“Today you can take people from different local authorities to any number of our sites and there would be a unifying sense of quality, cohesion, the delivery of infrastructure, the delivery of community, place and space that actually they know from the doorsteps and their postbags is the major complaint of places that have not been brought forward in this manner. And so you can build that relationship on a seeing is believing basis.”
Susan Freeman
Hi, I'm Susan Freeman. Welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum where I get to interview some of the key influencers in the world of real estate and the built environment. Today, I'm delighted to welcome James Scott. He is the Group Director of Strategy and Planning at leading master developer Urban and Civic. The company was created 15 years ago to disrupt the established approach to the promotion and delivery of large-scale residential-led strategic sites. James qualified as a barrister before cross-qualifying as a solicitor. Prior to being one of the founder members of Urban and Civic, James was part of the senior executive team of Lendlease Europe with responsibility for town planning and risk management. Within Urban and Civic, James heads up strategy, planning, and communications. Having previously served as a non-exec director of East Thames Housing Association and sat on the Development Committee of L&Q, James is currently a senior advisor to Dorrington Plc and a non-exec of Natural England. So now I'm very much looking forward to talking to James about how he came to co-found Urban and Civic alongside Nigel Hugill and Robin Butler, and what being a master developer involves.
James, good morning and welcome to the podcast.
James Scott
Good morning, Susan, thank you very much for having me. This is a podcast I have listened to for a while now, so it's an absolute pleasure to be joining you.
Susan Freeman
That's fantastic. So in the usual way, before we, we talk about Urban and Civic, I have a few questions about your career path. So very few of my podcast guests actually started out in the law, and, uh, you were a barrister, then qualified as a solicitor. I just wondered whether you feel that the legal training is an advantage, or whether you sometimes feel that you get too involved in the detail, because I certainly found that when I did an MBA. I realised that all my years of looking for the downside did not necessarily help me when dealing with entrepreneurial matters.
James Scott
Do you know what, I think that's a really good way of putting it and, and there's no doubt that when you train as a lawyer, you are spending all of your time looking at risk and trying to work through the worst case possible scenarios and then defend your clients, who you often perceived as slightly sort of gung-ho, um, in the way in which they just want to get the deal done and they regard the lawyers as being somewhat sort of fuddy-duddy and overprotective and how do you make the jump from one to the other? Well, I think firstly, I'd have to put my hands up and say I was probably a bit of a reluctant lawyer, if truth be told. Um, I mean, I loved my studies of the law and I loved actually, you know, when I was at UCL, I taught for a year afterwards and I absolutely loved the discipline and structure that the law brings. But one of the reasons I didn't stay at the bar was that I was getting a bit frustrated with the idea that I was just going to be called in at the end of a process when something had gone wrong and you were going to have to try and fix it rather than actually, if you look at the law as a framework against which decisions should be taken, but not always touched upon in the legal context, you should look at it as being a sort of a backstop.
And actually getting stuck into helping clients when I went through government and then into Dechert and worked with people like Stephen Fogel, um, you’ll remember Stephen. I mean, I mean, it's absolutely cutting edge back then in terms of real estate lawyer and really sort of got involved with the clients and really sought to work out what their actual commercial challenges are. That's where I realised that actually this is where you could have a lot of fun. And then I had a couple of really quite maverick clients like Malory Clifford at Blackfriars Investments, who was just wonderful, he was just such a character and amazing projects, um, Puddle Dock and the Mermaid Theatre, and being given the opportunity to run a planning application with Will Alsop as the architect on that project and trying to sort of navigate the real flamboyant approach with getting a valid planning application in to Peter Rees at the City of London, Corporation of London as then was. And I just thought, this is really great fun. And I was looking for an opportunity to make the jump into the commercial world, but as all lawyers know, the longer you're at it, the more difficult it is because you become more and more senior and the creature comforts of salary and various other things are challenging to move across.
So you've got to be quite brave or you've got to have the right opportunity. And well, fate favoured the brave in that instance and I was given the opportunity to be seconded over to Lendlease. And at that time, Nigel Hugo was Executive Chairman and Robert Butler was Managing Director of Lendlease Europe and to say that it was, you know, it was like finding home would be an understatement. It was absolutely joyous to go into that environment whereby they were delivering the Olympics. They came off the back of Chelsfield with all of that entrepreneurial gravitas that, that really underpinned the direction of the business at that time. And we got on like a house on fire. And I remember having the conversation with Robin, which was, you know, ‘Robin I don't really want to go back to Dechert’. And he said, ‘well, come over and join us’. And I said, ‘well, what would you want me to do?’ And he said, ‘I don't know, but come over and we'll find out’. And I ended up being the head of risk at Lendlease Europe for, it was my first sort of big role and I do remember saying, I don't know much about risk management. And they put me in a room with some really earnest individuals who were talking about Monte Carlo modelling and at that point, all of our eyes were glazing over slightly and somebody took me aside and said, ‘look, you're a lawyer, you know about risk, you understand risk. It's what you're trained to take on board’. And so in a way, it was like having an MBA on the job because as the head of risk, you could walk into any division of the business, any meeting, and you'd catch up with the heads of the different divisions on a monthly basis and I soon learned that the more complicated the structure you put in place, the less effective the answers were at actually being able to understand what people worried about. So I ended taking people for a coffee once a month to sit down and say, ‘what are you worried about? Let's just work it through’. And I had my risk matrix, of course, alongside it. But that really meant that it gave me an insight into the way in which the business operated, the problems that can come about, the way that an opportunity can go from opportunity to business plan banked to risk over the course of a year because things sway through.
