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Salford City Council - Record of Decision (Cabinet)
I
Paul Dennett, City Mayor, in exercise of the powers contained
within the City Council Constitution do hereby approve: Single Homelessness Accommodation
Programme (SHAP)
The Reasons are:
Delegate authority to the Executive Director of Place in
consultation with the Section 151 officer to enter into a
grant funding agreement with Homes England under the Single Homelessness Accommodation Programme 2023-28 for
£2,052,000 allocated capital grant.
 
Delegate authority to the Executive Director of Place in
consultation with the Section 151 officer to enter into a
grant funding agreement with Homes England under the Single Homelessness Accommodation Programme 2023-28 for
£940,995 allocated revenue grant.
 
Authorise the
Shared Legal Service to prepare all necessary documentation and to
take all steps which are required to give effect to the above
recommendations.
Options considered and rejected were:
The
SHAP proposal was informed by a strategic gap analysis on the youth
homelessness pathway in Salford, which informed the target number
of dwellings and type of accommodation required. As a result of the
gap analysis and development gateway process other proposals were
considered across different sites across the city.
Assessment of Risk:
The principal risk would be in
the council failing to develop the SHAP proposals within the
timescales of the programme or within the agreed terms of the grant
funding agreement.  Failure to meet
delivery targets within the timescales or to the agreed terms may
result in loss of grant.  This is
mitigated by further financial appraisal and the scheme will
require further City Mayor approvals prior to entering into
contract for the construction of the homes and drawing down
grant.
The source of funding is:
Funding for the Single Homelessness Accommodation Programme is
provided through Homes England in accordance with the Homes England
capital funding guide.
Legal Advice obtained:
Homes England has confirmed
that the Council has been awarded Single Homelessness Accommodation
Programme (SHAP) 2023-28 capital grant to fund the delivery of the
18 SHAP Dwellings described in this report.  Homes England has also confirmed that the Council
has been awarded SHAP revenue grant to fund the provision of
support services for the vulnerable young people who the Council
has agreed will occupy the 18 SHAP Dwellings.  The SHAP revenue grant will allow the Council to
fund the provision of support services until 31 March
2028. 
 
Homes England has advised the
Council that no changes can be made to their standard form of SHAP
2023-28 Grant Funding Agreement. The Council is therefore required
to accept all the terms and conditions of the SHAP 2023-28 Grant
Funding Agreement without any amendments.  Separately, Council officers have been advised by
Homes England that Homes England will agree to an extension of the
completion date for the 18 SHAP Dwellings beyond 31 March 2025,
although this will mean a 5% reduction of the amount of SHAP
capital grant which the Council will receive from HE. The Council
has advised Homes England that the Council proposes to transfer
legal ownership of the 18 SHAP Dwellings to Derive RP Limited at
completion and Homes England has indicated that they will provide
the required “prior written consent” to enable the SHAP
2023-2028 Grant Funding Agreement to be transferred to Derive RP
Limited.
 
Homes
England requires the Council to provide a Legal Opinion Letter,
signed by the Council’s Monitoring Officer, to confirm that
the Council has power and authority to enter into the SHAP 2023-28
Grant Funding Agreement and perform the terms and obligations
imposed on the Council by this Agreement. The SHAP 2023-28 Grant
Funding Agreement contains extensive provisions which allow Homes
England to withhold the payment of SHAP capital and revenue grant
and to require repayment of SHAP capital and revenue grant if the
Council fails to comply with the terms of the Agreement.
Financial Advice obtained:
There is capital grant
confirmed by Homes England of £2.052m, based on estimated
total scheme costs would mean a contribution from the Council via
unsupported borrowing of £0.254m to the scheme. Based on
timeline for delivery and profile of spend, this will be sought via
the Council’s annual capital bidding process for
2025/26.

The Bridgewater Street site has the potential for an additional 7
dwellings in the form of affordable houses.   A further bid for grant support is being
progressed. There could be further financial implications on the
Council outside of the mentioned unsupported borrowing that would
be required to progress the additional 7 units.

The SHAP revenue funding bid award is
for £0.940m. Homes England will confirm the amount of SHAP
revenue funding which the council will receive following completion
of the first SHAP Dwelling, with the council being able to
draw-down SHAP revenue funding until 31 March 2028. There is a
proposed risk to the Council of hiring to 4.5 new roles with
funding only confirmed after completion of the first SHAP
unit.

The Council has advised Homes England that the Council proposes to
transfer the 18 SHAP Dwellings to Derive RP Limited at completion.
Homes England has indicated that they will provide the required
“prior written consent” to enable the SHAP 2023-2028
Grant Funding Agreement to be transferred to Derive RP
Limited.

It
should be noted that it has not yet been confirmed whether the
Council will deliver the main construction contract or Derive RP
Limited will take the development forward in accordance. Under
traditional Council self builds we assume that, where the Council
takes on the contractor, builds, completes, and transfers ownership
to Derive RP Limited on completion. The cost of the financing and
loan repayments are factored into the business viability on this
basis.
Should Derive RP Limited take the development forward, the overall
scheme viability assessment would need to be revisited and a viable
proposal put forward to Derive board. As part of this proposal, the
terms of any loan between the Council and Derive RP Limited would
need to be considered further, factored into any viability
modelling, and agreed by the Council and Derive RP
Limited.
 
Procurement Advice obtained: N/A
 
HR Advice obtained: N/A
 
Climate Change Advice obtained:
The development of the SHAP
dwellings and additional AHP dwellings on Bridgewater street will
be built to Dérive’s low energy low carbon standard.
These new homes meet both current and future building regulations
and are optimized for net zero and meet the predicted capacity of a
future decarbonised grid.
 
The
following documents have been used to assist the decision
process:
 
Contact Officer: James
Barrett                             
Telephone number: james.barrett@salford.gov.uk
 
The
appropriate scrutiny to call-in the decision is the Growth and
Prosperity Scrutiny Panel.

 

Signed:
      Paul
Dennett                        
Dated:    28.05.24                                                
           
           
City Mayor
 

For Democratic
Services use only

 

This decision was
published on 28.05.24                                           

This decision will
come in force at 4.00 p.m. on 04.06.24                   
                              
unless it is called-in in
accordance with the Decision Making Process Rules.