Agenda item

The Cabinet considered a joint report of Chief Executive, Director of Corporate Resources, Director of Law and Governance and the Director of Environment and Transport which advised the Cabinet of the latest position concerning the Melton Mowbray Distributor Road South, Housing Infrastructure Fund (HIF) grant offer and discussions with Melton Borough Council regarding its draft masterplan for the North Sustainable Neighbourhood area and the risk-sharing implications in respect of the HIF grant offer. A copy of the report, marked ‘Agenda Item 5’, and a supplementary report, which was circulated separately, are filed with these minutes.

 

Members noted a letter received from Councillor Joe Orson, Leader of Melton Borough Council, a copy of which is filed with these minutes. The Leader of the County Council had also received an email concerning the matter from Alicia Kearns MP.

 

The Chief Executive said that the County Council was grateful to Homes England for extending the deadline for acceptance of the HIF grant offer to the week commencing 14 December 2020 and the matter, which had taken a disproportionate amount of officer time, now needed to be resolved.

 

The County Council had worked with developers to produce a revised development plan for the Southern Sustainable Neighbourhood to generate the necessary developer contributions to make it a viable and deliverable scheme. Approval of the recommendations, and the agreement of Melton Borough Council to share the risk of the infrastructure forward funding, would enable the HIF grant to be accepted and the delivery of the scheme for the southern section of the Melton Mowbray Distributor Road to be progressed.

 

Mr Rhodes said that there was a responsibility of all planning authorities to prioritise infrastructure costs when considering planning applications to ensure requested County Council Section 106 contributions were agreed and received.

 

The Leader said it was essential planning authorities engaged with the County Council at the earliest opportunity as large infrastructure schemes were identified so the various parties could work together to ensure schemes were viable. The development of a policy would help with this process and ensure growth continued across the whole county. 

 

RESOLVED:

 

That notwithstanding the letter from the Leader of Melton Borough Council of 15th December, it was resolved:

 

a)    That the outcome of work with Melton Borough Council and developers to progress the opportunity of the Housing Infrastructure Fund (HIF) grant, including the production of a revised development framework based on the illustrative development plan (as shown in Appendix A) with a view to that replacing the current masterplan for the Melton Southern Sustainable Neighbourhood (MSSN), be noted and supported;

 

b)    That subject to recommendations (c) – (d) below, the forward programme for delivery of the HIF scheme for the southern section of the Melton Mowbray Distributor Road (MMDR) be approved;

 

c)     That the Director of Corporate Resources be authorised, following consultation with the Directors of Law and Governance and Environment and Transport, and with the Cabinet Lead Members for Resources and Highways and Transportation, to:

 

                          i.          enter, subject to confirmation by Melton Borough Council of the acceptance of the principle of a finance agreement with Leicestershire County Council, into a Grant Determination Agreement with Homes England; 

 

                         ii.          finalise and enter into the necessary agreements to facilitate the securing of appropriate risk mitigation with Melton Borough Council, in line with the principles set out in paragraphs 57 – 59 of this report;

 

                       iii.          finalise and enter into the necessary agreements to facilitate the delivery of the scheme and to secure appropriate risk mitigation with relevant land owners and developers, in line with the required approach to Homes England HIF delivery;

 

d)    That the Director of Environment and Transport be authorised, following consultation with the Director of Corporate Resources, the Director of Law and Governance and the Lead Members for Resources and Highways and Transportation, to enter into such contracts as are necessary to progress the HIF scheme delivery and make minor amendments to the delivery programme;

 

e)    That the financial position of the County Council and the future pressures arising from growth outlined in paragraphs 19 – 23 of this report be noted, together with the emerging approach set out in paragraphs 60 – 65 of this report, which underpins the requirement for the risk-sharing agreement with Melton Borough Council to mitigate risk for the County Council, whilst supporting sustainable planned growth arising from the current requirements of the Melton Local Plan;

 

f)       That it be noted that the risk-sharing agreement reflects and understands the need to allow a substantial amount of the County Council’s risk to be transferred to Melton Borough Council;

 

g)    That it be noted that, following consultation, the County Council at its meeting in February 2021 will be asked to consider a policy which enables the County Council to support large infrastructure schemes in line with the Local Plans of district councils whilst mitigating the significant financial risks to the County Council; 

 

h)    That the current position with regard to the Melton North Sustainable Neighbourhood Masterplan be noted and that officers continue to engage with Melton Borough Council to support its delivery of a robust masterplan;

 

i)      That the Cabinet is disappointed by the tone of the letter from the Leader of Melton Borough Council which misunderstands the County Council’s position in that the issue is not what is affordable to Melton Borough Council but a request to carry out their role as local planning authority in a way which mitigates the financial risk to the County Council and should be seen in the context of the MSSN now being a financially viable development;

 

j)      That in the event of Melton Borough Council’s Cabinet rejecting the County Council’s request, the County Council would take no further action until the views of the developers were known, providing Homes England would allow a further extension of the grant acceptance deadline.

 

(KEY DECISION)

 

REASONS FOR DECISION:

 

1.     Pre-contract conditions must be met in order to accept and access the HIF grant offer from Homes England in demonstrating that:

 

·       the scheme has a business case for investment

·       the scheme supports a viable development that will deliver housing

·       developers and land owners are supportive of the scheme.

 

2.     Work undertaken by the County Council, in collaboration with Melton Borough Council and the development industry, has resulted in the County Council being in a position to meet these pre-contract conditions, including the need to replace the current masterplan for the MSSN.

 

3.     In 2015 the County Council resolved to support the sustainable growth planned for Melton as part of the Local Plan process.  The County Council recognised the need to support housing in sustainable locations and the potential challenges to achieving this, given the significant upfront infrastructure costs identified.

 

4.     In submitting the initial bid to Homes England, the County Council recognised the need to support the delivery of the MSSN with grant funding to ensure deliverability and prevent unplanned growth from coming forward in Melton Borough.  Work undertaken to meet the conditions of the offer demonstrates that the viability and deliverability of the MSSN will in large part be dependent on the HIF grant being accepted. Delivery without additional grant funding or public sector coordination will be extremely challenging.

 

5.     The programme to deliver the MSSN is complex and will depend on the procurement of several specialist resources, including in the fields of law, planning, construction and design. The recommendations ensure that officers have the necessary authority to work with partners against an agreed framework for HIF delivery and meet the required delivery timetable set by Homes England.

 

6.     The recommendations ensure that officers have the necessary authority to negotiate on behalf of the County Council to manage delivery and risk.

 

7.     In addition, the recommendations recognise the need for the Council to develop a financially sustainable model to support the growth needs of Leicestershire.

 

8.     Robust planning masterplans are one key way of ensuring successful delivery of strategic housing developments. This is particularly so in regard to the planned infrastructure as envisaged by the MSSN, to enable the County Council to recoup the forward funding in respect of the MMDR (required as a condition of Homes England grant funding through the planning process (S106 agreements)) plus other County Council requirements, e.g. education provision. The same principle applies to the Melton North Sustainable Neighbourhood (MNSN).