Abbeydale Hemsworth Extra Care Scheme
Report to: Cabinet 13th September 2006
From: Executive Director, Neighbourhoods & Community Care & the Director of Finance
1. Reason for Report
1.1 To advise members of the development of Extra Care Housing in the South of Sheffield.
1.2 To gain approval to undertake a single procurement process on the Hemsworth site for the development of Extra Care housing for older people.
1.3 To gain approval to place the Abbeydale site on the open market to release the land values.
2.0 Background
In September 2002 Cabinet approved the disposal of the sites at Abbeydale and Hemsworth for use as Extra Care Housing. This was to deliver the of Neighbourhood’s Strategy for Older Peoples Housing options and choices and the Social Services' strategy for decommissioning care homes, and reducing an over reliance on care homes, whilst improving the capacity and choice of care options. Approval given by Cabinet stipulated the sites should be disposed of in a competitive tendering exercise and made specific reference to the care contract, the facilities available and the nature and services provided. The tendering exercise was held in late 2002/early 2003 and unfortunately yielded bids that did not match the expectations of the Cabinet approval.
On 4th February 2004 Cabinet granted authority for the disposal of sites at Abbeydale and Hemsworth for the development of Extra Care Housing on a part commercial/ part social-rented basis. The development of Extra Care Housing is a corporate priority. Delivery through investing land value should enable effective development of extra care housing within the market and balance the requirement to achieve capital receipts for land. Methodist Homes for the Aged (MHA) were selected as the preferred partner. In November 05 MHA advised the Council that there were unable to deliver the schemes within the agreed financial envelope.
The sites were re-tendered and in June 2006 eight sealed bids were received from a range of private and public sector organizations to deliver housing and support solutions for older people. The tender evaluation panel established a number of threshold criteria to deliver a shortlist of partners whose submission required further evaluation and analysis.
The threshold criteria were:
- Minimum capital receipt
- Delivery of social rented housing / tenure mix
- Delivery of extra care housing scheme / independent living housing and support options for older people.
The procurement process was subjected to internal review to ensure clarity of process and evaluation and consider the balance between the provision of Extra Care Housing and the capital receipt required.
3.0 Current Position
The market analysis of the submissions and the short-listed partners indicates that the market is unlikely to deliver a mixed tenure development inclusive of social rented housing on the Abbeydale site. Of the four partners short-listed on the minimum threshold criteria only two suggested that any social rented housing could be provided on the Abbeydale site. The two bids that demonstrated an intention to place social rented on the Abbeydale site included density assumptions in excess of 50% above the outline planning guidance.
The re-tender documentation did not allow for variant bids, therefore excluding bids for Hemsworth only.
3.1 Options for delivery
Option One – Reject all offers and place both sites on the open market to release the land values. The City Council’s planning policy on affordable housing would require the provision of affordable housing on the sites or exceptionally payment of a commuted sum. In the present case a commuted sum could be made available to deliver the older people’s housing strategy in the City.
Option Two – Re-advertise and undertake a single procurement exercise on the Hemsworth site for the development of Extra Care housing for older people. Place the Abbeydale site on the open market to release the land values, the Abbeydale site is likely to be developed for ‘market’ housing.
It is intended that any commuted sum derived from the application of the Council’s Supplementary Planning Guidance (affordable housing policy) under section 106 of the Town & Country Planning Act 1990 with respect to the Abbeydale site be used to fund further provision of Extra Care Housing in the City. In the event that the Abbeydale site is developed for non-residential use, it is intended that an amount of the capital receipt equivalent to a commuted sum under section 106 will be used to fund further provision of Extra Care Housing. Recommendations to this effect will be made to the appropriate decision making body at the relevant time.
3.2 Risk
The primary project risk is the ability to deliver within an agreed timescale following tender evaluation process. To minimize the risk as part of the initial submission the bidders must commit to the following –
- Define the tenure mix
- Fix the capital receipt offer
- Confirm agreement of the SCC standard lease and fees
- Meet the Sheffield standard for the provision of housing related support and case within the threshold costs.
4.0 Financial Implications
The financial implications are contained within Appendix A – closed due to commercial confidentiality.
5.0 Property Implications
The procurement process should ensure the development of an extra care scheme at Hemsworth. The Abbeydale site will be marketed on the open market for development, with the most likely development being residential.
6.0 Human Resource Implications
There are no issues arising directly from the recommendations in this report.
7.0 Equalities
There are no issues arising directly from the recommendations in this report. The provision of housing options support and care solutions for the aging population is entirely consistent with the equalities standard and framework.
8.0 Conclusion
Despite the difficulties in delivering Extra Care Housing provision though land value to date, it is felt that it is essential to pursue a final procurement process on the Hemsworth site to deliver key housing options and choices within the South West of the City. The ability to deliver the required level of housing through grant funding is limited.
9.0 Recommendations
The resolution of Cabinet made on the 4th February 2004 with respect to the disposal of sites for extra-care housing be rescinded in so far as it applies to the Abbeydale site. Tenders be sought for the Hemsworth site in accordance with the resolution with the resolution of the 4th February 04. The Abbeydale site be sold as surplus to requirements.