Building questions the former Partnerships for Schools chief on Cornerstone’s upcoming work

Former Partnerships for Schools chief executive Tim Byles’ new venture, Cornerstone, is planning to release a £1bn pipeline of development work over the next three years. But how will the venture – which will buy public sector assets and develop them for community use – work in practice? And, following Building’s revelation that Morgan Sindall, Bougyues and Willmott Dixon are set to become investors in the firm, what opportunities are there for other construction firms to work with the company?

Here,’s Q and A with Tim Byles gives you the lowdown…

What kind of projects will Cornerstone develop?

“We started thinking primarily about converting surplus local authority assets for community-related facilities, such as schools or residential schemes. We are also working with health trusts that are rationalising their estates to convert facilities into these kinds of community facilities, maybe also involving some primary care. And the third strand we are looking at is care for older people, where local authorities need to procure bed spaces. Some could be specialist accommodation, and we’re close to concluding a deal for dementia centres.”

How will construction work be procured?

“We will have a close relationship with the firms we appoint as investor partners, and will expect them to be involved in a significant amount of our contracting work. It is likely we will run mini competitions for some projects, involving these firms and also some others – but on large schemes we expect to be working very closely with our investors. But we will also seek to use existing local frameworks and arrangements where appropriate, for example LEPs. We’ve got good relationships across the construction world with both larger and smaller companies, and we are interested in getting the balance right.”

How will Cornerstone procure architectural and consultancy services?

“We have relationships already with designers and cost consultants that have worked very well, but we will be working with others too. We will procure directly, not through our contractors.”

Will Cornerstone’s projects have to go through OJEU?

“Cornerstone will not have to go through OJEU to buy assets from local authorities as pure land transactions don’t have to go through OJEU – so this will speed projects up from the start. When we procure construction services, if we own the site outright we won’t have to go through OJEU as we’re a private company. If we are in JV with a local authority we are working on the assumption we would use OJEU, but would try to use existing procurement routes already established through that process.”

Will Cornerstone become involved in operating the schemes it develops?

“In relation to care for older people, sometimes the local authorities will operate the centres themselves, and sometimes Cornerstone could provide that service. We do see Cornerstone moving in the direction of providing services as well as assets, and it looks like that will happen more quickly than we anticipated.”

How will Cornerstone make its money?

“Our return comes as a result of the development. In some cases we will sell the scheme, and in some cases, for example some of the care schemes, there could be a lease. So for the period of the lease we’ll be paying for finance, and will cover our costs.”

What will happen to Cornerstone’s profits?

“Cornerstone operates as a mutual and there will be a return for investors and also for the third sector, through charities like the Transformation Trust.”

How big a part will education schemes play in Cornerstone’s work?

“We are working closely with the New Schools Network and Department for Education to identify site solutions where there are good proposals coming forward. This is at quite an early stage, but we are also working with academy providers, including looking at their surplus land for free schools.”

How far will Cornerstone adopt standardised design solutions?

“I think there are a number of opportunities in relation to a more standardised use of components. There are some excellent examples of standardised solutions around, and I think with offsite construction they can be an important ingredient in some cases. But I do believe it’s not appropriate to drop a square box in a historic town centre, and I do believe, for new build in particular, a lot of thought has to be given to the context.”

What would you say to those who may question whether your background working as a government delivery agent gives you an unfair advantage in the private sector areas Cornerstone is targeting?

“Civil servants are bound by rules about how quickly they can work in the private sector after leaving their roles, but I wasn’t a civil servant at Partnerships for Schools – PFS is a private company set up by government as a delivery agent. We weren’t part of the policy side, so the regulations don’t apply. Our access to sites is entirely local authority-led, and there is no question of us having special access. We are a private sector company but we have expertise that has come through the public sector, and we want to use that knowledge to help communities deliver the services they need.”