Islamia Primary School move - minutes of September 12th Cabinet Meeting that set the process in motion

In view of the intense interest in the proposed move of Islamia Primary School to a site in Strathcona Road, Preston ward, I thought it might be useful to publish the minutes of the Cabinet Meeting of September 12 that set the process in motion:

 

This report details a proposal regarding the relocation of Islamia Primary School and seeks approval to the associated capital project business case and statutory consultation process.

Decision:

Cabinet NOTED the comments by Sofia Moussaoui, representing the Governing Body of Islamia Primary School, who had requested to speak on the report in relation to the future of Islamia Primary School. 

 

 In commenting on the proposals within the report she advised that the main aim of the Governing Body moving forward was to secure the future of Islamia Primary School.  As such she advised the Governing Body remained committed to ensure that the necessary funding and a suitable, viable alternative site was secured for the school.  This recognised the advice from the Council that the South Kilburn site identified as the preferred alternative by the parents who had signed the petition was not a viable option given the timing of its availability and allocated use.

 

In advance of the report being considered, Councillor Butt again assured the petitioners about the formal consultation that would need to be undertaken by the Governing Body, should the recommendations be agreed, along with the work being undertaken with the School and Governing Board in order to maintain and secure the schools future provision on the basis of the proposals identified.

 

Having noted the report, including the exempt information within the appendix, and the comments raised by the petitioners and Governing Body representatives at the meeting Cabinet RESOLVED:

 

(1)       To note the historical context and background set out in the report.

 

(2)       To note that the Yusuf Islam Foundation has issued eviction notices to its Voluntary Aided Islamia Primary School and that the future options for the school were for the school to either relocate or close.

 

(3)       To note the proposal to relocate Islamia Primary School to the Strathcona site as a 2FE school and agree to allocate up to £8.0m capital towards the total project costs of £10.0m, noting that the preferred option was estimated to cost £9.11m.

 

(4)       To approve the delegation of authority to agree pre-tender considerations, procure and award the necessary works contracts valued in excess of £5m to the Corporate Director Finances and Resources, in consultation with the Cabinet Member for Children, Young People and Schools and Cabinet Member for Finance, Resources and Reform.

 

(5)       To note that if the school relocated to the Strathcona school site, the site could be transferred into the name of the Yusuf Islam Foundation who would be required to hold the site for the benefit of the Islamia Primary School. Further details in terms of ownership would be set out in a Trust Deed. This would ensure that the primary school would be protected from eviction in future. (My emphasis)

 

(6)       To note that a statutory consultation process to allow the relocation of Islamia Primary School as a 2FE Primary School to the Strathcona site would need to be undertaken and that the Governing Board would be responsible for making this proposal through statutory consultation.

 

(7)       To acknowledge that, should the Strathcona site be used for Islamia Primary School, then an alternative site would be required to deliver Post-16 SEND provision.

Minutes:

Following on from consideration of the petition relating to Islamia Primary School, Councillor Muhammed Butt (Leader of the Council) advised that he had accepted a request to speak on the report from Sofia Moussaoui, representing the Governing Body at Islamia Primary School.  In commenting on the proposals within the report, Sofia Moussaoui advised that the main aim of the Governing Body moving forward was to secure the future of Islamia Primary School.  As such she advised the Governing Body remained committed to ensure that the necessary funding and a suitable, viable alternative site was secured for future provision of the school.  This recognised the advice from the Council that the South Kilburn site identified as the preferred alternative by the parents who had signed the petition was not a viable option given the timing of its availability and allocated use.

 

In advance of the report being considered, Councillor Muhammed Butt again assured the petitioners about the formal consultation that would need to be undertaken by the Governing Body, should the recommendations in the report be agreed, along with the work being undertaken with the School and Governing Board in order to maintain and secure the schools future provision on the basis of the proposals identified.

