PART II
The report on the following item is
not for publication by virtue of exempt information of
the description contained in Paragraph 6 of Part 1 of Schedule 12A of the Local
Government Act 1972, as amended by the Local Government (Access to
Information)(Variation) Order 2006. Rule 9.10.4 of the Constitution also refers.
Extra Care Housing Development,
Hungerford
Title of Report:
(Paragraph 6 – information relating to proposed action to be taken by the Local
Authority)
Report to be
Management Board
considered by:
Date of Meeting:
01 July 2010
Forward Plan Ref:
n/a
Purpose of Report:
To seek agreement to establish a pre planning cost
risk sharing arrangement with Sovereign South &
West (SSW), in the context of partnership working to
deliver a key Supported Living Development project,
as part of the Putting People First Programme of work.
Recommended Action: The Executive resolves
(1) to support and implement the establishment of pre-
planning risk sharing agreement as set out in the
report.
(2) to delegate to Head of Housing and Performance in
consultation with the Head of Legal and Electoral
Services and Head of Finance, authority to negotiate
the Risk Sharing Agreement with SSW
(3) to delegate to the portfolio holder for Adult Social
Care authority to enter in to the Cost Risk Sharing
agreement.
Reason for decision to be
The requirement for the development of extra care
taken:
housing, to offer more appropriate care options for older
people is a key strategic aim for the Council and one of
the main methods of delivering savings for Adult Social
Care identified in the Medium Term Financial Strategy.
The initiation of these developments requires considerable
upfront investment and commitment from our partners;
achieving planning consent can result in costs in excess of
£500k. Whilst the Council is committed to supporting
these developments, meeting the demands of the planning
system will inevitably require substantial investment to
West Berkshire Council
Management Board
1st July 2010
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ensure plans are acceptable and even then there is the
potential that consent will not be achieved. The current
economic climate means that concerns around these risks
have heightened and our partners/RSLs require stronger
assurances of the Councils commitment to working with
them to meet identified priorities. It is proposed therefore
that consent is given to the establishment of a risk sharing
agreement, which would be negotiated to minimise the risk
of its being enacted.
Statutory:
Non-Statutory:
Other:
Other options considered:
Key background
Older Peoples Commissioning Strategy
documentation:
Putting People First - Adult Social Care Strategy
'Single Conversation' - Homes and Communities Agency
The proposals will also help achieve the following Council Plan Theme(s):
CPT3 - Affordable Housing
CPT7 - Safer and Stronger Communities
CPT10 - Promoting Independence
CPT11 - Protecting Vulnerable People
CPT13 - Value for Money
The proposals contained in this report will help to achieve the above Council Plan Priorities
and Themes by:
Delivery of 46 units of affordable housing, creating more appropriate support and care
opportunities for older people to enable them to remain living independently in the
community in a secure and safe environment. Enable the Council to commission care
services that offer greater value for money than alternative residential care services.
Portfolio Member Details
Name & Telephone No.:
Councillor Joe Mooney - Tel (0118) 9412649
E-mail Address:
xxxxxxx@xxxxxxxxx.xxx.xx
Date Portfolio Member
15 March 2010
agreed report:
Contact Officer Details Name:
Tandra Forster
Job Title:
Contracts & Commissioning Manager
Tel. No.:
01635 519248
E-mail Address:
xxxxxxxx@xxxxxxxxx.xxx.xx
West Berkshire Council
Management Board
1st July 2010
This Exempt Report should be printed on GOLD paper only
Implications
Policy:
Financial:
The proposed pre planning cost risk sharing arrangement could
commit the Council to a maximum of £175k in abortive costs and
this would have to be funded through the Council's Risk Fund.
However, the report details a range of controls that can be put in
place to help mitigate against the risk of the project not
proceeding and avoid having to incur these abortive costs.
Personnel:
Legal/Procurement:
Section 2.4 of the Report identifies the risk and controls that
need to be in place for such an agreement. Any agreement will
require clear instructions on what level of controls are considered
acceptable together with a maximum limit for each head of
expenditure needs to be defined.
