We should not be ashamed of the fact Britain is reliant on private finance to deliver new infrastructure. And there’s no reason why we should not use partnerships with the private sector to build thousands of Build to Rent (BTR) homes.
From major projects like the Thames Tideway scheme and airport expansion to new schools and hospitals made possible through PFI, state spending is subsidised by business.
Housing is no different.
Since the 1980s, governments have almost entirely depended on the private sector to deliver public policy. But Britain’s continued failure to build enough homes has led to calls for a rethink.
While local authorities now lack the resources needed for a programme of mass house building like we saw in the 1950s and 60s – even with changes to borrowing – there are other ways the public sector can help.
It remains one of the largest landowners in the country and organisations like the NHS and MoD possess the kind of brownfield sites successive governments have long prioritised for development.
With the public coffers under renewed pressure, renting could provide long- term income streams enabling public bodies to generate cash flow, without selling off the family silver.
The first steps were taken by the coalition government, which introduced the Infrastructure Act 2015, giving the Homes and Communities Agency additional powers to speed up the release of surplus public land. By 2016, 899 sites had been released – enough to build over 100,000 new homes.
More could be done but this will require initiatives from both the public and private sectors.
Firstly, central government must ensure all its departments adopt a modern view of “best value”. This means having proper reports and valuations from consultants and experts on how best to approach the disposal of public land. This will allow them to realise and demonstrate the wider benefits of any disposal.
Some local authorities have already taken the initiative. In Manchester, rather than taking a one-off approach, the city council has pooled together money from the DCLG and local pension fund to create a joint venture focused on housing.
But the solution is never just simply copying a model others have implemented.
Local authorities should be adventurous if they want to close the funding gap. Devolution offers more opportunities than ever before to be more creative in thinking and planning in this area – let us hope they seize them.