Digitising viability assessments to maximise affordable housing delivery

Full Application: Not funded at this stage

We are seeking to speed up the viability assessment process and reduce administration, while also increasing the provision of affordable homes.

Main objectives for the alpha phase are to:

  • Build prototypes of data-driven tools that enhance the process
  • Test these prototypes with users and stakeholders
  • Demonstrate the technical feasibility of the tool including effective use of existing and third-party data sources, linked with existing systems and processes
  • Design the most effective ways of explaining the data shown to users so they can use it as part of viability negotiations.
  • Understand how much the service will cost to develop and maintain and identify paths for making the tool and its use financially sustainable by local authorities
  • Detail the roadmap to move to beta and the biggest risks to scale

Building on the insights and concepts from previous discovery work, we will design and build an alpha version of a digital tool which serves as a rich resource of information to assist with decision making and viability negotiations, providing a common resource for case officers, consultants and developers.

This tool and the wider project will provide:

  • A standardised way to capture all planning viability information. Any templates generated will be openly shared
  • The ability to compare a new proposal with various sources of existing evidence. This will allow for sense checking and automated analysis to inform decision making
  • The tool will be developed in the open and its code will be released as open source, enabling others to deploy and extend this tool

We will consider this project a success if:

  • We are able to run a viability assessment through the tool and conduct a ‘sense check’ – if the figures are in line with previous assessments, and if the bottom-up residual calculation is in line with comparable sites
  • We can reduce the administration required to manage and process assessments

We have an identified and feasible path to develop the resultant tool into a technically and financially sustainable system

We will work with a supplier selected through the Digital Marketplace. They will provide expertise in design, agile development, delivery management and data science.

We will take an agile approach to the project, working in a series of time-boxed ‘sprints’ to maximise our chances of developing the alpha concept into a successful new planning viability service.

To ensure our design is fit for purpose we will apply the following principles:

  • User-driven throughout design
  • Learn by doing – prototype and test early and often
  • De-risk by using agile sprints

We will ensure our objectives have been met by tracking progress against the success criteria defined in question 1. We will understand the potential uses and limitations of the service through robust testing and evaluation with real users. This will help us uncover valuable insights about patterns of use and learn what works as rapidly and cost effectively as possible.

Essential milestones:

  • Project kick off to develop clear project aims, goals and roles
  • Design workshops bringing together data, insights from user research and insights from hypotheses
  • Test prototypes with users; testing assumptions quickly, to explore the possible solutions and feel confident about how to progress
  • Design and build; Iterate the product at intervals based on user feedback. Getting to a service that works with real users
  • Strategy and business case; Develop understanding of the service design and organisational change required to deliver. Developing a business case that demonstrates impact and how to progress.
  • Data sourcing and analysis: Identify key data sources for the digital tool. Transforming the data into a standardised format for analysis. Performing analysis to generate meaningful insights.
  • Roadmap for beta; Development and prioritisation of any future design and build. User needs prioritised based on what we have learned through testing. Consideration of the capabilities and skill sets required to introduce new ways of working, implement new technology and deliver the service. Understanding what’s technically feasible and potential future investment for scaling the service.

Planning viability is a significant process to fund – Southwark spent £440,000 in one year on consultants’ fees alone, funded ultimately by developers. By streamlining the process, and the viability negotiations that can often take months to conclude in particular, we will be able to save both time (getting more affordable housing built quicker) and money (the cost to plan and develop).

From our qualitative research we understand that around 35% of viability officer’s time is spent reviewing consultants’ reports and answering questions from planning officers. An additional 15% of their time is spent looking at policy and methodology considerations for viability. By providing them with the data-driven tool that we are proposing, we can help viability officers reduce the time they spend analysing reports, and let them focus on higher value analysis. Additionally, there are around 10 case officers in Southwark’s strategic/majors team, and 20% of their time is spent on viability, primarily acting as a go-between with developers, consultants and viability officer. By standardising some of the information, its collation and making it easy to access, review and analysis time can also be streamlined.

Reporting on viability figures is an almost exclusively manual process, open to error and hugely costly, in terms of officer hours, especially for centralised authorities, such as the GLA and MHCLG, who must collate and standardise data, of varying quality and consistency. A benefit of this work is that accurate and standardised data can be automatically collated and subsequently transferred to a centralised collecting authority. In London, it will help the GLA to reach their ambitious goal of digital planning in London by February 2020.

In combination with the insight delivered from the Discovery phase, we will share what we learn about the nature of the underlying data, the right kinds of processes for gathering and collating viability information, the design considerations we uncover and the source code and standardised templates we develop. This will primarily be through online documents.

It should be noted that there is cross over with the alpha application being submitted by Gateshead. Following a conversation, it was decided that whilst not sufficient to partner at this stage, we will remain in contact.

The tool we are looking to develop addresses the identified user needs (contained in this deck), many of which are not being met with the tools and processes that are currently available.

