Agenda item

For the benefit of new Board Members, C Blackburn provided an overview of the Housing Fund (Brownfield) programme.  

The Board was reminded that, as part of the Government’s ‘Get Britain Building Fund’, the MCA had been allocated £40.3m of capital funding and £841k revenue funding in 2020, for supporting the acceleration and development of housing schemes on brownfield land (up to end March 2025).  

The funding criteria had set out that the brownfield programme must enable the delivery of a minimum of 2,500 homes by end March 2025, with start on sites by this timescale. 

At the January 2021 meeting of the Board, the Board had endorsed the proposed Strategic Business Case which enabled the early deliverable schemes to enter the pipeline.  This followed endorsement by the Board of the Housing Fund (Brownfield) Prospectus which set out the purpose of the Fund and the MCA processes for project sponsors to follow.

In January 2021, the Board also had allocated £567k of revenue funding to help support and accelerate business case development of the early deliverable schemes.

At the March 2021 Board meeting, four Phase 1 schemes (West Bar, Malthouses, Porter Brook and Small Sites in Rotherham) had been presented and approved by the Board.  Contracts were currently being draw-up. 

As part of the Phase 1 package of schemes, the Allen Street scheme would be considered separately on today’s agenda. 

Since January 2021, work had taken place to develop the Phase 2 schemes for delivery in 2021/22.  In addition, work had also taken place to develop the longer term pipeline of schemes.  

As part of MHCLG’s requirements, the MCA is required to submit an indicative pipeline of all the schemes within the programme in June. 

The table contained in the report at paragraph 2.6 set out the current status of the Phase 2 schemes.  Of these, four schemes (Park Hill 4, Norfolk Park 10, Shirecliffe 2 and Phase 1 Council Build Programme in Doncaster) were being submitted to the Board for acceptance onto the Programme SBC pipeline, which if approved by the Board would allow the schemes to be progressed to the Outline Business Case (OBC) stage as soon as possible. 

The proposed Phase 3 schemes for funding and delivery later in the programme from 2022-25 were set out in the table in paragraph 2.11.  The table includes a proposed further twelve schemes to add onto the pipeline, noting that  some of these schemes were at the very early stages of development. 

The Board noted that a total of £40.3m of capital funding was available in the programme.  Taking account of all the schemes in Phases 1, 2 and 3, there was now an over-programme position, currently at a £65m ‘ask’.  It was highlighted that, due the uncertainty with some of the schemes and their timescales, a number of schemes may fall out of the programme and other schemes could potentially come forward over the next four years. 

In relation to the revenue allocation for 2020-22,  paragraph 2.15 set out a  proposed reprofiling of the revenue allocations between years to reflect the current situation with scheme’s development.

Paragraph 3 of the report presented the Board with three options for their consideration together with the risks and mitigations for each option. 

Following discussion, the Board recommended that ‘Option 1’ be progressed at this time, as follows:

‘To continue to work with Local Authorities partners and their selected ‘sponsored’ scheme promoters on the prioritised pipeline, submitting this as the current known Programme to MHCLG, and updating the Housing and Infrastructure Board via the Programme SBC and subsequent business case submissions’.

The Chair noted that Phase 2 proposals totalled £18.8m, however, £17m needed to be spent in 2021/22.  If a large scheme fell out of the programme there would be a risk and a challenge to spend to this level. 

The Chair asked for clarification when Phase 2 schemes would need to be in a viable position to make progress with their scheme. 

C Blackburn replied that the MCA Executive was currently working with all the local authorities to meet the end of July deadline for OBC submissions. 

It was acknowledged that the timescales were challenging.  To assist local authorities to complete their scheme OBCs, the MCA Executive had commissioned an expert consultant for the local authorities to draw down.

If the July deadline was achieved, the OBC’s would be presented for approval at the Board’s October meeting.  The OBCs would then need to be worked-up to full Business Cases which would be presented at the earliest, to the January 2022 Board meeting for consideration and approval. 

If the July deadline was not achieved there could be significant risk to the programme meeting the end of March 2022 spend deadline, which could have implications for securing MHCLG funding in future years of the programme. 

The Chair asked if there would be an opportunity to invite an ‘open call’ for schemes during the summer period, if schemes missed the July deadline. 

C Blackburn replied that this option was available for the Board to consider.  However, he noted that schemes would need to go through the full due diligence process involving SBC, OBC and FBC  which would mean that they  would not be ready until after March 2022.  If actioned, an open call would therefore only be to support the pipeline in the 2022-25 period.

Councillor Cheetham queried if the timetable for submitting Phase 2 Business Cases was achievable.  Furthermore, he queried if the MCA’s governance structure and scheduled Board meetings were fit for purpose to achieve the deadlines set. 

The Chair acknowledged Councillor Cheetham’s concerns and requested that a separate meeting be arranged with herself, Councillor Fox, Martin Swales and C Blackburn to discuss whether further meetings should be arranged to consider scheme business cases as soon as they are ready to be considered.  ACTION: C Blackburn

T Hawley commented that a challenge with delivering the Housing Fund (Brownfield) programme was local authority resources.  He was conscious that local authority colleagues were increasing stretched due to the number of capital funding opportunities currently available.  It was often the same individuals writing bids and delivering capital schemes for different programmes, and therefore, resource pressures available across the region were a significant risk.  Furthermore, it could equally be a risk to further investment and projects that may be supported by Homes England in the region due to these potential schemes relying upon the same individuals. 

T Hawley said he would be interested to understand the advice which had been given with regards to pursuing ‘Option 1’ over ‘Option 2’ as presented in the report, particularly in relation to Subsidy Control.

M Swales thanked T Hawley for his observations and agreed to provide comments outside of today’s meeting.  ACTION: M Swales

RESOLVED – That the Housing and Infrastructure Board:-

1.       Approved the Revised Programme Strategic Business Case for the South Yorkshire Housing Fund (Brownfield) and accepted the additional schemes onto the pipeline as set out Paragraphs 2.6 and 2.11.

2.       Approved the updated revenue spend profile for the Phase 2 schemes as set out in Paragraph 2.15.

3.       Agreed that Phase 1, 2 and 3 schemes be submitted to MHCLG as the current known five year Housing Fund (Brownfield) Programme, noting the over programming approach being proposed and the risks associated with the ‘Remaining Programme’ schemes at this stage.