 

Councillor Gwen Grahl (Cabinet member for Children, Young People and Schools) then introduced the report which set out proposals for the relocation of Islamia Primary School.  In considering the report Cabinet noted the outline of options reviewed along with the capital project requirements and business case supporting the option to develop the former Strathcona school site as a two form entry site for the School.  The report also set out the statutory consultation requirements that would be required in order to deliver the project.  In thanking the petitioners and representatives of the school Governing Body for their comments, Councillor Grahl advised that she acknowledged the concerns and frustrations raised but, at the same time, felt it important to recognise the limited options available in relation to the availability of alternative sites to secure future provision of the school.  In terms of reference to the new school site within South Kilburn, confirmation was provided that this had already been allocated for use as a replacement for Carlton Vale Infant and Kilburn Park Junior School as part of the wider South Kilburn regeneration masterplan with the new school also not available until September 2026.  Members noted it would also not therefore be available as a viable option on the basis of the timing, given Islamia Primary School were required to vacate their current site by the end of July 2024.

 

Taking this into account, members were advised of the significant effort which had gone into development of the Strathcona site as a viable alternative for the school along with the assurance of the Council’s continued commitment to work with the school and parents in order to ensure a smooth transition, should the proposal be approved, including on how best to facilitate travel and access particularly for more vulnerable pupils.

 

In recognising that the preference identified by the petitioners for allocation of the new school site in South Kilburn was not a viable option, members supported the efforts being made to safeguard the long term future of the school working with the Governing Body and Trust in terms of the provision of a suitable permanent site that could be developed to accommodate the school and on which it would be possible for parents to contribute and outline their views as part of the statutory consultation process.

 

Having considered the report, including the exempt information within Appendix A, and the comments raised by the petitioners and Governing Body representatives at the meeting Cabinet RESOLVED:

 

(1)      To note the historical context and background set out in the report.

 

(2)      To note that the Yusuf Islam Foundation has issued eviction notices to its Voluntary Aided Islamia Primary School and that the future options for the school were for the school to either relocate or close.

 

(3)      To note the proposal to relocate Islamia Primary School to the Strathcona site as a 2FE school and agree to allocate up to £8.0m capital towards the total project costs of £10.0m, noting that the preferred option was estimated to cost £9.11m.

 

(4)      To approve the delegation of authority to agree pre-tender considerations, procure and award the necessary works contracts valued in excess of £5m to the Corporate Director Finances and Resources, in consultation with the Cabinet Member for Children, Young People and Schools and Cabinet Member for Finance, Resources and Reform.

 

(5)      To note that if the school relocated to the Strathcona school site, the site could be transferred into the name of the Yusuf Islam Foundation who would be required to hold the site for the benefit of the Islamia Primary School. Further details in terms of ownership would be set out in a Trust Deed. This would ensure that the primary school would be protected from eviction in future.

 

(6)      To note that a statutory consultation process to allow the relocation of Islamia Primary School as a 2FE Primary School to the Strathcona site would need to be undertaken and that the Governing Board would be responsible for making this proposal through statutory consultation.

 

(7)     To acknowledge that, should the Strathcona site be used for Islamia Primary School, then an alternative site would be required to deliver Post-16 SEND provision.

Supporting documents:

• 07. Future of Islamia Primary School.docx, item 8. PDF 484 KB
• Restricted enclosure View the reasons why document 8./2 is restricted

Many pressures on Brent housing put projects at risk

 A Quarter 2 financial report LINK going to Cabinet on Monday covers a range of areas where inflation and the cost of living and energy crises have impacted on the Council’s budget. Of particular interest is the impact on housing, both the Housing Revenue Account (HRA- council housing) and the capital programme (building of new homes). [My emphasis throughout]

There is a double whammy of homelessness increasing and the affordable private rental sector reducing:

3.6.7  As the cost of living crisis deepens, with energy costs and day-to-day expenditure increasing steeply, there has been a rise in homelessness applications, resulting in an increased use of temporary accommodation (TA).

3.6.8  In addition, the affordable Private Rented Sector (PRS) has contracted, which means there is a lack of supply to move households on from TA, which will put further pressures on the budget. Although, the recent opening of Anansi and Knowles house has alleviated this pressure to some extent, both schemes are now full and silted up due to the lack of move on accommodation available.

