Report to Manydown Executive
Committee
Subject:
Manydown Project – update
Status:
Routine Matter for Discussion
03 June 2015
Report Ref:
Ward(s):
All
Key Decision:
Yes
Key Decision Ref:
N/A
Report of:
Richard Bayley - Strategic Project Manager - Manydown
Contact:
01256 845675 – ext. 2675
Appendices:
Appendix 1 – Indicative Phase 1 costs - Confidential
Papers relied on to
produce this report
None
SUMMARY
1
This Report
1.1
This report has been prepared for both the Manydown Overview Committee
and the Manydown Executive Committee. It provides an update on progress
with the Manydown project and is for noting.
1.2
The Manydown Overview Committee will meet on 26 May 2015 to consider
and comment on the scope and content of this report. Its comments will be
reported to the Manydown Executive Committee at its meeting on 03 June
2015.
2
Recommendation
2.1
It is recommended that the Manydown Executive Committee:
i.
notes the progress made with the Manydown project;
ii.
notes the proposal for introduction of all Member briefings to
commence in Summer 2015, initially to explore options in relation to
the council undertaking either direct development taking full
development risk, traditional disposal by way of Development
Agreement or a form of Joint Venture which shares development risks
and returns with an experienced partner(s), whilst providing a greater
degree of control for BDBC and HCC, as joint landowners, than would
otherwise be the case with a traditional Development Agreement;
iii.
agrees the Manydown landowners position on the future potential for
a cemetery as outlined in section 3.4 of the paper;
iv.
considers the comments of the Manydown Overview Committee in
respect to the matters contained in this report.
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PRIORITIES, IMPACTS AND RISKS
Contribution to Council Priorities
This report accords with the council’s Budget and Policy Framework and directly
supports the Council Plan priority/priorities of planning policies that safeguard local
distinctiveness to:
“Promote the use of Manydown land to deliver much needed high quality homes and
facilitate wider borough benefit, which protects local communities”
GLOSSARY OF TERMS
Term
Definition
BDBC
Basingstoke and Deane Borough Council
CIL
Community Infrastructure Levy
DevCo
Development Company
EM3
Enterprise M3 Local Enterprise Partnership
EPH
Economic Planning and Housing Committee
EIP
Examination in Public
HCA
Homes and Community Agency
HCC
Hampshire County Council
JV
Joint Venture
LPA
Local Planning Authority
Manydown OSCOM (until March
2014)
Manydown Overview and Scrutiny Committee
MAP
Members’ Advisory Panel
MEC
Manydown Executive Committee
MOC (since April 2014)
Manydown Overview Committee
MUSCo
Multi-Utility Service Company
NPPG
National Planning Policy Guidance
NPPF
National Planning Policy Framework
OJEU
Official Journal of the European Union
PRS
Private Rental Sector (housing tenures)
SPV
Special Purpose Vehicle
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MAIN CONSIDERATIONS
3
The Proposal
3.1
Background
3.1.1
The council resolved at its meeting on 12 July 2012 “that Manydown or parts
thereof should be actively promoted for development” in line with the powers
that the 999 year lease was purchased under namely section 226 and 227 of
the Town & County Planning Act to secure the proper planning of the area in
which it is situated. This council resolution together with the inclusion of the
Manydown project in the 2014/15 Council Plan constitutes the policy
framework within which the Manydown Executive Committee has been acting
to pursue the council landowner interests and which mean that the Manydown
Overview Committee provides oversight of this work from a landowner
perspective.
3.2
Update on Progress
Local Plan – additional land
3.2.1
At the last meeting of the Manydown Overview Committee (MOC) on 09
February 2015 and the Manydown Executive Committee (MEC) on 13
February 2015, some options for additional housing numbers on Manydown
were outlined so that the LPA could consider their inclusion in the next
iteration of the Local Plan period to 2029. In the papers to the EPH Committee
on 04 March 2015 and Cabinet on 17 March 2015, the LPA considered the
proposal to increase the density of the District/Neighbourhood areas (around
150 homes) on land at Manydown that BDBC and HCC have an leasehold
interest in, however the overall number of homes was retained at 3,400 in the
Manydown allocated area of the emerging Local Plan. The LPA decided not to
include the further development of plot 6a (additional 350 houses) as well as
the addition of other parts of plot 6 (additional 250 houses) in those papers
and consequently these additional 600 houses are unlikely to be included in
the emerging Local Plan that will be submitted for EIP later in 2015.
