South Kilburn Regeneration viability troubles should be on the Scrutiny Committee agenda tonight

 A number of factors have combined to threaten the financial viability of regeneration schemes across Brent and London including the requirements of the Building Safety Act (second staircases post-Grenfell), inflation, higher interest rates, supply chain issues and labour shortages.

In South Kilburn the Deloittes Viability Assessment provides a case study for the Hereford House and Exeter Court site.

Overall more housing is proposed but a lower proportion is social housing

 

51% affordable by habitable room

Build costs

GDV = Gross Development Vale

RLV = Residual Land Value 

Deloitte conclude:

Viability in planning is a fundamental principle of development, ensuring that the site is only pursued if it can an appropriate land value and adequate developer’s profit. The Residual Land Value (RLV) must be compared against a Benchmark Land Value (BLV) to determine whether there is enough surplus within the scheme to accommodate affordable housing, and / or other S106 obligations.

Viability in planning is achieved when the Residual Land Value (RLV) surpasses the Benchmark Land Value (BLV), indicating that the site can generate sufficient profit for the developer and meet the landowner's value expectations, thereby enabling the release of the land for development. The BLV represents the minimum price that a landowner would anticipate for their land.

In this instance, even if the Council (as applicant) was prepared to accept a BLV of zero (on the grounds that the Site is helping to facilitate a wider regeneration programme), the RLV still presents significant deficit.

Notwithstanding this outcome, the applicant, as a majority landowner remains committed to delivering a successful scheme, with 51% affordable housing (by habitable room number) to be offered at social rent.

Considering this and its role in facilitating regeneration, the applicant is proposing an affordable housing offer which is greater than the amount the scheme can afford. 

 So Brent Council is faced with the problem of finding a way of delivering the scheme as set out in the tables above when the viability assessment suggests that no developer will take it on. Scrutiny councillors will doubtless be concerned about a possible reduction in the social rent offer.

Viability assessments with be required on other regeneration sites across South Kilburn and the rest of Brent threatening to lower the amount of social housing overall. In South Kilburn it could mean (I hope councillors ask the question) that all the displaced council tenants will no longer be housed as promised.

The recent South Kilburn Tenant Steering Group received updates on the various South Kilburn sites and I highlight below the number of social rent homes proposed  out of the total number of homes proposed. The paragraph on Hereford and Exeter seems optimistic in light of the above:

Peel

In total, the Peel scheme is delivering 308 homes including 46 social rent homes for existing South Kilburn tenants and 98 shared ownership homes. 39 of the social rent homes have already been completed and let. The lower than usual number of social rent homes relates to the scheme financing the new Health Centre. However, the Council has now secured an additional four family homes for social rent in Phase 4.

NWCC Development

Countryside are progressing with the NWCC scheme (Neville, Winterleys, Carlton House and Carlton Hall), which will provide 225 new homes including 95 social rent homes for existing South Kilburn tenants. 40 of the social rent homes are 3 and 4 bedroom properties. Demolition works were completed in January with piling works for the new buildings are getting underway.

Craik, Crone and Zangwill

A planning application for the Craik, Crone & Zangwill (CCZ Site) had been submitted to the Council but was being reworked to comply with subsequent GLA guidance on fire safety requiring a second staircase. A mixed tenure scheme of 252 new homes is proposed, 104 of which would be for social rent to existing South Kilburn tenants. Two thirds of the social rent homes will be family sized to meet identified needs. New commercial and workspace, public realm improvements and infrastructure facilities are also proposed. The project has been paused whilst more strategic aspects of the programme are addressed.

Masefield, Wordsworth and Dickens

On the Masefield, Wordsworth & Dickens site, the proposed scheme includes new homes, a new primary school and enhanced green space. It is proposed that 146 homes would be built on the site in addition to the new school. 40% of the homes would be for social rent to existing South Kilburn tenants including 15 four bedroom houses. The South Kilburn Open Space will also be redesigned with new facilities within the scheme. The Planning submission is pending while the team work on funding mechanisms to deliver the school ahead of the rest of the development and examine opportunities to maximise housing on the site.

Austen and Blake

Proposals for the Austen & Blake site are intended to include new community facilities alongside new homes for social rent and private sale. The scheme would also reinstate Percy Road through to Malvern Road. It is anticipated that the site would deliver around 200 new homes in total. The team are currently considering options to combine delivery with the neighbouring Masefield, Wordsworth and Dickens site.

