Report of the Strategic Director, Growth and Development attached.

This report provides a high level summary of the Strategic Business Plan for approval by Executive, on behalf of the City Council as shareholder in the Northern Gateway Joint Venture. The report also provides an update on the current position with regards to the Housing Infrastructure Fund bid submitted to Government by the City Council and the proposed approach to ancillary infrastructure funding and delivery arrangements.

The Committee considered a report of the Strategic Director – Growth and Development, which provided a high level summary of the Strategic Business Plan in the Northern Gateway Joint Venture. The report also provided an update on the current position with regards to the Housing Infrastructure Fund bid submitted to Government by the Council and the proposed approach to ancillary infrastructure funding and delivery arrangements.

The Leader referred to the key points and themes within the report included:-

·                It was a requirement of the Northern Gateway Joint Venture Agreement for the Development Manager (FEC) to produce a Masterplan and a Strategic Business Plan, incorporating a Financial Model, for the approval by Northern Gateway Operation Limited (OpCo) and by the respective Shareholders of OpCo (FEC and the Council);

·                The purpose of the Strategic Business Plan was to set the strategic context for the Northern Gateway, based upon an overarching Financial Model and to set the parameters for the subsequent Development Area Business Plans;

·                The Strategic Business Plan would be updated annually to ensure that it took account of any changes in national and local policy, market sentiment or wider economic implications and was to be used as a mechanism to monitor the progress of delivery of the Northern Gateway;

·                The Plan was very ambitious, providing 15,000 homes, of which, at least 3000 would be affordable housing and also a significant amount would be social housing; and

·                Overall the Plan would equate to over a quarter of the housing development expected for the city as detailed in the outline Greater Manchester Spatial Framework.

Councillor Karney, Ward Member for Harpurhey addressed the Committee, welcoming the proposals for major housing intervention, including an additional 130 new council homes in the Collyhurst area.  He added that it was important that the Council was able to provide affordable homes within the schemes that were within the Strategic Business Plan which were in reach of Manchester residents who wanted to remain in the areas that they had grown up in.

Some of the key points that arose from the Committees discussions were:-

·                Members welcomed the proposals within the Strategic Business Plan, including the provision of new homes for people who were already living in the area;

·                Had any work been done to scope out the wider social benefit that would be brought about by the proposals within the Strategic Business Plan;

·                Assurance was sought that the delivery of infrastructure works, including flood mitigation in the Lower Irk Valley as indicated within the report would not displace any flood water to other parts of the city;

·                More information was requested on the proposals to expedite the move to a zero carbon economy including zero carbon development;

·                Clarification was again sought on what the definition of affordable housing was;

·                Was the tonnage of carbon emissions this Pan was likely to produce known so that plans could be made to mitigate this;

·                Consideration needed to be given to how the Strategic Business Plan might impact on existing communities and how these communities could be included throughout the process of development in order to avoid issues that had occurred in other regeneration schemes across the city.

The Leader advised that a lot of engagement with residents within the area that the Strategic Business Plan covered had already taken place, so it was not anticipated that the proposals would come as a shock or a surprise to them.  He added that there would only be a relatively small amount of intervention in existing housing stock and that residents whose existing home would be affected by the scheme in Collyhurst would have the benefit of seeing their new homes built before their existing home was demolished.  In terms of the definition of affordability, the Leader clarified that this would be what Manchester residents could afford and as set out in the Manchester Labour Manifesto, this would equate to be no more than 30% of a household’s total gross monthly income.

The Committee was advised that in relation to the wider social benefits, specifically healthier neighbourhoods, the strategic business case for a new general hospital at the North Manchester General Hospital site had been submitted and an outline business case was proposed for November 2020, with the start of development expected for 2021.  He advised that this would underpin a lot of work to achieve the objectives of the Manchester Population Health Plan and Manchester Work and Skills Strategy across the whole of North Manchester, not just the Northern Gateway scheme.

In terms of achieving zero carbon, the Leader explained that this was a real challenge to the whole of the construction industry supply chain, the main challenge at present being the cost in using new materials and providing a more localised energy supply balanced against the ability to deliver the outcomes of the Strategic Business Plan.

The Head of Residential Growth also advised the Committee of the works proposed to mitigate future flood risks within the area covered by the Strategic Business Plan.

Decisions

The Committee:-

(1)       Notes the report;

(2)       Endorses the recommendations to the Executive, these being:-

(1)        To note the summarised content of the Strategic Business Plan, the detail of which is appended to the Part B report on this agenda.

(2)       To note the intention of the Development Manager to appoint a Registered Provider partner to assist with the delivery of affordable housing on JV land within the Red Bank and New Town neighbourhoods to help meet the commitment of providing 20% affordable housing within the initiative.

(3)       To note that the Northern Gateway is currently characterised by large tracts of vacant and underutilised brownfield land and that for development of any scale to be delivered, significant “place-making” infrastructure interventions will be required and consequently a strategic approach towards leveraging investment from a range of sources will be necessary, including the capture of S106 developer contributions for the purposes of place-making infrastructure.

(4)       To note the intention to explore options for the preparation of a costed “placemaking” infrastructure strategy for the Northern Gateway against which Section 106 developer contributions can be sought. Note that any such strategy would be brought before Executive as part of a full consultation exercise.

(5)       To note the current situation with regard to the funding submission of £51.6m to the Government’s Housing Infrastructure Fund and the significant potential impact of this funding on the overall viability of the initiative.

(6)       To agree to the principle of ring-fencing Capital Receipts or overage generated from the disposal of Council-owned land through the Northern Gateway Joint Venture for re-investment into supporting the delivery of the Northern Gateway SRF objectives.

(7)       To note the significant contribution that the Northern Gateway initiative can make to the City’s affordable housing delivery ambitions and the various means available to the Council such as the Housing Affordability Fund through which investment can be leveraged to deliver affordable housing at scale within this area.

(8)       To note the summary of the intended content for the production of the initial Development Area Business Plan which will focus on the delivery of up to 1,000 homes in the neighbourhoods of New Cross, Red Bank and Collyhurst and delegate authority to the Chief Executive in consultation with the Leader, Deputy Leader and the Executive Member for Finance and HR to approve the full initial Development Area Business Plan.

(9)       To note that, subject to a positive announcement from Government relating to the Housing Infrastructure Fund, a further report will be brought before Executive regarding the specific terms and conditions applicable in advance of any decision to enter into a Funding Agreement.

(10)     To note that a Social Value strategy will be developed specifically for the Northern Gateway given the value of contracts/works to be carried out and the anticipated duration of the Joint Venture Partnership.