Main contractors vie for HCA delivery framework

Competition for a place on housing agency's Public Land Initiative is hotting up, as Aaron Morby reports.

Bouygues, Galliford Try, Kier, Laing O'Rourke, Wates and Skanska are believed to be among the main contractors vying for a place on the Housing and Communities Agency's huge delivery framework.

The contractors are among 40 firms short listed to pitch for a place on the framework to build a substantial housing programme under the Public Land Initiative.

The PLI is designed to take the risk of land ownership away from development by providing public land for developers.

Sir Bob Kerslake, chief executive of the HCA, has already stated that he wants to see more contractors involved in house building.

A source told Contract Journal: "Some people are very surprised because only two pure house builders have made it on to the shortlist."

The other firms are a mix of contractors, partnership homes specialists, four housing associations and a consultant- led consortium.

The HCA is now in detailed talks with the firms and hopes to announce the winners of the framework next month.

The delivery partner framework will be split into three panels covering three zones: North, Middle and South.

Alastair Stewart, construction and housing analyst at Investec, said: "If contractors take a higher proportion of jobs than house builders this could mark the start of a paradigm shift in the way the public sector procures housing. Previously from the Barker review, it was generally assumed that government saw the volume house builders as the main solution to mass housing provision."

He added: "The government looks to be turning towards contractors rather than house builders to deliver true volume growth in housing provision.

He added: "This wouldn't surprise me since contractors' raison d'être is high volumes of construction, supply chain management, partnering and risk management rather than chasing margin, which can be largely illusory."

Last week the HCA revealed that work will restart on more than 150 stalled housing developments after it granted £450m of funding for a swathe of schemes under its Kickstart programme.

The agency looked at 270 sites where work had stopped and 91 have been approved for funding, with another 63 approved subject to conditions being met or requiring further consideration.

The decision means £207m will now be allocated to directly fund 6,618 new and affordable homes. A further £241m could be allocated for 5,144 homes, to those schemes which have been approved subject to conditions.