MD1589 Starter Homes Local Authority Funding Programme - London

Type of decision: 
Mayoral decision
Code: 
MD1589
Date signed: 
17 March 2016
Decision by: 
Boris Johnson MP (past staff), Mayor of London

Executive summary

The Starter Homes Local Authority Funding Programme is a national fund launched by the Minister of State for Housing and Planning and the Mayor of London in October 2015.  The Fund invited bids from across England to accelerate the supply of local authority land available for exemplar Starter Homes development.  

The funding will help local authorities prepare vacant and underused brownfield land so that Starter Homes can be made available for first time buyers contributing to a national target of 200,000 Starter Homes by 2020.

The successful bid in London will be administered by the Greater London Authority (GLA).

 

 

Decision

That the Mayor approves:
-    the allocation of £854,718 to the London Borough of Barking & Dagenham (LBBD) (subject to receipt of funding from the Department for Communities and Local Government and entry into contract with LBBD), from the Starter Homes Local Authority Funding Programme to enable them to prepare land for Starter Homes development
-    entry into agreement with LBBD for the delivery of  their funding allocation from the Starter Homes Local Authority Funding Programme; and 
-    entry into an exchange of letters with the Department for Communities and Local Government for the receipt of £854,718 funding by the GLA for the successful London bid and for agreement to administer the programme in London.  

 

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    In October 2015, the Department for Communities and Local Government (DCLG) and the Mayor of London launched the Starter Homes Local Authority Funding Programme.  Local authorities were invited to bid for a share of £10m capital funding to accelerate the supply of local authority land available for exemplar Starter Homes development  The prospectus and additional information are available here: https://www.gov.uk/government/collections/starter-homes-local-authority-....

1.2    Funding will be made on a grant funding non-recoverable basis and must be spent by March 2016 so that Starter Homes can be built in 2017 to 2018.  The funding will help local authorities prepare exception sites, such as vacant and underused brownfield land, so that high-quality homes can be made available for first time buyers and contribute to a national target of 200,000 Starter Homes over the course of this Parliament. 

1.3    The land eligible for funding in this programme must be exception sites, therefore not currently identified for housing in a local or neighbourhood plan or within the authority’s 5 year housing land supply.

1.4    All bids were assessed against the criteria set out in the funding prospectus by a panel comprising representatives of the GLA, DCLG and Homes and Communities Agency.  There was only one successful bid in London – from the London Borough of Barking and Dagenham (LBBD).

 

Objectives and expected outcomes

2.1    The GLA will enter into an exchange of letters with DCLG in order for the GLA to administer the Fund in London.  DCLG will transfer the funding for the successful London bid to the GLA in order that the GLA can enter into a contract with LBBD and make the grant payment.

2.2    The funding will be spent on remediation works and site surveys on a site between Whiting Avenue and Gurdwara Way in Barking that is expected to deliver 44 new homes.  This land is currently owned by LBBD, but is not currently identified for residential development.  The borough completed the tendering process for the works at the end of December 2015 and will start works in March 2016. The funding will be drawn down in its entirety by March 2016.

2.3    Once the remediation and site survey work has been completed the borough will then be able to procure a developer to bring the site forward for development of the Starter Homes by March 2017. LBBD confirmed that the housing to be delivered on the site will comply with the Government’s Starter Homes regulations.  

2.4    The statutory framework for Starter Homes has not yet been fully published by the Government. LBBD will therefore review the product to be delivered with the GLA at the time the final regulatory framework surrounding Starter Homes has been published.  This will ensure that the homes to be delivered will meet with the agreed policy once it has passed through the full legislative process.

 

 

Equality comments

3.1    In administering this programme in London the GLA is implementing DCLG policy by giving grants to local authorities to carry out works to land, not providing grants or services to individuals.  The funding agreement requires the local authority to use the grant in accordance with the Government’s Starter Homes Exception Sites Planning Policy (as amended from time to time).  This means that if the policy changes then the obligations in the funding agreement require compliance with the amended policy.

 

Other considerations

4.1    The timescales for this fund are challenging, however the borough has detailed their commitment to meet them in their bid and are preparing the necessary steps to procure the remediation and site survey works once the allocation is confirmed and they are in contract. Officers will remain in regular contact with the Borough to discuss any issues and concerns as they arise.

4.2    The provision of these Starter Homes is additional to existing new supply projections included in the Mayor’s Housing Strategy. These homes will contribute towards the Mayor’s target to deliver 42,000 homes annually. The homes also help to support an increase in Londoners able to access a form of low cost home ownership by offering a substantial discount on the open market value.  

 

 

Financial comments

5.1    The document is seeking approval for the GLA to make a grant payment of £854,718 to the London Borough of Barking and Dagenham (LBBD) towards its Starter Homes project.  This was the only successful Starter Homes bid in London, and DCLG is fully responsible for funding this project.  The grant will be used to fund the cost of preparing the land for the Starter Homes development, and will be paid in arrears to LBBD.  DCLG will pay the grant to the GLA and LBBD will reclaim its costs from GLA when the preparation work to the land has been completed.  This initial phase of the project is expected to be completed by 31 March 2016. No major financial risks to the GLA, has been identified within this arrangement.

 

Investment and Performance Board

7.1       This decision was considered and endorsed by Housing Investment Group on 8 March 2016.

 

Planned delivery approach and next steps

Activity

Timeline

Announcement of allocations

December 2015

Completion of funding agreement

March 2016

Procurement of funded works by Borough

February 2016

Completion of funded works by Borough

March 2016

Start on site for Starter Homes

March 2018

Practical completion of Starter Homes

March 2019