Key insights:

  • Currently, viability assessments are not standardised and are often compiled from scratch.
  • There is a power imbalance between councils and developers, particularly in the information each party can access
  • There is an unequal playing field between large and SME developers
  • Viability assessments regularly miss supplementary information
  • Research showed that developers are frustrated when councils make demands without explaining why during the negotiation period
  • Currently viability assessments often miss out on a sense check
  • Viability assessments are speculative by nature and rarely take into account actual costs and values after construction and sales
  • Viability reports are impenetrable in their current format
  • There is inconsistency in how different councils approach transparency and commercial sensitivity
  • Currently Local Plans are based on high-level, generalised data

Efforts in this space thus far have included attempts to make viability assessments more open and transparent and the general direction of policy is for assessment of viability to take place in the plan-making stage as much as possible – there haven’t been concerted efforts to improve the data collection and exploitation capabilities of councils or provide a more collaborative space for viability discussion and presentation of evidence.

The tool we are proposing would give councils a much more robust evidence base to feed into their plan-level viability assessments, as well as informing individual cases.

As the use of this tool will give councils and developers evidence-based figures to indicate how much affordable housing is viable on a particular site, and give councils a stronger negotiating position, this should lead to fewer developments missing their policy targets for affordable housing and as such an increase in affordable housing provision.

Whilst this tool is initially being developed with Southwark Council, it should be applicable to other London boroughs (who are being involved throughout the process) and potentially other planning authorities nationally.

Other councils were involved in the discovery phase and we will continue to collaborate and work closely with others during the alpha.

This will include using relevant and accessible planning viability data from other councils to inform our design, create a standardised format and build intelligence around the data.

Partners will act as a sounding board to sense check and validate that what we develop works for all. Our approach will involve testing prototypes with planning teams in other councils to gather feedback and test the breadth of application to other boroughs. This will ensure the tool is applicable to a wide range of authorities in the future.

The alpha will be developed in the open and its code will be released as open source, with the aim of supporting others in sharing their data and contribute back to a growing evidence base, if they so choose. An existing MoU with FCC, will ensure that all work is applicable to other organisations and authorities.

We will also involve councils in our agile project rhythms and ways of working including inviting them to attend and participate in design workshops, show and tells, and share and contribute to our Slack workspace.

We will produce the following outputs and make them available to share online by the final week of the project:

  • A digital tool; We will iteratively develop an alpha product to support the planning viability assessment process and meet user needs, with a plan for scale. This includes an understanding of data sources and interoperability with current systems, both locally and nationally. At the end of the project we will share a simplified wireframe walkthrough and demo of the digital tool with others so they have a comprehensive understanding of the process and principles applied.
  • Operational Blueprint; We will build out an operational blueprint to enable the future development of the alpha. The operational blueprint will describe what is required to deliver and scale the service going forward, including:
  1. Functions, roles and requirements required to successfully operate the day-to-day service
  2. Optimal role for the Local Authority
  3. Messaging and marketing content
  • User research report with insights from testing prototypes with service users including case officers, planning viability consultants, property developers and other councils. This will include key findings around any new user needs surfaced, how to implement this new solution, problems encountered and recommendations. The report will also include a technical element with detailed data modelling and insights to share with the wider community
  • As described above, part of the alpha activity will be to develop the business case including an understanding of the service design and organisational change required to deliver along with the impact, costs and benefits. Consideration of other councils is built into the whole process, including the operational blueprint above
  • Conclusion informed by the above stating what will be taken forward and how it will be built upon in a beta phase. We will have our prototype(s) and ‘to be’ journey maps as inputs.

Primary users

  • Case Officers
  • Viability Officers
  • Viability Consultants
  • Developers
  • Officers from other local authorities

Secondary users

  • Planning committee members
  • Other related teams
  • Residents

The proposed user research objectives are:

  • Test the proposed idea with users to gain more insight into their needs
  • Learn how to improve the design so that it best meets the identified user needs
  • Testing the team’s assumptions in three key areas – assumptions around desirability, feasibility and impact.

Desirability

  • The proposed idea better meets user needs than the current process.
  • There is a need for this concept in other local authorities as well as Southwark.
  • Case officers will be in a better position to negotiate levels of affordable housing with this concept.

Feasibility

  • This concept is technically feasible.
  • It is possible to pull in third party data to enable councils to be less reliant on data only consultants hold or can access.

Assumptions around impact:

  • This concept will save case officers time in the planning application process.
  • This will speed up the delivery of affordable homes.

We will engage with our users by conducting testing sessions, putting various iterations of the alpha concept in front of them to gain feedback and evaluate the concept, based on how well it meets their needs.

The riskiest assumptions will be tested first and the proposed concept iterated and adapted as appropriate.

We would be grateful for any support in publicising this project with other authorities and stakeholder and generating interest.

We would also like to request senior level training and guidance on:

  • the Digital Marketplace and how and when it should be used.
  • Agile project management and the benefits over traditional ‘waterfall’ management and governance.

I can confirm that we have neither sought nor been granted funding for this project in the past.

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