Detailed Masterplan and Planning Application
3.2.2
The process for procuring the consultants to prepare the Detailed Masterplan
and Planning Application for phase 1 of Manydown has progressed and a
consortium has been selected with the appointment to remain confidential
during the ‘stand still’ period until the end of May 2015. These consultants will
also be involved in the forthcoming public engagement programme (later in
2015) and formal consultation events (during 2016) for Manydown. An
additional procurement process is currently being progressed to appoint a
Planning Legal solicitor to provide advice on planning application matters in
respect to the Manydown project.
Delivery and Financial strategy
3.2.3
BDBC and HCC, as joint landowners, will have the following broad options for
taking forward the delivery of Manydown:
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Disposal by way of Development Agreement
In this scenario the land is sold to a developer, typically on a subject to
planning basis. Although arrangements can be included for delivery within a
particular timescale, together with the sharing of profits above certain
thresholds through “overage” provisions, the landowner has a relatively low
level of control over the subsequent development, with matters of urban
design and phasing reliant on the powers of the LPA.
Direct Development
This option allows the landowner total control over urban design, phasing and
development management. However it also carries full development risk
especially in relation to homes designed that are not fit for purpose and cost
overruns through inexperienced or poor project management.
Joint Venture with experienced Private Sector Partner(s)
With this option the objectives of the Joint Venture are typically set out in a
Business Plan between the parties, which is then enshrined in the formal
documentation. The JV then takes forward the development with risks and
returns shared between the JV partners ensuring an alignment of interests.
3.2.4
The above options involve some complexity and therefore it is proposed to set
up All Member briefings in Summer 2015 to begin to explore the issues in
broad terms, prior to any decisions being made.
3.2.5
The process for procuring the consultants to undertake the next phase of the
Delivery and Financial strategy, including the appraisal of different options
together with the detailed business case for the selected means of delivery,
has now completed with GVA Grimley selected. Additional procurement
processes are currently being progressed to appoint Property Legal and
Corporate Tax consultants to work alongside GVA Grimley to help develop the
options appraisal and subsequent delivery arrangements and thereafter to
provide ongoing advice to the project.
3.2.6
In advance of the next phase of work, some indicative development costs for
Phase 1 of Manydown (i.e. the land allocated in the emerging Local Plan)
have been provided on a confidential basis in Appendix 1. The indicative
development costs represent a very initial estimate of the likely order of costs
for Phase 1 of Manydown pending further work to be undertaken in the
coming months on the next phase of the Delivery and Financial strategy which
will be linked with the Detailed Masterplan work and the Planning application
work. This next phase of work on the Delivery and Financial strategy will
provide some more certainty about the quantum and the phasing of the costs
for Phase 1 of the Manydown project. However a more precise forecast of the
financial viability of the scheme and level of returns will not be derived until
discussions about the planning application, including the significant package
of community benefits, have been concluded with the LPA.
Member engagement
3.2.7
The council’s Chief Executive has advised that Member engagement should
be as broad as possible, and should include the opportunity for all Member
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briefings, where appropriate, given the scale and importance of the
Manydown project. Over the next two years of the Manydown project, it is the
intention to engage all members, where appropriate, in the development of the
key elements of the project including: the Delivery and Financial strategy for
the project including initial options appraisal for delivery considerations; the
Detailed Masterplan together with the Planning Application for phase 1. The
Member engagement plan will be discussed with Group Leaders. The plan
would comprise all Member briefings (starting this summer) and specific
informal site visits available for all Members in addition to the MOC/MEC
governance meetings.
