In August, the new Mayor of London Sadiq Khan announced that he would be employing an expert group to scrutinise affordable housing viability assessments, the documents property developers have to submit to councils when they want to drop affordable housing obligations. We have reported on a number of occasions on how viability assessments are used to boost the profits of developers at the expense of planning obligations.
Of course, any additional scrutiny being brought to bare on the development industry is welcome, but most planning authorities already test the figures of developers by employing external consultants to review the figures submitted to them. That system is clearly not working and in order to be effective, the new team at City Hall will need to be doing something different.
Last month Ourcity.london asked three questions aimed at testing whether the new team would be a serious tool to hold developers to account.
Caroline Pidgeon, the Liberal Democrat assembly member at the GLA has taken up those questions and put them directly to the Mayor, who has now answered them. So did the new mayor pass the test? No.
Conflict of interest
One of the big issues for local authorities is the revolving door between planning departments and the development industry. As we reported, often viability consultants will work for developers one day, and local authorities the next, and they see no problem with this.
Asked by Caroline whether he would “consider introducing new rules in London to tackle the existing issue of viability consultants frequently working for both developers and local authorities?” and in particular looking at “strict conflict of interest provisions to prevent individuals from taking up work for private developers” for a period of time after they left City Hall, the mayor said no.
Instead he will leave it up to the industry regulator RICS to police any conflicts of interest, an organisation run by surveyors, for surveyors. An organisation that could be accused of having some of its own conflict of interest issues. They mayor said:
“Generally viability consultants are members of the RICS and thus must adhere to the professional rules of conduct which requires members to “act with integrity and avoid conflicts of interest and avoid any actions or situations which are inconsistent with their professional obligations”. In addition, I understand that RICS is due to publish further guidance on this issue.”
Indeed it would appear that Mr Khan simply doesn’t see the revolving door as an issue. He went onto say “Once my new viability team is fully established it will provide a public sector viability resource and thus avoid any such potential conflicts of interest.” In other words, if it is in the public sector there can be no conflict. Tell that to Southwark Council. A report published in 2015 showed an exodus of council officers to developers around the Elephant and Castle in the period after the authority had granted planning permission for a huge redevelopment of the area.
Same old people, same old results?
In the press release announcing the change the Mayor suggested that the new team would be drawn from the finance profession. As we said at the time, given that the surveying profession has hardly covered itself in glory over the past few years, it would be a smart move to look to the many qualified people outside of the industry with knowledge of how the viability process works.
Caroline Pidgeon asked the Mayor whether he would be recruiting his team from outside of the industry. Again the answer was no. The reply “It is expected that applicants will have extensive experience in viability negotiations”.
Poachers being asked to apply for the new role of Gamekeeper at city hall.
Finally Caroline asked whether the process for scrutinising viability assessments would itself be open to public scrutiny. The answer? That details will be set out in the forthcoming policy document on the issue.
Well at least there is some hope that the system won’t be a total waste of time, but it is concerning that Mr Khan can’t give a clear response on such a fundamental issue as transparency.
So is the Mayor serious about holding developers’ feet to the fire and stopping them from playing financial games at the expense of the community? The new mayor says he is determined to increase the amount of affordable housing being built in London, but he could hardly say anything else. If he wants to do more than simply give the appearance he is doing something, whilst the development industry carries on avoiding their obligations, he must do better.