A week after a major developer pulled out of a £6bn public-private partnership with a London borough and another London borough awaits the decision of a Judicial Review into its own regeneration partnership, a group of chief executives convened at a round table breakfast event, sponsored by Pinnacle Group, to discuss the future of joint venture partnerships.

One representative of Pinnacle said he thought the key to successful partnerships was the ability of the public sector to procure the ‘right partner for the right project'. He continued: ‘I don't think there is always a full appreciation of the difference between a long-term investor-operator like us who is focused on a "build-to-stay" approach and, say, a volume housebuilder who is more focused on a shorter-term ‘build-to-sell' approach. That is not to say that in your communities there is no place for volume housebuilding. There absolutely is a place for the widest range of delivery models. The important thing is to select a private sector partner whose own approach to investing and operating is consistent and complementary with your own strategic vision and community aspiration.'

He went on to say there was ‘huge transformational potential for joint ventures to draw on the best from both sectors and unlock the necessary patient capital and delivery capacity and capability to regenerate communities in a truly sustainable way'

Housing and regeneration has quickly sprung up on the local government agenda in recent years. We have seen the birth of a generation of local authority housing companies and an emergence of public/private joint ventures among a range of other models.

Council chief executives are broadly receptive of the idea of entering joint venture partnerships with the private sector as one option for delivering housing growth and building stronger communities. They see the value in bringing in the expertise and capital, while sharing risk and profits.

However, many remain cautious based on past experiences. One chief executive told colleagues that if they are to enter a partnership, they should ‘make sure it is truly a partnership and risk-shared'. The participant continued: ‘There are a number of challenges but some of our relationships and past experiences haven't ended well. What's different this time?'

The majority of chief executives also urged caution about jumping into an overarching strategic partnership with a single developer. One chief executive said that ‘in the absence of public money going into housing', he was looking at several approaches. ‘We've got to find a way of achieving some of the social outcomes we want and so the challenge for us is: is that best delivered through big strategic partnerships or is it better delivered through a different model that we need to create?'

He continued: ‘The problem for us is that when the big strategic contracts go wrong, they go wrong big time. You cannot put all your eggs into one basket.'

Another echoed the comment, saying: ‘The challenge for us is how we manage growth and make sure our place still feels authentic, still feels like [our place]. We see all these flats but no community. I am not a fan of one big strategic partnership. That is a tricky place to be. I prefer trying to spread our risk.'

Ensuring developments did not mar the character of the place was a common theme – particularly in areas which have diverse populations, geographies and land values.

One participant, whose council boundaries span expensive conservation areas in one part of the area, and much cheaper built-up land elsewhere, said balancing the investment across the area was important.

Another said: ‘Where places are varied and different, you have really got to think about context and pick the partners you want to work with. I think for those bringing forward big change, you have got to think about the right partner or the right approach for the right place.'

The consensus around the table was the importance of having a clarity of purpose.

One chief executive said: ‘You always know when you embark on this type of activity that it takes time. It's complicated. You have to get the lawyers involved.

‘I think it is absolutely crucial to keep an eye on what you're trying to do. It can take time so you have to be clear about what you're trying to do and about your purpose.'

Another added: ‘You have to be clear about outcomes, clear about what it is you are trying to do. Plan for the worst because, although you might be friends in the beginning, if it goes wrong, how do you break it?'

One delegate echoed previous comments about picking the right partner for the approach, adding: ‘If that means you are having three or four conversations, then so be it. With joint ventures, you have to understand that although the outcomes you want should be the same, the underlying principles of why you are in it might not be the same. There needs to be an acceptance of that and you should not let this get in the way. That is really important.'

The other key element is getting the governance right. One chief executive said: ‘It's quite easy for a joint venture or a new company to have quite a lot of overlap with the local authority. Sometimes councils behave as though they are part of the local authority, but it's important to make the distinction about decision-making and then give the joint venture space. Don't treat it as though it's part of the local authority, otherwise there's no point in doing it.'

Another delegate said good governance was vital because it ‘stops people getting themselves into serious problems'.

One chief executive said councils embarking on major regeneration projects or developments were ‘making huge financial decisions for generations to come', adding: ‘You have got to think about governance and who makes the right decisions. You have to make sure aspirations are embedded in the partnership because you're not building houses, you're building communities.'

The point about creating communities and using regeneration is not just to pour concrete and lay bricks, but also to add social value is crucial – particularly when thinking about the partners councils select.

One chief executive said his council's regeneration projects were not only about building houses, but were a foundation of economic growth.

‘It is also about generating business growth, mixed developments, place-making. In terms of our business rates outlay, we have to start to improve the look and feel of our market towns and make them more attractive for businesses to relocate there.'

But, of course, one of the major barriers to housebuilding and developments is getting residents – who have perhaps seen failed regeneration projects over the years – on side. One chief executive spoke passionately about the need to develop a new narrative.

‘I think there is something here about the story we tell. If you keep asking the same question, you will keep getting the same answer. That is something we keep doing in UK. There is an element around some leaders wanting to tell a different story and share some of the successes elsewhere in the world because the UK story is not healthy.

‘The UK story is one of volume builders. As a country we are not creating that vision. We are not showing communities what the possibilities are. There is no narrative about the possibilities and if you're a tiny area, you need help to tell that story.

‘What is needed is a different story and this goes all the way to government because…frankly, it is just trying to bash out the houses it needs. That's where [long-term, private sector investors] need to be helping us.

‘There are fantastic examples around the world which are clever, colourful and ambitious and they create better communities than we create here.

‘In the UK we create industrial estates which are empty at night and housing estates that are empty in the day. Our old people are shoved into residential homes when they're no longer in that space anymore. That's where we need help.'

A representative from Pinnacle said the company understood there was no silver bullet and that a ‘plurality of models' was needed if the country was to deliver more and better homes faster.

He continued: ‘We invest in communities: their creation, their regeneration and their ongoing management and operation. We want to bring our extensive capacity and capability to bear to create places, in partnership with local authorities, where people want to live and where, consequently, investors like us want to invest and operate. For that, we need a patient capital, long-term approach that combines place-making with a focus on place management and community stewardship.

‘Of course, we welcome the emergence of joint venture public/private partnerships with a clear purpose to transform communities.'

‘From our point of view, it is important we continue to debate and understand the local authority senior officer perspective on how best these joint venture models are structured and procured, in order to meet the needs and wants of your local communities.'

Round table attendees:

John Gilbert – chief executive, Swindon BC

Karime Hassan – chief executive and growth director, Exeter City Council

Paul Najsarek – chief executive, Ealing LBC

Manjeet Gill – chief executive, Wokingham BC

Angela Probert – strategic director, change and support services, Birmingham City Council

Daren Turner – strategic director – place, South Kesteven DC

Lee Sirdifield – assistant chief executive, South Kesteven DC

Sandy Hopkins – joint chief executive, East Hampshire DC/Havant BC

Alison Broom – chief executive, Maidstone BC

Michael Burton – editorial director, The MJ (chair)

Sam Clayden – features editor, The MJ (reporter)

Neil Euesden – Pinnacle Group

Chris Turnbull – Pinnacle Group

Jim Saunders – Pinnacle Group