Purpose

The report updates on the status of the Britannia masterplan, and in particular progress to deliver Britannia Phase 2b

Decision

RESOLVED:

1. To note that the cost of delivering the Britannia Phase 2b project is now likely to exceed the current approved budget of £196.875m before costs can be recovered.  
2. To approve the revised current estimated funding requirements set out in Exempt Appendix 1.
3. To note the position set out in Exempt Appendix 2 in relation to market sales, and delegate authority to the Executive Director, Finance and Corporate Resources, to explore all routes open to the Council to mitigate the Council’s risk in relation to the disposal of the new homes on Britannia Phase 2b.
4. To note that Cabinet will be updated on the scheme on a quarterly basis, or as otherwise required to enable decision making, as part of the Capital Update and Property Disposals and Acquisitions report or the Overall Financial Position report.

REASONS FOR DECISION

1. Following the administration of ACGL, the Council is no longer able to complete the construction of the Britannia Phase 2b homes within the existing approved budget. This is due to the additional time to procure, mobilise, assess and re-commence works on site with a replacement contractor.
2. Whilst a performance bond is in place for such eventualities, losses need to be incurred and demonstrated in order to be agreed and recovered from the bond provider.
3. The main risk to cost escalation on the project is the time taken to re-commence the works. Contingency planning has thus focused on being in a position to move forward with a replacement contractor as soon as the administration process has allowed.
4. The Council’s initial priority was to work with the administrator to ensure the site was safe and secure. In conjunction with this, critical services remained operational, to mitigate the risk of damage and warranty invalidation.
5. The next step, which commenced following handover of the site from the administrator on 29 June 2026, is to work with a new contractor to assess the immediate actions which are required to protect the works and personnel on site, and put in place the required risk management protocols for a site of this scale and nature.
6. Concurrent with this, the Council is working towards entering into a Pre Construction Services Agreement (PCSA) with Wates Construction Ltd in order to work up a recovery plan to complete the works. A construction contract will subsequently be recommended to the Cabinet Procurement and Insourcing Committee (CPIC) for approval as soon as possible but no later than the autumn.
7. In order to mitigate the Council’s sales risk, it is necessary to consider off plan sales to date, forecast sales going forward, and how the latest economic context and project specific delay impact on these basecase forecasts.
8. This is a fast moving issue, and greater clarity on cost risk, programme timelines, and the future sales strategy will be gained as the Council works over the next 3 months with Wates and the supply chain to recommend a works contract.