Neville, Winterleys, Carlton House & Carlton Hall

As reported, Countryside are onsite as the Developer Partner for the scheme at 1-8 Neville House, 1-64 Winterleys, 113-128 Carlton House and Carlton Hall (NWCC Site). 225 homes are proposed for the site, 95 of which will be for social rent to South Kilburn tenants with a significant number of family sized homes. It is proposed that the first 72 homes for social rent would be completed by early 2026.

Hereford & Exeter

The Hereford & Exeter scheme is intended to deliver 250 homes, 109 of which will be for social rent for existing council tenants in South Kilburn and a new open space. A new planning application has been submitted following redesign work to meet GLA guidance on fire safety requiring a second staircase on taller buildings. This should be the next phase onsite in construction by 2025.

 There was a Q&A at the same session that will be of interest to the tenants:

 

Questions were asked as follows:

Q – Is there any progress with the Queens Park/Cullen House site ?
A – The Council is continuing to negotiate the purchase of the former Falcon pub in order to facilitate the design of a revised scheme and subsequent planning application.

Q – What are the Council doing about squatting and break ins at Blake Court ?
A – The Council are trying to work with the police to prevent squatting and securing empty properties where possible. Residents should contact the Council on 020 8937 2143 or email at Housingmanagement@brent.gov.uk regarding instances of squatting or break ins to empty properties. If there is a threat of injury, the police should be contacted on 999.

Q – Are empty homes in John Ratcliffe House going to be refurbished and relet ?
A _ The Council is letting empty flats in later phase blocks as temporary accommodation to save costs and improve security. However, these tenants will not have the right to permanent rehousing in South Kilburn.

Q – Why is the rent going up when we live in such poor conditions at Dickens House ?
A – Rents are being increased across the borough at RPI plus 1% in line with Government guidance in common with other social landlords. The Council are actively looking at options to move tenants from Dickens and Austen House.

Q – Why has rehousing priority for Craik and Crone Court tenants been changed ?
A – Tenants in Dickens & Austen House and Blake Court are now being prioritised due to the need to vacate the site for redevelopment.

Q – Who will be prioritised for the new homes at NWCC and Granville ?
A – Tenants in Dickens & Austen House and Blake Court are currently being prioritised for all available homes. However, any surplus new homes will be offered to tenants in subsequent phases.

Q – Are new build flats fitted with baths or shower ?
A – They normally have a shower within the bath but separate showers or wet rooms are provided for tenants with specific identified needs through an Occupational Therapist.

Q – When will tenants in William Dunbar House be rehoused ?
A – William Dunbar House is in the final phase of the programme, the block is not due to be redeveloped for some years.

 

ACE Brent (Action on the Climate and Ecological Emergency Brent), a new coalition of Brent environment groups, challenges Brent Council to step up its climate action

 From words to action

 

 

 

ACE Brent (Action on the Climate and Ecological Emergency Brent), a new coalition of Brent environment groups, challenges Brent Council to step up its climate action. 

 

ACE Brent does not believe that Brent is working effectively to reach Net Zero in 2030, and are asking for : 

• A clearer, more measurable, accountable and ambitious Climate Action Plan
• Prioritisation of actions that reduce emissions most and that protect the most vulnerable residents
• Annual monitoring and reporting 
• A new Climate and Ecological Emergency Scrutiny Committee
• A new Brent Climate Assembly and regular reports to open meetings

Ace Brent have also drawn up a list of specific demands covering cycling and transport, insulation and retrofitting, divestment, planning, renewable energy, food, trees and green space.

 

They have written to all Brent councillors with their requests, and have organised a deputation to the full Council Meeting on Monday 20^th Nov, Brent Civic Centre, at 6pm. 

 

Members of ACE Brent are Brent Cycling Campaign, Brent Friends of the Earth, Brent Parks Forum, Brent Pure Energy, Brent XR and Divest Brent.

 

Christine Smith, from Brent XR, says: 

 

This is an emergency. Act now!

 

Simon Erskine, Co-ordinator of Divest Brent, says:  

 

Divestment of the council pension fund from fossil fuels is an example of a climate action that has been a very long time coming despite active discussions with members and officers.