Property:
Risk Management:
See section 2
Equalities Impact
This project supports age equality and non-agreement could
Assessment:
jeopardise this if it is not able to go ahead.`
Corporate Board’s
Further clarification required on decisions and amended report to
View:
be considered at Management Board.
NOTE: This section does not need to be completed if your report will not progress
beyond Corporate or Management Board.
Is this item subject to call-in?
Yes:
No:
If not subject to call-in please put a cross in the appropriate box:
The item is due to be referred to Council for final approval
Delays in implementation could have serious financial implications for the Council
Delays in implementation could compromise the Council’s position
Considered or reviewed by Overview & Scrutiny Commission or associated Task
Groups within preceding six months
Item is Urgent Key Decision
West Berkshire Council
Management Board
1st July 2010
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Executive Summary
1.
Introduction
1.1
The requirement for the development of extra care housing to offer more
appropriate care options for older people, has been identified in both the Council’s
Older Peoples Commissioning Strategy and the Putting People First (PPF) Strategy
for Adult Social Care (ASC).
1.2
The provision of extra care sheltered housing, as a real alternative to more costly
residential care, is one of the key strands of work that ASC is undertaking to
support the delivery of a significant level of savings that have been identified in the
Medium Term Financial Strategy (MTFS).
1.3
Within the governance structure of PPF, the Supported Living Development
Programme (SLDP) has the lead responsibility for the delivery of the associated
projects, of which one is an extra care sheltered housing scheme in the west of the
district.
1.4
The Priory Court Project in Hungerford is a 46 unit extra care housing development
for people aged 55 plus, which will be developed by Sovereign South & West
(SS&W) on previously developed land within their ownership. The project will also
include the development of a 29 unit sheltered scheme for older people with
support needs.
1.5
Given that the development project has been prompted in direct response to
identified council priorities, SS&W have indicated that their Board have concerns
that achievement of the overall planning consent could lead to costs in excess of
£500k.
1.6
In light of these concerns, Sovereign has asked if the Council will enter into a Risk
Sharing Agreement to enable the project to proceed. This means is that the
Council would accept a proportionally capped share of the pre-planning costs in the
event that the project fails to achieve planning consent.
1.7
Advice has been sought from legal and finance who have referred to external
auditors KPMG, to establish if the local authority can enter into this type of
agreement. It has been confirmed that this is possible, but that any agreement
would need to be sanctioned by Executive. This sanction would have to be on the
basis of a balanced view of the risks in proceeding with the agreement, against the
benefits that will be achieved for the district through the delivery of the project.
2.
Conclusion
2.1
Development of extra care housing is a clear Council priority as set out in the Older
Peoples Commissioning Strategy and the Putting People First Strategy. The Priory
Project will offer more choice and control in the way older people receive care,
creating better outcomes and improved well-being. It will also support the delivery
of savings identified as part of the Medium Term Financial Strategy essential to
meet the rising demand for services for older persons across the district.
West Berkshire Council
Management Board
1st July 2010
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2.2
It is recognised that by entering into a legally binding agreement of this nature that it
is new ground for the Council. The request to do this reflects the pressures that
have been created by the current economic climate and the consequential anxieties
that have arisen for partners/RSLs in bringing forward new projects. It also raises a
broader issue in respect of large capital building projects developed to meet the
Council’s priorities and how the Council manages risk in these projects, despite
being a relatively small cash limited authority.
2.3
With the balance of risk, control and benefit satisfied, it is recommended that
Members agree to the development of a risk sharing agreement between the
Council and SS&W and that the agreement is negotiated through WBC legal team,
to minimise the risk of it having to be enacted. The work to be carried out with a
clear mandate to enable the Council to bring forward an extra care sheltered
housing development in partnership with SS&W in the west of the district.
