Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: October 28, 2024

Purpose:

Content: RESOLVED:   1.  That the scheme for Climate, Homes & Economy Directorate as set out in section 11 was approved as follows:   Local Implementation Plan (LIP) 2024/25 and Mayor’s Air Quality Fund (MAQF) 2024/25 and 2025/26: Resource and spend approval of £3,967k (£3,427k in 2024/25, £320k in 2025/26 and £220k in 2026/27) was requested to enable Council Officers to proceed with the final year of the three year LIP programme as well as the two year programme of works for the Mayor of London Transport Strategy (Air Quality Fund).   2.  That the s106 Capital schemes summarised below and set out in section 12 was approved:   S106 2024/25 £'000 Capital 920 Total S106 Capital for Approval 920   3.  That the s106 Capital scheme summarised below and set out in section 13 was noted:   S106 2024/25 £'000 Capital 7 Total S106 Capital for Noting 7     4.  That the capital adjustment summarised below was noted:   Current Directorate Capital Adjustments   £'000 Non Housing 304 Housing 0 Total 304     5.  Delegated to the Interim Group Director, Finance the authority to accept the additional Local Authority Housing Fund Round 3 (LAHF3) of £15.7m grant funding in section 15 in accordance with the agreement.  This will enable the budget increase of the Council’s Temporary Accommodation investment and Afghan Resettlement Scheme.   6.  Approved an increase of £34.9m to the General Fund Capital Programme and £2.5m to the HRA Capital Programme to fulfil our LAHF3 commitments. This adjustment includes £15.7m in grant funding and £21.7m in borrowing.   7.  Authorised the purchase (either freehold or leasehold) of suitable dwellings within the administrative area of the Council for the purposes of allocation of both Temporary Accommodation and housing for on ACRS resettlement schemes and delegated authority to the interim Group Director, Finance to agree all commercial terms for these purchases.   8.  Delegated authority to the Acting Director of Legal, Democratic and Electoral Services to settle all necessary legal documentation to enable these transactions.   9.  Noted The Pedro Project information contained within this report and progress to date. The Pedro Club, 175 Rushmore Rd, E5 0HD and 3 Pedro Street, London, E5 OHD (shown for identification purposes edged red on the plan at Appendix 1 and 2).   10.Noted that King’s Park Moving Together (KPMT) are submitting funding proposals to Sport England for additional funding to support the organisational  development and the The Pedro capital project.   11.Authorised the allocation of up to £1.5m of Council capital funding from the Council’s Voluntary and Community Sector capital budget towards The Pedro Project capital works, subject to The Pedro Club having:    ·  Secured a minimum match funding of £1m from Sport England; ·  Secured other sources of funding to ensure the project is fully funded; and ·  Satisfactory progress on organisational capacity building and strengthening of its governance.   12.Subject to availability of capital funding, to continue work to progress The Pedro Project through RIBA stages 3 and 4.   13.Approved the disposal of 6 small pieces of land as set out in section 15 and in Appendix 3 and shown for identification purposes edged red on the plans at Appendices 4-9.   14.Delegated authority to the Director of Strategic Property Services, in consultation with the Interim Group Director, Finance to agree the terms of the agreement for the disposals.   15.Authorised the Acting Director of Legal, Democratic and Electoral Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report and to enter into any other ancillary legal documentation as required.   REASONS FOR DECISION The decisions required are necessary in order that the schemes within the Council’s approved Capital programme can be delivered and necessary to approve the property proposals as set out in this report.   In most cases, resources have already been allocated to the capital schemes as part of the budget setting exercise but spending approval is required in order for the scheme to proceed.  However, where resources have not previously been allocated, resource approval is requested in this report.   To facilitate financial management and control of the Council's finances.   Proposed Project of The Pedro Club, 175 Rushmore Rd, E5 0HD and 3 Pedro Street, London, E5 OHD: This project will make a significant contribution to delivering key corporate objectives and local priorities. The project will support sustainable and enhanced community services in a particularly deprived ward, delivered by a strengthened VCS partner operating from improved and fit for purpose premises.   The Pedro Club is highly valued by the local community, the Council and by other stakeholders such as local schools, NHS providers and the Met. Police. It plays a key role engaging with residents that statutory services struggle to serve, and provides services to residents of all ages including; sports and exercise, an amateur boxing club, youth club, a cycle hub, mentoring, learning activities, and holiday schemes for children.   The Project has developed with due regard to the historic challenges and systemic disadvantages the Club has faced and of their capacity today - they are still a small and predominantly volunteer led organisation with limited financial resources. In addressing the organisational development needs of the Club the project has also ensured that the strengths of the Club, and its impact within the local community are acknowledged.   The project offers increased scope for partnership working with Council services, other statutory agencies (e.g. NHS, Police, DWP, Schools and Colleges), community partners and those from boxing, sport and leisure sectors and sport. This is important in a somewhat isolated neighbourhood with limited access to support services in the area.    The building is a key aspect of the club’s business plans to enhance community services whilst also generating sufficient income to cover operating costs. The Club’s ability to maintain the premises will continue to be challenging without intervention and support to improve the premises.  If the Project is not successful it will have a significant adverse impact on services, the community and on the Club’s viability and sustainability. In the worst case scenario there is a risk of the Club folding in the future.   