The meeting approved both a new charging schedule for Biodiversity Net Gain monitoring fees¹ and the adoption of three new sales policies for the Council’s housing company, Eastbrooke Homes. The Cabinet also noted the second quarter performance report and progress on the One Horton Heath development.

One Horton Heath

The Cabinet received a report about progress on the One Horton Heath development. The report detailed the revised delivery trajectory for the whole site which would see the final elements of the project delivered in 2035.

The report highlighted the issues causing delays to the development and increased costs on the Lower Acre. These delays were attributed to a number of factors including;

...poor ground conditions leading to the need to instruct for additional excavation and filling work. A variation of works to Foxwood Road has also added an additional 12 weeks to the programme and this, coupled with design inconsistencies / availability of drawn information for contractors working on site; Hope & Clay and Speedeck. This has impeded the continuity and sequencing of both contractors’ ability to carry out their contract works to programme.

Wates Construction Ltd was due to start work on the Lower Acre in September, but as a result of the delays, this date was pushed back to February 2025.

The Outline Planning application for the whole site is almost ready for submission to Committee, with the main issues to be resolved relating to education and the mitigation for the impact of the development on the New Forest. The Council has agreed to

accept the ‘financial risk’ associated with providing s106² contributions to a new SANG ³ at Stoke Park Farm (£4.6M).

However, there is an ambition to reduce or remove the financial contribution by creating alternative green spaces on and around the One Horton Heath site. This includes creating a new Suitable Alternative Natural Greenspace at Stoke Park Farm. The Council has decided that residents at One Horton Heath will be provided with one free annual parking permit for Itchen Valley Country Park.

The report also detailed the progress made across the wider site including:

• the near completion of ‘The Avenue’
• the progress made with the sustainable drainage basins
• the ongoing work on off-site junctions such as the new signal controlled junctions on Allington Lane and Blackberry Drive
• the withdrawal of the planning application for site-wide Green Infrastructure
• progress on the revised house type packs and
• the progress of appointing the new One Horton Heath strategic development team, whose role will be to

...work on the wider site requirements including looking at the capacity of the site and the integrations of key infrastructure to ensure that the community is fully connected across the whole development.

The Cabinet also received an update on the delivery of the new primary school. The report stated that the cost of self-delivery will be significantly more than the developer contributions from the Section 106 agreement.

One Horton Heath - Lower Acre

The Cabinet also received a separate report about the Lower Acre, the first residential phase at One Horton Heath. This report included a revised Business Plan that addressed cost and income changes since the previous report in July. The Cabinet approved the revised Business Plan.

The Cabinet noted the ongoing work to reduce costs through a review of house type designs, housing density, the procurement strategy for future parcels, and the timing of the remaining infrastructure across the site. The report stated that the Council will

...investigate the delivery of wider infrastructure works to ensure they are delivered at the most appropriate time to facilitate the development; and that works are not procured without having the detail of how competing elements like the road may interact with development parcels.

The Cabinet also noted the revised tenure mix for the Lower Acre, with more units moving from private sale to market rent. The report suggested this change would increase revenue surplus in the long term but would increase the level of debt held by the Council by £5 million. The arguments for and against each of the three delivery models were summarised in the report:

• Market Rent (Appendix B1) - This model generated the highest level of revenue surplus at £105,145,000 but also had the highest level of debt at £74,438,000.
• Affordable Housing (Appendix B2) - This model has a cumulative revenue deficit of £54,371,420 and a final debt position of £34,590,605.
• Shared Ownership (Appendix B3) - This model had the lowest level of revenue surplus at £15,179,806 and also the lowest level of debt at £12,143,572.

Biodiversity Net Gain Monitoring Fees

The Cabinet approved a new charging schedule for Biodiversity Net Gain monitoring fees.

Since the introduction of the Environment Act 2021, all new planning applications must demonstrate a minimum 10% biodiversity net gain. This requires developers to assess the existing value of habitats on development sites, and then to design schemes that either maintain or improve their ecological value.