It was wonderful and that really underpinned the move across before ultimately when Robin and Nigel took the step out and looked for other opportunities and, um, I absolutely was on that journey with them in the forming of U&C that then came out of it and never looked back.
Susan Freeman
Well, it sounds like an inspired role for you. And so, how many years did you have at Lendlease before Urban and Civic?
James Scott
Not many, actually. It was a short but sweet time. I often think of Lendlease as an exceptional academy, um, where a lot of really good people pass through it and go on and do some extraordinary things, as you can see from Earls Court and elsewhere at the moment but, and I was there for probably just around 2 years, I think, in total, um, before I moved over to U&C.
Susan Freeman
So what was the strategic idea behind Urban and Civic? What did you want to do differently?
James Scott
If we go back to the various earliest conversations, I mean, Robin and Nigel are, again, wonderful people, wonderful, inspiring people who had a vision and an understanding of the way large-scale strategic sites worked, but predominantly from a London base, it's fair to say, because Chelsfield and then Lendlease were mainly London-focused, but they did realise that actually the leverage of dealing with large-scale blocks of land professionally, getting a planning consent, achieving the uplift, but then being able to deploy the infrastructure needed to unlock that residual store of value was something that was not being very well done at a strategic scale outside of London. You know, it just was not, uh, there were not a lot of people in the market doing that. And, you know, Tony Gallagher was there, but actually there were quite big house building divisions as well. And, and they were struggling slightly because within a house builder, the strategic land business had a slower churn than the house building business, which was on return on capital employed. So there was always a bit of an implicit tension in all of that. And we thought there was a better way of doing it. There was a better, more professional way of doing it right and actually creating really great places that we could be collectively proud of, but recognising that these were going to take a long time to deliver. These were going to be 15, 20, 25-year schemes and not being afraid of that. That was one of the big barriers to entry that actually people looked at it and thought, God, you must be crazy to be taking on something of that, uh, uh, scale and duration. But if you don't, then in essence you lose a unifying guiding force for these places. And you can feel it when you walk around ones that have come forward in a far more piecemeal manner and that was really the underpinning of it. And all credit to the boys that they, you know, not only forged that idea off the back of the experience, but they also pulled together a band of people that we'd all worked together in different ways, um, in different organisations before, and set off at the bottom end of the global financial crisis in 2009, 2010 with a private equity backed start-up acquiring 1,100 acres of Cold War airfield at the edge of Cambridgeshire. You know, you had to be pretty brave to do that and I think the jury was certainly out in those early days as to whether that was going to be a viable model.
Susan Freeman
And how did you, how did you go about funding it?
James Scott
So that was private equity backed in first instance, it was GI Partners that put the money up for the acquisition of Alconbury and the operational capital of Urban and Civic. Equally though, one of the things that Robin spent a long time doing, looking, he often tells the story that sat at the desk of now the late Mike Shaw with a stack of particulars on Mike's desk, Mike not being a very happy man at that particular time with a lot of strategic land trying to get out the door and going through them and looking at the different options. And Alconbury had a number of advantages on its face, it was brownfield, demonstrably brownfield land, but it also had quite a significant temporary income, temporary use income, which meant that you could acquire it and you could generate revenue from it from day one rather than just sitting on effectively neutral land, unable to generate income until such time as you got a consent and started delivering. And so those two key ingredients really underpinned the selection of that site, so a combination of private equity and, and income from the site. And then we traded on that basis until 2014 when we did the reverse takeover of Terrace Hill, which was an AIM-listed company, and we did a listing on the main market and a capital raise at that time.
And that's really where Nigel's connections and existing relationships within the funding market came to the fore because you had David Camp on a while ago, sort of talking about the fact that your reputation is everything. And actually there was a very much a case of, there was a real belief in what was being done and the approach that was being undertaken and we'd got another site under our belt at that particular point at Houlton in Rugby. And we were able to raise the money and list in a way that I think actually very few others would've been able to at that particular time. And then that underpinned our journey right the way through to 2021, when we were acquired by the Wellcome Trust to be part of their investment portfolio. So it's been an amazing, you know, existence over that 16 years, not just from a development perspective, but actually even from a corporate evolution perspective.
Susan Freeman
And just to give our listeners an idea of the scale of Urban and Civic now, I mean, how many of these strategic sites do you have under your belt now?
