably qualified consultant team to undertake the study and related work during consultation and Examination of the London Plan. This reflects the scale, complexity and expertise required to undertake the study which will test a range of policies when applied to key development types across London.

Objectives and expected outcomes

2.1 The study will:

• examine the likely cumulative viability impact of the proposed policies and standards in the Plan, including affordable housing requirements, planning obligations/CIL, together with other standards and policy requirements applicable to various development types.
• provide a broad strategic understanding of viability across London based on current and projected market trends, likely development costs and appropriate benchmark land values in different boroughs. 
• test the viability and deliverability of an appropriate range of sample sites across London boroughs, covering various development typologies, densities and sizes of sites.
• model various scenarios and variables in relation to planning policy requirements, densities, grant funding and trends in development values and build costs.
• draw on expert evidence relating to assumptions and inputs including development values, build costs, benchmark land values and profit.

2.2 In addition the consultant team will provide support at the consultation and Examination in Public stages of the Plan to enable successful adoption of the Plan.

Equality comments

3.1 Section 149(1) of the Equality Act 2010 provides that, in the exercise of their functions, public authorities must have due regard to the need to:
• Eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010;
• Advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and
• Foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

3.2 The obligation in section 149(1) is placed upon the decision maker. Due regard must be had at the time a particular decision is being considered.  The duty is non-delegable and must be exercised with an open mind. 

3.3 Taking into account the obligations under section 149(1) of the Equality Act 2010, the assessment will consider the viability of new development to support the new London Plan which is a requirement of national planning policy and guidance. The assessment will inform policies considered as part of the new London Plan for which an Equalities Impact Assessment, as part of the Integrated Impact Assessment, will be undertaken.

Other considerations

4.1 A key issue will be identifying a consultant team that is capable of meeting the specification of the brief given the range of expertise required regarding different development types and value and cost information for different market areas. Submissions will be considered from groups of consultants bringing together the necessary skills and expertise, and where necessary additional specialist input may be commissioned.

4.2 The study will consider a range of policies based on the Mayor’s priorities as set out in A City for all Londoners and forthcoming Housing, Transport, Economic, Environmental, Health Inequalities and Cultural Strategies. The study will inform the policies included within the Draft Plan.
 
4.3 The Study will form part of the evidence base for the new London Plan which will be subject to public consultation in 2017/18 and Examination in Public in 2018. Final adoption of the plan is anticipated at the end of 2019.

Financial comments

5.1 Approval is being sought for expenditure of up to £120,000 to procure a team of specialist consultants to produce a viability study to support the new Examination in Public of the London Plan.  The cost will be funded from the London Plan Programme 2017-2018 Budget.

Planned delivery approach and next steps

7.1 The assessment will be managed by the GLA Viability Team with input from other officers. The project will comprise the testing of policies for different development types, densities and inputs with initial outcomes presented to the client team and final report fulfilling the requirements of the specification. Consultants may be required to present evidence and carry out further research as part of consultation and Examination in Public of the Plan.

Activity table

Activity

Timeline

Procurement of contract

May/ June 2017

Delivery Start Date

June 2017

Final evaluation start and finish (self)

October – December 2017 (ongoing while plan progresses)

Delivery End Date

October 2017

Project Closure:

Autumn 2018 (following EiP)

Appendices and supporting papers

London Plan Viability Assessment – Commissioning Brief


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