How can local authorities create development schemes that are fit for delivery - right from the very start?
With the government’s focus on ‘levelling up’ and various pots of funding being made available for investment in infrastructure projects to help the UK ‘build back better’ we could soon run into trouble.
Why? Because as there’s a rush to secure funding and kick-start local economies there will be a huge gulf between development plans that are fit for delivery and those that are still aspirational, bringing a whole host of problems, delays and costs for everyone concerned.
Local authorities, who often have sole responsibility for key infrastructure such as transport, housing, schools, and wider regeneration projects, face the burden of delivering tangible outcomes for their communities within overstretched budgets and resources. This can result in poorly planned schemes with little strategic oversight or long-term consideration for lifetime costs, funding, connectivity, environmental impact, or social outcomes.
Typically, poorly planned schemes will encounter problems at every stage. Right from the off, many project timelines and costs are publicised well before any project capabilities and delivery strategies have been tested. Lifecycle parameters around the availability of materials and products, long-term costs, maintenance and revenue generation haven’t been considered and more often than not there’s very little scope for changes caused by external factors. And if there’s one thing we’ve all learned over the past year, it’s how external factors beyond our control can completely and fundamentally change everything we do and how we do it.
But change is why at Mace we’re looking to the future with optimism, not just for our industry but the public sector as a whole. The pandemic is an opportunity for local authorities to be bold, think differently and approach infrastructure projects with clear outcome-based objectives. With over 30% of contracts awarded to the construction industry coming from the public sector, local government has an important role to play in encouraging good behaviours and practices that will ultimately help transform the construction sector.
So how can local authorities create schemes and projects that are fit for delivery right from the very start?
- Firstly, by getting the right long-term funding in place. Local authorities tend to use the same funding streams such as low-cost loans from the Public Land Works Board (PWLB) to advance housing and regeneration schemes. With new restrictions there are limitations on what the money can be spent on and how projects can be delivered. Local authorities have access to alternative and cheaper borrowing opportunities. The greater choice in funding sources and structures provides an attractive alternative to PWLB.
- By creating an effective delivery strategy. Local authorities need to decide if it’s best for them to deliver the project themselves or through a strategic partnership. Bringing in an external partner to help develop the business plan and access viability and risk can be a huge help pre-delivery. If an authority does decide to take on full project delivery and debt this can be a huge risk that could wipe out limited reserves. By looking at strategic partnerships the financial risk can be shared alongside the reward and positive outcomes. Local authorities need to assess their appetite for risk in order to optimise their return on investment for the medium to longer term.
- By thinking about constraints to development. Getting a new scheme through planning is often a complicated and challenging process. By looking at any constraints to delivery, such as whether the site in question is in greenbelt, has any existing utilities or infrastructure pre-planning, can really help project viability. By making sure sites have the infrastructure needed for development such as nearby utility supplies and access to transport routes their viability is increased alongside their value. This ultimately makes them more attractive to developers and private investment to support the council.
- By ensuring connectivity. Projects on sites that have access to transport and digital infrastructure are far more appealing to the market. Planning a project on a piece of land without any access to the road, rail and/or bus network or with no access to digital infrastructure means delays, and it won’t make the scheme fit for delivery right from the off. It’s vital local authorities think about ‘place’ and creating the right development, for the right people, in the right location. Bringing forward plans for a huge affordable housing development on the outskirts of town with no bus links for instance isn’t a scheme fit for delivery. It’s absolutely imperative that development happens in the right locations with the connectivity needed to serve its purpose. If local authorities can get this right it creates a ripple effect attracting businesses and services into the local economy.
- By ensuring projects are ‘shovel worthy’ rather than ‘shovel ready’. Infrastructure is recognised as a good way to stimulate economic growth and jobs but not all schemes are created equal. Instead of pushing ‘shovel ready’ schemes authorities should focus on projects that will deliver the greatest community benefits and outcomes in the post-Covid world.
- By incentivising innovation. When procuring projects and creating contractual agreements innovations should not only be encouraged but rewarded. If successful partners deliver projects earlier than expected or with better outcomes this should be encouraged and appropriately rewarded.
- Environmental sustainability needs to be at the heart of the project.The government’s commitment to making the UK economy net zero carbon by 2050 is only possible if the public sector puts environmental sustainability centre stage. With 75% of local authorities setting a Climate Change emergency, authorities should challenge their designers and delivery teams to be radical and go beyond compliance to deliver net-zero projects and built environment.
Over the last year we’ve seen local authorities focus on delivering the best outcomes to support communities. As we start to focus on levelling up to tackle economic inequality across the country, authorities need to ensure their delivery strategies are fit for purpose and able to drive green and inclusive growth that achieves the government’s levelling up ambitions and meets local needs.
Lesha Chettylocal government sector lead
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