Delivering homes for London: addressing procurement
25 September 2019
London’s housing targets are ambitious. And what these homes look like – the high-quality, high-performing, sustainable communities people want to live in – is regularly debated. But how we will enable the delivery of these homes – how they will be procured – is often left untouched and not discussed enough… until now.
As part of the London FirstDelivering homes for London: a new era for joint venturesseries of roundtables, a group of leaders from the housing sector, public and private, explored the barriers in existing procurement methods. What did we feel was holding us back from working collaboratively to deliver the homes that London really needs?
Consider the commerciality The cost of procurement was one of the key challenges discussed. In a market where commercial developer margins are getting tighter, construction price inflation is still rising and values are stagnant, the cost of public sector procurement processes are challenging the private sector’s ability to deliver affordable homes. It seems now is the time for a more open discussion on what a model procurement method should look like: agreed industry guidance that properly considers commerciality.
Model on outcomes The question of a procurement model ignited more debate: what could this be? It needs to be outcome-based rather than ‘best value’, which favours low prices over quality. And should it adopt competitive negotiation procedures; or would the increased time involved potentially be a barrier to effective procurement? Could there be a third way?
Commit and co-invest Regardless of the procurement model, stepping back and addressing our working relationships is key. If public and private sectors drew their expertise together, with shared goals and priorities, the likelihood of considering commerciality and achieving shared outcomes could be accelerated. Long-term, committed co-investment partnerships would no doubt help London deliver the housing it needs.
Lead from the centre It’s clear that whatever model is adopted, local authorities will still need leadership, guidance and backing from central bodies such as the GLA to assist them in achieving these housing targets. Where strong borough leadership already exists, private sector developers see opportunity, but it is not universal. Funding, legal cover and support for new ways of delivering, such as MMC (Modern Methods of Construction), are all key to encouraging more partnerships. Should there be a City Hall ‘super team’ focused on providing this guidance and fast-tracking developments of affordable homes?
Kick start change So the debate is now open. We need to create better partnerships between the design and delivery skills of the private sector with the land and better access to affordable development finance of the public sector. But to make those partnerships successful we also need procurement models that work for different delivery methods and bring together cost, value and shared outcomes. And finally, support from the centre is essential: helping to drive us all, with confidence, to deliver the high-quality, high performing, sustainable homes and communities that we want people to be proud of.
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