Agenda item

The Committee received a report of the Corporate Director of Regeneration Economy and Growth and presentation which provided an update on the council house delivery programme; background to the programme; update on activities since the January 2024 report to Economy and Enterprise Overview and Scrutiny Committee (EEOSC); update on the delivery pipeline for new build development and an overview of the building conversions and acquisitions scheme (for copy of report and presentation slides, see file of minutes).

The Housing Delivery Manager provided Members with a detailed presentation which outlined that in October 2020, the council agreed to begin a council house

delivery programme of up to 500 homes by 2026. Cabinet reports in February 2021 and December 2021 agreed Phase 1 and Phase 2 sites for the programme, however progression of the council house delivery programme had been impacted by a series of global factors: Covid 19, the war in Ukraine and the global energy crisis.

On the 12 July 2023, Cabinet approved an updated business case for the

council house delivery programme, including a revised financial model which responded to three challenges for the programme: macro-economic changes had seen both inflation and interest rates rise significantly since the first business case was prepared, the opportunity to revisit both the delivery approach and assumptions to support viability considerations within the programme, and to understand how the programme could support a reduction in the cost of temporary accommodation provision.

A progress update was then provided since January 2024, which saw the conclusion of the procurement exercise to appoint a main contractor to deliver the programme, the development of a delivery pipeline and detailed work undertaken with the main contractor to refine the pipeline,  the progression of the first three sites towards the planning application stage with planning applications for all three sites submitted in November 2024, with a further two sites at pre-application planning stage. It was noted that should these sites be granted planning permission, be viable and successful in attaining Homes England Grant and subject to all other contractual agreements and funding gateway approvals, work would start on site in 2025. A further procurement exercise had been undertaken to appoint a Modern Methods of Construction (MMC) provider to deliver the Merrington View and Spennymoor site. Work was ongoing to prepare a report to Cabinet outlining the operational and management consideration of the programme which would also include a Financial Strategy for a Housing Revenue Account.

With regards to the delivery pipeline, it was originally intended to deliver 500 new build council houses by 2026, however owing to macro-economic factors, the programme would be delivered by 2029. Sites would be delivered in phases, progressing two or three at a time across a rolling programme with any sites that were considered unsuitable for development being removed from the pipeline. The suitability of sites would consider factors including the site topography and elevation, the size of the site, and the scope of the developable area. It was highlighted that if the programme proved to be a viable proposition, it was intended that the programme would be extended beyond 2029 and the number of new homes built would exceed 500.

The Housing Delivery Manager then provided an overview of the progress at the first three sites: Portland Avenue Seaham, Greenwood Avenue Burnhope and Merrington View Spennymoor, noting that that the Portland Avenue, Seaham development was part of a wider local plan allocation being delivered jointly alongside Homes England.  In relation to Portland Avenue, Seaham, this would include 33 units consisting of a mix of two bedroom bungalows along with two and three bed houses.  In addition, the site would include Sustainable Urban Drainage Systems (SUDS) and he confirmed that the planning application had been submitted in November 2024 and that subject to planning approvals and Homes England grant and contractual gateways, work would commence in Spring 2025.  Concerning Greenwood Avenue Burnhope this site will consist of 32 units, a mix of two bedroomed bungalows along with two, three and four bedroom houses with a SUDS pond at the bottom Corner of the site.  He confirmed that the planning application had been submitted in November 2024 and that work would commence on site in Spring 2025, subject to planning approvals, Homes England grant and contractual gateways.  Concerning Merrington View, he confirmed that this site would consist of eight one-bedroomed properties and was an MMC scheme as part of the Single Homeless Accommodation Programme (SHAP) with the planning Application submitted in November with work on site commencing in Spring 2025, subject to planning approvals and contractual gateways

In relation to the wider pipeline, it was envisaged that 372 units would be delivered, however site density had increased significantly and it was expected that the sites in the pipeline would deliver more units than originally anticipated, with delivery monitored against targets. The council would also continue to consider other opportunities as they arise including actively exploring opportunities to the west of the A68 in rural communities.

It was expected that a number of sites originally allocated to the programme had been identified as unsuitable and that this is anticipated to total 197 units with sites having various issues.  It was highlighted that the further review of the identified sites may show that other sites are unsuitable in which case alternative sites would need to be considered.

The Housing Delivery Manager continued by commenting that repurposing and converting surplus buildings within the Council’s property portfolio and property acquisitions formed an important part of the delivery programme and in meeting housing needs across the county.  He highlighted that current activity as part of the Single Homeless Accommodation Programme (SHAP) would provide 10 units at the former Children’s Home in Tow Law and the Registry Office at Bishop Auckland with both of these units completed and ready for occupation by the end of March 2025. He continued by commenting that targeted acquisition were a way to supplement the new build element of the programme and provide an opportunity to meet housing needs in locations where there were limited land opportunities.  It was confirmed that targeted acquisitions had taken place historically to meet various housing needs including the general need for affordable housing, the need for temporary accommodation and to provide accommodation for rough sleepers. In relation to the distribution and form of properties, the Housing Delivery Manager confirmed that the properties are distributed across a range of settlements within the county and consist of studio apartments, 1,2,3 and 4 bedroomed properties.  It was highlighted that 2 bedroom properties are the largest element of the stock with the range of property sizes reflecting housing need within the county.

