At the meeting of the Council held on 11 December 2017 (minute 100 refers), the attached Notice of Motion, ‘Economic Viability Assessments from Developers’ proposed by Councillor Stuart Kelly and seconded by Councillor Chris Carubia was referred by the Civic Mayor to the Environment Overview and Scrutiny Committee for consideration.

In accordance with Standing Order 7 (6), Councillor Kelly has been invited to attend the meeting in order for him to be given an opportunity to explain the Motion.

At the meeting of the Council held on 11 December  2017 (Minute 100 refers) the following Notice of Motion, ‘Economic Viability Assessments from Developers’, proposed by Councillor Stuart Kelly and seconded by Councillor Chris Carubia was referred by the Civic Mayor to the Environment Overview and Scrutiny Committee for consideration –

Economic Viability Assessments from Developers

“This Council recognises the pressing need to provide quality homes which are affordable to those on low and middle incomes in Wirral and for transparency with regard to planning applications to ensure that the Council’s own policies on affordable housing requirements are met.

Regrettably, a recent report from the housing charity, Shelter, has revealed the widespread use and abuse of Economic Viability Assessments (EVAs), resulting in thousands of affordable homes being lost every year because of viability assessments. (Slipping through the loophole: How viability assessments are reducing affordable housing supply in England)

http://england.shelter.org.uk/__data/assets/pdf_file/0010/1434439/2017.11.01_Slipping_through_the_loophole.pdf

Council are dismayed that there are companies who are openly boasting in their promotion that they can help developers to avoid paying Section 106 monies and making appropriate levels of affordable housing provision. These companies produce EVAs in order to demonstrate that developers are not making sufficient profits to enable councils to insist on full 106 or affordable housing contributions.

http://www.s106management.co.uk/how-it-works

Whilst some of these EVAs are submitted in good faith, there is sufficient evidence to suggest that the reports can be prepared in such a way as to attempt to confuse local planning committees and present a misleading picture. Some London councils, such as Lambeth LBC, now insist that EVAs are no longer able to be submitted unless they are able to be viewed by members of the public and in open session at planning committee meetings. https://www.lambeth.gov.uk/sites/default/files/pldevelopment-viability-spd.pdf

Accordingly, this Council, which is committed to increasing the delivery of affordable housing, requests that the Cabinet commissions the development of a new Development Viability Supplementary Planning Document to:

1.  require any planning application which does not meet the affordable housing requirement to submit an Economic Viability Assessment which must be fully public and will be published online alongside the other planning application documentation.

2.  require such Economic Viability Assessments to be in a standard proforma to aid understanding and comparison by members of the planning committee and the public.

3.  consider offering a ‘fast-track’ planning service to applications which deliver 40%, or more, affordable housing, as identified in the Wirral Strategic Housing Market Assessment and Housing needs Study (May 2016) to incentivise this behaviour by developers.

4.  consider ‘clawback’ mechanisms where large applications cannot comply with the affordable housing thresholds, to ensure that any subsequent improvement in viability is accompanied by an appropriate increase in the affordable housing provision.

The Development Viability Supplementary Planning Document (SPD) would enable these factors to become a material consideration for the Planning Committee dependent on the circumstances of individual applications”.

In accordance with Standing Order 7(6), Councillor Kelly had been invited to attend the meeting in order for him to be given an opportunity to explain the Motion.

Councillor Kelly advised that the housing charity Shelter had issued a report on the use of Economic Viability Assessments (EVAs) by developers to avoid provision of affordable housing within developments and that he had also been made aware of companies who specialised in producing such assessments for developers.  Further research indicated that some Councils now required EVAs to be made public.  Noting the Plan timetable submitted elsewhere on the agenda for this meeting, it was suggested there was now time for the Committee to consider the issue.

Councillor Kelly made further reference to the Strategic Housing Market Assessment which while recommending that 40% of new housing should be affordable had recognised that viability made this a challenging figure.  He further noted that the Council already recognises viability issues and sought provision of 10% within areas of greatest need and 20% outside areas of greatest need.  Given that viability was already being addressed, it was suggested to the Committee that Officers be asked to look at the approaches of identified Councils in respect of EVAs.

Members acknowledged that while the Council could do better in this area, there was insufficient information available at the meeting and that inputs from Officers were required.  It was noted that as issues might arise around competitiveness with other areas for development, and that viability had the potential to prevent schemes, any policy considered needed to have some flexibility.  The need for affordable housing within the Borough was stressed by Members, and the view expressed that developers should not be shirking their responsibilities in this regard.

Officers confirmed that affordable housing provision was contained within the Local Plan, but the legal issues around confidentiality of information within EVAs required more detailed consideration.  In response to a query, it was advised that the publication of EVAs was not currently set out as a requirement of developers/applicants at this time, but could be included in a future Local Plan.  The Council’s current approach was to refer EVAs for independent assessment, the results only of such assessments being reported to Planning Committee.  A Member requested that a statement indicating whether or not an EVA had been made on any application submitted to the Planning Committee be included in the Officer’s report.

Councillor Foulkes left the room on the raising of an issue related to a particular development during the debate while that issue was considered by the Committee, returning for the remainder of the debate.

In discussion, Members of the Committee considered that further information, including detail on the approach of other local authorities referred to in Councillor Kelly’s presentation and confirmation of the associated legal issues was required  and, on the Motion of Councillor Carubia, seconded by Councillor Sykes, it was –

RESOLVED: That

(1)  the Notice of Motion be referred to a Task and Finish Group for consideration of further information; and

(2)  the item be included in the Committee Work Programme and be discussed further by the Chair and Spokespersons.