U+I pushes the case for PPPs

U+I’s mixed use development at 8 Albert Embankment is situated in a prime location on the south side of the river Thames, virtually opposite the Houses of Parliament in London. Visited as part of the GRI Experiences tour in November 2018, the Public Private Partnership (PPP) is now nearing the end of its planning process, with two final consultations expected to take place in the next few months. As a PPP, U+I is developing its scheme in partnership with the London Fire Commissioner: the 2.5 acre site houses the iconic Lambeth Fire Station and former London Fire Brigade headquarters, a listed art deco building, together with a vehicle depot.

Eoin Condren, director of joint ventures at U+I, explains that the aim of the PPP project is to “create something that is greater in its constituent parts than what it is today, hopefully: homes, offices, affordable workspace, as well as a public realm.”

Condren also points out that the building sits on Lambeth High Street. For any GRI Experiences London participant that visited the project, that observation may come as a surprise. “Yes, that is the high street,” continues Condren, “and there’s nothing there. We want to make that place a place again.” 

Much of U+I’s business comes through partnerships with the public sector. Condren takes it further: “PPPs are 100% us. They are key to how we do business.”  Part of U+I’s existing approach to PPPs is to engage early and ‘authentically’ with the local community, including the pursuit of meanwhile - or what it calls ‘worthwhile’ - use. The site at 8 Albert Embankment, for example, includes a pop-up museum and artist workshops. “It allows us to engage with the community - their hopes, fears and dreams, their history and heritage,” continues Condren. “And we take that into account within planning. It’s the community who own the building: they own the place.”

PPP market reset

U+I, in seeking to address challenges in the broader PPP market, has recently published a new report ‘PPP: The Reset’, under the cover title “It’s not wrong, it’s just not right enough … yet”. The publication draws upon desk research, structured telephone interviews, round tables and a poll commissioned from independent agency YouGov, which found that amongst the general public, 45% of respondents felt negative about the use of PPPs to develop publicly-owned land.

One challenge is that PPP gets easily mixed up with PFI (the private finance initiative), which can suffer from a poor perception amongst the general public. As Condren explains: “PPPs have been misrepresented.  With PFI, you look to find a specific piece to bring to market, for delivery of that project. But PPPs are a very different kettle of fish - more of an open-book partnership, that isn’t quite get specified, where you try to create value for all stakeholders. And there is a big difference between price and value. Price is where you say that this piece of land is worth this amount. Value is where you are fixing something that is broken - creating jobs, places to socialise, regenerating a place where people can enjoy their lives.”

PPP recommendations

The context of U+I’s report is a scarcity of public sector money, illustrated by a Local Government Association report that between 2010 and 2020, councils will have lost 60p out of every £1 the Government has provided for services. At the same time, the development potential of public sector land is illustrated by a House of Lords Select Committee on Economic Affairs, reporting in 2017 that some 6% of all land in England and Wales is held by public bodies, rising to about 15% in cities and over 20% in London.

U+I believes that what is holding up the PPP pipeline, fundamentally, is a ‘trust deficit’. Better communication by the public sector, in setting out a positive case for PPP and why it is a preferred solution, might help repair the trust deficit, say U+I. But in the meantime, U+I’s objective is to get the PPP market moving by delivering schemes, and the report has four main recommendations: to define the local community - those who stand to benefit and those who will be affected - along with local, politically neutral ‘patriots’; to engage early with communities and maintain that engagement; to cede power to local communities and support them in engaging; and to ensure commercial and political transparency.

U+I is practising what it preaches by establishing a Community Challenge Panel, made up of representatives from the public sector, civic society and other developers. The Panel sits inside U+I’s corporate governance structure and will assess all U+I projects against socio-economic metrics for a five-year period from completion.  One of the first tasks of the Panel is to propose a review and governance mechanism - a ‘Community Profit Share’ - so that any profit above a projected return on U+I’s major PPP schemes is directly shared with the relevant public body and local community. Alongside the Panel, U+I is establishing a Community Engagement Fund, so that community organisations and representatives can engage more effectively in the planning process.

Will U+I’s recommendations be taken up more widely, and will PPPs really start to take off? U+I, in its report, is certainly confident that others will follow its lead: “We could imagine a time when an independent challenge panel would look at PPP industry-wide and assess socio-economic performance against original targets.”

Urban regeneration and mixed used developments will be discussed further at British & Irish GRI 2019 on 15-16 May in London.