In terms of the next steps, the Housing Delivery Manager advised that progression would continue in relation to the first schemes, with further sites brought forward within the pipeline, the continuation of the acquisitions programme and a future report to Cabinet looking at the operational management and maintenance of the properties within the council house delivery programme.

Councillor Heaviside commented on the significant progress made since the report was presented in January 2024 and asked for clarification as to who provided the support in relation to the Single Homeless Accommodation Programme (SHAP). The Housing Delivery Manager responded that a specialist support provider had been commissioned to support the SHAP programme and confirmed that Emmaus had been awarded the contract, noting that the scheme would be managed by the Council.

Councillor Heaviside commented that he would seek advice as to whether he needed to declare an interest.

Councillor Currah asked for clarification as to whether sites included in the County Durham Plan that were not in development would be considered under the Council House Delivery Programme. The Housing Delivery Manager advised that a lot of the sites in the County Durham Plan were in private ownership and that the Council House Delivery Programme used sites in Durham County Council ownership.  However, the Council were looking at opportunities to purchase sites, in relation to the rural west of the county. He confirmed that if the Council were approached by developers or private landowners, they would explore and consider the offer. 

With regards to the Modern Methods of Construction (MMC), Councillor Currah asked about the difference in timeline between this method of construction and conventional methods and concluded by commenting that the SHAP programme was not popular with residents in local communities. The Housing Delivery Manager confirmed that the difference could be months as with MMC a lot of the construction was done in the factory which could be carried out in bad weather and on multiple units at the same time. He highlighted that the external finishes on MMC properties would provide the look and feel of traditional builds. With regards to the SHAP programme, he would be happy to discuss any concerns/queries outside of the meeting.

Councillor Shaw commented that in 2011 it was intended that there would be a Targeted Delivery Plan for every ward, with fifteen developed and asked whether there had been any progress in the development of these plans.

The Housing Delivery Manager confirmed that Targeted Delivery Plans had not progressed and that there were still the same number of plans.  He commented that work had taken place looking at confirming their role with the focus on those already in place. He continued that work had taken place in 2019 on those Targeted Delivery Plans already in place.

Councillor Shaw continued by commenting that no work had taken place in relation to housing needs within the various areas of the county. The Housing Delivery Manager confirmed that work is undertaken to identify housing needs with housing need being looked at separately. He confirmed that Targeted Delivery Plans are separate to the Housing Delivery Plan.

Councillor Shaw responded that Target Delivery Plans identify outstanding housing need, the housing priorities, within an area. He continued that there are 11,500 requests for housing within the county. He continued that private developers do not build to meet outstanding housing need and that Targeted Delivery Plans would identify where need is within the council area to then focus delivery of the Council House Delivery Programme. He then asked what the split of housing was in relation to the Portland Avenue site at Seaham

With regards to the Portland Avenue site at Seaham, the Housing Delivery Manager responded that the site included the erection of thirty-three dwellings that consisted of six two bed three person bungalows at the southern end of the cul-de-sac, twelve two bed four person houses, six two bed four person ’corner turner’ house, five three bed five person houses and four three bed five person 2.5 storey houses. He continued that work had taken place looking at the site layout and local housing need together with the viability of the site. He highlighted that originally, 20 units were identified for the site and that this diversification resulted in a greater mix to meet housing need.

Councillor Shaw added that the site layout moved away from the original design layout which had been mostly bungalows. He was concerned that the Council House Delivery Programme (CHDP) was doing the same as the private sector and not meeting housing need as there was a shortfall in bungalow provision within the local area. The Housing Delivery Manager referred to the Cabinet report in July 2023 that reported the need for a greater mix of housing in order to get the sites up and running.

Councillor Shaw then asked that as the site now had a greater mix of housing, how would the need for more bungalows be met locally and whether cumulative sums were used. The Housing Delivery Manager responded that if they only looked towards building bungalows, there would be difficulties with the viability of sites, however over the life of the programme, bungalow development would be delivered. He confirmed that cumulative sums could not be used in relation to this locality.

Mr Simons was pleased to see progress in relation to the programme and referred to the sites in the initial stage of the programme where it stated that viability was subject to Homes England grant. He was surprised that these sites were so far down the development process without confirmation of funding. The Housing Delivery Manager explained that it was normal at this stage of the process not to have funding in place and that Homes England would want to see that sites had planning consent before funding was allocated. He confirmed that it was expected that as the schemes were within the required parameters, Homes England would support the projects and provide grant funding.

