URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1850

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To consider housing delivery options on the King Offa development site

Content: In April 2025, Members considered a comprehensive report on the King Offa Leisure and Residential Development programme.  It was proposed and agreed that, given the financial challenges, potential loss of grant funding and strategic considerations compounded by the Local Government Reorganisation, the Council should continue to focus on maintaining its existing leisure facilities and reallocate funds to address immediate needs and not progress the full leisure centre redevelopment at this time.   The report identified alternative options for the King Offa site of “Do Least”, “Do More” or “Do Most” for consideration.  The site had capacity for between 45 to 65 new homes, which was well-justified through various concepts, options and capacity studies undertaken over time.  More detailed commercially sensitive information was included within Confidential Appendix A to the report.  Cabinet did not consider it necessary to go into confidential session to discuss the contents of Appendix A.   The options were, as follows:   ·           Outright Sale (Do Least): Sell the development land on the open market, achieving a capital receipt, which could then be used to reduce the borrowing requirements within the Capital Programme.  Potential to generate a capital receipt of between £1m to £2m.  All control of the site would be relinquished, and the Council would have no influence over the design, appearance, size, mix and tenure of the development delivered.  As part of the sale, the Council could insist on the delivery of a policy-compliant level of affordable housing (AH) [30%].  This option would ensure delivery of homes and achieve a capital receipt whilst minimising risk, resource impacts and further borrowing. ·           Joint Venture (Do More): To seek a Joint Venture (JV) partner (property developer), which could include a Registered Provider (RP), with high AH proportions and based on a pre-agreed proportion of investment by both the Council and JV partner, including the land value and any capital invested.  Properties could either be let (as AH or Temporary Accommodation [TA]) or sold.  All risks, rewards and costs would be shared, and the Council would have a good degree of control and input in respect of timings, design, appearance, mix and tenure of delivery.  Potential to deliver higher numbers of units more focused on local needs.  This option would retain more control and ensure delivery of AH whilst balancing this with capital investment and risk.  Significant investment via borrowing would be required. ·           Rother DC Housing Company [RDCHC] (Do More): There were risks to RDCHC taking on a new site at this stage, as its focus was on the delivery of 200 homes at Blackfriars, Battle.  RDCHC would be dependent on borrowing the cost of available finance, which might limit what could be offered on the land value relative to a RP or other purchase who might have access to more favourable lending terms and higher capital investment.  This option would deliver increased financial risk to the Council.  Councillor Thomas, Chair of RDCHC reassured Members that RDCHC did have the capacity and expertise to take on new projects, whilst still delivering on Blackfriars. ·           Turnkey Contract (Do Most): To procure a construction partner to deliver a turnkey contract to undertake all design, construction, and potential planning services to the Council’s specification and on its behalf.  The Council would have to fund 100% of the development, be responsible for all associated risks and retain or dispose of all completed homes, which could include AH, private rental, open market sales and TA.  This option represented the highest overall capital investment for the Council, with the potential for higher capital returns.     Once formally approved, project timescales indicated that construction would start in late 2027 with completion by mid-2029.   Following debate, Cabinet’s preference was to progress with the sale of the land for affordable housing, to maximise social housing where possible, with an element of affordable (shared ownership) housing.  Members were mindful that only 11% of housing stock in Rother was social housing compared to 17% nationally and there was a real need for these tenures.  Officers were confident that there would be interest in the site as it was flat with good connectivity and particularly in light of recent government announcements.  All agreed that speed was of the essence and the solution needed was the one that could be delivered soonest.      It was agreed that £20,000 of the TA budget be set aside for pre-sale activities to be undertaken, and officers report back to Cabinet and full Council on finalised proposed sale terms etc. for formal approval.   RESOLVED: That:   1)     the proposal to progress a sale of residential land at the King Offa site in Bexhill be approved;   2)     Cabinet’s preference be confirmed as b) sale for affordable housing tenures;   3)     £20,000 from the Temporary Accommodation budget be approved to allow pre-sale activities to be undertaken; and   4)     officers report back to Cabinet and Council on full proposed sale terms seeking final approval for the preferred option regarding residential development.   (Appendix 1 was considered exempt from publication by virtue of paragraph 3 of Schedule 12A of the Local Government Act 1972, as amended).   (Councillor Coupar declared an Other Registerable Interest as a Director of Rother DC Housing Company Ltd, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof.)   (Councillor Thomas declared an Other Registrable Interest as Chair of Rother DC Housing Company Ltd, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof.)  

Date of Decision: July 28, 2025