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.’

A drastic proposal

Bleak outlook: the estate before demolition

With the action plan in place, DBI faced its biggest challenge: how to redevelop the area’s housing stock. Meeting the challenge would lead to a massive and controversial programme of demolition.

The Brackenhall estate had a huge over-supply of two-bedroom houses which were even more difficult to let than the rest. In addition, the council wanted to create a greater mix of tenures, with more homes for private ownership. At the end of the 1990s, only 17 homes had been bought by their tenants, a figure well below the national average.

In 1999, a development brief was produced and potential development partners were invited to submit proposals for a partnership arrangement to ‘remodel areas of void housing, develop land sites, carry out environmental improvements and provide some of the community facilities’.

Eventually, Kirklees council struck a deal with developer Southdale Homes, whereby much of the Brackenhall estate would be demolished and the land used to build new private housing. The land would be transferred to Southdale and as homes were sold, a portion of the profits would be kept to reinvest in the local area - a ‘community dividend’ that would eventually be worth £8m.

Once again local people were asked for their views. In October 2000, Kirklees Housing Services carried out a house to house survey of the Brackenhall estate. They interviewed 393 residents out of a possible 500, asking them how they felt about the possible demolition of some of the houses.

The result was overwhelmingly in favour of some level of demolition. Only 7 per cent thought things should stay as they were, while 48 per cent thought at least half the estate should be knocked down.

Southdale Homes, on the other hand, wanted something more radical. Their original proposal was to demolish the entire estate, replacing it with a mix of private homes and commercial premises. The eventual agreement, signed in December 2001, was to demolish 600 homes, beginning with those nearest the upmarket area of Fixby on the other side of Bradford Road. The idea, Southdale said, was to ‘borrow value’ from more affluent areas to attract private buyers.

But even at this stage it was clear that a substantial number of local residents wanted to stay put. So Southdale dropped its plans for commercial premises, leaving an enclave of 180 council homes in the new development.

This wasn’t enough for the scheme’s opponents. ‘People said we should knock some houses down but they didn’t like it when it was their house,’ recalls Peter Beck, neighbourhood housing regeneration manager.