3.3
CLG scoping and feasibility studies
3.3.1
The MEC received updates at the 02 December 2014 and 13 February 2015
about ongoing discussions with government officials at CLG. On 17 March
2015, the Treasury announced in the Budget statement that CLG will provide
£850,000 worth of funding to progress scoping and feasibility studies for
infrastructure to support Manydown and other developments on the western
side of Basingstoke in line with the existing BDBC Economic Masterplan.
3.3.2
A copy of the detailed business case that was submitted to CLG was made
available to all Members through the weekly bulletin on 24 April 2015. The
funding for these CLG studies is for the financial year 2015/16 and includes
£230k Local Capacity funding (to fund interim positions) and £620k for
Feasibility studies including Housing and Financing, Transport and Education.
3.3.3
This funding will enable BDBC, working with its partners HCC and EM3 LEP,
to properly scope and plan the provision of future infrastructure over two local
plan periods, including energy, schools and transport in order that it can
effectively support the future provision of affordable homes, new transport
improvements, good schools, jobs and community amenities on the western
side of Basingstoke. Work is now underway to develop the detailed work
programmes that support these feasibility studies and Members will be briefed
further in due course.
3.4
Cemetery
3.4.1
BDBC needs to plan for a new cemetery in the future. The preferred site is at
North Waltham where an option for some land has been secured and an
outline planning application has been submitted to support the development
and operation of a cemetery by 2018/19. Members wish to explore other
options in case there are problems with getting approval and/or constructing a
new cemetery on the proposed site at North Waltham, or if there are
preferable sites available. In that context, BDBC officers have been asked to
formally explore several other potential sites including Manydown.
3.4.2
The Manydown land is subject to the provisions of the legal agreement
governing the 999 year lease jointly purchased by BDBC and HCC in
February 1996 which stipulate that BDBC and HCC can only purchase the
freehold of the land once planning permission for the future development of
the site has been secured. There is no provision for a potential cemetery in
the lease agreement and the Manydown Company Ltd could insist that the
valuation of the land for a potential cemetery be consistent with values for
residential development that it would replace on that specific plot of land.
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3.4.3
In relation to the potential location of a cemetery on land within the Manydown
allocation contained in the emerging Local Plan, all parties (BDBC/HCC and
the Manydown Company Ltd) are agreed that there is no prospect of
accommodating a cemetery as it would prejudice the viability and the ability to
deliver the number of homes that have been allocated for Manydown in the
emerging Local Plan to 2029.
3.4.4
In relation to the remaining land at Manydown, BDBC has a lease agreement
on which is land located to the south (and west) of the initial allocation for
Manydown in the emerging Local Plan to 2029. This land has been identified
in the emerging Local Plan for the wider masterplanning of Manydown in the
longer term beyond the timescales of the Local Plan period to 2029. All parties
(BDBC/HCC and the Manydown Company Ltd) would consider the potential
for a cemetery at the point when land comes forward for consideration, as
long as it can be located in an area that is commensurate with the overall
development proposals for that land. However, the potential for a cemetery
can only be considered as part of the longer term masterplanning of
Manydown which is unlikely to begin until 2018 at the earliest.
4
Corporate Implications
4.1
Financial Implications
4.1.1
The cost of the activities outlined in this report will initially be jointly funded by
this council and HCC and may be eligible for recovery from any enhancement
in the value of the land in accordance with the Manydown lease. The annual
budget for 2015/16, approved by full council in February 2015, includes
revenue expenditure of £572,500 on Manydown (N.B. an identical amount is
also funded by HCC).
A summary breakdown of proposed revenue expenditure in 2015/16 is below.
4.1.2
Manydown Project 2015/16 budgeted
project spend
Amount
(£)
Delivery and Financial Strategy
Masterplan Strategy
Other costs
Total forecast spend
50% BDBC
160,000
710,000
275,000
1,145,000
572,500
The proposed revenue expenditure in 2015/16 as set out in the previous
paragraph is consistent with and part of the BDBC £1.6m budget to obtain
planning permission over a four year period beginning 2014/15 that was
approved as part of the Medium Term Financial Strategy in February 2014.
