Categories: Thought Leadership
Government funding is one of the biggest accelerators for major regeneration projects, but the public sector needs to exercise caution on how it spends it, according to our head of construction Jonathan Parker.
As major international real estate event MIPIM returns this week in Cannes, Jonathan has spoken on his belief that the key themes of this year’s event are particularly pertinent for the UK, with urban regeneration continuing to be a major source of investment.
However, those local authorities looking to make the most of such funding need to be diligent in ensuring they procure projects correctly or face the risk of issues later down the line.
Jonathan said: “MIPIM’s strapline this year is ‘Driving Urban Change’, something which is particularly relevant in the current development climate in the UK with the recent round of financial support through the Levelling Up Fund and the overall focus on building back better.
“Add into that mix the additional injection of capital that can be obtained through the Future High Streets Fund (FHSF), and it is an attractive time to be a developer looking to partner with the public sector.
“However, the public sector needs to exercise caution in ensuring that its procurement for such major projects is fully compliant. There is a risk – especially with time-limited funding such as the FHSF – that corners are cut in order to accelerate the development, but this is short-sighted and can potentially be dangerous for those involved in procuring the project.
“Any public funds must go through due process to ensure that any procurement using them is fully compliant. However, traditional OJEU routes can take anything up to two years to fully play out, so many public-private partnerships that are reliant on additional government funding are chomping at the bit for a solution that reduces that timeframe and maximises the opportunity to deliver truly significant projects.
“The regeneration agenda has led to a dramatic increase in these kinds of partnerships, which is why it is more important than ever that the way the subsequent projects are procured is swift, efficient and maximises the amount of funding that can be used on bringing them to life.”
Our £47bn Developer Led Framework was the first framework of its kind when it launched to the market in December 2020, with 29 companies appointed across nine lots to deliver projects across a huge variety of development sectors.
The framework was recently used for the £290m Tustin Estate project for Southwark Council. The scheme, delivered by Bouygues Construction’s development arm Linkcity, features nearly 700 new homes, as well as a central park and at least 1,800 sqm of commercial floorspace.
Speaking about the project’s procurement, Jonathan said: “As part of the framework and procurement process, we assisted with the procurement advice, development’s business case, early engagement, expression of interest, formulating the invitation to tender, quality scoring and tender moderation, tender summary report, and notification letters.
“This end-to-end type service is a unique market offering for developers and clients alike, and has the potential to rapidly accelerate major regeneration projects that make a huge social difference, something which will be increasingly important as the UK government continues to pursue its Levelling Up agenda.”