URL: https://committeeadmin.lancaster.gov.uk/ieDecisionDetails.aspx?ID=1590

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: enabling options for procurement and delivery

Content: Cabinet Member with Special Responsibility Councillor Caroline Jackson)   Cabinet received a report from the Chief Officer Housing & Property that sought Cabinet approval for a twin-track procurement strategy and progress Preliminary Market Engagement to test partnership opportunities for the redevelopment of the Skerton School site and Mainway regeneration.   The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:     Option1: Partnership Option 2: Works contract Option 3: Blended partnership/ contract options/ multiple partners Option 4: Do nothing Advantages - PME to explore market interest and models for a viable route to delivery within a partnership model.   - Test market interest in models compatible with project outcomes.   - Transfer of major risks (funding, sales, development).    - Injection of development expertise and capacity.   - Reduced control over design detail and lettings policy.   - Greater cost certainty for the Council within delivery model - Compliant process via procurement frameworks   - Mitigates volatility of construction costs   - Strong Council control over design, sustainability standards, and tenure   - Potentially lower construction costs - Partial transfer of construction risk to contractor. - Flexibility to combine different partnership and or contract models that are deemed best suited   - Potential to attract a consortium of partners bringing complementary skills (funding, development, construction, management).    - Spreads risk by not relying on a single delivery partner. None Disadvantages - Potentially higher long-term costs   - Reduced control over design and delivery   - Potentially reduced control as a council owed asset   - Portability of grant provision into Partnership model. - Increased pre-development cost and management costs   - Significant management resource   - Current unavailability of funding prior to CHSR   - High financial burden on HRA   - Affordability risk   – mitigation via Homes England grant and potential new Government borrowing programmes. - Risk of misaligned objectives between partners.   - Longer negotiation period may slow mobilisation.   - Added complexity in procurement, legal structures and governance.   - Higher resource needed to manage multiple relationships.   - Risk of misaligned objectives between partners.   - Longer negotiation period may slow mobilisation.   - Added complexity in procurement, legal structures and governance.   - Higher resource needed to manage multiple relationships.     - Failure to progress key procurement strategy Risks and mitigation - No appetite for engagement   - Proposals not compatible viability/tenure/control - Exploration of suitable frameworks to increase cost certainty may reduce management burden. However, a tender at this stage may risk predetermination challenge. - Risk of fragmented delivery   – mitigated through clear governance and robust partnership agreement. - Could confuse the market – PME will test interest.   - Potential overlap or conflict between models, winning both sites may be vital to Partners business model - Stagnation of the project objectives.   - Pursue twin track approach.   The officer preferred recommendation is to proceed with Option 3, with engagement on the broadest possible terms, providing a clear scope and definition of each site, and our priority to advance Skerton first in alignment with Homes England programmes.   The blended option will help shape the most viable partnering options for the Skerton development and the Mainway regeneration and ensure that both schemes are advanced in a coordinated and comprehensive context. In doing so, it will increase the attractiveness of the proposition to potential partners, signal opportunities for longer-term relationships, and demonstrate the Council’s intent to bring forward Skerton as part of a wider regeneration of Mainway.   Cost plan assumptions may be compliantly reviewed through structured consultation supported by framework benchmarking and independent advice and provide a consistent baseline for comparison alongside partnership.   This is an efficient approach, which can be managed within the existing project resource and will generate a comprehensive range of responses and options to develop a preferred delivery model and navigates any perception of predetermination prior to a final decision by members.   Members noted that no single procurement route is fully developed at this stage. They therefore directed officers to pursue a twin-track approach, keeping both partnering and contract options open for Skerton. Members subsequently further agreed that engagement should be extended to include Mainway and signal the Council’s intention to work with the market to bring this forward wider regeneration.   Councillor Caroline Jackson proposed, seconded by Councillor Hamilton-Cox:   “That the recommendations, as set out in the report, be approved with recommendation (1) revised with the deletion of ‘estimate’ and insertion of ‘accurate account’.   Resolved unanimously:   (1)             That Cabinet authorises officers to obtain an accurate account of the full costings in respect of a Council led Design & Build contract for the construction of housing on the Skerton School site such costings to be obtained via a suitable framework.   (2)             That approval be given to the commencement of Preliminary Market Engagement (PME) activity in respect of the construction of housing on the Skerton School site.   (3)             That approval be given to the commencement of PME activity in respect of the development of Mainway both as a procurement in its own right or alternatively as a procurement connected to the Skerton School development.   (4)             That officers be authorised to take all necessary steps to commence PME in respect of recommendation 2 and/or 3 in accordance with all requirements under the Procurement Act 2023.   (5)             That Cabinet notes that a further report will be brought back to Cabinet with a recommended preferred route once PME and cost benchmark analysis has been completed in respect of Skerton School and/ or Mainway.   Officer responsible for effecting the decision:   Chief Officer Housing & Property   Reasons for making the decision:   The decision is consistent with Council Priorities: A Sustainable District –Climate Emergency: Properties brought forward will be developed to a high standard, therefore benefitting residents with quality and warm homes.   An Inclusive and Prosperous Local Economy – opportunities for local contractors to be employed as part of development opportunities.   Housing Strategy – will link directly to the Homes Strategy for Lancaster District 2020-2025 by seeking to increase provision of affordable housing.     The proposals ensure that Skerton is advanced as the first enabling phase, aligned with Homes England programmes, while also increasing the attractiveness of the overall proposition to potential partners. By signalling the long-term opportunity at Mainway, the Council can build interest, explore longer-term relationships, and position both schemes within a coordinated regeneration strategy.   The estimated value of the works is above the qualifying financial threshold, and the Council is required to follow the full statutory procurement procedure. The twin track proposal following a recommendation for a compliant PME brings forward partnering options and greater certainty for construction costs in a step-by-step approach and is supported by procurement advice.   It makes the best use of resource and enables the project programme deadlines to be achieved, avoids any perception of predetermination and positions the Council to move positively into the most appropriate formal tender once robust market evidence is available and there is clarity on CHSR funding and the Autumn statement.

Date of Decision: October 21, 2025