local authority finance


London Borough of Bexley

Growth Fund/Housing Rental Vehicle


bexleyThe Assignment

Bexley Council commissioned 31ten Consulting in April 2015 to undertake a study to consider the most appropriate approach to securing housing growth and regeneration within the Borough, whilst also driving increased land values and returns on the Council's investments.

The purpose of the study has been to work with the Council to understand and develop methods for how it can use its financial strength to be a driving force in enabling and delivering growth through utilising its powers, assets and income streams to maximise its influence within the borough and the wider South East London Region where opportunities exist. A key component of the work has been to determine the Council's attitude to risk and reward. While certain models or interventions and investment may advance growth and development more rapidly, these may require the Council taking greater risk in the deployment of financial or property resources and statutory powers.

This commission was then extended for our team to develop a business case to implement a Housing Rental Vehicle to acquire properties within a Council owned company for Temporary Accommodation and other tenures


 Key Outcomes

Through the examination of a number of relevant tools and approaches a preferred solution for the Council has been developed. This preferred solution, The Bexley Growth Fund, utilises a funding toolkit approach as detailed in the diagram below.

bexley growth fund

The Bexley Growth Fund is designed to be a flexible and agile funding approach that makes use of a range of tools to support the market investment an, intervene where appropriate to drive forward growth via a range of approaches. This type of fund is consistent with the Council's desire for a measured approach to risk and reward, with a portfolio that spreads risk across a range of assets.

31ten provided advice on how the Council can manage the fund; which required strong internal governance processes that reflect and sit alongside those within the Council, while also being designed to manage risk in a way that reflects the dynamic environment in which the fund will operate.

The fund has been initially set up as an internally managed fund and is capitalised from a range of internal and external sources. However, as the fund looks to take on potentially more complex funding and development requirements and establishes a demonstrable track record of successfully delivery, it may be appropriate and advantageous for the fund move outside of the Council, operating as an external fund whilst maintaining the same overarching growth and income objectives. In this way the fund can remained focused on growth within Bexley and be suitably flexible to meet the ever changing regeneration needs of the borough whilst increasing its potential attract other sources of public and private funds.

The Housing Rented Business Case is still being developed with the conclusion of the work schedule for early 2016.