Our 'Public-Private Partnerships: Driving Growth, Building Resilience' good practice guide supports councils to establish more effective public-private partnerships, with case studies of partnerships which have delivered high impact outcomes. One example is a joint venture between Wirral Council and Muse Developments, delivering multiple projects including offices, homes and bus station upgrades.
Project overview
Wirral Metropolitan Borough Council’s (WMBC) entered into a joint venture (JV) to deliver multiple projects including A grade office space, 651 new homes, bus station upgrades and a new market in Birkenhead, The Wirral.
The JV partnership responds to WMBC's plan to drive self-sufficiency in the council and play an active role in Wirral-wide growth. In its decision to deliver through partnership, WMBC sought to generate revenue streams and financial returns from its land and minimise undue financial risk by encouraging private sector investment.
WMBC opted for a developer-led proposition where the council would benefit from a developer’s delivery expertise. Following a two stage OJEU procurement, in 2019 WMBC entered into a 50:50 JV with Muse Developments for an initial 10-year period to deliver its Birkenhead town centre regeneration project.
The Wirral Growth Partnership will assemble land and underwrite CPO costs, secure consents, and deliver the projects. Each phase is delivered as a separate project through the corporate entity, with the council benefiting from a residual land value of council assets once developed, interest on any deferred land payments, and share of surplus/profit achieved through the JV.
Some notable characteristics of the partnership are that it will enable the council to lease and leaseback its civic assets and retain the freehold for non-housing sites. As is typical of these corporate partnerships, Muse provides funding to match the value of the equity land value from the council and secures third party finance to the Special Purpose Vehicle (SPV). Council resource costs for establishing and managing the partnership are issued as loan notes to the JV and accrue interest.
In addition to securing a popular planning consent, the Wirral Growth Company has secured significant investment for the development of its two new Grade-A office schemes.
Key points of learning
The formation of Wirral Growth Company has brought significant inward investment into Birkenhead. The partnership has enabled WMBC to make best use of its operational and investment properties, maximising returns on investment land, whilst also rationalising its civic assets to reduce costs. The high-grade office buildings will also deliver on the council’s commitment to improving its carbon footprint through efficient building design.
The Wirral Growth Company allows the council to benefit from value uplift and take a longer-term view about land use and in particular where it may want to promote different types of development in the longer term to respond to the local needs. Wirral Council as landowner is also able to ensure the sites included in the agreement deliver wider growth, social and community benefits.