Out-Law / Your Daily Need-To-Know

Developers planning to create new garden communities need an effective vision that sets out the main objectives, components, characteristics and qualities of the development, and addresses its environmental, social and economic aspects.

The vision must be viable and deliverable, realistic and tested early on with a viability model fit for purpose to examine the plans for its delivery. This will be complex and take place over the long term but robust viability models suitable for garden communities are key. It must be flexible enough to be capable of refinement through the course of the project as more detailed assessments are carried out and new information becomes known, as well as being capable of dealing with land trading and reflective of any Homes England or other funding support.

The garden community objectives in the former Ministry of Housing, Communities and Local Government’s garden communities prospectus (10-page / 316KB PDF) as well as the Town and Country Planning Association’s garden city principles offer useful guidance on developing a vision. Ultimately, though, the vision for a garden community will be defined and developed through a business case.

Developing the business case

A strong business case is required with evidence to demonstrate why a garden community is the right approach for large scale growth – socially, economically and environmentally, to address governance and consider high level funding requirements.

The outputs from the business case work will provide the initial vision and objectives of the garden community

Developing a strong business case should comprise consideration of the strategic, commercial, management, economic and financial case for the garden community. This approach aligns with the ‘five case’ approach recommended by the UK Treasury for evaluating projects in which public sector expenditure is envisaged.

Strategic case

This should involve outlining the evidence for developing a garden community, and the challenges and opportunities arising. There should be explanation of how the project aligns with local, regional and national policy, presentation of the organisational overviews, and a clear articulation of the strategic aims and needs.

Commercial case

This should articulate how the proposed development would be delivered, key milestones and timelines and identify the sites for development. Details of project delivery roles and responsibilities should be set out, and key risks identified along with plans for how those risks will be addressed. The market demand should be made plain to the reader.

Management case

This aspect of the business case should outline the main skills and resources that the developer thinks will be needed to deliver the project, how it plans to build capacity and resources, and how it will communicate and engage with stakeholders throughout the project. Risks associated with the management of the project should be set out alongside plans for how those risks will be addressed, and a clear explanation of governance and reporting arrangements should be provided.

Economic case

The developer should be clear about what the critical success factors are for the project. Developers should lay out the different options that are available alongside theirs and offer an analysis of the expected costs and outcomes of those options. The economic case should also outline the anticipated economic and social vale outputs from the project, on a qualitative and quantitative basis, and the value for money in delivering the project should be clearly stated.

Financial case

This should provide a high-level appraisal of the cost of the project, as well as an analysis of peak funding levels, funding options, and affordability. It should also set out contingencies and risk management measures.

Business case outputs

The outputs from the business case work will provide the initial vision and objectives of the garden community.

Important information such as relevant planning history and local community views, land ownership details and site opportunities and constraints, and the scale of new housing needed in the area and why a garden community is preferred over other options, will also be gathered from the process of putting together the business case.

Other outputs from the work will include initial likely costs and returns related to development of a garden community, associated infrastructure provision and finance options, including the cost of the resource needed to plan and deliver the garden community.

A better understanding of the social, economic and environmental benefits that will be generated will also be obtained, which can help make the case for any compulsory purchase of land needed to complete the planned development. Developers will also gather information on the main risks associated with delivering the garden community.

In working on the business case, developers will get a better sense of the likely delivery structures that will be deployed by public sector stakeholders, as well as what the correct structures to deliver the development will be – such as a commercial joint venture, energy or multi-utility service companies, or land value capture vehicles.

Developers will also have a better understanding of the long-term stewardship and management of the project and the delivery structures required in this regard, whether management companies, trusts, community interest companies or a mix.

Pinsent Masons has asked 70 market participants about garden communities, and you can find out what they said in our results (40-page / 5MB PDF). And you can find out more about a step by step approach to garden communities in this guide (40-page / 6MB PDF).

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