Agenda item
Huncoat Garden Village
- Meeting of Cabinet, Wednesday, 30th October, 2024 5.00 pm (Item 214.)
- View the background to item 214.
Report attached.
Minutes:
In accordance with Regulation 11 of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012, approval was given by Councillor Jodi Clements, Chair of the Communities and Wellbeing Overview and Scrutiny Committee, to the following decision being made by Cabinet on 30th October 2024, under the special urgency provisions for key decisions, on the grounds that the decision was urgent and could not reasonably be deferred.
In the absence if the Mayor, approval was given by the Deputy Mayor, Councillor Josh Allen, to the disapplication of the call-in procedure on the grounds of urgency, in accordance with Overview and Scrutiny Procedure Rule C14.
The Cabinet considered a report of Melissa Fisher, Portfolio Holder for Housing and Communities, providing an update on the Huncoat Garden Village project and seeking a series of approvals to progress the project, including authority to accept the grant award and enter into a grant funding agreement with Homes England.
Councillor Fisher provided a brief introduction to the report. She confirmed that the Council was pleased to announce its intention to progress plans for the redevelopment of the former Huncoat Power Station and Huncoat Colliery brownfield sites for 1,816 new homes, of which 263 would be affordable or social housing. The development would include a relief road, village centre, primary school extension, railway station parking and some 23 hectares of open space, including woodland and sports facilities.
The Portfolio Holder thanked the officers for their hard work, Homes England for the grant funding and Councillor Clare Pritchard for her work in chairing a Cabinet Working Group, which had led a review of the proposals.
Councillors Aziz and Khan both spoke in favour of the project. Councillor Khan raised questions about a proposal for a strategic rail freight terminal and about how the decision on the overall project would be communicated to residents, to which Councillor Dad responded.
Approval of the report was deemed a key decision.
Reasons for Decision
Huncoat Garden Village formed a key part of Hyndburn Borough Council’s growth plans. It was a residential-led, brownfield housing development project with the potential to transform the housing market within Hyndburn.
The Huncoat Garden Village Masterplan and Framework and Delivery Strategy, approved by Cabinet in October 2021, had set out a framework for the new housing development and expanded settlement of Huncoat, with the Masterplan Framework becoming a material consideration for planning applications for the Garden Village area. A design code (currently in final draft form) set out good design principles including rules (the dos and don’ts) for the creation of a high quality residential development and environment and this would be used by Hyndburn Borough Council, landowners, developers, house builders, etc. as the project was delivered.
Huncoat Garden Village also formed a key part of the emerging Local Plan (Hyndburn 2040: Local Plan {Strategic Policies and Site Allocations}), Policy SP2. Homes England had confirmed that the Huncoat Garden Village proposals remained consistent with the new Government’s strategy for housing growth as the project would make a significant contribution to the new housing targets for Hyndburn using a brownfield first approach, and “grey” belt where necessary. For this reason, Homes England had proposed adoption of the emerging Local Plan as a post contract condition within the grant Heads of Terms (as set out in Appendix 1 to the report). It was therefore important to stress that Huncoat Garden Village project was contingent on the adoption of the emerging Local Plan, and vice versa. Without both, the Council would not be in a position to meet the new housing targets.
The project would bring back into use the site of the former Huncoat Power Station, and the site of the former Huncoat Colliery, to create an extension to the existing Huncoat village using new garden community principles. It would deliver 1,816 new homes of mixed tenure (including affordable and social housing) over a circa 15-year period, alongside a new local centre meeting amenity needs, an expanded primary school, 24 hectares of strategic and functional open space, including a safeguarded area of ecological importance, new woodland and networked open space, and infrastructure in the form of a new residential relief road, car parking provision at Huncoat Railway Station, and localised road junction upgrades as required.
Given the major constraints presented by the previously developed land at the former power station and colliery sites, redevelopment was not feasible without public sector intervention to part fund site remediation and infrastructure to help provide serviced development platforms for viable housing development, as well as a new residential relief road that would connect new development areas with the existing network, as well as relieving congestion that already existed in the village.
Following a successful bid to the Brownfield, Infrastructure and Land (BIL) fund there was an opportunity to secure just under £30 million of grant funding to unlock the development of much needed social and market housing in Hyndburn.