 

Sylvia Gauthereau, from Brent Cycling Campaign, says:

 

According to the council's own statistics, road transport is the largest contributor to air pollution in Brent, accounting for over 52% of emissions in the borough. The Council urgently needs to implement some specific measures, that are known to effectively tackle road pollution. This cannot be achieved without significant changes to the built environment, to enable anyone who wishes to actively travel, to choose so. The time for talking about it is over, now is the time to act. The evidence is there, the 'how to' examples are plenty, the guidance is available, the opportunity and appetite are there. It doesn't have to be massively costly. Just get on with it now.

 

Suzanne Morpurgo, from Brent Parks Forum, says: 

 

It's Brent's stated intention to be ‘one of the greenest, most biodiverse and climate resilient boroughs in London’ by 2030' . This needs an increase in tree cover and green spaces,  including sports ground provision. At the moment there is no clear plan for this, or any form of 'FiT' status for sites. We are happy to help.

 

Elaine Sheppard, A Co-ordinator of Brent Friends of the Earth, says:  

 

It's 4 years since Brent Council declared a climate emergency.  We are experiencing flooding and extreme weather in Brent. Our relatives and friends in the Global South are facing much worse. We have come together to request a stronger response as appropriate to the emergency. We need bigger change to reduce emissions, proper reporting and proper involvement of Brent residents in the actions being taken. We are looking for more action, ambition and accountability.

UPDATED: Cost of putting Granville New Homes right rises to £25m. Brent Council purchased them for £17.1m

 

Tucked away in the Housing Management Update tabled for next Thrsday's Scrutiny and Wellbeing Committee is the above paragraph, devoid of context.

Granville New Homes were built via  partnership between Higgins and Brent Council in 2009, and purchased by Brent Council for £17.1m.

In 2021 mounting defects led to the independent Ridge report that put the costs of remediation at c£13.5m:

 

 

Philip Grant queried a report to Scrutiny in October 2021  that put the costs of remediation at £18.5m and Debra Norman replied for Brent Council LINK:

 

As you point out, page 26 of the Ridge Report gives the cost estimates as totalling £13,645,000 but the Cabinet, ASAC and Scrutiny reports refer to estimated costs of £18.5m.  You query why this is and whether there is a second specialist report on fire safety issues which accounts for the difference.

 

 

This figure of £13,645,000 is included in the £18.5m referred to in the reports.  As set out in paragraph 3.9 of the Cabinet report, that higher figure also includes the cost of fire safety work already undertaken and paid for by FWH, e.g. the waking watch over the premises and a new fire alarm system, and a contingency figure.  In addition, paragraph 3.9 make clear that the total figure is inclusive of VAT, which FWH and I4B, unlike the council, would be required to pay.  The final sentence of 3.9 should have read that the £18.5m is “based on” an estimated value from Ridge, but in the overall context of the paragraph I think the position was clear.

Brent Council had rejected various options to address the problems including a rebuild.

 Instead they settled for a complex financial arrangement with FWH (First Wave Housing) disposing of the blocks to the Council's Housing Revenue account. LINK

The Extraordinary Scrutiny Committee of October 2021 asked some tough questions, not least Ketan Sheth's on why Higgins was still being offered contracts by the Council after its Granville New Homes failure,. With superb irony Higgins having been involved with building a block that needed £13.5m/£18.5m remediation was awarded the remediation countract, for another faulty block, Merle Court.

The Committee were told that the amount of time that had passed since 2009 meant the Council were not likely to succeed in any settlement claim against Higgins. I believe that changes in the law about time limits means that is no longer the case and there are reports that the Council may be in tlaks with Higgins.

Certainly that is something that Scrutiny should take up with the Council as well as the failure to complete the works by October 2023 as first forecast and of course the rise of costs to £25m which with the original purchase price of £17.1m brings the total to c£42m. It would also be useful to know if the bald £25m is the end of the story or other costs will need to be added as in Debra Norman's response.

It may be instructive for Scrutiny Committee members to revisit the Minutes of their October 2021 meeting. Here is an extract:

The Committee queried whether the Council, as Guarantor of FWH, had chosen to challenge FWH on the issues. Minesh Patel advised that the Council’s role as a Guarantor was to meet with the Board of FWH on a regular basis to go through Key Performance Indicators and understand how the Company was running. The Guarantor had not been made aware of any issues prior to the final Ridge report.

Hakeem Osinaike (Operational Director Housing, Brent Council) advised that the properties were managed by Brent Housing Management (BHM) on behalf of FWH, and they had managed the repairs in those blocks up until the inspection. He advised that it was in rectifying the fire safety issues a decision was taken to rectify any other issues as well.

