The community dividend: how did it work?

New homes helped to finance the community dividend

For some, the demolition of homes on the Brackenhall estate was a traumatic experience, involving the loss of neighbours and memories. For others, it was a chance for a new start.


Essential to that new start in Deighton and Brackenhall was a pot of money known as the community dividend. Instead of putting the money from the land deal with Southdale Homes back into Kirklees Council’s coffers, the value of the land would be earmarked for the local community. On top of that, if the sales values on each phase of the development were higher than forecast, half the additional profits would go into the community pot.


When the original deal was done in 2002, it was expected that the community dividend would amount to £4m over the lifetime of the development. In the end, because the development was mainly done at a time of rising property prices, DBI gained nearly twice that.


Chris Harris, chairman and former managing director of Southdale Homes, explains, ‘We did the development in four stages and every time we went to acquire a piece of land from the council the valuations were based on the prices we’d achieved in the previous phase, so over time the price of the land was staircasing upwards. 


‘If we did better than the sales forecast the council gained 50% and we gained 50% on an “overage agreement”, so there was an incentive for all parties to do the best we could in terms of sales value.’


At the start there was no guarantee the new homes would sell. Southdale insisted on selling the first homes, built near the Asda superstore at the entrance to the site, at low prices - only £70,000 each. That created the momentum for the rest of the scheme.


The community dividend was a novel idea at the time, but was approved by central government ‘on the understanding that the focus is firmly on providing the community the opportunity to become involved in the regeneration of their communities and neighbourhoods’. Guidelines were drawn up by Kirklees Council to ensure the dividend was matched by funds from other sources.


The dividend helped fund activities such as Deighton Carnival and the creation of the Chestnut Centre in Sheepridge. But DBI and the council recognised it would never be enough to change the area on its own.


As DBI chief officer Andi Briggs, says: ‘We haven’t just sat on that pot, we’ve used it to bring in other investment into the neighbourhood. We’ve been very clear it should always be enhancing mainstream provision, not replacing it.’