The Council has a time sensitive opportunity to leverage Sport England funding for this project: Capital investment of approximately £1m for the building project, and; revenue funding of approximately £200k to support the Club’s organisational development.   There is an expectation from Sport England that the Council will match their level of capital investment. Sport England funding decisions are due in Dec. 2024. If the Council is not in a position to allocate capital funds this will jeopardise the Sport England funds.   The capital investment will deliver improved, modernised and more sustainable premises, for example capital improvements will ensure that the premises meet minimum energy efficiency standards (MEES). The Council as freeholder is obligated to ensure that these properties achieve an EPC rating of B by 2030.   The ‘whole site’ approach recommended for the project encompasses 175 Rushmore Road and 3 Pedro Street (see 5.2 below). This approach maximises the potential for increased community impact, income generation and operation of viable services. This view is endorsed by Sport England who are reluctant to invest in a less impactful project.   If the project does not proceed, the premises will still require Council capital investment:   ·  3 Pedro Street will require investment before any new letting. Capital works estimates at £397k will be required over the next 3 - 5 years.  ·  175 Rushmore requires significant investment over the next 3 - 5 years to ensure the building is safe and in good repair so that the Club (or any other occupier) could continue to operate from the premises for the next 15 years or more. ·  Both properties must achieve an energy performance rating (EPC) B by 2030. As freeholder, the Council is responsible for works required to achieve an EPC B rating.   A ‘do minimum’ option for capital works (as described at 4.12 above) for both premises  would cost in excess of £1m. This level of investment would deliver assets in adequate condition for operations, health and safety compliance and meet energy efficiency requirements.  However, this will not leverage additional investment in the assets from Sport England and other sources.   Local Authority Housing Fund: Round 3 (LAHF3)  Grant Award: This is a further round of grant funding to support local authorities to acquire good quality, and better value for money Temporary Accommodation (TA) for families owed a homelessness duty by local authorities, all properties acquired must be within the borough boundary.  The grant programme is aimed at reducing the usage of poor-quality B&B accommodation and to enable local authorities to grow their asset base and help manage local housing pressures on an ongoing basis.   Although LAHF3 is providing grant funding for the acquisition of properties, the Council will need to provide funding for the full purchase in the short term until the grant is claimed. Therefore this will require £34.9m to be put into the capital budget for 56 TA properties and £2.5m put into the HRA for the purchase of 4 resettlement properties. The Council will be borrowing £21.7m to match the grant and purchase these much needed properties.   The resettlement properties purchased using LAHF3 grant funding are specifically for housing families who are on Afghan housing schemes. This is a very small number of properties that are being taken forward due to the very generous grant funding received.  This funding is being provided to help ensure that those communities which had been most generous in welcoming new arrivals were not ‘penalised’ with longer social housing waiting lists.   DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND REJECTED   Proposed Project of The Pedro Club, 175 Rushmore Rd, E5 0HD and 3 Pedro Street, London, E5 OHD: Other options for this site are limited because 175 Rushmore Rd is leased to The Pedro Club until 2049. This rules out a number of whole site options until after that date, unless the Club were to cease operations at these premises. Other options considered and rejected are summarised below.   Partnership Project not continued: This option would still require a minimum capital investment by the Council of circa £1m in order to fulfil its property obligations, but would not leverage in excess of £1m external funding and would not realise the enhanced community services and impact.    Alternative VCS letting: Possible option for 3 Pedro Street if project does not proceed. This would be a viable course of action but would require capital investment of nearly £400k, and would not achieve the leveraging of external investment and the impact of The Pedro Club project above.   Enabling development: Option to develop housing on the site, in order to create capital receipt to fund a new build boxing/sports club and community facilities.  This option has been rejected because the timescales are long and uncertain given the high level of community need now.  The Council’s Asset Review notes that the cost of residential development at this site would be high and outcomes delivered would be lower in comparison to other sites. Furthermore this option would require the support and agreement of the Club who have a lease for 175 Rushmore Rd until 2049.   Local Authority Housing Fund Round 3 Grant Award: Building on the previous rounds of funding and the number of homes being acquired for TA through LAHF3 we are widening the scope for the purchase of properties beyond ex Right to Buy properties on LBH estates to encompass properties within the borough boundary.   LAHF3 funding is being provided to support local authorities to acquire good quality, and better value for money TA for families owed a homelessness duty by local authorities, all properties acquired must be within the borough. This is aimed at reducing the usage of poor-quality B&B accommodation and to enable local authorities to grow their asset base and help manage local housing pressures on an ongoing basis. Hackney is forecasting a net spend on temporary accommodation rental expenditure alone to exceed £28m in 24/25, in comparison to £8m for 23/24 and £2.5m for 22/23. Purchasing properties through the LAHF3 scheme will go some way to alleviating this pressure and rising costs. If we chose not to proceed, we would forgo a huge amount of grant funding which could go some way in alleviating the financial pressures faced by the Council both currently and in the long term.