2.4
It is also recommended that following the approval of the council to enter into the
agreement, that the final approval of the detailed agreement is delegated to the
Portfolio Member for Adult Social Care, to be taken as an individual decision.
West Berkshire Council
Management Board
1st July 2010
This Exempt Report should be printed on GOLD paper only
Executive Report
1.
Introduction
1.1
The requirement for the development of extra care housing, to offer more
appropriate care options for older people, has been identified in both the Council’s
Older Peoples Commissioning Strategy and the Putting People First Strategy for
Adult Social Care.
1.2
The Priory Court project, an extra care housing scheme, forms part of a range of
projects within the Supported Living Development Programme (SLDP), the aim of
which is to promote choice and independence for vulnerable people in West
Berkshire.
1.3
The SLDP is a key part of Putting People First which is the Council’s overarching
strategy for transforming adult social care in West Berkshire.
1.4
The Priory Court project in Hungerford is a 46 unit extra care housing development
for people aged 55 plus, which will be developed by Sovereign South & West
(SS&W) on previously developed land within their ownership. The project will also
include the development of a 29 unit sheltered scheme for older people with
support needs.
1.5
SS&W have estimated that the extra care housing scheme will cost £8.9m to
develop of which they will contribute £6.6m and anticipate that the Homes and
Communities Agency (HCA) will make a grant allocation of £1.3m. It is proposed
that the Council contributes £1m of pre-allocated S106 funds for construction costs
and £500k capital for fixtures and fittings that are specifically required for an extra
care sheltered scheme, for example kitchen and laundry provision, the build is
forecast to complete by Autumn 2012.
1.6
Given that the development project has been prompted in direct response to
identified council priorities, SS&W have indicated that their Board have concerns
that achievement of the overall planning consent could lead to costs in excess of
£500k.
1.7
In light of these concerns, Sovereign has asked if the Council will enter into a Risk
Sharing Agreement to enable the project to proceed. This means is that the
Council would accept a proportionally capped share of the pre-planning costs in the
event that the project fails to achieve planning consent.
2.
Risks and benefits
2.1
Advice has been sought from legal and finance who have referred to the external
auditors KPMG, to establish if the local authority can enter into this type of
agreement. It has been confirmed that this is possible, but that any agreement
would need to be sanctioned by Executive. This sanction would have to be on the
basis of a balanced view of the risks in proceeding with the agreement, against the
benefits that will be achieved for the district through the delivery of the project.
2.2
Pre-construction costs attached to the project have been estimated at £500k. For
the purposes of the agreement it is proposed that a proportionate amount of 50% of
West Berkshire Council
Management Board
1st July 2010
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the total pre-construction costs would be considered, equating to a maximum
amount of £250k. Of the £250k it is proposed that the council would be liable for a
maximum of 70% of the cost equal to £175K and in effect 35% of the total pre-
construction costs.
2.3
In consultation with KPMG the following risks have been identified:
(1)
Potential for the agreement to compromise the independence of the
planning process
(2)
Risk that the agreed triggers for payment are not clearly defined and
that the Council is as a consequence compelled to enact payment for a
failure that is either inappropriate or should have been controlled
(3)
Financial risk to the Council arising from the enactment of the
agreement
2.4
The table below shows the risks identified and the controls that will be put in place
to mitigate them:
Risks
Controls
Potential for the agreement to
Ensure that detailed pre-planning application meetings
compromise the integrity of the are held and that all parties are represented
planning process
SLDP Project Team to work with planning to properly
understand and interpret advice provided through the
pre-planning stage and to ensure that this is factored into
the final planning application
Robust governance arrangements are put in place to
ensure that the joint project management of the
development project does not offer the opportunity for
compromise of the council decision making process, on
the basis of the financial risk arising from a refusal of the
planning application
Risk that the agreed
Negotiation of the agreement led by the legal
triggers for payment are
representative of the Council and in consultation with all
not clearly defined and
relevant council services, to ensure the triggers and
the council is compelled
controls are agreed and robust.
