Manchester Town Hall ©Purcell (2)
The Town Hall refurbishment budget is to be shrunk in the coming year

Manchester housing company set for final sign-off

Sarah Townsend

The city council expects to gain approval on Wednesday to set up a company to deliver at least 500 homes each year until 2025, including affordable and private tenure units, and reduce the budget for projects such as the Town Hall refurbishment.

The proposal for a council-owned housebuilder was agreed in principle by Manchester’s executive committee in March, with the aim of helping the council meet its affordable homes delivery target by 2025. This week, the committee is to give its final stamp of approval on the plans before the finer details are worked out.

Manchester City Council previously committed to delivering at least 6,400 affordable homes between 2015 and 2025, representing 20% of its overall housing target of 32,000 homes over the same period.

Since 2015, 13,259 homes have been completed in the city. However, the council is concerned it will fall behind on its target without further interventions. The proposed company would have the potential to deliver 2,000 homes up to 2025, representing 500 each year since 2015, including pipeline or in-construction units.

The new homes would be a mix of affordable and market homes, with the latter helping to subsidise the affordable units. The company would also enable the council to invest in land and utilise receipts from the Right to Buy policy.

Following approval, a report outlining the delivery model for the company – whether it would be wholly council-owned or a joint venture – will be produced for discussion by the committee in the coming months.

Cllr Suzanne Richards, Manchester City Council’s executive member for housing and regeneration, said: “Bringing an element of affordable housing development in-house will help us meet the housing needs of Manchester people using our own land and with a clear focus on sustainable, low-cost, zero-carbon housing.”

The committee is to discuss other property-related proposals at the meeting on Wednesday. These include to push back until future financial periods the £6.2m set aside to acquire plots of land for the Northern Gateway regeneration scheme while negotiations with landowners remain ongoing, and earmark £13.1m to fund the planned acquisition of land at Hyde Road, expected before the end of this year.

Annual budgets have been squeezed for projects including The Factory arts complex, to £30.1m compared to £55.3m set in February, and the refurbishment of Manchester Town Hall to £17m from £24.4m, to reflect revised construction timelines due to Covid-19, according to documents published ahead of the meeting.

Work resumed on site at the town hall on 15 April following a two-week hiatus at the start of lockdown.

The council also said it has approved a business case for works to improve Piccadilly Gardens, and has requested the funding needed to take initial plans from landscape architect LDA Design to the next stage.

This next stage would include permission “to deliver the redevelopment, surveys, design works and planning [application] submission, and also to bring forward short term improvements to enhance the experience of the space and reduce current levels of antisocial behaviour,” the documents said.

 

 

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Exactly. Borrow money at near interest-rates and invest it to create economic growth, to create more tax income, to be re-invested, and ad infinitum. Our Victorian elders did it. It’s called social capitalism. The North grew from an economic wasteland to the economic powerhouse of the world within one hundred years. How? Not by daft Tory austerity policies, but by capital investment. Saving money does not make you wealthy, borrowing and investing money does.

By James Yates

Wow. Disgusting that the Council will be competing against the private sector for land. They have a pretty much zero cost of borrowing and can 100% gear the entire delivery costs giving them a totally unfair advantage. Also not their own money involved so you’ll see them sharpening assumptions on cost and value to secure land.

By The Old Faithful

Disgusting? Really @The Old Faithful?

On the other hand, the council are not obliged to make the obscene 20%-plus margin like most volume house builders must do to satisfy their investors. Sure, part of that saving will be used in out-bidding house builders and part of that will be producing a better quality of product and allows them to be active throughout the traditional development cycles. It’s a great outcome for consumers and occupiers.

By Remark

I fully support the council setting up a development company and I think they should aim to make it Manchester’s most prolific development company. At least with a council-run devco, the profits willl be reinvested into things like schools, hospitals, transport improvements and other public services. With certain private development companies, any profits are scurried away or hidden in offshore bank accounts. This is hopefully the beginning of a less parasitic development sector, one which actually contributes to the city and its people instead of just erecting some bland box and then leeching wealth out of the local economy

By Anonymous

Dear By The Old Faithful. Why should the common good be held back for the benefit of private individuals? Marketism and anarchist competition is a failed ideology, in my humble opinion.

By James Yates

@ The Old Faithfull:- I doubt they will be competing against Private Developers for Land, they will simply release the thousands of Acres in Council ownership they’ve sat on for years ! It worked on a National level in the 30’s & 50’s so why not now ? (just don’t mention the 60’s & 70’s).

By The New Radical

Let me tell you, if it’s anything like the RPs and all other council departments, they simply won’t pay the staff high enough salaries to attract the best talent that is required to run a development business. They’re biting off more than they can chew and taking risks with tax payers money along the way. It’s not as easy as it looks, but good luck to them.

By The Old Faithful

@Faithful It’s really not that complicated. The hard bit is obtaining the land at the right cost to turn a profit and that depends on information and connections rather than skills. The construction side is straight forward, particularly given the highly conventional technologies and construction methods used by most of the big listed house builders.

By Remark

The cynical side of me says they will just give this to the painful JV Manchester Life. Throw up property that’s basic and budget, charge a premium for it and sod the tenant issues and they then have to fight for basics and being worse than some private landlords.

This needs to be totally in house and run much cleaner and tighter and should take over the Mcr Life setups and improve the issues with them

By John

@ John. Fully agree, Manchester Life are terrible and worse than many private developers. It’s shocking to see some of the blocks they’re putting up in New Islington. If MCC simply merge the company into Mcr Life then it wouldn’t be worth it.

By Remark

@Remark – you’re wrong. The hardest element by far is the laborious planning departments. It’s also more difficult these days to get a build contact at a sensible price than buying land at a sensible price.

By The Old Faithful

Well said James Yates. Although I do second John’s concerns re. the Manchester Life example

By Fair prices

@The Old Faithful

You are bang on the money with your comments…

By Anon

Sorry to mention it didn’t Liverpool start something similar a couple of years ago and how are they doing, I seem to recall a big project for Otterspool, any others?

By Just saying!

@Old Faithful

Planning problems are a consequence of house builders’ highly risk averse business model. When the standard approach is to dump the same flimsy boxes on an unsustainable site, devoid of adequate infrastructure, of course the developer is going to encounter turbulence in the planning system.

Similarly construction costs might be insulated from inflation somewhat if house builders took more of the process in house and actually invested in people and process more or even ventured into pre-fabrication more.

None of these issues are difficult to address in their own right. They’re more a symptom of house builders own business practices which a public sector client, not being beholden to ravenous city investors can more easily avoid.

By Remark