Jump to content

Welcome to Field to Farm Community
Register now to gain access to all of our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, post status updates, manage your profile and so much more. If you already have an account, login here - otherwise create an account for free today!
Photo

Financial Tests


  • Please log in to reply
39 replies to this topic

#1
pigman

pigman

    Duckling

  • Book Owners
  • Pip
  • 47 posts
  • LocationCornwall UK
Hi Dave,
Recieved your book yesterday and have had a good look through - wish we would have found you before makes interesting reading.

Over 2 years ago we purchased some land built a shed installed a potacabin, storage unit, caravan to live in and started a smallholding mainly raising rare breed pigs for meat and breeding stock and selling the produce direct to the public by mail order and from our portacabin farm shop.

We applied for planning for the caravan for 3 years and got it after the second attempt and will be due to apply for a dwelling later this year.

We were told we would need to show we make �21k for one of the years and show a return on our investment by the County Land agent who advised the planning dept - Can you tell me how to cite with what sources the figures you have given in the book as we have problems reaching the CLA's required figures.

Best Wishes
  • 0

#2
Guest_Dave_*

Guest_Dave_*
  • Guests
Hi
If You google planning policy statement 7 sustainable development in rural areas the second one down with 21 pages.go to annex A paragraph 8 quoted below:

8. New permanent accommodation cannot be justified on agricultural grounds unless the farming enterprise is economically viable. A financial test is necessary for this purpose, and to provide evidence of the size of dwelling which the unit can sustain. In applying this test (see paragraph 3(iii) above), authorities should take a realistic approach to the level of profitability, taking account of the nature of the enterprise concerned. Some enterprises which aim to operate broadly on a subsistence basis, but which nonetheless provide wider benefits (eg in managing attractive landscapes or wildlife habitats), can be sustained on relatively low financial returns.

Most councils and planning inspectors accept that as there is a mandatory minimum wage in the UK which is by the Governments reakoning is sufficient to house, feed and cloth yourself this is the yard stick by which to judge the necessary income required to be viable.

  • 0

#3
pigman

pigman

    Duckling

  • Book Owners
  • Pip
  • 47 posts
  • LocationCornwall UK
Hi Dave,
Yes the wording contained within most PPS documents and in particular Annex A to PPS7 all read favourably when applied too many types of application when using real English and indeed with my own also.
Unfortunately local planning authorities colour the wording of these documents according to their own needs and wishes and they may not necessarily be applied consistently or in the true spirit locally for which they were intended when they were authored at national level.
What we need are case law citations to be pre armed for pre planning so if we have to take these points to appeal we know we are on the right track.
Are there any such case law or other that may help � Because without this you must be bound by the conditions laid out when the application is granted and the conditions are contained within the detail � In my case contained in the county land agents report.

To Recap - My Planning detail were:
2200 unit man hours
�21,000 profit in 1/3 years
Return on Investment

  • 0

#4
Guest_Dave_*

Guest_Dave_*
  • Guests
Hi,

Unfortunately to my knowledge there usually isn't case law as these types of decision go to appeal. The judgements are rarely put into the public domain.

I personally don't think that the government can lay out the conditions of a minimum wage which is meant to feed, clothe and house the average person and then ask you to make more money than the minimum wage so that you can live on the land.

If you wished to carry on living on the site in a mobile home or log cabin there would be no issues about what you would need to earn above the minimum wage as they couldn't use the excuse that you would have additional mortgage payments to make the house.

Regards,

Dave
  • 0

#5
pigman

pigman

    Duckling

  • Book Owners
  • Pip
  • 47 posts
  • LocationCornwall UK
Hi Dave,  thanks for the reply,

I found the following post on another site and tried to contact the person who made the claim that case law does exist regards minimum wage etc but had no reply from them - maybe somebody else might want to try to get a response from them - this information could be very useful to many if it can be sustantiated.

http://community.riv...id:25707/page:2

lightpacific  message > view profile >
Jan 31, 2010 at 11:53 AM
report




Andy,

It is important to realise that the planners do not always have a comprehensive knowledge and understanding of the legislation, are generally not keen on this kind of thing and will frequently give incorrect information either deliberately or mistakenly. Forum users will lead you even further astray with repeating this misinformation and with 3rd hand anecdotes! You must acquaint yourself with the legislation yourself, preferably first hand by reading the Town and Country Planning Act 1990, the T & C Planning General Permitted Development Order 1995 (GPDO). This way the planners cannot take advantage of your ignorance. Remember though that your Local Planning Authority interprets the planning law and has quite wide leeway in this.
Planning legislation is in place to prevent development of open countryside. Change of use from agricultural to residential can be achieved if you can demonstrate a genuine agricultural need to be on-site 24 hrs/day (the functional test) and that your agricultural business is financially sound (the financial test). �10000 per annum is not legally necessary, as it has been determined in the courts that subsistence farming is okay (if you are employing yourself you are doing better than many). This is all to prevent speculation and limit planning permission to those who genuinely need it for agriculture.


