What Needs to Change? - Westminster City Council

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hello I'm Toby Fox from 1.5 million new

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homes the local government challenge

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sponsored by Redloft and by Mount Anvil

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and Pitman Totosa Architects now I'm

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visiting a different council every month

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to find out what works and what needs to

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change to get more homes built and this

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month I've come to

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Westminster i'm lucky enough to be here

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with James Green who's director of

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regeneration and development at

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Westminster City Council responsible for

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uh strategy essentially affordable

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housing strategy yeah so tell us a bit

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about where we are uh today and um what

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this project could be if only we could

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deliver more homes oh wow okay where do

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I start really i think I think we need

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to look at the macro situation um the

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current climate um in the UK it's

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challenging you know um it's a really

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difficult time to be developing and

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building particularly affordable housing

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in central London um we've gone through

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a long period of uh bill cost inflation

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um uh on the back of COVID um and

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everything that came with that um so

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just building things is tricky enough um

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and then we got to sell them so I don't

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know uh if you looked at the Molly

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report uh this month but we are back to

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2009 levels in terms of um building

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output um and: 2011

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in terms of private sales exactly yeah

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so you know for the private sector you

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know to you know actually put a foot

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forward and um develop sites out is

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really really challenging um so you know

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everything's fallen back rps um have

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obviously got their own fire safety

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legislation challenges which means their

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output's been curbed as well so I think

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you know looking at local authorities to

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you know really um uh move forward um

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and start building is is the key and you

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know that's why we're looking for the

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government and the GLA to really get

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behind us and start um having you know

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serious conversations with us about

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grant levels um and helping us

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supporting us uh deliver more affordable

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homes so have you got the capacity to

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deliver more affordable homes if the

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grant is there um absolutely i mean

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every obviously every site is is

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different um and the economics on every

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site's got to work um but we've got a

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pipeline of opportunities we've got a

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fantastic team um that you know is

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delivering and uh we're very well

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resourced in that regard so you know we

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are ready to go we've had some very good

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conversations with GLA um with

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MHCG um about pipeline opportunities but

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what we want to see is those

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conversations turning into something

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much more detailed um in terms of how

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you know they can provide us with

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targeted uh grant um on particular sites

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on the pipeline we've got um getting

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that grant in early um you know so uh

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that we can start mobilizing um and we

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can really apply our resources to those

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sites that we've got so what is the

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scale of the opportunity then how many

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homes could Westminster deliver so I

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mean since: 2019

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1250 I think it is um we've got a

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pipeline of over 2,000 um but you know

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we're in a huge burough we've got a

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massive demand for affordable housing um

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and you know we're actively looking for

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for more sites to add to that pipeline

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as well so you know we're we're we're

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hugely ambitious we're very realistic

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about what we can do what we can offer

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and we've got a track record um like Eb

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here you know that um demonstrates that

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you we can do this as a council yeah so

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so we're here on uh it's Eb um Bridge

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Road eb Road yeah uh it's an estate

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regeneration project delivering 700

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circa 800 800 homes um and what you're

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saying is you could do this again and

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again and again and again it's about

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providing the grant funding that enables

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it the grant funding helps but obviously

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you know we've got to be realistic about

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how much we can do at any one time um

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you know the resourcing uh you know that

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bringing forward in a state like Eb

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takes is huge m um it requires a skill

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set you know from you know community

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engagement through to development

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economics through to construction

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through to sales marketing and

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ultimately handover um and everything

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that goes with that so it requires you

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know a really broad skilled uh team uh

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to do that so I think to bring forward a

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ski a regeneration like eb of 800 homes

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local authorities have got to be risk

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about how many of those they can do at

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any one time um and uh so that's

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something to take into mind but it's

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building upon uh the success um

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recognizing

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uh the resourcing and the skill set

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that's required and garnering the

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support from the government GLA to go on

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to the next one that's the conversation

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we want to have given you know the grant

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that you would like to have what what's

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your sweet spot how how much would you

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like to be building and how much would

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that cost wow that's that's quite a

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question um the sky's is the limit right

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you know uh but we got to be realistic

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um for a local authority to build homes

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it's got to sell homes because that's

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ultimately uh what cross subsidizes um

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along with a grant um along with

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affordable housing fund that's what

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subsidizes the affordable provision um

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we got to be mindful of uh you know

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we've talked about uh the sales market

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is challenging at the moment um and also

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flooding a burough um with private sale

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homes is not an ideal situation so So

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that's the same limitation that faces

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the private sector because you're

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selling privately homes to subsidize the

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cost of and ultimately our model is very

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much the same as the private sector the

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only difference is is that we're

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maximizing our affordable housing

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provision at 50% yes um whereas uh and

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we're we're that's our priority rather

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than making a margin on on every

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development site that we do so listen

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you know I I don't want to focus on

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quantum piranha necessarily but what I

