U+I Promises To Give Back Excess Profits On Public-Private Partnerships
Following the collapse of Carillion and various reports into whether they provide good value, public-private partnerships have a tarnished image. But given the public sector owns lots of land but doesn’t have the skills to build on it, they are a useful way to build the homes and commercial assets London needs to grow if done right.
So one developer is looking to change the image of public-private partnerships and so profit from the potential they offer. Following a six-month consultation, listed company U+I will introduce a series of measures to try to improve their reputation.
Most eye-catching is the creation of a mechanism to ensure any profit U+I makes above an agreed projected return on a PPP project is shared with the relevant public partner and local community directly, via a Community Profit Share Arrangement.
This would be a way of ensuring that local authorities and government bodies do not feel they are selling the family silver only to see a developer make a huge profit from what was previously a public asset.
It will also establish an independent challenge committee — overseen by a new nonexecutive director — to drive greater transparency and accountability across its £9.5B portfolio of projects. The panel will ensure that U+I meets the socio-economic standards it sets itself in delivering for the local community, at completion and then over a five-year period.
On all of its major PPP schemes, U+I will also set aside a specific budget through a Planning Performance Agreement so that community organisations and representatives are better equipped to engage more effectively in the planning process.
“For a long time, the term PPP has been tarnished and we recognise that in many cases developers may have lost the trust of partners and communities, but we also recognise the huge value that PPP can deliver to the towns and cities of the U.K.,” U+I Chief Executive Matthew Weiner said. “Our in-depth consultation has demonstrated how important it is that the reputation of PPP as a positive option for delivering regeneration is renewed.
“The series of commitments that we have announced today will support us in doing everything we can to make PPPs a genuine partnership between developer, public sector and local community. We do not have all the answers, but we hope that our partners will recognise this commitment and back us in our endeavour to create regeneration projects that are truly collaborative and ultimately better for the places in which they are delivered. Our profit must have purpose.”
