Agenda, decisions and minutes

To confirm the Minutes of the Meeting held on 4 July 2023.

27.1   The Minutes of the Meeting held on 4 July 2023 were confirmed as a correct record.

To receive from Members, declarations of interest in relation to any items included on the agenda for this meeting, in accordance with the Waverley Code of Local Government Conduct.

28.1   Cllr Paul Rivers, Co-Portfolio Holder for Housing (Operations and Services) declared a non-pecuniary interest in relation to Item 10 (Housing Delivery – Local Authority Housing Fund). This report recommended that the Council purchase properties for rent, ring-fenced for allocation to Ukrainian or Afghan refugees on the Government’s re-settlement and relocation schemes. Cllr Rivers and the Mayor, Cllr Penny Rivers, had been hosting a Ukrainian family since before this Government scheme was announced.

28.2   Cllr Rivers wished to avoid any perception that the family he and the Mayor were hosting might receive preferential treatment because they were being hosted by two Members of the Council, one of whom (as Co-Portfolio Holder for Housing (Operations and Services)) may be in a position to review and comment on processes associated with exercising related allocations.

28.3   Cllr Liz Townsend, Portfolio Holder for Planning, Regeneration and Economic Development declared a non-pecuniary interest in relation to Item 9 (New Build Housing Delivery, Ewhurst) as she was the Surrey County Councillor for the Cranleigh and Ewhurst division.

The Chairman to respond to any questions received from members of the public for which notice has been given in accordance with Procedure Rule 10.

The deadline for receipt of questions is 5pm on Tuesday 25 July 2023.

29.1    There were no questions from members of the public.

The Chairman to respond to any questions received from Members in accordance with Procedure Rule 11.

The deadline for receipt of questions is  5pm on Tuesday 25 July 2023.

30.1    The following question had been received from Cllr Michael Higgins:

"Downhurst Road in Ewhurst is made up of a number of young families that enjoy using play areas. A number of residents have expressed support for replacing the houses (to be discussed at item 9 on the Agenda) with further Social Housing but they are concerned that the play area will be lost in the process. Could the Executive provide reassurance that they remain committed to retaining and refurbishing play areas including the one in Downhurst Road?"    

30.2   Cllr Nick Palmer, Co-Portfolio Holder for Housing (Delivery) provided the following response:

“The Council is in the process of developing the plans for the site at Downhurst Road which includes six existing properties and the current grassed play area to the rear of their gardens.

Pre-application advice has been obtained on the current plans which include the relocation and reprovision of a new play area as part of the new development proposals.

When the design for the new build scheme has been developed further and ahead of submission of a planning application, the Development Team will arrange an informal consultation ‘drop in’ event in the village. At this event residents will have an opportunity to see the proposals for the new homes, play area and share with their comments on them with officers and some members of the design team.”

31.1   The Deputy Leader advised that the Executive was considering its response to the Planning Inspector’s decision in the Waverley Lane appeal, and Cllr Townsend as the relevant Portfolio Holder would have more to say on this.

31.2   Cllr Clark went on to report that 60% of councillors were now using the new Samsung tablets, which was good progress on the journey to reducing the use of paper within the council. However, Cllr Clark stressed that no councillor would be forced to give up paper copies of agendas if they had valid reasons.

31.3   Cllr Victoria Kiehl advised that work had begun on reviewing the arrangements for executive decision-making which was currently very centralised. This could lead to the need for additional meetings to meet decision deadlines which was not a good use of council time. Cllr Kiehl and officers would be engaging with the Chairs of the Overview and Scrutiny Committees and the Standards and General Purposes Committee as proposals developed.

31.4   Cllr Merryweather, as Ward Member for Farnham Moor Park, noted that the Waverley Lane appeal decision had caused a huge amount of confusion and distress to residents and he thanked the Portfolio Holder for Planning, Cllr Townsend, other Executive members, and officers who were working very hard to identify how this might be remedied.

