To: Executive Board Professor Steven Broomhead Chief ... · The Executive Board considered a report...

To: Executive Board

Councillors:

T O’Neill (Chair), R Bowden (Deputy Chair) J Carter, J Guthrie, T Higgins, M McLaughlin, H Mundry, H Patel, D Price, P Wright Executive Board

Date: Monday, 15 January 2018

Time: 18:30

Venue: Council Chamber, Town Hall, Sankey Street, Warrington, WA1 1UH

Contact Christine Oliver, Democratic & Member Services, Tel: 01925 442104,

Email:[email protected]

AGENDA

Part 1

Items during the consideration of which the meeting is expected to be open to members of the public (including the press) subject to any statutory right of exclusion. 1 Code of Conduct - Declarations of Interest

Relevant Authorities (Disclosable Pecuniary Interests)

Regulation 2012

Members are reminded of their responsibility to declare any

disclosable pecuniary or non-pecuniary interest which they have

in any item of business on the agenda no later than when the

item is reached.

2 Minutes

Minutes of the meeting of the Executive Board held on 11 December

2017.

5 - 14

3 Executive Decisions - Forward Plan

Report of the Head of Legal and Democratic Services and Monitoring

Officer to the Council.

15 - 24

Professor Steven Broomhead Chief Executive

Town Hall Sankey Street

Warrington WA1 1UH

1

Part 2

Items of a “confidential or other special nature” during which it is likely that the meeting will not be open to the public and press as there would be a disclosure of exempt information as defined in Section 100I of the Local Government Act 1972. The following information comprises the formal notice under Paragraph 5(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 that a decision has been taken to hold this part of the meeting in private. Information is also provided against each item heading about the reasons for holding this part of the meeting in private, any representations received and the response to those representations.

8 Housing Development Options Appraisal (Forward Plan No 037/16)

Joint Report of Councillor R Bowden, Deputy Leader and Executive

Board Member, Corporate Finance and Councillor M McLaughlin,

Executive Board member, Public Health and Wellbeing.

4 Housing Development Options Appraisal (Forward Plan No 037/16)

Joint report of Councillor R Bowden, Deputy Leader and Executive

Board Member, Corporate Finance and Councillor M McLaughlin,

Executive Board Member, Public Health and Wellbeing.

25 - 54

5 Contract Award for the provision of Supported Housing for Single

Males and Females at risk of homelessness (Forward Plan No

042/17)

Report of Councillor M McLaughlin, Executive Board Member, Public

Health and Wellbeing.

55 - 60

6 Contract Award for the provision of Social Care and Support for

Adults to Catalyst Choices Management Services Limited (extension

for an optional additional year) (Forward Plan No 044/17)

Report of the Leader of the Council, Councillor T O'Neill.

61 - 66

7 FCC Environment Residual Waste Contract (Forward Plan No 047/17)

Report of Councillor J Guthrie, Executive Board Member, Environment

and Public Protection (including Climate Change).

67 - 70

2

Reasons for Considering in Private:

Exempt Information - Category 3, Schedule 12A, Local Government

Act 1972.

Representations Received:

Nil.

Response to Representations:

Nil.

9 Contract for the provision of Supported Housing for Single Males

and Females at risk of homelessness (Forward Plan No 042/17)

Report of Councillor M McLaughlin, Executive Board Member, Public

Health and Wellbeing.



Act 1972.


Nil.


Nil.

3

10 Contract Award for the provision of Social Care and Support for

Adults to Catalyst Choices Management Services Limited (extension

for an optional additional year) (Forward Plan No 044/17)

Report of the Leader of the Council, Councillor T O'Neill.



Act 1972.


Nil.


Nil.

11 FCC Environment Residual Waste Contract (Forward Plan No 047/17)

Report of Councillor J Guthrie, Executive Board Member, Environment

and Public Protection (including Climate Change).



Act 1972.


Nil.


Nil.

4

Agenda Item 2

Minutes Issued on Thursday, 14 December 2017. Call In expires midnight on Monday, 18 December 2017. Decisions can be implemented from Tuesday, 19 December 2017.

Minutes of the Meeting of the Executive Board – 11 December 2017

Present: Executive Board Members: Councillors:

Leader T O’Neill Deputy Leader/Corporate Finance R Bowden Children’s Services J Carter Environment and Public Protection (including Climate Change) J Guthrie Leisure and Community T Higgins Highways, Transportation and Public Realm H Mundry Personnel and Communications H Patel Culture and Partnerships D Price Statutory Health and Adult Social Care P Wright Note: before commencement of the meeting Councillor O’Neill, Leader of the Council welcomed members of the public and press to the meeting. EB 108 Apologies Councillor M McLaughlin Executive Board Member Public Health and Well-being. EB 109 Code of Conduct – Declaration of Interest Councillor D Price declared a non pecuniary interest in item EB112 on the basis of being a Board Member of LiveWire; Councillor J Guthrie declared a non pecuniary interest in item EB112 on the basis of her husband being the Deputy Chair of LiveWire: both members left the room whilst the item was under consideration, did not take part in the consideration of the matter and did not vote on the matter. EB 110 Minutes Decision: That the minutes of the meeting of the Executive Board held on 13 November 2017 were received and signed as a correct as a correct record by the Leader of the Council. EB 111 Executive Decisions - Forward Plan The Executive Board considered a report of the Head of Legal and Democratic Services and Monitoring Officer to the Council on the contents of the Executive Decisions Forward Plan covering the period 1 December 2017 – 31 March 2018. The following updates were tabled and received at the meeting:

UPDATES – 15 JANUARY 2018 MEETING

018/17 Playing Pitch Strategy – moved from 15 January 2018 meeting to 12 February 2018 Executive Board meeting. REASON: Reason – deferred pending finalisation of the Strategy and

5

Agenda Item 2


associated papers.

035/17 Solar Farm Investment – moved from 15 January 2018 meeting to 12 February 2018 Executive Board meeting. REASON: deferred because the due diligence on the business plan has been delayed, and therefore in order to be able to provide a robust risk assessment in the paper so that we give full advice to the Executive Board it is proposed to delay by one month.

038/17 Birchwood Business Plan – Moved from 15 January 2018 meeting to 12 February 2018 Executive Board Meeting REASON: The item has been deferred to allow for further financial planning.

Decision: The report was received and noted. Reason for Decision - The report was submitted for information and comment. (Note: Councillors D Price Executive Board Member Culture and Partnerships and J Guthrie

Executive Board Member Environment and Public Protection (including Climate Change)

both left the room prior to commencement of the following item)

EB 112 Libraries Modernisation – Recommendations of the Libraries Modernisation

Working Group (Forward Plan No 030/17)

The Executive Board considered a report of Councillor T Higgins, Executive Board Member,

Leisure and Community, which detailed the work undertaken by the Libraries Modernisation

Working Group since March 2017 and which presented a series of recommendations

proposed by the Working Group, intended to support an improved and modernised libraries

provision across Warrington.

In discussing this item Councillor R Bowden Executive Board Member Deputy Leader/Corporate Finance sought to simplify and clarify the recommendations identifying the need for robust business cases to be presented and put forward the following amended recommendations: Proposed by: Councillor R Bowden Seconded by: Councillor T Higgins The Executive Board is recommended:

(1) To commit to maintain Warrington’s existing Libraries provision and keep all existing Libraries open subject to robust Business Cases that deliver the outcomes of the new Libraries Partnership Group. These matters will be delegated to the Director of Corporate Services in conjunction with the Deputy Leader and the Portfolio Holder for Leisure and Community;

(2) To support the Vision for Warrington Libraries (Appendix A to the report);

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Agenda Item 2


(3) To provide up to £1m in the Council’s Capital Programme to support a planned programme of repairs, maintenance and investment identified from in the individual Library cases. To support the investment in the book fund as stated in paragraph 7.5 to the report; and

(4) To approve the development of a new Libraries Partnership Group Chaired by the Director of Corporate Services. This group will oversee the development of a new partnership strategy for Libraries and established a new set of performance measures.

Decision - the amended recommendations were unanimous agreed Reasons for decision –

Resources for frontline services are becoming increasingly pressurised. As the Council is

forced to make cuts elsewhere as a result of this government’s continued austerity

programme, libraries also come under the spotlight. The Council’s goal is to modernise the

service to ensure it is financially sustainable and meets the wider aspirations for community

wellbeing and public service hubs.

Public feedback has strongly argued against closure, but instead to find other ways to keep

libraries open and relevant to modern needs. This paper recommends we continue to seek

alternatives to closure and an ongoing shrinkage of the libraries service, whilst seeking

alternative methods of maintaining a sustainable libraries provision.

(Note: Councillors D Price Executive Board Member Culture and Partnerships and J Guthrie

Executive Board Member Environment and Public Protection (including Climate Change)

both returned to the room and participated in the remainder of the meeting)

EB 113 Capital Programme Monitoring 2017/18 Quarter 2 July-September (Forward Plan

No 014/16)

The Executive Board considered the report of Councillor R Bowden, Deputy Leader and

Executive Board Member, Corporate Finance which detailed the current position and

progress of the 2017/18 Capital Investment Programme and its financing as at 30 September

2017. The report took into account the monitoring of both financial and scheme progress

with service area project officers. The report detailed the following categories:

Borrowing Projects [Revenue Cost to the Council]

Grant/Contribution/Capital Receipts Projects [No Revenue Cost to the Council]

Invest to Save Projects [No Revenue Cost to the Council – a return is generated]

Decision – That the Executive Board

(1) Noted the monitoring report;

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Agenda Item 2


(2) Approved amendments to the 2017/18 capital programme as detailed in the report; (3) Agreed the projects additional budget request of £90k (section 9) and the associated

borrowing costs; and (4) Agreed new schemes be added to the capital programme contained within section 10

of the report and the associated borrowing costs. Reason for recommendation - To ensure effective corporate governance procedures are in place for the management of the capital programme. EB 114 Budget Monitoring 2017/18 – Quarter 2

The Executive Board considered a report of the Councillor R Bowden, Deputy Leader and Executive Board Member, Corporate Finance, which detailed a forecast financial position for the year ending March 2018 and progress against the savings targets of £8.8m included within the current year budget.

Decision: That the Executive Board noted:

(1) the draft forecast outturn before use of reserves as at Quarter 2 of £4.7m overspend; (2) the intention to continue to review other budgets, including those areas where

savings have been delayed, and the possible need to use reserves to balance the budget;

(3) the reserves position as outlined in Appendix 1 to the report; (4) the progress on delivery of savings targets as at Quarter 2; and (5) that Executive Directors would continue to look at ways to bring spend back into line

with the approved budget.

Reason for Decision – The Council is currently forecasting an overspend of £4.7m. It was noted that if Directorates are unable to mitigate the extent of the savings unachieved in year or actively address budget pressures, this may result in service cuts.

It is important for Members to have a detailed view of the current budget position and pressures to enable Members to play a full part in the decision making process and the implications that brings, to ensure a balanced budget can be reported at the end of the year. EB 115 Proposed DCLG Changes to Local Authorities Guidance on Investments and

Minimum Revenue Provision Consultation

The Executive Board considered a report of Councillor R Bowden, Deputy Leader and Executive Board Member, Corporate Finance on changes proposed in the DCLG Consultation on the guidance for treatment of Investments and Minimum Revenue Provision (MRP) and which sought endorsement of the Council’s response to the consultation. Decision: That the Executive Board:

8

Agenda Item 2


(1) noted the proposed changes to DCLG Investment and MRP Guidance; and (2) endorsed the Council’s response to the DCLG Investment and MRP Guidance

contained within appendix 2 to the report.

