Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
The Mainway project represents a once in a
generation opportunity to shape the development of our District in
way that fully involves our community.
The significance of this project is the contribution that it potentially makes to the delivery of the Council’s priorities.
This particular report updates Cabinet on progress made on the Mainway Project, highlights some key issues and opportunities, and seeks agreement to allow use of reserves from the Housing Revenue Account to provide fully formed investment options for the Council to consider.
Mainway is a social housing estate comprising 257 properties which, except for a small number of right-to-buy properties (19), is almost wholly in Council ownership.
The estate was built in the 1960s. The expected lifespan of the buildings has been met and structural surveys show that the buildings either require significant refurbishment or rebuilding. The cost of rebuilding is estimated at £37,000,000 which will provide at least an 80-100 year life expectancy. The cost of refurbishment is estimated to be £23.5 million which will provide an extra 25-30 years life.
Much detailed work planning has already taken place and can be found within the appendices of the report. However, in order to seek an investment decision from the Council, further information is needed to provide the necessary financial assessments and due diligence for a project of this scale.
To get to this point, the project now requires further work including- commissioning detailed site investigations, appraising different options for redevelopment, bringing forward a tenant management plan and establishing a detailed business plan (including financing the redevelopment of the site and project plan for delivering it). This business plan will enable the Council to understand its options, their implications for the Council’s budget and agree any onward capital, borrowing and revenue implications.
An extensive consultation exercise has taken place to seek Tenant views through a range of events and other activities, with a clear picture emerging of a desire to retain a cohesive community at the Mainway location, to continue social housing at the location to achieve that, and therefore to support a significant renewal of the housing stock. 70% of the Tenants were in favour of change.
It is recognised that in order to provide certainty to residents, ensure that Council has needed information on which to base such a significant investment decision and maintain the safety of the existing building considerable capacity will be required to maintain the momentum of this project.
(Cabinet Member with Special Responsibility Councillor Jackson)
Cabinet received a report from the Director for Communities and the Environment which provided an update on the Mainway estate project and sought authorisation to proceed to the next stages.
The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:
From the work undertaken so far it is clear this project provides an opportunity to work with the community to develop a vision for the Mainway area that contributes significantly towards the priorities agreed by the Council and outlined at the outset of this report. Work has been undertaken to start to develop the vision with further work required to set out clearly what the possibilities are. In order to deliver this vision a view on the different options for the buildings in the area is required.
There are essentially 4 options: -
A) Refurbish the existing buildings to extend their life by approximately 25-30 years. The cost of this option is estimated to be £23.5M. This option would still require tenants to be relocated whilst works were undertaken. The end product would still not meet the Council’s standards for housing energy efficiency, health, safety and security. It would essentially be a short-term repair, with little prospect of recovering the investment from rent returns before a further development or repair project would be required.
B) Demolish and rebuild the estate. The cost of this option is estimated to be £37M (keeping a similar number of properties within the Council’s portfolio). It is envisaged that the estate will mainly be built for social housing however further detailed analysis in terms of a mixed tenure scheme including opportunities for market and affordable rent, as well as other options and delivery through More Homes for the Bay (yet to be incorporated) will need to be considered. Additional properties could be considered however, to keep the integrity of the proposed new estate and ensure planning approval, this will be difficult.
C) Demolish the estate, sell the land and seek to rebuild elsewhere. This is the least worked up option. On the basis that a) there will be considerable demolition costs that will offset the value of the land b) the Council does not have alternative land to build equivalent properties and c) uprooting an established community and moving people elsewhere creates considerable conflicts with the Council’s intended outcomes for the District and its residents.
D) Demolish the estate, sell the land and don’t rebuild lost properties elsewhere. Along with option C this option has not been worked up in any detail. Properties would all need to be vacated within 5yrs- this would create a local housing crisis and creates a significant conflict with the Council’s intended outcome for the District and its residents. There would be considerable risk to the future of the HRA through lost rental income.
