Viability Assessments & Disclosure

The case of LB Southwark v IC, Lend Lease and Glasspool in 2014 (“Lend Lease”), made clear that the public interest will be given more weight than confidentiality when it comes to the disclosure of viability assessments.

Since then several cases and decisions by local councils have made it even harder for developers to keep their viability assessments confidential.

What is the public interest in viability assessments?

The public have an interest in viability assessments due to their ability to be used to decrease affordable housing obligations. In the Lend Lease case, a member of the public requested to view the viability assessment when the local authority approved a planning application on the basis of 25% affordable housing, despite the stated aim of the borough being 35%. The tribunal ordered the viability assessment to be published, with only the viability model and sales and rental figures redacted.

Similarly, in the Royal Borough of Greenwich v The Information Commissioner (2014), an affordable housing obligation of 21% was agreed on the basis of viability, despite the required level being 35% for the area. This resulted in a tribunal decision in January 2015 which ordered the release of the viability assessment for public scrutiny.

As a result of these cases, both Southwark Council and the Royal Borough of Greenwich adopted new policies in 2016 which require developers who submit applications that do not comply with the 35% affordable housing target to make their un-redacted viability assessments public. Furthermore, the London Assembly Planning Committee wrote to the Mayor of London in February 2016, to request supplementary planning guidance in relation to viability assessments, stating that developers are “hiding behind confidential viability assessments”.

Reaction from Developers

Developers typically are of the opinion that their viability assessments should not be disclosed on the basis of confidentiality. Many developers have taken the position that significant damage to their economic interests could be sustained if the viability assessments were released. Such economic interests can relate to:

• retaining or improving market position;

• ensuring that competitors do not gain access to commercially viable information;

• protecting a commercial bargaining position in the context of existing or future negotiations;

• avoiding commercially significant reputational damage; or

• avoiding disclosures which would otherwise result in a loss of revenue or income.

The Tribunal in Lend Lease acknowledged that these were legitimate interests that needed to be protected, which was why it allowed certain confidential information that amounted to trade secrets to be redacted. In order to protect such economic interests in the future, Lend Lease has said that it would consider making its viability assessments available only for inspection at its premises. Other developers have insisted on councils using a remote log-in system, so they can monitor exactly which parts of their viability models are being tested.

Future Developments

Developers will await with interest any supplementary planning guidance from the Mayor of London, as has been requested, in relation to viability assessments. Until then, it seems that the trend for disclosure is gaining momentum at local authority level. Developers will need to be prepared for this and consider carefully all of the information that they provide to authorities and what they can do to protect the most commercially sensitive information.