Reason for Decision – To ensure members are aware of the changes proposed in the recently published proposed changes to the DCLG Investment and MRP Guidance, and to endorse the formal response. EB 116 Performance Report – Quarter 2 2017-18 The Executive Board considered a report of Councillor H Patel, Executive Board Member,

Personnel and Communications which detailed achievements against the targets and

pledges in the corporate strategy. The report set out how the council will work differently to

deliver its vision and pledges. The report identified a set of key performance indicators

developed by the Strategic Management Team (SMT) for 2017-18 to reflect their priories for

the year and reported that SMT would also report any additional performance issues causing

concern. The contents of this report would be publicised through traditional and on-line

media, in accordance with our stated aim of being open and transparent.

Councillor Patel commented on the indicator ‘creating a cultural vision and plan and celebrating the town’s history and heritage’ and commented that the poor performance and lower than expected participation in culture needs to improve to support the town culture offer and contribute to the ambitions of the council.

Decision – That the Executive Board noted -

(1) the quarter 2 2017-18 performance position; and (2) that the relevant Executive Board Members will liaise with their Executive

Directors to discuss specific performance issues.

Reason for decision - To ensure that Executive Board Members are aware of the Council’s

performance position as at quarter 2 2017-18 in relation to delivery of the Corporate

Strategy.

EB 117 Strategic Risk Environment at Quarter 2, 2017/18

The Executive Board considered a report of Councillor H Patel, Executive Board Member,

Personnel and Communications which provided an overview of the Council’s strategic risk

environment for the first six months of the financial year 2017/18. The information was

presented to provide Executive Board with assurance regarding the management of strategic

risks and to facilitate the Executive Board’s review of these arrangements.

Decision – That the Executive Board -

9

Agenda Item 2


(1) Reviewed and commented on the Council’s strategic risk environment at quarter 2 of

2017/18; and (2) Considered the new and emerging risks for inclusion on the strategic risk register.

Reason for decision - To ensure that the Council maintains an effective framework of internal control and continues to manage its key risks, and to ensure the continued review of the Council’s strategic risks EB 118 Burtonwood Road/Kingswood Road Junction Improvements – Funding Update

and Construction Contract Award (Forward Plan Key Decision 022/17) The Executive Board considered a report of Councillor H Mundry, Executive Board Member, Highways, Transportation, and Public Realm which

(a) updated the Executive Board on the progress in developing the project; (b) provided feedback on the recent public engagement undertaken on the

scheme; (c) informed members of the procurement route proposed to be adopted to

ensure the successful delivery of the project; (d) sought approval to accept National Productivity Investment Fund (NPIF)

funding of £2.1m; (e) sought approval to draw down existing capital borrowing approvals for

transport infrastructure contained within the capital programme for the delivery of the Burtonwood Road/Kingswood Road improvements scheme to contribute to the delivery of the scheme; and

(f) sought approval from the Executive Board to award the construction contract.

Decision – That the Executive Board -

(1) Agreed to accept the award of a maximum of £2.1m of National Productivity Investment funding awarded by the Department for Transport as a contribution towards the delivery of the scheme;

(2) Approved the draw-down of £0.897m of funding previously approved by the

Executive Board in October 2014 from the Integrated Transport Block (ITB) ‘top-up’ fund to support the delivery of the Burtonwood Road/Kingswood Road Improvement scheme;

(3) Accepted the construction price of up to a maximum of £ 2.20m from Balfour Beatty

to deliver the scheme with delegated approval to Executive Director Economic Regeneration, Growth and Environment, following consultation with the Head of Legal and Democratic Services and Monitoring Officer to the Council and Executive

10

Agenda Item 2


Board Member, Highways, Transportation and Public Realm to award and enter the construction contract;

(4) Approved the retention of £0.32m of risk funding within the project budget, as a

Warrington Borough Council contingency to cater for changes and unforeseen events encountered whilst constructing the scheme; and

(5) Authorised the Head of Legal and Democratic Services and Monitoring Officer to the

Council to enter into to the necessary agreements with Omega Warrington Ltd., Homes and Communities Agency and Secretary of State to enable the works to be carried out.

Reason for recommendation - Contract Procedure Rule CR60 requires the Executive Board to approve tenders greater than £250,000. The value of the Burtonwood Road/Kingswood Road Improvements scheme exceeds this amount. EB 119 Springfield Street – Public Realm Improvement Scheme, Update and Award of

Construction Contract (Forward Plan Key Decision No 029/17) EB 122 refers. EB 120 Walton Estate – Conservatory Range and Shippon Main Contractor Appointment,

Award of Tender (Forward Plan No 034/17) EB 123 refers. EB 121 Exclusion of the Public (including the Press)

Decision: That members of the public (including the press) be excluded from the meeting by reasons of the confidential nature of the following items of business to be transacted being within category 3 of Schedule 12A Local Government Act 1972 (Rule 10 of the Access to Information Procedure Rules) and the public interest in disclosing the information is outweighed by the need to keep the information confidential. EB 122 Springfield Street – Public Realm Improvement Scheme, Update and Award of

Construction Contract (Forward Plan Key Decision No 029/17) The Executive Board considered a joint report of Councillor D Price, Executive Board

Member, Culture and Partnerships and Councillor H Mundry, Executive Board Member,

Highways, Transportation and Public Realm which advised Executive Board Members of the

progress of the project; recommended the proposed source of capital funding for the

project; advised Executive Board Members on the recent procurement undertaken for the

11

Agenda Item 2


construction contract; recommended acceptance of the tender for the construction works

believed to offer best value for this work to be undertaken.

Decision - That the Executive Board:

(1) Noted the progress made to date in delivering this first piece of the wider Cultural Quarter masterplan;

(2) Approved the overall scheme budget and update the capital programme accordingly; (3) Awarded the contract for the construction of the Public Realm Improvements to

Tenderer A, as outlined in the report with delegated approval to Executive Director Economic Regeneration, Growth and Environment, following consultation with the Executive Board Member, Culture and Partnerships and the Executive Board Member, Highways, Transportation and Public Realm, to award the construction contract.

Reason for decision - Contract Procedure Rule CR60 requires the Executive Board to approve

tenders greater than £250,000. The values associated with the various levels of funding,

agreements and contract awards for which approval is sought is above this figure.

EB 123 Walton Estate – Conservatory Range and Shippon Main Contractor Appointment, Award of Tender (Forward Plan No 034/17)

The Executive Board considered a report of Councillor T Higgins, Executive Board Member,

Leisure, Community and Culture which detailed progress of the project to repair and restore

the Conservatory Range and associated buildings at Walton Estate in order to create a place

for learning and education; recommended the proposed source of capital funding for the

project; provided details of the recent procurement undertaken for the construction

contract; and recommended acceptance of the tender for the construction works believed

to offer best value for this work to be undertaken.

Decision – That the Executive Board – (1) Noted the progress made to date in delivering this project to restore the

Conservatory Ranges at Walton Hall; and (2) Approved the overall scheme budget and update to the capital programme

accordingly; (3) Awarded the contract for the construction of the Works to Tenderer D, as outlined in

the report with delegated approval to the Executive Director, Economic Regeneration, Growth and Environment, following consultation with the Head of Legal and Democratic Services and Monitoring Officer to the Council and the Executive Board Member, Leisure and Community, to agree the construction contract.

Reason for recommendation - to enable the repair and restoration of the Conservatory Range and Shippon at the Walton Estate to be completed and the benefits to the estate and

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Agenda Item 2


its visitors realised. Contract Procedure Rule CR60 requires the Executive Board to approve tenders greater than £250,000. The values associated with the various levels of funding, agreements and contract awards for which approval is sought is above this figure.

Signed…………………………………… Dated……………………………………..

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Agenda Item 3

WARRINGTON BOROUGH COUNCIL

EXECUTIVE BOARD – 15 January 2017 Report of:

Head of Legal and Democratic Services and Monitoring Officer to the Council

Executive Director: Steven Broomhead, Chief Executive

Senior Responsible Officer:

Bryan Magan, Head of Democratic and Member Services

Contact Details: Email Address: [email protected]

Telephone: 01925 442120

Key Decision No.

N/A

Ward Members:

All

TITLE OF REPORT: EXECUTIVE DECISIONS - FORWARD PLAN 1. PURPOSE 1.1 To consider the current Executive Decisions Forward Plan covering the period 1

February– 31 May 2018. 2. CONFIDENTIAL OR EXEMPT 2.1 The report is not confidential or exempt. 3. INTRODUCTION AND BACKGROUND 3.1 Key Decisions are Executive decisions of the authority which are decisions of the

Executive Board or an Officer under delegated powers which are likely to –

Result in Warrington Borough Council incurring expenditure, making savings or vireing £250,000 or more having regard to the Local Authority budget for the service or functions to which the decision relates, or

Be significant in terms of its effects on communities living or working within Warrington Borough Council’s area comprising two or more Wards.

3.2 To comply with the legislation 'Local Authorities (Executive Arrangements) (Meetings

and Access to Information) (England) Regulations 2012', the Council is required –

15

mailto:[email protected]

Agenda Item 3

(1) to give 28 days’ notice of key decisions. (2) to publish a notice of its intention to discuss confidential or exempt items at

least 28 days in advance of the meeting; and

(3) to publish a further notice at least five clear days’ before a private meeting which must include a statement of the reasons for the meeting to be held in private, details of any representations received and a statement of its response to any such representations.

4. THE REPORT 4.1 The current Executive Decisions - Forward Plan is attached at Appendix A. 4.2 The following amendments/changes to the Forward Plan are reported for information:

NEW ITEMS – 15 JANUARY 2018

044/17 Contract Award for the provision of social care and support for adults to Catalyst Choices

047/17 FCC Environment Residual Waste Contract

UPDATES – 15 JANUARY 2018

002/17 Bewsey and Dallam Hub – item moved from 15 January to 12 March 2018 Executive Board meeting. REASON: item deferred pending ongoing work to review the scheme development and funding options.

040/17 Priority Transport Infrastructure, Centre Park Link – Funding update and Construction Contract Award – item moved from 15 January to 12 February 2018 Executive Board meeting. REASON: – item deferred for finalisation of contractual matters.

NEW ITEMS – 12 FEBRUARY 2018

043/17 Court of Protection Judgement

045/17 Additional Secondary School places – Great Sankey High School

046/17 Omega Local Highways Phase 3 – Funding Agreement

048/17 Warrington 2020 Service Transformation Programme – Software Procurement

5. FINANCIAL CONSIDERATIONS 5.1 None. 6. RISK ASSESSMENT 6.1 N/A. 7. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

16

Agenda Item 3

7.1 There are no specific equalities issues in relation to the content of this report. 8. CONSULTATION 8.1 N/A. 9. REASONS FOR RECOMMENDATION 9.1 The report is submitted for information and comment. 10. RECOMMENDATION 10.1 That the Executive Board receives the contents of the Executive Decisions - Forward

Plan and make comments as appropriate. 11. BACKGROUND PAPERS

Papers held within Democratic and Member Services about items for inclusion and changes to the Forward Plan.

