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.
The 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 stakeholders
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 long‐term management vehicle. A financial contribution towards future stewardship could also be included in section 106 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 stewardship 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 106 agreements for the project.