Through partnership, lobbying and engagement, the property industry has responded to our Building a Better Britain campaign with vigour. When we launched it in the wake of last summer’s riots, our call for support from the industry was met with hundreds of offers.
Our first step was to form a Regeneration Commission and we fed the ides of those respondents into the commission’s work. This spring, the commission’s work was endorsed by government and behind-the-scenes work continues.
But property’s response to the new economic environment and the social fallout runs deeper. For some, it has prompted profound changes.
Take former Barclays corporate real estate director and senior adviser Nick Salisbury. Since the turn of the year, he has reinvented what he does.
Going plural has been a well-trodden career path for many senior industry figures. But, as Salisbury demonstrates, doing so in a socially minded context is now an option.
“Having done 33 years with Barclays, rather than just stick it out to the end, I thought actually it’s better to go on and do something different,” he says.
Initially, Salisbury feared his skill set was limited but soon realised that in the third sector there is demand for “commercial nous and for experience”.
In a few short months he has built up a portfolio that includes a two-days-a-week consultancy with Social Finance – a leading social investment intermediary in the UK. He is an independent member of the London Housing Board, part of the GLA. And in July Salisbury joins the board of Home Group, one of the largest national housing associations.
In many ways, it’s a continuation, not a change of direction. In each role, he draws on his banking experience. Indeed, Salisbury sees lessons there that could be applied more widely.
“Over the next few years, capital advocacy and regulation are going to make life very difficult for banks. In the longer term, finance should come not [just] from banks, but from institutions and I think we will see more philanthropic equity coming in – people do want us to do something which has more of a social impact with their money.”
The recent rows triggered by government plans to change the taxation of charitable donations by wealthy individuals only highlights the complications around the process. “It hasn’t necessarily been easy [to finance social institutions]. The mechanisms haven’t necessarily been in place other than just to give it away.”
Opportunities in housing
Salisbury sees opportunities to change that. “I think in the housing market there’s an opportunity.” And he points to work being undertaken by Social Finance which is looking to put together a social impact bond for Peterborough Prison. “It is designed to reduce re-offending, but it’s very much a payment-by-results structure coming from government. It will be interesting to see how you can extend that into the social housing market.”
Salisbury’s first role, three decades ago, was with Barclays Merchant Bank, which then became part of BZW. “And it’s largely been asset finance, property-related, cash flow-related, since. I was doing property and then PFI started to be talked about, so we began looking at PFI hospitals. That developed into a PFI team. We did the first schools bundle, we did the first hospital in Scotland and quite a few other firsts.”
After that, Salisbury moved into pure property, developing a structured finance team.
But it was after a restructure, coupled with the property crash, that prompted him to think about a change. “I’d felt when I was financing PFI – and, to a certain extent, residential finance – that there was something substantial coming out of it. It was a worthwhile thing to do, in particular if you’re providing hospitals or schools – that was a good end result. But I didn’t get the same satisfaction from refinancing an office block that had been financed several times in the past and would be refinanced again. I guess it was at a time when financing seemed to be an end in itself rather having anything to do with the real economy.”
He rises to defend a common political punchbag. “Obviously PFI has taken a lot of stick and, by many standards, it has proved to be an expensive alternative. But actually there’s an awful lot of infrastructure out there that wouldn’t be there if it hadn’t been for PFI. Comparisons are quite hard because government hasn’t actually been very good at maintaining things, whereas a PFI hospital will stay in the same condition for 25 years. We all see around us the evidence of hospitals that have been procured under the traditional route just falling apart. There’s still an argument to be made that PFI has proved to be a good thing for the country.”
A churchgoer, Salisbury talks a lot about moral capitalism. He can also see why some have drawn parallels between banking excess and the riots. “It’s interesting that Barclays came from Quaker beginnings and those Quaker business leaders were very attentive to their workers and built facilities, housing and all sorts of things for them. They were seen to be very much as concerned about their own good as they were about the good of the general community.
“At the moment, my concern is that that’s rather being forgotten and people are getting so focused on capital adequacy constraints, regulation, sticking to the rule book and delivering the best return on capital that they’re perhaps forgetting about some of the wider issues.”
Lessons can be learned, he insists, and his PFI experience tells him that partnership is the most constructive way of delivering regeneration.
“The PFI does cast a long shadow, but actually in terms of regeneration it’s where things have got to be,” he says. “It’s got to be that the public and private sector have to work together. The private sector has got the cash and the public sector may have the assets. There needs to be that co-operation. I think it’s the only way that regeneration is going to work.”