Contact for Background Papers:

Name E-mail Telephone

Christine Oliver [email protected] 01925 442104

17


Agenda Item 3

Updated: 5 January 2018

EXECUTIVE DECISIONS – FORWARD PLAN

1 February 2018 – 31 May 2018

Report of the Head of Legal & Democratic Services and Monitoring Officer to the Council This is formal notice under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 of Key Decisions due to be taken by the Authority and that those parts of the Executive Board meeting identified in this Forward Plan will be held in private because the agenda and reports for the meeting will contain confidential or exempt information as defined in the Regulations. Contact Information: Democratic & Member Services Town Hall Warrington WA1 1UH Email: [email protected] Tel: 01925 01925 442104

19


Agenda Item 3

What is the Forward Plan? The Forward Plan contains all the key decisions the Council expects to take over the next four months. It will be refreshed regularly and will give at least 28 days’ notice of any Key Decisions and, if applicable, the Executive Board’s intention to discuss an item in private and the reason for this. What is a Key Decision? Key Decisions are Executive decisions of the authority which are decisions of the Executive Board or an Officer under delegated powers which are likely to –

Result in Warrington Borough Council incurring expenditure or the making of savings of £250,000 or more, having regard to the Local Authority budget for the service or function to which the decision relates, or

Be significant in terms of its effects on communities living or working within Warrington Borough Council’s area comprising two or more Wards.

For information, the Forward Plan also includes some other matters expected to come before the Executive Board or that the Executive Board is likely to recommend to full Council whether or not they may give rise to Key Decisions. What does the Forward Plan tell me? The Plan gives information about:

what key decisions are to be made in the next four months;

the matter in respect of which the decision is to be made;

who will make the key decisions;

when those key decisions are likely to be made;

what documents will be considered;

who you can contact for further information. Who takes Key Decisions? Under the Authority’s Constitution, Key Decisions are taken by the Executive Board or individual officers acting under delegated powers. Most Key Decisions are taken at public meetings of the Executive Board. Executive Board meets once a month on a Monday at 6.30 pm (except August) at the Town Hall, Warrington. Further Information and Representations about items proposed to be heard in Private Names of contact officers are included in the Plan and can be reached via (01925) 442104. If you are unsure, please contact Democratic & Member Services on the same number and staff there will be able to assist you. If you wish to make representations about an item proposed to be heard in private, you should contact Democratic and Member Services by no later than six clear working days before the meeting. The areas of responsibility of the ten members of the Executive Board are:

Councillor T O’Neill Leader

Councillor R Bowden Deputy Leader/Corporate Finance

Councillor J Carter Children’s Services

Councillor J Guthrie Environment and Public Protection (including Climate Change)

Councillor T Higgins Leisure and Community

Councillor M McLaughlin Public Health and Well-being

Councillor H Mundry Highways, Transportation and Public Realm

Councillor H Patel Personnel and Communications

Councillor D Price Culture and Partnerships

Councillor P Wright Statutory Health and Adult Social Care

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Agenda Item 3

Last forward plan entry No. 048/17 If you have any questions about any of the items listed please contact Christine Oliver on 01925 442104.

Decision Reference Number

Date added to the Forward Plan

Item £s to be spent/saved /vired

Statement of Reason why the item of business is private

Wards Affected Lead Executive Board Member

List of Policy/Reference Documents

Directorate and Contact for Further

Information

Key Decision

(Y/N)

Key Decisions – 12 February 2018 018/17 27/07/17 Playing Pitch Strategy N/A N/A All *Executive Board (see

above) Councillor T Higgins,

Leisure and Community

Economic Regeneration, Growth & Environment Dave Cotterill Tel: 01925 442711 [email protected]

Yes

035/17 03/10/17 Solar Farm Investment £17m *Part 2 confidential (see note below)

All *Executive Board (see above)

Councillor R Bowden Deputy

Leader/Corporate Finance

Corporate Services Danny Mather Tel 01925 442344 [email protected]

Yes

037/17 23/10/17 Tender and Contract for award for re-instatement of Town Hall Gates

>£250k *Part 2 confidential (see note below)




Economic Regeneration, Growth and Environment Stewart Brown Tel: 01925 442850 [email protected]

Yes

038/17 02/11/17 Birchwood Park Business Plan *Part 2 confidential (see note below)




Economic Regeneration, Growth and Environment Stewart Brown Tel: 01926 442850 [email protected]

Yes

040/17 15/11/17 Priority Transport Infrastructure, Centre Park Link – Funding update and Construction Contract Award



Councillor H Mundry Highways,

Transportation and Public Realm

Economic Regeneration, Growth and Environment Tom Shuttleworth Tel: 01925 442353 [email protected] Paul Lawrenson

Yes

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Agenda Item 3

Tel: 01925 442699 [email protected]

043/17 12/12/17 Court of Protection Judgement *Part 2 confidential (see note below)


Councillor P Wright Statutory Health and

Adult Social Care Councillor M McLaughlin

Public Health and Well-being

Families and Wellbeing Teresa Dawson Tel: 01925 443955 [email protected]

Yes

045/17 13/12/17 Additional Secondary School places – Great Sankey High School

£3m N/A Great Sankey North and

Whittle Hall Chapelford and

Old Hall Burtonwood and Winwick

*Executive Board (see above)

Councillor J Carter Children’s Services

Transfer of Barrow Hall Primary site to Great Sankey High School

(13/06/17)

Families and Wellbeing Hilary Smith Tel: 01925 442940 [email protected]

Yes

046/17 13/12/17 Omega Local Highways Phase 3 – Funding Agreement

>£250k N/A Burtonwood and Winwick Westbrook




Economic Regeneration, Growth and Environment Tom Shuttleworth Tel: 01925 442353 [email protected]

Yes

048/17 03/01/18 Warrington 2020 Service Transformation Programme – Software Procurement



Councillor H Patel, Personnel and

Communications

Corporate Services Gareth Hopkins Tel: 01925 443932 [email protected]

Yes

Non Key Decisions – 12 February 2018 Nil.

Information Items – 12 February 2018 Nil

Key Decisions – 12 March 2018 039/17 02/11/17 Capital Programme Monitoring

2017/18 - Quarter 3 Report N/A All *Executive Board (see

above) Councillor R Bowden

Corporate Services Danny Mather Tel 01925 442344

Yes

22












Agenda Item 3

Deputy Leader/Corporate

Finance

[email protected]

041/17 20/11/17 Bewsey & Dallam, Grey to Green. Phase 2 Highway / Environmental Improvements – Construction Contract Award





Economic Regeneration, Growth and Environment Tel: 01925 442353 [email protected] Keith Sanders Tel: -01925 442531 [email protected]

Yes

Non Key Decisions – 12 March 2018 Nil.

Information Items – 12 March 2018 02/11/17 Budget Monitoring 2017/18 –

Quarter 3 N/A All *Executive Board (see



Finance

Corporate Services Claire Harris Tel: 01925 442766 [email protected]

No

02/11/17 Performance Report 2017/18 Quarter 3

N/A All *Executive Board (see above)

Councillor H Patel, Personnel and

Communications

Corporate Services Gareth Hopkins Tel: 01925 443932 [email protected]

No

Key Decisions – 9 April 2018 002/17 31/05/17 Bewsey and Dallam Hub

>£250k *Part 2 confidential (see note

below) Bewsey &

Whitecross *Executive Board (see



Finance

Economic Regeneration, Growth and Environment Steve Park Tel: 01925 442993 [email protected]

Yes

Non Key Decisions –9 April 2018 Nil.

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Agenda Item 3

Information Items – 9 April 2018 Nil.

Key Decisions – 22 May 2018 Nil.

Non Key Decisions –22 May 2018 Nil.

Information Items – 22 May 2018 Nil.

**Note: Part 2 confidential Exempt Information – Schedule 12A, Local Government Act 1972: It is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during that item, confidential information would be disclosed to them in breach of the obligation of confidence

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WARRINGTON BOROUGH COUNCIL EXECUTIVE BOARD - 15 January 2018 Report of Executive Board Members:

Councillor R Bowden, Deputy Leader and Executive Board Member, Corporate Finance Councillor M McLaughlin Executive Board Member, Public Health and Wellbeing

Executive Directors: Andy Farrall, Deputy Chief Executive and Executive Director Economic Regeneration, Growth and Environment Lynton Green, Director, Corporate Services


Steve Park, Managing Director, Warrington & Co


Telephone: 01925 443940

Key Decision No. 037/16

Ward Members:

All

TITLE OF REPORT: HOUSING DEVELOPMENT OPTIONS APPRAISAL 1. PURPOSE 1.1 To seek Executive Board approval for the business case to establish two companies

limited by shares, wholly owned by the Council, with the aim to maximise revenue income and deliver 500 high quality homes of mixed tenure.

2. CONFIDENTIAL OR EXEMPT 2.1 Part 2 of this report is to be considered as a Part 2 item being exempt by virtue of

category 3 Local Government Act 1972, schedule 12A.

3. INTRODUCTION AND BACKGROUND 3.1 In December 2016 the Council’s Executive Board agreed the revised Warrington Means

Business growth framework. This document explicitly identified the need to accelerate the provision of homes in Warrington including a specific reference to the delivery of

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26,000 new homes (which includes 7,800 affordable homes) by 2040. The Warrington Means Business growth framework also made explicit reference to establishing a Housing Company under the management of Warrington & Co.

3.2 In February 2017 the Department for Communities and Local Government (DCLG)

published its White Paper titled “Fixing our broken housing market”. This set out how the Government plans to boost housing supply and create a more efficient housing market. Specifically for the Council, the White Paper made reference to the availability of capacity funding and as well as funding for infrastructure; and an explicit indication that the Government would seek to intervene locally where the number of homes being built is below expectations. The Government wishes to encourage modern methods of construction in house building as well as seeking to expand and diversify the house building sector, and in doing so support small and medium-sized housebuilding companies.

3.3 It is broadly accepted that, both nationally and locally, there are not enough homes

being built to meet housing needs thus the Government’s White Paper. Since the 1970’s, on average, 160,000 new homes each year have been built in England whilst the consensus is that 225,000 to 275,000 per year are required. Appendix 1 to this report illustrates the number of homes built between 1946 and 2014 by private enterprise, housing associations and Local Authorities. The chart in Appendix 1 clearly indicates that the level of housing delivery needed has only ever been met when Local Authorities have a major role to play in the delivery of homes.

3.4 In April 2016 the Government launched the £4.7bn ‘Shared Ownership and Other

Affordable Homes Programme’ which excluded grant funding to build new affordable rent homes. However, in the Autumn Statement 2016 the Government provided additional grant funding of £1.4bn and in the Housing White paper confirmed that this can also be used to fund affordable rent homes. A further £2bn of grant funding was confirmed by the Prime Minister during this year’s Conservative party conference.

3.5 The Council is looking at meeting local housing need as well as new alternative ways of

creating an income stream in light reductions in Government funding. Councils are increasingly using housing as an opportunity to develop an income stream which includes rental income, New Homes Bonus, increasing Council Tax receipts and loan margin from lending. In many cases this is being achieved via Local Authority, wholly owned, but arms-length housing companies. It is estimated that by 2020 up to half of all Councils in England will have a local housing company.1 This Executive Board report seeks to set out the proposal to establish such a structure in Warrington.

1 The Smith Institute; The Rise Of local Housing Companies, 2017

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3.6 In the Autumn Budget 2017 the Government set out its aim to deliver 300,000 homes per year by the mid 2020’s by providing investment of £44bn over the next five years. The proposals set out in this report are consistent with the aims of the budget.

3.7 A summary of the Autumn Budget 2017 proposals is as follows:

£630m small sites fund to free-up the delivery of 40,000 homes.

£8bn of financial guarantees to support private housebuilding.

£2.7bn housing infrastructure fund.

£1.1bn to unlock strategic sites including new settlements and urban regeneration schemes.

£400m estate regeneration funding.

New money for a home builders fund to get Small & Medium Size Enterprises (SME) housing builders building again.

£1bn extra borrowing for Local Authorities with a Housing Revenue Account (HRA) to build new affordable homes.

