Long-term financial sustainability

If stakeholders decide to create a new organisation to manage a community's assets it is vital to ensure that the organisation is able to and capable of generating a sustainable income. There are various models for income generation that might be considered.

Canal in HackneyThe following models are a selection that have been used to generate a sustainable income in previous developments and may be appropriate for local authorities and other stakeholdersGlossary: A group of people or an organisation with a legitimate interest in a given situation, action or enterprise to consider for new communities:

Planning agreements

When previously unused land gains planning permission its value often rises. It may be possible to capture this 'added value' and share it between the developers and a longā€term management vehicle. A financial contribution towards future stewardshipGlossary: refers, in this context, to the ongoing process of managing, maintaining and tending a community could also be included in section 106Glossary: (S106) allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a property developer for the benefit of the community agreements and invested to produce a sustainable income.

Endowments

Either cash for investment, or property and other facilities with the potential to generate revenue over the long term.

Ground rents

From freeholders of properties in the community once it is developed.

Rent charges

From property owners, and transferable to future owners.

Parish Council charges and precepts

From a parish council, where its boundary matches that of the managed area / development.

Commercial charges

From the occupiers of business premises in the area.

Service charges

From local residents, although it is important that these are set at a reasonable level and are clearly linked to actual running costs.

It will be helpful to consider the financial sustainability of a potential stewardshipGlossary: refers, in this context, to the ongoing process of managing, maintaining and tending a community vehicle at the earliest stage of planning a new development to ensure that any assets or revenue that it will rely on can be built into the masterplan and planning arrangements, including section 106Glossary: (S106) allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a property developer for the benefit of the community agreements for the project.