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Doing business in Social Housing: Why Wates is getting involved with the HCA

Wates, Skanska and Bouygues among others have been approached by the HCA in a deal where the agency would contribute part of its land in exchange for building work.

The idea is that the contractors would avoid taking a big risk on land values that a developer might traditionally have done. Housing minister John Healey said: “We want to use public land to stimulate new development models. We are looking at going in as an equity partner. So we are asking them to take a lower level of risk.”

Wates Group’s affordable homes contractor is Living Space, which provides about 25 per cent to 30 per cent of the group’s turnover. Living Space’s turnover will be about £285 million this year. Strategy director Steve Trusler told Construction News that he welcomed the HCA’s approach. “We have informally put forward that there is no doubt that the existing models of housebuilding haven’t worked. An alternative way to do it is to use contractors,” he says.

 “The government and agencies own lots of land and contractors work on more economical models and you can start to get housebuilding on volume across the UK. Unless you are a housebuilder doing open market sales it’s very difficult to get hold of land.”

For Mr Trusler it isn’t just about building homes on a large scale, it is about quality and working sustainably in communities – especially during a recession. “The idea of being able to provide local employment and training is almost as important as building the homes themselves,” he says.

It is thought the HCA will run a competition for a pilot project of up to 500 homes. Mr Trusler says: “I see no reason that on the right model, and if the HCA and government can bring in organisations like ours, why we couldn’t be building 2,000 to 3,000 homes a year.”

He adds that it makes sense for contractors to get involved: “Organisations like ours are financially strong and can invest in looking at these sorts of opportunities.”

As to where the work is likely to be – there are few details at present. “It really depends on where the bids come from,” says an HCA spokesman.

The planning process for local authorities

Between 2002-2003 and 2007-2008 the percentage of major residential planning applications decided within 13 weeks almost doubled to 67 per cent. The Department for Communities and Local Government recently published a report on speeding up planning for homes.

It has:

  • Set a target of 13 weeks for planning decisions to be made
  • Provided £68 million a year to reward local authorities for meeting the target
  • Decided that it needs to collect data on the average time taken in the planning process to help speed up the system. The whole planning process from pre-application to starting on site is on average almost two years.

This will go some way to speed up the planning process. However, objections have been voiced, with RICS saying that if a planning authority is coming towards the deadline they may reject it to meet government targets rather than spend another week on a proposal which may then be accepted.

RICS director of external affairs Gillian Charlesworth says: “Instead of the arbitrary 13 week target system, a system of intelligent targeting should be introduced where local authorities and developers arrange a decision date and meeting this would be reflected in targets. Unless the efficiency of the planning system is improved it will continue to be an expensive process which is delaying much needed housing development.”

Links

www.publications.parliament.uk, search term ‘planning’. Includes the full ‘speeding up planning’ report.

www.cih.org The Chartered Institute of Housing’s website

England

www.hca.gov.uk

Wales

www.wales.gov.uk/topics/housingandcommunity for the relevant pages of the Welsh Assembly Government’s website

Scotland

www.scotland.gov.uk/Topics/Built-Environment/Housing for the Scottish Government’s housing pages

Northern Ireland

www.nihe.gov.uk/ is Northern Ireland’s housing executive

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