£34m to develop construction skills across the country. 4. HOUSING NEEDS 4.1 There is a clear need for more housing in Warrington and this need covers all types and

tenure. In November 2017 there were 3,202 households registered on CHOOSEaHOME2 seeking social housing in Warrington. The Mid-Mersey Strategic Housing Market Assessment in May 2017 identified that Warrington’s “Objectively Assessed Need” for new homes over the next 20 years equates to 955 per year. In order to meet the Council’s growth aspirations this will need to increase to 1,113 of which 288 per year need to affordable. Additional information on housing needs is set out in the accompanying business case to this report.

4.2 The business case that supports the establishment of Council owned arms-length

housing companies is built on the assumption that the housing companies will build or acquire 500 homes. The first phase of development will initially be on two Council owned sites.

5. OPTIONS APPRAISAL 5.1 A comprehensive options appraisal exercise has been undertaken to determine the most

effective structure to generate new house building. There are eight options that have been evaluated which are summarised below: 1. Do Nothing:

2 Golden Gates Housing Trust online based register for those looking for affordable homes in Warrington.

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No investment by the Council in new housing stock.

2. Housing Associations: This option would involve the Council providing land at reduced or nil value, Section 106 commuted sums and other funding from the Council’s capital programme which would enable the housing associations to provide affordable rented accommodation.

3. Council New Build under the Housing Revenue Account (HRA): This option would involve establishing a new HRA which would record all income and expenditure on housing by the Council.

4. Council New Build under the General Fund: This option would involve building within the General Fund.

5. Local Housing Company: This option would consist of establishing two wholly owned companies with the Council acting as sole shareholder, instead of setting up a HRA.

6. Joint Venture: This option would involve the Council procuring a partner through a joint venture.

7. Cheshire Joint Venture: Cheshire East and Cheshire West and Chester Councils are assessing options to increase the provision of housing and one option is to work in partnership to establish a Cheshire wide joint venture.

8. Community Interest Company or Community Benefit Society: This option would involve setting up a Community Interest Company or Community Benefit Society under the Companies Act 2006 which would be separate from the Council.

5.2 An appraisal criteria was created to enable the assessment of each option against the

following:

Legality: Are the proposals legal and likely to avoid a challenge?

Speed: How quickly can the companies be created and work started to meet objectives?

Deliverability: Will the option be able to deliver the homes and service required?

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Government: Will the option be acceptable to the Government or require approval?

Affordability: Are the proposals affordable for the Council given the current financial climate and challenges?

Financial return: Does the option provide a potential financial return for the Council?

Procurement: The cost of the proposals to procure and the complexity or ease of implementing the option.

Influence: Ability to influence the level of quality of new housing, services, location, scale and exit arrangements.

Scalability: Will the option deliver the required number of homes?

Tenancy: Flexibility on tenure type and on rents charged.

Objectives: Flexibility to change long term objectives of the organisation.

Exit arrangements: Does the option allow for an appropriate exit of the Council’s interest and receives good value for the investment?

Risk Benefit: Will the option secure the anticipated benefits given the risks taken by the Council?

Refinance: Does the option enable the Council to attract and secure private sector investment to transfer the risk away from the Council?

5.3 The criteria set out above were used to evaluate the eight options set out in section 5.1

and a scoring methodology was established consisting of 0, 1 and 2 with the results set out in Appendix 2. An additional weighting process was carried out to reflect the importance of key factors such as legality and the results are set out in Appendix 3.

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5.4 The table below provides a summary of the main comments. Table 1: Options Appraisal Summary Comments Option 1: Do Nothing

No proposals to increase affordable housing for rent.

Council has a statutory duty to consider the housing needs of the borough and have a strategy to meet them.

Council has a statutory duty for homelessness without housing stock to meet this duty.

Option 2: Housing Associations

Discounted on the basis that delivery would be insufficient to meet housing needs.

Potential income through the provision of loans.

Procurement timescales and cost involved.

Council land is likely to be sold at nil or reduced land value so less capital receipts to support the Council’s financial challenges.

Funding required from the Council’s capital programme.

After loans repaid, additional income is retained by housing associations with no revenue income for the Council.

Option 3: Housing Revenue Account

Discounted on the basis that delivery would be insufficient to meet housing needs.

Void properties may have to be sold to comply with the Housing and Planning Act 2016 and capital receipts paid to the Government to fund the extension of the Voluntary Right to Buy for Housing Associations.

Borrowing cap is likely to be applied by the Government which will reduce the amount of funding available for new build.

As part of the process in agreeing to establish a new HRA the Government is likely to require the Council to take on debt which will reduce the level of funding within the business case to build new affordable homes.

Option 4: General Fund

This approach would provide additional pressure on the Council’s financial position because costs will be incurred during development which will need to be financed before receiving rental income.

Option 5: Local Housing Company – RECOMMENDED OPTION

Legal advice confirms can be established.

Opportunity to provide additionality, accelerating housing investment.

Council can provide loan finance on commercial terms to provide a financial return to the Council.

Any surpluses generated after tax will provide a financial return to the Council.

Potential capital receipt and equity on land sales.

Opportunity to build new homes to higher energy efficiency standards improving overall affordability on rent and running costs.

Option 6: Joint Venture

Ability to bring third party development expertise.

Procurement timescales likely to be 12 to 18 months and associated cost involved.

Reduced financial return for the Council.

Option 7: Cheshire Councils Joint Venture

Uncertainty on timescales.

Will require effective governance across 3 Cheshire authorities and potentially reduce the influence by the Council on directing its activities.

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Potential economies of scale.

Option 8: Community Interest Company or Community Benefit Company

Financial return locked within the company with no potential income for the Council.

Council land is likely to be sold at nil or reduced land value so less capital receipts.

Funding required from the Council’s capital programme.

5.5 The unweighted and weighted qualitative score set out in Appendices 3 and 4 shows

that the preferred option emerging from the option appraisal is establishing two Local Housing Companies. Whilst each of the options have their merits in delivering housing investment, on balance each has a particular weakness which reduces its appeal and thus its weighted score. The option to establish the Local Housing Companies has therefore been subjected to more detailed scrutiny on how the proposals work as part of a business case which is described in Section 6 of this report and set out in detail in Part 2 of this report.

6. PROPOSALS 6.1 Housing Companies 6.1.1 The proposal is for the Council to establish two arms-length Special Purpose Local

Housing Companies under its General Fund powers which will be 100% owned by the Council. Both of the Housing Companies will be constituted as companies limited by shares in which the Council will own all the share capital giving the Council full control of the Housing Companies. The Housing Companies will therefore be in effect a subsidiary of the Council. There are legal requirements that will apply to the Housing Companies such as the obligation to file annual returns and accounts or the requirements of Local Government legislation such as Local Government and Housing Act 1989 with respect to Local Authority companies and others that the Council will be able to determine.

6.1.2 The Council appointed Price Waterhouse Coopers (PWC) to provide technical financial

advice and they have recommended that the Council should establish two Housing Companies. The reason for establishing two Housing Companies is to mitigate the potential VAT costs on acquisition of the land and professional fees involved in the purchase and construction. One of the Housing Companies will be the development company and the second one will be the operating company.

6.1.3 The principal aim of the Housing Companies will be to maximise revenue income

through the delivery of high quality mixed tenure housing across the borough to meet local housing needs and to offer a genuine choice of tenure to local people. It is proposed that the Housing Companies could develop affordable rent, open market rent, shared ownership/equity and open market sale. The Housing Companies will not replace development carried out by housing developers and housing associations, rather these proposals will provide additional house building capacity and more homes.

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6.1.4 In the case of affordable housing for rent, then this requires subsidy to deliver which could be provided from cross-subsidy through open market rent, shared ownership, equity and sale as well as HCA grant funding, Section 106 monies secured through the planning system and other sources. Alternative funding sources will also be explored such as developing housing for sale/shared ownership/open market rent out of borough to cross-subsidise affordable housing in Warrington.

6.1.5 Rental housing will be let under assured shorthold tenancies providing high quality

homes at affordable rents and open market rents. In the Government’s Housing White paper “Fixing our broken housing market” February 2017, the Government has stated its support for Local Authorities to build, although it wants “to see tenants that Local Authorities place in new affordable properties offered equivalent terms to those in Council housing including the right to buy.”

6.1.6 To assist the Council’s homelessness statutory duties opportunities will be evaluated to

provide good quality accommodation let on longer tenancies as an alternative to private rented sector.

6.2 Governance Structure 6.2.1 It is estimated that there are currently 150 Housing Companies in operation that have

been or are being set up by Councils. The Council has completed a study on a number of them particularly in the area of good governance and have carried out three study visits to Council’s. The proposed governance structure below is based on good practice from other Council’s with housing companies.

6.2.2 The roles of the various aspects of the governance process are summarised below:

Council: Owns 100% of the share capital of the Housing Companies. As sole shareholder in the Housing Companies, the Council has power to appoint and remove its directors.

Executive Board

Strategic Housing & Regeneration Board

Local Housing Companies

Audit & Corporate Governance Committee

Council

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Companies: These will be legally constituted entities wholly owned by the

Council. The directors of the company will be Council employees with the necessary range of skills and able to take operational decisions quickly in what is a commercial environment. At least one founding director is required to be named in order to incorporate the Companies. It is proposed that the authority to nominate such Council officers to be directors of the companies is delegated to the Deputy Chief Executive and Executive Director Economic Regeneration, Growth and Environment and the Director of Corporate Services and the Head of Legal and Democratic Services and Monitoring Officer to the Council, following consultation with the Deputy Leader and Executive Board Member, Corporate Finance and the Executive Board Member, Public Health and Wellbeing.

Executive Board: The Executive Board will play a leading role in providing approving strategic direction and viability sign off of the business case and individual schemes on a project by project basis for the approval of loans. The Executive Board will approve the Housing Companies business plans on an annual basis and any ‘in-year’ amendments to them if necessary.

Strategic Housing and Regeneration Board: It is proposed that the existing Regeneration Board will be reviewed and expanded to play a leading role in developing the strategic approach for the Housing Companies as well as a strategic overview of the wider housing programme. It is proposed that this board should meet every quarter with annual reviews of the Housing Companies business plans and to monitor the progress of development schemes. Any remedial actions, if needed necessary, would be recommended to the Executive Board as well as considering initial specific development proposals. The suggested membership of the Strategic Housing and Regeneration Board is as follows:

Leader of the Council,

Deputy Leader of the Council,

Executive Board Member, Public Health & Wellbeing,

Executive Board Member, Environment & Public Protection (including Climate Change),

Executive Board Member, Highways, Transportation & Public Realm,

Chief Executive

Deputy Chief Executive & Executive Director - Economic Regeneration, Growth & Environment,

Director of Corporate Services,

Head of Legal & Democratic Services,

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Director of Public Health,

Managing Director, Warrington & Co.

Audit & Corporate Governance Committee: The committee will receive quarterly update reports on the activities of the two Housing Companies. In addition the Council will also report on the corporate finance relating to the Companies that will be included within the quarterly Treasury Management reports that are considered by the committee.

6.3 Business Plan 6.3.1 The Business plan will be approved by the Executive Board on annual basis and will be

monitored by the Strategic Housing & Regeneration Board on a quarterly basis. 6.4 Scheme Gateway Process 6.4.1 It is intended that the scheme gateway process will involve reviews by both the

Companies and the Council at specified stages of the development. It is proposed that there are 5 stages for each development considered by the Companies. Through the proposed governance arrangements the Council will consider and approve the development and funding arrangements at the Gateway stages of 1 and 3 as well as any “Change Gateway”.

