Decision details

The Cabinet will be asked to approve proposals associated with the implementation of Phase 1 of the Leys Estate redevelopment.  The report will include details of the proposed housing mix and financial arrangements for the Birdbrook Close redevelopment, the appointment of the construction contractor for that site and also proposals to purchase 29 residential units at a separate development at 699 Rainham Road South as part of a cross-subsidy arrangement.

The Cabinet Member for Housing introduced a report on the proposed housing mix and financial arrangements for Phase 1 (Birdbrook Close) of the Leys Estate redevelopment, the appointment of the main contractor for that site and the purchase of 29 residential units at a separate development at 699 Rainham Road South, Dagenham.

The sum of £12.746m had been allocated within the Housing Capital Programme for the Phase 1 redevelopment.  However, design changes required by the Mayor of London as part of the grant support conditions and other amendments arising from the planning approval process had resulted in a total project cost estimate of £14.884m inclusive of fees and contingencies.  In view of the additional budget requirement, the Cabinet Member advised that officers had been asked to consider options which would enable the Phase 1 project to proceed within the overall budget parameters.

The preferred option (Option 3a) to achieve that aim involved the sale of approximately 19 of the 89 units to be developed under Phase 1, with the receipt used to offset the £2.3m budget deficit, meet additional costs of approximately £600,000 associated with the increased specification for the circa 19 units to be sold and other related costs, and to contribute towards the purchase of 29 flats and the site freehold at the Weston Homes development at 699 Rainham Road South, Dagenham.  The remaining shortfall would be met from the reallocation of the £2.5m Street Purchase budget within the Housing Capital Programme.

The Cabinet Member commented that the proposed approach represented the best outcome in view of the financial constraints and would enable the Phase 1 redevelopment works to commence without further delay.

Cabinet resolved:

(i)  To approve the appointment of the preferred tenderer, Mulalley and Co Ltd, as main contractor for the construction of Phase 1 (Birdbrook Close) of the Leys Estate redevelopment in the total contract sum of £14,884,008 inclusive of fees and contingencies;

(ii)  To approve the outright sale of circa 19 houses at the Leys Phase 1 development (Option 3a) to offset the increase in construction costs beyond the £12.6m set aside in the Housing Capital Programme, with any surplus to be allocated towards the purchase of the 29 units at 699 Rainham Road South;

(iii)  To approve additional expenditure of £601,287 to cover the cost of the increased specification for the private sale units, Stamp Duty Land Tax, Community Infrastructure Levy payments and sales, marketing and legal fees;

(iv)  To approve the purchase of 29 flats and the reversionary site freehold at 699 Rainham Road South on the terms set out in the report; and

(v)  To delegate authority to the Chief Executive, in consultation with the Cabinet Member for Housing, the Corporate Director of Housing and Environment and the Head of Legal and Democratic Services, to agree the final terms in respect of (ii) and (iv) above.