How can local authorities create fit-for-delivery development schemes?

As the government focuses on ‘levelling up’ and various pots of funding become available for investment in infrastructure projects to help the UK ‘build back better’, we could soon run into trouble.

As there’s a rush to secure funding and kick-start local economies, we're beginning to see a gulf between development plans that are fit for delivery and those that are still aspirational, which could bring 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 budgets and resources that are often overstretched. 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.

Projects that are poorly planned typically encounter problems at every stage. Often, project timelines and costs are publicised, before any project capabilities and delivery strategies have been tested, as well as before lifecycle parameters around the availability of materials and products, long-term costs, maintenance and revenue generation have been considered. This leaves little scope for changes caused by external factors. If there’s one thing we’ve all learned over the past year, it’s how external factors beyond our control can fundamentally change what we do and how we do it.

The pandemic is an opportunity for local authorities to be bold, to think differently, and to 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?

By getting the right long-term funding in place.

Local authorities tend to use funding streams such as low-cost loans from the Public Works Loan 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. But local authorities have access to alternative and cheaper borrowing opportunities and this 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 assess viability and risk can be a huge help pre-delivery. Taking on full project delivery and debt can be a major 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.

The planning process for a new scheme can often be complicated and challenging. Looking at constraints to delivery, such as whether the site in question is in greenbelt or 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 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 imperative that development happens in the right locations with the connectivity needed to serve its purpose. By getting this right, local authorities can create 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 also be encouraged and appropriately rewarded.

By putting environmental sustainability 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. By ensuring that delivery strategies are truly fit for purpose, driving greener environmental objectives and striving to ensure inclusive growth, authorities can create schemes that go right to the heart of tackling economic inequality across the country and create better experiences for all.