Gateway Structure: The gateway process will ensure that each scheme is assessed, approved and its progress tracked. A change gateway will ensure that any variances outside permitted tolerances are identified alongside changing circumstances that may impact on the viability of the scheme.

Gateway Council Company

Gateway 1 Strategic Housing & Regeneration Board approve potential land transfer and development by the Housing Company.

Directors consider site opportunity and permit initial expenditure.

Gateway 2 Directors consider design, approve submission of planning application and approve scheme tenders to be obtained.

Gateway 3 Strategic Housing & Regeneration Board recommends to the Executive Board the approval land

Company enters into agreements with the Council and Construction Contracts.

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transfer and funding agreements to the Housing Company.

Gateway 4 Housing Company Directors undertake pre-completion review and lettings/sales release.

Gateway 5 Directors carry out post completion review.

At any time in the above process there may be a need for a Change Gateway

Change Gateway Strategic Housing & Regeneration Board and, if necessary, the Executive Board consider significant change request.

Directors make a significant change request.

Significant change request is defined as a change requiring revenue spend over and above the approved budget 6.5 Proposed Delivery Model 6.5.1 A delivery model is proposed which uses Council staff and resources to support the

Housing Companies in their activities with additional capacity and resources incorporated within the business plan. The Housing Development Company will be a Contracting Authority in its own right, but will remain subject to the Financial Regulations of the Council. It is proposed that the options to deliver housing management and maintenance services are evaluated and services will be tendered. It is important to note that where the Companies use any Council resource this is identified and paid for on a full commercial basis.

6.5.2 The costs of running the Housing Companies will include time spent by Council staff

acting as Directors of the Companies and any ad hoc support provided by the Council. In relation to construction of the new homes, it is proposed that initially the Housing Development Company will utilise a suitable OJEU3 compliant procurement framework let by a central procurement body or other contracting authority and then to conduct a mini-tender exercise to ensure best value is achieved. The Housing Development Company will eventually develop the capacity to tender its own framework agreement or direct contract at a point in the future.

6.6 Name of the Housing Companies

3 Official Journal of the European Union

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6.6.1 Both of the Housing Companies will require a name which is not already registered with Companies House. It is proposed that the names of the Housing Companies are approved by the Strategic Housing and Regeneration Board.

6.7 Regulation 6.7.1 The Housing Companies will be subject to the regulation of Companies House which is a

light touch regulator, requiring the filing of annual accounts as well as notices following various actions such as appointing or removing directors. The option of the Housing Operating Company applying for registration as a provider of social housing with the Homes and Communities Agency will be evaluated in due course.

6.8 Funding 6.8.1 It is intended that the Council will provide loan finance to the Housing Companies on full

commercial terms. 6.9 Trading Disclosure 6.9.1 As regulated companies, the Housing Companies must ensure that certain documents

display information about the Local Authority owners of the companies to ensure transparency as regards to the governance structures of regulated companies. For example, the Housing Companies would need to set out that they are controlled by the Council in any business letters they produce.

6.10 Accounting 6.10.1 The Housing Companies will be consolidated into the Council’s accounts and group

accounts will have to be prepared for this purpose. The Housing Companies will be recognised as a debtor and a fixed asset investment within the Council’s accounts. No Minimum Revenue Provision (MRP) will be payable on loans to the Housing Companies due to housing being an appreciating asset and the potential option to dispose of the properties, subject to the conditions of housing market at a given time.

6.11 Staffing 6.11.1 It is proposed that initially the Housing Companies would not directly employ its own

workforce. The Council will, therefore, agree to either second or provide employees on a labour only basis, the costs of which would be funded by the Housing Companies. In the short term, it is likely that consultancy resource will be required to support the start-up and initial operational phase of the Housing Companies; again this being funded by the Housing Companies.

6.12 Contracts

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6.12.1 Any construction contracts will need to be in the name of the Housing Development

Company rather than the Housing Operating Company or the Council. 6.13 Operating Budget 6.13.1 The annual operating budget, including the one-off set up costs for the Housing

Companies is set out in Part 2 of this report. 6.13.2 It is expected that operating costs will increase in line with the volume of outputs

resulting from the Housing Companies, however it is also expected that economies of scale can be achieved. All operational costs will be recovered as part of the broader business case.

7. BUSINESS CASE 7.1 Business Case Assumptions 7.1.1 The business case is supported by a bespoke strategic financial model, which has been

developed with financial advisors PDW4 and M3H5. Assumptions made in developing the financial model include matters relating to:

Council Loan to Housing Companies arrangement fee.

30 years interest only loan rate.

Public Works Loan Board (PWLB) 30 years interest rates.

Land costs are based on independent valuations undertaken by GVA6 and the District Valuer Service7.

Estimated housing construction costs per square meter with an additional contingency.

Percentage of fees and on-costs associated with the housing development.

The land costs have been included as equity.

Management costs per housing unit.

Maintenance costs per housing unit.

Major repairs based on a percentage of reconstruction costs.

Voids and bad debts levels.

Homes and Communities Agency (HCA) Affordable Housing programme grant funding per housing unit for each affordable rented home.

Two year housing development period.

4 www.pdw-uk.com - Housing & Development Consultancy

5 www.m3h.co.uk - Housing Advisory Services

6 www.gva.co.uk - Valuation Services

7 www.gov.uk/government/organisations/district-valuer-services-dvs - Valuation Services

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http://www.pdw-uk.com/

http://www.m3h.co.uk/

http://www.gva.co.uk/

http://www.gov.uk/government/organisations/district-valuer-services-dvs

Agenda Item 4

Total of 347 new build homes and the acquisition of 153 homes for refurbishment.

7.1.2 The various assumptions set out above have been used to carry out a financial feasibility

appraisal of each site. The costs used are provided from benchmarking data from schemes carried out by Housing Associations and similar work within the housing sector.

7.2 Management 7.2.1 Costs are per housing unit per annum. This represents the cost of managing the

properties and relates to administrative tasks of letting and dealing with management related issues. It is assumed the cost is higher on market rent properties in comparison with affordable rent as the letting process can often require additional work.

7.3 Maintenance 7.3.1 The cost shown for maintenance is per housing unit per annum. This represents the cost

of maintaining the property, including work relating to the obligations of a landlord such as responsive repairs as requested by the tenant.

7.4 Major Repairs 7.4.1 A property is likely to require major repairs following several years of tenant occupation.

The repair work will form part of the landlord’s asset management strategy which will include the predetermined replacement of particular components of the property such as bathrooms, kitchens and boilers.

7.5 Voids and Bad Debts 7.5.1 This represents the rent loss as a result of a property becoming vacant or unpaid tenant

debts and is expressed as a percentage of the rent due in the financial year. 7.6 Land Costs 7.6.1 The land costs are based on independent valuations and have been included within the

model as equity. 7.7 Development Period 7.7.1 Smaller developments will have a shorter construction period whilst the larger

developments can take between 12 to 24 months to construct. An assumed worst case scenario of two year period of development and construction has been included within the financial model.

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7.8 Construction Costs 7.8.1 Construction costs for the proposed developments have been assumed to be based on

costs experienced by housing associations has been assumed with an additional 5% contingency.

7.9 Fees and On Costs 7.9.1 To inform the business case an overarching percentage figure of 10% has been included

to fund professional fees and on-costs associated with the development such as planning, consultants, legal fees etc.

7.10 Corporation Tax 7.10.1 The Housing Companies will pay full corporation tax on any profits made. 7.11 Stamp Duty Land Tax (SDLT) 7.11.1 The Council will need to apply for group relief and, if approved, there will be no payment

of SDLT in relation to any sites that the Council sells/transfers into the Housing Companies in return for equity. However, SDLT will be payable on any new sites that the Housing Companies purchase from other landowners or existing properties.

7.12 Homes and Communities Agency (HCA) Shared Ownership Affordable Housing

Programme 7.12.1 Affordable rent requires some form of subsidy. The HCA £4.7bn Shared Ownership and

Affordable Homes Programme 2016 to 2021 provides grant funding. A prudent estimate of £30,000 per housing unit for affordable rent has been included in the financial model combines with other funding sources such as Section 106 commuted sums that the Council receives.

7.13 Site Capacity Initial Assessment 7.13.1 For the purposes of the business case, a range of Council sites have been assessed on the

potential number of homes that could be built. The actual final number of homes built and actual Council owned sites to be developed is likely to vary. Each Council owned site will be subject to a detailed design and the financial model will be updated accordingly.

8. FINANCIAL CONSIDERATIONS 8.1 The Council’s Finance Team have worked extensively with professional advisors PWC,

PDW and M3H to develop this business case, confirming the commercial, accounting and

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taxation positions of the housing development proposals. The business plans have also been reviewed by Traderisks8.

8.2 The results of this work have confirmed that the development proposals will generate a

surplus to the Council over the 30 year period of the business case. Wider economic benefits of increased New Homes Bonus and Council Tax on housing stock, dividends, and sale of services to the Council will also be achieved. A major income source to the Council is on the interest earned on loans the Council will provide to the Housing Companies.

9. RISK ASSESSMENT 9.1 It is to be expected that there are risks with a project this size and these are set out in

Table 7. However, with good governance and management the risk analysis does not indicate any reason for not proceeding with the project.

9.2 The Housing Companies will operate a risk register and be responsible for risk

management as well as regularly reporting to the Strategic Housing & Regeneration Board.

9.3 A specific risk is worth highlighting which relates to the Government’s proposal to see

tenants that Local Authorities (even under a Local Housing Company) placed in new affordable housing offered equivalent terms to those in council housing - including Right to Buy.

9.4 It is expected that the Housing Company will, amongst other build types and tenures,

may build sheltered housing for older people. Such sheltered housing is excluded from the Right to Buy legislation.

9.5 In summary, the Right to Buy rules stipulate that for the first 15 years properties could

not be sold for less than the costs in acquiring, building and maintaining them. As a result for the first 15 years after construction the amount of discount is likely to be nil. However, after 15 years tenants could be entitled to the following discounts:

35% discount for a public sector tenant for three years.

Discount remains at 35% until a tenant has five years of public sector tenancy.

After five years the discount goes up by 1% for every extra year the tenant has been a public sector tenant.

Maximum discount of 70% or £787,600 (which increases with CPI each year) whichever is the lowest.

8 www.traderisks.com - FCA regulated finance and risk management advisory services

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http://www.traderisks.com/

Agenda Item 4

If the property is sold within three years one third of the discount has to be repaid.

9.6 In response to a parliamentary question (see appendix 5) the Government has no plans

to extend Right to Buy through legislation. Without such legislation the Government will not be able to force Councils to extend the Right to Buy to Local Housing Companies. However, Councils may feel under pressure to comply with the Government in order to receive grant funding. For housing associations the Government has proposed that they will be reimbursed for the discount which would be funded with the sell-off of high value Council homes owned under the Housing Revenue Account. It is unclear on the announcements made to date whether Local Housing Companies would be treated in the same way as Housing Associations.

Table 7: Risk Assessment

Risks Mitigation Measures

Increase in the cost of funding not offset by an increase in rent inflation

Option to develop to sell, sell existing stock, reduce operating costs, reduce/halt new development.

Increase in void turnaround times

The management strategy will remain focused on a threshold of quality that supports the rent charged to maintain interest. If this issue is due to lack of demand for accommodation then the company can re-structure its operating model to include alternative options such as market sale or offer short term rental deals to manage any market fluctuations.

Increase in land costs above the rate of increase in the business case

The impact of potential new developments would be tested as part of the viability test. It is anticipated that increases in land costs will flow through to increase rents which would offset the impact. A market increase in rents would also benefit the existing portfolio bringing in a net gain.

