The Cabinet Procurement and Insourcing Committee has decided to approve the procurement strategy for construction works in Hackney's New Homes Programme.

URL: https://hackney.moderngov.co.uk/ieDecisionDetails.aspx?ID=8425

Decision Maker: Cabinet Procurement and Insourcing Committee

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To approve the procurement strategy for construction works for the housing development projects comprising Tranche 1 of Hackney’s New Homes Programme:

Content: RESOLVED:   1.  To approve the procurement strategy for construction works for the housing development projects comprising Tranche 1 of Hackney’s New Homes Programme:   a.  Broadway (Orwell and Welshpool), and Regents Court (NHP1)   Procurement of a single contractor by means of single stage tender for the joint Design and Build delivery of two nearby construction projects at Orwell Court garages / Welshpool Street depot (known as Broadway) in Haggerston and London Fields wards, and at Regents Court garages in Haggerston ward.   The procurement shall be a competitive call-off from a compliant framework or Dynamic Purchasing System (DPS) which may include the Notting Hill Genesis Framework - Development Contractors Lot.   b.  Cropley Court and Buckland Court (NHP2)   Procurement of a single contractor by means of single stage tender for the joint Design and Build delivery of two nearby construction projects at Cropley Court garages and Buckland Court garages in Hoxton West ward.   The procurement shall be a competitive call-off from a compliant framework or DPS which may include the Notting Hill Genesis Framework - Development Contractors Lot.   c.  Fellows Court and Weymouth Court (NHP3)   Procurement of one or two contractors by means of single stage tender for the Design and Build delivery of two nearby projects at Fellows Court garages and Weymouth Court garages in Haggerston ward. The procurement shall be structured such that the two projects are separate Lots whereby the best offer is selected for each, which may lead to the selection of the same bidder for both.   The procurement shall be a competitive call-off from a compliant framework or DPS which may include the Westworks Dynamic Purchasing System (DPS).   d.  NHP5.1 Blackwell Close and NHP6 Morris Blitz Court   Procurement of one or two contractors by means of single stage tender for the Design and Build delivery of two projects at Blackwell Close garages in Kings Park ward, and Morris Blitz former neighbourhood office in Stoke Newington ward. The procurement shall be structured such that the two projects are separate Lots whereby the best offer is selected for each, which may lead to the selection of the same bidder for both.   The procurement shall be an open market (Procurement Act 2023 compliant) Competitive Flexible Procedure utilising a Conditions of Participation (CoP) process followed by an Invitation to Tender. A maximum of five bidders will be shortlisted through the CoP process.   e.  NHP5.2 Nye Bevan Estate   Procurement of a contractor by means of single stage tender for the Design and Build delivery of the development at Nye Bevan Estate garages in Kings Park ward.   The procurement shall be an open market (Procurement Act 2023 compliant) Competitive Flexible Procedure utilising a Conditions of Participation (CoP) process followed by an Invitation to Tender. A maximum of five bidders will be shortlisted through the CoP process. This opportunity will also be advertised through the GLA Small Sites Small Builders portal, in order to fulfill a funding requirement and to maximise opportunities for smaller organisations to be prioritised, although all formal procurement will be in line with the Procurement Act 2023.   2  To delegate authority to the Group Director of Climate, Homes and Economy, in consultation with the Group Director of Finance and Corporate Resources and the Director of Legal, Democratic and Electoral Services, to enter into main building contracts and if appropriate any preceding or parallel demolition or enabling works contracts with the preferred contractor for each project.   Reasons For Decision   This report provides to CPIC the business case and considerations for the procurement of construction works for the first tranche of Hackney’s New Homes Programme (NHP) - this first tranche comprises nine housing development sites containing around 305 new homes. The report describes the analysis and market engagement undertaken to arrive at a strategy for procurement and construction delivery of the projects, and sets out recommendations accordingly. A further report is expected to be brought to CPIC in due course for the second tranche of the programme, comprising a further five projects.   The NHP was launched by Cabinet in December 2022 (CHE S142) with authority to proceed through the design and engagement stages, and submit planning applications, initially for fourteen brownfield ‘anchor’ locations on housing estates across the borough. The programme has been set up to deliver around 400 new homes on underused Housing Revenue Account (HRA) land such as car parks, garages and redundant buildings. 75% of the new homes are to be for social rent at Council rent levels.   