PS and also SD points out that further information on "subsistance farming" would be useful also
  • 0

#6
josh

josh

    Chick

  • Members
  • Pip
  • 6 posts
Hi Dave
With reference to the financial test - can you tell me if you can earn too much? We can't afford to buy a house in the area but do have a fair income, but age is not on our side for a long mortgage. We earn a profit every year but want to know if we earn too much and how deeply does the council consultant delve into your personal finances, how do they decide if you could afford to rent in the area?
  • 0

#7
PumpkinEater

PumpkinEater

    Newbie

  • Book Owners
  • Pip
  • 38 posts
  • LocationScotland
Hi Josh - just to reassure you - your personal finances have absolutely nothing to do with the financial test. It is the LAND that has to produce sufficient in monetary terms to pass the financial test. The size of any residential building on the land will be limited by the amount of money the land is producing providing it is by acceptable means. For instance, if you have a caravan and camping club licence and some ponies, you would not be allowed to use any money raised by giving riding lessons to the holidaymakers towards the financial test. But any food that you had grown on your land and sold to the visitors would help towards the financial test. Remember though that you cannot buy from 'outside' and sell on site as for that I believe you would need planning permission.

If you follow Dave's guidelines in his books and the threads on this forum, we cannot see why it should not be possible to eventually pass the financial and functional tests. The fact that there are houses available to rent nearby should not make much difference after the length of time advised by Dave - after all by that time, your mobile home has become HOME.

Rita
  • 0

#8
dudman

dudman

    Duckling

  • Members
  • Pip
  • 42 posts
  • Locationwest midlands
Hi
the comments mentioned within the book and the thread.relate to your earnings to calculate the size of your dwelling .but woudn't the size of your family be a factor ad well?
  • 0
Regards
Ray
west Midlands

#9
kernow

kernow

    Chick

  • Book Owners
  • Pip
  • 20 posts
Does all this mean that if you have a profit of 12k you could get permission for permanent planning on a mobile home but not a fixed dwelling or have I misunderstood?
  • 0

#10
happymanoftheworld

happymanoftheworld

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 439 posts
Anyone know of the Scottish version of "planning policy statement 7 sustainable development in rural areas" - espscially the bit about subsistance income. I have tried all sorts of Googleing but no luck. Possibly the Scottish Government missed it out because we are nearly all on subsistance income here! Thanks
  • 0

#11
KChally

KChally

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 371 posts
Hi,

Our planning authority will not quote us a figure which we need to meet. All they say is that the figure has to be " a sufficient amount"

Is this legal or do they have to tell you what the minimum figure to attain is for 1 years profit in 3?

Regards
K Chally
  • 0

#12
surreydodger

surreydodger

    Agricultural Planning Advisory Service

  • Book Owners
  • PipPipPipPipPip
  • 1,208 posts
  • LocationWest Sussex
Kernow, you can get permission for a permanent dwelling (with ag restrictions normally).

Happyman, sorry I don't know of any differences with Scots regs. A quick call to the LPA might be the answer for thisone.

KChally, if your planning officers are being their usual more than helpful selves and will not provide the amount for 'sufficient', then you could reasonably ask them for the criteria they use in judging it. If they refuse that as well, I think I'd start throwing a few Freedom of Information threats in their direction.
  • 0

#13
KChally

KChally

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 371 posts
Thanks Surreydodger,
We have always tried not to antagonise our planners cos I know what they can be like. From previous posts I have read it would seem that each planning authority has their own idea of what the figure should be. Surely it would make sense for it to be the same amount nationwide.
I may have no choice but to follow your advice. Thanks

KChally
  • 0

#14
Thegreatescaper

Thegreatescaper

    Turkey

  • Book Owners
  • PipPip
  • 80 posts
  • LocationMid Essex
Hi KChally,
My personal viewpoint is that there is a legal minimum wage in this country that legally can sustain you as a worker. The profit from your enterprise must be able to pay you this. I could envisage the planner asking for more to ensure that you farm build suffcient capital to esure that the business can overcome difficulties should they arise, hence be sustainable.
I will personally be working out all the things that can go wrong within my business plan and what they will cost to overcome. As long as the business can cover at least a couple of things going wrong in any season, as you rightfully should in my opinion, I would be willing to argue it in court. This is the measure I personally use, although I understand this is too stressful for many but I can't see how anyone can undertake this task if they don't have the 'fight' in them (wrong that they should I agree, but planners seem to love to fight). You can even put this into your business plan under contingency.
In addition are you entitled to any tax credits? If so these cannot be used to make up your minimum wage. But is there anything to stop you buying from you farm gate using this money? Unethical, maybe, but do you believe planners are ethical?

