The Balancing Act: Unblocking regeneration - public land, risk and delivery

David Meecham: Hello and welcome back to The Balancing Act, the podcast focused on the realities of delivering regeneration in the real world. Across earlier discussions and episodes, we've explored why regeneration schemes are often the first to feel pressure when markets tighten. We've also looked at why trust, early engagement and patient capital can matter just as much as contractual certainty.

Today we're getting very practical. We're focusing on public land, risk appetite and the tools being used to unblock delivery from early intervention through to compulsory purchase.

I'm delighted to be joined by Virginia Blackman, who works with public bodies and development partners to unlock complex and stalled sites. Her work focuses on public sector regeneration, site assembly and compulsory purchase, using practical interventions to de-risk delivery and enable housing, regeneration and infrastructure projects to move forward. Welcome, Virginia. Thank you, David. So,

I know one of the things that you think is a lever for regeneration and you're keen to talk about, is the use of public land. What do you think?

Virginia Blackman: I think that having land ownership within a development area or development project gives you leverage. You're part of the ownership, part of the process, part of the decision making in that case. You can be proactive. And so I think that many public sector bodies are already doing that for major schemes. So, know, estate regeneration areas where they have a shopping centre, where they have the freehold public bodies already doing this, but I think they can be looking a bit further and a bit more kind of creatively at maybe some of the smaller projects, maybe some of the edges of things where they've only got small bits of land and the developer is already moving forward, but where they might be the lever, they might be the thing that opens it up and what can they achieve with that?

David: And so how do you go about facilitating those conversations between either your private clients, as in private sector side or your public clients?

Virginia: I suppose it depends on where the query comes from, where the question is. So from the public sector side, I know that lots of authorities are looking at what they own and where they have land ownership adjacent, where they have things which are next door to part of sites that are prime sites for regeneration and development. And then you'd be encouraging then conversations with the adjacent owners and developers to see whether there is, if it's a big sort of Greenfield-Brownfield site, is it an equalisation agreement? Is it some form of promotion agreement, some form of working together? If actually you own as a public sector body a very small amount, then you might say, “I'm very willing to put this land in and make it a part of the development if we can achieve - these are my objectives.”

David: And do you think there is enough, intelligent interrogation of land ownerships by public sector organisations to understand where they can maximise opportunities for the private sector on the delivery of a holistic scheme?

Virginia: I think it's hard because the public sector is doing far more with far less than it's ever done. So asking people who are already under pressure to do more and more proactively rather than things that they're being pushed and sort of shouted at to do is a big ask. But I think if there's a little bit of capacity somewhere that can be sort of made available to do some of these initial searches, these initial work, then I think it might pay dividends for them.

David: So assuming that we've got some private sector landowners, we've got some public sector landowners, we've got a development partner who may or may not be a landowner within that particular scheme, there are obviously things that can be done with that land collectively and holistically in order to get that scheme away. And I know that you and I have spoken previously about the limitations attached to the public sector need or focus rather, well actually both, need and focus on the likes of best consideration.

Virginia: Yeah and I think there's an understandable caution from those working in the public sector to make sure they're not sort of throwing away value, they're not disposing of things which are owned by the public without getting the best consideration for them and the governance, the monitoring officers, all of those members in local authorities are all very conscious of signing that off. I think there could be benefit in a little bit of a rethink around what best consideration, best value for the public sector actually is. And could that be delivery of policy? Could that be giving you a lever to move a scheme into being a better quality of place into more affordable housing into getting more local businesses involved in the supply chain? Whatever it is that is your objective at the moment, if you have some flexibility in there, then that might help. These might be levers that would help public sector bodies to move forward their policy rather than simply getting an amount of cash, which is then very constrained about what they can do with it.

So I think there's a bit if we're going to have sort of localism, if we're going to have moving power from the centre to locally, then we have to start letting local decision making around what's important there. Is it cash for a site or is it actually putting that land in, maybe getting a bit of cash at the end, but saying I would rather have?

