Experts cast serious doubt over the viability of the Highsted Park proposals

The last few weeks of the public inquiry into Highsted Park have seen some of the most heated debates so far with both sides levelling accusations and counter-accusations against one another regarding the financial viability of the scheme.

Whilst the applicant and various professionals employed on their behalf continue to argue that the scheme is wholly viable, Kent Highways, Highways England and The Five Parishes Group have not only disputed this position but have warned about the catastrophic consequences if it were to fail, including the possibility of an eye watering tax payer bailout amounting to potentially hundreds of millions of pounds.

This goes well beyond the normal planning debates as to whether the scheme can deliver even the modest levels of affordable housing offered by the applicant or meet its Section 106 contributions such as delivery that new football club that so many supporters of this scheme are wedded to, but questions whether even the critical highways infrastructure can be delivered, left alone any of the new schools, the NHS primary care health facilities, bus services, parks, open spaces and other sporting facilities.

Underpinning this debate is a significant absence of detail from the applicant and the constantly evolving nature of the proposals that are still in flux even now, years after the planning application was submitted.

I think it is also critical to understand the scale of what we are dealing with here, as this is clearly no run-of-the-mill housing development a point which Mr Christopher Young KC puts best with these comments

“In this instance Quinn is here acting as both a land promoter, with the landowners in tow, and Quinn also build homes, but they are not a Persimmon and they are not a Barratt, they are much smaller scale.”

“So here am I, a small to medium sized builder down here in the corner of Kent and I am thinking about building something which turns out to be the biggest planning inquiry for housing the country has ever seen.”

Construction costs

One of the most contentious parts of the inquiry related to viability was without doubt the enormous upfront costs of the critical highway infrastructure, namely the two relief roads and new motorway junction and in particular the viability evidence provided by Mr Tim Mitford-Slade MRICS of Strutt & Parker acting on behalf of the applicant.

The following are representative of some of the criticisms levelled against the applicant in this respect.

Mr Matt Spilsbury MRICS acting on behalf of KCC stated in his evidence

“RICS guidance on undertaking financial viability and planning under the National Planning Policy Framework sets out that evidence should be collected and presented to support the assumptions adopted on development costs. I would expect as an absolute minimum practice that those infrastructure costs would be assessed within a full cost plan produced by a chartered quantity surveyor. We don’t have that information at all.”

“Absence of supporting evidence at this stage where evidence is being heard in an inquiry for areas as acknowledged by the applicant having a major bearing on the viability and deliverability of the sites, in my view represents a serious breach and a failing of the RICS professional statement.”

“Because there is not a robust cost plan for each of the sites, I can’t scrutinise the evidence supporting the figures, and I can’t instruct my client to instruct a chartered quantity survey to review the figures because there is nothing to review.”

“Having reviewed Mr Mitford-Slade’s viability evidence, and this is the all evidence from 2024 to now, in my opinion is that Mr Mitford-Slade has failed to meet the mandatory requirements of the RICS professional statement in several areas.”

Mr Chris Gardner MRICS acting on behalf of the Five Parishes Group stated in his evidence

“The main premise of my analysis is that the viability evidence put forward by the applicant cannot hold weight, because there is no cost plan and it hasn’t met the minimum requirements of the RICS guidance and it hasn’t met the professional standards in terms of the professional statement, so in that regard the viability evidence from the applicant is not up to scratch and can’t be relied upon.”

Mr Aust of Pathfinder Consultants, acting on behalf of the Council  conceded that the significant sums allowed for by Mr Mitford-Slade for major infrastructure costs are not able to be verified for either the Northern or Southern sites due to the absence of the evidence and there is a significant risk in placing reliance in the viability outcomes of both his and the applicants reports given the inability to verify the applicants’ figures.

Needless to say, Mr Mitford-Slade strongly disputes the points made above.

Cash flow

Whilst there are significant differences of opinion on costs, especially those related to the critical highway infrastructure, the problems with viability do not stop there. There are also serious differences of opinion in relation to cash flow, where it is suggested that the applicant is being overly optimistic about the timescales, in particular the point at which income is received vs the massive upfront expenditure commitments especially for the highway infrastructure. The timing of income vs expenditure has a significant impact on the amount of interest that will be incurred and therefore also feeds into the scheme’s overall viability.

Now I have just massively oversimplified the above, but that gives you a taste of arguments put forward.