James Scott
Yeah, so, so in 16 years, we've gone from our first strategic site at Alconbury to we now have 20 strategic sites, uh, under our belt with about 11 in delivery, in active delivery. And they've come into the portfolio in different ways. So individual negotiation, outright acquisition, public procurement are a number of the routes, but we've also acquired a number through corporate acquisitions. So we acquired a business from Eric Grove back in, uh, 2015 called Catesby Estates. That brought in one of our strategic sites as well as a smaller-scale, uh, land promotion business. And, um, then we acquired L&Q Estates from L&Q, which is the business that they had acquired from Tony Gallagher again in, um, 2024. So, um, that, that has grown the portfolio either through a combination of organic, uh, acquisition or through corporate acquisition. And it's brought in such a range and diversity of sites as well, which, you know, significantly brownfield, but also greenfield and a number of greenbelt sites as well. So it's a full mix now.
Susan Freeman
And are they all predominantly housing residential?
James Scott
We'd say they're residential led, but they're not insignificant with commercial. So Alconbury is 3 million square feet of commercial floor space alongside, UM, 6,500 homes. Rugby has, or Halton has, 1 million square feet of commercial floor space. There is a real mix, but they would all be residential led, yes.
Susan Freeman
And obviously with these larger schemes, they are very long-term. I just wondered how you, you know, balance commercial returns with the day-to-day realities of having infrastructure-heavy, you know, really long-duration schemes. I mean, how do you generate income during that period?
James Scott
You have to be built for it. I mean, my point earlier about the fact that house builders are on a different model and therefore find this a difficult thing to be able to do, the heavy lifting and the duration, is a really important point, you know, you can't put a square peg into a round hole. These are different sites with different metrics and different requirements. So the way we've set about doing it is being very clear eyed about that, you know, we call it the hockey stick and you're going to be out for 5 to 6 years before you are actually in a position where you're going to be generating revenue. And in that period you're going to be out, you're going to be spending both on the acquisition in what form that might take, but also then the significant planning risk and then the early infrastructure piece. Now, over the 16 years, we have seen a massive evolution in the funding market for these as well. So if you think back to what was the Homes and Communities Agency back in the day, that then became Homes England and is now becoming the National Housing Bank, we've gone from the very early days of 2014 where they started to talk about infrastructure acceleration loans, but it was on such rigid terms that very often it would be the computer says no if you couldn't fill the spreadsheet in, in exactly the right way, to an evolution over that time where they've got some very, very intelligent and commercially minded ex-bankers in there, and they are looking at being able to structure terms which enable you to have long-dated loans with repayment out of receipts and a rolled-up coupon, which is exactly the sort of type of borrowing that you need if you are to manage these large-scale schemes in this way. You had Andrew Jones on a while ago, didn't you? Where he was saying that the only way in which you go broke is you over supply or you over borrow. And the, that is certainly true that these strategic site providers have generally got themselves into problems where they've overly commercially leveraged the sites and then they've had to go through an economic cycle and they've just not been able to refinance within those periods. So we've been very cautious about that and we've used the Homes England financing on a site-by-site basis in order to be able to do that, go further with the front-end heavy lifting. But we've twinned that with a really, really professional focus and cost control approach to the delivery of that infrastructure. And that's a crucial balance. So it's not just about, you know, if anybody could do it, if they had the funding, you've really got to focus in on the product, and the pace of infrastructure delivery and the way in which you then balance your return profile and look at them really from an IRR perspective rather than, as I say, more of an immediate return perspective.
It's just, they just require that sort of thinking. And to that end, I think I would make, you know, coming at this as I often do from the planning perspective, the observation that in the planning world, you don't tend to find that local authorities and indeed government understand that fundamental differential of the viability of these sites and the way in which they need to be done by comparison to a 250 unit site. And that's, that's really underpinning one of my big campaigns at the moment, which is this idea of achieving a super strategic site designation in planning, which would enable us to hang more of the framework that's required for these sites off a definable definition and avoid cross-contamination or the cross-contamination risk that local authorities fear about.
Susan Freeman
So what, what do you think needs to change to sort of help get these super strategic sites off the ground?
