Brent Cabinet asked to approve a total allocation of over £10m of Strategtic CIL to eight Brent projects, plus unspecified amounts for Morland Gardens and Church End

 

 

Monday's Brent Cabinet will consider a request LINK  to allocate just over £10m of Strategic Infrastructure funds to eight projects. The amounts vary from £102k to £2.6m.  Most were considered by the Infrastructure Officer Working Group. (IOWG). Some money is allocated to community centres, a need for which has been a recent demand post-Covid. Other sums are due to budget shortfalls.

The officers' report provides more detail and a justification for using SCIL for these purposes as below.

However, apart from this direct approval of these sums there is also a request that the:

Cabinet delegates authority to the Corporate Director of Finance & Resources in consultation with the Lead Member for Finance, Resources & Reform to agree any additional SCIL allocations to the Morland Gardens project and any SCIL allocation to the Church End redevelopment project.

 'Any' is a very open-ended commitment to make without further Cabinet approval of the actual amounts involved.

 

· £0.9 million for use towards Wembley Transport Improvements

The North End Road Connector project provides a new access to North End Road from Bridge Road. This benefits residents and businesses by providing an alternative route across Wembley Park to access the North Circular Road, improving the traffic flow in the area. This route will provide an available vehicular route at all times - particularly useful for residents of North End Road who are impacted by the road closures on event days. This project complies with the CIL Regulations because it will help to support the growth in the area and improve traffic flow and connectivity through the area.

 

  · £413,000 for use towards Wembley Hostile Vehicle Measures

 

 

The HVM measures will support the proposed growth and development identified in the Wembley Growth Area. In addition they will provide a safe and secure environment, and enhance the attraction of the Stadium as a safe and secure environment to visit, in line with the Local Plan aspirations. The safe andsecure environment will help to encourage and maintain growth and development within the Wembley area.

 

  · £559,100 for use towards Harlesden Library

 

 

The project will future proof the facilities for an estimated further ten years and enable more flexible use, building in capacity for the service to adapt to changing community needs. These will be primarily community assets, developed to address social and cultural infrastructure challenges, build capacity in the local community and creative sector and develop new partnerships to enhance the service offer to residents.

 

In October 2021, the total cost of the project was £605,600 with a funding application to the ACE Libraries Improvement Fund for £285k already successful. A capital contribution ask of £320,600 from SCIL funds was required to make up this shortfall.

 

  · £1,951,162 for use towards the creation of Carlton Vale Boulevard

 

 

This significant request is the result of a short-fall in funding despite revisions to the scheme:

The total cost of the project is £6,669,900 following £1,166,000 of savings made to the original scheme, which has been reduced in scale and value engineered down. Funding of £305,273 from S106 obligations towards tree planting and £4,413,465 of Housing Infrastructure Funds (HIF) (agreed verbally, confirmation in writing still awaited) have been secured. HIF is to facilitate improvements and unlock housing growth. 

 

If the scheme is solely reliant on the HIF funding a place-making scheme would not be deliverable and it is likely that the HIF offer would be withdrawn. 

 

The total cost of the project includes contingency costs that have been included within the RIBA Stage 4 Cost Plan by the appointed cost consultant. The contingency costs, including inflation and risks, are considered standard considering the nature of the project. 

 

The funding gap at £1,951,162 is being sought from SCIL. This would be split between £1,722,162 to enable the project to go forward and £229,000 to the lifetime maintenance. It is expected that over a 25 year period, 40% of the maintenance spend would occur in the first 12.5 years and 60% of the maintenance spend in the remainder. 

 

Supporting Development & Growth 

 

The population of South Kilburn is set to double through the wider regeneration proposals. The CVB project provides a transformational piece of infrastructure connecting current and proposed developments with improved active travel through the improved cycle lanes and wider and more attractive pavements.

The project will help to increase footfall, providing support to current and future local businesses, public spaces and community facilities.

 

  · £102,427.26 for use towards the creation of a new community café and external amenity space as part of the Stonebridge redevelopment

 

 

Due to high levels of population growth owing to new development there will be a need for new community and cultural facilities to ensure the provision of social infrastructure to meet the needs of our diverse community. The neighbourhoods experiencing the highest levels of deprivation are largely located in the south around the Harlesden, Neasden, Stonebridge and South Kilburn areas. This commercial space is a key piece of social infrastructure that will help both existing communities and new communities together in the Stonebridge area and will help complement future mixed developments such as the Bridge Park Masterplan.

