Earlier this year I had the pleasure of staying at Ashridge Business School in Hertfordshire, where the buildings go back 700 years. The gardens were designed by Humphrey Repton in the 19th century and cover 190 acres. He laid out the lawns and trees in the knowledge that his design would only reach its full splendour long after his lifetime; over 100 years later.

What a contrast to the short-term horizon which has driven so much of our building in recent decades. Of course that is the way of things. The electoral cycle is short and drives our politicians because we, the general public, are hooked on the instant. Commercial developers, house builders and investors are also under the cosh of the annual reporting round and the eagle eye of the investment analyst.

Yet the regeneration of towns and cities and our council housing estates is not something that is susceptible to the quick fix. They are not just bricks and concrete, but living communities. The patient does not always respond to a short, sharp shock. A course of prolonged treatment is needed. So, how can relationships between public authorities, developers, and investors be built for the long term?

It is a fact of life that any large-scale planning application is so time consuming and expensive that it only makes sense if the development put forward is going to stand the test of time. The demands of environmental assessment, the design and access statement and the extended timetable for producing development documents under the Planning and Compulsory Purchase Act 2004 all add up. It can take as long as building a major mixed-use scheme itself! So, for a start, the system forces councillors to look beyond the next election and commits developers to invest heavily for the future at considerable risk.

However, the key commercial driver for a long-term relationship is a shared commitment to value capture. Value capture means the private sector accepts that return depends in part on rising values created from the very development it undertakes. Not from inflation caused by demand outstripping supply, as has often been the case with housing, but from the renewal of the area itself. This inevitably means a broader involvement in the heart of the community. The things that make it tick and make people want to live and work there; the schools and the transport links.

A local authority committed to value capture resists the temptation to take a quick return to support the annual budget (and I appreciate how beguiling that can be in the hard reality of demands from front line services). Instead it waits until it too can share in the better values created by the regeneration. It also accepts that if the private sector commits to the same agenda, it will want some role in how the public sector assets are renewed. After all, values will not increase if schools are not rebuilt and transport links are not improved.

And what about the lawyer in all this? The traditional disciplines of property, planning, construction and corporate all have much to do. But there is a strategic role for the lawyer who thinks across different disciplines. With colleagues the task is to knit together the kind of agreements which go beyond the development documents which has served us well over the years. They will create public-private partnerships either in the legal sense or as a means of managing the overall project and work out ways of sorting out the inevitable disagreements along the way.

The documents will set out how to handle change over the life of the project. They will address the complexity of phasing and how to ensure that costs like roads and services, civic spaces and public realm are fairly shared by all the participants. There will be long-term management arrangements for the public realm. They will allow for new parties to come in where they have niche expertise or to share some of the risk. And they will bring into the project aspects of the public sector estate which affect value while respecting the ultimate responsibility of the local authority for them.

We have public and private sector clients who have grasped this vision. They are working together in the West Midlands. And I expect some of them will feature in this supplement.

I do not expect to see the fruits of their efforts tomorrow, or next year, or maybe even the year after. But when you do see them, like the gardens at Ashridge, you will applaud the tenacity and foresight, which started it all.

---

For further information about this published aticle, contact Kathryn Hobbs on +44 (0)121 213 2397, Alexa Highfield on +44 (0)121 213 2396 or Amie Ryalls on +44 (0)121 213 2360

This published article may contain information of general interest about current legal issues, but does not give legal advice.