HCA seeks contractors for development work

Contractors on the Homes and Communities Agency's developer panel will get their first chance to bid to work on three public sites for 500 homes brought forward today.

Housing minister John Healey said that three sites - Bentley in Doncaster, Kingsmead South in Milton Keynes, and East Bank, Ouseburn, in Newcastle would be the first to be developed under the Public Land Initiative.

The 28 contractors, developers and housebuilders who qualified for the HCA's developer panels will now enter into mini competitions to be awarded work on the sites.

A spokesperson for the HCA said the competitions would take place in March, with selection due to take place in May. The spokesperson said the competitions would be a shortened version of the usual procurement process.

The three sites will provide 500 homes and are the first of 1,250 pledged to come through the Public Land Initiative, for which the HCA's developer panel was set up. Contractors on the panel, which is split into three regions, include Kier, Carillion, Galliford Try, Bouygues, Skanska and Wates.

The HCA is understood to be in conversation with another 40 public agencies about using the developer panel to procure partners to develop out sites, including on mixed-used regeneration schemes where plans have stalled due to the credit crunch.

The government estimates there is enough public land to build 300,000 homes, of which 100,000 is on council sites.

Of the three sites launched today, Bentley and East Bank will be procured using the HCA's northern panel, with Kingsmead South using the Midlands panel.

The Public Land Initiative forms part of the prime minister's June £1.5bn housing pledge, which saw government funds switched into the building of new homes. The initiative will see deals done on a so-called “blended margin”, somewhere between the 20% developers expect to take and the 5% contractors expect to take, because the government is taking on some of the development risk.

John Healey said it was a “new deal” for public-private housebuilding. He said: “I expect other public bodies to follow, and I am now looking to new companies to bring a new competitive edge to the industry. We are looking to test this new business model on the first three sites I am announcing today, with the first builders on site over the coming months.”

Sir Bob Kerslake, chief executive of the Homes and Communities Agency said: “The PLI is a significant new model for creating strong public-private partnerships that share the risks and rewards of delivering new homes. These first three sites will be an important test bed for the initiative.”

Details of the three sites are:

Bentley, Doncaster - 178 homes are planned for this site, of which 47 will be affordable. Subject to planning permission, work is expected to start this summer

Kingsmead South, Milton Keynes - this site will deliver 200 homes, of which 60 will be affordable. Work is expected to start this Autumn

East Bank, Ouseburn, Newcastle - a joint venture between ONE North East, Newcastle council and 1NG, this will deliver between 90 and 100 town houses and larger apartments, 22 of which will be affordable. Work is due to begin in May.