LCCI Property & Construction Breakfast Club
Posted on Thursday, May 23, 2019 by Tim Goggin & Hannah Harward — No comments
Today we attended the second Quarterly LCCI Property & Construction Breakfast Club of 2019. The keynote speaker for this event was Claire Kober OBE, Managing Director of Housing at Pinnacle Group. Claire has varied experience gained from the Commercial and Local Government sectors, and during her speech she discussed the challenges and benefits of a partnership between the two when it came to development projects.
From her experience working within local governments, Claire understands that they often lack the money and skills to move forward with projects. However, the commercial sector can afford to pay for the top talent they need, which is why a commercial partnership is ideal.
Local governments also need to eliminate risk in a project as much as possible, and the combined insight from partnering will enable this. Moreover, the project can move at a far quicker pace, due to the fact that in the commercial sector less people are required in the sign off process.
Furthermore, local governments have previously been forced to sell land to the highest bidder in order to gain a quick financial return, but subsequently relinquished all future profits and control on projects. By contrast, a strategy that enables a 50/50 partnership and a split in costs means the council is not forced to give up these potential future earnings due to a lack of immediate funds.
Ultimately, commercial organisations need involvement in projects to facilitate profits, while local governments need expertise and knowledge, thus paving the way for a partnership where both parties can work together and complement each other’s goals. However, it can be noted that for the relationship to work there needs to be the following:
- An understanding on both sides of the challenges faced in their particular fields
- Equal involvement when working together to lead a project, without one side dominating
- A clear understanding and agreement on who will pay for additional costs that arise outside of the initial contract
- A shared vision and focus on outcomes
- Bespoke solutions that will change to suit each party and the project worked on
- An understanding of what realistically can be delivered, without an oversell on expertise from either side
- No hidden surprises - if something goes wrong then the relevant party must have the integrity to admit it at the earliest possible point and the determination to work through it
- Recognition of individual political interests and sensitivity to these, in addition to an understanding of how they might change how a project is run
Article written by Tim Goggin and Hannah Harward
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