Agenda item

Report attached.

Members considered a report of Councillor Melissa Fisher, Deputy Leader of the Council and Portfolio Holder for Housing and Communities, updating Cabinet on the Huncoat Garden Village (HGV) project and advising Cabinet on the next key steps of the project.

Councillor Fisher provided a brief introduction to the report, highlighting the overall aims of the project, key features of the development, the overall funding and potential risks.  She commented that Councillor Parkins (Huncoat Ward) had requested completion of the access road prior to any development on site.  Councillor Khan added that Councillor Cassidy, (Huncoat Ward) had expressed the same view.

Mark Hoyle, Head of Regeneration and Housing, reported that Homes England required the Council to enter into an agreement with them by the end of March 2025.  A final draft of the agreement had recently been received from Homes England, but this had included some last minute changes which required urgent consideration by the Council and which might alter some of the conclusions as set out in the report now presented, particularly in relation to the risk register at Appendix 2 to the report.  Any significant variations would be discussed with the Leader and relevant Portfolio Holder.  Notwithstanding this, the report remained relevant and its formal recommendations were unchanged.  Councillor Khan requested a copy of any updates to the risk register following the above-mentioned review.

Approval of the report was not considered to be a key decision.

Reasons for Decision

On the 30^th October 2024 Cabinet had agreed to accept Homes England’s offer of £29,897,722 for the HGV project towards infrastructure costs.  Cabinet had also delegated 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 grant funding agreement (for Brownfield, Infrastructure and Land [BIL]) with Homes England.  A summary of the main terms of the Grant Funding Agreement was included at Appendix 1 to the report.

The funding provided key infrastructure and enabling funding for the development of 1,816 new homes at Huncoat over the next 15-20 years.  The overall investment from the project was estimated at £463.24 million.  The BIL funding of just under £30 million was for the following specific items:

• A new 1.1km residential relief road connecting Huncoat directly with the A56, such road to be constructed by the Council and subsequently adopted by Lancashire County Council;
• Land acquisition to enable the delivery of the new residential relief road
• Brownfield land remediation on the former colliery and power station sites;
• A contribution towards improvements to  junction 8 on the M65 motorway (and potentially towards improvements to the Shuttleworth Mead junction) to alleviate traffic pressures arising from the residential development.

The project would have significant regeneration and growth benefits for Hyndburn by diversifying the housing offer, and proving modern housing in a high quality environment.  The scale of development supported the Council’s and Lancashire’s wider economic growth plans and would provide access to open space and new recreational and sport facilities.

Project Update and Progress

Since Cabinet’s decision to accept Homes England’s grant offer, the authority had been negotiating and putting together the grant funding agreement terms with Homes England.  Terms were almost agreed with Homes England and the Council expected to enter into the grant funding agreement before the end of March 2025.  The main agreement incorporated the following key strategies which formed the overall grant funding agreement with Homes England:

• Delivery Programme;
• Expenditure Forecast;
• Cost Plan;
• Land Acquisition Strategy;
• CPO Strategy;
• Recovery Strategy;
• Viability Appraisal;
• Valuation;
• Output Delivery Strategy (Housing );
• Procurement Strategy;
• Risk Register;
• Governance Strategy;
• Professional Team Strategy;
• Approach to Subsidy Control;
• Funding Strategy; and
• Cost Overrun Strategy .

A summary of the key terms of the grant funding agreement was included as Appendix 1 to the report.

Preparation of a full planning application and Environmental Impact Assessment (EIA) for the proposed new residential relief road was complete and the full application had been submitted on the 21^st March 2025.  The application was expected to be validated soon.

A two stage tender process was being used to procure a contractor to construct the proposed new residential relief road.  Stage 1 of the process was complete and a preferred contractor had been selected to construct the proposed road.  The Stage 1 process had also provided an initial contract cost.  The preferred contractor would now work with the Council on fine-tuning the final design of the road (RIBA Stage 4), which in turn would finalise the cost of the proposed new road.

National Highways were making positive progress with improvement plans for Junction 8 of the M65 Motorway.  The junction was currently considered at full capacity.  National Highways had completed design work for Junction 8, which had been modelled and showed that the improvement works could be implemented and improve traffic flow and safety at Junction 8.  The modelling had also shown that improvements at the Shuttleworth Mead junction, north of J8 on the A6068 where it met with the A678, also needed to be implemented.  Discussions were taking place with Lancashire County Council about the timing and implementation of improvements at Shuttleworth Mead, but the proposed funding agreement with National Highways would allow for some or all of the grant to be used in connection with Shuttleworth Mead if not required in connection with Junction 8.

The Council proposed to pay £2.19 million of the Homes England funding to National Highways as a contribution towards the improvement works at Junction 8.  This would be by the way of an agreement made pursuant to section 274 Highways Act 1980.  This agreement was at an advanced stage, with terms close to agreement.  The Council expected to enter the agreement with National Highways by mid-April 2025.

Liaison with land owners and house builders had continued, to ensure that new house building came forward once all the new and improved infrastructure was in place.  Discussions and negotiations with key landowners were expected to proceed at pace once the Council entered the grant funding agreement with Homes England (referred to at Paragraph 3.4 of the report).  There would be three forms of agreement put in place with landowners, as follows:

• Where land owners benefited from grant towards land remediation with subsequent house building.  Terms would include arrangements for remediation of the land, equalisation arrangements and S106 funding;
• Where the Council acquired land for construction of the proposed new relief road; and
• Where house building would take place, but no grant funding was paid, but arrangements for equalisation and S106 arrangements were required.

On the 10^th March 2025 the new, draft Local Plan 2021-2040 had been submitted to the Secretary of State for independent examination.  This submission marked a significant milestone in the Council's efforts to shape the future development of the Borough, including policy direction and support for Huncoat Garden Village.

Project Risks

A project of this size and scale came with a number of risks.  The risks were identified in the table attached to the report at Appendix 2.  These should be read and considered in conjunction with the legal summary at Appendix 1 of the report.

The report to Cabinet on the 30^th October 2024 included analysis of the most significant risks the project presented to the Council, together with mitigation measures.  These had been updated in the table provided at Appendix 2 of the report.  All risks remained under constant review and members would be kept advised of the risk position as the project progressed.

There were no alternative options for consideration or reasons

Resolved                                   -    That Cabinet:

(1)   Notes and welcomes progress with the Huncoat Garden Village project.

(2)   Notes the summary of the key provisions of the Grant Funding Agreement at Appendix 1, and the updated Risk Register at Appendix 2 of the report.

Councillor Scott Brerton gave his apologies and left the meeting at this point.