Based on the work undertaken to date options A and B are the only options that are able to contribute to the Council’s priorities. Option B is the one the provides the outcomes that best support the Council’s priorities. The point has now been reached where in order to seek an investment decision from the Council, detailed proposals need to be brought forward that can be financially assessed and considered within the overall context of the Council’s budget and priorities. To progress the project it is proposed that reserves from the Housing Revenue Account are used to undertake several key activities to progress the Mainway project.
They are: Work with Elected Members, residents and partners and develop the overall vision for the project so that it is delivered in a way that best contributes to the Council’s priorities.
- Commissioning the next phase of Master-planning and design works for option B. Producing a detailed Business Plan which enables the Council to proceed in resolving the challenges at the site in a way which presents best value for the Council in achieving its priorities.
- Developing and delivering a Tenant Management Plan to support the detailed engagement and planning work that will be required to support our residents through a period where they will need to be rehoused on an interim basis.
- Establishment of a project management team, including external experts.
This work will result in a series of regular updates to Cabinet and stakeholders on progress and will seek to agree and bring forward the Business Plan and relevant financing details for the Project to September Cabinet.
Councillor Jackson proposed, seconded by Councillor Hamilton-Cox:-
“That the recommendations, as set out in the report, be approved.”
Councillors then voted:-
(9 Cabinet Members voted in support of the recommendations. Due to technical difficulties Councillor Hamilton-Cox who had seconded the recommendations, was unable to participate in the vote.)
(1) That Cabinet recognises the importance of this project and its’ contribution to Council priorities.
(2) That Cabinet recognises that without significant investment within the next 2-5 years residents will be required to leave their homes on the Mainway site.
(3) That Cabinet agrees to the use of up to £300,000 from the HRA Business Support Reserve as set out in Section 11 of the report, in order to allow the next phase of the Mainway Project to proceed:
§ in developing a strategic vision for the site involving all key stakeholders,
§ commissioning site design works and concept designs,
§ developing the detailed Project and Business Plans through employing dedicated Project Manager resource, and
§ to develop and deliver the Tenant Management Plan.
Details of which will be presented to Cabinet in September 2021 which will detail the further calls on reserves and any borrowing requirements.
(4) Cabinet provides authority for officers to engage with tenants, residents and other stakeholders in order to undertake a comprehensive data collection exercise to inform the design approach and dwelling mix of a proposed scheme as well as the Tenant Management Plan.
(5) Cabinet authorises officers to cease the re-letting of void council properties in the first proposed phase (Bridge House, Captains Row, Derby House, Lune House and Park House).
Officer responsible for effecting the decision:
Director for Communities & the Environment
Reasons for making the decision:
The Mainway project represents a once in a generation opportunity to shape the development of our District in way that fully involves our community. The significance of this project is the contribution that it potentially makes to the delivery of the Council’s priorities:
· A Sustainable District –Climate Emergency: The design and masterplanning will seek to ensure that the properties are resilient to a changing climate and are fit for a zero-carbon future.
· An Inclusive and Prosperous Local Economy – through the creation of jobs and training and opportunities for local companies. The reduction of blight at a key location, and provision of affordable, suitable housing which enables access to employment and reduces poverty. Ensuring money is spent locally.
· Happy and Healthy Communities – proposals contribute to the well-being of tenants, tackle health inequalities and provide quality housing and green space.
· A Co-operative, Kind and Responsible Council – working in partnership and truly listening to tenant voices through consultation has supported the future designs of the estate.
The decision is also consistent with the Local Plan and contributes towards the provision of housing to meet a locally identified need and opportunities to increase the choice and supply of social housing and will link directly to the Homes Strategy for Lancaster district 2020-2025.
Report author: Joanne Wilkinson
Publication date: 26/03/2021
Date of decision: 23/03/2021
Decided at meeting: 23/03/2021 - Cabinet
Effective from: 07/04/2021