URL: https://democracy.bathnes.gov.uk/ieDecisionDetails.aspx?ID=2459

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: Delivery of homes on the Council's land at Bath Riverside prioritising a mix of affordable homes to be owned and managed by the Council. Delegation for entry into delivery arrangements with Berkeley Homes following completion of Enabling Works.

Content: The Cabinet approves the three delegations as set out below;   1.  Delegate the approval to the Director of Capital & Housing Delivery in consultation with the S151 Officer to:   (1)   Enter funding agreements with Homes England under the Affordable Homes Programme to fund delivery of 303 Homes (approx. 30% of total homes being delivered across the site).   (2)   Add capital grant funding to the Council capital programme upon entry to funding agreements with Homes England.   (3)   Move provisional capital approved to full approval upon entry to funding agreements based upon a full business case for the homes transferring to the Council.   2.  Delegate the approval to the Director of Capital & Housing Delivery in consultation with the S151 Officer to:   (1)  Enter a Deed of Variation to the Homes England Housing Infrastructure Fund (HIF) Agreement to allow for the provision of affordable housing as additionality over any secured S106 planning obligation with variations to permitted disposals and overage obligations.   (2)  Enter Agreements between B&NES Council and Berkeley Homes for the land swap agreement with the purchase of 92 Market Homes on Berkeley Homes land for Council affordable homes to be held and managed by B&NES Homes in return for the Council transferring its part of the Site to Berkeley Homes.   (3)   Enter any additional fit out works agreements (if required) with Berkeley Homes.   (4)   Enter any Deed of Variation to the existing Neighbourly Deed with Berkeley Homes in relation to shared infrastructure (if required).   (5)   Repay the WECA LAF funding on completion of the Land Swap from the proceeds of disposal of part of the land to Berkeley Homes.   3.  Subject to future funding being made available, delegate the approval to the Director of Capital & Housing Delivery in consultation with the Cabinet Member for the Built Environment, Housing and Sustainable Development and S151 Officer to:   (1)  Define the final tenure mix of the affordable homes and inclusion of possible 3rd party investment in mid-market rental homes for essential workers.   (2)   Enter Development Agreement(s) with Berkeley Homes for the construction of c140 social rented affordable homes.   (3)   Complete option to purchase Berkeley Homes S106 affordable housing (79 homes) subject to a full business case and additionality funding from Homes England. Bath Western Riverside Phase 2 (the Site) is the former Bath gas works site. The Site is part owned by the Council (which owns 31.5%), and part owned by St William Homes LLP (part of the Berkeley Group) (Berkeley) (which owns 68.5%). The Council intervened to acquire its part of the Site in 2019 for regeneration purposes with the objective to maximise the provision of affordable housing delivered given the viability challenges faced from the former land uses and site conditions.   To date, the Council has carried out a series of staged initial gas rationalisation and enabling works, funded predominately by Homes England (initially carried out between October 2020 and October 2023), with the most recent site wide remediation and enabling works (the Remediation Works) commencing in 2025, with Berkeley carrying out the works on a site wide basis.   Homes England again provided significant funding for the required Remediation Works, and the Council passed on the proportional benefit of the Homes England grant to Berkeley (in line with Berkeley's ownership of the Site), who it entrusted to deliver the Remediation Works (including the works across the Council owned portion of the Site).   In order to comply with both planning and strategic housing aims, the Council must obtain a minimum number of affordable housing units across the Site as a whole and therefore has the option to either: procure the construction of such units itself, being restricted to its own part of the Site; or to increase provision by acquiring units from Berkeley (additionality) which will be constructed on Berkeley's land.   The project will deliver against a number of key Council priorities:   ·  Tackling affordability through the provision of social rented affordable homes. ·  Creating and developing a better quality of life - facilitating high quality urban design, built environment and distinct sense of place where communities can thrive. ·  Create vibrant, diverse communities with a range of accommodation to meet needs of local people. ·  Improving the local environment - regenerate 12.7 acres of brownfield land, incorporating green infrastructure and improved access to the river and tow path. ·  Minimise carbon emissions by securing low carbon housing development with low energy needs. ·  Leverage the site's natural assets and inner-city location to promote use of sustainable travel modes.   The Council's objectives are:   ·  Achieve comprehensive development in line with the Core Strategy Placemaking Plan policy SB8. ·  Deliver homes focussed upon economically active demographic occupiers within the Bath city. ·  Continue to diversify tenure options within the city’s housing supply. ·  Maximise the provision of affordable housing given the viability challenges presented. ·  Use external grant funding to support Council objectives, recycling value to deliver onsite affordable housing. A range of options for delivery have been considered, each with differing characteristics across a range of categories including level of control, transference of risk, maximisation of value for money.   Direct Delivery - Given the viability constraints of the site the main alternative delivery option is for the Council to progress the direct delivery of the site deploying the Council’s development company, Aequus – this option does not offer the same positive land receipt, value, nor the same speed of delivery as the proposed transaction. All delivery and construction risk would remain with the Council as Shareholder. B&NES would face minimal or even negative value from standalone redevelopment, while also needing to secure substantial public funding to make any scheme viable.   Disposal – Given the investment to date and the underlying viability challenge in maximising affordable housing, a market disposal of the site would remove the ability to control and achieve the Councils stated objectives.   The proposal also enables the delivery of full policy-compliant affordable housing, including the transfer of a fully-serviced affordable housing block to the Council, with the potential for additional blocks. This outcome would be unachievable if B&NES were to proceed independently. By contrast, Berkeley’s involvement unlocks the integrated delivery of 30% affordable housing across the wider site, far beyond what B&NES could finance or deliver alone.

Date of Decision: July 2, 2026