Purpose

The report covers the acquisition of four commercial office buildings in Thames Quay, Marsh wall, for conversion to Temporary accommodation comprising of 180 self-contained family sized units.

Decision

The Pre-Decision Scrutiny Questions and officer responses were noted.

The exempt/confidential information in the appendices to the report were noted.

DECISION

1. To note the findings of the financial and property appraisal relating to the proposed lease of 191-197 Marsh Wall.
2. To delegate authority to the Corporate Director of Housing & Regeneration, in consultation with the Mayor, to conclude preliminary negotiations, obtain an independent rental valuation, agree the final lease terms, and take all necessary steps to complete the transaction and to come back for final consultation with the Mayor once risks and negotiations are concluded.
3. To approve the initial capital allocation outlined in Appendix 1 to the report to enable the advancement of the programme into delivery. The source of funding is proposed to be General Fund borrowing.
4. To approve the commencement of all necessary procurement activity for the appointment of professional consultants, specialist advisers and the principal works contractor, in accordance with the Council's procurement and governance requirements, to facilitate the timely design, mobilisation and delivery of the programme.
5. To delegate authority to the Corporate Director of Housing & Regeneration in consultation with the Mayor to enter into preparatory drafting for a main works contract and all associated legal documentation which will be subject to further approval being sought once all negotiations are concluded.
6. To note that the proposal carries a degree of financial risk relating to the overall cost of the scheme. Mitigating measures are outlined within this report. In considering the proposal, these risks should be balanced against the significant social benefits of increasing the supply of local temporary accommodation, including enabling homeless families to return to the Borough, maintain family and community support networks, access local services, and achieve greater household stability and wellbeing.

Action by:

David Joyce, Corporate Director, Housing and Regeneration

Sam Brown – Director of Corporate Property & Estates

Reasons for the decision

The Council continues to experience significant demand pressures within its Temporary Accommodation portfolio and therefore considers opportunities to increase the supply of local accommodation where they represent value for money, support homelessness reduction objectives, and contribute to reducing reliance on out-of-borough placements.

The proposed rental charge is considered competitive and would apply across the entire building footprint, including ancillary and non-income-generating areas. The proposed 10-year lease term is considered the best offer available to the Council and although the scheme would cost more than the current TA costs, in considering the report, the Council realises the anticipated operational and social benefits arising from the scheme.

The proposal would enable up to 180 families to be accommodated within the

Borough.

Having regard to the financial appraisal, the current temporary accommodation costs, and the wider social benefits, the proposal is considered to represent a prudent use of public resources. The scheme would support the return of up to 180 families to the Borough, enabling them to reconnect with established family, educational and community support networks, which are recognised as important factors in promoting household stability, wellbeing, and positive outcomes for residents.

Alternative options considered

Option 1: Reject the Proposal

Not Recommended

Rejecting the proposal would result in the Council foregoing the opportunity to bring up to 180 families currently placed in temporary accommodation outside the borough back into Tower Hamlets. The proposal is expected to cost more over 10-year lease when compared with the current cost of out-of-borough placements. In addition to the financial impact, rejection would lead to continued disruption for affected households through separation from local support networks, schools, healthcare services, and employment opportunities.

Option 2: Pursue Alternative Provision

Recommended as a Complementary Approach

This option would enable the Council to continue developing its strategic Temporary Accommodation Asset Acquisition Programme, with a focus on increasing the supply of suitable family accommodation within the borough.

However, pursuing alternative provision does not need to be mutually exclusive to accepting the current offer. The Council could progress both approaches simultaneously, thereby strengthening its overall temporary accommodation strategy, increasing resilience in supply, and reducing reliance on more costly out-of-borough placements. Accepting this as a complimentary approach to the current proposal, enables the Council to secure immediate accommodation benefits while continuing to build a longer-term, sustainable supply of temporary accommodation assets within the borough.

Option 3: Do Nothing

Not Recommended

Maintaining the status quo is not recommended. The current cost of accommodating households in out-of-borough temporary accommodation continues to contribute significantly to the Council’s annual budget pressures. Furthermore, this option would leave around 180 families living outside the borough, limiting access to community support networks, local services, schools, and employment opportunities. It would also hinder the Council’s

ability to improve household stability, wellbeing, and long-term outcomes for affected residents.