James Scott
So I'm reasonably well known for a number of different statements in the planning world, one of which we've been promulgating for some time now, which is flexibility is better than prophecy, and it's so much so that I've even got it on the back of my phone case. And I, I think that is one of the really big recognitions that these sites are different. They are just not the way in which you do smaller scale infill sites. You've got to have that mind-set that things change over time, you know, going back to your interview with David Kemp, you could actually see him saying the same thing with regard to offices and the fact that they have to be flexible. But if you take an office and think of its flexibility, if you then take a strategic site at a scale of 1,000 acres and the fact that that's going to become going forward over 30 years, you've really got to have what we call adaptive certainty rather than prophetic certainty. There's a desire, there's a real desire, and I understand it, of a planner to say, let me nail down all the tent pegs of what this place is going to be at the point of the grant of consent. And then lo and behold, you start unpicking those tent pegs pretty quickly because that just doesn't survive the early engagement and the early structuring, or worse still, you've not had an honest conversation with the planners and said, actually, look, the logic you're deploying doesn't work. If you make me accept that, then I'm going to have to come back in due course and argue it again. Or that a landowner would just simply say, oh God, you know, I'm going to give up. I'm just going to accept it knowing that they might come back. But what that will mean is that there's a broken promise and somebody will remember the promise and somebody will feel cheated. So our approach has always been, look, very honest, very open-eyed, very focused on the delivery of these large-scale strategic sites rather than just the planning of them, and built in a range of mechanisms within our planning consent, which really are enshrined under the caption, flexibility is better than prophecy. You create parameters and principles at the outline level. You then come forward with phases of the development at different scales, maybe bigger, smaller, depending upon the site that you're dealing with. And that brings forward a detail in design coding and review opportunity, both viability review but also transport review and things like this that you can adjust and adapt accordingly as you move through within the overall parameters. And then finally, the reserved matters applications that you bring forward as a master developer for the green, the grey, and the community infrastructure. And then the house builders, our customers, bring forward for the homes. And we found that works really well, but it does take a, a logic shift and part of the difficulty and why we're going on about the super strategic site designation is because that will then give a formal recognition of the fact that these sites are different and have to be treated differently and that this isn't the, the local planning authority or the planning officer being, if you like, led down the garden path to the advantage of a developer. You know, there's got to be a degree of trust in this and, you know, Mark Vlessing was talking about that on your podcast as well, about the fact that actually there's got to be a degree of trust between planners and developers, but particularly so if you're going to be together for 30 years. You know, you can't make a promise at the beginning and then break it a few years later and then lo and behold, expect to have other promises then understood and accepted going forward. So that engagement, that dialogue, that creating the framework for that to happen over an extended period of time is really important.
Susan Freeman
And of course, one of the, one of the difficulties is you are, you know, thinking about 30 years, you know, the political cycle is much, uh, is much shorter than that. And perhaps we should just talk a little bit about we've just had the local elections. There's been a lot of, a lot of change in the makeup of the local councils. I mean, how is that going to affect the relationships that you've clearly built up with the local authorities that you are dealing with?
James Scott
Well, again, you know, if you are on a site for 30 years, you have to be pretty clear eyed that you're going to go through both economic and political cycles, and that therefore you can't just expect your relationships that you forge on day one to survive all the way through that period of time, you've got to keep building and engaging and discussing with the politicians that are in front of you at the time. And you have to be very straight about this, you know, you have to, you engage with the politicians that are in front of you at the time, and you are responsible for the curation and the guiding of the site throughout its lifespan as a master developer. So, you know, we have seen councils, in fact across our portfolio of sites, whereby they would've started predominantly in local authorities that were predominantly blue and now we're seeing a far greater diversity. And at the moment, on the basis of recent local elections, you are seeing an increased preponderance of no overall control. So no single party with a, with a majority, and you are therefore seeing coalitions emerge and it's all about continuing to engage with those local authorities and those members and build the relationships with them, show them as they come into their posts, the sites, explain why that we're doing things the way we're doing things, identify the quality, identify the fact that people actually enjoy living on these sites.
And our experience is that transfer of power means you've got to build new relationships, there might be a little bit of a delay. It doesn't mean that the baby gets thrown out with the bathwater. And, you know, again, the big outcome of these local elections has been the rise of Reform councillors and, and we've got Reform councillors and Reform councils that we're now engaging with. Equally, we've seen some local authorities where they were Lib Dem led, particularly where those Lib Dem majorities have strengthened. So it's not a universal picture by any means and you've just got to engage with what's in front of you and recognise that it will change over time and certainly not play the odds. You know, there is no point in doing that.
Susan Freeman
And you mentioned trust and, you know, one of the things I hear often from, you know, developers is the difficulty of building trust with the local authorities and so I suppose if you have new inexperienced councillors coming in, they may be coming in with thoughts that they can't trust developers and you've got to, you know, you've got to build that relationship all over again.
James Scott
Yeah, you do. I, I go back to our earliest days at U&C when we were really trading on our previous reputations in the market of Chelsfield, Lendlease, um, and what had been done outside of Urban and Civic. And the two big areas that we were working in at that particular time was Huntingdonshire with Alconbury and Rugby with Halton. At that time, we did not have anything to show for what we were seeking to achieve. There was a degree of, you know, we're going to trust us, we're going to do this right, but you've got to trust us. And I take my hat off to the, both the planning officers and the members in those councils at that particular time, you know, there are people there that I'd identify as my planning heroes in local authority planning departments, people like Anna Rose, who headed up the department at Rugby, Steve Ingram and, and Malcolm Sharp at Huntington. And they were prepared to give us a go. They were prepared to say, all right, this is a bit different, these guys are a bit maverick, but let's give this a go. Today, you can take people from different local authorities to any number of our sites and there would be a unifying sense of quality, cohesion, the delivery of infrastructure, the delivery of community, place and space that actually they know from the doorsteps and their postbags is the major complaint of places that have not been brought forward in this manner. And so you can build that relationship on a seeing is believing basis. Now that's the advantage we're in today. It's also the hurdle that people coming into this sector would have if they were starting afresh. And a reputation hard fought is easily lost and we, you know, as we grow and as more people come into the business, Robyn, Nigel, and myself all sit down and do an induction with every new joiner in the business. And it's a point we make, it really is, that actually this is something we are very proud of and continue to fight for on a day-to-day basis.
