In an increasingly uncertain political and economic environment, local councils are under more pressure than ever to find new ways of generating revenue to fund investment and development in their towns and cities.

Some authorities are looking to build up substantial property portfolios to generate a return, others use commercial development to expand tax receipts, whilst a small number have adopted more inventive approaches, for example establishing companies to sell merchandise at concerts.

Unless a development partner is brought in, councils then have a choice of funding projects through the use of capital budgets, grants, borrowing through the Public Works Loans Board, or indeed a mix of these.

Sifting through the procurement minefield

Once this has been decided, there’s a minefield of procurement choices to sift through, from the various forms of OJEU tendering to an increasing number of public sector frameworks.

But what about the organisations who are wedged in the middle, with characteristics from both the public and private sector?

Incrementum, Warrington Borough Council’s new housing development company, is a perfect example of this.

The company is funded through a commercial loan from the Council, but has been created as a private commercial enterprise, tasked with delivering 600 new homes for rent over the next five years and creating a sustainable income to be reinvested back into the Council. The aim is set a standard for modern living in Warrington, supporting multi-generational living and encouraging young people to live in the area as opposed to the big cities.

This is where Scape Venture has offered the ideal procurement solution. Whilst the framework doesn’t carry the full suite of requirements of the OJEU-compliant Scape Procure, it provides the same responsible procurement approach and focus on social value that the Council, as ultimate owners, expect.

Balancing speed and efficiency with value for money and cost certainty

Through the Venture framework, Incrementum has benefited from a procurement solution that balances speed and efficiency with value for money and cost certainty, providing invaluable early support to take potential housing sites from concept design and budget development, through the planning process and ultimately to site for construction.

Add this to a jointly selected design team who are all working towards a common goal, and Incrementum has everything it needs to inform its business case and economic viability, from the most efficient layout and a robust budget, to a programme and logistics strategy and early commitments to achieving objectives around sustainability, modern methods of construction and local labour, all through a single, straightforward procurement exercise.

These attributes can be vital when building to set timescales, as Jonathan Smith, the Manager of Incrementum, notes:

“The overwhelming benefit of Scape Venture is that it allows Incrementum to access a full range of professional services under one pre-qualifying contract. This saves considerable time on procurement, and also has the added advantage of allowing us to work directly with the main contractor throughout the initial stages, thus ensuring the housing is designed for maximum efficiency and buildability.”

Robust budget that informs business case and viability

Viability is key to every Incrementum scheme, and our early budget advice during feasibility stage enables Incrementum to assess its business case before committing to a particular scheme.

We prepare a robust budget that gives the client confidence that there will only be one request for funding, before driving down the cost plan through innovative design and a rigorous survey process. Again, this has major benefits, as Jonathan notes:

“It is important to provide some degree of cost certainty when the Company seeks its commercial loan. The fact that the costs have been provided by the intended builder gives the funder – in this case the Council – a level of confidence that it would not otherwise have. This also gives our overall business plan additional weight.”

Wates is already progressing plans for four sites across the borough, including a mix of low-level housing and mid-rise apartment schemes. Ultimately the aspiration is to set a brand for the borough, whereby units immediately look and feel like an Incrementum property.

Helping Incrementum deliver Warrington’s housing needs is an exciting opportunity for the Wates North West team, and through an efficient and socially responsible route provided by Scape Venture, we look forward to building a valued relationship with a potential repeat customer.

Alan White, Regional Business Manager North West

07932 276033
Alan.White@wates.co.uk

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