Grant is no longer the hard part. Delivery capacity is

Nearly £10bn was allocated for new homes outside London on 25 August under the SAHP, yet out of the 33 Strategic Partners named by Homes England, just three are councils: Cambridge City Council, Eastleigh Borough Council and Newcastle City Council, with almost £400m between them. While councils have been eligible since 2021, this is the first time any have been selected. Newcastle’s £141.4m will fund 966 homes towards an ambition for 15,000 over ten years.

Government has been open about the reasoning. Its strategy on reinvigorating council housebuilding proposes raising the acquisitions funding cap so councils can buy homes while they increase their capacity and capability to deliver directly. That is a judgement about capacity, not about ambition.

More than £16bn remains to be allocated outside London, with social rent and council homes prioritised. So what has to change before the next round? Two things, I think, and only one of them is about councils.

Councils have to make delivery provable

Not because councils are inactive. UCL Bartlett’s research into local authority housing provision, which we co-fund, found this August that 95% of English councils are active in housing delivery in at least one way.

The activity sits across companies, joint ventures, HRAs, acquisitions and regeneration, and councils rarely claim the delivery they enabled rather than built. Capability that cannot be seen does not get funded.

Underneath that is a people problem. Responding to the announcement, the National Housing Federation described how housing associations have used recent government certainty to rebuild their development capacity and invest in skills. Many councils have not had that chance, and experienced development staff moved accordingly. The £46m Capacity to Build package is welcome, but over three years and across England it will not rebuild those teams before the next allocation.

Then there is the money, and how the funding is assembled. At Navigation Way in Rugby we delivered 100 affordable homes on the former Biart Place site, now fully occupied from Rugby Borough Council’s waiting list, after helping the council secure a £6.8m Homes England grant and £2m of Get Building Fund. Wherever the money comes from, it gets assembled before the programme starts, not during it, which is why it's crucial to build the right team early to do this.

And the market has to change what it offers

The clearest suggestion from the UCL roundtables was that councils shift towards standard house types, as developers do. I would go further: standardisation is also how the supply chain gets built.

At Perry Barr in Birmingham we proposed a light gauge steel frame and around 700 offsite bathroom pods, because a heated market and scarce materials made traditional build the riskier option. The frame took 25 people to assemble where a concrete equivalent needed 160, and our plots handed over nine months ahead of the traditional ones on the same scheme. Indigo in Peterborough carried that learning, and much of the same team and supply chain, into 315 affordable homes, cutting build time by an estimated 20 to 30%.

That worked because the schemes followed each other closely. Councils procuring one scheme each in isolation cannot generate the volume that makes offsite manufacture economic, and no business invests in factory capacity against a headline total. We invest against sequence, which is what councils asked government for when they called for five to ten year programmes.

The most significant thing in last week’s announcement, for anyone thinking about manufacturing capacity, is not the money. It is that more than £2bn of this first wave goes to mayoral areas outside London, and that Established Mayoral Strategic Authorities now set the strategic direction of the programme in their areas, with more funding expected to flow to them as it develops. A single council procuring one scheme at a time cannot create sequence. A mayoral authority programming across several councils can. That is the mechanism the offsite argument has always been missing, and it arrived with the announcement accompanied by very little comment.

Which puts an obligation on our side of the table too. Contractors have grown used to pricing uncertainty rather than removing it, and to arriving once a scheme is already defined, funded and de-risked by somebody else. If we want the volume that makes manufacture viable, we have to be in earlier, at our own cost, on schemes that may never proceed. For us that means holding design and preconstruction capacity against a programme rather than a project, committing to a mayoral or multi-council pipeline before the individual schemes are funded, and investing in supply chain capacity on the strength of that sequence rather than waiting for each contract award. It is a commercial risk. It is a smaller one than another decade of stop-start procurement.

Contractors bid where the site is defined, the money is assembled and decisions get made, and a council arriving late with an untested site finds the capacity committed elsewhere. That is a rational response to an irrational pattern of demand, and it is fixable from both ends.

Before the next round

Three things for councils:

• Put the delivery evidence in one place, including the schemes you enabled rather than built.

• Choose two or three sites and test the funding on them properly, now.

• Decide whether you are designing each scheme, or building a type you can repeat.

And three for contractors, including us:

• Commit capacity against programmes, not individual schemes.

• Be in early, at our own cost, on sites that may never proceed.

• Offer a repeatable type rather than pricing a new design every time.

Where this comes from

We’ve learnt a great deal in recent years delivering thousands of homes for local authorities or their direct delivery companies. We have also met the newer obstacles in the form of Gateway 2 clearance from the Building Safety Regulator (BSR) for ‘higher risk buildings’ above 18 metres. It is something we have a lot of expertise in.

Building our Future, our strategy to 2030, commits us to whole project support: engaging early on business cases, land and funding, and staying accountable afterwards.

It is also why the company launched Willmott Dixon Developments in May. It exists to close this gap in the short term, testing viability, structuring the deal and fixing the funding route while a scheme is still an ambition, and while a council builds its own team back up.

The programme runs to 2036. Capacity has to exist on both sides before the money can be spent, and neither side builds it by waiting for the other.