The Place Overview & Scrutiny Sub-Committee met to scrutinise the business plans of Mercury Land Holdings (MLH) and three regeneration projects: Bridge Close, 12 Estates, and Rainham & Beam Park. The committee discussed the financial viability, delivery progress, and strategic alignment of these plans.

Mercury Land Holdings Business Plan

The committee reviewed the business plan for Mercury Land Holdings (MLH), a wholly-owned subsidiary of the council established in 2015 to deliver housing for private rent and sale. Officers presented an analysis arguing that a revised focus on delivering social homes would be financially ruinous for MLH, as it is not a registered provider of social housing and would be unable to access affordable housing grants. MLH's current business model is structured for private rented sector (PRS) housing, which generates financial returns for the council through loan interest and potential dividends.

The committee heard that MLH has completed four schemes, managing 143 PRS units and delivering market sales, shared ownership, and affordable rental units. The current pipeline is forecast to increase PRS homes under management to 239. MLH is in an investment phase, requiring an increase in working capital to £6.4 million, though no additional capital funding is sought. The break-even point for MLH is projected to be reached when they have 250 PRS units, anticipated around 2030-2032.

Key discussions revolved around the deliverability of the original motion, the financial implications of MLH's operations, and its contribution to the council's wider housing strategy. The committee voted against calling an extraordinary full council meeting to debate the motion further. The MLH business plan was noted to be proceeding to Cabinet.

The committee discussed potential recommendations to Cabinet regarding the MLH business plan, including:

• Mercury Land Holdings should produce a benefits dashboard for Havering Council, outlining the impact on temporary accommodation cost avoidance, the general fund, and the Housing Revenue Account (HRA).
• Consideration should be given to restricting the sale of MLH properties to non-Havering local authorities, with a preference for marketing to local individuals.
• If MLH struggles to achieve sales of units, there should be flexibility to convert them to PRS properties.
• MLH should amend its business plan to include an objective of delivering social value in line with Havering's Social Value Strategy.

Regeneration Projects Business Plans

The committee also reviewed the business plans for three significant regeneration projects: Bridge Close, 12 Estates, and Rainham & Beam Park.

Bridge Close

The Bridge Close project aims to deliver over a thousand new homes, alongside essential infrastructure including a school, nursery, SEN unit, health investment, and public realm improvements. Progress over the last 12 months includes planning approval for a hybrid application, continued design development, and land assembly efforts, including a Compulsory Purchase Order (CPO) for a portion of the London Ambulance Service site. The next 12 months will focus on finalising planning details, confirming school funding with the Department for Education, crystallising health provision, and continuing land assembly. Key risks identified include scheme viability, the selection of an ESCO provider, and site assembly. Recommendations were noted for approving the business plan, agreeing budget provision, delegating authority for detailed arrangements, and continuing discussions with the Islamic Cultural Centre (HICC) and London Ambulance Service.

12 Estates

The 12 Estates regeneration programme encompasses several sites. Progress includes sales completions at Park Rise, planning permission secured for Waterloo Queen Street, and phase one demolition works at Chippenham Road. The forward plan involves monitoring sales performance, commencing construction at Waterloo Queen Street, concluding outstanding property interests at Chippenham Road, and finalising grant discussions for Farnham Hill Dean. Financial data shows movements between budget periods. Risks include unsold units at Park Rise, potential repayment of GLA grant, site assembly challenges, and securing GLA grant for Farnham Hill Dean. Recommendations were noted for approving the business plan, delegating authority for agreements, and noting updated viability assessments.

Rainham & Beam Park

The Rainham & Beam Park project's progress has been influenced by the decision to pause the programme pending the development of the Beam Park station. The council has acquired interests from Notting Hill, appointed a managing agent, and is exploring opportunities for modular housing and enhancing commercial income. Eight residential units have been refurbished and occupied, avoiding nightly paid accommodation costs. The next 12 months will focus on the potential announcement regarding Beam Park station by the Mayor of London, anticipated in Q1 2026, which is expected to act as a catalyst for regeneration. A business case for the NR 0203 site is also anticipated. The financial data shows council investment backed by acquired assets, with a portion allocated to design and planning activities. Risks include scheme viability and impairment costs. Recommendations were noted for noting the current status, approving the management and placemaking strategies, and authorising officers to take necessary actions.

The committee noted the Housing Revenue Account (HRA) business plan.