31.5   Cllr Kika Mirylees reported that talks were continuing between the council, Woolmer Hill School and Surrey County Council regarding the future of The Edge. However, the outdoor sports pitches continued to be used by the community. The council was in discussion with the disability sports group about their requirements to see how they might be temporarily re-located, and the other groups and clubs that used the Edge were encouraged to contact the council to discuss their requirements.

31.6   The gym upgrades at the Farnham, Godalming and Haslemere Leisure Centres would be taking place in the current financial year, including replacement of all gym equipment and décor. The new contractor, Everyone Active, had started well and officers were discussing with them the refurbishment of the Farnham Leisure Centre.

31.7   The first project meeting for the Museum of Farnham project would take place later in the week, following which there would be a clear timeline for delivery of the scheme.

31.8   Cllr Nick Palmer reported that the Community Infrastructure Levy (CIL) bidding round for this year had now opened and he encouraged Members to engage with local community groups to alert them to the opportunity to bid for funds.

31.9   Cllr Liz Townsend echoed Cllr Mirylees’ frustration with the slow progress on finding a resolution to the issues at The Edge. Cllr Townsend also confirmed that the council was working alongside Farnham Town Council to look for grounds on which to challenge the Inspector’s decision in the Waverley Lane appeal and she would provide a further update in due course.

31.10  Cllr Townsend reminded Members that a High Court judge had decided that a legal challenge to the adoption of the Waverly Borough Local  ...  view the full minutes text for item EXE 31/23

There are no Overview and Scrutiny recommendations to the Executive.

32.1   The Deputy Leader advised that there were no recommendations to the Executive from the meeting of the Resources Overview and Scrutiny Committee on 10 July 2023.

The purpose of this report is to seek formal approval to enter into a contract for the demolition of existing and delivery of 26 new homes across five sites in Chiddingfold.

Members have already considered and approved the business cases for and delivery of these homes and full project budget at a meeting of Full Council on 13 December 2022. However, progression of construction design, the provision of information from the utility companies and other work to de-risk the project, additional budget is required to ensure that the contingency is in place when we enter into contract. The scheme remains financially viable.

Recommendation to Executive

It is recommended that the Executive approves:

i.        Entering into a contract with the preferred contractor Feltham Construction Limited for the delivery of the works.

ii.        Giving delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements and to Strategic Director (Place) to enter into the JCT Contract.

iii.       Giving delegated authority to the Strategic Director (Place) to approve pre contract agreements with the preferred contractor to enable the development of the project and authorise spend in accordance with the budget.

iv.       Giving delegated authority to the Strategic Director (Place) to enter into any related contractual documentation (including collateral warranties or agreements) relating to the project.

v.       Giving delegated authority to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the project budget.

vi.       The sale of five shared ownership homes to be delivered on the Chiddingfold sites with the Executive Head of Housing Services in consultation with Portfolio Holders for Housing (Delivery and Operations) to approve the final terms of such sales having regard to market value and giving the Executive Head of Legal and Democratic Services authority to approve the final form of the sale agreements and any ancillary related legal agreements.

vii.      Giving delegated authority for Executive Head of Housing Services in consultation with Portfolio Holders for Housing (Delivery and Operations) to approve the future sale of percentage shares.

It is recommended that Executive recommends to Council that:

       i.          An allocation of an additional £402,332 budget from reserves is approved.

The Executive RESOLVED to:

i.        enter into a contract with the preferred contractor Feltham Construction Limited for the delivery of the works.

ii.       give delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements and to Strategic Director (Place) to enter into the JCT Contract.

iii.      give delegated authority to the Strategic Director (Place) to approve pre contract agreements with the preferred contractor to enable the development of the project and authorise spend in accordance with the budget.

iv.      give delegated authority to the Strategic Director (Place) to enter into any related contractual documentation (including collateral warranties or agreements) relating to the project.

v.       give delegated authority to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the project budget.

vi.      approve the sale of five shared ownership homes to be delivered on the Chiddingfold sites with the Executive Head of Housing Services in consultation with Co-Portfolio Holders for Housing (Delivery, and Operations) authorised to approve the final terms of such sales having regard to market value; and the Executive Head of Legal and Democratic Services authorised to approve the final form of the sale agreements and any ancillary related legal agreements.

vii.     give delegated authority to the Executive Head of Housing Services in consultation with the Co-Portfolio Holders for Housing (Delivery, and Operations) to approve the future sale of percentage shares.

