Dancing to a new tune, together

In partnerships, councils and investors must keep in step, writes Waheed Nazir On the day of the Autumn Statement, infrastructure proved the obvious winner in Philip Hammond’s calculations. That means far less central funding will be available to other commercial development or regeneration projects than in recent years. Take Birmingham New Street Station. This fantastic £600m project, which has created jobs and transformed first impressions of the city, was delivered with significant central government funding. It is not realistic to expect similar levels of investment from Westminster now and that has consequences for local governments looking to drive growth through development. The public sector needs to see itself not as a simple delivery partner, but as a strategic lead on new projects. Firstly, with the cost of borrowing so low, many councils have some fiscal room to manoeuvre, leveraging the local asset base. Secondly, local authorities need to attract private sector capital. But what can local authorities do to move beyond a simple sales pitch and develop genuine partnerships? They need to have a clear strategic plan for growth, and deliver on it. That means ensuring that public service investments in schools, healthcare and transport infrastructure are aligned. It also means ensuring planning applications, regulations and licenses are dealt with efficiently. Keeping to reasonable timeframes and having one point of contact equates to a positive customer experience. Beyond these basics, taking on real strategic leadership means developing a more complete understanding of what investors value in their public sector partners. For example, retaining institutional knowledge within planning teams creates a hugely valuable asset. Councils should not underestimate how much they can help partners by sharing that knowledge freely. More significantly, public bodies could do more to understand the investment criteria of different partners. Private equity, listed funds and pension funds will always have different objectives, time horizons and appetites for risk. Understanding what kind of project will appeal to what source of capital is vital. Armed with that insight, councils can be much more strategic in targeting specific partners for specific projects. This is a more efficient way of working, with fewer speculative presentations and meetings. In an age of big data and sophisticated financial modelling, it is easy to forget that the strength of a working relationship can be a decisive factor in risk assessments. An understanding of a partner’s priorities at the outset shows a collaborative mindset that promotes trust and minimises perceptions of risk. By adding this strategic approach to the basics of integrated masterplanning and giving partners a fast and efficient customer experience, councils can move beyond being a simple delivery partner and take on a genuine leadership role in promoting local growth. Many have already made significant strides in this direction. But following the Autumn Statement, what was once a value-add that marked out the most forward-thinking authorities must now become standard practice for all. Waheed Nazir is strategic director at Birmingham City Council