Agenda item

To award a contract for the construction of bed bungalows and bed flats and the retail block at Carrington Road, Friardale Road and School Road, Friar Park and to change the funding source of the scheme. 

Approval was sought to the tender from Deeley Construction Ltd, in the sum of £7,128,724.00, in relation to the redevelopment of the Carrington Road/School Road area, and for allocation of a further budget of £1,400,000 above the contract sum to accommodate, if required, future costs relating to project management and associated fees and possible increased market inflation on construction materials.

This would result in allocation of resources totalling £8,528,724 from the Housing Revenue Account (HRA) capital programme, including an allocation of £3,411,889 from the unallocated balance of 1-4-1 replacement receipts.

Approval was sought to change the funding source for this scheme from the Shared Ownership and Affordable Homes Programme administered by Homes England, as approved at Cabinet meeting on 16 May 2018 (see Minute No.75/18) to Right to Buy 1-for-1 Capital receipts.

Approval was sought to bring forward the development of Phase 4 of the scheme, 0.158 hectares with council owned homes, in accordance with the approval at Cabinet 4 March 2020 (see Minute 60/20) as part of a single contract.

Given the complexities around the phasing of the construction of this site and other abnormal costs, approval was finally sought for application to be made, if applicable, to the West Midlands Combined Authority (WMCA) to determine whether any additional gap funding could be secured to deliver this scheme. An application would be made in line with the WMCA’s single commissioning framework.

Reasons for Decision

The Carrington Road/School Road area of Friar Park had been in decline for many years and any intervention by the Council needed to be very comprehensive to deal with a number of very complex and inter related circumstances specific to the area. The area could be broken down into two bespoke areas – a cleared vacant site and a shopping parade/commercial area which each presented different obstacles that need to be overcome.

This scheme was to provide 10 x 2 bed bungalows in Friardale Road, 20 x 2 bed flats at Carrington Road/School Road and the retail block in School Road. The new council-owned affordable homes would meet Building Regulations and current housing requirements.

The funding sources for all schemes within the Council New Build programme were constantly monitored to ensure that the most beneficial funding source is selected, that all Homes England grant commitments were achieved and that all RTB capital receipts were allocated to prevent any loss of the receipts due to not expending them within the designated time periods. There had been no loss of Homes England grant funding and all current grant funding had been allocated to other schemes.

Alternative Options

Adding this site to the Homes England funding programme to accord with the previous recommendation of Cabinet was considered, however, all current Homes England funding was allocated to other sites. It was deemed more financially advantageous for the Council to use to the Right to Buy Receipts to deliver this scheme.

There was an option to not proceed with this scheme. However, given the considerable pre-construction work that had already been completed, this was not deemed viable. In addition, the demolition of the recently acquired properties must be completed for health and safety reasons. Following demolition, if works were not to proceed, the Council would be left with the management of an underutilised vacant site. The site was capable of being developed and there was public expectation that a scheme would proceed.

Agreed:-

(1)     that approval be given to change the funding source for this scheme from the Shared Ownership and Affordable Homes Programme administered by Homes England as approved at Cabinet meeting on 16 May 2018 (Minute No.  75/18) to Right to Buy 1-for-1 Capital receipts;

(2)     that approval be given to bring forward the development of Phase 4 of the scheme, 0.158 hectares with council owned homes in accordance with the approval at Cabinet 4th March 2020 – The Redevelopment of Carrington Road School Road Area, Friar Park (Minute 60/20 refers) as part of a single contract;

(3)     that the Director Regeneration and Growth be authorised to accept the tender of Deeley Construction Ltd, in the sum of £7,128,724.00, for the Construction of 10 x 2 bed bungalows, 20 x 2 bed flats and the retail block at Carrington road, Friardale Road and School Road, Friar Park, which includes Phases 2- 4 of the scheme as tendered using the Homes England DPP3 Framework;

(4)     that a further budget of £1,400,000 be allocated above the contract sum to accommodate (if required):

·      project management and associated fees

·      possible future increased market inflation on construction materials that may arise during the project programme;

(5)     that the Director of Finance and the Director of Housing be authorised to allocate resources totalling £8,528,724 from the Housing Revenue Account (HRA) capital programme, including an allocation of £3,411,889 from the unallocated balance of 1-4-1 replacement receipts;

(6)     that the Director of Law and Governance and Monitoring Officer be authorised to enter into or execute under seal any documentation in relation to award of the contract and/or other agreements as may be deemed necessary;

(7)     that the Director of Regeneration and Growth, in consultation with the Director of Finance, subject to confirmation of the funding rules applicable, be authorised to submit an application for funding to the West Midlands Combined Authority with a further report submitted to Cabinet before accepting any grant award.