The Executive further RESOLVED to recommend to Council that an allocation of an additional £402,332 budget from reserves is approved.

Reasons for the decisions:

1.       The Executive and Full Council have previously approved the Business Cases for each of the five sites and the recommended authority is required to enter into the contract with a build contractor and approve additional budget to facilitate delivery of the new homes on these sites through one JCT Design and Build Contract. Through delivery of the project there may be a requirement to enter into project related contractual documents or ancillary agreements.

2.       The Waverley Corporate Strategy 2020-2025 sets out the Vision and Strategic Priorities for the Council. One of the strategic priorities is to ‘provide good quality housing for all income levels.’

3.       Build More, Build Better, Build for Life Affordable Homes Delivery Strategy 2022 – 2025 sets out the Council’s commitment to build homes to buy or rent for households from all income levels. The strategy has been supported by evidence studies including the Waverley Housing Affordability Study 2021.

4.       Delivery of 26 homes at Chiddingfold including five shared ownership homes meets these priorities and commitment

[Overview and Scrutiny Committee – Resources]

33.1   Cllr Palmer, Co-Portfolio Holder for Housing (Delivery) presented the report which proposed demolition of a number of existing properties to enable the delivery of 26 new homes across five sites in Chiddingfold. The project had been approved by Council on 13 December 2022 and work had progressed since in full consultation with tenants affected. The scheme remained financially viable and approval was now sought to move to the next stage of the project.

33.2   Cllr Liz Townsend spoke in support of the project and emphasised the importance of the council building houses for social rent that would be affordable for residents on the housing list.

33.3    The Executive RESOLVED to:

i.    enter into a contract with the preferred contractor Feltham Construction Limited for the delivery of the works.

ii.   give delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements and to Strategic Director (Place) to enter into the JCT Contract.

iii.  give delegated authority to the Strategic Director (Place) to approve pre contract agreements with the preferred contractor to enable the development of the project and authorise spend in accordance with the budget.

iv.  give delegated authority to the Strategic Director (Place) to enter into any related contractual documentation (including collateral warranties or agreements) relating to the project.

v.   give delegated authority to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the project budget.

vi.  approve the sale of five shared ownership homes to be delivered on the Chiddingfold sites with the Executive Head of Housing Services in consultation with Co-Portfolio Holders for Housing (Delivery, and Operations) authorised to approve the final terms of such sales having regard to market value; and the Executive Head of Legal and Democratic Services authorised to approve the final form of the sale agreements and any ancillary related legal agreements.

vii. give delegated authority to the Executive Head of Housing Services in consultation with the Co-Portfolio Holders for Housing (Delivery, and Operations) to approve the future sale of percentage shares.

33.4   The Executive further RESOLVED to recommend to Council that an allocation of an additional £402,332 budget from reserves be approved.

The purpose of this report is to seek Executive approval to buy back an ex-council home in Ewhurst and to demolish six existing properties ahead of approval of a full business case to deliver a development with a net gain of sustainable homes to meet local housing need.

Recommendation

It is recommended that the Executive approves:

       i.          The buyback of one leasehold maisonette on best terms, legally required and reasonably obtainable and the use of the buyback reserve for this, together with any related professional costs and Stamp Duty Land Tax.

     ii.           The demolition of existing properties in advance of submission of a full planning application, to mitigate the risk associated with properties with significant movement due to subsidence.

    iii.          Giving delegated authority to the Executive Head of Housing in consultation with Executive Head of Finance (S151 Officer) to approve the final terms of the purchase.

    iv.          Giving delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements relating to purchase.

     v.          The allocation of an £100k budget from reserves to commission consultant services and demolition contractor to demolish the existing properties and associated works. This budget allocation will be included within financial viability appraisal that will accompany the business case for the new build scheme when it is bought forward later in the year.

    vi.          Giving delegated authority to the Strategic Director (Place) to enter into any related contractual documentation relating to this demolition stage of this project.

  vii.           Giving delegated authority to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the allocated budget.

