Tim Byles is stepping down as chief executive of Partnership for Schools to set up a social enterprise that aims to deliver buildings for councils without public funding.
The former Norfolk CC chief executive has been with the agency for five years and will leave at the end of this month.
His new venture, named Cornerstone, will be an employee-owned mutual that will use private money to buy surplus public sector assets, and put together deals to provide facilities such as schools, libraries and care homes.
It will deliver a return for commercial investors as part of larger redevelopments but donate some of its surpluses to charities.
Mr Byles said: “There are surplus assets that the public sector is keen to dispose of and local services that need investment, and my experience in putting public/ private partnership deals together has led me to conclude there are opportunities to lever in private sector investment to create social value through the planning system.
“I am from local government and understand the very difficult circumstances local authorities are facing and this will be an alternative source of funds for the public sector.”
Cornerstone will be funded by a combination of Mr Byles’ own money, conventional lenders and investment funds set up for ethical purposes.
“There is private investment available on a large scale. I have five or six sources and we do not need to go for aggressive returns,” he said.
One example of the kind of project in which Cornerstone might engage was the deal put together by PfS for the former Bolingbroke hospital site, where it worked with Wandsworth LBC and its local health trusts to deliver a new secondary school and two doctors’ surgeries.
Mr Byles admitted councils might be able to put public/ private deals together for themselves but said he offered “a win/win for everyone, not just a commercial transaction where you sell an asset and it is gone”.
PfS was set up to deliver the now-abandoned Building Schools for the Future programme.
Mr Byles resignation statement implied it would be wound up and merged into the Department for Education, saying he expected education secretary Michael Gove “and his departmental colleagues will deliver an exciting and much-needed programme of free schools and new academies”. But Mr Byles said: “We will have to wait and see”.
PfS chairman Michael Grabiner said: “Tim Byles has made an outstanding contribution to the delivery of education capital investment in this country, establishing a track record as someone whose core focus is to get the job done.”