Agenda item

Report attached.

Members considered a report of Councillor Kath Pratt, Portfolio Holder for Housing, Health and Wellbeing, updating Cabinet on progress concerning the Huncoat Garden Village project and seeking approval for the Council’s Infrastructure funding bid.

Councillor Pratt indicted that this was a major growth project provided for in the Council’s Corporate Strategy.  The Masterplan represented an opportunity to retain existing households and attract new households into the Borough.  Liaison was on-going with Homes England, Lancashire County Council, National Highways and various landowners in order to deliver the Masterplan.  There was estimated to be a funding gap in the region of £25M to make the scheme viable.  The plan included a new access road; additional school places; and remediation of the former power station and colliery sites.  The intention was to make a bid of around £30M to Homes England.

The Leader reiterated that the scheme was a game-changing opportunity to retain households and attract new ones into the area.  He outlined the key elements of the scheme listed in the report, which would deliver 1,816 new homes, including 312 safeguarded for the next Local Plan period beyond 2036.  He also summarised the content of the proposed bid to Homes England.  He commented that the proposed Junction 8, M65 improvements would also benefit the Altham employment site.  The overall scheme would help to protect other Green Belt land within the Borough.  The project was the culmination of much hard work over many years by a large number of people.

Former councillor, Mr Dave Parkins, was given permission to speak on this item.  He enquired about the number of homes which would need to be built before the link road would be required.  Current proposal suggested that 400 homes would be required, but previously the figure stated had been 451 homes.  The current road infrastructure in Huncoat was inadequate.  Councillor Pratt indicated that the exact number of homes would be a matter for Lancashire County Council.  The Leader commented that some housing development could take place before the new link road was in place.  However, the wider Huncoat Garden Village scheme was more aspirational and would include housing, biodiversity and a link road.  Housing was critical to the growth of the Borough.  Councillor Melissa Fisher asked what would happen if the funding bid was not successful.  The Leader responded that the report presented a positive picture of what the Council wished to achieve.  There would still be some housing development in Huncoat, even if the full scheme was not realised.  However, there was a strong belief that the bid would be successful.

Approval of the report was not deemed a key decision.

Reasons for Decision

Huncoat Garden Village formed a major part of Hyndburn Borough Council’s growth plans including a once in a lifetime opportunity to diversify Hyndburn’s housing offer and provide new housing in a fabulous landscape setting.  The Garden Village was a game-changing opportunity for market making housing in Hyndburn, at a scale that not only helped the Borough retain those households that otherwise would leave to meet their housing aspirations elsewhere, but also attract new economic households to the Borough.

On the 20^th October 2021, Cabinet had approved the Huncoat Garden Village Masterplan framework and Infrastructure Delivery Strategy.  The Masterplan framework was now a material consideration to any planning application within the area.  The Masterplan also formed part of the Council’s new, emerging Local Plan.  The key elements promoted by the masterplan framework over the next 15 years included:

• Delivery of 1,816 new homes, including 312 safeguarded for the next plan period beyond 2036, with an assumption of policy compliant affordable housing delivery within the mix;
• A new residential relief/distributer road linking Huncoat Garden Village directly with the A56;
• Provision to expand Huncoat Junior School (or an option to build a new school if that became necessary);
• A new village centre located at the junction of Lower Gate Road, Altham Lane and Station Road.  This would link the existing Huncoat Village with the Garden Village area providing local facilities including shops and car parking within walking distance for all existing and new households;
• Railway Station improvements including a significant car parking facility with cycle storage and improved access arrangements;
• Circa 40 hectares of improved open space including 24 hectares of safeguarded land for a potential Biological Heritage site;
• In addition to the existing football/sport pitches of Bolton Avenue, a new state of the art 11-a-side 4G pitch with floodlighting and a 9-a-side grass pitch; and
• 7 formal and 7 informal play areas

Since the Masterplan framework’s approval, the Council had been working with Homes England, Lancashire County Council and National Highways to bring forward the Masterplan sites within Huncoat for residential development.  The Masterplan Framework and Infrastructure Delivery Strategy had been subject to high level viability analysis to help inform whether the Masterplan was ultimately deliverable.  On the basis of the analysis, it had been concluded that there was a headline viability funding gap likely to be in the region of £25 million, plus the need to generate an appropriate per acre land value that would enable development to commence.  The Masterplan Delivery Strategy had recognised that due to the viability challenges identified, the comprehensive delivery of the Garden Village would require grant funding to achieve a viable and deliverable Garden Village.  The key viability drains were the proposed relief/distributor road, excessive abnormal costs on the former developed sites (former power station and colliery sites), school expansion and other key infrastructure costs including off-site electricity reinforcements, foul drainage connections, new surface water attenuations and management, etc.