Over and above that, there is currently no budget or reserves set aside for
Manydown capital works in the Medium Term Financial Strategy (e.g.
infrastructure) should the council decide as part of its Delivery and Financial
strategy to invest in developing out Manydown once planning permission has
been obtained. Appendix 1 provides indicative costs for the development of
the land which have been calculated by the council’s consultants and the
extent to which these are incurred by the council will depend on the agreed
delivery structure. As the report highlights in the Delivery and Financial
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strategy section above, reports will be required in the future to present the
outcome of the detailed options analysis and subsequently will then need to
include a full business case covering financial implications, governance, risk
and the benefits of the recommended approach.
4.1.3
The final recommended financial delivery option for Manydown will have
revenue, capital programme and treasury management financial implications
for the council as well as risk management and governance considerations
that will need to be included in the future reports to be considered by
Members.
4.1.4
In relation to the £850,000 funding for CLG studies, awarded by the
government, to progress scoping and feasibility studies for infrastructure, the
council received an initial payment of this grant of £200,000 in March 2015,
with the balance being due in July 2015. The allocation of these funds will be
determined during the planning phase and may involve some of this grant
being allocated to our partners HCC or EM3 dependant on who is best placed
to conduct those studies. Members will be advised of this allocation once
determined and will then be requested to approve release of grant monies into
the current year’s budget for those studies to be performed by BDBC.
4.2
Risk Issues
4.2.1
The principal risks identified in and addressed by this report would arise from:
the Local Plan not proceeding according to its current timetable; BDBC as
landowners not continuing to “actively promote” Manydown by progressing
work to secure a planning application; and by not considering the most
appropriate delivery and financial mechanism in order to protect the value of
the investment made by BDBC when it purchased the 999 year lease in 1996.
4.3
HR Issues
4.3.1
In relation to the activities outlined in this project update, the following
recruitment activity will be undertaken:
 Manydown (BDBC): a Programme Officer is being recruited with a focus
initially on internal candidates and a Project Accountant has recently
been recruited to partly work on the Manydown project;
 CLG studies: an experienced Programme Manager is being recruited on
an interim basis to set-up an overall programme office framework and
some Development/Masterplan experts will be contracted to help
establish physical, social and economic benefits as part of a long term
community strategy for the western side of Basingstoke.
4.4
Equalities
4.4.1
There are no equalities implications arising from the report
4.5
Legal Implications
4.5.1
The Detailed Masterplan and Planning Application together with the Delivery
and Financial Strategy are both designed to protect the landowners position
and reduce the risk of potential legal implications arising from BDBC not being
able to actively promote Manydown in a deliverable and viable manner.
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4.6
Any Other Implications
4.6.1
There are no other specific implications arising from the report
5
Communication and consultation
5.1
The consultants for the Detailed Masterplan and Planning Application and the
Delivery and Financial Strategy as set out above were jointly commissioned
with HCC and the contents of those briefs have been jointly agreed with HCC
in its capacity as joint landowner of Manydown.
5.2
The contractors and consultants required to undertake the CLG studies are
being commissioned by the partners who submitted the bid, namely BDBC,
HCC and EM3.
5.3
As set out in paragraph 3.2.5, there will be opportunities for all Councillors to
participate in workshops and receive update briefings together with site visits
during the course of 2015 and 2016. A public engagement programme for the
first phase of Manydown will be undertaken later in 2015 involving residents,
community groups and representatives from the parishes and wards
surrounding Manydown.
6
Conclusion and next steps
6.1
The detailed work to progress the first phase of the Manydown project has
begun with the Detailed Masterplan and Planning Application and the Delivery
and Financial Strategy commissioned and underway. In addition, detailed
work programmes that support the CLG studies are currently being
developed. Members will therefore be formally briefed on the progress of
these workstreams at the next meeting in October 2015.
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