The Executive RESOLVED that:

      i.          the buyback of one leasehold maisonette on best terms, legally required and reasonably obtainable and the use of the buyback reserve for this, together with any related professional costs and Stamp Duty Land Tax be approved

     ii.          the demolition of existing properties in advance of submission of a full planning application, to mitigate the risk associated with properties with significant movement due to subsidence be approved.

   iii.           delegated authority be given to the Executive Head of Housing in consultation with Executive Head of Finance (S151 Officer) to approve the final terms of the purchase.

   iv.          delegated authority be given to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements relating to purchase.

     v.          a £100k budget be allocated from reserves to commission consultant services and demolition contractor to demolish the existing properties and associated works. This budget allocation to be included within the financial viability appraisal that will accompany the business case for the new build scheme when it is bought forward later in the year.

   vi.          delegated authority be given to the Strategic Director (Place) to enter into any related contractual documentation relating to this demolition stage of this project.

 vii.          delegated authority be given to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the allocated budget.

Reason for the decision:

1.       The homes on this site are not habitable and need to be demolished as they have been deemed dangerous structures under the Building Act 1984. Subject to the buyback of one leasehold maisonette, all the existing properties can be demolished, mitigating the risk of further movement and potential collapse.

2.       The Waverley Corporate Strategy 2020-2025 sets out the Vision and Strategic Priorities for the Council. One of the strategic priorities is to ‘provide good quality housing for all income levels.’

3.       Build More, Build Better, Build for Life Affordable Homes Delivery Strategy 2022 – 2025 sets out the Council’s commitment to build homes to buy or rent for households from all income levels. The strategy has been supported by evidence studies including the Waverley Housing Affordability Study 2021.

4.       Demolition of the existing homes will leave a clear site to facilitate the delivery of new affordable and sustainable homes at Downhurst Road, Ewhurst.

[Overview and Scrutiny Committee – Resources]

34.1   Cllr Palmer introduced the report that proposed to progress an affordable housing development by the council in Ewhurst through the acquisition of a former council-owned flat which would enable the demolition of 6 properties which were currently unoccupied and not habitable, and which had been deemed as dangerous buildings. The intention was to then develop the site to deliver twelve affordable homes for rent.

34.2   Cllr Michael Higgins, Ward Member for Ewhurst and Ellens Green, thanked officers for keeping him updated on the development of the site. Residents were concerned about the future of the site, which had been cordoned off for some time, and also about the play area that was used by a number of young families living nearby. Cllr Higgins had been reassured by Cllr Palmer’s response to his earlier question regarding the play area, and he fully supported the recommendation to demolish the properties in question and to progress the delivery of new affordable homes for Ewhurst. This first step would show real intent on the part of the council to fulfil its ambitions to increase the provision of affordable and social housing.

34.3    The Executive RESOLVED that:

                        i.             the buyback of one leasehold maisonette on best terms, legally required and reasonably obtainable and the use of the buyback reserve for this, together with any related professional costs and Stamp Duty Land Tax be approved

                      ii.             the demolition of existing properties in advance of submission of a full planning application, to mitigate the risk associated with properties with significant movement due to subsidence be approved.

                    iii.             delegated authority be given to the Executive Head of Housing in consultation with Executive Head of Finance (S151 Officer) to approve the final terms of the purchase.

                     iv.             delegated authority be given to the Executive Head of Legal and Democratic Services to approve the final form of any legal agreements relating to purchase.

                      v.             a £100k budget be allocated from reserves to commission consultant services and demolition contractor to demolish the existing properties and associated works. This budget allocation to be included within the financial viability appraisal that will accompany the business case for the new build scheme when it is bought forward later in the year.

                     vi.             delegated authority be given to the Strategic Director (Place) to enter into any related contractual documentation relating to this demolition stage of this project.

                   vii.             delegated authority be given to the Strategic Director (Place) to enter into any ancillary agreements related to the project provided that these are within the allocated budget.

