Thriving communities, affordable homes

Working with Partners to Enable Regeneration

New Delivery Approaches

Presented by Helen O’Doherty

Date 27th July 2010

Thriving communities, affordable homes

 New Approaches to Delivery

 Delivery Partner Panel

– New procurement route
– Partnership focussed
– Accelerate delivery
 Public Land
– New delivery tools
– Risk Mitigation
– A transferable approach

Thriving communities, affordable homes

 Delivery Partner Panel

 New Players
 Procurement Cost/Timescales
 One stop shop
– Development
– Construction
– Dev Management and other Services

 New procurement model

 Improve Competitiveness
 Reduce cost and timescales
 Earlier private sector involvement
 Regular Engagement / Commercial sense check

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 DPP Framework
 OJEU Compliant Process
 3 Super-Regional Clusters
 South Panel – 17 Members
– House Builders
– Developers
– Contractors
– RP’s / HA’s
– Consortium’s
 Financial Check
 Framework Contract
 One-Stop-Shop service
 Tendered Rates
 3 year duration – but
contracts can extend beyond
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Ardmore First Base Partnership
BDW Trading Ltd (Barratt David Wilson)
Bouygues UK
Carillion Igloo Consortium
Countryside Properties UK Limited
Crest Nicholson Operations Limited
Family Mosaic Home Ownership
Galliford Try PLC
Hadley Mace Limited
JB Leadbitter & Co Limited
Kier Group Limited
Laing O'Rourke Construction Limited
Lovell Partnership Limited
Mi-Space (UK) Limited
Skanska Construction UK Ltd
Taylor Wimpey UK Limited
Wates Construction Limited
 Using the Panel

Contra
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 Appointment Process

 Mini competition required

 Reduce numbers through:-
– Phone round and sifting brief
 Issue mini project tender and
project contract
 Financial appraisal
 Insurances
 Evaluate
 Appoint via ITP
 Project specific and efficient

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 Mini-Competition Process
Panel
Members
WHOLE SUPER REGIONAL CLUSTER

1-2 days
17

Stage 1
Phone/Email

ALL CAPABLE AND AVAILABLE

< 17 PANEL MEMBERS

1-3 weeks
Stage 2
Sifting Brief

SELECTED PANEL
3-8 MEMBERS TO TENDER

6-8 weeks
Stage 3
Tender

SINGLE APPOINTED
1 DPP MEMBER

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 Delivery Partner Panel

 Rigorous Panel Selection

Process
 Significant cost and time
savings
 Commercial input to help
shape proposals
 Support and Advice
available

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 Public Land - Rationale

Current housing supply issues

De-risk the process Demand for homes

Identify new developer partners New way of working needed

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 Public Land:
Wider Outcomes for the Sector

 Reduce transaction costs across public

sector
 New delivery models including deferred
receipt
 Wider range of private sector partners
 Greater competition driving value & quality
 Create incentives to bring SPSL sites
forward
 New skills for industry in low carbon homes
 Increase capacity in public sector to unlock
development land

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 Public Land:Business Model

Key Principles
 Deferral of land receipt
 Fair balance of risk and reward
 Risk sharing linked to scheme revenues and site
super-abnormals
 Maintaining the principle of value capture
(overage mechanism)
 Retention of construction costs risk by PSP
 Flexibility to negotiate key terms

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 Public Land :Business Model

Risk Mitigation Principles

 Deferred land payment
 Planning and design
 Section 106 costs identified
 Enabling cost and works
 Alignment with LIP priorities
 Pre-sales – RSL/PRSI
 PLI enabling funding
– Flexible funding stream
• E.g. Gap Funding; Equity Loan; Remediation)
 The wider funding question?

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 Public Land Business Model:
Appraisal Process
 Mini-Competition Appraisal
– Establishes benchmark costs, revenues and land value/gap funding requirement
– Establishes public sector risk share sum

 Pre-development Appraisal
– Post planning – pre-start on site
– Fix on build cost ceiling (apart from super abnormals)
– Estimated revenues
– Fix on gap funding requirement

 Completion Appraisal
– Re-measure revenues – HCA will share in 50% of the shortfall in scheme revenues up to the
max public sector risk share sum (base case assumption)
– Cost savings to be shared 50:50 (base case assumption)

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 Public Land: Legal Toolkit

 Heads of Terms
 Site Development Agreement
 Building Lease
 Financial schedule
 Housing Gap Funding Agreement
 Equity Loan Agreement
 State Aid Note

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 Further information

Delivery Partner Panel

Steve Ball – DPP Panel Manager
Steve.ball@hca.gsx.gov.uk
Tel: 01908 35 3642

Deborah Vogwell – Framework Panel Manager

Deborah.vogwell@hca.gsx.gov.uk
Tel:01908 35 3905
Public Land
Jayne Lomas – PL Coordinator
Jayne.lomas@hca.gsx.gov.uk
Tel: 01925 64 4792

Helen O’Doherty – Senior Professional Place Making

Helen.o’doherty@hca.gsx.gov.uk
Tel: 01925 64 4663

Thriving communities, affordable homes

Thriving communities, affordable homes