Susan Freeman
The government has set a target of 1.5 million new homes in this Parliament and, you know, we're now hearing construction costs have doubled, and, you know, house prices certainly in London remain flat. I mean, how is that affecting what you're doing at Urban and Civic?
James Scott
Yeah, it is definitely another period of volatility that we are having to navigate. Completions are materially below the 300,000 a year target, um, average house prices have dropped from their peak of about £395,000 to currently around £380,000. Um, you're seeing, um, the 6 major publicly listed house builders, their market capitalisation is around 50% of what the 2020 peak was. So there are undoubted headwinds and you know, you can see that in gilt rates as well and the prospect that we haven't seen any interest rate reductions. And even, you know, most recently that you're beginning to see the Fed Futures showing that you've got a 1 in 3 chance of interest rates going up in the US by the end of the year, so we don't gainsay this at all, but again, it goes to the fact that this is an economic cycle and these sites have to be built to be able to handle that economic cycle. And there are periods last year, for example, where the house builders were very active and they were buying land parcels from us at record rates. Um, this year it does feel quieter, but at the same time you are seeing the evolution of the single family home build-to-rent model on these large-scale sites outside of the multi-family, more dense London, flatted model that we would've known so well. So, you know, there I can say that, you know, from the trials that we're doing, and we've got a bit U&C pipeline of, um, three sites that are coming forward for build-to-rent at the moment, but we've got a lot of land and we've got a lot of opportunity to deliver more build-to-rent into those markets. New homes rent five times faster than they sell. And there will be this, this cycle. If you go back to the conversation again you had with Mark, which was, you know, a really, a really fascinating conversation from a man that had sort of structured and designed a product to meet a demand. What he said, which struck with me, was that, you know, in essence you've got market housing and you've got social housing, and in between you've got affordable housing. But the definition of affordable housing should be very broad, and it should include things like market rent, things like Pocket Living that, that they're doing, things like affordable rent and all of that will then create a set of tiers that people can deploy themselves to depending upon their need and their resources and their situation at a relevant time. And that's what we are seeing with these sites. They've got an enormous opportunity to create a broad tenure mix of homes and we have to help curate that through the different cycles that we are facing. And sometimes you'll be dialling up market sales, sometimes you'll be dialling up, uh, rental. And that's, that's the opportunity that these sites present. They're not very dense metropolitan sites where the economics have, have basically you've, you've jumped in on the basis of an economic stack, the variance of which destroys the investment hypothesis. Here, you can dial up, dial down as you need to, to move through the cycle. And absorption rates for us are really important and they're, you know, they're probably more important than, you know, the exact pounds per square foot, um, of the selling price because you're wanting to move through and keep the delivery of the site going. When a site stalls, that's not a good feel and you can see those, you know, where the hoardings have gone up around a particular parcel and nothing's happening on it, but people are living either side, that, that doesn't feel right. So we work really hard to curate a delivery that's actually going to be brought forward at various different rates through the lifecycle of a scheme.
Susan Freeman
And which, you know, gets back, you know, the whole point about flexibility and, you know, the amount that things change during the lifecycle of the site. So you are dealing with these large sites and, you know, you can plan and tweak and, you know, change the, you know, the product that you are delivering. But what is the secret to actually creating a community that works, that has vitality rather than, you know, just a group of homes and how do you make that happen?
