Decision details

RESOLVED (unanimously) that the Cabinet agreed:

1.1  The eight sites identified in Appendix 1 are progressed as 100% affordable housing sites, including 117 Newbridge Hill, and in accordance with the delivery route detailed in the report;

1.2  Fully approve £413K from Provisional Affordable Housing Budget in 2021/22 to immediately progress scheme development work on five sites with funding coming from earmarked Right to Buy Receipts

1.3  The balance of funding of £11.73m identified in Appendix 2, will be incorporated into 2022/23 budget setting with approval subject to a full business case and confirmation of grant awards.

1.4  Individual scheme business cases will be authorised through the existing capital processes and in consultation with the relevant Cabinet Member.

The administration set a manifesto commitment to deliver Council Housing in addition to the social housing currently being delivered through established enabling activities.  A programme to directly deliver around 50 units of accommodation over the next 1-2 years, including both supported housing and shared-ownership housing, is currently in progress. 

A decision is now required on the milestone to extend this programme to deliver a further tranche of up to 58 affordable Council Houses by utilising eight sites identified in this report.  These homes would all be social rented homes. 

1.1  As an alternative to direct delivery a joint venture/partnership approach with a Registered Provider was also considered.  There are many models for joint ventures and partnerships.  However, given the Council’s strategic housing objectives and its existing (and potentially future) sites it is more likely that some form of contractual Strategic Development Partnership would be the most appropriate type of joint venture/partnership approach. 

1.2  Developing the structure of partnership would require significant up-front procurement and legal work.  However, the premise of similar such agreements is typically that the Council provides the land, and the partner funds, develops, owns and manages the homes.  In return the Council receives 100% nomination rights.  The partner would need to be an RP to meet HE grant funding and housing management requirements.  An open procurement approach would demonstrate the value of the Council’s offer to RP partners and whether all the Council’s obligations could be met. 

1.3  The benefits of the Joint Venture/Partnership Approach can include:

o  De-risks the development programme both at development and housing management stages, particularly on large sites/programmes.

o  Provides access to greater capacity and breath of development and housing management competences and therefore the ability to operate at greater scale should future land opportunities arise.

o  Removes any futures issues concerning opening an HRA.

o  The Right to Acquire legislation (max of £11k discount), as applied to RP tenants, is less generous than Right to Buy, potentially reducing the likelihood of lost units.

1.4  The disadvantages of the Joint Venture/Partnership Approach are broadly the opposite of the benefits of the direct delivery approach, though the ones of particular note include:

o  Long lead time for legal and procurement process, generally only cost effective when considering significant number of homes (typically 200+)

o  Even if the Council secured 100% nomination rights the RP would have the final say in allocations.  As such this option does not enhance the Council’s operational resilience when trying to house challenging clients.

o  The procurement and contracting of a suitable partner is unlikely to be quick and would take significant time to formalise.

o  Our RP status could be at risk, given that this was based on an ambition to deliver our own social housing stock. 

1.5  Whilst both delivery routes are practical and feasible the direct delivery route has been recommended on these eight sites as this is more aligned to the corporate objectives, notably: providing the Council with full control over the design & build of units; enhanced operational resilience and quick to mobilise and deliver.