The report therefore made a series of recommendations for the Council to accept the BIL grant and enter into a grant funding agreement with Homes England towards site preparation works and new infrastructure. As accountable body, the Council would “passport” funding with conditions under grant agreements to landowners to undertake the remediation works. The proposed relief road passed over several land ownerships and therefore the Council proposed to enter legal agreements with these landowners to acquire land, and to construct the new relief road.
The report included detailed information on the following matters:
- Background;
- Project update and progress;
- Junction 8, M65 Motorway;
- Homes England grant funding agreement;
- Project Risks; and
- Financial implications for the Council
The report also set out the following details about consultations.
The Huncoat Garden Village Masterplan Framework had been subject to extensive consultation leading up to its approval by Cabinet in October 2021. In addition, Huncoat Garden Village formed part of the consultation on the new, emerging Local Plan (Hyndburn 2040: Local Plan {Strategic Policies and Site Allocations}).
Infrastructure and housing development at Huncoat Garden Village would be subject to further public consultation as part of individual planning applications.
At the request of the Council Leader, a Cabinet Working Group comprising elected members and local representatives had been set up in October 2024 to review the HGV project and to make a recommendation to Cabinet on whether the Council should accept the Homes England grant offer. The Working Group had concluded that the Council should accept the grant offer, and that the project should remain under review especially at the start of each Phase as set out in the Masterplan Framework. Furthermore, the Working Group wanted to ensure the opportunity for a freight rail terminal opportunity as set out in the new, emerging Local Plan remained open.
Alternative Options considered and Reasons for Rejection
Cabinet could choose not to proceed with the HGV project and to decline the BIL funding offer. However this was not recommended as it would put at risk the development of just over 1,800 new homes in the Borough (20% of which would be social housing or affordable), which formed a major part of the housing growth proposed in the Local Plan. The HGV project was a central part of the draft Local Plan, which would also have to be abandoned if a decision was taken not to proceed with the Huncoat scheme. The costs incurred to date in preparing the draft local plan to submission stage (approximately £250,000) would have to be written off and a similar sum would be required to produce a new draft Local Plan. In this regard, the Council would be required to begin the plan-making process from scratch, including the compilation of a detailed evidence base, a call for sites and public consultation. This process could easily take over 30 months to complete and a start could be delayed whilst the new Government consulted on, and then implemented, changes to the Local Plan-making regime. In the meantime, the Council would be without an up to date Local Plan and without sites for delivery of the new housing targets. This meant that, as a matter of law, the presumption in favour of sustainable development would apply to planning applications. In turn, this posed a threat to the Borough’s green belt as there would be a much greater risk of speculative applications for housing development being successful, including on appeal, if the presumption applied.
A decision not to proceed with the HGV project would also be contrary to the Government’s policies for encouraging new house building at scale and pace, including the proposed requirement for Hyndburn to deliver 313 new homes a year through the planning system. If the brownfield / grey belt land at Huncoat was not used for housing development, the Borough’s greenbelt would be put at significant risk as the Borough does not have anywhere near enough brownfield sites to enable housebuilding at this scale. Furthermore, many of the limited number of brownfield sites that existed in the Borough were not considered to be viable for development without considerable public funding (for example because of contamination and / or poor ground conditions) and there was no guarantee that this level of public subsidy would be available. It could also have other potential consequences for the Council, including:
- reputational damage with key stakeholders including Homes England, MHCLG, National Highways, house builders, registered providers, etc.
- the Council would not recover costs incurred to date on the project i.e. £607,792
Homes England considered the HGV project as a significant opportunity for new housing at scale, consistent with national Government policy. The funding was critical to supporting new infrastructure at Huncoat, without which, the Council’s ability to enable additional housing to meet future housing needs would be potentially jeopardised.
Reducing the number of new housing units at Huncoat Garden Village was also not an option. The Council’s bid was framed within the Masterplan Framework, and in turn the draft new Local Plan. The whole business case justifying circa £30 million grant funding was predicated on 1,816 new housing units. In turn, a reduction in units would fail to achieve the required Benefit Cost Ratio and potentially exceed the maximum grant rate per unit. Therefore, Homes England would not consider such an option.
