HCA tools for regeneration

Thriving communities, affordable homes


Working with Partners to Enable Regeneration

New Delivery Approaches

Presented by Helen O’Doherty

Date 27th July 2010


New Approaches to Delivery

Delivery Partner Panel– New procurement route– Partnership focussed– Accelerate delivery

Public Land– New delivery tools– Risk Mitigation– A transferable approach


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


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

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

Contractual arrangements enabling a Local Authorityto use the Delivery Partner Panel

HCA

DPPMember

Framework Contract

Framework Contract

LocalAuthority

Lette

r of A

gree

men

t


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


Panel Members

17

< 17

3-8

1

Mini-Competition Process

1-2

da

ys

1-3

we

eks

6-8

we

eks

WHOLE SUPER REGIONAL CLUSTER

ALL CAPABLE AND AVAILABLE PANEL MEMBERS

SELECTED PANEL MEMBERS TO TENDER

SINGLE APPOINTED DPP MEMBER

Stage 1Phone/Email

Stage 3Tender

Stage 2Sifting Brief


Rigorous Panel Selection Process

Significant cost and time savings

Commercial input to help shape proposals

Support and Advice available

Delivery Partner Panel


Public Land - Rationale

Current housing supply issues

Demand for homes

New way of working neededIdentify new developer partners

De-risk the process


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


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


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?


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)

Public Land Business Model: Appraisal Process


Public Land: Legal Toolkit

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


Further information

Delivery Partner PanelSteve Ball – DPP Panel [email protected]: 01908 35 3642

Deborah Vogwell – Framework Panel [email protected]:01908 35 3905

Public Land Jayne Lomas – PL [email protected]: 01925 64 4792

Helen O’Doherty – Senior Professional Place MakingHelen.o’[email protected]: 01925 64 4663


Documents

HCA tools for regeneration