North Lanarkshire Council - New Supply Development Pathfinder (2021 / 22)

Description

North Lanarkshire Council (the Council) are undertaking an innovative ‘development pathfinder’ approach for the purchase of newly built new affordable homes for social / affordable housing in North Lanarkshire. The scale of the Councils ambitious new build programme presents a number of delivery challenges, not least in procuring enough homes that meet the required standard and which can be delivered in a cost-effective and timely way. Therefore it is proposed to expand the use of ‘off the shelf’ acquisitions of completed homes from private developers. The Council already acquires completed homes from developers on private sector sites as part of developers’ affordable housing policy obligations in the Cumbernauld housing market area and in Ravenscraig, Motherwell. At time of publication of this Prior Information Notice, 117 homes have been purchased in this way with agreement for a further 104 to be purchased in future. In addition to the agreement detailed above, a ‘development pathfinder’ approach is proposed whereby the Council would proactively engage with developers about bringing forward private sector housing sites, on which the Council may be able to purchase properties. This approach may bring forward additional affordable homes and reduce both costs and risks associated with the Councils new build programme. It may also be attractive to developers as it could de-risk their investments (by providing a guaranteed buyer for at least some of the homes on a site) and secure their supply chains. It may also enable the development of alternative tenures, including mid-market rent and shared equity. The approach could therefore help stimulate private sector delivery, attracting new jobs and residents into North Lanarkshire Under the development pathfinder approach, the Council would not undertake a formal procurement procedure by issuing tender documentation specifying its requirements for a particular site etc. Instead, the Council would engage directly with the market, providing outline guidance on its ambitions on the location, site mix etc. for acquisition of units in particular geographical areas. The Council would, in asking developers to come forward with proposed sites, be under no obligation to purchase homes. The Council would, on a case by case basis, have to satisfy itself that it is acting within its powers, reflecting on its obligations under procurement legislation. Any proposals received would be evaluated to ensure value for money can be demonstrated. This approach would by necessity result in less control being exercised by the Council in respect of the design of homes that may be built and the pace of development, relative to those projects where the Council acts as employer in a traditional works contract. Any agreements made with developers will be subject to a ‘longstop’ set out in missives, enabling the Council to break the agreement should the development not be delivered within the required timescales. To ensure that the Council can effectively engage with interested parties and efficiently consider and respond to any enquiries and proposals made, the Council will pilot this approach across North Lanarkshire where there is higher demand and / or a significant re-provisioning programme. As outlined above private housing sites in the Cumbernauld housing market area are already subject to obligations in respect of the Affordable Housing Policy - SPG 13 (https://www.northlanarkshire.gov.uk/planning-and-building/planning-applications/our-supplementary-planning-guidance) which can result in the Council, or a housing association, purchasing homes from developers.