The cost-of-living crisis is expected to increase the number of families in rent arrears while the financial impact on the HRA budget could mean an increase in rent and reduced services:

3.6.9  The current economic climate could also have an impact on the rent collection rates and result in increases in rent arrears. Collection rates are being closely monitored and there are ongoing investigations to better understand the drivers for the movements.

3.9.2  The HRA is forecasting a break-even position for 2022/23. This is the net result of overspends on voids and a backlog of repairs being offset by underspends due to staffing vacancies and a reduction of the capital programme. There are also a number of other risks and uncertainties in this fund that could pose financial pressures.

3.9.3  High levels of uncertainty around the inflation and rising interest rates pose a financial risk to the HRA. This has an impact on the cost of materials and repairs, as well as the cost of new build contracts. Rising energy costs are to be passed on to tenants and leaseholders resulting in an increased risk of non- collection. In addition, rising cost of living is likely to impact rent collection rates and consequently result in increased rent arrears. Other pressures involve the capital programme as there is no new government funding having been made available to meet environmental priorities and requirements such as carbon reduction works to homes.

3.9.4  The increased costs experienced by the HRA would have to be met by rent inflation and modifying service delivery. The rents policy is currently under consultation and it is unclear at this stage what restrictions the Council will face.

The delivery of new homes is in jeopardy due to inflationary pressures and the report anticipates further changes in tenure of the kind already reported on Wembley Matters at Watling Gardens where the amount of genuinely affordable housing at social rents is reduced to ensure viability of the project. This could mean the proportion of private housing and controversial shared ownership being increased and London Affordable Rent becoming the norm  and some projects being abandoned or postponed:

Capital Programme

4.1  Rising inflation, a continued shortage of labour and materials and events such as the COVID-19 pandemic and the war in Ukraine have had an adverse effect on costs and therefore the financial viability of schemes. The Government reported an increase of 23% in the costs of materials such as steel, timber and concrete last year alone.

4.2  For those projects in contract and being delivered, the Council is already receiving requests from contractors to re-negotiate pricing due to the cost of raw materials of which the Council are exploring all options to sustain viability including value engineering and tenure mix to allow schemes to continue. This is also impacting viability for schemes that are not yet in contract but within the Capital Programme and those in the forward plan pipeline. Even with the mitigating measures, it is likely there will be schemes that are cancelled, paused or reduced in scope to ensure funding can be prioritised appropriately.

4.3  The Council is in the process of reassessing the viability of our Housing Capital Programme in light of recent inflation figures. The exercise will model the potential impact of expected cost increases for schemes not yet in contract or received a recent tender price. In anticipation of the adverse affect on the scheme’s viability, the Council will assess the scope of the scheme whilst also reviewing the impact of cross subsidy.

4.4  The impacts of inflation are not reflected to the full extent in the budget variances reported as above due to:

·  The variances analysed in this report are for the financial year 2022/23 only;

·  Some impacted projects have had additional budgets secured by Cabinet for example Watling Gardens which now includes 23 shared ownership homes which protected the Council’s ability to deliver 45 Extra Care homes and 56 homes at London affordable rent;

·  Many projects have the initial phases of the budget approved which is forecast above, however the further build phases of the scheme are yet to have been approved.

A further pressure is over-spend on Housing General Fund project.

4.6  Housing General Fund

The General Fund Housing Programme is projecting a variance of £2.8m (overspend of £3.3m and slippage of £0.5m). An overspend of £2.5m is forecast on the Learie Constantine Centre as a result of amendments to the cost plan and contract arising from changes in building safety regulations. A £0.4m overspend is forecast for Empty Property Works Programme based on the project team’s assessment of the need. There is an £0.2m overspend forecast on Church End development due to the need to redesign RIBA Stage 3 to comply with the new Building Safety Act. There is a £0.2m overspend forecast on Peel Road to account for the contractor’s claims which they have assigned to variations instructed by the Council. There is a slippage of £0.1m on Clock Cottage and £0.4m on Nail Acquisition & Refurbishment resulting from the ongoing assessment of scheme progress and spend timing estimates.

