Agenda item - New Homes for Neighbourhoods - Rotherfield Crescent

Report of Executive Director for Economy, Environment & Culture (copy attached).

A decision on this report was deferred until the Housing & New Homes Committee on 17 January 2018.  

56.1   The Committee considered a report of the Executive Director, Economy, Environment & Culture which set out the development proposals for the site at Rotherfield Crescent put forward by the successful architects, Innes Associates, which the Estate Regeneration team wished to progress through to planning and construction stage. The report was presented by the Project Manager, Estates Regeneration Team.

56.2    Councillor Gibson asked how tender price inflation had arisen and how it had reached the figure of £77,000 in the breakdown of the estimated costs on page 358.  He noted that the breakdown for preliminaries, overhead and profit was £140,000, and asked what element of that figure was profit? Councillor Gibson noted that the scheme costs worked out overall at £300,000 a property and he felt that the council needed to find ways of bringing the costs down. People in the city would not see this as a good use of HRA money. He was concerned at going ahead with a scheme which had such high costs, and the council should look at ways of bringing costs down.

56.3    Officers responded by confirming that the net cost for Rotherfield Crescent was £1,820 per sq metre. The BCIS average prices for low rise apartments once taking into account the Brighton location was in a range of £908 to £2829 per sq metre with a mean or average of £1490 per sq metre. The scheme was in the middle of that range and slightly above the mean average for Brighton based on equivalent costs but this was not exceptionally high. There was an opportunity to look more acutely into the costs, and the report did recommend that the council appoint an independent cost consultant. The shared space added cost to the build but was necessary.  The scheme was a quality build which adhered to Brighton & Hove City Council’s design specification. Materials were being used that had longevity and durability but ultimately would lead to lower maintenance costs for the council. There were exceptional circumstances related to the site, with 22 properties backing on to the site with gardens and garages and officers had to maintain access to 10 privately owned garages which was why there was more expense attached to the access road into and out of the site. It was a very constrained site. Officers had looked at a range of ways of trying to develop this site. The council needed to develop some of these small sites if it was going to deliver all its housing numbers and if it was going to improve some of its neighbourhoods

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56.4   It was further explained in response to questions that the tender price inflation of 77,000 was bringing the prices up from quarter One in 2016, to quarter One of 2018 when the scheme would be finished. It had added 3.5% for the first year and 4% for the second year.

56.5   Councillor Bell stated that the design was outstanding but was not appropriate for HRA funded housing land. It was an expensive scheme with a total cost of £1.25m. The scheme should be about providing affordable, social rents. At full council it had been stated that a rent of £1000 was not acceptable yet the weekly rent for the three beds was £230.28 which would be £997 a month. Councillor Bell asked why the scheme had brick walls, flat roofs and used resin bound gravel for the access road. There was no need for solar panels, large flat windows, a barbeque area and a roof terrace.  The price was unrealistic. Tenants and tax payers could not be expected to pay for high specification design. Spending £1.2 m for four houses was not viable.

56.6   The Executive Director, Economy, Environment & Culture responded to reassure the committee that officers did listen to the debate at the Housing & New Homes Committee and wanted to reflect the wishes of the committee. However, it had not been possible to find a normal development route for this site. The Committee had asked officers to move forward on this site and the committee had agreed that there should be a design competition. It was acknowledged that the unit costs were higher on this scheme, however, the majority of costs were external costs.  All options were open to the committee

56.7   Councillor Mears stated that she was a member of the Regeneration Board. She considered that £300,000 per unit was unacceptable. She suggested that the site could be sold to a small builder. Spot purchase properties could be bought at a cheaper price. She could not support the scheme. Either the costs should be looked at or officers should look at a different scheme. 

56.8   Councillor Druitt referred to the argument of charging LHA rates made earlier on the agenda. The same argument applied to this scheme. Sheffield had a very successful partnership that produced a scheme that cost £200,000 for each property. There was no reason why Brighton & Hove should have a scheme that cost twice that amount. Councillor Druitt proposed that the report was deferred to the next meeting of the committee in January to give more time to look at the finances. He considered that the current scheme seemed poor value for money.  Councillor Druitt asked for more detail about external works and for details on the design construction contingency. He stressed that members needed more time to look at the costs. 

56.9   In response it was explained that external works included a 40m access road, a derelict waste site, the demolition of garages, and dealing with contamination.  There needed to be a contingency. The idea of the scheme was to create a nice neighbourhood for people who moved into the houses. Some costs could be brought down; for example, the bonded surface would be replaced with a tarmac surface.  The green roof and shared space added higher costs.

56.10  Councillor Hill was interested to know how often this proposal had been discussed at the Regeneration Board, and how much detail the Board had been given to date. She asked what role the Regeneration Board had played with this scheme.  It was explained that the project had been regularly presented to the cross party Board. However, this was the first time that detailed costings had been brought forward.

56.11  Councillor Hill remarked that if a member of the Board had problems with flat roofs, large windows and bonded surfaces they could have raised objections before now. A recent workshop for councilors had discussed details of the partnership. Taxpayers did not fund these projects – the money came out of the HRA. The schemes were difficult to develop and there was a shortage of space in the city.  She asked officers to comment on the suggestion that the site could be sold to a small builder.  With regard to the value of the site if sold to a small builder, officers explained that there were 10 privately owned garages and access rights to the site. A small builder’s budget would not cover the costs. The site was very constrained and there would be little interest from others to develop the site.

 56.12 Councillor Gibson stated that he wanted to see quality new homes, but there needed to be scrutiny on how costs could be reduced. He was aware that the council wanted to achieve as many council homes as possible. There was a need to see if costs could be brought down by the next meeting. The way forward was to defer the report to the next meeting to enable officers to consider ways of saving on costs.  

56.13  The Chair stated that she would not go to a vote on the recommendations as there was no cross party agreement. She withdrew the report and stated that it would be presented to the next meeting. 

56.14  Consideration of the report was therefore deferred until the meeting on 17 January 2018.