A budget of £10m was authorised by Cabinet to procure the necessary design and consultancy services, surveys and investigations; carry out comprehensive community and stakeholder engagement including establishing Resident Steering Groups (RSGs) where local appetite exists; engage with the required statutory authorities including the Council’s Planning Service; submit planning applications and prepare procurement documents ready for the tendering of construction contracts. This ‘pre-development’ work is well progressed on the Tranche 1 projects, and construction procurements are expected to commence from summer 2025.   The following table provides a summary of the new homes outputs currently expected to be delivered by the projects covered in this report. It should be noted that, as with all capital projects, these are subject to planning, detailed design and financial viability.   See paragraph 5.4 of the report.   The NHP is being delivered against a set of seven overarching objectives which are used to ensure decision making and project delivery remain in line with the original intent. These objectives and their constituent themes are summarised in the table below.     Objectives Themes 1 Meeting housing need ·  Prioritise the delivery of new Council homes for social rent ·  Ensure the mix and type of homes we build is informed by an understanding of housing need and demand in Hackney. ·  Provide homes for outright sale to help pay for the social homes. 2 Contributing to Hackney’s sustainability objectives ·  Deliver environmentally friendly new homes, contributing towards the Council’s net zero obligations. ·  Future-proof projects to meet strengthened sustainability regulations and requirements. ·  Protect and improve the biodiversity of locations. ·  Avoid unnecessary demolition of existing homes.   3 Creating better homes and neighbourhoods ·  Deliver high quality homes that support attractive, functional, safe and sustainable neighbourhoods. ·  Build upon Hackney’s reputation for high quality architecture and characterful buildings, making places where people want to live. ·  Create inclusive places for all ages, identities and abilities. ·  Improve surrounding areas of estates and public spaces, including greenery and children’s play.   4 Involving residents meaningfully ·  Implement Housing Services’ Resident Engagement Strategy. ·  Adopt the Residents Charter and ‘Keeping Communities Together’ policies. ·  Involve residents meaningfully through our collaborative approach, ensuring communities can have their say at every stage of the process. ·  Work in partnership with local organisations, TMO, TRAs, schools and public services to maximise the benefits of new developments.   5 Making best use of Council resources ·  Make the best use of underused Council-owned land and buildings. ·  Continue our Council-led, not-for-profit approach to housing delivery, harnessing our experienced in-house teams, with external support. ·  Work with the GLA and others to maximise the funding for new Council homes, to complement the Council’s own resources. ·  Increase the pace and efficiency of our delivery by implementing lessons learned from past programmes and other developers.   6 Securing value for money in the short and long term ·  Ensure viable and deliverable projects that maximise benefits and safeguard the Council’s financial stability. ·  Balance upfront capital costs with long-term environmental goals, cost-in-use and whole-life costs. ·  Work closely with Housing Services and other teams to ensure new homes have a cost-effective lifecycle. ·  Build robust and well-loved homes that will age well and stand the test of time. ·    7 Supporting an inclusive economy ·  Provide new community uses and high street spaces where appropriate to strengthen local services and economies. ·  Promote diversity and inclusion in procurement and ensure projects support green and inclusive growth. ·  Expand apprenticeship and training placements, both with building contractors and professional teams   A holistic overall strategy has been prepared for the delivery and procurement of development / construction works for the NHP, focusing to date on the Tranche 1 schemes for which detailed arrangements are set out in this report. Work on the strategy began at a workshop session on 20 May 2024 attended by the Council’s Procurement Service, project teams, the Programme Finance Manager, the programme’s two Cost Consultant practices, and Regeneration Strategic Design colleagues. Two further workshops (5 August 2024 and 29 October 2024) were held to develop and finesse the strategy. Further, 8 monthly (latterly fortnightly) meetings between the Procurement Service and Housing Regeneration Heads of Service have taken place since September 2024   Alternative Options Considered and Rejected   The range of options considered, and their appraisal, are set out comprehensively on a package by package basis in sections 5.25 onwards (within the report), and are therefore not repeated here.   Insourcing This Business Case encompasses nine construction contracts, for the delivery of new build housing development of the highest standards of quality and sustainability, and on complex brownfield sites. The capacity and expertise for this work does not exist within the Council whereas there is a large, mature and competitive sector for these works and services in the market. For these reasons insourcing is not an appropriate option for further consideration.

Date of Decision: July 7, 2025