The Government and Cabinet wanted to see an increase in house building, including additional affordable / social housing up to 50% of the overall new homes built. The Council’s BIL submission was made before the new Government announced it’s new housing targets including those for a greater proportion of affordable / social housing units. The BIL grant award allowed for 20% affordable /social housing units which complied with the Council’s Local Plan and the new emerging Local Plan. Cabinet and officers had engaged with Homes England about increasing the level of affordable / social housing units for the project. Homes England had confirmed this would not be possible due to project viability and because significant additional grant would be required to achieve an increase in affordable / social housing units. However, this did not rule out an increase in the number of affordable / social housing delivered at Huncoat. This was a 15-20 year project and therefore the Council could expect further funding opportunities to be available in the future to increase affordable / social housing provision. This included future rounds of Homes England’s affordable homes programme, which was due to be reviewed in 2026.
Resolved - That the Cabinet:
(1) Notes and welcome progress with the Huncoat Garden Village project, including the offer of a maximum grant of £29,897,722 from Homes England.
(2) Accepts the £29,897,722 grant offer subject to paragraph (3) below.
(3) Notes the Heads of Terms for the Huncoat Garden Village Grant Award at Appendix 1 of the report, and delegates authority to the Head of Regeneration and Housing in consultation with the Leader of the Council and Portfolio Holder, and following consultation with the Executive Director (Legal and Democratic Services) to negotiate and enter into a BIL grant funding agreement with Homes England noting the risks detailed in paragraph 4.10 (4.10.1 - 4.10.6) of the report and at Appendix 2.
(4) Notes the in principle agreement with National Highways Limited in relation to Junction 8 of the M65 motorway described in paragraphs 4.6 - 4.8 of the report and delegates authority to the Head of Regeneration and Housing following consultation with the Executive Director (Legal and Democratic Services) to finalise terms and enter into the necessary legal agreements with National Highways Limited, subject to the grant funding agreement with Homes England having been completed pursuant to paragraph (3) above
(5) Delegates authority to the Head of Regeneration and Housing, following consultation with the Executive Director (Legal & Democratic Services) to agree heads of terms and enter into legal agreements with landowners to enable delivery of Huncoat Garden Village where such agreements relate to:
· acquisition by the Council of land, rights or interests for the purpose of constructing the proposed new residential relief road at Huncoat (Huncoat Lane) or are associated easements, licences and / or option agreements
· the award of BIL grant by the Council to the owners of the former Colliery and Power Station sites to facilitate remediation of their land for residential development
· an equalisation arrangement between landowners benefitting from residential development whereby the cost of non-grant funded infrastructure and enabling costs, any costs that exceed grant awarded for the residential relief road, and for strategic open space is shared proportionally between the landowners
In all cases, subject to completion of the Homes England grant funding agreement pursuant to paragraph (3) above, and in consultation with the Leader of the Council and Portfolio Holder.
(6) Notes the following budget out turn position for 2023/24 and for the 2024/25 budget:
· The Council spent £553,208 in 2023/24 in progressing Huncoat Garden Village against an approved budget of £483,220 with a negative variance of £69,988 met from revenue reserves for the reasons set out in paragraph “4.12”
· Costs of £54,584 have been incurred in 2024/25
· Should the Council accept the grant award and enter a grant funding agreement with Homes England, all of the above costs (£607,792) should be recovered.
(7) Approves a revenue budget of £400,000 for 2024/25 in advance of entering the BIL grant funding agreement to meet essential consultancy costs to enable the Council to continue to progress key aspects of the Huncoat Garden Village project as described in paragraph “4.14”, recognising this spend is at risk but most will be recoverable if the Council enters a grant funding agreement with Homes England (and draw down of funds will be subject to consultation with the Executive Director (Resources).
(8) Grants approval to submit a planning application with supporting Environmental Impact Assessment for the proposed residential relief road.
(9) Approves the appointment of appropriate consultants as required to support the Council and progress the project in line with the BIL grant funding agreement and the project delivery timetable.
(10)Notes that regular progress reports will be presented to the Council’s Management Team and to future Overview and Scrutiny and Cabinet meetings given the size and scale of the project.
Supporting documents:
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Huncoat Garden Village - Main Report and Appendix 1 - Heads of Terms, item 214.
PDF 320 KB
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Appendix 2 - Risk Register, item 214.
PDF 230 KB