Lower Tier Residential Development
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
To advise members of progress being made in bringing forward the Lower Tier site at Bexhill Road for residential development and to establish a budget for pre-development work ultimately to be covered by Homes England.
The Assistant Director, Housing & Built Environment presented a report to advise members of progress being made in bringing forward the Lower Tier site at Bexhill Road for residential development; details of Homes England’s Grant Funding Agreement; and to establish a budget to cover the Council’s costs in advance of any grant monies due from Homes England.
The site is currently identified for 192 homes, of which 40% would be Affordable Housing. At this stage, the Affordable Housing has been identified as a mix of Shared Ownership and Affordable Rent, which is rent that is up to 80% of open market rental value.
The Council will be solely responsible for taking forward the initial stages of the development until the site is fully remediated, planning is obtained and the land value has been maximised. The Council will then enter into a JV agreement with a Registered Provider (RP) for the housing development phase. This approach is in part due to the need to provide Homes England with the confidence that the Council, who has no recent track record of residential development, has the necessary expertise to take forward a site of the size and complexity presented by the Lower Tier.
The Council is receiving legal advice on how best to contract with a RP partner and is exploring options for entering into a contract following a Voluntary Transparency Notice (VEAT) being published.
The Assistant Director noted that any flood mitigation measures at the site could improve circumstances for existing residents as well as the proposed development.
Councillors discussed the report and asked questions of the Assistant Director.
Councillor Batsford proposed approval of the recommendations of the report, seconded by Councillor Forward.
RESOLVED (6 for, 2 against):
1. That the engagement of Harmony Homes for professional support and project co-ordination prior to planning permission being granted is agreed.
2. That the engagement of Ambiental Technical Solutions for flood remediation modelling and works is agreed.
3. That the use of the Bloom Procurement Framework to engage professional services including architectural services up to the granting of planning permission is agreed.
4. That the Council agree expenditure of up to £6.9million capital (this expenditure to be funded by Homes England) and £90,000 revenue (interest) to fund development costs associated with the delivery of the Lower Tier residential development.
5. That a further report be produced for Cabinet and Council agreeing a revised Capital Programme for 2019/20 and beyond. This to include the potential development funding for the Lower Tier site.
Reasons for the decision:
The Council intends to develop circa 190 new homes on part of the former recreation ground at Bexhill Road. Extensive remediation work is required to bring the site up to a marketable value, and the scheme would not be viable without external funding.
Through the Homes England Local Authority Accelerated Construction (LAAC) fund, the Council has secured up to £6.9m to bring the scheme forward. This funding must be drawn down by the end of March 2021.
The resulting homes will make a significant contribution to meeting local housing need across a range of tenures and will include for 40% affordable housing. In addition, an opportunity exists to purchase properties through the Council’s Housing Company for private letting, creating an ongoing income stream for the Council.
The terms of the funding agreement with Homes England require that claims against the grant funding up to the value of £6.9m are paid quarterly in arrears. Therefore, it will be necessary that payments are made in advance of receiving grant funding.
The funding of the development following the initial grant funding will need to be separately agreed as part of the Council’s revised Capital Programme due to be considered in September 2019.
Report author: Susan Hanson, Simon Hubbard, Andrew Palmer
Publication date: 08/08/2019
Date of decision: 08/07/2019
Decided at meeting: 08/07/2019 - Cabinet