I think Mr Christopher Young KC, instructed by Kent County Council, in cross examining Mr Mitford-Slade’s cash flow which had dramatically changed within the space of a single month summed it up best with the following:

“It’s a bit obvious when you are doing a viability appraisal to wonder what the costs of the major infrastructure might be.”

“There is changing your opinion and there is abandoning it and you have completely and utterly abandoned your figures, the timescale, and you have done it simply to try and deal with the problem of viability.”

“Is it a change or is it manipulation? I am going to put to you; to use your own words, it is very obviously manipulation.”

“You have manipulated the figures to try and deal with the problem of rising interest costs.”

“When we see dramatic changes, significant fluctuations, figures that are doubling from one report to another a month later. All of that reflects the fact that this is a very infrastructure heavy proposal, it’s a high-risk proposal in terms of those costs.”

Viability, is it even relevant?

One of the more interesting discussions during the course of the inquiry has been around whether it should even be a concern of Swale Borough Council or Kent County Council as to whether they think a scheme is viable or not.

The applicant argues that viability is not a material planning consideration and suggests that the authority should simply accept the applicants position and that if indeed it proves not to be viable then the scheme doesn’t get built.

Mr Young KC
“So, no matter what the cost of the road, no matter what the cost of the other infrastructure, no matter what the sales values, the finance costs, no matter what the abnormal’ s and all the other components. None of that matters if we sign a Section 106 that says the affordable housing will be delivered in a policy compliant level, then everything else is irrelevant in your view”

“If we have a policy compliant level of affordable housing then there is no need to look at viability, that’s your case isn’t it.”

Ms Claire Dickinson, Senior Director at Planning Consultants Quod
“Technically, yes”

Mr Young KC
“Your position and it's helpful to get clarity on this your position is if a develop says, look, we can afford the roads, then that's the end of the story.”

Ms Dickinson
“That's correct. Yes. There is no policy requirement, it's very clear that the risk associated with delivery sits with the developer not with the decision maker or if you're preparing a local plan, the plan maker. But the risk of delivery sits with the developer that is an absolutely key principle.”

My Young KC
“The suggestion somehow that you can't look at the cost of the road and see if it can be afforded when the road is a primary obligation in this proposal is just wrong.”

Affordable housing provision

Another area of contention is the applicant’s interpretation of the council’s local plan, which sets out affordable housing targets for Sittingbourne town, urban extensions and Iwade of 10% with all other rural areas set at 40%.

The applicant is suggesting that this means the “Sittingbourne Housing Area” rather than Sittingbourne Town to argue for the adoption of the 10% figure as opposed to the 40%.

Mr Young KC
“Do you think the local authority would have wanted to satisfy themselves as to whether in the context of a big strategic site with big infrastructure costs the affordable housing could be afforded? Do you think the local authority would have been wanting to know that?”

Dickinson
“No”

In response to a question of whether the applicant was saying that it is an urban extension to Sittingbourne town, Miss Dickinson responded with

“No I’m saying its part of the local housing market area of Sittingbourne and it’s an urban extension within that framework.”

The applicant did attempt to claim that the scheme delivers more affordable housing than was accomplished in the last decade, however this was proven to be incorrect and given the likely duration of the scheme is not a like for like comparison in the first place.

Sittingbourne has an acute shortage of affordable housing and this scheme whilst offering what might have been considered on par by historical standards, does not come remotely close to delivering the levels set out in the councils local plan. Of course, if the inspector or indeed the Secretary of State for Housing, Communities and Local Government were to side with the councils position the scheme would almost certainly be dead in the water from a viability point of view.

Other projects with viability issues

The applicant continues to maintain their position that the scheme is viable, but viability has been an issue on other projects that Quinn Estates are involved with.

Betteshanger Park is a 230-acre activity centre near Deal with a surf lagoon and hotel was acquired by Quinn Estates approximately 6 years ago. The developer of the luxury £30 million hotel has recently pulled out, creating uncertainty about the scheme’s future. The Friends of Betteshanger Country Park say that there were serious defects in the planning applications and that the project's financial viability is in serious question.

Ashford International Studios - Quinn Estates are part owners of the Ashford International Development Company, the promoters of the failed film studios project which was ditched after councillors believed it was "not economically viable". This after a staggering £27 million of public money was pumped into a project which was shown to have been unviable at the time planning permission was granted.