David: And it's a very tricky question to answer, isn't it? Because ultimately you've got the public sector landowner who is understandably wanting to maximise their receipt because they need the cash. And you've got local communities who are wanting to ensure that they've got the best quality of place and the right community. And it's that ever present tension between the two of them, isn't it? It would be great to think that it the community could be involved in the wide regeneration of, particularly residential-led development, in a way that is positive as opposed to being a negative perception or a view that the community may well be a blocker, whereas in fact the community might be the absolute opposite of a blocker.

Virginia: Yeah, and it might mean that some of the big some of the big national priorities around housing delivery, and economic development and growth can become more acceptable to people, as you say, by that evolution, via the delivery of those, being able to be sort of centred around what local areas need, rather than saying every area needs, for example, 50% affordable housing. That's not true. They might need some private sector housing to provide homes for the people who are going to be working in the new businesses that are investing in the area. And that's the kind of thing that we would like, I think, to see the local authorities have that flexibility to do and say, we will put our land in with these constraints and sort of guardrails around it to allow this focus and priority we know of local people to be delivered, even if we don't get as much cash out yet.

David: That's really interesting, Virginia. Thank you for that. We're hoping to have a representative of a community as a voice as part of this series. And it'll be interesting to hear from that community as to exactly what are the drivers for them, what are the important things? Of course, it's about place. Of course, it will be about the quality of product. I say product, should be saying new homes… and the quality of things like green and blue infrastructure. Just taking a bit of a change away from that topic, we've spoken previously about de-risking development and a large part of your work is thinking about the things that may potentially be constraining for regeneration schemes. And I just wondered if you could talk us through a bit of the detail of that.

Virginia: There are so many things that have to get right for regeneration schemes to go forward. The people involved, their financial support to do it, et cetera. But there are also, I suppose, some land related issues which I spend a lot of my time dealing with now and that's interesting because that's a change from probably ten years ago when we were putting a red line around, great swathes of places and demolition and start again. Whereas now we're often looking at a site which has been majority assembled, nearly ready to go, it's got a good planning position, all that kind of thing. But there's one or two things which are holding that up and which are difficult to resolve without the involvement of public sector and some of the powers they have.

So some of the things that we are looking at are where there's not good access or where there's not good documentation of the ownership of that access. So how can you get the necessary certainty that you can go ahead with the development when you haven't got the access clarified? And there are of course ways you can deal with that with insurance, et cetera, but if you can deal with that by using compulsory purchase to maybe buy the unknown ownership that makes a very clear, very simple access situation then that in a lot of situations will be enough to give the funders, the developer, the sort of confidence then to start work on delivering homes to do that. Rights of light, I suppose, has become a big issue mainly in urban areas, it's fair to say.

David: Presumably, particularly London.

Virginia: Particularly London, but I suppose we're starting to see it more now outside of London where we are starting to see some density and some particularly around transport hubs. You are seeing density around, Birmingham, Manchester, Leeds, all those areas, the cities, we're not going to see this in small towns, absolutely fine, but we might be starting to see this in the smaller cities to do that. But I think probably London has been an early adopter of that, maybe, simply because of the density and the conflicting rights in there. So particularly people like City of London, Westminster, City Council have for a very long time had a policy which says that if you are delivering development that is creating benefits to the community, they will be prepared to think about using their powers of appropriation, which is, in a very non-legal way, somebody will tell us if we got this wrong, but effectively it turns the rights of light into a right to compensation. It means that the development can proceed and people get compensation to which they're entitled to.

David: Please write in on a postcard if think that Virginia's got that wrong.

Virginia: In many ways actually, the fact that local authorities are prepared to do that has meant that the negotiations have had a different kind of balance of power and it means that often where they are willing to do that, they haven't needed to do that, and so there's bit of kind of push and pull in there. But it also means that they then have some, as well as their sort of controls via planning or any other sort of statutory controls they have, they also have this kind of contractual push and pull. We will do this if… and unlikely you're going to do this if people are arguing over their contributions to community benefits. If they're arguing over realm, if they're arguing over affordable housing, you're less likely to do this. And so that's something that developers are looking at and saying, well, how much are we willing to pay to de-risk this and move forward? And it's not about the cheapest, but it's about that getting rid of risk. And similarly with restrictive covenants, and we're starting to see restrictive covenants in London undoubtedly, but also outside of London now, I have one project which I can't go into detail, but it will be an economic development commercial project. But there are restrictive covenants which would make it too risky to proceed. They're very historic. They're very, very much in the past. And therefore, would that be a sensible thing for a local authority that wants to bring jobs and growth to their area to think about - of course it is.