as a consequence to
enact payment for a
Triggers and controls put in place safeguard the project
failure that is either
from aborting due to factors beyond WBC control e.g.
inappropriate or should
third party income not appearing, poor practice leading to
have been controlled
planning application being refused
Clearly defined process in place to allow for arbitration
and dispute resolution to ensure that any decision to
enact the agreement is taken in a fully informed and
transparent manner
West Berkshire Council
Management Board
1st July 2010
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Risks
Controls
Financial risk to the Council
Cap on the maximum financial liability for the Council
arising from the enactment of
should the agreement be enacted.
the agreement
Robust monitoring and use of the defined controls within
the agreement
An acceptabe level of risk and a maximum limit for each
head of expenditure to be clearly defined as part of the
negotiated agreement
2.5
Set alongside consideration of risk Members must take into account in their
decision the benefits that this development project will bring, the role it will play in
the modernisation of adult social care and the impact that failure to deliver the
service will have on the Council’s ability to achieve its longer term MTFS
aspirations.
2.6
Benefits that have been identified as part of the SLDP programme governance
structure are set out in the table below:
Financial
The development of this project will contribute to the delivery of a
savings target in excess of £300k in the MTFS 2012/13.
It will offer more choice in the care market and consequently
increase value for money.
Affordable Housing
The development will contribute to the Council’s target for the
delivery of affordable housing
Choice
This project will widen the opportunity for people to access extra
care services, ensuring a balance of provision across the district,
enabling people to remain living close to their families
Promote better longer term outcomes for older people as it will
encourage independence and greater control in line with the
personalisation
Vibrant
The project will encourage close links with local businesses to
Communities
offer tenants a wide range of services e.g. hair dressing, small
convenience store.
Employment
Create employment opportunities through the tender of a care
contract.
3.
Conclusion
3.1
The provision of Extra Care Sheltered Housing, as a real alternative to more costly
residential care, is one of the key strands of work that ASC is undertaking to
support the delivery of a significant level of savings that have been identified in the
West Berkshire Council
Management Board
1st July 2010
This Exempt Report should be printed on GOLD paper only
Medium Term Financial Strategy. Extra care housing is a clear Council priority and
is set out in the PPF Strategy and the Older Persons Commissioning Strategy.
3.2
The savings plan for ASC through to 2012 and beyond is dependent on the
expansion of capacity in the care and support sector, to provide for the growth in
the numbers and expectation of the older people living in the district, and this
project will be key to the achievement of this.
3.3
The initiation of developments of this scale and scope, require considerable up-
front investment and commitment from our partners. They also require recognition
of the role the Council must play in ensuring that plans are put in place to secure
the delivery of identified priorities and development projects of this nature are an
essential part of this.
3.4
Whilst the Council is committed to supporting these developments, meeting the
requirements of the planning system will inevitably require substantial investment to
ensure plans are acceptable and even then there is the potential that consent will
not be achieved. The current economic climate means that concerns around these
risks have heightened and our partners/RSLs require stronger assurances of the
Councils commitment to working with them to meet identified priorities. .
3.5
With the balance of risk, control and benefit satisfied, it is recommended that
Members agree to the development of a risk sharing agreement between the
Council and SS&W and that the agreement is negotiated through WBC legal team,
to minimise the risk of it having to be enacted. The work to be carried out with a
clear mandate to enable the Council to bring forward an extra care sheltered
housing development in partnership with SS&W in the west of the district.
3.6
It is also recommended that following the approval of the council to enter into the
agreement, that the final approval of the detailed agreement is delegated to the
Portfolio Member for Adult Social Care, to be taken as an individual decision.
Appendices
There are no appendices to the report.
Consultees
Local Stakeholders:
Officers Consulted:
June Graves, Mel Brain, David Holling, Shiraz Sheikh, Leigh
Hogan, Andy Walker, Gary Lugg, Gary Rayner
Trade Union:
West Berkshire Council
Management Board
1st July 2010
This Exempt Report should be printed on GOLD paper only