here - PSP | Public Sector Plc
The MJ Future Forum! ! PSP-CCG Plenary Session! Welcome! AGENDA! ! ! ! 1) Welcome and Introductions - Lord Graham Tope CBE ! ! 2) Jackie Smith, South Staffordshire Council - Why South Staffs Joined the Group! 3) Paul Brown, Bolton MBC, Project Overview! 4) Alison Knight, Cheshire West and Chester, Future Perspective ! 5) Where Next – The Announcement! 6) Q&A! WHAT IS PUBLIC SECTOR Plc?! Relational Partnering is a pioneering approach to public private partnerships! § Currently ten local authorities utilising the approach across the country and who come together as the Local Government Council Consortium Group [CCG]! § It is a unique hybrid vehicle uniting the public and private sectors. It is an ‘additional’ option for the public sector and is only used when outcomes are as good as or better than! § It originated in the public sector. It puts the formation of a strong relationship ahead of projects! § It seeks to bolster the public sector by bringing additional resources and commerciality into the public sector ! § It allows a best of both worlds approach to projects to ensure a broad range of value added outcomes. It is flexible, non-exclusive and consensus based! § It has a robust governance structure and well evolved procedures to ensure full legal, financial and procedural compliance for an authority! § The private sector ‘Plc’ is represented by PSP Facilitating who provide funding, resources and expertise! WHY PSP?! ! ! ! ! ! Jackie Smith, South Staffordshire Council Director of Environmental & Customer Services LLP Opera?ons Board Chair Limited Liability Partnership South Staffordshire Council The MJ Future Forum 26th March 2015 South Staffordshire Council • 106,000 residents • 46,000 homes • Shares border with nine La’s What did we want? • Generate new addi?onal income through property related project to support a financially self sustaining council • Access to significant levels of Capital investment – which we do not have ourselves • Resilience – tapping into experIse/resources with a commercial edge • Community benefits; realising improvement and inward investment in the local economy • Revenue cash savings and genera?ng capital receipts • Up skilling our staff to act more commercially and changing the mind-‐set What’s in it for us? • Highly flexible/crea?ve approach • AddiIonal opIon, does not remove ability to consider other approaches • Allows projects to evolve and be assessed before any commitment • Baseline value remains with the council it’s the added value that is shared – No risk • Investment of private sector funds into projects of mutual benefit • Working with the other established local authority LLP’s How we did it? • Members and Staff workshop • Regular cross-‐organisaIonal updates • 1-‐2-‐1 meeIngs with key stakeholders • Timescales to date: • IniIal meeIng held on 17th March 2014 • Sign off by Full Council on 16th September 2014 • 6 months in total…. So it is possible! Governance Arrangements “For each individual project” Concept Stage Income Generation Group Initial Proposal 4 E’s Process: Explore Examine Evaluate Engage Check & Challenge of Proposals Recommendation to Council Consideration/ Recommendation to LLP Board Approve/ Not Approve Overview ongoing process Joint Meeting of Cabinet & SMT Operational Board: PSP/Council Officers 50/50 Representation Member Challenge Workshop Cabinet Full Council LLP Member Board: PSP/Elected Members 50/50 representation 3 Elected members Members Oversight Group Where are we now? • Aiming to become a financially self sustaining organisaIon – developed an ambiIous Efficiency and Income Plan 2015 -‐2020 • Strategically reviewing all assets with partners (not just public sector) to ‘see the art of the possible’ • Enjoying the ride…. Way ‘4’ward • 4 Key phrases to keep in your mind: 1. Why should we? 2. Why wouldn’t we? 3. Why haven't we? 4. We should be! PROJECTS OVERVIEW! ! ! ! ! ! ! ! Paul Brown, Bolton Metropolitan Council! Chief Property Officer ! LLP Operations Board Chair! MJ FUTURE FORUM Paul J. Brown 26th March 2015 Why PSP? • Initially sceptical – Too good to be true? – What is the catch? • Commercial approach and expertise • True partnership model – Trust • Another tool in the box! • What is the risk? • Why not PSP? Current Projects • Surplus land • Portfolio (phase 1 and 2) • Academic Village • Affordable Housing Surplus Land • PSP part of internal consultation process • Number of sites currently included – various sizes and locations – Constraints dealt with – Acquisition?? – Joint approach with other landowners – Planning permission – Relocation of council services • Financial appraisal Council – Private – PSP – Council • Significant results • Programme of disposals - £8-10m • Potential to reinvest and construct homes for rent? Portfolio 1 • Aim – Reduce cost of holding portfolio of c2600 ground rents whilst protecting income of c£900k pa • Solution – Transfer ground rents to LLP for value with share of upside and pass through of income – Utilise value to assemble smaller more efficient portfolio of property Result – Ground rents transferred to LLP October 2013 – Bolton Travelodge acquired - 85 bedrooms, 25 year lease, £300k pa, £3.5m