David: It's interesting just hearing you talk about just those three issues. So access issues, rights of light and restrictive covenants. They are complicated enough on their own. And of course, what we're not including within all of that is, I know we'll probably move on to land assembly and land ownership and all that kind of stuff. But the additional pressures associated with increased densities and increased heights in London, which therefore creates higher risk buildings, which therefore create different complexities around the building, say around building safety. We've also got funding restrictions for the difficulty in getting money in both private and public. So you can start to see why all of these regeneration schemes do take, the phrase that springs to mind is “it really does take a village”, doesn't it? To get all of these things away. And we've had some people on the podcast talking about issues around construction and building safety. We've had some people talking about funding limitations.

Just bringing it back to you though, Virginia, and compulsory purchase and appropriation. You've touched on some of them and we've talked about a little bit earlier on around land ownership and you made a point around not wanting to just draw a red line around a large swathe land. So in the context of CPO and appropriation, can you expand on that a bit?

Virginia: I mean, there are still situations where that's the right thing to do. But the more land you are buying, the higher cost upfront and the more I suppose the public sector has to be really proactive in that. And I think what we are seeing is that landowners and developers are being very proactive and bringing forward sites. And some of this is, and your work, my work is about saying who's best placed to do different things. Those developers are in a good position to bring forward those sites if it's one or two issues can be solved. So you might own 95% of the site. You might own 100% of the site, but there are some freehold but there are some subsidiary interests like there's a long lease hold in there there's some occupying tenants, there's a little bit of an access issue. All those kind of things might be holding it up, so I think what I'm saying is there's a lot more again - regeneration schemes, where in terms of the brownfield sites you're trying to put things and fit them into a really complicated oven grating aren’t you.

So to do that, I think we just have to be a little bit more thoughtful about how much do you have to own? How much do you have to control? And how much can the landowners, developers, private setters get on and deliver with a little bit of assistance, a small amount of CPO, a small amount of that, or a small amount of we’ll CPO if we can't reach agreement again, because it's the mine to get towards a deal, to end up delivering things at really small cost and much less time and effort from the public sector.

David: Which really does come back to that word that is being spoken about so much partnership. Just hearing you say that, again, you're giving us really insightful comments, Virginia that recognising and acknowledging that there are people around the table who have different skills, different resource availability, different capabilities, different capacities, recognise all of that, come together, recognise that you've got different types of organisations within that partnership, and then just get on and do it.

Virginia: Yeah. Yeah, and there are things that, so for example, it might be that as a developer, you have more flexibility in negotiating with somebody, and you might say that all the negotiations are done by a developer because they've got flexibility to say, for my project, this works best. And therefore, might pay bit of money or I might let you stay for a bit longer, but have an agreement that you'll move up, whatever that is. Whereas the public sector sometimes is a bit more constrained about what they're able to agree and get signed off through their governance process. Having an early stage commitment from the public sector that they will support a project if negotiations don't work will help that developer to do that. I think the partnership is there about everyone doing what they do best, but also having a little bit of trust in the other parties to do what they do best.

David: Absolutely. And that's one of the themes that has come out from people chatting on this podcast is the need for partnership with a big P in terms of the concept. But partnership with a little P, in terms of me and you, I need to trust you, you need to trust me and know that the big partnership with the big P will actually deliver what you and I want to deliver.

Virginia: And that's sometimes the job of us as advisors is having the conversations with our clients about they need to trust a bit and they also need to behave in the spirit of what they've agreed, not just in the words in the contract of what they've agreed. we will both have lots of clients who are absolutely on that. And we will also have some clients that have needed to have a bit of encouragement to work like that. But that is the way that it works.

David: It would be great if we had a playbook almost.