The purpose of this report is to brief members on the purpose and details of funding allocated to the Council from the Local Authority Housing Fund and how the homes will be acquired or re-allocated under this scheme.

Recommendation

It is recommended that the Executive:

       i.          Approves the principles of the Council using the Local Authority Housing Funding Scheme, and forward financing the acquisition or allocation of property under this scheme.

     ii.           Approves the principle of purchasing properties in the terms set out in the report and Exempt Annexe 1 and delegates to the Executive Head of Housing in consultation with the Portfolio Holder of Housing (Delivery and Operation) to approve the purchase of properties to deliver this project.

    iii.          Approves the principle of allocation of the 11 homes as set out in ‘Allocations’ (Section 10) of this report. With the additional wording for the Allocation scheme to be approved by Executive Head of Housing and Housing Portfolio Holder (Operations) in line with Waverley’s Allocations Scheme for housing applicants.

    iv.          Delegates to the Executive Head of Housing the authority to tender and enter into any contract to repair or bring up to standard any property purchased under this project in accordance with the principles set out in the Exempt Annexe 1

     v.          Grants delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of wording of any legal agreement related to the project.

    vi.          Approves the reallocation of 4 two bed shared ownership homes at Ockford Ridge, Site C to allocation as homes for affordable rent for use within this scheme.

The Executive RESOLVED to:

i.        approve the principles of the Council using the Local Authority Housing Funding Scheme, and forward financing the acquisition or allocation of property under this scheme.

ii.       approve the principle of purchasing properties on the terms set out in the report and Exempt Annexe 1 and to delegate authority to the Executive Head of Housing in consultation with the Co-Portfolio Holders of Housing (Delivery and Operations) to approve the purchase of properties to deliver this project.

iii.      approve the principle of allocation of the 11 homes as set out in ‘Allocations’ (Section 10) of this report, with the additional wording for the Allocation scheme to be approved by Executive Head of Housing and Housing Portfolio Holder (Operations) in line with Waverley’s Allocations Scheme for housing applicants.

iv.      delegate to the Executive Head of Housing the authority to tender and enter into any contract to repair or bring up to standard any property purchased under this project in accordance with the principles set out in the Exempt Annexe 1

v.       grant delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of wording of any legal agreement related to the project.

vi.      approve the reallocation of 4 two bed shared ownership homes at Ockford Ridge, Site C to allocation as homes for affordable rent for use within this scheme.

Reason for the decision:

1.         The Waverley Corporate Strategy 2020-2025 sets out the Vision and Strategic Priorities for the Council. One of the strategic priorities is to ‘provide good quality housing for all income levels.’

2.       Build More, Build Better, Build for Life Affordable Homes Delivery Strategy 2022 – 2025 sets out the Council’s commitment to build homes to buy or rent for households from all income levels. The strategy has been supported by evidence studies including the Waverley Housing Affordability Study 2021.

3.       The Council has been allocated a total of £2,039,531 LAHF funding to provide a maximum of 40% of the cost of each property on the ‘Main Element’ and up to a maximum of 50% of the costs of the ‘Bridging Element’ (four bed property.) The use of funding supports the delivery of additional homes for those in housing need whilst reducing the financial impact on the Housing Revenue Account and level of borrowing required.

[Overview and Scrutiny Committee – Resources]

35.1   Cllr Paul Rivers, Co-Portfolio Holder for Housing (Operations and Services) introduced the report setting out how the council proposed to use capital funding from the Department for Levelling Up, Housing and Communities (DLUHC) to obtain additional housing for families with housing needs who had arrived in the UK via the Ukrainian and Afghan resettlement and relocation schemes.

35.2   Cllr Rivers drew attention to the EDI impacts, as the properties acquired with LAHF capital would be let in the first instance to households of specific nationalities. However, at the end of the fixed term, these homes would be brought into general need housing stock and let to qualifying households on Waverley’s housing register. Financial modelling showed a positive net revenue impact over the life of the assets, for both the new builds and homes acquired on the open market.

