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The Portfolio Holder presented report which provided an update on the Farmstead Drive scheme which provided an update on the project and sought approval from Cabinet for the proposed recommendations.

He advised that the report had been considered by the Finance & Investment Advisory Committee and Members spoke enthusiastically for the development, but also recognised the marginal financial viability for the project at this time. Essentially the Committee were cautious, taking into account the financial elements, but at the same time recognising the benefits to the community in terms of maintaining improving existing amenities and environment. The view was that these issues should be carefully assessed.

In November 2021, the Council approved the development of the scheme and provided approval to undertake further feasibility and design work, agreed the budget and appropriate delegations, subject to the scheme remaining viable and planning permission obtained. Further consultation with key stakeholders and members of the public had been undertaken and had been used to make improvements to the scheme design. 

Since the decision, additional funding of £375,000 had been secured from the Brownfield Land Release Fund. However, as a result of recent global market events, notably increases to construction and material costs, alongside the revised scheme design as a result of the public consultation, there has been an impact on the project’s cost. Therefore, the initial budget required had increased, however the scheme remains feasible and viable.

The Portfolio Holder highlighted that the Council was utilising the opportunity to provide a wider ranging community benefit redevelopment constructing a new community hall and retail premises, as well as an enhanced play area, landscaping and an additional 41 car parking spaces to serve the wider estate. All of which represented significant planning and community benefits for the local community and residents but would come at significant cost, of which arguably a mainstream private developer would not be providing. If the Council were not intent on delivering these important community benefit facilities and infrastructure the scheme’s total project cost would be around £7.952m, which would result in a greater surplus positive margin for the scheme, yielding a 24% profit margin.

The budget required for the project had increased, resulting in an additional funding requirement of £2,741,785. However, the scheme remained feasible and marginally financially viable in accordance with the key financial assumptions outlined in the report and in Appendix B. It was viewed that the significant social and community benefits outweighed the weakness of the scheme’s marginal viability on purely financial evaluation.

Subject to Council approval of the additional funding required, demolition and enabling works are expected to start in mid-November, with start on site for the main construction works in January next year, with completion in January 2026.

Having discussed the questions raised at Finance & Investment Advisory Committee with Officers he was satisfied that all matters have been appropriately considered and dealt with.

The Regeneration and Development Project Manager further advised that financial due diligence works had been undertaken for the procurement of the contractor by  ...  view the full minutes text for item 31