Increase in build costs The impact of potential new developments would be tested as part of the viability test. If not offset by the market increase in rents the company has the ability to develop a strategy which includes selling a proportion of the units in a development to release a developers margin which could assist in offsetting any increase in build costs or determine not to proceed. An increase in build costs may also have an impact on increasing market values.

No rent indexation or fall in rent

If this problem happened early on the companies would not continue developing unless alternative savings in costs could be achieved. If this occurred later the

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company would have benefited from previous increases in inflation.

Property prices remain flat Reduces the long term value of the asset and therefore long term returns. However, this has no impact on the short term performance of the companies.

Property prices fall The project carries the benefit of a portfolio built over time generating a build-up of equity value in the assets. New build units assumed to generate a cushion in value.

Receipts from sales/shared equity programme are lower than forecast

Receipts from sales aim to cross subsidise the funding of affordable homes. If the receipts are less than projected this will have a direct impact on the numbers delivered. The companies would only have to deliver what it has funding for. Seek to identify alternative funding.

Failure to deliver on time affecting cashflow

Project management activities will be controlled in house by the companies including escalation to the Board for any significant delays or costs. The companies would need to adjust their growth plan accordingly and manage its overheads.

Lack of available sites or opportunities

After the sites owned by the council the companies will need to compete for land as it becomes available. The companies could consider acquisition of existing properties. An option would be to look outside of the borough to secure sites.

Increase in competition Consideration has been given to the type of housing, quality of housing, property standards and service. In the event of excess supply units can be sold.

Lack of public sector funding or cap on the council’s borrowing capability

Seek funding directly from the market and as a portfolio it would be possible to refinance mature units to enable the recycling of funding for new developments if needed.

Political risk affecting the housing sector

In the event of change the business could decide to sell units or seek to restructure its objectives to comply with changed policy directives.

Funding terms at transfer pricing requiring adjustment to meet market

To ensure compliance with state aid the project assumes that commercial terms are included. The model would be adjusted which could either reduce or increase the overall level of return and/or the number of units. The impact will be visible on a project by project basis from the viability assessment.

Government intervention If there is an intervention which restricts the size of

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financial exposures the business plan would need to be adjusted to reflect this.

Change in tax environment with higher tax levels

Higher tax levels would be included in any viability assessment and their impact flows through into the business plan. This may reduce returns or encourage a different financing structure which is more tax efficient.

Construction risk Construction risk is passed to the builder through the contract. Price risk is evaluated through sensitivity analysis in the viability assessment.

Increase in costs of life cycle

The business would be structured to operate with a maintenance reserve which would assist in managing cost increases.

No willing investor to purchase the portfolio if the council needs to fully or partially exit

There is an emerging market amongst institutional investors and pension companies for the long term returns provided by housing. In addition a number of housing associations, such as Your Housing Group, have moved into the private rented market as well as affordable rent. Ultimately if an investor cannot be found to acquire all or part of the portfolio then the portfolio could be disposed through sales in the open market.

Staffing capacity to deliver the project

The business case includes resources to fund work required to deliver this project.

Government proposals to change the funding for supported housing

The government are proposing to introduce a new funding arrangement from April 2019 and the Council will need to ensure that the proposed supported housing schemes are included in future projections for funding. At this stage it is difficult to identify long term mitigation measures on proposals which are being developed by the government.

The government in the Housing White Paper is welcoming the innovative approaches such as Local Housing Companies for local authorities to build again. However, they want to see tenants local authorities place in new affordable properties offered equivalent terms to those in council housing including the right to buy

These provisions do not seem to apply to open market rent, although no additional information is available at this time. Sheltered housing is excluded from the Right to Buy scheme. Housing Companies are not required by the current legislation to include the Right to Buy The cost floor rule for a property requires that for the first 15 years the property cannot be sold below the cost spent on building, buying, repairing or maintaining it.

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their home

Vote to leave the European Union

Additional grant funding of £1.4 billion for house construction provided by the government which now includes affordable rent. Opportunity to train apprentices and pilot alternative building methods.

10. IMPLEMENTATION PLAN 10.1 A full implementation plan will be developed if approval is given to establish the two

local housing companies. There will be a range of activities to progress and the initial key milestones are summarised as follows:

May 2018 two Companies formed

April 2020 154 properties built and occupied 11. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT 11.1 The accommodation provided will be to a high standard to meet housing need. An equity

and diversity impact assessment will be undertaken for each proposed development which will be subject to future Executive Board approval.

12. CONSULTATION 12.1 Consultation has taken place through the development of the Housing Companies

project to date directly with stakeholders and through the market research and the option appraisal process. Protecting the Most Vulnerable Committee, Scrutiny Committee and the Treasury Management Board have been consulted. The full internal consultation process as outlined in the Council’s Financial Procedure Rules has been adhered to. The Council’s Capital Programme agreed by Full Council in March 2017 contains the Housing Company project. The business case has been reviewed by Traderisks and professional financial advice taken from PWC, PDW and M3H. Professional legal advice has also been taken from Sharpe Pritchard.

13. REASONS FOR RECOMMENDATION 13.1 Establishing the Local Housing Companies will help contribute towards the delivery of

the Council’s Warrington New City Programme of 26,000 new homes (including 7,800 affordable) and 31,000 jobs. Developing on Council owned land provides an opportunity to build high quality energy efficient homes that meets local need and provides a revenue income.

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13.2 Building new homes will directly create jobs and support supply chains that will contribute to economic growth. In addition, housing is an important feature of the sub-regional economy in that it provides some of the place capacity necessary to support sustainable economic growth.

14. RECOMMENDATION 14.1 The Executive Board is recommended to:

(i) approve the establishment of the two Local Housing Companies, based on the business case set out in Part 2 of this report.

(ii) approve the delegation of authority to the Director of Corporate Services and

Head of Legal and Democratic Services, following consultation with the Deputy Leader/Executive Board Member, Corporate Finance and the Executive Board Member, Public Health and Well-being, to undertake the necessary tasks to establish the two Housing Companies limited by shares with the Council as sole shareholder and to agree:

a) The details of the Memorandum and Articles of Association and the Shareholder Agreement. b) The name of the Housing Companies. c) The process of incorporation with Companies House. d) The appointment of Directors, Company Secretary, size and composition of the board of the companies e) To ensure that the Housing Companies will hold appropriate insurances and/or benefit from insurances that the Council holds.

(iii) approve establishing insurance for the provision of indemnity cover for any

decisions made by Council Officers when acting as Board Directors for the two Housing Companies and that the Council indemnifies officers working for the two Companies.

(iv) approve the governance structure contained in Section 6.

17. BACKGROUND PAPERS Executive Board report 14 March 2016. Contacts for Background Papers:

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Steve Park David Cowley Danny Mather

[email protected] [email protected] [email protected]

01925 443940 01925 246890 01925 442344

46




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Appendix 1

Chart 1: The Number of New Homes Built

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Appendix 2 Table 7: Qualitative Appraisal Criteria and Scoring

Criteria

Weighting

Score

0 1 2

Legality

3 Fails regulations or likely to be challenged

Potential challenge, but sufficiently flexible to defend

Fully compliant to regulations and law

Speed 3 Not able to create the vehicle and start development work within 12 months of the business plan approval

Not able to create the vehicle and start development work within 9 months of the business plan approval

Not able to create the vehicle and start development work within 6 months of the business plan approval

Deliverability 1 Significant lack of resources in critical areas to successfully deliver the project

Potentially inadequate resources in less critical areas

Adequate resources in all areas

Government 3 Will be challenged by the government or requires approval

Potential challenge although sufficient flexibility to defend

No challenge possible

Affordability 3 Material annual revenue cost in both the short and long term

Material annual revenue cost in short term and no material revenue impact in long term

No material revenue impact

Financial Return

3

Low probability of financial return for the council

Reasonable probability of financial return for the council

High probability of financial return for the council

Procurement 1 Arrangements in place more than 12 months and costs in excess of £500,000

Arrangements in place less than 12 months and costs less than £500,000

Arrangements in place less than 6 months and costs less than £250,000

Influence 2 Influence ceded to a third party

Council has some influence

Council has high degree of influence

Scalability 2 Less than 2,200 units over 10 year period

More than 2,200 units over 10 year period but not likely to achieve close to or the maximum number of units relative to other options

Likely to achieve close to or the maximum number of units relative to other options

Tenancy 1 Very restricted Limited flexibility over Full flexibility

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flexibility over tenure and rents

tenure and rents

Objectives 1 Very restricted on ability to change long term objectives

Limited ability to change long term objectives

Full flexibility

Exit Arrangements

1 Exit not clearly defined or not reasonably achievable and level of compensation due reflects a material penalty on exit

Difficult to exercise an exit or there is a significant penalty attached

Exit clearly defined and reasonable with achievable level of compensation or no material penalty on exit

Risk Benefit 1 Benefits unlikely to be secured and significant risk retained

Benefits likely to be secured and likely manageable risk

Benefits more likely to be secured risks more likely to be mitigated

Refinance 1 No possibility of attracting private investment

Significant restructuring required which would not be easy to undertake prior to attracting private investment

Can attract private investment or already has substantial non council investment and it is not essential to refinance the council’s debt

Note: there is a potential trade-off between financial return and economic benefit in which the Council could decide to increase the economic benefit and reduce its financial return or vice versa. For the purposes of this appraisal we have assumed a balanced approach which evaluates the potential to achieve both economic benefits and financial return.

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Appendix 3 Table 8: Qualitative Appraisal Unweighted Score

Do Nothing

Housing Assoc.

Housing Revenue Account

General Fund

Local Housing

Company

Joint Venture

Cheshire Joint

Venture

Community Interest

Company

Legality 2 2 2 1 2 2 2 2

Speed 2 0 1 2 2 0 0 2

Deliverability 0 2 1 1 1 1 1 1

Government 2 2 0 0 1 2 2 2

Affordability 2 2 2 0 1 1 1 1

Financial Return

0 1 0 1 2 1 1 0

Procurement 2 0 2 2 2 0 0 2

Influence 0 1 3 3 3 1 1 1

Scalability 0 1 0 1 2 1 2 1

Tenancy 0 2 0 0 2 2 2 2

Objectives 0 1 1 1 2 1 1 1

Exit Arrangements

0 2 0 1 2 1 1 0

Benefit/Risk 0 2 0 1 1 1 1 1

Refinance 0 2 0 0 2 2 2 2

Total 10 20 12 14 25 16 17 19

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Appendix 4 Table 9: Qualitative Appraisal Weighted Score

Do Nothing

Housing Assoc.

Housing Revenue Account

General Fund

Local Housing

Company

Joint Venture

Cheshire Joint

Venture

Community Interest

Company

Legality 6 6 6 3 6 6 6 6

Speed 6 0 3 6 6 0 0 6

Deliverability 0 2 1 1 1 1 1 1

Government 6 6 0 0 3 6 6 6

Affordability 6 6 6 0 3 3 3 3

Financial Return

0 3 0 3 6 3 3 0

Procurement 2 0 2 2 2 0 0 2

Influence 0 2 6 6 6 2 2 2

Scalability 0 2 0 2 4 2 4 1

Tenancy 0 2 0 0 2 2 2 2

Objectives 0 1 1 1 2 1 1 1

Exit Arrangements

0 2 0 1 2 1 1 0

Benefit/Risk 0 2 0 1 1 1 1 1

Refinance 0 2 0 0 2 2 2 2

Total 26 35 25 23 46 30 32 34

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Appendix 5

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EXECUTIVE BOARD - 15 January 2018 Report of Executive Board Member:

Councillor M McLaughlin, Executive Board Member, Public Health and Wellbeing

Executive Director:

Steve Peddie, Executive Director Families and Wellbeing


Dr Muna Abdel Aziz, Director of Public Health, Housing and Neighbourhoods

Contact Details:

Email Address: [email protected]

Telephone: 01925 443967

Key Decision No. 044/17 Ward Members:

All

TITLE OF REPORT: CONTRACT AWARD FOR THE PROVISION OF SUPPORTED HOUSING FOR SINGLE MALE AND FEMALES AT RISK OF HOMELESSNESS

1. PURPOSE 1.1 To seek approval for the direct award of a contract for the provision of Supported

Housing for men and women at risk of homelessness to maintain the delivery and planned development of further services to single homeless men and women in Warrington.

