Purpose

MAHP resourcing and affordable housing provision.

Decision

DECISION: To

1. Note the significant progress that has been made in delivering the Mayor’s Accelerated Housing Programme (MAHP)
2. Approve the portfolio-based Planning Equalisation Strategy and authorise the Corporate Director of Housing and Regeneration, in consultation with the Mayor, to finalise the details with the Local Planning Authority (LPA) and the Greater London Authority (GLA)
3. Approve the capital budgets for 10 MAHP housing development schemes totalling £143,235,790, off-set by GLA grant funding of £70,000,000, subject to securing grants from the Mayor of London’s Affordable Homes Programme (AHP), and £30,600,000 from Right to Buy Receipts
4. Approve the principle of managing the programme budget as a “working capital budget” as detailed in paragraph 3.44 of the report.
5. Approve a capital budget of £5,719,522 from the General Fund to fund delivery of a new Idea Store and One Stop Shop as part of the Bethnal Green PDC (MAHP) development
6. Approve the MAHP Procurement Strategy and authorise the Corporate Director of Housing and Regeneration, in consultation with the Mayor, to agree the final form of tender and procure delivery partners to deliver the first ‘Batch’ of MAHP sites, in accordance with advice from Legal and Procurement. Procurement to be via a one stage procurement process, unless by exception via a two stage procurement process and following agreement with the Mayor in consultation with the Lead Member.
7. Authorise the Corporate Director of Housing and Regeneration, in consultation with the Mayor, to approve the award of contracts in respect of the procurements run in accordance with these recommendations and to authorise the sealing of any and all agreements required to give effect to these recommendations
8. Authorise the Corporate Director of Housing and Regeneration, in consultation with the Mayor, to vary the contract with Mace Consult Ltd to provide procurement and other supporting services, in accordance with advice from Legal and Procurement.

REASONS FOR DECISION: 

1. Approval of the Planning Equalisation Strategy affirming Cabinet’s support for the utilisation of a portfolio-based approach to housing delivery. Equalisation will enable tenure, housing mix, and a minimum of 51% affordable housing by habitable room to be balanced across the MAHP programme, rather than on a site by-site basis.
2. Approval of the capital budgets will enable 10 schemes to progress with certainty, and for design-development related revenue costs to be capitalised. These costs are allowed for within the Housing Revenue Account (HRA) Business Plan.
3. Approval of the Procurement Strategy (for the first ‘Batch’ of MAHP sites) will enable continued preparations for a swift transition from planning to competitive contractor/developer tender and delivery. This will expedite start on site and address housing need without the delay associated with a more traditional and time consuming sequential three step – design, planning, procurement - approach.
4. The MAHP will secure multiple public benefits, including:

•         Addressing housing need, particularly affordable, family sized and wheelchair accessible homes

•         Responding to the 30,000+ households on the housing register, 13,000+ households living in over-crowded conditions and 3,000+ households living in temporary accommodation, and associated costs savings

•         Generating up to £20m of Tower Hamlets Community Infrastructure Levy (CIL)

•         Providing local economic investment, including job and training opportunities.

•         Improving public realm and bringing underutilised and, in some cases, derelict sites into use.

1. The MAHP will contribute towards the promotion and improvement of the economic, social and environmental well-being of the borough’s residents, businesses and places

ALTERNATIVE OPTIONS:

1. Do not approve the Planning Equalisation Strategy: Equalisation enables the balancing of tenure and housing mix (dwelling sizes) across the expanded portfolio of 42 MAHP housing development sites. Should equalisation not be pursued MAHP schemes would need to be submitted for planning individually and assessed by the LPA on their own merits. Only by balancing tenure, housing mix (and viability) across the portfolio is it possible to bring forward sites (and particularly smaller sites) that would otherwise be unviable.
2. Do not approve scheme budgets now: The £8,068,150 programme budget approved by Cabinet in July 2025 is revenue funding from the HRA and was intended as a cap on exposure to potential abortive costs. Once scheme capital budgets are approved the costs incurred to date can be capitalised, easing pressure on the revenue budget cap. The £8.068m budget was awarded to enable due diligence, design, planning, cost and viability for the then 37 sites in the MAHP programme. The approved budget was based on some of the sites progressing to pre-application only. Subject to gateway approvals, all but nine of the current 42 sites in the programme are intended to progress to RIBA Stage 3 and full planning, creating a pipeline of ‘shovel ready’ schemes. The increase in the number of sites and expansion of the scope of work has placed additional and more immediate pressure on the £8.068m MAHP programme budget. It remains an option to agree the scheme budgets upon resolution to grant, consent or signing of a construction contract. However, this would negatively affect the MAHP programme budget cashflow requiring running a deficit, a slowdown in spend, or temporary cessation, undermining the objective of progressing the MAHP and addressing need at pace.
3. Do not approve the Procurement Strategy: Procurement of a delivery partner or partners to deliver the first ‘Batch’ of MAHP sites (and 341 homes, of which 250 will be affordable) via a group procurement is proposed on the basis of a hybrid approach whereby a single or two stage tender will be agreed with the Mayor on a site by site basis. Alternate approaches, including individual site procurements, establishing a Tower Hamlets Panel or Framework, utilising existing Framework Agreements, or a single procurement for all MAHP sites have been considered and discounted by the MAHP Board as either requiring disproportionate resource and time, not offering sufficient breadth and depth of competition, or exposing the Council to unacceptable risk. In keeping with the spirit and intent of the MAHP, the priority is to ‘triple track’ design, planning and procurement to avoid more traditional sequential progression and move directly to delivery once consents are secured. This approach will also minimise the costs associated with more traditional sequential approaches and drive efficiencies via economies of scale. It will also reduce costs associated with maintaining and securing sites that are currently vacant.

Action by: Corporate Director of Housing and Regeneration