In establishing formal partnerships, local authorities go through a competitive procurement process to ensure it complies with competition law. Both developers and local authorities have raised frustrations that procurement processes based on EU requirements can be complex, protracted and uncertain. The resulting cost, bureaucracy and timescales can be off-putting and can undermine the benefits of partnership working. As Sir Howard Bernstein, Chief Executive of Manchester City Council, told a Select Committee last year:
“One key issue that is consistently raised by private sector partners is that lengthy, complex and sometimes uncertain procurement processes can often hinder the delivery of effectively integrated regeneration projects and programmes….The current procurement regulations are extremely prescriptive and contain little flexibility… and can stifle such innovation.” 127
126 LGA submission and others
In addition, a number of submissions to the review highlighted that interpretation of OJEU requirements presents a real challenge to partnership working as they are seen to require local authorities to tender development contracts even where proposals have been developed in collaboration with a partner. This can present a disincentive to developers to commit to the upfront costs and time involved in developing a scheme if they then have to go through a competitive tender process in which, due to the upfront costs involved in development, they might be at a disadvantage compared to other bidders. Examples have shown that there are ways to avoid this problem but some local authorities remain wary believing that they have no choice in the matter. There is a need to identify and promote proportionate approaches to procurement and when they can be applied so that local authorities understand the freedoms they have to enter into long term partnerships. We recommend that Government should produce clear guidance to local authorities on their freedoms to establish long term partnerships and how this should be reflected in interpretation of OJEU requirements and procurement rules. There are a number examples and good practice guides128 that could be drawn on to highlight the excellent way in which a number of local authorities have handled such procurement exercises that are likely to be of particular help to many authorities who may handle major development proposals only occasionally.
Recommendation 25: Better use of public land
Promote the better use of surplus public land to support new homes through:
Y
Clear guidance to central and local government to promote investment of land as equity and secure long term returns from investment. This should include clarity and a consistent approach to best value considerations and phased payment approaches to embed them across all department and authorities.Y
Government should set a new ambition for the release of sites for 200,000 homes over next parliament half of which should bedelivered through equity sharing partnerships.Y
HCA and local authorities should produce revolving 5 year land delivery plans clearly identify opportunities for release of public land.Y
Task HCA as delivery agency with a clear imperative to initiate development of public land for housing to meet a target of delivering 200,000 homes on public land by 2020.Y
Clear guidance to local authorities on their freedoms to establish long term partnerships and how this should be reflected in interpretation of OJEU requirements and procurement rules.There is a growing consensus, clearly reflected in the evidence to this review that a new programme of Garden Cities and New Towns would make an important contribution to delivering the homes we need. In exploring the impact such a programme could have, how it could be funded and over what timescales, we have sought to build on lessons from the previous experiences of Garden Cities and New Towns. We conclude that a programme of Garden Cities should be a part of the portfolio of measures to meet the nation’s housing needs and one that will have a significant impact over the longer term. In the medium term, applying Garden City principles to other large scale development projects, especially urban extensions as Garden Suburbs and the re-modelling of existing towns has the potential to deliver more housing growth, faster, from a number of existing and new sites. All are needed to meet demand and to plan sustainably over the longer term.
This chapter explores what action is needed to unlock investment in infrastructure and services up-front and over the longer-term, both in encouraging local authorities and communities to come forward in support of development and in building prosperous and sustainable new places. In doing so, this chapter builds on issues discussed in full elsewhere in the report. Of particular relevance are: the proposal to enable land value capture to fund up front infrastructure discussed in detail in Chapter 4; the powers and structure of development corporations, which is discussed in Chapter 5; and the importance of community support and engagement in both the identification and long term stewardship of
development. We conclude that securing real local consent is the only strategy which has any chance of commanding support for long enough to make ambitious proposals for Garden Cities and other large scale development deliverable.