Agenda item

Allocation of Section 106 funds to support the delivery of new affordable homes at the Shaftesbury Christian Centre site, Frankham Street, Deptford

1.1      The Vice Chair informed Panel Members that Councillor Bernards, had asked for this report to be submitted to this Panel for consideration.

1.2      Councillor Bernards said that he was concerned about a contract being awarded to J49 because he had not seen any business that they had been involved in and asked whether due diligence had been undertaken for this company. He was also concerned about a contradiction in the papers where it states that J49 was created for this project and the dates that the company was created and the dates that the land was acquired by the current owners were different. He also asked whether other providers had been approached to deliver the same project.

1.3      The Principal Development and Land Manager explained that J49 were a body that had been created to fulfil a registered provider function. Due diligence was focused on them working with the social housing regulator to become a registered provider. As part of that process, they had passed the initial assessment. They were now going through the main body of the assessment, which would consider various governance, financial and capability measures.

1.4      The Principal Development and Land Manager explained that the approval for the money was conditional on J49, as a new body, passing all of the regulatory, economic and governance requirements. Money would not be released until the social regulator, who oversees all the social housing in the country, agreed. In addition, J49 had bid for GLA funding, and this would also have to be approved.

1.5      The ownership of the land was with the trust and the church. Lewisham would not be in a position to negotiate with anyone else in terms of housing development. Housing would be built over their land so Lewisham were responding to something that the owners were trying to achieve.

1.6      Councillor Bernards said that J49 did not have any assets and giving this company a substantial amount of money was, in his opinion, risky. He said that planning permission had been acquired through delegated authority and asked why it had not been submitted to the relevant Committee. The Principal Development and Land Manager said that J49 was a creation of existing bodies. A lot of people involved with due diligence, had been involved in other developments; working with Homes for Humanity and Berkley Homes. Officers recognised that this was a new body so there was a risk. That risk, in terms of the suitability of the body, would be overseen by the social housing regulator and the reason why there was an additional condition around that.

1.7      The Principal Development and Land Manager said that planning permission has a monetary value, therefore, there was an asset upon which officers were considering making a charge on, so there would be some possible recompense if the very worst should happen. However, there had been a lot of due diligence with finance colleagues and although there was a risk, officers believed that this had been mitigated as much as possible. J49 were a ‘not for profit’ organisation so they had strict guidelines regarding their financial reporting There were also strict guidelines with the social housing regulators. The Housing Delivery Manager said that it was highly likely that the reason that planning permission was not sought from Committee was because there were not sufficient objections. He agreed to investigate and contact Councillor Bernard accordingly.

1.8      Councillor Wise asked whether J49 would receive approval to be a registered provider in order to draw down the 106 funding and the GLA funding and what plans were in place if, in the unlikely event, approval was not received.  The Housing Delivery Manager said that the company have a loan from an ethical bank, an application for GLA funding and a request for section 106 funding. The project relies on three parts of funding and was standard procedure for any housing development process. If Lewisham do not approve the 106 funding then there would not be a project. Lewisham were providing £1.7m section 106 money to the scheme which was just over £51,000 per unit. The GLA normally pay £100,000 per unit. This was considered to be good value for money for Lewisham. 

1.9      Councillor Millbank said that residents would be nominated for accommodation by Lewisham at a cost of £51,000, which was good value for money. She said although there was risk, it was important to note that a local charity were willing to offer a lot of land to benefit young people aged 18-35 years.  They were working with Bench, a strong housing provider and she understood why officers were pushing for this project because it was a positive for young people in this borough.

1.10   In response to questions from Councillor Bernards, the Principal Development and Land Manager said that officers were looking at a possible project start date in July 2021 with a 2 year build plan. Officers would be working with J49 and they would provide officers with a project highlight report every two months and meeting them every month. Every quarter officers would meet with J49 and the GLA to ensure the project was on budget and was progressing. Development was the area that carried the most risk and with these regular meetings, officers would be able to be identify any issues at the earliest opportunity and resolved. The Principal Development and Land Manager confirmed officers had been successful in ensuring that Lewisham would have 100% of all nominations despite the fact that Lewisham were contributing considerably less funding than the GLA.

The meeting then went into closed session. It was then

RESOLVED that the report be noted.

The Chair then joined the meeting.