The opportunities for delivery

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Andrew Walker, Policy Researcher for the Local Government Information Unit highlights the opportunities available for councils to play their part in the delivery of new homes…

We need to drastically increase the amount of new homes we build in the UK. It is proving quite difficult to do so, however. Something has to change and councils could be the key, if they are able to grasp the opportunities that are available.

They may have the potential to facilitate partnerships and create the conditions for new development to thrive. LGiU’s research for Under Construction, released in June in partnership with Mears, shows that local government is not yet in a position to play that part effectively, however.

Local authorities will be expected to function differently in the not-too-distant future. Their new role will require councils to move away from some of their traditional approaches and act in a more indirect and facilitative way. The majority of housing officers responding to our survey had relatively traditional views of local government’s role in housing supply, however. They tend to see councils as direct deliverers, rather than brokers and partnership builders. We also found that alternative delivery models, such as joint ventures, wholly owned companies and special purpose vehicles, were not widespread across the sector.

True, there are some substantial challenges. After years of underinvestment in housing departments, many local authorities lack the necessary skills and confidence to take control of this agenda, while structural barriers often prevent housing, planning, infrastructure and design priorities from aligning properly within organisations.

There are pockets of innovation, however, that demonstrate some of the things that councils could do to make the most of the opportunities available to them.

As the second biggest city in the UK, Birmingham faces some serious housing challenges and the population is predicted to grow significantly over the next decade or so. Birmingham City Council’s place-making housing strategy demonstrates an open and collaborative approach to working with developers. The council produced a “Housing Prospectus”, which lists all potential development sites, including major brownfield sites, as a means to attract large private sector investment. The broader approach is enabled by the dual role of director of planning and regeneration, which draws together several key portfolios that many councils hold in separate departments.

Meanwhile, Oxford City Council set up Barton Oxford LLP, a 50/50 joint-venture investment partnership with Grosvenor Developments Ltd, and has secured planning permission to deliver 885 homes on a 90-acre site of land owned by the council. Rather than setting up a local housing company immediately, or sell the land to a developer, the council works on a site-by-site basis, making plots of land available in partnership with individual investors. The strategy gives greater control to the council, who turned down the first round of bids on the basis that they did not meet design requirements. An independent design review panel was established and the council insisted that the scheme had a Master Planning Architect to ensure the standards and frameworks in each plan.

Another opportunity for local government to build fruitful partnerships with developers has arisen in the government’s Housing Zone programme. Housing Zone status is intended to help speed up and simplify the process of house building on selected sites through a range of support measures including infrastructure funding and project support provided through the Homes and Communities Agency. The scheme originated with the Greater London Authority and made funding available for a selection of sites across the capital.

As part of the recently announced Housing Zones outside London, the York Central Housing Zone, for example, will allow the council to accelerate development of up to around 1,100 homes on a 35 hectare brownfield site, as part of an emerging partnership between Network Rail and City of York Council.

This type of innovation needs to be more widespread if local government is to begin to unlock the housing development that we need up and down the country. The report makes some recommendations for councils that may help us to get there. These include:

Address their skills gaps

Councils will need to develop their skills and capacities, in order to address gaps in market intelligence, viability assessment, procurement, design and partnership building. There are also significant gaps in construction skills, which councils would do well to address as part of wider growth strategies. Regional partnerships could help significantly with this.

Consider housing deals and combined housing authorities

Councils should consider how they can place housing at the centre of their devolution proposals, especially in the context of the Cities and Local Government Devolution Bill. This would also have the advantage of encouraging more long-term, strategic planning and could open up opportunities to pool resources and skills.

Rethink departmental structures

Councils should consider how their departmental structures support or impede innovation and leadership in housing development. Implementing a comprehensive housing strategy requires teamwork and partnerships within councils. Organisational structures can have a huge effect on these relationships and councils should consider consolidating their planning and housing and regeneration teams.

Despite serious challenges there is a growing consensus around a positive understanding of what councils can do in terms of housing. Local authorities are fast being expected to occupy a new role that involves facilitation, commissioning and adaptability. Housing strategies should fit with this wider shift.

Local government needs to step up to the plate to make the most of the opportunities available. Action may entail risk, but the cost of inaction could be far greater.

Andrew Walker

Policy Researcher

Local Government Information Unit (LGIU)

Tel: 020 7554 2800

info@lgiu.org.uk

www.lgiu.org.uk

www.twitter.com/LGiU

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