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Housing delivery vehicles – to be or not to be?

It is critical local councils actively manage the risks posed by housing delivery vehicles by ensuring regular, strategic reviews of the progress, whether they be fully council owned or in partnership with the private sector, says Martin Walker.

It is estimated there are more than 200 housing delivery vehicles in existence, and owned by local authorities, in the UK today. There was a notable surge in the numbers of these vehicles being established around five years ago.

An increasing number of councils who have set up such vehicles are now asking us to review progress and, critically, what the appropriate future shape of those vehicles should be. In quite a few cases, councils are contemplating abolition of their delivery vehicles.

Establishing new housing development businesses from scratch is not easy. Recent years have been a particularly turbulent time in which to attempt this. Many vehicles have been buffeted by headwinds including the impacts of the pandemic, and inflationary pressures in the construction industry and the wider economy. 

It is hardly surprising, therefore, that councils are finding the pace of delivery is often significantly slower than originally forecast and, in some cases, delivery vehicles have no plausible strategy to repay loans received from councils, while accumulating financial losses on an annual basis.

As delivery vehicles mature, we also see numerous recurring issues arising, including around clarity of objectives (and the tensions between them), mission creep, and governance – not least around the role of elected members, and striking the right balance between transparency and commercial agility.

It is critical local councils actively manage these risks by ensuring regular, strategic reviews of the progress of delivery vehicles, whether they be fully council owned or in partnership with the private sector. 

A political will to harness the potential of delivery vehicles to meet housing need should be balanced with a realistic, commercial assessment of the optimum approach to meeting that need in a new operating environment. 

Local Partnerships has worked with dozens of councils in recent years – in exploring the most appropriate delivery route or, increasingly, in reviewing existing housing delivery vehicles.

We are shortly hosting a webinar on our free tool, the Housing Delivery Toolkit. To register your interest or if my thoughts above resonate with you, please contact me at martin.walker@localpartnerships.gov.uk, for an informal discussion. 
localpartnerships.org.uk

Martin Walker is senior director, Local Partnerships

This article is sponsored content for The MJ
 

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