Decision

1. 1

The Committee considered a report where they were asked to consider seven separate recommendations for disposal of council land at less than best consideration for the delivery of social rent affordable housing on the following sites:

·       Land at Chapelwood Road, Darnall, S9 5AY

·       Land at Fife Street, Wincobank, S9 1QE

·       Land at Leighton Drive, Gleadless Valley, S14 1ST

·       Milton Street Car Park, City Centre, S3 7WJ

·       Land at Ridgeway Road, Hollins End, S12 2TW

·       Land at Oxley Close, Stocksbridge, S36 1LG

·       Land at Wordsworth Avenue, Colley, S5 9FP

1. 2

RESOLVED UNANIMOUSLY: That the Finance and Performance Policy Committee:-

a)    Approve the individual disposal of each site under section 123 of the Local Government Act 1972 held under the General Fund listed below at (i) to (v) at less than best consideration on the terms set out in this report including the restricted Appendix 2, recognising the improvements to social and economic wellbeing resulting from the delivery of 100% social rent affordable housing on each site:

                        i.         Land at Chapelwood Road, Darnall, S9 5AY

                       ii.         Land at Fife Street, Wincobank, S9 1QE

                      iii.         Land at Leighton Drive, Gleadless Valley, S14 1ST

                     iv.         Milton Street Car Park, City Centre, S3 7WJ

                       v.         Land at Ridgeway Road, Hollins End, S12 2TW

b)    Approve, the individual disposals under section 32 of the Housing Act 1985 of each of the Housing Revenue Account (HRA) land sites listed below at (vi) to (vii) at less than best consideration on the terms set out in this report including the restricted Appendix 2:

                     vi.         Land at Oxley Close, Stocksbridge, S36 1LG

                    vii.          Land at Wordsworth Avenue, Colley, S5 9FP

1. 3

Reasons for Decision

1. 3.1

The recommendations in the report to dispose of Council land at less than best consideration, directly contribute to the ambitions of Sheffield’s 10-year Housing Strategy 2024-2034 by increasing and accelerating the delivery of affordable housing at social rent through well-established RP partners.

1. 3.2

The loss of capital receipt is to be offset by the impact of improved social and economic wellbeing that additional affordable housing will bring, providing good quality homes that are safe, secure, and affordable, and supporting people to live happy, healthy lives in successful neighbourhoods across the city.

1. 4

Alternatives Considered and Rejected

1. 4.1

Alternative Option 1: Disposal through open market disposal Disposal through an open market process would not have achieved offers for 100% affordable housing delivery from private developers. Whilst this would have tested the market valuation for acceptable development, current planning policy would have only required approximately 13 affordable homes in total from across all the sites. As a result, Registered Providers may not have submitted offers knowing they could not compete with more viable open market sale developments.

1. 4.2

Alternative Option 2: Disposal through formal tender Initial work was carried out by the project team to explore disposal through a formal tender process. Legal advice at the time indicated external legal counsel was required to produce a development agreement that detailed the council’s requirements for 100% affordable housing. Due to the relatively small size of sites in phase 1, it was felt the cost would be disproportionate to the potential outcomes, placing additional burden on bidders to submit tenders, and delaying the launch of the first phase. Subsequent phases will include larger sites with the requirement for mixed tenure development. Therefore, a formal tender process may be an appropriate option in future.

1. 4.3

Alternative Option 3: Direct delivery The current economic conditions mean there is a risk that homes delivered directly by the Council will cost the HRA more than their resultant market value due to high construction costs and high site abnormal costs. As part of the latest HRA Business Plan refresh 2025-26, it was agreed that the focus for the Stock Increase Programme to 2029 will continue to be on acquiring new market homes, strategic acquisitions and directly delivering a small number of affordable specialist housing schemes which remain viable and that will continue to meet an identified need for housing in the city.