Agenda item

6.1  Geri McLeary, Aylesbury regeneration programme director (interim), introduced the report on the Aylesbury regeneration programme. He explained that the report had been written before the recent news had been received from the government about the planned curtailment of Private Finance Initiative (PFI) funding. The Homes and Communities Agency (HCA) recently  informed the authority that funding from the Private Finance Initiative, in the current government spending round, will no longer be available for any regeneration projects whose outline business cases have not yet been approved. This decision will affect 13 authorities across the country, including Southwark Council’s Aylesbury PFI housing project. 

 

6.2  The director confirmed that those PFI projects further along in the PFI approval process, i.e. projects that have already had their Outline Business Case approved, and are in procurement, will continue to receive funding, subject to demonstration of value for money.

 

6.3  The director indicated that the government’s decision on the Aylesbury PFI pipeline project came as a complete surprise but the government has indicated that there may be a, albeit small,  possibility of some continued funding for the pipeline PFI housing projects.  

 

6.4  An update was given on the report circulated and emerging proposals to keep the regeneration scheme on track.  Phase 1a is being developed by London & Quadrant and will deliver a new Southwark Resource Centre (replacing the old adult day centre for disabled people)  and 261 new homes comprising:

 

·  fifty-two in 2011 (37 homes for social rent and 15 for intermediate uses)

·  one hundred and forty-nine in 2012 (51 homes for social rent and 15 for intermediate uses, 83 for sale)

·  sixty in 2013 (13 homes for social rent, 3 for intermediate uses and 44 homes for sale)

 

6.5  The new homes delivered by this part of the scheme have been ring fenced for Aylesbury tenants. If they are not required by local residents with the appropriate Homesearch banding status then they will be opened up to other people on the list. People in band 1 have been invited to express an interest.

 

6.6  The director explained that the Aylesbury regeneration programme is a huge and complex programme which relies on a number of different funding streams to push it forward. The Private Finance Initiative (PFI) was set to deliver 360 social homes for rent. The PFI would have acted as a catalyst for a further 583 homes, which when added to the original amount would have created 22% of the 4,200 homes to be delivered under the total Aylesbury regeneration programme.

 

6.7  The project remains underpinned by the Aylesbury Action Plan, which currently requires that 37.5% of the homes built on site must be for social rent, and 12.5% need to be available for intermediate (shared ownership).

 

6.8  The director indicated that that they are using the business case developed for the PFI proposal to look at other funding opportunities because the council does have funds set aside to buy out leaseholders so the sites could be cleared for development.

 

6.9  The chair then invited questions. Members asked how much had been cut from the Social Housing Grant and the director responded that around £2.2 billion had been cut nationwide.

 

6.1  A member asked the director if an earlier submission of the PFI project outline business case would have secured the funding. The officer replied this may have been the case; however the council was not in a position to do so. 13 other authorities are in the same position. Members asked for a list with indicating authorities in the same position be circulated ( this information is given at the end of the section).

 

6.2  A member asked what options are there available for funding future regeneration on the Aylesbury if government funding is not available. The director responded that the ratio of social housing to private housing for some sites had been set at 59 % to 41 % for the early phases and this metric may need to be revisited for more marginal sites comprising the programme if more capital investment is needed. This should not affect the overall aim to deliver 50 % affordable housing. Other options that are available under new central government policy are to invite Registered Social Landlords to submit schemes where tenants would be charged up to 80% of market rent; however the administration will need to consider if this is an option it wants to pursue. A member commented on the affordability and desirability of 80% market rents.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.3  Members asked some detailed questions about particular blocks and requested  a map, pasted below:

 

 

 

 

 

6.4  Some tenants and home owners on sites 7 (Missenden 300-313) and 10 (Wolverton1-59) have already moved and the director reported the council are speaking to the rest about their rehousing needs and options. The council are looking to continue with the existing rehousing plans for sites 1b (Bradenham 42-256, Chartridge 1-105) and 1c (Arklow 1-28, Chartridge 106-149, Chiltern 1-172). However, it will not be starting rehousing for sites 8 and 9 (Taplow 1-215, Northchurch 1-76, East Street 184-218) for the time being while it develops a new plan.

 

6.5  Members asked about the costs associated with vacant possession, for example buying back leaseholds. The director indicated that it had cost the council around £22 million for site 1b. The council has a ball park figure of £13 million for leasehold purchases on site 8 & 9.

 

6.6  The chair thanked the director for his report, presentation and for answering questions.

 

6.7  The information on requested on PFI housing projects in the pipeline is given below:

 

 

Support for housing PFI projects

The Department’s 2010 Spending Review Settlement provides funding for all Housing PFI projects under contract and in procurement but no funding for pipeline projects.

 

Projects in procurement

The Department will continue to support Housing PFI projects in procurement, subject to rigorous demonstration of value for money. We currently expect this assessment and decisions on individual projects to be made in December.

Projects in procurement will also be subject to normal PFI approval processes and requirements.

Housing PFI projects in procurement are:

Local Authority	Project
Derby City Council	Social Rented Housing
Kent County Council	Excellent Homes for All
Kirklees Metropolitan Borough Council	Excellent Homes for Life
Lambeth London Borough Council	Myatts Field North
Leeds City Council	Little London
Leeds City Council	Beeston Hill & Holbeck
Manchester City Council	Brunswick Estate
North Tyneside Metropolitan Borough Council	Older People Homes for the Future
Oldham Metropolitan Borough Council	Gateways to Oldham
Salford City Council	Pendleton Estate
Stoke-on-Trent City Council	Extra-Care Housing
Wiltshire County Council	Social Rented Housing
Woking Borough Council	Priority Homes

 

Pipeline projects

Housing PFI pipeline projects i.e. those projects where the OBC has not yet been approved by the Department and HM-Treasury’s PRG, do not have funding provision and therefore cannot continue to receive Departmental funding support.

 

 

 

Pipeline Housing PFI projects are:

Local Authority	Project
Birmingham City Council	Lyndhurst Estate
Cheshire East Council and Cheshire West and Chester Council	Extra-Care Housing
Camden London Borough Council	Gospel Oak Regeneration
Cornwall County Council	Extra-Care and General Needs
Hull City Council	Orchard Park Estate
Leeds City Council	Lifetime Neighbourhoods
Manchester City Council	Collyhurst Estate
Northampton Borough Council	Eastfields and Thorplands
Nottingham City Council	Meadows Estate
Portsmouth City Council	Somerstown Estate
Shropshire County Council	Extra-Care Housing
Southwark London Borough Council	Aylesbury Estate
Stoke-on-Trent City Council	Suburban Estate

The HCA will work with local authorities to consider future options. Consideration will be given in particular over the course of the SR10 period to possible means and prospects to support local authority-led estate regeneration schemes including through non-PFI mechanisms. However we do not wish to raise any expectation of alternative funding at this time given the Department’s tight SR10 capital and resource funding settlement.

Authorities with pipeline projects are asked to be aware that the Department may be able to consider their Outline Business Cases in the event of any further resources being made available in the latter part of the Spending Review period or a bid being made for PFI funding in the following Spending Review.

However, whether it is worth local authorities continuing to invest in developing their plans for possible future PFI or non-PFI funding routes will be a decision for each authority to consider and take at its own risk.

The HCA will be in direct contact and liaise with local authorities that have Housing PFI projects in procurement or pipeline projects.