Virginia: Yeah. And I think there's a little bit in there around, there's a little bit in there where perhaps London is ahead, perhaps the big cities are ahead. But that's perhaps because they've had to face some of this earlier just because of the complexity of what they're doing. But they are constrained by the rules and the regulations. And we come back to if devolution lets them have a bit more flexibility subject to outcomes rather than process, that makes sense, then I think that we might see a bit more ability for everyone to be a bit more flexible then. Because you have to let people be, even with lots of goodwill, we have to let people be. And there's a real balance between making sure that the public's interest is protected, but also trusting that the people that you have, who are in many cases experienced.

David: And I suppose the other thing is the willingness to learn. I think probably what I'm meaning there is the willingness to learn from experience of others so that those authorities, I'm probably particularly thinking about the public sector side at the moment, those authorities that haven't necessarily had the good experience of London boroughs, let's say, in delivering some of these really complex schemes. Is there a way for that knowledge to be passed on? Because I think one of the other things that gets talked about in the market a bit is the sort of lack of almost institutional knowledge at the moment within the public sector on how did these schemes get away?

Virginia: Yes, and I think that it's interesting you say that. Andrew Ward at MHCLG, who is a CPO lead there, has led on a project they've been doing to put successful compulsory purchase orders planning based to put some of the documentation into a central database to do exactly what you say. And that is great news because if you as a local authority that's never used compulsory purchase before, you might trust me and me say, that's great, now we can do this. But if you can go into a database and say these five other local authorities did this and I can ring them up and say “how did it work how did it do” then that gives you so much more confidence to do that. But I do think it's something that is it central government is it regional government which it kind of needs to be a convening high you know higher level authority that can do that.

David: Or is it Homes England, is that the role of Homes England as well?

Virginia: Homes England I think has got people with that knowledge but I don't think they're necessarily I haven't seen a database or a repository of that library of that yet. But yeah, certainly the CPO side, there's an effort to do that. It used to be held by the old government office for London - that's who used to keep records of all the CPOs and then it was lost at that point. So I think MHCLG is bringing it forward again. But I think in lots of other ways, there could be, whether is it the development agreements? Is it the partnership agreements? Is it the willingness to use this power, that power, those kind of things are interesting.

David: Just latching on one of the things that you said just a bit ago, you were saying about it would be really interesting for authorities to understand how these CPOs got away. I almost wonder whether it's it would be really interesting for some authorities to know how to do a CPO. Almost even more fundamental, maybe. I don't know. I'm probably taking a very broad brush view on that.

Virginia: I think it would be interesting and it is interesting and that is something that Homes England, Claire Giles who leads on CPO for Homes England is doing some work on that. They're doing quite a lot of work on kind of educating and bringing people's knowledge and experience and sharing that. So that's great. The more of that the better.

David: So just following on from that, Virginia, Homes England is obviously relevant for schemes outside of London. And as you've mentioned, Claire Giles is leading on CPO for them as an agency. Obviously within London, we have a number of different organisations, but primarily the GLA is probably the one who springs to mind, who is so similar in nature to Homes England. Any thoughts about their role?

Virginia: Yeah, I think that to date, the GLA and Homes England have had quite a similar approach in some ways in that they are a supporting and facilitating organisation whereby they do have powers of their own, but they are more focused generally on supporting local authorities within the area to use their powers and deliver themselves. I think that for me, I think the GLA probably could be a bit bolder at times and take a chance and move some of the bigger priority growth areas for London forward and to do that themselves. We have a tricky balance between the GLA and local authorities, which needs to be managed as well. Then there's an opportunity to be a bit braver, but it has to be in agreement with the local authorities that run the area as well. It's not nobody wants a big monster that's trampling over everything. It's about what's the most helpful way of doing it really.

David: Although I suppose just thinking about that the one point that springs to mind immediately that we have within London and that we don't have outside of London, is obviously the requirement of 50% affordable on scheme subject to ballot.

Virginia: Yes, and that's right. And I think the work that the GLA has done there in terms of estate regeneration has been massively successful from a starting point where I think a lot of developers and advisors were a bit cautious about that. But that has totally changed the approach to estate regeneration, changed the approach to resident involvement in those projects. I don't think we dare say anything's perfect, but I think it was a game changer in terms of that.