The Committee noted that Higgins had been appointed to design and build the blocks in 2009, and had heard from residents and staff that there had been problems with the blocks since they were built. They queried what legal action against Higgins, as the contractor, had been pursued, considering the roofs had been previously replaced when FWH took over the building. Peter Gadsdon confirmed that BHP had replaced one of the roofs before FWH took over, and once FWH had taken over they had done works on water ingress issues and had planned to replace all roofs over time as part of previously published business plans for the Company, with an original cost estimate of £2m – 2.5m. With regard to any legal action taken, Peter Gadsdon advised that the records showed the building had been signed off and handed to the Council, but he was unable to comment on anything before 2017 when FWH took over the buildings. He advised that FWH had not had any conversations with Higgins regarding the defects which they were made aware of in May 2021. Legal advice was previously sought about whether there was any chance of redress but due to the passage of time were advised it was unlikely. The Board’s priority was to ensure the properties were repaired back to safety.

Continuing to discuss the contract with Higgins, the Board queried why the Council were not communicating with them on this considering they were current contractors on other blocks being built. They queried whether there was a risk of this happening in other blocks that had been built or were being built. Minesh Patel advised that he did not have the details on the construction contracts with Higgins as that was a procurement process, but nothing had been brought to his attention that there were any concerns on any of the blocks Higgins had worked on.

Councillor Southwood advised that the contractor had been awarded work by the Council through a procurement process without prejudice, the specification of which would have applied modern building control and expectations to whatever they built, and which would include monitoring on the delivery of their contracts. From a FWH perspective it was highly unlikely any other stock would have these issues as Granville New Homes were the only medium rise buildings in the assets. Peter Gadsdon added that, like the Council, FWH and i4B commissioned stock condition surveys and had Fire Risk Assessments in place and there were no issues in that regard. Councillor Southwood agreed to provide written assurances to the Committee that there was no issues in any of the blocks Higgins had worked on, and further information on the procurement process such as whether past performance of a contractor was considered before awarding a contract.

 

Philip Grant adds:

 

 

Another interesting sideline on Granville New Homes is that Brent Council is supposed to have acquired Granville New Homes (for its Housing Revenue Account) from First Wave Housing Ltd for £0 in early 2021. [That should probably say early 2022]

This was part of a refinancing arrangement that would reduce the interest payable on the £17.8m loan Brent had made to Brent Housing Partnership Ltd (as it was then called) to buy Granville New Homes from Higgins (or to pay them for building the four blocks).

It appears that the £17.8m loan is still outstanding, but according to the Charges Register in the Companies House records for First Wave Housing Ltd (as at today, 16 November 2023), that loan is still secured on a property known as Granville New Homes!

How can a loan be "secured" by a 'Fixed Charge over land known as Granville New Homes, Granville Road, South Kilburn, London NW6 0JJ', when First Wave Housing Ltd no longer owns that property?

And another odd thing from the Companies House records. Despite owing Brent Council £17.8m on a loan for a property it no longer owns, as at 31 March 2023, First Wave Housing Ltd had £11,028,334 in its bank account, up from £4,231,167 at 31 March 2022. What is going on?

Perhaps the Community & Wellbeing Scrutiny Committee should be asking Peter Gadsdon, Corporate Director of Resident Services, about that, when he makes his Report to its meeting next week. He should know the answers, because he is also a Director of, and Company Secretary of, First Wave Housing Ltd (a company wholly owned by Brent Council, but a separate legal entity from the Council).

LINK TO FIXED CHARGE CERTIFICATE

 

Street cleansing road categories explained - are you DH, DM or DL? This will determine the frequency of manual sweeping

 

The documentation for tonight's delayed Scrutiny Commttee regarding changes in recycling and street cleansing contains the above table.

I asked for clarification of the DH, DM and DL categories of zones.

Brent Council responded:

The terms 'high, medium and low' used in a cleansing perspective come from the old Best Value199 and National Indicator 195 classifications for land use types. 

Below is a link to the Code of Practice on Litter and Refuse (COPLAR) which covers this:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834331/pb11577b-cop-litter1.pdf

High obstruction would include blocks of flats including tower blocks or large complexes

Medium would involve smaller communal dwellings such as low rise blocks or mid-size complexes

Low would mainly be free standing houses, semi's or terraces.

Typically the more homes there are within an area, the more resources are required to maintain it.

My conclusion is that most suburban streets would be reduced to a minimum monthly cleansing frequency unless 'intelligence' (residents' informing the council) triggered a special clean.