Mrs Morris commented that the programme seemed academic when Government had stated that a total of 2,210 new homes were to be delivered in the county every year until 2029. The Strategy and Delivery Manager confirmed that the figure had reduced to 2,011 each year, however this was a big increase from the 1,500 new homes that were currently being delivered. He continued by commenting that Durham County Council was sceptical about the sector delivering the new total set by Government as developers cannot deliver the numbers required due to skill shortages. He confirmed that discussions had taken place with developers in relation to penalties and land banking to encourage them to deliver.

Mrs Morris highlighted that she had concerns as the figures from government were not negotiable and asked for confirmation that the Committee would continue to receive updated delivery plans and that when identifying areas of land, they would be looking at different areas of the county. The Strategy and Delivery Manager explained that the CHDP would deliver a small part of the total housing delivery numbers for the county and confirmed that in March a report looking at reviewing the County Durham Plan would be considered. He also confirmed that a new Housing Market Assessment would be produced.

Mrs Morris commented that the Committee would want to see the new County Durham Plan as soon as possible. The Strategy and Delivery Manager confirmed that the review of the plan would be a long process starting at high level first and then down to local level.

Councillor Wood asked for clarification as to how the mix of properties were determined in relation to the various sites and used the example of the Portland Avenue site where one in five units would be a bungalow. He continued that private developers deliver a lower number of bungalows, as they cost more to develop. He asked what the difference would be with the CHDP developments and whether the long-term housing need within an area is being considered. He concluded by commenting that within Pelton, some older people were occupying family homes and that if there were more bungalows available, this would free up family homes.

In relation to identifying housing needs, the Housing Delivery Manager advised that they looked at data from DKOs which identified the type of properties that were bid on within an area with a site needing to be varied in mix of housing. He confirmed that all housing within the CHDP would be affordable not just 30% which was the figure private developers were required to provide. The properties would be managed by Durham County Council and would be built to the required standard and could be adapted to meet the needs of the tenant.

Councillor Wood commented that if density on sites were increasing, there was a danger that this would become more like the private sector with smaller floor space per unit. The Housing Delivery Manager advised that the programme was elevating standards and that the County Durham Plan had shown that developers were not meeting standards and the resulting impact this has. He added that the density on the sites was the best use of the land for the viability of the scheme which would then pay off the borrowing incurred for the programme.

With regards to the Portland Avenue site and the shared driveways, Councillor Wood asked how this would work in practice and why this approach had been used. The Housing Delivery Manager confirmed that they would have their own points of access and curtilages and that the roads had to be built for access, not to adoptable standards. He continued that the approach of shared driveways could be looked at going forward.

Councillor Stead felt that it was a positive move that the CHDP included bungalow provision as there are a lot of older people living in four-bedroom houses as bungalows are unavailable. He referred to appendix 7 of the report and the fourteen available one-bedroom properties in Stanley and asked for detail in relation to the properties, what would be the cost of bringing them back into use and how quickly this could be done. The Housing Delivery Manager confirmed that the properties were currently in use as part of the acquisitions programme and used by Housing Management colleagues to meet housing needs.

Councillor Moist thanked the officer for the report and presentation and commented that he could see the progress that had been made and the planned delivery in relation to the targets and assumed there would be no delays in relation to the planning process. He noted the monitoring of the targets going forward and the reference that Cabinet would receive detail of performance in relation to targets. He referred to previous minutes which had asked that monitoring information also be considered by Overview and Scrutiny. He also noted from the information provided that delivery would still be behind target and recommended that future monitoring information be considered by Overview and Scrutiny. He asked for clarification as to whether financially unviable sites would be dropped from the programme and alternative sites considered. He concluded by highlighting the need for the Council to provide affordable homes via this programme and that he would have liked to have seen this progress four to five years ago.

The Housing Delivery Manager advised that the planning process was entirely independent and in relation to monitoring, the Housing Strategy included targets in relation to the scheme. He confirmed that he would be happy to come back to Overview and Scrutiny and provide an update on the development of the scheme and its performance in relation to targets. With regard to site viability, it was explained that the design of the scheme was quite a bit down the line in the development process and it was at this stage when it becomes apparent as to whether a site would be determined as viable or not. He confirmed that the programme would provide affordable homes within the context of the definition used to determine affordable homes within the county.

Councillor Moist added that he was aware that one site previously identified had Japanese Knot Weed and another site planned for bungalows had gradient issues. He highlighted that these issues should be identified quicker so that another suitable site could be identified. 

Councillor Batey commented that there was a history of private developers not consulting local Members and highlighted the need for Officers to consult with local Members on the design of future sites in programme.  She concluded by highlighting that local Members know the housing need within their local communities.

The Chair agreed with Councillor Batey that it was essential that local Members be consulted.

Resolved:

i)             That the contents of the report and presentation be noted.

ii)            That the Economy and Enterprise Overview and Scrutiny Committee receive further updates on the progress of the Council House Delivery Programme, including monitoring information on the performance of the programme in relation to delivery targets.