Agenda item

To consider a report seeking approval to accept £10,000,000 of grant funding from Homes England which will enable the Authority to construct a significant portion of the site’s infrastructure works (HIF Funded Infrastructure) and support housing development at the Killingworth Moor site.

Cabinet received a report seeking approval to accept £10 million of grant funding from Homes England which would enable the Authority to construct a significant portion of the site’s infrastructure works and support housing development at the Killingworth Moor site. 

The Authority’s Local Plan provide for the delivery of an additional 16,500 new homes across the Borough up to 2032. The Killingworth Moor site was included as a key strategic site with an allocation for 2,000 homes.

In Summer 2017, Homes England and the Ministry of Housing, Communities and Local Government (MHCLG) had launched the Housing Infrastructure Fund (HIF) to offer Local Authorities and Combined Authorities the opportunity to secure funding to deliver infrastructure on large scale housing developments to assist in realisation of housing.

The Authority had worked with representatives from Homes England, MHCLG and the landowners/developers to develop and submit a bid to Homes England for £10 million of HIF. This had been submitted in September 2017, and following an extensive assessment period, in Spring 2019, Homes England had confirmed an allocation for the Authority of

£10 million. This would require the Authority to enter into a Grant Funding Agreement with Homes England and Licence(s) for Works with the relevant landowners/developers to enable construction of the HIF Funded Infrastructure.

It was proposed that the funding would deliver a significant proportion of the site’s key link road which was identified in the masterplan and would unlock the site for housing development.

In line with state aid advice, the Authority would be in control of delivery of the road and would manage spend. This involved appointment of consultants to undertake detailed design works; submission of a planning application seeking approval for development of the HIF funded works; and appointment and management of contractors appointed to construct the necessary works on site.

This would be undertaken in line with agreed governance arrangements with the Local Plan Steering Group and relevant developers/landowners.

The Authority had a Risk Register for the delivery of the HIF Funded Infrastructure, which detailed the following:

·         State Aid – detailed legal advice had been sought in relation to this project.

·         Non-compliance with the Grant Funding Agreement.

·         Overspend – this was mitigated through appropriate risk and contingency planning being applied to the infrastructure costs and ensuring that the definition of the ‘Project’ in the Grant Funding Agreement was such as to ensure it was deliverable.

·         Delays to Spend – the Project would be governed in line with the agreed Delivery Plan between the Authority and Homes England. Progress reporting would enable early identification of issues which may cause delay and allow mitigation to ensure the Project remained on time and on budget.

Cabinet considered the following options: toapprovethe recommendationsset out inparagraph1.2ofthe reportto acceptthe grant offer of £10 million from Homes England and enter into the Grant Funding Agreement and necessary Licence(s) for Works with relevant landowners/developers to enable the Authority to construct the HIF funded Infrastructure works, or alternatively, to not approve the offer ofgrantfunding from Homes England and therefore not deliver the HIF Funded Infrastructure works at the Killingworth site.

Resolved that (1) theHeadof Resources be authorised to accepttheoffer of£10 million Housing Infrastructure Fund (HIF) fromHomes England; and

(2) the Head of Regeneration and Economic Development and the Head of Environment, Housing, and Leisure be authorised, in consultation with the Head of Resources, Head of Law and Governance and Deputy Mayor, to:

a)  enter into the Grant Funding Agreement with Homes England to accept grant funding of £10 million;

b)  enter into the necessary ‘Licences for Works’ with relevant landowners/developers to enable the Authority to construct the HIF funded infrastructure works; and

c)  carry out a procurement exercise to appoint a contractor for the construction of the HIF funded infrastructure works.

(Reasons for decision - The outcome requirement of the Local Plan is the delivery of 16,500 new homes up to 2032. By securing the HIF and working with the landowners/developers the Authority will facilitate the delivery of 2,000 new homes on the Killingworth Moor site, the second largest single allocation in the Local Plan.)