 

4.9 St Raphael’s

The two St Raphael’s schemes, Estate Regeneration and Phase 1 of the Infill Development, are forecast to spend to budget for the professional fees and works to support the planning applications associated with the scheme of £1.4m and £0.5m respectively.

Risk and Uncertainties

For the Infill housing development, the project team are working on the planning application for Phase 1 as per the Masterplan. The viability of the development is under regular review and work is ongoing to understand the implications of the current market environment for delivery on the site.

 

A further risk not covered by the report is that slippage of some schemes will mean that Brent Council is not complying with the timetable demanded by the GLA as a condition of their grants and the funding could be lost:

 

 

 

 

Residents attempt to hold Brent Cabinet members to account with public questions. Did they succeed?

Islamia Chair of Governors tells parents that final approval after consultation on school move 'should be no more than a formality'. Yusuf Islam Foundation is to redevelop the present site.

The proposed site photographed earlier this week

 Sofia Moussaoui, Chair of the Islamia Primary School Govering Board, has written to parents troday following the Brent Cabinet's approval of the report that cleared the way for consultation on the move of the school from Queens Park to the former Roe Green Strathcona site  in Preston, Wembley.

The letter reveals that the Yusuf Islam Foundation plans to redevelop the Queens Park site - a prime site in a well to do area.

In a passage that has annoyed parents, who sense a fait accompli as regards the consultation, Ms Moussaoui states:

...This approval in principle is subject to final approval upon the conclusion of the consultation process, but it should be no more than a formality.

The letter conscludes:

We would encourage you all to provide constructive suggestions as to how we can the transition easier for both teachers and parents.

No mention of children!

The text of the letter to parents and carers:

I am writing to update you on the proposed relocation of the school.

I am pleased to report that the Yusuf Islam Foundation, the GB[Governing Board] and the Local Authority have agreed terms in principle for the relocation of the School. The Yusuf Islam Foundation has agreed to withdraw the eviction notice in return for the GB committing to vacating the Salusbury Road site in July 2024 and in return for the Local Authority committing to provide an alternative site for Islamia by the same date.

The greement is yet to be signed but all 3 parties have committed to signing the document in its current agreed form. Brother Yusuf Islam is due to travel to London to sign and execute the agreement.

The Local Authority has proposed that Islamia relocate to the Strathcona Site which is located at the Roe Green Strathcona School Site, Strathcona Road, Wembley, HA9 8QW. Furthermore, the Local Authority is adamant that they have conducted extensive searches over the last couiple of years and that there are no other suitable sites within the Brent area,

The Yusuf Islam Foundation will be redeveloping its land and therefore ongoing occupation of the curent school site after the agreed July 2024 date is not an option.

The GB is aware of the 500 strong petition to relocate the School to a site in South Kilburn. This  has been raised with the Local Authority who have confirmed that the site has already been earmarked for another school and that  it will in any event not be ready for occupation for 4 years, Therefore, the site in South Kilburn is not a viable option.

The priority for the GB is to avoid the closure of Islamia, who in 2 years' time cannot continue to occupy the Salusbury Road site. Currently our only viable option to avoid closure is the relocation to the now closed Roe Green Strathcona School Site, Strathcona Road, HA9 8QW.

On Monday 12th September 2022, 5 members of the GB attended the Cabinet Meeting at Brent Civic Centre  * where Councillors voted on the proposal to fund the relocation of Islamia to the Strathcona Site. In total the costs of the relocation and rebuild ** are estimated to be circa £12million. The Councillors approved the proposal and have committed in principle to providing the funds. The approval in principle is subject to final approval upon the conclusion of the consultation process, but it should be no more than a formality.