1.2 The current contract for the service has been in place since 1 April 2016 with an

expiry date of 31 March 2018. The annual contract value is £297,000, with an average cost of £105.77 per unit per week. A direct award will ensure continued provision of Supported Housing and the development of a direct access service.

1.3 The proposed contract award is for a period of one year until 31 March 2019 with the

option to extend for a further six months to 30 September 2019. The value of the proposed contract is £297,000 per annum. If the additional six month contract option is actioned, the total contract value will be £445,500. Due to the proposed value of the contract, Executive Board approval is required.

1.4 The report sets out the rationale for the proposed approach and outlines the latest position in relation to the service to be commissioned.

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1.5 The issues associated with building management and ownership covered later means Executive Board approval is sought under CR6 of the Council’s Constitution, to waive the competition requirements as set out in CR27. Pursuant to CR9, the request for a waiver falls into the category of – ‘the purchase of proprietary or patented goods or materials or services which in the opinion of the Executive Director are obtainable only from one firm and where no reasonably satisfactory alternative is available’.

1.6 The services delivered fall into what is known as the ‘light touch’ regime under

Section 7 and Schedule 3 of the Public Contract Regulations 2015 (“PCR 2015”). The exact services are identified within the CPV codes below:

85311000-2 Social Work Services with accommodation

85312300-2 Guidance and counselling services

85312310-5 Guidance Services

85312500-4 Rehabilitation Service 1.7 To confirm, the light touch regime only requires Contracting Authorities to undertake

a full tender exercise for light touch services where the total contract value is in excess of £589,148. The value of this contract is below this threshold and therefore the Council does not have to formally tender the services and has discretion in the process of procurement. The Council is however under a duty to abide by the EU Treaty Principles of fairness, transparency and openness, as well as having regard to its Best Value duty.

1.8 The Direct Contract Award will specifically enable:

o The maintenance of current services o The proposed implementation of direct access to services. o The undertaking of an appropriate procurement exercise for continued

provision of supported accommodation for single men and women at risk of homelessness.


category 3 Local Government Act 1972, schedule 12A. 3. INTRODUCTION AND BACKGROUND TO THE SERVICE 3.1 James Lee House is managed and run by The Salvation Army and provides 54 units of

supported accommodation for single homeless males and (since April 2016) up to eight females. All residents are over 18 and have been assessed by Warrington’s Housing Plus team as homeless, vulnerable and with a local connection. All referrals to James Lee House are subject to a full needs and risk assessment and would only be offered the service if they are homeless and have additional needs e.g. physical/mental health, substance misuse, domestic abuse, unemployment, family breakdown etc.

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3.2 The service is a well-established and important one with a track record of meeting the needs of those who are vulnerable and with complex needs. 72% of those that used the service in 2016/17 left in a planned way. The Council contract is a contribution to the overall cost of running the service and when reviewed alongside outcomes is assessed as providing good value for money. The service is fundamental to supporting the council in delivering its statutory duties in relation to Homelessness and the Care Act 2014. Located in Brick Street, close to Warrington Town Centre the service is in purpose built accommodation and is subject to conditions associated with accommodation use and management arrangements.

3.3 The management agreement between the Salvation Army and Your Housing Group

(the building landlord) is open ended with a termination right on either party with twelve months written notice. The agreement includes clauses covering a requirement to maintain 90% occupancy with any bad debts being accrued by the Salvation Army as the incumbent provider. The Salvation Army in partnership with WBC Housing Plus manage referrals and entry to the service.

3.4 The accommodation is used exclusively by the Salvation Army under an extended

lease arrangement with Your Housing Group. The land which the building sits on belongs to Warrington Borough Council, for which there is a lease for 999 years between the Salvation Army and Warrington Borough Council which expires in 2984. There is no duty or requirement on the owner of the building (the Salvation Army) to transfer or gift use of the setting to any new provider that may emerge during a procurement process.

3.5 The care and support services to residents are available 24 hours per day, 365 days a

year and also provided by the Salvation Army. The service provides short term support (less than two years) which enables residents to eventually be ‘resettled’ into more independent accommodation. The type of support offered by support staff includes:

promoting access to training and education opportunities, promoting access to paid work, work experience and volunteering, managing physical/mental health, managing substance misuse, promoting independent living skills (12 week resettlement course) Resettlement in to independent living.

3.6 The service operates at 90% occupancy and in 2016/17 the service supported 216

single homeless adults (9% female 81% male). The rates of resettlement of residents to permanent alternative accommodation is considered good given the profile of service users and the assessment of impact on other outcomes including Health and Wellbeing (access to substance misuse and health services), Economic Wellbeing (addressing rent arrears and debt), Enjoy and Achieve (through the resettlement and employment programmes) and Staying Safe are assessed as good across the service.

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3.7 The average length of stay has been five months and as noted in 2016/17 72% (101 individuals) of people leave James Lee House in a planned way, with 54 people resettled, and taking up independent tenancies in the borough, with the remaining individuals supported to move to family, friends or other supported accommodation more appropriate to meeting their needs.

3.8 James Lee House has been a key service in the prevention of repeat homelessness for

individuals. Since 2013, approximately 17 individuals have re-presented to James Lee House, following an initial stay at the service, this indicates that only 2% of individuals who access James Lee House will re-present to the service as requiring accommodation to address their risk of becoming homeless.

3.9 In response to current need the Council, Salvation Army and Your Housing Group

have worked together to secure capital funding that will enable the development of direct access into the service. Direct Access will focus on providing emergency accommodation for people at risk of rough sleeping, with an identified pathway into the main Supported Housing service.

3.10 The proposed implementation of direct access will be delivered by the current staff

team with no increase to the current contract value. This will provide a clear pathway to suitable accommodation with access to support for improved health and wellbeing including access to primary care and substance misuse services, and access to education, training and leisure activities as part of their bespoke support plans.

4. COMMISSIONING ARRANGEMENTS AND INTENTIONS 4.1 As noted James Lee House assists the Council in meeting its statutory duties under

the relevant Homelessness legislation, the Care Act and the recommendations of the Warrington Homeless Commission.

4.2 Over the last two years, and in response to the Homeless Commission, significant

development work has been undertaken to meet the gaps identified including accommodating women at risk of homelessness, provision of emergency access for people at risk of rough sleeping and enhancing day time opportunities at James Lee House.

4.3 The contract value has been reduced over time by approximately 30% from its

highest point of £427,000 (per year) to its current annual level of £297,000. The service has maintained its capacity of 54 units and will pick up the additional planned Direct Access whilst operating at the same cost. This has been achieved by re-configuring service delivery and re-modelling provision. A revised service specification has been developed to reference the changes to include direct access.

4.4 In September 2017, a market test was undertaken, to understand the potential

market for the service and also benchmark potential cost across providers. The outcome of the Market Test (summarised in the part 2 report) indicated limited interest.

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4.5 As stated above the Council’s legal and procurement teams have confirmed that the

Council is not bound by the PCR 2015 to competitively tender this contract as the services provided are below the relevant threshold.

5. FINANCIAL CONSIDERATIONS 5.1 The proposal does not place any additional financial responsibilities on the Council

other than those currently in place as the budget has been allocated to fund the services.

5.2 The proposed contract takes account of additional services that will be at no extra

cost to the Authority. 5.3 The service is intended to reduce risk and need, which contributes to the reduction in

demand and costs associated with other services, for example, Hospital, Mental Health, substance misuse and other services.

6. EQUALITY IMPACT ASSESSMENT 6.1 The impact of both directly awarding a new contract and not awarding has been

considered in light of the Authority’s equality responsibilities. In the event of awarding, no adverse impact has been identified - this view is in the context of the improvements made to extend services to women and planned direct access beds whilst also maintaining the existing service.

6.2 The impact of not awarding has been assessed in the context of the impact on

current residents, and rough sleepers and others at risk of homelessness who need support. The full impact will be dependent on the alternative arrangements that can be made, but as noted the likelihood of alternative provision is limited and therefore the position will be kept under review until contract arrangements are concluded.

7. CONSULTATION 7.1 Through the contract monitoring process and the oversight of access by Warrington

Borough Council Housing Plus Team a range of consultation activities have been undertaken. Learning from these activities include:

feedback from people accessing the service has been positive regarding the support on offer - suggestions people made during consultation regarding their contributions, catering arrangements and day time activities have been considered and are being discussed with regards to the revised outcomes service specification;

Wide stakeholder feedback for this service has been positive regarding how people access, support and resettlement opportunities are available. Further

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discussions will be undertaken to improve access arrangements particularly for individuals with a local connection;

Consultation with the existing provider has indicated a willingness to continue its work with the Council, for example developing further its offer in relation to direct access, supporting women, day opportunities and improving quality and people outcomes.

8 REASONS FOR RECOMMENDATION 8.1 As noted the current circumstances concerning the accommodation and delivery of

the service mean currently no genuine competition can be obtained for the supply of this service. A direct contract award in line with the Council’s Financial Regulations shall: a) Ensure continued provision of supported accommodation for single men and

women at risk of homelessness; b) Ensure the development and implementation of direct access to provide

emergency accommodation for up to eight people at risk of Rough Sleeping.

c) Ensure that sufficient and appropriate supported accommodation for people at risk of homelessness exists to assist the Council in discharging its statutory duties in relation to homelessness.

9 RECOMMENDATION 9.1 The Executive Board is recommended to:

(i) Direct award a new contract for the provision of supported housing, including direct access provision, for single men and women at risk of homelessness for a period of one year from 1 April 2018 to 31 March 2019, with the opportunity to extend for a further six months to 30 September 2019.

(ii) In order to achieve the above, the Executive Board is asked to agree a waiver of the Council’s Constitution requirements set out at CR27 requiring the invitation of competitive tenders for the named services. Such a waiver is sought pursuant to CR6 and CR9.

10. BACKGROUND PAPERS

Service specification. Contacts for Background Papers:


Rick Howell [email protected] 01925 442979

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WARRINGTON BOROUGH COUNCIL EXECUTIVE BOARD - 15 January 2018 Report of Executive Board Member:

Leader of the Council, Councillor T O’Neill

Executive Director:

Steve Peddie, Executive Director Families and Wellbeing

Senior Responsible Officers:

Lorraine Goude, Interim Operational Director, Adult Social Care

Contact Details:

Email Address: [email protected]

Telephone: 01925 444251

Key Decision No. 044/17 Ward Members:

All

TITLE OF REPORT: CONTRACT AWARD FOR THE PROVISION OF SOCIAL CARE AND

SUPPORT FOR ADULTS TO CATALYST CHOICES MANAGEMENT SERVICES LIMITED (EXTENSION FOR AN OPTIONAL ADDITIONAL YEAR)

1. PURPOSE 1.1 To seek approval to extend the contract for the provision of care and support services

with Catalyst Choices Management Services Limited, for a period of 12 months in order to maintain the delivery and planned development of further services to adults with assessed social care needs.