David: And how do you think the approach might change in the future?

Virginia: Crystal ball time. I think we do think that there is a tension between the need for delivery and the involvement of communities. And I think that is going to be one of the most difficult things we have to manage around if we start from the principle that we will be delivering denser new housing in cities, because we will be, that's an absolute requirement. How do you give communities some involvement in the design and quality of that whilst they have to accept they can't have a yes/no on whether it will happen at all. And that's a really tricky balance in there. And I think it will not be a simple process. But that is the bit that we will have to navigate.

David: Indeed. And that community voice is obviously so important and one of the things we talked about just at the start of this podcast is the need to ensure that that community is seen as a positive and not as a negative. And not as a blocker. So therefore they are taken along the journey. And the question is, how do you do that including all of the constraints that the public sector have in terms of the things that we've talked about, CPO appropriation, access, rights of lights, restrictive covenants, land ownership and, and, and, and, and… which I think probably that probably is the final unanswerable question for the purposes of our discussion today. Virginia.

So just sort of wrapping up. I've done with previous contributors is to ask about why they're involved in regeneration. We've talked a lot about it, the practicalities, but why is it that Virginia Blackman is sitting here today?

Virginia: Absolutely unclear, really. It's a meandering path. Because if you do ask me when I was 16, 17, I was going to be a vet, a horse vet. So it could not be more different to where I am now. Because my brother did some work experience with a rural practice surveyor, I thought that sounded quite interesting and off I went to train to be a rural practice surveyor and in my head I was going to drive around in a Land Rover with a Labrador and it was all lovely. I started work and I realised that the bit that I found most interesting was a road scheme in Essex, the A130 where we were doing the Land Assembly compulsory purchase and I was a bit like, I love this bit, this is interesting. And then I moved into London and I realised actually as a compulsory purchase person, you get to work on a real variety of projects, everything from infrastructure to regeneration to big commercial - the shopping centre redevelopments of the sort of early 2000s, all of those. And actually the bits that were most interesting to me were the regeneration development-y bits. And of those projects, how you got those projects underway, how you've got people working together, how you've got them de-risked, how you've got them starting to build. That was the most interesting bit to me. And therefore I moved, some sort of sideways moves, different moves into companies where I did some development and some CPO works to get that experience of doing the wider piece and that is how I end up where I am now.

David: I do have a vision of you in a Land Rover with a Labrador though.

Virginia: Interestingly, I do still do an occasional bit. I have a small project down on the South Coast and I had to acquire some farmland for it and I – mortified - realised that the only wellies I had were bright pink ones that I walk my dog in and I turned up to meet the farmer in my bright pink wellies and I thought, goodness me, my boss from when I first started work would have absolutely sent me home and told me just to go away and stop embarrassing everyone. The farmer laughed. We had a conversation and it was fine. But honestly, I did think times have changed.

David: That is great. I'm absolutely loving that. My pink wellies. Before we do actually finish up, another question that I've asked all of the guests is who inspires you most in this space or who would you think of as being a champion for regeneration?

Virginia: Yeah, and this is so hard, isn't it? Because there's so many people that we work with that you could talk about and, some of whom will be very well known to listeners, some of whom will be less well known. But I think for me, one of the people who properly inspires me and I think is doing great stuff is Eleanor Young, who's a regeneration consultant working in London and Southeast. I think she started in the GLA. I worked with her on a project in Ealing. She's now at Oxford Growth Commission. She is just one of these people that connects people, sorts problems, just keeps moving and keeps these things underway. And if we don't have people like Eleanor that do that, we will not have these projects.

David: So to wrap up, let's all be more like Eleanor.

Virginia: Let's be more Eleanor.

David: Yeah, be more Eleanor. Well, thank you very much, Virginia. Thanks for listening to The Balancing Act. If you enjoyed this episode, please subscribe on your usual podcast platform. To hear more conversations about shaping next gen cities, visit TLT.com or follow us on LinkedIn.