This week Inside Housing published an article that said 44% of local authorities are reducing their housing capital programmes. As many as 25% have halted them altogether. According to the article, this means that 23,000 fewer homes will be built under the Affordable Homes programme up to 2026. Is this a deepening crisis brought about by spiralling borrowing costs or is it something more insidious? Are Councils using increased borrowing cost to excuse the fact that their development programmes were already failing?

Local authority led housing delivery has been a disaster throughout my career. As a budding advisor with KPMG I sat in endless meetings up and down the country about Local Asset Backed Vehicles (LABVs) and countless other structures with pithy acronyms meant to deal with ‘market failure’ and unlock all the problems of non-delivery. I wrote reports and produced financial appraisals about innovative new models for driving up housing growth and accelerating the pace of delivery where it was most needed. Manchester is currently on its third iteration of its innovative approach to housing delivery in twenty years. The first new Council houses will hand over this year.  

Local Government is simply the wrong place from which to do development. Development is full of risk. There is risk in the ground, in the finance, in the market, in the build and the contractors. Managing risk is the single most important skill that any talented developer must possess. But risk must be taken. And here lies the main problem. Local Authorities are institutionally configured in a way that is diametrically opposed to what a good risk-taking organisation should look like. Their governance is (rightly) politicised. Their leadership and executive teams (also rightly) behave cautiously. Most local authorities can’t buy stationery without strict adherence to the latest public procurement rules. Risk avoidance is baked into the bureaucracy. It is in the DNA and culture of local government. It is a valuable attribute for fair and democratic government. It is also a straightjacket. It prevents Councils from taking meaningful action in areas that are inherently full of risk.

What is the alternative? Housing associations help to address the affordable housing challenge – but even the biggest are producing just over 4,000 homes per annum. Joint Ventures with the PLC housebuilders can help, but the degree to which these are genuinely joint is always questionable.   Self-delivery rarely works. So we find ourselves stuck – unable to achieve anything near the level of housing completions needed.

There is a better way. A solution that delivers more and better homes, faster and more efficiently.

Place Capital Group was established specifically to help local authorities and the housing sector more generally to build new homes while regenerating existing communities. We are working with some of the most progressive Councils and Housing Associations to find the capacity to build new, beautiful, and low carbon homes on their existing land assets and housing estates (thus minimising land costs). We do this through flexible, bespoke collaborations that are structured as genuine partnerships, producing real results quickly. No failed targets, no expensive advisors needed to form unnecessarily complex Joint Ventures. Instead, we use simple Development Management or Direct Development Contracts that enable early delivery and true risk sharing.