Decision

That Cabinet recommend
to Council:

 

1.    That the Capital
Programme be uplifted by £3m, wholly funded by capital grant
received from MHCLG, to commence delivery of the Accommodation
Repurposing Project (also known as ‘Hotels to
Homes’);

That subject to 1.
above, Cabinet:
 

2.   
Approve the turnkey acquisition of Scheme 1 for use as social
housing, in accordance with business case provided at Exempt
Appendix 1 (and funded by the MHCLG grant award);
 
That subject to 1. and
2. above:
 

3.   
Delegation be provided to the Director of Pride in Place, in
consultation with the Cabinet Member for Housing and Finance and
Director of Finance, to agree final terms to purchase Scheme 1, and
following satisfactory completion of all necessary due diligence,
proceed to acquire the scheme as set out at Exempt Appendix 1.
 

4.   
The Head of Strategic Housing & Delivery present a report to
Cabinet at the appropriate time, to outline and recommend the
financial and delivery arrangements necessary to move from a single
scheme to a long-term, (largely) self-sustaining programme
utilising all grants and external funding available.

Reasons for the decision

The Council was
awarded a capital grant of £3m to commence delivery of the
first project (“Scheme 1”), with conditions to
demonstrate substantial delivery progress by March
2025.  Whilst the new homes created by
this scheme would be let through Devon Home Choice to eligible
households with a local connection to Torbay, there was an
intention to make these sites attractive to households where at
least one adult works in a key industry (what has historically been
called “keyworkers”).  This
was to seek to specially address the chronic recruitment issues
faced by parts of the public sector such as the NHS, where a lack
of good quality housing that was affordable was having a direct
impact on recruitment and retention, creating a major implication
for the health service and ultimately the health outcomes of Torbay
residents.  Providing homes for local
workers was essential to ensure the long-term sustainability and
health of our population. 

Alternative options considered

Option 1, the
preferred option, was to acquire the scheme as set out in Exempt
Appendix 1 to the submitted report on a turnkey basis with
stakeholder deposit and completion payment in the normal
way.  This was a relatively low risk way
to deliver new homes and would ensure that the Council’s
investment was protected throughout the build as completion funds
would only be released once assurance had been provided that the
scheme had been completed appropriately and the contract terms
met.
 
Option 2 would be to
withdraw from the current opportunity and attempt to identify
another hotel that already has a suitable planning consent, and to
directly commission construction by March 2025.  However, this would require the Council to take a considerable degree of
commercial risk in respect of both commissioning construction of an
inherited design and planning consent. 
The expectation was that this would also cost more than an
equivalent turnkey option and would significantly delay delivery;
whilst it is hoped that a degree of flexibility could be negotiated
with the Ministry of Housing, Communities and Local Government
(MHCLG), this would put the Council in direct conflict with the
grant award terms.  Therefore, this
option was discounted.
 
Option 3 would be to
hand back the grant and decline to proceed any further.  This would be detrimental to the Council’s
relationship with MHCLG (and the new government).  This may also cause wider implications for other
Council delivery programmes and funding streams, too.  Ultimately and very importantly, this would also
mean that the additional affordable housing supply that was
urgently need, would not materialise. 
This option was discounted.