Pilgrims Hospices - Plans for a new £10 million state-of-the-art hospice in Kent were abandoned earlier this year and instead the charity will focus on modernisation of the existing site. This was to have been funded by the Tory Foundation, Pentland Properties and Quinn Estates. The Tory Foundation kept it’s end of the bargain with a £4 million donation the largest single donation ever received by Pilgrims Hospices.

Mr Colin Finch, Development Investment Team Manager, Kent County Council – Growth & Communities told the inquiry

“We have noticed in Kent that a lot of the larger scale applications are in need of some kind of central government support or funding to enable them to proceed.”

This is clearly illustrated with these ongoing projects, which do not feature Quinn Estates

Chilmington Green in Ashford is a new development of 5,750 houses, which faces several legal challenges related to its development. The applicant applied to vary the section 106 agreement, to vary or delay obligations related to infrastructure like schools, affordable housing, and community facilities. Kent County Council had to step in and provide the access to secondary school after applicant failed to do so and is currently pursuing enforcement action.

Otterpool Park in Westenhanger, Kent is a new garden town of potentially 10,000 homes. The Section 106 has not been completed and Folkestone and Hythe District Council who have already sank circa £26 million of public money into the scheme, have initiated assistance from Homes England to review the infrastructure levels and to assist with issues relating to financing the project. It is currently unable to progress due to financial viability concerns.

Grovehurst Junction Upgrade – We learned during the course of the inquiry that contractor Jackson Civil Engineering who are also responsible for estimating the highways infrastructure costs associated with Highsted Park, have seen costs on the junction upgrade jump from £161,000 to a massive 2.23 million. Now by anyone’s standards that is a nightmare scenario whoever is to blame.

The risk

The above in particular highlights just how risky these projects can be, and we know from the inquiry that Highsted Park is considered a very high-risk proposal by all parties.  

Ultimately there is a massive difference of opinion between the estimates provided by Jackson Civil Engineering and Kent County Council with regards to the critical highway’s infrastructure. A difference so large that it is more than enough to bury the proposal entirely on its own without any of the other viability challenges this project faces.

Based on arguments put by both sides, I would not touch this proposal with a very long barge pole. This is almost reckless in its ambition and risks severely undermining local services, local infrastructure and needlessly destroying hundreds of acres of countryside based on an overly optimistic, if not damn right fanciful, financial appraisal. 

Andy Hudson
Sittingbourne.Me

This echos what I’ve been saying since first viewing the plans for this project, also what I advised our local MP on on two occasions, that the key to this project is the motorway connection and link roads which must be in place before any construction is considered. 

That kind of massive expenditure could never be viable either in terms of up front financing or from housing sales. What I’ve just read of the apparently cavalier attitude of the developers representative to viability of this project just beggars belief. 

Very comprehensive appraisal of the proposals so far. Thank you Andy. I particularly like your final paragraph. 

I no longer have concerns for myself, but I do fear for my grandsons growing up I  this area.

The article asks "Viability, is it even relevant?"

I asked Chatgpt in turn "Are there specific protective provisions proposed and/or formally lodged?

Chatgpt's response;

"In short: Yes, KCC is emphasising financial risk and the need for protective measures—but we don’t yet see explicit evidence they’ve proposed specific legal tools like bonds in their case documents (at least, as publicly reported).

Short answer: yes—there are already “protective” mechanisms on the table (in draft s106s and condition sets) that KCC and the other parties are pointing to, even while KCC is now pressing for tighter security because of the Allen Dadswell cost review.

What’s actually proposed/lodged so far

#1 “No occupation until…” transport triggers

The current draft s106s include a Transport Infrastructure Delivery Strategy with hard occupation restrictions: you can’t occupy phases until the strategic transport works required for that phase (incl. SRR/NRR links) are delivered as per the approved strategy. hwa.uk.com+1

#2 Governance & monitoring to police delivery

Drafts set up a Transport Review Group (KCC, Swale BC, National Highways, promoter, Travel Plan Co-ordinator), transport monitoring schemes, annual reviews, bus delivery/management strategy, pedestrian & cycle route delivery/maintenance, and Public Rights of Way management and contributions—with “no occupation” hooks if these aren’t in place. hwa.uk.com

#3 Highway condition/damage protection

KCC’s formal consultation responses include pre- and post-construction highway condition surveys and a commitment to fund repairs for any construction-related damage; also “no dwelling shall be occupied until” on-plot par