13 Jul 2021
It has, without question, been a challenging year for our town and city centres. As the global pandemic continues and lockdowns come and go, a raft of the nation’s most famous retailers have disappeared from high streets across the country. As in the rest of the developed world, the Covid-19 pandemic has been a ‘game changer’ for the sector. With the growth in online shopping over the last decade or so, most centres had already devised strategies based on re-focusing their offer away from retailing and toward a leisure and food and beverage-based offer.
However, successive lockdowns have acted as a catalyst in speeding up changes in shopping behaviour, and impacted directly on the leisure and hospitality sector to the extent that it is now quite unclear how centres will function as restrictions ease.
In the North of England, our town and city centres have suffered more than most in recent years. While Covid-19 has sped up the process of change, even prior to the pandemic many centres were already experiencing major challenges due to both changes in shopping behaviour and weak underlying economic conditions.
The Government’s Levelling Up Fund Prospectus, published in March 2021, identifies a total of £4.8 billion to be invested over the coming years to support town centre and high street regeneration, local transport projects, and cultural and heritage assets across the country.
In addition to the Levelling Up Fund, as part of the Government’s wider package of interventions, there are three key funding streams, which have already seen a great deal of uptake across the North:
Future High Streets Fund – This fund seeks to allocate £830 million to help deliver transformative changes to struggling high streets;
Towns Fund – 100 cities, towns and areas have been invited to bid for part of this £3.6 billion fund designed for proposals which drive economic growth. In many places, town centres are integral to these schemes; and
High Street Heritage Action Zones – Seeking to transform High Street buildings which can help to fuel economic, social and cultural recovery.
Town centre stakeholders are responding with a range of radical and ambitious projects. These include strategic interventions by local authorities, including through the acquisition of shopping centres and use of Compulsory Purchase Order powers.
With innovative and ambitious strategies now in place in many towns – and Government funding available to support delivery - there are grounds for optimism over the future of our town centres.
Lichfields’ Insight, ‘Moving on up? Levelling up Town Centres across Northern England’, reviews the various different funding bids currently under consideration. Using this research, we have identified six key themes which underpin the different plans and strategies currently under consideration. These are:
Health and Wellbeing - With the demise of retail, we need to find a reason to draw visitors into town centres. As well as more pleasant and healthy outdoor spaces and experiences, this could also involve locating other essential services close to transport hubs where they can help to maintain footfall.
Education - Universities and colleges have long been key parts of daily life in our city centres. Opportunities exist to locate student populations in the heart of these centres, where they can contribute to vitality and viability.
Tourism - Many of the North’s town and cities have fascinating visitor attractions and dramatic physical and geographical environs. An ambitious and coherent tourism strategy should seek to make the most of these unique assets to drive trips to their town centres.
Heritage - The North has a rich and varied history, the remnants of which live on in many of our town and city centres. They can make a real contribution to the environment and attractiveness of these towns as visitor destinations.
Digital and creative - Whilst retail may never return to its previous levels, flexibility is required to re-purpose the floorspace left behind by these vacancies. Utilising new funding streams and planning reforms, space should be made to accommodate innovative small businesses which will contribute to the vibrancy and culture of town centres.
Town centre living - As retail space recedes, we need to ensure our town centres remain attractive places to live. As well as making an invaluable contribution to housing supply in our urban areas, maintaining a meaningful 24-hour population in town centres will in turn drive demand for services and facilities which contribute to the vitality and viability of the centres.
With these themes in mind, our Insight provides evidence across the North of innovation, optimism and ambition in the town centre sector, which means the future may not be as bleak as many sceptics would have you believe.
08 Jul 2021
The issue of development viability is becoming an increasingly important battleground in planning and plan-making. There are several reasons for this, not least the issue of rising costs. The Covid-19 surge in house prices notwithstanding, there remains the potentially longer-term problem for the sector to accommodate the rising cost of labour and materials as well as the need for adaptable and flexible housing to meet the requirements of an ageing population and of achieving ‘net zero’ targets.
2019 changes to the NPPF and related PPG further underlined the importance of viability. The changes point towards the ‘frontloading’ of viability assessment to the plan-making (rather than the decision-taking) stage and the greater requirements for the standardisation of inputs that have evolved as a result. Perhaps one of the most important takeaways from the amended guidance is the following quotation:
“The price paid for land is not a relevant justification for failing to accord with relevant policies in the plan. Landowners and site purchasers should consider this when agreeing land transactions.” [Paragraph: 002 Reference ID: 10-002-20190509]
Developers are now required to engage early on viability issues – the option of negotiating at application stage is now no longer a realistic option unless ‘particular circumstances’ justify the need to. At Lichfields, we have questioned whether the practical implications of this approach could actually disadvantage the smaller players in the market who will not necessarily have the same resource as volume builders at their disposal to absorb the costs associated with earlier engagement.
Two years on from the publication of changes to the NPPF and related PPG, there are still quite significant misunderstandings in the industry about the implications of the changes. Whilst relevant case law helps to provide further clarity on the interpretation of particular aspects of the guidance, we are still not much further on in terms of how to deal with issues of standardisation in viability assessment.
To this end, our forthcoming Insight (subscribe to Insights to get it sent to your email) aims to fill a gap by bringing together a comprehensive analysis of evidence submitted to local plan and Community Infrastructure Levy (CIL) examinations. It covers a total of 93 local authorities across England and in Wales, reflecting a broad coalescence of policy approach between the two.
Our findings therefore reflect the distillation of a large body of evidence on the assumptions and approaches used in undertaking viability assessments for housing development in a local plan context and for local plans (and CIL charging schedules) that were found sound at examination. In this way, we hope that the findings will be useful to a wide range of users and will assist in providing a broad framework for the standardisation on inputs/approaches.
Further detail can be found by reading the Insight, but overall, we distilled our findings down to three main areas:
Factors with a common methodology;
Factors with a narrow range of values/figures; and,
Factors with a broader range of values/figures.
It is important to note that the above findings are intended to guide practitioners to ready-reckoners and ranges for which there has been broad coalescence based on a review of the evidence. They should not be used dogmatically, and it should be emphasised that such an approach cannot account for all eventualities – there will inevitably be specific circumstances that justify the application of alternative inputs.
How Lichfields can help
Whilst the issue may have traditionally been viewed as the exclusive realm of agents/valuers, changes to the NPPF/PPG mean that viability is now central to the plan making process and site deliverability. Viability is therefore now critical to planning policy and practice. In particular, the shift towards the standardisation of inputs allows a greater role for planners who can focus less on the assessment of individual input assumptions and concentrate more on how the issue dovetails with other planning considerations. This is perhaps also reflected in the recent update to the RICS guidance note on viability which directly responds to the changed planning context.
As a leading planning consultancy, we have a unique and deep understanding of the interface between viability and planning which others may not be able to offer. We have extensive experience of supporting clients at plan examinations on planning and more recently on viability issues.
Please get in touch if you would like to discuss how we might be able to assist.
RICS (2021) Assessing viability in planning under the National Planning Policy Framework 2019 for England. Guidance Note England 1st edition, March 2021 https://www.rics.org/globalassets/rics-website/media/upholding-professional-standards/sector-standards/land/assessing-financial-viability_final.pdfR (Holborn Studios) v London Borough of Hackney(2020)