Agenda item

Recommendation

Executive is recommended to authorise the Council to enter into a Grant Agreement with Brierley Homes for £2,600,000 to deliver the Broomfield’s Farm Eco-Homes Development subject to satisfying Subsidy Control Regulations.

Considered – A report of the Corporate Director for Community Development advising on changes to the Whitby Town Deal Project in relation to the Broomfield’s Farm net zero village, now renamed Broomfield’s Farm Eco-Homes Development.  The report also sought approval for entering into a grant agreement with Brierley Homes in respect of the Whitby Towns Fund grant of £2.6m to deliver the Broomfield’s Farm Eco-Homes Development.

The Executive Member for Open to Business, Councillor Mark Crane, introduced the report and reported that the project would see 49 affordable homes provided in Whitby.  The original developer had proposed 60 homes, however that developer had pulled out and officers had worked to enable Brierley Homes to take over the project with the number of homes reduced to 49 in line with pre-planning advice.  Whitby residents were supportive of the scheme.

Councillor Simon Myers advised that the homes would use 90% less carbon than the average home and be cheaper to run. 

Resolved (unanimously)

That the Council enter into a Grant Agreement with Brierley Homes for £2,600,000 to deliver the Broomfield’s Farm Eco-Homes Development subject to satisfying Subsidy Control Regulations.

Reasons for decision

To allow the successful delivery of 49 100% affordable homes in Whitby through the Broomfield’s Farm Eco-Homes Development project as part of the Whitby Town Deal programme and secure the £2.6m investment from the Towns Fund.

Alternative options considered

The Council explored a few options for the delivery of the Broomfield’s Farm project including:

Competitively procured contract

1.     This option would see the Council undertake a tender exercise to the open market to competitively procure a Housing Developer and Registered Provider (RP) partnership to deliver the project.

2.     Because the total value of the procurement would have been above WTO thresholds, the Council would be required to follow the ‘above threshold process’ set out in the Procurement and Contract Procedure Rules within the Constitution. This process would require a minimum of 6 months to complete.

3.     The housing developer and registered provider would receive the £2.6m grant from the Towns Fund via the Council as accountable body through a third party grant agreement. The housing developer or registered provider would be responsible for purchasing the land from Keyland.

4.     Until the tenders had been returned, the Council would not know what proposals the housing developer or RP would put forward for the provision of any interventions within the homes to achieve net zero standards.

5.     Due to the length of time to go through a procurement process, which may yield zero returns, this option would not meet Keyland’s requirements for the land sale to complete by the 31st March 2025.

Partner delivery utilising a local registered provider

1.     This option would see the Council utilise the £2.6m grant to purchase the land from Keyland and act as the developer and landowner. The Council would procure a Registered Provider to both build and manage the homes on completion.

2.     The Council would be the project sponsor and responsible for ensuring the project was delivered and the outputs for MHCLG met.

3.     Again, the Council would have to go through a lengthy procurement process to appoint a Registered Provider which may yield zero returns. Officers held initial conversations with Sanctuary Housing (the previously involved RP) and Together Group, both providers indicated concerns and believed the current timescales rendered it undeliverable due to the procurement process and uncertainties with the planning process. 

4.     There would also be an additional Council approval process to go through in order to secure authority to purchase the land.

5.     Both these processes would take several months to complete and therefore would be not meet Keyland’s timescale of completing the land purchase by 31 March 2025.

6.     Because the Council would be the landowner and developer, it would maintain a high level of control over the project and its outputs but it would require a higher amount of internal resources to deliver and keeps most of the risk of the project and development with the Council.

Purchase of the land and sell onto a third party for delivery

1.     This option would see the Council utilise the £2.6m Towns Fund grant, subject to approval from MHCLG to purchase the land from Keyland, currently valued at £1,815,340 and then market the land itself for sale to a developer. Council approval would be required in order to undertake a land purchase.

2.     There is no guarantee that the Council would be able to sell on the land to a developer leaving it at considerable financial risk in the event MHCLG clawed back the funding due to non-delivery of the project.

3.     The Council would also not be able to guarantee the provision of a 100% low carbon affordable homes development on the site by 31^st March 2029 because it would lose any control over the project delivery. 

None of the above options would have given the Council, or Government, assurance that a low carbon 100% affordable housing scheme would have been delivered on the site within the timescales of the Towns Fund programme and therefore were discounted as viable options to secure delivery of the site.