A strong appetite for investment and a focus on delivery will shape the West Midlands over the coming months according to the range of experts speaking at the recent West Midlands Forum for Growth event held in Birmingham.
Jane Kemp, a partner at Adducere, is spearheading a solution for many cash-strapped public sector organisations. Adjuto, a joint venture between Adducere and Willmott Dixon, is an innovative new funding model that provides a different approach to sourcing funding for public sector bodies. Jane took part in one of the day’s panel debates.
She said: “There are a number of areas on which the West Midlands Combined Authority is focusing on as it looks to maximise what the region has to offer and bring forward important infrastructure schemes.
“The message from the West Midlands Forum for Growth event was one of positivity – about policy and the direction of travel for the region, but also in terms of delivery. The region is keen to emphasise connectivity and transport, innovation and enterprise as well as international trade and to promote the West Midlands as a great place to live, work and play.
“A key part of that is delivery; whether that urban regeneration schemes or HS2, the West Midlands knows it must be able to make its aspirations a reality if it is to perform on a national and international scale.
“The appetite for investment in the region is strong thanks to the compelling case made as a viable alternative to the London market, but bringing forward large-scale projects is essential.”
The funding challenge
“The public sector is ambitious and can so often act as an important catalyst for regeneration in our towns and cities, but it is hampered by very real funding challenges. More and more, local authorities and the like are on the hunt for innovative and alternative funding mechanisms to drive essential capital works schemes that are driving regeneration.
“Collaboration is hugely important and, as such, the private sector has an increasing role to play when it comes to public sector development. More and more, we are seeing public organisations considering how they can work in partnership with private businesses to bring forward key projects and schemes.
“Projects spearheaded by local authorities have the potential to offer significant opportunities to private sector investors, so there is a natural fit there in bringing together the development world and working together.”
Innovative solutions
“Local authorities often drive the regeneration agenda and the Adjuto model could offer an innovative solution.
“We are seeing a huge amount of regeneration across the West Midlands, much of which is being delivered by the public sector as it looks to make our towns and cities attractive places to live, work and play.
“Through the provision of high quality public spaces and facilities, the public sector is driving economic growth but there are real challenges in terms of funding.
“The design requirements of buildings such as swimming pools, offices, particularly those with strong environmental credentials, for instance, can lend themselves to the Adjuto model as a funding solution.
“The model allows public sector organisations to access private capital to help fund a development, principally through the transfer of land and long lease income – achieving a saving of up to 10 per cent for the public sector.”
The Adjuto model
“The structure provides secure income for investors at a low initial yield with significant flexibility for rental terms. This model also includes a pre-agreed buy back option – this is a big differential from standard pension fund, forward funding or PFI options.
“The Adjuto model is a unique funding structure that is aimed at encouraging regeneration and unlocking development opportunities within the public sector, and so could provide real solutions for local authorities considering urban redevelopment schemes.”