Best of luck
thegreatescaper
  • 0

#15
KChally

KChally

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 371 posts

Hi KChally,
My personal viewpoint is that there is a legal minimum wage in this country that legally can sustain you as a worker. The profit from your enterprise must be able to pay you this. I could envisage the planner asking for more to ensure that you farm build suffcient capital to esure that the business can overcome difficulties should they arise, hence be sustainable.
I will personally be working out all the things that can go wrong within my business plan and what they will cost to overcome. As long as the business can cover at least a couple of things going wrong in any season, as you rightfully should in my opinion, I would be willing to argue it in court. This is the measure I personally use, although I understand this is too stressful for many but I can't see how anyone can undertake this task if they don't have the 'fight' in them (wrong that they should I agree, but planners seem to love to fight). You can even put this into your business plan under contingency.
In addition are you entitled to any tax credits? If so these cannot be used to make up your minimum wage. But is there anything to stop you buying from you farm gate using this money? Unethical, maybe, but do you believe planners are ethical?

Best of luck
thegreatescaper


Hi Greatescaper,

Are you talking about the national minimum wage? I wouldnt have thought that this figure would be enough to enable you to build a house. Perhaps I am in a different position to some book owners following the 28 day rule, who build a log cabin in which they would live in permanently eventually. We want to build a bricks and mortar home which will cost us a pretty penny, so will need much more than the minimum wage.
I agree, planners are not ethical, just jobsworths. I have today sent an email to my planning authority requesting they give me the information regarding the minimum amount we need to reach for 1 years profit in 3. Previously they told me it had to be just "sufficient" (whatever that means). I await their reply with baited breath!!

Regards
KChally
  • 0

#16
KChally

KChally

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 371 posts
Have had reply to my email from my planning authority:

"Unfortunately there is no definitive answer. It is usually proportionate to the size of the farm and the current economic factors to determined the feasability. Each case is looked at individually."

What a stupid thing to say. Does this mean then, as we only have 6 acres and the country is about to go into a double dip recesssion that we can use less than the minimum wage as a guide. These planners are worse than MP's. I will pursue this till I get my answer!!!

KChally
  • 0

#17
surreydodger

surreydodger

    Agricultural Planning Advisory Service

  • Book Owners
  • PipPipPipPipPip
  • 1,208 posts
  • LocationWest Sussex
I remember reading the document to planners as posted by HappyMan about some applicants may be fractious,,,, it is little wonder when yousee that kind of twaddle!

I would persist KChally with pinning them down as afterall, how are you supposed to comply with the rules of the land if they resist in letting you know what they are.

By them saying it is 'usually', I would be asking them to provide the parameters of 'usually' and thus, by such a statement, what 'unusually' therefore consists of. It'll be a case of keeping on at them until eventually they will corner themselves into having to provide you with some rule or another.

Give em hell :) :blink:
  • 0

#18
che

che

    Lord of the Manor

  • Book Owners
  • PipPipPipPipPip
  • 1,166 posts
  • LocationSHROPSHIRE
Hi KChally
Think I would ask them to provide you with the system they use to relate proportionality to land size and how this was affected by the economic climate in each of the last 5yrs. I would also point out i am entitled to this under the Freedom of Information act.
Dave C
  • 0
che

#19
Thegreatescaper

Thegreatescaper

    Turkey

  • Book Owners
  • PipPip
  • 80 posts
  • LocationMid Essex
My reply as to the minimum wage was in respect of gaining the full planning albiet at the minimum, hence log cabin route etc.

I agree with the other posters about keeping on at the council as they may give you an answer that suits, although I doubt it.

I can see several ways that the planners could go,

1) Work out total build cost. From this work out mortgage payments. From these they will have an annual cost of the home to you.

2) Work out the value of the built house (and no doubt the land and business included). From this they can work out the mortgage and therefore the annual cost of the home, not only to you but more importantly anyone that you could sell on too (government don't seem to understand that some of us try to survive by saving rather than borrowing).

As you can guess the figures in the above would vary greatly. In fact you should have a rough if not exact idea of what these costs should be, and you can work out payments for a mortgage for both 1 & 2 giving you an annual cost that must be able to be met by your business plan

From this figure they could summise whether or not the dwelling is financially sustainable (affordable in the long term according to your business plan).
However don't forget that a considerable part of your minimum wage can go towards your housing costs, after all this is the case for millons of urban dwellers in this country.

Best of luck
thegreatescaper
  • 0

#20
KChally

KChally

    Farmer Giles

  • Book Owners
  • PipPipPipPip
  • 371 posts
Update on profit 1 year out of 3 and trying to get this info out of my planning authority:

They asked me for more info ie decision notice number, address etc so emailed them that info. Didnt hear a thing so sent them another email asking when were they going to reply to my previous email. Had reply back yesterday:

"Unfortunately your enquiry has not been allocated to one of our officers, therefore I cannot give you a contact name. There is a backlog with enquiries at present. Apologies for any inconvenience caused"

I dont need a contact name just the bloody information (sorry, getting a bit frustrated now). I will wait a few days before I email them again and then I will quote the Freedom of Info Act and ask them how they work their figures out. Time is getting on for us now, we need to know this info, so that we know whether we are on track or not. This word they give of "sufficient" could mean anything, we might make £15k and they say no it has to be £20k your business is not sustainable, then we might make £20k and they say £25k so on and so on.

KChally
  • 0