35.3   The Executive RESOLVED to:

i.        approve the principles of the Council using the Local Authority Housing Funding Scheme, and forward financing the acquisition or allocation of property under this scheme.

ii.       approve the principle of purchasing properties on the terms set out in the report and Exempt Annexe 1 and to delegate authority to the Executive Head of Housing in consultation with the Co-Portfolio Holders of Housing (Delivery and Operations) to approve the purchase of properties to deliver this project.

iii.      approve the principle of allocation of the 11 homes as set out in ‘Allocations’ (Section 10) of this report, with the additional wording for the Allocation scheme to be approved by Executive Head of Housing and Housing Portfolio Holder (Operations) in line with Waverley’s Allocations Scheme for housing applicants.

iv.      delegate to the Executive Head of Housing the authority to tender and enter into any contract to repair or bring up to standard any property purchased under this project in accordance with the principles set out in the Exempt Annexe 1

v.       grant delegated authority to the Executive Head of Legal and Democratic Services to approve the final form of wording of any legal agreement related to the project.

vi.      approve the reallocation of 4 two bed shared ownership homes at Ockford Ridge, Site C to allocation as homes for affordable rent for use within this scheme.

In March 2022, Full Council approved the acquisition of 69 High Street, Godalming as a General Fund mixed use asset to support the Council’s aspirations contained within the Corporate Strategy 2020-25, including:

·             To bring forward affordable housing, in this case in Godalming town centre, and

·             To deliver a positive contribution to Godalming by preserving the integrity of the high street

The purchase was completed in May 2022, and in November 2022 the Executive noted a “mixed use” Project Initiation Document (PID) to:

·             progress the design optimisation scheme, in line with corporate priorities, to optimise housing numbers, and

·             ensure the site – in the central high street – does not remain vacant and development of the scheme is done at pace.

This report describes the outcome of the Stage 1 (RIBA stage 0-2) work  in that PID and makes recommendations for next steps.

Recommendation to the Executive:

1.       To approve the phasing of the project.

2.       To approve the Outline Business Case and project timeline for the Phase 1 of the revised project (Exempt Annexe 1).

3.       To recommend to Full Council the approval of a budget of £230,000 (Exempt Annexe 2), to be met from the Asset Investment Reserve, to progress phase 1 of the revised project.  This will be to deliver the commercial element of the project to RIBA Stage 4 (the detailed design phase) and to enable the submission of a planning application for the commercial unit.

4.       To delegate to the Strategic Director of Place, in consultation with the Lead Portfolio Holder, the submission of a new planning application for the commercial unit, including demolition to facilitate delivery and preparation for the prospective housing.

5.       To recommend to Full Council the approval of an overall capital budget of £1.96 million (including the £230,000 referred to above), as per the breakdown in Exempt Appendix 4, to cover the anticipated cost of the capital works to the commercial unit, with delegation to Executive to approve the final budget once tender returns for the construction contract have been received.

6.       To delegate authority to the Executive Head of Assets to enter into a long-term (15 years) commercial lease for 69 High Street.

7.       To delegate to the Strategic Director of Place to:

i.         Approve the commencement of tender process for construction contracts, including those of the professional team.

ii.        Approve the appointment of contractors following appropriate procurement subject to the appointment being within the identified budget.

iii.       Approve the entering into any related contractual documentation (including collateral warranties and novation agreements) related to the development of the project.

iv.       Approve the entering into any agreement (including paying any necessary sums provided they are within the project budget) with any utility or related provider to ensure the connection, moving or management of any services to facilitate the project.

The Executive RESOLVED to:

1.       approve the phasing of the project.

2.       approve the Outline Business Case and project timeline for the Phase 1 of the revised project (Exempt Annexe 1).

3.       recommend to Full Council the approval of a budget of £230,000 (Exempt Annexe 2), to be met from the Asset Investment Reserve, to progress Phase 1 of the revised project.  This will be to deliver the commercial element of the project to RIBA Stage 4 (the detailed design phase) and to enable the submission of a planning application for the commercial unit.

4.       delegate authority to the Strategic Director of Place, in consultation with the Lead Portfolio Holder, to submit a new planning application for the commercial unit, including demolition to facilitate delivery and preparation for the prospective housing.

