- Why did you decide to go with a 50:50 partnership with a private partner?
- Are there other examples of local authorities setting up joint ventures?
- Haven’t some joint ventures established by other council flopped?
- Have you been in touch with any of these councils to share information or learn lessons on how a joint venture should best work?
- Were other options for development considered?
A huge amount of work has been done to get to this stage. The principle of a joint venture development vehicle was carefully considered, as one of a range of options, and agreed by Cabinet in November 2015. Those options were set out in a detailed business case which looked at the cost, deliverability and risk to the council of six different approaches to developing some of our land to deliver the homes, jobs and opportunities our residents need. The overarching joint venture approach was recommended, and approved by Cabinet, as the most effective way to do this.
This built on the work already done by the councillor-led Future of Housing Review which looked at the options for the long-term management of the council’s housing stock. As part of that it concluded in its September 2015 report that some kind of dedicated development vehicle was the best option for redeveloping estates where simple refurbishment could not cost-effectively maintain decent quality homes.
Yes, the London Borough of Hammersmith and Fulham has established a joint venture with developer Stanhope to build new homes. Joint venture approaches to help finance new housing and redevelopment have also been taken in other towns and cities in the UK including by Sunderland City Council, Bournemouth Borough Council and Slough Borough Council.
The benefits of existing joint ventures have been highlighted by the press - the Guardian recently featured the work of the Sheffield Housing Company (external link), which is a 50/50 joint development company set up by Sheffield City Council, in partnership with a contractor and housing association.
It is true that some joint ventures established by local authorities have been less successful than hoped, but this is down to the specific objectives, business plans and management of those joint ventures rather than the structure of the joint venture itself. It is also important to note that there are some local authority joint ventures which have a successful record.
Have you been in touch with any of these councils to share information or learn lessons on how a joint venture should best work?
We have talked to and met with other councils who set up joint ventures to inform our work on how a 50: 50 partnership should be governed and managed so it works best for Haringey.
Our Future of Housing Review, which included both Labour and Liberal Democrat councillors, travelled around the country to visit a number of councils to explore in some detail the different options open to Haringey. In addition, we are receiving external advice from advisors who have experience of joint ventures around the UK.
Our Cabinet meeting in November 2015 considered a range of options to increase the numbers of new homes being built in the borough. We also conducted a major borough-wide review which concluded a development vehicle was ‘likely to be the most appropriate option’ for driving estate renewal and other development on council land, as it ensured the council could have a share of the profits and be able to reinvest this in community facilities and existing housing whilst maintaining control over the development.
This is the link to the February 2015 Cabinet report which sets out the development vehicle feasibility study and business case (item 822).
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