Surrey County Council moves forward with £1.5bn joint venture

By Vivienne Shirley, Senior Consultant

Places for People, one of the UK’s largest property development and management companies, has been selected by Surrey County Council (SCC) as its partner in a real estate deal expected to last 15 years.

The contract award notice, published yesterday, stated: “If the venture were to reach its full potential the upper range of the value to the market is indicated at £1.5bn.”

Places for People was originally approved as SCC’s ‘50/50 partner’ back in December, following the government’s decision to allow councils to ‘unlock’ public land for much-needed housing, whilst also creating assets with income potential.

In the first partnership of this kind for a county-wide authority, the JV will build thousands of homes on publicly-owned sites across Surrey and further afield, starting with 32 sites within the county. The council stated that it could work with other authorities on a further 100+ sites, by creating additional partnerships as subsidiaries to the main body, with the potential for more than 5,000 residential units to be delivered.

The JV comes at a challenging time for SCC, which along with other local authorities has been hard hit by government cuts. It hopes that the venture will help it meet savings targets of £250m over the next three years.

Announcing the limited liability partnership in December, Surrey’s cabinet member for property and business services Tim Oliver said: “We intend to create a partnership which will not only provide Surrey with much needed extra housing, which will help our boroughs and districts, but also create the opportunity for us to raise funds for services as government support continues to disappear.

“I know some people have expressed concerns around a strategy of using property to raise revenue to support services but we would be failing in our duty to residents if we did not.”

The JV is just one of a number of measures the cash-starved council is taking to try to get its finances under control, along with reinventing how it provides children’s centre services and cutting special educational needs and disabilities (SEND) budgets by over £20 million.