Policy GEN 7: Recovery of planning obligations reduced on viability grounds

  1. Development proposals should meet all relevant planning obligations required by local plan policy. It is up to the applicant to demonstrate to the council whether particular circumstances justify the need for a viability assessment at the application stage.
  2. Where the council has agreed to reduce required planning obligations on the grounds of viability, the applicant must enter a legal agreement that enables the council to review an agreed viability assessment against future trigger points, with the aim of recovering all or part of the reduced planning obligations should a new assessment indicate that profits are higher than the normal developer returns already accounted for in the agreed viability assessment and the council considers the reduced obligation can no longer be justified on viability grounds. The underlying principle being to prioritise the use of any higher than anticipated returns, so that they are used in the first instance to deliver policy requirements that were previously determined not to be deliverable before being considered as an additional profit return to the developer.
  3. The details of the reduced planning obligation will be recorded in the legal agreement together with the form or nature that any recovery of obligation will take. These obligations should comply with national regulations on planning obligations.
  4. The council will refuse planning applications where applicants request the reduction of planning obligations on viability grounds but have not agreed a legal agreement that enables these planning obligations to be reviewed and recovered, should a proposal deliver higher returns than the normal developer profit already accounted for in the agreed viability assessment.

Supporting information

3.33 The council’s local plan contains a number of approved policies that place obligations on developers to fulfil when proposing a scheme for development, such as the level and type of affordable housing provision required or other infrastructure needed to support development (such as that needed for education, health, transport, open space, green infrastructure, flood risk and water management etc.) It is the council’s expectation that infrastructure and other planning obligations required to make a development acceptable in planning terms will be provided as part of all development, where these obligations meet the three tests set out in CIL Regulation 122.

3.34 A proportionate assessment of viability that takes account of all relevant policies, standards and costs, including CIL and planning obligations, is required by national Planning Practice Guidance (PPG) as part of the plan making process. This is to ensure that the total cumulative costs of development do not undermine the deliverability of the plan. As the council’s local plan policies have been viability tested prior to adoption and policies set out the contribution expected from development, the assumption in planning guidance is that “planning applications that fully comply with them should be assumed to be viable” (see PPG Reference ID: 10-007-20190509). In addition, it is the responsibility of site promoters to ensure that proposals for development fully comply with up to date plan policies and that the price paid for land is not a relevant justification for failing to accord with relevant policies in the plan (see PPG Reference ID: 10-002-20190509).

3.35 It is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. Planning guidance indicates that “such circumstances could include, for example where development is proposed on unallocated sites of a wholly different type to those used in viability assessment that informed the plan; where further information on infrastructure or site costs is required; where particular types of development are proposed which may significantly vary from standard models of development for sale (for example build to rent or housing for older people); or where a recession or similar significant economic changes have occurred since the plan was brought into force” (see PPG Reference ID: 10-007-20190509).

3.36 It is unlikely that the council will agree to the reduction of a planning obligation where it provides essential site specific items to mitigate the impact of development such as a necessary road improvement. In these circumstances the opportunity to negotiate a reduced obligation is limited.

3.37 As viability is judged on a range of factors, any of which may change over time, it is appropriate that the council should seek to recover these obligations should market conditions improve, or development prove to be more viable than originally forecast. This is particularly important on larger sites that are likely to be developed out over many years and where the potential for a positive change in viability is greater. This will be undertaken through a review process as set out in a legal agreement between the council and the applicant. As detailed in planning guidance, the review mechanism agreed should not be seen as “a tool to protect a return to the developer, but to strengthen local authorities’ ability to seek compliance with relevant policies over the lifetime of the project” (see PPG Reference ID: 10-009-20190509).

3.38 A typical example of where a reduced obligation may apply would be affordable housing. It may be agreed for viability reasons that a developer should provide less than the policy target for affordable housing, say 20% rather than 30%, with the remaining provision being set aside as a reduced planning obligation to be provided should certain circumstances detailed through a legal agreement be triggered.

3.39 While the details of each reduced planning obligation agreement will vary in accordance with site-specific circumstances, the general mechanism for establishing and managing an agreement will be as follows:

3.40 Alternative mechanisms to that described above are possible and may be appropriate for certain schemes. For example, for regeneration schemes a re-valuation may be more appropriate than an updated viability appraisal.

3.41 Therefore in some cases, variations to the above process may be agreed or required at the discretion of the council.

Related documents

Policy information


Previous page: Policy GEN 6 'Manchester Airport public safety zones'  |  Cheshire East Local Plan policy index  |  Next page: Policy ENV 1 'Ecological network'