The next step for the GB is to conduct a informal consultation process which we hope to begin within the next 1-2 weeks. The informal consultation will run for 4 weeks. Thereafter, there will also need to be a formal consultation process.

We would encourage you all to provide constructive suggestions as to how we can make the transition easier for both teachers and parents.

* Around 15 parents opposed to the plans also attended the Cabinet meeting and one made a speech presenting the 500+ signature petition.

** The plans are for the refurbishment of the existing buildings and the building of a new block. From the Cabinet Report: 

4. Retain and refurbish all buildings on the Strathcona site and build a new block to meet 2FE accommodation requirements

New Homes at 1 Morland Gardens – but not the ones Brent promised! Has Brent Council shot itself in the foot?

Guest post by Philip Grant in a personal capacity

 

In January 2020, Brent’s Cabinet approved proposals for a new adult education college, and 65 affordable homes, on the site of the existing Brent Start building at 1 Morland Gardens in Stonebridge. They delegated authority to make all the Key Decisions for this project to the then Strategic Director for Regeneration (in consultation with a Lead Member). His report told them that work on the new building should be completed by the summer of 2022:-

 

Morland Gardens “Delivery Timetable” from the report to Cabinet, January 2020.

 

In fact, the scheme had already been informally approved by the Leader, and then Deputy Leader and Lead Members for Education and Housing, at a meeting with the project team in February 2019. Then they were told that 89 new homes could be built on the site. That number was later reduced to 65, as even Brent’s planners would not agree that the impact on neighbouring residents (loss of light, etc.) of the 89-home design would be ‘acceptable’.

 

The proposal had started off in 2018 as an updated college and some new housing. The original design by the architects would have retained the locally-listed Victorian villa, and developed the site in phases, so that there was no need for Brent Start to by decanted. There was a viable alternative to the scheme which the Cabinet approved. However, it seems that the Council were determined to build as many new homes as they could on the college site, even though it meant demolishing a valuable heritage asset their own policies promised to protect, and that was the first of many mistakes they have made on this project.

 

Architect’s image of the proposed new building (viewed from across Brentfield Road).

 

In August 2020, the Council controversially obtained planning consent for the development, despite strong local opposition. It was soon celebrating its “award winning” Morland Gardens scheme, and the 65 new homes it would deliver. Two years later, there are new residents at 1 Morland Gardens, but in the original building, not the new one pictured above. 

 

The Brent Start college was moved out earlier this year to a “temporary home” in the former Stonebridge School Annexe. (The adaptations to the annexe cost at least £1.2m, and the building will be demolished once the college leaves, as it is on the site of Brent’s Twybridge Way 67-home housing scheme, which was given planning consent in May 2020, and should be nearing completion now!) That left 1 Morland Gardens vacant.

 

What do you do with a large empty building, when the catalogue of mistakes you’ve made means that you are still not ready to go ahead with its redevelopment? In May 2022, Brent contacted Live-in Guardians, and by early July this organisation was housing mainly young single people in the former college building.

 

An Instagram advert for Live-in Guardians at 1 Morland Gardens, July 2022.

 

I was first aware of Live-in Guardians (“LIG”) there when I attended a site meeting with Brent’s Project Manager on 26 July, to discuss my objections to the proposed Stopping-up Order for the highway outside the property. There was a sign on the gateway to say that they were providing live-in protection for the building, and a resident would not let us enter because the Officer had not arranged access in advance. 

 

I’m interested in all aspects of the Morland Gardens project, so I put in an FoI request for a copy of the Council’s agreement with LIG. This has been supplied to me, and as live-in guardianship is an idea which may be of wider interest, to single people (or couples) in need of an affordable short-term home as well as to property owners, I will include some information and extracts from it below.

 

The opening paragraphs from Brent’s agreement with LIG.

 

These “new homes” would not be for people on Brent’s housing waiting list, so who were they for? The agreement says that up to 26 “Guardians” would be provided with accommodation at 1 Morland Gardens, and gives details of the type of person and how LIG selects them.

