Therefore, its known narrative elements are not a part of the Doctor Who universe. It may have been the basis for a similar story in another medium, however — and that story may indeed be a part of the DWU.
Iris Wildthyme in the City of the Saved was a proposed Iris Wildthyme novel pitched by Philip Purser-Hallard to Big Finish Productions in January 2001, when Big Finish was considering starting an Iris Wildthyme novel series parallel to their Bernice Summerfield books. The proposal was submitted at the urging of Iris Wildthyme's creator Paul Magrs, who was impressed by Purser-Hallard's story Cabinet of Changes in the 2000 charity anthology Walking in Eternity.
Big Finish ultimately decided not to continue with the plans for the Iris Wildthyme novel range, but Purser-Hallard went on to reuse several of the story's key concepts, most notably the City of the Saved itself and the character of Rex Halidom, in his later Iris Wildthyme and Faction Paradox stories: his entries in the 2002 faux-encyclopedia The Book of the War, his 2004 novel Of the City of the Saved..., his 2009 short story Battleship Anathema in Iris Wildthyme and the Celestial Omnibus, and his 2011 short story A Hundred Words from a Civil War in A Romance in Twelve Parts.