Issue - meetings

C Howard presented a paper which requested approval to enter into contract for three BHF (Brownfield Housing Fund) projects, subject to the conditions set out in the assurance summaries.  

The paper also requested the Board to recommend one BHF project to the MCA Board for full approval.  Two Outline Business Cases were recommended to continue developing their projects for a future decision on funding.  Finally, the paper recommended changes for one approved scheme. 

Full details of all the projects, key risks identified and any specific conditions which were recommended to be met prior to contracting/grant drawdown were included within the papers and the Board considered each project separately.

G Smith referred to the ‘Phase 4 Park Hill, Sheffield’ project.  She queried if the developers profit margin needed to be adjusted in light of current market conditions. 

C Howard replied that the project had been assessed on a funding gap basis and therefore, to make this scheme viable, it included a level of developer profit.  The proposed contract clauses include a break once further design and feasibility work is carried out, and it is at this point that better cost certainty will allow a further consideration of the viability gap. Here a final check can be carried out on the level of developer profit to check it is in line with existing market conditions. 

Councillor Wood asked if checks are made on the country of origin of schemes’ finances.

M Swales replied that, previously, this had not been part of the MCA’s due diligence work.  He agreed to discuss further with colleagues after today’s meeting.  ACTION: M Swales

G Smith highlighted that several projects contained a risk with regards to cost increases.  She reported that, over the last 12 months, the building industry had seen an increase of 8% in build costs.  Current forecasts had suggested that there could potentially be an additional 10% cost increase on top of the 8% increase over the course of the next 12 months. 

In relation to future projects, G Smith asked if the Board could examine the level of contingency contained in applications. 

M Swales replied that the MCA were witnessing cost increases for all infrastructure projects.  In addition, MCA colleagues were currently considering submitting a policy paper to a future MCA Board to outline the impact this was having on all programmes. 

RESOLVED – That the Board approve:

i)               Full approval of “Doncaster Small Sites” project for £0.89m Brownfield Housing Funding to DMBC (Doncaster Metropolitan Borough Council) subject to the conditions set out in the Assurance Summary attached at Appendix A.

ii)              Full approval of “Former Nightingale School” project for £1.57m Brownfield Housing Funding to DMBC (Doncaster Metropolitan Borough Council) subject to the conditions set out in the Assurance Summary attached at Appendix B.

iii)            Full approval of “Adwick Depot” project for £1.2m Brownfield Housing Funding to DMBC (Doncaster Metropolitan Borough Council) subject to the conditions set out in the Assurance Summary attached at Appendix C.

iv)            Progression of “Phase 4 Park Hill  ...  view the full minutes text for item 6