 

It sounds from this extract that the Guardians living here will be people who do need relatively inexpensive accommodation, at a stage where they are not in a position to rent or buy somewhere more permanent. But how long can they stay in the building?

 

The paperwork makes it clear that the Guardians only have a licence to occupy the premises, subject to the right to 4 weeks’ notice to leave after the 26-week contract period. Their legal status is explained to them on the LIG website.

 

From the LIG website.

 

1 Morland Gardens has been used as a college since 1994, when it was sympathetically designed around the restored Victorian villa. Turning it into living accommodation would require some alterations, but as part of the agreement LIG paid the initial fit-out costs, for things such as installing a kitchen, 4 extra showers, and carrying out all of the necessary safety checks. The cost of this work was estimated at up to £17k.

 

It appears that Brent is getting a good deal out of allowing Guardians to live at 1 Morland Gardens. The Council would not have to pay a security company to look after the vacant property. The only expenses they would incur during the contract period would be the Council Tax or Business Rates, and any repairs or maintenance which the agreement made them responsible for. And, at any time after the 26 weeks, they could get vacant possession of the building and land within its garden walls by giving only four weeks’ notice.

 

I have to say that I approve of Brent’s decision to allow 1 Morland Gardens to be used for providing temporary accommodation, rather than remaining empty after they had moved the Brent Start college out of the building. The presence of Live-in Guardians will hopefully prevent the beautiful heritage building from being vandalised (and among the potential vandals, I include Brent Council and the contractors it has recently hired, perhaps unlawfully, to demolish it!)

 

1 Morland Gardens, the former Brent Start college, June 2022.

 

Another reason why I like Brent’s agreement with LIG (although, on refection the Council may regret it) is that the 26-week period will last until at least the end of December 2022. At a Scrutiny Committee meeting on 9 June, Brent’s Strategic Director for Regeneration justified the urgent award of a c.£38m contract for the Morland Gardens development on the grounds that if work did not begin on site by August ‘the Council stood to lose the £6.5m GLA grant towards affordable housing.’

 

The site is in two parts. They can’t build on the land outside, because there are open appeals against the proposed Stopping-up Order. Now they can’t begin any work inside the boundary, because that is legally occupied by Live-in Guardians. Brent can’t “start on site”, within the terms of their GLA grant agreement, this month (or this year), because they have no site to start on! 

 

Philip Grant.

i4B and First Wave Housing board membership and governance arangements on agenda for Brent Cabinet's September meeting

Wembley Matters recently drew attention to the Brent Council Internal Audit that found a possible conflict of interest in the directorships of Brent's companies First Wave Housing and i4B. See LINK. Wembley Matters drew attention to the role of a councillor director who is the brother of the Leader of Brent Council as well as Brent Council officers.  

Brent Council responded to the Audit:  Management Response: We will review job descriptions to identify and mitigate conflicts of interest.

Proposed changes to the Board membership and governance arrangements for both companies have now been tabled for Cabinet on September 12th. The decision is led by Cllr Mili Patel, Deputy Leader of the Council:

To agree the proposed changes to the Board membership and governance arrangements of the Council's housing companies i4B Holdings Ltd and First Wave Housing Ltd

Decision type: Non-key

Decision status: For Determination

Wards affected: (All Wards);

Notice of proposed decision first published: 22/07/2022

Decision due: 12 Sep 2022 by Cabinet

Lead member: Deputy Leader and Cabinet Member for Finance, Resources and Reform

Lead director: Strategic Director - Customer and Digital Services

Department: Customer and Digital Services

Contact: Harry Chavasse Email: Harry.Chavasse@brent.gov.uk.

Documents

• i4B/First Wave Housing Governance and Board Membership Update  

 

40 minute Cabinet nods through all item in a 'heavy agenda'

 Yesterday's Brent Cabinet completed all  10 decision items in 40 minutes, underlining the fact that this 'public meeting' merely serves as a rubber stamp with any real discussion and debate taking place elsewhere in private.

A member of the public had applied to speak on one of the items but Cllr Butt ruled that the request had not complied with the required amount of notice.

