Issue - meetings

The Leader of the Council to submit a report updating Members on the prospect of Leicestershire County Council accepting the Housing Infrastructure Funding award, the expectations they have placed upon Melton Borough Council including with regard to risk sharing and development of the revised Masterplan as a key element of the supporting information required by Homes England.

Cabinet:

2.1  NOTED:

a)    the progress made towards acceptance of the Housing Infrastructure Fund (HIF) award and the positive and collaborative work undertaken between Melton Borough Council, Leicestershire County Council and developers.

b)    the significant efforts that Melton Borough Council has undertaken to support infrastructure delivery within Melton.

c)    that the decision as to whether to accept the Housing Infrastructure Funding rests with Leicestershire County Council and the risk associated with the delivery and funding for Highways and Education is a statutory function of the County Council which the Borough Council is committed to support.

2.2  APPROVED the proposed development layout included in Appendix A which will further develop the Masterplan to guide the consideration of future planning applications in the South Sustainable Neighbourhood area and support the County Council’s intention to accept the Housing Infrastructure Fund award.

2.3  APPROVED in principle that the Borough Council enters into a risk sharing agreement on the basis of the principles set out in this report, specifically at section 5.10 which limits its financial liability as proposed i.e. up to £1m cap (capital) or £50k cap (revenue).

2.4 Subject to 2.3 and the County Council agreeing to proceed with the Borough Council’s proposed cap, APPROVED the delegation of authority to the Director for Corporate Services in consultation with the Leader of the Council to negotiate the practicalities, parameters and terms of the risk sharing agreement before seeking approval from Council.

Jim Worley, Assistant Director for Strategic Planning and Delivery introduced the report, the purpose of which was to update Members on the prospect of Leicestershire County Council accepting the Housing Infrastructure Funding (HIF) award, the expectations they have placed upon Melton Borough Council including with regard to risk sharing and development of the revised Masterplan as a key element of the supporting information required by Homes England.

Mr. Worley confirmed that the Council and its partners were committed to the project.  Leicestershire County Council (LCC) had invited the Council to work with them towards satisfying Homes England’s pre-contract conditions and developers and other stakeholders (Davidson’s, Greenlight and Truframe) had also expressed their desire and commitment to work collaboratively to complete the project.

Mr. Worley highlighted that the HIF bid was based on maximising development potential, seizing opportunity and accelerating development.  A revised Masterplan was required by Homes England, as part of the pre-contract conditions and a development framework (Appendix A), viability assessment, ‘planning strategy’ and Housing Delivery Strategy had been developed (as detailed at paragraphs 3.2, 3.3 and Section 5 of the report) to form a basis for establishing the revised Masterplan.

Dawn Garton, Director for Corporate Services advised of the original basis for the financial risk sharing principles agreed between LCC and this Council for the project.  They were based upon the fact that the Council had historically received financial benefit of development in the area through the New Homes Bonus Scheme and that it was therefore proposed part of this gain would be shared with LCC.  However, the New Homes Bonus Scheme is being phased out and,, as things stand, there would be very limited direct financial benefit from development to the Council.  Underwriting the financial risk (market and developer) from the Council’s core funding was out of proportion to its resources.  Should the risk be realised, the Council would not be financially sustainable.

Mrs. Garton explained that the Council had limited reserves to draw upon and any payment would need to be borrowed and the debt serviced from the revenue budget.  This would impact its financial viability and on the level of services provided from core funding, resulting in a redirection or reduction of services. 

Mrs. Garton advised that although not providing the level of underwriting requested by LCC, the affordable limit of the financial risk sharing was £1m, which created an incentive on the Council to ensure the s106 monies for projects are collected.  Entering into a risk sharing agreement at the level being requested by LCC would place the Council’s future financial sustainability at risk and be potentially unlawful.

Councillor Joe Orson, Leader of the Council noted the recent collaborative work between LCC and this Council and thanked developers for confirming their commitment to the project.  He noted the forthcoming meeting with the Director of Housing Delivery the Ministry of Housing, Communities and Local Government (MHCLG) and representatives from Homes England with a view to discussing the current position.  He reiterated that given the  ...  view the full minutes text for item 138