Developer Contributions Supplementary Guidance

Viability

19. Where it can be demonstrated that there are such abnormally high site preparation costs that addressing the provisions of this guideline threatens the financial viability of developing the site, the requirement to make a contribution towards infrastructure in line with this guidance may be reviewed.  It is accepted that for a development to be viable an appropriate site value needs to be achieved by the landowner and an appropriate return for the developer, taking account of market conditions and risk, needs to be achieved. However, developers should take account of the Council’s policies (and the likely costs of contributions towards infrastructure, as set out in this SG) in bidding for land. The Council will not accept over-inflated land values as a reason for reducing contribution requirements. Financial viability will be assessed in accordance with the Royal Institution of Chartered Surveyors Guidance Note, Financial Viability in Planning (1st Edition, 2012). There is an expectation that the applicant will enter into an open book exercise in order to prove viability concerns. This open book exercise should include a financial appraisal supported by an evidence base including forecasting development values, development costs, any abnormally high site preparation costs, and an assessment of land value. Financial viability is one of many material considerations in the determination of a planning application. 

Funding Mechanisms 

20. Many of the infrastructure requirements in this SG seek proportionate contributions from development, with the remainder being from other capital budgets and/or external funding bids. These funding streams are subject to change and will be updated in the Action (Delivery) Programme. The financial impact of the City Plan Action (Delivery) Programme on capital and revenue budgets is reported annually to the Council’s Finance & Resources Committee.