1.2 The current contract for services has been in place since 1 February 2015 with a

contract review point at three years (29 January 2018) and two optional additional one-year periods (i.e. a 3+1+1 year contract). The current annual contract value is £7,767,7k.

1.3 Extending the contract will ensure continued provision of social care and support

supporting a wide range of people who access services and the further development of services in line with Catalyst Choices Management Services Limited business plans to both develop critical services and deliver contract savings. The 12 month period deemed to be the review period – will allow commissioners to further explore options based on needs and when considering the gaps in provision pertaining to Warrington Market Place, with a clear view about model of service, deemed fit for the future.

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1.4 The original report to Executive Board on 9 December 2013 authorised entry into the initial three year term of the contract but given the contract value, a 12 month contract extension requires Executive Board approval.

1.5 The Part 1 report sets out the rationale for the proposed approach and outlines the

latest position in relation to the services to be commissioned. The Part 2 report sets out issues and matters considered commercially sensitive for Catalyst Choices Management Services Limited and the Council.


category 3 Local Government Act 1972, schedule 12A. 3. INTRODUCTION AND BACKGROUND TO THE SERVICE 3.1 The original contract for Adult Social Care and Support Services was awarded to

Catalyst CIC to the value of £8,228,298 per annum, commencing February 1 2015. Catalyst Choices CIC was a newly formed, staff led, social enterprise. All existing staff were transferred under TUPE from the Council.

3.2 The contract was subject to a novation from Catalyst Services CIC to Catalyst Choices

Management Services Limited, who were set up by, and wholly owned by Catalyst Choices CIC. Catalyst Choices Management Services Limited in turn sub-contract the services under the Contract from Catalyst Choices CIC. Catalyst Choices Management Services Limited are therefore the provider under the Contract, however due to the subcontracting arrangements Catalyst Choices CIC actually deliver the services.

3.3 The services are operated from buildings owned and leased by either Warrington

Council or local housing providers. A capital investment was made to upgrade facilities at both the Woodleigh campus (older peoples residential care and learning disability respite) and Gorse Covert (learning disability day services), which enabled the company to withdraw from James Phoenix House, which has subsequently been decommissioned.

3.3 Over the last three years Catalyst Choices CIC who deliver services under Catalyst

Choices Management Services Limited has been monitored regularly through contract management meetings. The Council has sought to ensure the portfolio of services meets current and expected needs whilst continuing to be mindful of the terms and implications on meeting the conditions set out through the TUPE process. Warrington Council is currently the sole commissioner of Catalyst Choices Management Services Limited.

3.4 The Care Act 2014, sets out legal duties of the Council through commissioning to have

clear market oversight of services to ensure sufficiency to meet needs effectively and at an appropriate level of quality. The revised specification for services and negotiations reference the need for Catalyst Choices CIC and Catalyst Choices

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Management Services Limited ensure to their provision is focussed on priority needs and is (financially and operationally) sustainable and good quality.

3.5 The Council has worked to support Catalyst Choices CIC and Catalyst Choices

Management Services Limited to diversify services, to ensure they are sustainable now and in the future. This activity supports the move towards a more independent future as expressed at the initial roll out from the Council and through recent business plans.

4. COMMISSIONING ARRANGEMENTS AND INTENTIONS 4.1 As noted, Catalyst Choices CIC and Catalyst Choices Management Services Limited

assist the Council in meeting its statutory duties under the Care Act 2014. 4.2 Contract monitoring of Catalyst Choices Management Services Limited has noted

compliance in all areas and the service has maintained Care Quality Commission ratings of ‘good’ for Broomfields sheltered housing and Woodleigh. Mosslands sheltered housing has a CQC rating of ‘requires improvement’ (but with ‘good’ in safe, caring and responsiveness).

4.3 Incremental adjustments and variations have been made to the contract value over

the first three years totalling £460,587 per annum, including:

Reductions in the block purchase of Older Peoples Day care places.

A net decrease of support purchased in the Learning Disability Supported Accommodation service.

A reduction in the block purchase of Learning Disability Respite beds.

A change to the Supported Employment service. 4.4 Recent proposals for a transformation of some areas of service by Catalyst Choices

Management Services Limited have been received positively by the Council, particularly where service development will enable commissioners to meet gaps in provision across health and social care.

5. FINANCIAL CONSIDERATIONS 5.1 The proposal does not place any additional financial responsibilities on the Council

other than those currently in place as the budget has been allocated to fund the services.

5.2 The proposed contract is expected to achieve efficiencies and return savings by way of

reduction to unit cost and changes contracting arrangements. 5.3 The proposal for service continuation is intended to reduce risk and need and to

contribute to the Council’s programme of cost reductions in order to deliver essential services within a diminishing resource settlement.

6. EQUALITY IMPACT ASSESSMENT

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6.1 The impact of extending the contract or letting the contract expire at the end of the

initial term (31 January 2018) have been considered in light of the Authority’s Equality responsibilities. In the event of awarding no adverse impact has been identified.

6.2 The impact of not extending has been assessed in the context of the impact on current

vulnerable service users who continue to need support. The full impact will be dependent on the alternative arrangements that can be made, but any move to alternative provision will introduce new risk. The proposal is to use the first optional year to weigh up all alternative options, including potential impacts involved in any of those alternatives.

7. LEGAL IMPLICATIONS 7.1 The contract with Catalyst Choices Management Services Limited allows for an

extension of the contract for up to two, one year periods. The Executive Board can therefore lawfully extend the contract for the proposed period without any further procurement exercise being carried out, subject to no substantial changes to the contract being made.

8. CONSULTATION 8.1 General service user feedback for Catalyst Choices CIC’s services has been positive

regarding the care and support. 8.2 Consultation with the provider has indicated a willingness to continue its work with the

Council, for example developing further its offer in the Shared Lives Service, developing a more inclusive dementia pathway service and improving quality and outcomes.

9. REASON FOR RECCOMMENDATION 9.1 The current circumstances concerning the contract extension are in line with the

Council’s Financial Regulations and:

a) Ensure continued provision of care and supported to vulnerable adults; b) Ensure the development and implementation of services in line with

expectations and changing needs and service gaps; c) Ensure that progress is made in delivering financial efficiencies reducing unit

costs in line with the agreed business plan. 10 RECOMMENDATION 10.1 The Executive Board is recommended to:

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(i) Authorise the Executive Director, Families and Wellbeing, following consultation with the Leader of the Council, Head of Legal Services and Democratic Services and Director of Corporate Services to progress and conclude negotiations with Catalyst Choices consistent with the service and cost principles set out in the report.

(ii) Authorise the Executive Director, Families and Wellbeing, following consultation with the Leader of the Council, Head of Legal Services and Democratic Services and Director of Corporate Services to complete and execute all necessary contract changes and requirements.

(iii) Subject to the above, issue a contract extension for one year to Catalyst

Choices until 1 February 2019.


Executive Board Report -13 October 2014 Executive Board Report – 9 December 2013

Contacts for Background Papers:


Rick Howell [email protected] 01925 442979

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EXECUTIVE BOARD – 15 January 2018 Report of Executive Board Member:

Councillor J Guthrie, Executive Board Member, Environment and Public Protection (including Climate Change)

Executive Director: Andy Farrall, Executive Director, Economic Regeneration, Growth and Environment


Ian Brackenbury, Business Manager, Economic Regeneration, Growth and Environment


Telephone: 01925 442775

Key Decision No.

047/17

Ward Members:

All

TITLE OF REPORT: FCC ENVIRONMENT RESIDUAL WASTE CONTRACT 1. PURPOSE 1.1 To provide an overview of the current position regarding the contractual

arrangements with FCC Environment and the outcome of the negotiations to extend the contract from 1 February 2018 through to January 2020, in line with the wider waste management procurement strategy.

1.2 To recommend acceptance of the option to extend with FCC Environment on the new terms given the current market conditions, contract rates and information from the Waste and Recourses Action Programme (WRAP), and the lack of suitable facilities within the area.

2. CONFIDENTIAL OR EXEMPT 2.1 Part 2 of the report (agenda item 11) is to be considered as a Part 2 item being

exempt by virtue of category 3 Local Government Act 1972, schedule 12A. 3. INTRODUCTION AND BACKGROUND 3.1 Household waste is currently collected at the kerbside and disposed of via three

waste streams as set out below:

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o Residual / non recyclable waste – Black Bin o Co-mingled recyclates waste – Blue Bin o Green waste – Green Bin

3.2 The waste service is currently investigating potential waste strategy / disposal

options which could potentially see substantial reductions in contract / service costs. The timescale for this option / business case work or more traditional procurement options will require current disposal contracts to be extended until January 2020.

3.3 The contract for the disposal of the residual waste is with FCC Environment. The

contract was procured in February 2013 for five years with the option to extend by a further two years by mutual consent through to January 2020. The contract has worked well and overall the performance of FCC has been good. Waste is delivered by the Council Refuse vehicles to a third party transfer site in Widnes. Here the waste is bulked and transported to different facilities operated and supported by FCC Environment for end treatment. Officers have had several meetings with representatives from FCC Environment about the potential extension to the current contract.

3.4 Currently approximately 50,000 tonnes of residual waste per annum is disposed of

through the FCC contract. The contract allows for an annual uplift of Retail Price Index (RPXi%) in accordance with the terms of the original agreement.

3.5 Officers commenced detailed discussions with FCC Environment in September 2016

with regard to potential contract extension from February 2018 to January 2020.

4. OPTIONS 4.1 Officers through negotiations with the current contractor have considered all options

available to the Council in relation to this contract. 4.2 The options considered have been to extend the current contract with FCC

Environment on the new terms taking into consideration the current market position or to undertake a procurement exercise to procure a new contract from February 2018 - January 2020.

5. FINANCIAL CONSIDERATIONS 5.1 The ongoing financial situation has been recognised as a budget pressure for the

service and an allocation has been included in the MTFP for 2018/19.

6. LEGAL CONSIDERATIONS 6.1 Colleagues from Legal Service have been involved in the detailed negotiations with

the current contractor. In addition to this advice has been sought from our external lawyers in relation to the matter.

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Agenda Item 7

7. RISK ASSESSMENT 7.1 There are risks irrespective of what course of action to take, they are briefly:-

No Waste Disposal solution in place from February 2018

Impact of increased gate fees as a result of market changes

Resources available to mobilise new contracts. 8. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT 8.1 The contract requires the successful tenderer to comply with its statutory obligations

in terms of equality and diversity legislation. 8.2 The application of appropriate equality and diversity policies will be assessed via

regular contract monitoring meetings once the contract commences. 9. REASONS FOR RECOMMENDATION 9.1 To ensure continued provision of kerbside residual waste collection services across

the borough and the appropriate transfer and management of the waste. 10. RECOMMENDATION 10.1 The Executive Board is recommended to:

(i) Delegate to the Executive Director, Economic Regeneration, Growth and

Environment, following consultation with the Executive Board Member, Environment and Public Protection (including Climate Change), Head of Legal Services and Democratic Services and Monitoring Officer to the Council and Director of Corporate Services the ability to negotiate and agree the terms of the modification to the current contract with FCC Environment.

(ii) To approve the extension of the contract with FCC Environment from 1

February 2018 for a period of two years.

(iii) Delegate to the Executive Director, Economic Regeneration, Growth and Environment and the Head of Legal and Democratic Services and Monitoring Officer to the Council, the preparation and completion of all necessary documents in order to give effect to both (i) and (ii).


Procurement documentation and submitted tenders.

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Agenda Item 7

Contacts for Background Papers:


Ian Brackenbury [email protected] 01925 442775

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