(2) To recommend that Full Council (at its extraordinary meeting on 16 January 2023) approves the continuation of the project until officers have completed the required due diligence described in recommendations (3) and (4) below and report back to Full Council in July 2023.
(3) To request officers to provide alternative risk assessed option appraisals other than to proceed with the original Full Council approved scheme, including all possible mitigations and alterations to the current funding and specifications, indicating by use of a range of values where specific data is not available, and a full explanation of assumptions with reasons, sufficient to enable Members to make a fully informed decision on how it wishes to proceed at Full Council in July 2023.
(4) To request officers to update the project with the latest assumptions, indices and valuations and report back to the July 2023 Full Council.
(5) To approve the transfer of £72.062m from the provisional capital programme to the approved capital programme for payments which the Council is obliged to make to TWUL under the TW Agreement for 2022/23 and 2023/24, for costs necessary to meet the milestones set within the Homes England HIF agreement and design cost necessary to prepare the planning application for the SCC Waste Transfer Centre and construction of the New Council Depot.
(6) To delegate to the Strategic Director of Place, in consultation with the Lead Councillor for Regeneration, and Lead Councillor for Finance and Planning Policy, authority to enter into such other contracts and legal agreements connected with the WUV as may be necessary in compliance with Procurement Procedure Rules and within the approved budget.
Reasons:
The projected deficit, and significantly wide variation and uncertainty of the outcome of this project, renders the project as no longer compliant with the Full Council approval to break even at zero cost to the Council, i.e. the project has greater or equal value to the receipts received. At this point Officers do not have Full Council authority to incur any further expenditure until councillors have considered their full options and implications. However, temporarily stopping expenditure is not realistic due to contractual commitments.
The recommendations will:
· Ensure that there is sufficient understanding of the projected financial forecast of the programme.
· Ensure that there is sufficient funding in the approved programme to cover the phase 1 & 2 infrastructure costs, SCC Waste Transfer Centre design cost, construction of the new Council Depot and the payments which the Council is obliged to make to TWUL under the Thames Water Agreement for 2022/23 and 2023/24.
· Ensure that statutory service agreements and construction agreements can be entered into for the delivery of services and infrastructure for the development and to ensure that Homes England Housing Infrastructure Fund (HIF) milestones are achieved.
· Support the delivery of the Council’s Corporate Plan (2021-2025) priorities, by supporting high quality development of a strategic site, creating employment opportunities through regeneration and facilitating housing that people can afford.
Other options considered and rejected by the Executive:
OPTION 1: The Council could decide to continue with the project, but not implement the proposed mitigations. This was not recommended given the potential financial exposure facing the Council as outlined in Section 4 of the report.
OPTION 2: The Council could decide to exit the project. Non-delivery of the Weyside Urban Village programme and the associated c.1500 homes would have implications for the delivery of the Local Plan. Further information was contained in exempt Appendix 1.
Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:
None.
a) That the current financial position of WUV at the planning committee meeting gateway be endorsed.
b) That the Director of Strategic Services,in consultation with the Leader of the Council and the Lead Councillor for Regeneration, be authorised to finalise heads of terms in accordance with those attached to the report and thereafter to negotiate, sign and complete the legal agreement with Surrey County Council in accordance with the finalised heads of terms and to proceed with implementation of the relocation of the Waste Transfer Facility accordingly.
c) That the Director of Strategic Services, in consultation with the Lead Councillor for Regeneration, be authorised to enter into such other contracts and legal agreements connected with the Weyfield Urban Village (WUV) project as may be necessary at reasonable costs within the approved budget.
d) That the commencement of infrastructure procurement following receipt of a satisfactory planning consent pursuant to Hybrid planning application submitted on 15 December 2020 (Reference No 20/P/02155) be endorsed.
e) That the transfer of £67.185m from the provisional capital programme to the approved capital programme for payments which the Council is obliged to make to Thames Water under the TW Agreement for 2021/22 and 2022/23, for costs necessary to meet the milestones set within the Homes England HIF agreement and design cost necessary to prepare the planning application for the SCC waste transfer facility be approved.
Reasons:
a) It was agreed that the project team would report the financial position of WUV at the planning committee meeting gateway.
b) To ensure that there is sufficient funding in the approved programme to cover the phase 1 Infrastructure costs, SCC waste transfer design cost and the payments which the Council is obliged to make to TWUL under the TW Agreement for 2021/22 and 2022/23.
c) To inform the Executive of the Commencement of Infrastructure Procurement following receipt of a satisfactory planning consent.
Other options considered and rejected by the Executive:
None.
Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:
None
Decision of the Leader:
1. That the Managing Director be authorised, in consultation with the Leader of the Council, to sign and complete the Deed of Variation to the Thames Water Agreement with Thames Water and to proceed with the implementation of the relocation of the Sewage Treatment Works and associated works.
2. That, pursuant to s122 of the Local Government Act 1972, the Council owned land shown outlined in blue on the plan at Appendix 1 to the report submitted to the Executive be appropriated for planning purposes in connection with the implementation of the Weyside Urban Village in so far as it is not already held for those purposes.
3. That it be noted and recorded that the land to be acquired by the Council from Thames Water pursuant to the Thames Water Agreement (as varied) and any further land to be acquired by the Council for, or in connection with, the Weyside Urban Village development is to be acquired pursuant to s227 of the Town & Country Planning Act 1990 for planning purposes to enable the implementation of the Weyside Urban Village.
4. That the call in procedure be waived in respect of the decisions referred to in paragraphs (1) to (3) above.
Reason(s):
To enable the completion of the Deed of Variation at the earliest opportunity and to ensure that there is clarity as to the powers under which, and the purposes for which, land needed for or in connection with the Weyside Urban Village is held or acquired by the Council.
Other options considered and rejected by the Leader:
None
Details of any conflict of interest declared by the Leader and any dispensation granted:
None
The Executive
RESOLVED: That the Managing Director be authorised, in consultation with the Leader of the Council, to sign and complete the Grant Agreement with Homes England to implement the infrastructure works and draw down the grant expenditure.
The Executive further
RECOMMEND (to Council):
(1) That an additional capital supplementary estimate of £274.057 million be approved to allow a total capital budget of £359.504 million to enable the Council to deliver the infrastructure phase of the Weyside Urban Village Development.
(2) That £5.781 million of the additional capital budget be placed on the approved capital programme to progress the allotment relocation and funding of the Thames Water agreement costs during 2019-20.
(3) That the Council acts as Infrastructure Developer until completion of the Thames Water Infrastructure in 2026.
Reasons:
There are financial, economic and social benefits:
The budget would enable the Council to deliver the infrastructure for the development ensuring deliverability and control.
The land value would be increased by the infrastructure phase being delivered upfront and ahead of Land Parcel Sales.
The project would also deliver:
· 1500 new homes including 600 Affordable Homes
· 2000 square metres of community space
· 6500 square metres of employment space
· A new relocated fit for purpose Thames Water Sewage Treatment Works
· Extensive infrastructure improvements
· This scheme contributes to the delivery of the adopted Local Plan
· This scheme contributes £233 million in economic impacts for Guildford
The project has significant infrastructure to be put in place to enable the above critical success factors to be delivered. Allocating the capital budget would enable all of the infrastructure phase to be delivered and would de-risk the site in readiness for the next stage to facilitate the delivery of homes.
Alternative options considered and rejected by the Executive:
To cease the project retaining the site in its existing state.
Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:
None