Breckland Bridge Extension
Meeting: 14/10/2019 - Cabinet (Item 78)
Report of Executive Member for Contracts & Assets, Councillor Paul Hewett.
Appendices are private & confidential and will be discussed under Agenda Item 17 if applicable.
(The Executive Member for Finance and Growth, and Maxine O’Mahony the Executive Director for Strategy and Governance left the meeting prior to this item).
The Executive Member for Contracts and Assets presented the report to Members that asked if the Council should continue the Breckland Bridge property development joint venture partnership. He highlighted that there were some changes in the scheme due to lessons that had been learnt along the way. Whilst it was considered a risk for the Council in terms of costs if projects should overrun, everything had been put into place to mitigate those risks. He went onto recommend Option two to Members.
Reasons for Recommendation:
Overall the performance outputs of the joint venture have been good based on the two projects which had been completed (Riverside and Mileham) and the forecast outputs from the third project (Chapel Road, Attleborough) were positive. It had been an effective partnership so far and the Council had been able to obtain income from land receipts and loan interest. The joint venture had also added capacity to the Council’s property teams and thus access to strategic property advice. The guidance had been efficient and cost effective and delivered at speed which would otherwise had to have been procured. It should not be under-estimated given the additional activity the joint venture had undertaken. The joint venture had also undertaken work to prepare sites for a more delivery-focused business plan over the next period, subject to the decision to continue.
The Council needed to consider whether to continue with the partnership and the main reasons for doing so were set out below:
· Breckland Bridge was now established and should deliver both a financial return and housing return over the next 5-10 years.
· The next business plan was financially viable, based on the assumptions upon which it had been modelled and providing the risks were managed and the controls embedded within the legal documentation were adhered to.
· There were added benefits to being in the partnership and the changes that were proposed reflected the learning from the first business plan period. This would improve the outputs for the second period which would be more delivery focused with less overhead on the company. It would not lose the flexibility of receiving services from the partnership as required. The re-focused financial vision would also assist the joint venture.
· Delivery over the initial period had been good and the partner Land Group wanted to stay involved in the joint venture.
· Projects had been successfully delivery on time and within budget and achieved what they set out to achieve and they (Mileham) had made a financial surplus.
· The ability to access additional property development expertise and skills efficiently.
· Additional ad-hoc work property related could be undertaken without the need for procurement.
· Allowed for delivery quickly without need for individual procurement on individual projects.
· There was an established and trusted partnership infrastructure and there was no need to re-procure the partner.
· By continuing the joint venture, ... view the full minutes text for item 78
To receive a presentation from the Strategic Property Manager Ralph Burton.
The Deputy Leader and Executive Member for Governance, Paul Claussen stated that the Breckland Bridge extension was a key decision as to whether Breckland Council should continue with the Breckland Bridge Partnership.
The Strategic Property Manager explained that in 2014 Breckland Council procured Land Group, a private sector company with the intention to create a joint venture that would be based on the development of some of the Council’s property assets. The entity that was created was Breckland Bridge and it was based on a local asset backed vehicle model of delivery where the Council provided the assets and the other partner provides the equity, skill and capacity, and access to finance if required, to undertake property development schemes. Breckland Bridge was set up as a long term partnership with a review point at the 5 year anniversary.
The Strategic Property Manager summarised the following details:
· the partnership had delivered projects to meet property development aspirations, providing a variety of regeneration housing and financial outputs so far;
· added capacity to asset teams, provided good quality property advice and guidance;
· overall the performance, or delivery track record has met expectations;
· created a solid foundation of the partnership in the first phase.
Following a series of questions Members noted the report.