5.       recommend to Full Council the approval of an overall capital budget of £1.96 million (including the £230,000 referred to above), as per the breakdown in Exempt Appendix 4, to cover the anticipated cost of the capital works to the commercial unit, with delegation to Executive to approve the final budget once tender returns for the construction contract have been received.

6.       delegate authority to the Executive Head of Assets and Property to enter into a long-term (15 years) commercial lease for 69 High Street.

7.       delegate authority to the Strategic Director of Place to:

i.        Approve the commencement of tender process for construction contracts, including those of the professional team.

ii.       Approve the appointment of contractors following appropriate procurement subject to the appointment being within the identified budget.

iii.      Approve the entering into any related contractual documentation (including collateral warranties and novation agreements) related to the development of the project.

iv.      Approve the entering into any agreement (including paying any necessary sums provided they are within the project budget) with any utility or related provider to ensure the connection, moving or management of any services to facilitate the project.

Reasons for the decision:

1.       69 High Street, Godalming was purchased as a General Fund mixed use redevelopment project to support the Council’s aspirations contained within the Corporate Strategy.

2.       It aligns with the Government guidelines around ‘Investment for Service Purposes’ being expenditure on assets that form part of the Council’s public service which also support the corporate priorities.

3.       Since the property was bought, macro-economic factors including build cost inflation and increased borrowing costs have adversely impacted the financial landscape. The redevelopment options have been revised accordingly, and are in line with the Council’s Asset Investment Strategy. Further consideration has been given as to how the Council might best look to progress the delivery of the scheme to achieve the strategic objectives. The recommendations in this report will enable the scheme to progress towards delivery of the project.

[Overview and Scrutiny Committee – Resources]

36.1   Cllr Mark Merryweather, Portfolio Holder for Finance and Assets, introduced the report which recommended the preferred option for developing the property asset at 69 High Street, Godalming.

36.2   Cllr Merryweather explained that much of the reporting relating to this matter had to be restricted to Exempt papers for good reason including commercial confidentiality, and it would be necessary to move into Exempt session, but there were a few points of principle that he wished to draw out from the public part of the report:

1.     When the council acquired this site nearly 18 months ago, the objective was – and it still was - to provide much needed genuinely affordable housing and to re-invigorate the one empty High Street unit that we could.

2.     The council had not been immune to the macro-economic climate which had made this project so much more difficult, but there were still options to deliver the intended outcome that were financially viable and demonstrated value for money.  The macro-economic climate meant that these and other options had weakened from where they were 18 months ago, while others had even had to be all but ruled out, but the recommended option was still expected to achieve the original outcome and pay for itself.

3.     Indeed, beyond the base case version of recommended Option 3 presented in the Exempt Annexes, the council also had funding reserve capacity to improve on that base case should it chose to do so, plus the flexibility to progress the residential element through either the General Fund or the Housing Revenue Account – decisions that did not have to be taken now.

4.     While the council had to assess the project’s value for money, it was not allowed to undertake the project primarily to make a profit, a yield, either in income or capital terms.  In contrast though, and precisely because of the exact same macro-economic factors, it would not be in the council’s strategic or financial interests to abandon the project and exit now into the open market.

36.3   Cllr Merryweather thanked council officers and the council’s team of independent professional expert advisers who had worked so hard to update all of the analyses in this period of exceptional economic turmoil. 

36.4   Before moving into exempt session, the Deputy Leader asked the Executive Head of Legal and Democratic Services and Monitoring Officer to respond to a point raised by Cllr Jerry Hyman prior to the meeting regarding whether the Executive was able to make a decision in Exempt session, referring to Paragraph 9 of revised Part 1 of Schedule 12A of the Local Government Act 1972. The Executive Head of Legal and Democratic Services confirmed that she was satisfied that the report did contain exempt information in accordance with paragraph 3 of Schedule 12A to the Local Government Act 1972 which provided that information that related to the financial or business affairs of any particular person including the authority holding that information could be deemed to be exempt. There was  ...  view the full minutes text for item EXE 36/23