James Scott
Oh, that's, I mean, that's where the fun happens, to be honest. That's the, you know, the secret sauce, the magic, you know, there are undoubtedly a number of different elements that in our experience, you have to pull together and a master developer is incentivised to be able to pull together. I often explain it like this to those that approach these discussions from a slightly more cynical perspective and say, well, you would say that, wouldn't you? And the answer is, as a master developer, if you are curating a great place, then you are not just creating it and curating it for 250 homes, you're creating it for the duration of maybe 5,000 to 6,000 homes, and you've got an interest in the land underpinning all of those homes over time. So actually there is an economic rationale in creating a great place that's perfectly logical because it assists the leverage land value of the back end of the site. So that's the economic rationale. But actually, as I say, we set out as a business to just, with the ambition of doing things right, we wanted to create great places, you know, there are easier ways to make money in real estate than by doing super strategic sites. You know, that's the health warning that needs to be out there for everybody that's sitting here listening to this and thinking, well, I'll give that a go. You have to be really built for it, but you also have to be really ambitious with regard to the places that you are bringing forward. And I've, I’ve sat and learned so much from watching people like Nigel in meetings where a great example is the school at Halton, the secondary school at Halton. That was a Grade II listed building built for, in 1926, 100 years ago, to be the world's most powerful radio transmitter. And I remember in 2014, '15, he walked into that building for the first time and just looked around it and said, this is going to be the secondary school. And I was going, oh God, just pace yourself, that's not what the planning says, you know, that's a big ask. And he said, no, no, this is going to be the secondary school and the reason this is going to be the secondary school is because if we don't do it, this building will sit there like a white elephant. We just won't be able to find a proper use for it. We need a proper second life. But also there is a grandeur to this building, there is a power to this building that actually, if put into an educational context, would inspire students and as a result, it is worth fighting for. And lo and behold, over the course of the next 4 years, right the way up to when we were delivering it during the pandemic, he navigated and encouraged and cajoled and brought together the various different experts and bodies that underpinned that becoming the most awarded new secondary school in the country, to the point where it won the RIBA Reinvention Award the first time it was presented alongside the Stirling Prize. And, you know, I go into that building on a regular basis. I take, you know, tours around that building. I've gone and spoken to the students in that building, and on every occasion, I can honestly tell you he was spot on with being, it is an uplifting experience, but a Grade II listed conversion, which we had to deliver as a business because there was no way we were going to be able to pay the money over to the local education authority to do it because they wouldn't take the risk, delivered under contract through COVID and opening on time and on budget was an extraordinary feat and one which defines that site as a place and the ambition of the business as a whole in a way that no amount of words could ever replicate.
Susan Freeman
And did the school go in first, or?
James Scott
Uh, the primary school did. So there was a primary school that was delivered before the first home was available to purchase. The secondary school was actually accelerated before it was technically required under the planning consent via a repayable grant that came through, located from DfE because they needed a new secondary school in the area. Again, it goes to the point, Susan, you know, that flexibility is better than prophecy there was a need for an educational delivery within that area. We had both the long-term investment and the ability to deliver it and we got on and did that. And we are now repaying that grant through the Section 106 triggers in the original planning consent so that in essence it's cost neutral for us, but it's place beneficial and regional beneficial for the area as a whole.
Susan Freeman
And what else is there now at Halton?
James Scott
Oh, it's a fantastic site. I would encourage all of your listeners, um, if you are up in Rugby, go and have a look at Halton. Um, you've now got one primary school with two FE fully operational. You've got a nursery, you've got another primary school being built alongside the secondary school to be able to provide an all through year’s academy. You've got this extraordinary secondary school which has a sports hall that we invested in above and beyond the budget in order to make that a community facility because we built it to Sport England requirements rather than DfE requirements. There's a story in that whereby the actual specifications are different, which is a limiting factor for sports halls that are being brought forward just to DfE specs. You've got a number of cafes on site, including the extraordinary Tuning Fork Cafe, which is run by a local family and has been since its inception and it was open before the first house was available to buy. You've got a Co-op, you've got a co-working space, you've got a David Lloyd Centre, um, and you're coming up to 1,500 homes on that site. And it's a fantastic site, which also, and I, this is where I get teased a little bit by my colleagues, but, you know, back in the day, I had a slide when I was taking that through Planning, which was a newt carrying a flagpole which said, you might have a housing crisis, but so do we. And we had to accommodate a median population of great crested newts on site. It was before district-level licencing. And we did and we put that infrastructure in and that extraordinary green infrastructure, which feels like veins of green running through the site, now actually achieves a 28.8% projected biodiversity net gain. Now B&G was not a twinkle in the eye at 2014 consent, but has now come about to be and, you know, we often take groups up there, including Natural England and others, to be able to show what landscape led development can look like. And it, again, is part of the reason we bought a tree nursery last year, because that gave us access to and the ability to stock up on the types of raw material that we as master developers use most frequently, which landscape rather than bricks and mortar.
Susan Freeman
It makes a lot of sense. And since you mentioned biodiversity net gain, how's the adopted beaver?
James Scott
You might need to set that in a little bit of context, Susan. But the, um, I enjoyed doing that talk on B&G, um, about 3, 4 years ago now. And if you ever get invited to talk by Susan, then you should be aware that you may be given an adopted animal as a thank you and it comes in the form of a certificate rather than the actual animal itself. But that certificate is sat proudly alongside, uh, my desk and continues to do so. But biodiversity net gain is one of those areas which I think as a country we should be very proud of that actually we've managed to create an environmental market by virtue of a consistent measuring tool, a demand and a supply. But by no means is it complete, finished and perfect and so we've got to keep working at it and you can see the way in which the government have been doing that at the smaller end of the development spectrum, and I'm actively encouraging them to also think about it from the larger end of the development spectrum. And it'd be remiss of me not to take this opportunity to say one of the reasons I'm keen to do that is because at the moment, the primary legislation for biodiversity net gain creates a 30 year monitoring and management regime for any on-site biodiversity net gain. But the way it's drafted is that that 30 year period only kicks in at the substantial completion of the development. Now, if you are delivering a development that's going to take 25 to 30 years to substantially complete, that means that the 30 year management regime will only kick in at the completion of that development, meaning that you will be managing the biodiversity net gain on site for 25 years before the 30 year period kicks in and that is not intended. It is a challenge in the drafting, and it's not been what's replicated in the National Infrastructure Project approach to B&G. So discussions are ongoing on that, but it is definitely something to watch out for if you are delivering a larger scale scheme that you've got to factor in that 30 year period starting upon the substantial completion currently.