investment – Proposed construction of c30,000 sq ft office space § Site secured adjacent £48m bus and rail interchange (Bolton Central) § Design team appointed and planning permission obtained § £5-6m investment § Potential income of c£400k pa § Due to complete late 2016 – Proposed construction of 3 car dealerships in town centre § Pre let to national operators § c£450k pa § £2.5-3m investment Bolton Central Benefits • Increased revenue with growth potential • Reduced costs and management input • Share of uplift in GR income and capital value via LLP • 28% uplift in income may be achieved (£900k pa £1.15m pa) • Regeneration – Local supply chain – Jobs – Business rates Portfolio Phase 2 • Current position – Significant number of assets held for investment – c£3m pa income/£30m capital value – Holding Costs = High Net Return = Low! • Aim – Reduce cost of holding portfolio of investment properties and maintain income – Increase returns and development opportunities – Reduce risk • Proposed Solution – Residual portfolio transferred to LLP – LLP underwrite net income – LLP take over management – Uplift shared via LLP Portfolio 2 cont’d Savings on council establishment (transfer of staff?) Reduced running/holding costs More focused and informed approach to adding value Opportunities for development and marriage value identified Potential for significant uplift in revenue and capital value throughout life of the LLP – Aiming to conclude agreements June 2015 and transfer portfolio by September 2015 – – – – – Academic Village • Strong links to Bolton University • University looking to expand and increase presence in town centre. Council looking to regenerate • Increase numbers of overseas students • Creation of ‘Academic Hub’ in town centre • 850 rooms (Phase 1??) • ancillary facilities • c£40m investment • MOU now signed with University. Detailed work progressing Affordable Housing • Site identified and secured on periphery of town centre • 40 dwellings • LLP to construct dwellings • Land to be held on lease at a modern rent • Cost of dwelling plus rent = less than equivalent mortgage payment • Investment value of income = greater than land value • First time model will be used in Bolton • Seen very much as a pilot for future schemes Key Drivers – PSP Bolton (LLP) • Maximising return from property assets • Economic regeneration/prosperity • Increased income • Capital Receipts • Another tool in the chest! Learning • LLP is an independent company and needs to be treated as such • A commercial approach/view is required when considering opportunities • Treat as a partnership. Trust is key! • Take a broad view of opportunities (capital and revenue) and of what you want to achieve. Talk to your partners! • How can you use the LLP to best advantage?? FUTURE PERSPECTIVE! ! ! ! ! ! Alison Knight! Head of Places Strategy! Cheshire West and Chester Council! Operations Board Member! One Public Estate ! The Ellesmere Port Public Service Hub! ! Overview! ! A partnership with 7+ public sector organisations:! • Local Authority! • Health Sector! • Social Housing! • Fire! • Police! • Ambulance! • FE/HE! ! ! Interest in the project from the Government Transformation Unit and Treasury! Aims of the Project! ! • Service Improvement by joining up and redesigning services in a way that is beneficial for local people! • Reducing cost and increasing value from a number of different buildings and land assets! • Regeneration of a town centre that is in decline! Present Position! ! • Feasibility Study Complete! • Outline Business Case signed off by the Public Service Board! • LGF 2 Allocation £8.2m! • Commencing Full Business Case! • Public Consultation! • Service Redesign Workstreams! ! • Financing! Where the LLP Model could help! ! • PSP as LLP members are there as partners round the table to offer advice and support! • Access to funding via the Relational Partnering Model – the 4 Es! • Ability to use the LLP for procurement which will ease the complications! • Ways of developing a new landlord model for a joint building! • Assisting with wider strategic Asset Management and Strategic land use across the Public Sector Estate.! Multi-agency space - The landlord! Create a vehicle in which all stakeholders have a share and third party funders can be introduced. Stake Group 1! £! Group 2! ££! Group 3! £££! Funder! ££! Multi-agency space - The tenants! Everyone pays in accordance with their level of usage Rent and service charge £££! Group 1! ££! Group 2! £! Group 3! ANNOUNCEMENT! ANNOUNCEMENT! £500m to be made available for public sector ! organisations pursuing Relational Partnering ! approach to property ….. ! ! ! ! Public Sector Plc (PSP) intend to make available via its major funders Talisman Global Capital up to £500m for the benefit of the next tranche of LLP’s who wish to secure an additional property option and access funding through the application of PSP’s governance framework and processes. ! Q&A! Question and Answer Session ….! CONTACT! If you would like to know more please contact! ! Mark Hammersley | Corporate Director of Partnerships! T: 020 7871 1852! M: 07771 820737 ! ! ! ! ! ! E: [email protected]!
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