The policy requires the Council to

...track and record the progress towards reaching biodiversity net gain wherever and however this is secured.

The report detailed how the charges were calculated using the Mycelia software and proposed a schedule of four charges to cover different size categories of development:

• Category 1 - less than 0.5 hectares = £13,485
• Category 2 - 0.5 to less than 1 hectare = £14,363
• Category 3 - 1 to less than 3 hectares = £16,797
• For developments of more than 3 hectares, a bespoke fee will be calculated.

The report noted that the proposed fees were higher than those of other local authorities because they were based on a full cost recovery model.

Corporate Performance

The Cabinet noted the report on the Council’s performance for the second quarter of the 2024/25 financial year. The report detailed the forecast financial position, the progress of the Service Improvement and Efficiencies (SI&E) programme, and the performance of the Community Investment Programme.

The report noted that performance against the Council’s Corporate Performance Indicators was generally good. It stated that

...performance monitoring shows performance against Corporate Performance Indicators (CPIs) was comparable to performance of the same period during 2023/24.

However, there were some areas of challenge for both revenue and capital projects:

There are however areas of challenge. For capital projects, delivery of homes on the Lower Acre at One Horton Heath project has been delayed to 2025, as reported to Audit and Resources Committee (item 7) in November 2024. In respect of the General Fund the Council is forecasting a revenue overspend of £482,000 for 2024/25. While this is manageable in the short-term, there are longer term pressures, primarily within the Street Services and Arts and Culture Service areas, which are to some extent masked by in-year savings and the use of reserves. These pressures will lead to unsustainable growth within the Medium-Term Financial Plan (MTFP) if not mitigated.

The report noted that there was a significant forecast underspend against core staffing budgets, but that much of this was likely to be used to offset other staffing costs such as backfilling vacant posts with consultants.

The forecast overspend in Street Services was attributed to increasing disposal costs and reducing income for Trade Waste.

The Arts and Culture Service was also forecast to overspend and was relying on the use of earmarked reserves.

The report highlighted a significant slippage against the Service Improvement and Efficiencies target. Despite some progress in identifying savings from fees and charges and insurance renewals, there was still a pressure of £1.9 million to be addressed by the end of the financial year.

The report detailed the performance of the Community Investment Programme to the end of Quarter 2. The £80.5 million budget was being impacted by the ongoing delays to the One Horton Heath project and would likely need to be reprofiled.

Eastbrooke Homes - Sales Policies

The Cabinet approved the adoption of three new sales policies for Eastbrooke Homes, the Council's housing company:

• The Open Market Homes Sales Policy;
• The Shared Ownership Homes Sales Policy and
• The Sales Incentives Policy.

The report stated that the policies were necessary to enable the company to

...facilitate the sale of open market and shared ownership homes, ensuring alignment with the Council’s objectives and compliance with relevant regulations, particularly the New Homes Quality Code (NHQC).

The report highlighted the importance of the Council’s commitment to register as a developer under the New Homes Quality Code.

The policies included the following provisions:

Open Market Homes Sales Policy

This policy defines how Eastbrooke Homes will sell new build homes on the open market and includes:

• details of Fair Marketing practices,
• Eligibility and Financial Assessment processes,
• details of the Sales process,
• consideration for Vulnerable Customers and
• details of the process for Early Bird reservations.

Shared Ownership Homes Sales Policy

This policy outlines the framework for selling new build homes under a shared ownership scheme. Shared Ownership allows people to purchase a percentage of a property and pay rent on the remainder to the Council. It is an affordable housing product designed to help people onto the property ladder who wouldn't otherwise be able to afford to purchase a home. The policy includes:

• details of Eligibility Criteria,
• the Allocation Process,
• details of Fair Pricing and
• how staircasing will work.

Sales Incentives Policy

This policy governs the use of sales incentives to achieve sales targets for open market properties. The policy aims to ensure that any incentives are used strategically, transparently, and responsibly. It includes:

• details of Incentive Limits,
• Incentive Types and
• Campaign Incentives.