Following discussions with Homes England, the Government’s housing accelerator, Homes England had encouraged the Council to make a Business Case submission to its Brownfield Land Infrastructure Funding programme.  Jointly funded by Homes England and the Council,  Avison Young had been appointed to help the Council make a bid, using their expertise to prepare a five case Business Case (strategic, economic, commercial, financial and management).  In addition, funded by Homes England, Arcadis had been appointed to prepare an outline relief/distributor road design with costings to inform the Business Case.

Arcadis had concluded its commission to plot and confirm the route and costs of the proposed new relief/distributer road.  In addition, Avison Young were well advanced in preparing the Council’s Business Case submission, subject to Cabinet approval.  If approved, the Business Case should be ready for submission to Homes England before the end of October 2022.

Following further viability work and analysis, the Council proposed to make a funding submission of circa £29.6 million to Homes England, with the main grant funding costs as follows:

• £6,762,327 for delivery of the relief/distributor road;
• £4.5m contribution to delivery of Junction 8, M65 upgrades;
• £18,317,660 for abnormal costs associated with the need for site remediation on the two brownfield development areas;
• £29,579,987 total bid submission.

Factoring the above into an updated viability appraisal from that prepared as part of the Masterplan process, the residual value showing on the viability appraisal was £15,582,511 (positive) which equated to a land value of £215,317per hectare.  Engagement with Homes England and review of Government ‘reasonable’ land value benchmarks supported the view that this was an acceptable residual land value to leverage grant support.

Whilst the appointed external consultancy had developed suggested responses to the questions needed for the Council’s Infrastructure Funding bid submission, there would be a number of specific bid documents / statements which required the Council’s Chief Finance Officer, (Section 151 Officer) and Chief Executive to make and sign as a true and correct record on behalf of the Council.

The Huncoat Garden Village Business Case would seek funding for the following three key interventions, further details of which were set out in the report:

• Huncoat Relief / Distributer Road;
• Huncoat Junction 8, M65 Upgrade; and
• Site Remediation on the two Brownfield Sites.

Alternative Options considered and Reasons for Rejection

The Huncoat Garden Village Masterplan Framework and Infrastructure Delivery Strategy had considered six options as part of the process to arrive at the preferred option for Huncoat Garden Village.  This had been reported in the Masterplan report to Cabinet on the 20^th October 2021.  Detailed analysis of the option development and testing was provided within the Masterplan Stage 2 Option Testing and Development Report which could be viewed on the Huncoat Garden Village Website.

The Council could decide not to make a funding submission, and Cabinet could decide not to support the recommendations in the report.  This was not recommended as this was a major opportunity to access significant funding to bring forward housing at scale to support the Council’s growth plans.  If the market was left to deliver new housing development in Huncoat there was a significant risk that delivery would be compromised and slowed down, and the Council would lose the opportunity to direct development in line with the Masterplan and emerging Design code.

Resolved                                    -    That Cabinet:

(1)    Notes and welcomes the progress being made on bringing forward development land and infrastructure to enable new residential development as set out in the Huncoat Garden Village Masterplan Framework and Infrastructure Delivery Strategy.

(2)    Approves the principal interventions set out in Paragraph 3.8 of this report to be included within the Council’s Infrastructure Funding bid submission to Homes England.

(3)    Approves the proposal to apply for Infrastructure Funding to Homes England for up to £30 million for Huncoat Garden Village as outlined in this report.

(4)    Delegates authority to the Head of Regeneration and Housing, following consultation with the Leader of the Council and Portfolio Holder, to make amendments to the Infrastructure Funding Bid submission prior to submission of the same to refine costs or improve project viability.

(5)    The Council’s Chief Executive and Director of Finance are given delegated authority, following consultation with the Leader of the Council, to sign off the relevant documents required for the Council’s Infrastructure Funding bid submission as highlighted in Paragraph 3.7 of the report.

(6)    Note that if the Infrastructure Funding Bid is successful, a further report will be brought to Cabinet to approve acceptance of the funding, once the terms and overall project structure have been confirmed.  In addition, further approvals will be sought in relation to procurement, appointment of contractors and professional services, and a number of legal agreements with third parties including land owners/developers and National Highways as set out in the report.

(7)    Further notes, in progressing the Huncoat Garden Village project should the Council’s Infrastructure Fund bid be successful, entering a funding agreement with Homes England and the spend programme will generate a number of risks for the Council.  Some of the key risks are set out in in Paragraph 3.13 of the report.  Should the Council’s bid be successful a further report will be brought to Cabinet as described in Resolution (6) above.  This will include a risk register with details on how the risks will be mitigated.