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want to focus on is regenerating

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redeveloping the estates within

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Westminster and providing our residents

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and communities um with modern uh

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accommodation that's fit for purpose and

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gives them every benefit and and every

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advantage in life really you know and

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that's that's the bit we want to focus

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on a scheme like Ebrie um obviously

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there was an existing estate here uh

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that was subject to right to buy um and

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just to give you a flavor of the cost

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that it bring that it takes to bring

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forward a site like Eb um in: 1989

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three bed home was sold for 85 grand uh

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the uh the tenant received a 50 grand

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discount on that so effectively bought

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in: 1989

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bought back by the council in: 2023

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for over a million pounds

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that's so obviously that's a huge uplift

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um on the back of that you know the

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tenant had the option to buy back into

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Eb as well and obviously received a uh

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disturbance payment um on the back of

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that so the cost of that one home to

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reprovide that one home you're starting

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from a you know minus a million pound

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number yeah you know you've got to add

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on the bill cost to that which could be

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600 grand something like that um and

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then you've got to look at how you're

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going to recoup that money and pay for

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that so you might get a GLA grant uh

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funding per unit of about £200,000 mhm

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um and then we put some affordable

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housing fund which is recycled section

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106 payment in L money essentially of

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about 250 okay so that's a huge deficit

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that that's still only 450 yeah exactly

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and you're you're talking about 600,000

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just in bill cost exactly exactly so

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you're only going to get so much from

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the private sale um to cover that um and

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obviously the grant funding as well so

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essentially the council has got to take

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on board that as a negative land value

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so to bring forward like a scheme like

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Eb the council is essentially investing

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in this and carrying that debt uh in

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perpetuity yeah um that's why it's so

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challenging to bring forward schemes

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like Ebrie why does it make sense to do

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that why would the council want that

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debt um because it is providing

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fantastic new uh accommodation uh for

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its residents um and it's setting a

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benchmark for what can be achieved in

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terms of affordable housing not only in

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the burough but in the UK and nationwide

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really um and it sets an example and

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hopefully raises the bar for affordable

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housing provision uh for everyone else

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so how would you answer the charge that

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that's just an expensive folly you know

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this is just councils um giving out

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public money like does it really add up

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well if you look at if you look at it

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from a you know an economics perspective

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um and the numbers only yeah you could

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argue that that money could be spent

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somewhere else but if you look at it

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from the perspective that it's not just

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about the bottom bottom line in terms of

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of money it's about an investment in its

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residents its people to remain in the

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burough um to find jobs um you know

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educate and you know put something back

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into Westminster and have every

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opportunity to succeed then that's the

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value ad i think it's it's about a

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long-term view rather than and a bit of

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short-term pain for a long-term view and

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I guess what we're looking for the

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government is to recognize that to

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recognize um the investment that the

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burough is making in its affordable

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housing and its residents and to help us

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and support us on that journey and that

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investment is anchored by ownership of

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the land ultimately that value doesn't

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disappear i should say that you know

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um I would say about 85 90% of our

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development program is self-d delivery

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yeah we absolutely retain the land the

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freehold of the land um and we develop

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out these sites and we offer obviously

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lease holds on the private sales um and

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therefore we remain the landlord in

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perpetuity um and we're here for the

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long term really much like the landed

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estates you know we are a long-term

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custodian in Westminster um and

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therefore we you know we have a

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long-term view and that's why we'll take

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on um that uh debt uh you know to

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develop something out like this and part

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of part of that story is taking on the

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the financial debt to do the delivery

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but it's also about building the team

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that has the expertise and and the

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capacity to do the delivery a lot of

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councils especially now more than ever

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are choosing to go into a joint venture

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partnership with the private sector in

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order to bring new homes forward yes why

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are you choosing a direct delivery

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method instead

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because we're invested um you know this

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is about building the skills the

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resources and leading the way in terms

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of how local authorities can build

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council housing um and I'm a firm

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believer we do do joint ventures not

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many but we do um but I'm a firm

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believer that you know you've got to

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have absolute accountability uh and

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ownership for what you're doing schemes

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like Eb take you know years in the

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making but years to you know build and

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develop out um that is why you've got to

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have the team of resources um that you

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know can do that um yes we can call it

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in we can get assistance from the

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private sector but ultimately you know

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we are as I talked about the custodians

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of this land um you know we represent

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our our residents um and that is why we

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want to uh have a big part to play in

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terms of how these schemes um end up

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james Green thank you very much for your

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contribution to 1.5 million new homes

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yeah my pleasure thank you and that's

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just about it for another episode of 1.5

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million new homes the local government

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challenge sponsored by Redloft and Mount

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and Pitman Toto Architects we're going

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to be back in a few days with more from

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Westminster but until then if you could

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hit like and subscribe we'd be really

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grateful and we'll look forward to

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seeing you next time thanks for watching