How does a local authority build an attractive state-of-the-art library or leisure centre in cash-strapped times without selling off valuable land or saddling future taxpayers with debt? Well, you could do as Lambeth LBC did and enter into an innovative public-private partnership (PPP).
The soon-to be-completed £80m Clapham One scheme in the centre of Clapham combines a new library, a medical centre, a leisure centre (which has already opened to the public) and 199 homes (44 of which are affordable housing) on two sites just a few feet from one another. Remarkably, the leisure centre and the library have been built at no cost to the taxpayer and funded entirely by the sale of residential flats.
According to Martyn Evans, marketing and creative director of Cathedral Group, responsible for the Clapham One project alongside developers United House, it’s a winsome proposition for local authorities. “Sell the land, get a one-off capital receipt,” he says. “Or enter a PPP deal, get a state-of-the-art leisure centre free, and the freehold in the land is returned to you.” He makes it sound simple but is the first to admit that PPPs are not easy to negotiate; the benefits to both parties can be great however. In the case of Clapham One the borough of Lambeth had a failing public facility - an old Victorian swimming pool in an advanced state of disrepair - that they saw as an expensive liability, now they have a spanking high-tech leisure centre that has cut carbon emissions by 40% and attracted twice as many members as its predecessor in the first few weeks of opening. Similarly, the new library (and flats) is located on the site of a former and rather unlovable 1960s council office block.
The traditional development model for the private sector has been to get hold of land or assets for as little as possible and sell them for as much as possible explains Evans. Accordingly, obligations to the public sector were seen as demands to be met, never exceeded. Given this rather adversarial and mistrustful state of affairs, the only way a PPP can work for all sides is through “trust, honesty and open book agreements,” says Evans. “The best PPP deals are those where private sector and public sector come together in an entrepreneurial partnership, both contributing equally to the deal and both sharing equally. This is new and interesting.”
Flexibility and creativity in deal-making are key and all part of the appeal when it comes to making public-private partnerships happen, agrees Councillor Steve Reed, Leader of Lambeth Council. “The PPP model was the best option for Clapham as we had underutilised land and the advantage of a desirable location with good land values. This allowed us to be quite creative in terms of how we engaged with the market. Adopting the PPP model meant that we had more control on the structure of the land transactions.” He appears genuinely impressed that Lambeth has been able to build new facilities at a time when other councils have had to close and consolidate library facilities and put a moratorium on public building projects. “The whole thing has cost us nothing - partnership working is how this project has survived the recession.”
High land values aren’t essential though says Evans says. Cathedral is also working on a PPP in Sittingbourne town centre, an area with much lower land values than up-and-coming Clapham High Street. “That’s where being clever and creative comes in,” he says. “There we have a very different scheme, one that takes account of that difference, and which has managed to assemble a portfolio of sites that will contribute across the town centre to making a viable scheme.”
It would seem that the time for inventive public-private partnerships is rife. When asked at what stage Cathedral tends to get involved, Evans says increasingly earlier. “We are spending more and more time just talking to potential local authority partners about the principles of the model and how they might benefit,” he says. “Too many times local authorities are selling off land for a one-time-only cash receipt when the right kind of PPP deal could deliver a 50 times multiple in long term gross added value to the local economy.”
The importance of good (quality) design in public projects
The Clapham One scheme demonstrates a far higher quality of architecture than is usual in many public projects. The leisure centre - designed by international sport and leisure specialists LA Architects - is elegant, highly sustainable and filled with light.
The library building - a Guggenheim-esque spiral structure by London-based architectural practice Egret West - has the sort of defined architectural form that will make it a local landmark, whether or not it is to your taste.
The same sort of strong design is evident in a new scheme in Bromley town centre that has just got planning consent. (It is also the result of a partnership between Cathedral and Bromley Council whereby the council will retain the freehold of the land, the developer’s profits are capped over a certain amount and profits over and above this are shared between Cathedral and the council.)
The development, designed by Guy Hollaway Architects and Studio Egret West, will see an existing car park demolished and transformed into a mixed-use leisure development with a landscaped public plaza at its centre. “One of the greatest strengths of the approved scheme is the quality of the architectural design and choice of materials,” says Marc Hume, the director of Renewal & Recreation at the Borough of Bromley.
The importance of design cannot be overrated. “We could build boxes that would make us the same money,” says Evans, and instantly dismisses the idea. “What we’re building is slightly more complicated to do. But our instinct is that over time it’ll prove itself to be way more valuable.”