Agenda item

To receive the report of Amena Matin, Head of Regeneration & Growth.

Amena Matin, Head of Regeneration & Growth presented this item, which provided an overview of the current economic conditions, progress at Joyce Avenue and Snells Park (J&S) estates, successes, which there have been a number of, particularly around resident engagement and procurement of grant funding, as well as challenges and responses to these, which has included the mobilisation of the professional services team to progress the masterplan for up to 2000 homes over 10 phases which has good support from residents.

A lot has been happening on the estates in terms of the Council’s investments and overall commitment to this project. There have however been a number of challenges; the economy has changed since the start of the project in terms of interest rates, building costs and other external factors, which have all impacted on affordability and viability of the scheme. The other changes relate to enhanced building regulatory standards which were not known in September 2021. However, the Council is continuously reviewing the affordability and viability of the scheme and exploring delivery routes to offset the call on debt and respond to market conditions.

Questions were invited from members.

In response to concerns from Members regarding the viability of the scheme the Leader of the Council, Cllr Caliskan confirmed that there was still a political commitment for the plan to proceed and the way to ensure this would include a re-design, applying for extra grant funding and looking to work with a wide range of partners. She added that the Council are open to looking at the chronology of the phasing so that the scheme can progress and de-risk any loss of grant funding.

Members sought clarification regarding the requirement of a second staircase and Officers advised that in December 2022 the Mayor of London indicated that this would be a requirement in all new high-rise buildings above 30m and more recently (July 2023) Government has announced an intention to move to a secondary stair exit at 18m which has impacted on the scheme progression through planning as the Council intends to redesign and future proof the homes. Therefore, the tender process was abandoned pending a new procurement. Officers advised that to move forward and have confidence in the viability of the scheme depended on further guidance from the Government and it was hoped that a formal announcement would be made later this year. However, Members were reminded that the whole sector is in the same situation, therefore re-designing schemes seems the best solution at this time, rather than waiting for Government guidance that may never come.

In response to questions regarding funding, it was confirmed that in October 2021, the GLA allocated grant for 338 homes of which 88 will be for existing leaseholders who wish to stay and take up a new shared ownership home and 250 social rented homes for tenants who wish to remain on the estate. The grant funding approved at this stage was £54.4m. A revised bid was submitted in March 2023 to offset the changing inflationary pressures and approved. This increased the grant allocation to £64,476m (an uplift of £10,060m). The Council was then awarded £50m from the GLA Land Fund for buybacks (subject to contract). This is additional subsidy which will be applied to purchase of leaseholder properties, which overall reduces borrowing call on capital in the early years if the HRA Business Plan. Officers said that the Council have received support at all points from the GLA as they have the confidence that the scheme will be delivered.

In response to a question regarding the 50% affordable housing target as part of the strategy, it was confirmed that this is still the aspiration.

Following a question regarding the Council’s confidence in Vistry as a partner, and whether they remain as supportive of the scheme as they did two years ago, the Leader said that Vistry are very supportive in the partnership, but it was recognised that there are challenges from their perspective as well as the Council’s perspective around viability. As the Leader, Cllr Caliskan said that her responsibility is that the scheme is viable from the Council’s perspective but again, recognised that as a partner, Vistry must ensure that their schemes are viable too. She added that one of the benefits of doing the scheme site by site and phase by phase is because had a different approach been adopted, the Council would now be in a situation where the Master Developer would have complete control of the overall site, and therefore as a Council, we would not be able to negotiate at any stage.

The Chair thanked Officers for their report and attendance at the meeting.

The Panel agreed:

I.    To note the report.