I asked for a list roads by zone classication so readers could identify how their road woul be affected, The answer:

We are not able to share a list of all roads by zone classification at this stage as this is commercially sensitive and subject to an ongoing live procurement process.

The Scrutiny Committee can be viewed on Live Stream HERE from 6.30pm

1 Morland Gardens – yet another twist!

Guest post by Philip Grant in a personal capacity

 

“Altamira”, 1 Morland Gardens, with community garden in the foreground. (Photo by Irina Porter)

 

When Martin reported, just a week ago, that a call-in meeting of Brent’s Resources and Public Realm Scrutiny Committee had given the go-ahead for the contract for the Council’s Morland Gardens redevelopment scheme to be awarded, you might have thought that the fate of the heritage Victorian villa there was sealed.

 

The only thing that could scupper Brent’s controversial plans to demolish the locally-listed building might be the objections to the proposed Stopping-up Order for an area of highway between the restored garden wall of the villa and the community garden. Council Officers, with the encouragement of several Cabinet members, had decided in early 2019 that they could use this extra piece of Council-owned land, in order to build more homes as part of the development. They had failed to consider the consequences of that decision, or to take the necessary action to obtain the Order, which led to the call-in.

 

The “award-winning” building which Brent wants to replace “Altamira” with.

 

Alan Lunt, Brent’s Strategic Director (Regeneration and Environment), won his right to award the two-stage Design & Build Contract for Morland Gardens to Hill Partnerships Ltd on the evening of Thursday 9 June. But when the agenda for the Cabinet meeting on 20 June was published the following day, this was item 12:

 

‘12. Authority to Tender for the Design & Build Contract at 1 Morland Gardens, Stonebridge.

Following on from a call-in relating to the original contract award, this report requests approval to invite tenders by way of a direct award under the Network Homes Contractor Framework and approve the pre tender considerations as required by Contract Standing Orders 88 and 89.’

 

The Report for this item was “to follow”, and that was not published on the Council’s website until the afternoon of Thursday 16 June. What had gone wrong? This is the explanation given at para. 3.3 of the Report:

 

‘The council also sought to procure a contractor for the scheme in May 2021 and May 2022 but both tender opportunities were unsuccessful. The first tender opportunity did not elicit any bids. The second tender opportunity elicited three bids and the council recommended the award of the contract as detailed in the Key Officer Decision report of 20 May 2022. This decision was subject to “call in”, during which period the Framework under which the contract was awarded, expired and so the council is required to procure a contractor again under a further procurement process.’

 

It appears that Mr Lunt may be trying to blame the call-in for the missed opportunity to award a contract for the scheme, and the need for a third attempt ‘to procure a contractor’. In fact, he was given a second chance to find a contractor in August 2021, and the three bids under that procurement process were received in November 2021. The fact that Brent took until 20 May 2022 to decide which of the three contractors they wished to award the contract to is no fault of the councillors who called-in his decision. They did so because of the risk of awarding a contract for a project which involves land that Brent does not have the legal right to build on!

 

Brent’s Cabinet are being asked to make a big decision at short notice. Not only that, they are being asked to approve the finding and appointing of a new contractor in a very rushed process, set out in this table from the Report:

 

Extract from table at para. 3.6 of Cabinet Report.

 

The Report says that ‘the estimated contract value of the procurement is £38m.’ The bid the Strategic Director wanted to accept in May was £37,933,491, but that had been made in November 2021. There was another item on the Cabinet agenda (Watling Gardens) where the Report was also not available, and a Council Officer has explained to me the reason for that:

 

‘Item 16 was not available on that date because the need for the report has arisen unexpectedly because of the escalation in the costs of the project due to the current inflation situation.  You may recall the challenges this situation is causing for the council were mentioned by the Chief Executive at the recent call-in meeting.’

 

That “escalation in costs” will surely affect the amount that any contractor submitting a tender for the Morland Gardens project is willing to offer. And if they offer an amount within the Council’s “budget” for this scheme, what corners will they cut in order to build it and still make a profit? This could easily become another Granville New Homes, where what was on paper an award-winning design was so poorly built, in order to keep “within budget”, that it is now costing more than the original contract to remedy the defects.

 

Brent Council has made so many mistakes and bad decisions over 1 Morland Gardens, which is why they are in the mess they are now over it. Will they plough on, digging a deeper hole for themselves, or will they finally see sense and go “back to the drawing board”?

Philip Grant