The extensive Climate Strategy item for was dealt with in just 3 minutes with Environment lead Cllr Krupa Sheth reading aloud a short prepared statement.  As well as the main report there were six Appendices. We were left unenlightened about what exactly is involved in the creation of 'Sustainable Neighbourhoods' and why there were no plans for safe and accessible cycling routes in the borough.

Cllr Promise Knight was unwell so was not present for two key items including the conversion of  24 in-fill units at Watling Gardens from London Affordable Rent to Shared Ownership.  The CEO had to remind Cllr Butt of an addition to the report stipulating that the change had to be approved by the Planning Committee.  This appears to have been the result of Philip Grant's intervention covered on Wembley Matters HERE.

It was also left to the CEO to make a passing mention of the risks involved in the arrangements for Brent Council's purchase of hoiusing units at the Euro House development in Wembley Park.

The meeting only livened up, if you can call a couple of questions livening up, at the end when a restructure of the counci's senior management, deleting one post, was discussed.

The items and decisions can be viewed HERE

Cabinet set to approve financial arrangement to purchase 298 social rent units on Euro House (Wembley Park) site

 

The blocks on the former Euro House site between the Wealdstone Brook and Fifth Way

 

Monday's Cabinet will be asked to approve plans for the Council to make an arrangement for the purchase of a lease at three of the blocks that will be built on the former Euro House warehouse site in Wembley Park. The Council claim success in having negotiated an improvement on the amount of affordable housing available and that at social rent. in blocks D and E above It is partly financed by the Council managing 46 lettings at market rent in Block A.

 The housing mix has also changed with more family sized accomodation:

The main provisions are below. I have highlighted some of the possible risks.

This report seeks permission to negotiate and thereafter purchase a mix of affordable units in Blocks D and E and market units in Block A forming part of a development of Euro House, Fulton Road Wembley HA9 0TF. The Council will enter into an underlease for up to 60 years of Blocks A, D and E, from an Asset Special Purpose Vehicle (ASPV) who will have entered into a 999 year
headlease with the freeholder. The freeholder is Crown Wembley LP. The Council will have an option with ASPV to acquire the headlease for a peppercorn upon the expiration of the 60 year underlease. The site will be developed by a developer called Regal London. The scheme is due to start in September 2022 with an estimated practical completion date of Q4 2025 for the affordable rented homes

 

To finance the purchase of this block, the Council will take a lease of up to 60 years from the ASPV, with rents set at current day social rents and indexed at CPI plus 1% subject to a cap of 5% and a floor of 1%. Upon completion of the underlease, a reversionary 939-year lease will be granted at nil rent or peppercorn

 

The total cost of the lease based on a term of up to 60 years is circa £128M. The social rented units will sit within the Housing Revenue Account  and the Council will utilise the most effective mechanism to manage the market rented units. There has not been an opportunity to purchase these units or vary the tenure and size mix through a traditional financing mechanism.

The proposed scheme provides a target of 252 affordable units and 46 market units to be delivered through the lease. To ensure the scheme is financially viable, the Director of Finance in consultation with the Lead Member for Finance and the Operational Director of Property and Assets will negotiate the optimal unit mix that supports the increased delivery of the affordable units from the original proposal. This may result in a variation in the affordable unit and market unit mix from the target mix described in section 3.4 above.

With the proposed target scheme converting 34 market units to social rented units, this will enable the Council to claim £100k per unit for the additionality provided by the scheme and £28k per unit for the remaining 218 affordable units. The total grant claim expected to fund this development is £9.5M.

It has been assumed that the Council will receive 100% Stamp Duty Land Tax (SDLT) relief based on the assumption that:

a) The Council is deemed to be a relevant housing provider that is controlled by its tenants; and

b) The application of GLA grant receipts meets the requirements of a qualifying public subsidy.

These assumptions will need to be fully tested with the Council’s tax advisors and HMRC. Failure to secure the SDLT exemption noted above would increase the cost of the scheme.