Susan Freeman
And do you think that biodiversity net gain is actually changing developer behaviour, or is it just creating another level of compliance at the moment?
James Scott
Well, I would put it this way. Go back to my 2014 example. What were we talking about at Halton back then? We were talking about habitat regulation because that was what was in people's minds at that time. Biodiversity net gain is now in people's minds, and the idea that you are going to be leaving a place at the completion of the development in a better state of biodiversity than when you found it is not something I think anybody would say is inherently wrong. It's, you know, there is an issue with brownfield sites and open mosaic habitats, but that's being addressed to a degree. But I don't think any of us in the development sector would say, yeah, we want to destroy biodiversity by virtue of what we are bringing forward. So it's given us a mechanism and a focus by which to be able to address that and I think that's a positive and I think we should recognise the fact that actually the rest of the world is looking at the way in which we have done this in this country and created a regulated environmental market. There are challenges and there are inefficiencies, and that's true of any system. But I don't think personally that I would regard this as a bad thing to have done. I would actively encourage, you know, people to look at it as an opportunity to leave your footprint of your development in a better state than when you found it. You focus heavily on the bricks and mortar and the place making that that creates. Why not the nature that surrounds it? But it does rely upon others as well, including local authorities and county councils as currently standing to then start being more accommodating of biodiversity net gain too, rather than just regard the management of those as an operational headache to deal with subsequently. So it, it's something we've all got to address, but I, I welcome it.
Susan Freeman
So just in practical terms, you will master plan a site, you will then bring in the house builders to build the houses on that site rather than build them yourselves?
James Scott
Yeah, in the main, um, that's absolutely right. So put simply, our model is you acquire the land either directly or synthetically um, and by that I mean, you control the site, um, you have an interest in the whole site. You get an outline planning, flexible outline planning across the entire site and then you get on with the delivery of a phase of that site. As the master developer, you will be putting in the green, the grey, and the community infrastructure to create the framework into which our customers, who are the house builders, the SME house builders, the national house builders, the build-to-rent investors, the affordable housing providers, will then drop in their product, which is the houses that they are bringing forward. Now, we don't let them just drop in anything, but at the same time, we don't expect them to fundamentally re-design their product in order to deliver on our sites. So there's a balance there, right? I often liken it to buying a car. You don't go into a car showroom and say, here's a picture of a car I drew, I'd like you to sell me that car. You actually go into the car showroom and say, show me the different ranges of houses, the different prices and everything else. And then you say, okay, well look, we do that with that modification and the like. That's the sort of discussion that we have with our housebuilding customers and we push quality, there's no doubt about it. And we also sign off reserved matters applications before they go in, which is a big help for local authorities as well as understanding that we are invested in that quality for the same reasons I was discussing earlier. And therefore we are aligned with them as local authorities in trying to create great places. The house builders deliver the homes, they then sell them to the homeowners. We will be doing more of the direct delivery of the build-to-rent housing ourselves. So we will be contracting with different suppliers, MMC, other house builders, contractors in order to be able to deliver the build-to-rent housing. And then also you've got the commercial buildings on a number of sites as well, which are then done in different deals. But ultimately the master developer is the overall overseer of the site and they are managing all of those different elements and also ensuring fairness between those customers. Because I think one of the problems that existed on portfolio sites before we really adopted the sort of model we're adopting is that people will be sold parcel of land and then just allowed to get on with it. And then house builders being house builders would've been enjoyably competitive with each other and a bit naughty about the way in which they might be putting their, um, you know, their diggers or their stack of materials or their flags and, you know, trying to out flag each other. All of that is very, very carefully regulated on our sites to maintain parity across the board and that's, you know, actually really welcomed by our house builders and extends down into health and safety consortium meetings and sustainability discussions, um, and community engagement. So you often see our house builders getting involved with community activities that the U&C team are curating, but which they are then joining in with and feeling that they're involved in that community creation.
Susan Freeman
And you mentioned MMC and one of the things I'm wondering about with these like very large sites, are there enough people with the construction skills that you need to bring in to build the homes and other units? Because we keep hearing that they're just, you know, we don't have the construction skills so is it going to have to be offsite construction?
James Scott
Yeah, I mean, go back to a couple of years with Homes England's massive enthusiasm for promoting different types of modern methods of construction contractors and you saw some of the house builders setting up their own factories and the like. There was definitely a sort of a rush of blood to the head with that and it's not all of them have survived, but it doesn't mean that the fundamental premise is wrong and that at a certain point in time you will see greater diversity of supply coming forward in the market. And you're actually beginning to see what we would've defined very, you know, as again, modern methods of construction is a bit of a wild west phrase as I like to call it. It's like, you know, it's steel, it's wood, it's offsite construction, it's panelised, you name it there's, you know, there's everybody saying it's modern methods of construction, but you are seeing house builders incorporating. I mean, Barrett have a very extensive, uh, MMC division now where they're looking at timber frame processes, and they're also refining what they can do on-site and off-site as well and that will, I'm sure, continue. So I think it will, it's something that hasn't quite caught fire yet. The individual independent businesses struggle to get the demand that they needed in order to scale. Whether that will happen at a certain point remains to be seen, but the house builders are starting to take those learnings and those efficiencies within and into their processes, and we are seeing that.
Susan Freeman
Yes, it'll be interesting to see how things move forward on that front. So, as we draw to a close, I just wondered what sort of most excites you and what sort of change you expect to see just looking, you know, over the next sort of 5 to 10 years at Urban and Civic?
James Scott
Oh, I love that question, I love that question. I mean, so the paper that I wrote for the Oxford Planning Conference last year starts with a quote, which is that the only thing you can be certain of is change. And I think that's the key lesson that you've got to be prepared for in this market at the moment and in this particular state of technological evolution that we are in. I am insatiably curious as an individual. I just love learning about the history of a site or the way in which we might be doing things. You know, I'm fascinated by politics and the way in which we're going to have to manage a new political landscape and navigate a new political landscape. It is extraordinary to me that actually the last prime minister to serve a full parliamentary term was David Cameron in 2015. Just think about that for a minute, a full parliamentary term. And, you know, before that, Thatcher did two, Blair did two, and I think Harold Wilson did one. So I mean, you've got to be prepped for all of this. Matthew Pennycook is our fourth longest serving housing minister at the moment. And he is only outpaced by Chris Pincher and Brandon Lewis. If he carries on until July, he'll overtake them. And then you've got Grant Shapps as the longest serving and if he carries on until the end of October, he'll get past them. So politics is going to be changing and we're going to be learning and evolving with all of that. But we have had, at least within the housing minister, a period of stability, and that's shown in the changes to the system. It would be impossible to answer your question without talking about AI, um, and the role of AI in both our business and also in the industry as a whole. I am proudly the new head of Urban and Civic's technology group. And again, you know, at the grand old age of 51, I'm delighted to say that I'm enjoying learning about the mechanics there. And I can see the opportunity. I can also see the challenges. And a lot of that will rest upon actual data management and businesses that need to get themselves match fit with their data management in order to maximise the opportunity that AI will bring. Technological innovations around housing and sustainability, you know, are ever-present and, and we will be looking at those as we bring forward the next phases of our sites so that they don't just replicate what's gone before. And you can see that in terms of the adoption of the building regulations and the way in which we are moving from gas to air source heat pumps at the moment and different people's views on those. But I think people will continue to want great places to live. There's a really wonderful book called Places for the People by a chap called Eric Klinenberg, and it's worth a read. And what he talks about is that society requires physical place to be able to operate effectively. You can't have strong societies without well-designed places that facilitate the aggregation and meeting of people. And I think that has underpinned a lot of the way in which U&C has approached the last 16 years. And I think it will continue to be a defining feature of what we seek to do over the next 5 years. And it will be a differentiator for these places that are coming forward and I hope they, you know, the communities continue to grow in strength and collegiality. And there are some lovely stories and examples that come from across our portfolio of sites, which just warm the heart on a daily basis and actually make you think, this is worth doing, this is worth fighting for, this is worth navigating all of those different challenges in order to achieve. So, yeah, that's where I would put it.
Susan Freeman
Well, that's brilliant. I think that encapsulates it all. I'm just sad we've got through this podcast without a master developer rap, but…
James Scott
My agent is very restrictive on when I'm able to do that now, Susan.
Susan Freeman
Okay.
James Scott
But it is available to all good viewers of LinkedIn if they ever want to go have a look at it.
Susan Freeman
Absolutely. Uh, James, thank you so much, that was really, really, really, really interesting and I will, um, have to come and visit the, um, Halton site in Rugby.
James Scott
I'd love to show you around, and, uh, it's definitely worth doing, um, and then taking the learnings back from things like that to multiple other sites as they are thought about. The art of the possible and dealing with that initial negative reaction that you might have to development that it can be good and it can be done well and you've just got to go about doing it in the right way, with the right people, with the right ethos.
Susan Freeman
Brilliant. Thank you very much.
James Scott
Thank you, Susan.
Susan Freeman
Thank you so much, James, for some fascinating insights into the Urban and Civic journey and for talking to us about what goes into creating large-scale, successful, thriving communities.
So that's it for now. I hope you enjoyed today's conversation. Please join us for the next PropertyShe podcast interview coming soon.
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