 

  

 · £1,015,684.77 for use towards the creation of a new community facilityas part of the Preston Community Library redevelopment

 

This community hub will help to support growth and development that is outlined in the Brent Local Plan particularly in the North West part of the borough. It is in proximity to Northwick Park Growth Area. This SCIL funding investment will help deliver a modern, replacement community hub that will strengthen the existing sense of community by celebrating Brent’s diversity, heritage and culture, and creating places where Brent’s communities can meet.

 

  · £2,643,445.04 for use towards the creation of a new community centre as part of Learie Constantine Centre redevelopment

 

 

Due to high levels of population growth owing to new development in both Neasden Stations and Church End Growth Areas there will be a need for new community and cultural facilities to ensure the provision of social infrastructure to meet the needs of our diverse community. The Brent Local Plan emphasises the need to ensure that community facilities are not lost where they meet or could meet a potential need and ideally enhanced to address these needs. This SCIL funding investment will help deliver a modern, replacement community centre that will strengthen the existing sense of community by celebrating Brent’s diversity, heritage and culture, and creating places where Brent’s communities can meet.

  · £2,479,770.31 for use towards the creation of a new community centre as part of the Brent Indian Community Centre redevelopment

 

Due to high levels of population growth owing to new development in both Neasden Stations and Church End Growth Areas there is a need for community facilities that will support development. This SCIL funding investment will help deliver a modern, replacement community centre that will strengthen the existing sense of community by celebrating Brent’s diversity, heritage and culture, and creating places where Brent’s communities can meet.

 

Morland Gardens Unspecified amount

 

Readers will be familiar with the controversy surrounding the Morland Gardens development which involves the demolition of the Altamira Victorian Villa. The delegation to Lead Member and officers appears to anticipate a rise in costs of the education and community facility.  Note that this section of the report does not mention the Lead member for Finance and Resources as part of the decison making, leaving it as a decion for the Coprorate Director of Finance and Resources. There does not seem to be an intention for a reference to the Infrastructure Officer Working Group.

 

In January 2020, Cabinet agreed an investment package of £43m to deliver the Morland Gardens development. The Morland Gardens development secured planning permission in October 2020 to deliver a state of the art adult education centre, 65 new affordable homes, 675 sqm of affordable workspace for start-up businesses from the local community, and a public facing café. A SCIL allocation of £15.2 million towards the education facility was agreed by Cabinet on 14 January 2020.

 

In August 2022, the Council appointed Hill Partnerships Ltd as the main contractor to deliver this scheme. Hill Partnerships Ltd is currently progressing delivery of RIBA Stage 4 – Technical Design in order to finalise the contractor’s proposals and final build cost.

 

Officers are therefore recommending delegated authority for the Corporate Director of Finance & Resources to agree any additional SCIL allocation to deliver the non-residential elements of the Morland Gardens scheme.

 

Support Growth & Development

As outlined above, the neighbourhoods experiencing the highest levels of deprivation are largely located in the south around the Harlesden, Neasden, Stonebridge and South Kilburn areas. A new state of the art centre is required to create an aspirational learning environment for the community, partners, learners and staff. Morland Gardens will be an asset to be utilised with and by the local communities of Stonebridge, which have some of the lowest average income, skills, and highest economic inactivity in Brent

This SCIL funding investment will help deliver a range of modern, replacement community facilities that will strengthen the existing sense of community by celebrating Brent’s diversity, heritage and culture, and creating places where Brent’s communities can meet and will help complement future mixed developments in the Stonebridge area such as the Bridge Park Masterplan.

 

Church End Unspecified amount

 

The Church End development comprises 99 affordable homes, a new market square to replace the existing market and commercial use space. In February 2022, the Council appointed Wates as the main contractor to deliver this scheme.

 

Wates is currently progressing delivery of RIBA Stage 4 – Technical Design in order to finalise the contractor’s proposals and final build cost. 

 

Officers are therefore recommending delegated authority for the Corporate Director of Finance & Resources to agree the appropriate SCIL allocation to deliver the non-residential elements of the Church End scheme such as the new market square for local traders, improvements to the town centre and new community/cultural infrastructure to help small and medium enterprises.

 

 

 

 

 

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: