The University of Oxford has chosen a “private sector partner” to help it build 2,000 homes, addressing a housing shortage for staff and postgraduates in one of the UK’s least affordable cities.
In an email to staff on the plans, seen by?Times Higher Education, the university says that its “global competitors” have tackled housing problems in their local areas “and now is the time to do something about it in Oxford”.
Oxford will follow the University of Cambridge – which is building 5,000 homes, mainly for staff and postgraduates, at its North West Cambridge site – into large-scale housing development.
Both universities have concerns that the infamously constrained and expensive housing markets in Cambridge and Oxford – which?some blame on the universities?– are hindering their ability to attract staff and postgraduate students in a global recruitment race. Oxford wants to use its significant land holdings around the city to take action.
However, while Cambridge is financing its scheme through its ?350 million bond borrowing, Oxford has told staff that it wants to fund its plans without “significant calls” on its own ?750 million bond, much of which has been allocated to other projects.
Within Oxford, there are sceptics who see the project as akin to a private finance initiative deal, in which commercial operators complete and manage public building projects in return for long-term payments, and they have issued warnings about the potential scale of profit for the partner and the risks to the university.
However, it is understood that the university rejects the PFI analogy, as it will control rent setting. The university would take back management of the buildings from the private partner after 60 years in the deal, it is thought.
In an email sent to Oxford staff, vice-chancellor Louise Richardson says that consultation on the university’s strategic plan found “one of the most frequently raised issues was the scarcity and unaffordability of housing for our staff and students”.
The email contains a message from David Prout, pro vice-chancellor (planning and resources) and former director general of the High Speed 2 rail project, who says that the strategic plan “prioritised the provision of at least 1,000 subsidised homes for university and college staff and at least another 1,000 units of affordable graduate accommodation”.
Cherwell District Council has already “proposed to allocate” university-owned land north of Oxford for housing and the university is “currently waiting for the government inspector to issue his report” on that proposal, while work has also been conducted to identify suitable land inside the city, Mr Prout says.
The university has been looking for “an appropriate private sector partner to help us deliver the new accommodation”, he continues. “The basic principle is that the accommodation delivers an income stream in the form of rents paid by residents, and that this can be used to borrow funding over a long period of time to cover build and maintenance costs.”
The university has identified “a single potential partner who met our requirements”, Mr Prout says. The university hopes “to be able to put a proposal to council for agreement before the summer”, he adds of the deal.
At the core of the proposed agreement “is that the university will retain the freehold of the vast majority of our land” and “that our potential partner will take the build and financing risk”, Mr Prout says.
Oxford declined to name the private partner.
