To consider the Call in requests regarding the following In Individual Mayoral Decisions (IMD):

1.    No. 302 - 3-5 Arnold Road: Approval to increase project budget to enable build contract to be awarded. 8th September 2022; and

2.    No. 303 - Redevelopment of Bancroft and Wickford Street Garages, Mayor's Executive Decision Making - Wednesday, 14th September 2022.

The Committee considered the Call-in requests regarding the following In Individual Mayoral Decisions (IMD):

1.            No. 302 - 3-5 Arnold Road: Approval to increase project budget to enable build contract to be awarded. 8th September 2022; and

2.            No. 303 - Redevelopment of Bancroft and Wickford Street Garages, Mayor's Executive Decision Making - Wednesday, 14th September 2022.

The Committee noted that the above Individual Mayoral Decisions had been ‘Called-In’ by Councillor James King (signed also by Councillors Leelu Ahmed; Sirajul Islam; Amina Ali; Amy Lee; Shubo Hussain and Faroque Ahmed) in accordance with the provisions of the Overview and Scrutiny Procedure Rules of the Council’s Constitution.

Accordingly, the Committee considered:

v  Individual Mayoral Decision No. 302 - 3-5 Arnold Road: Approval to increase project budget to enable build contract to be awarded published on 8th September 2022.

v  Individual Mayoral Decision No. 303 - Redevelopment of Bancroft and Wickford Street Garages published on 14th September 2022.

v  the “call in” requisition from the Call-in Members.

v  representations by the Call-in Members; and

v  representations from the Cabinet Member for Regeneration, Inclusive Development and Housebuilding, Councillor Kabir Ahmed.

In addition, the Committee noted the following alternative course of action proposed in the call-in to:

A.            Fund the increase in the contract for the Arnold Grove and Bancroft TMO/Wickford Street Schemes from Housing Revenue Accounts Reserves.

B.            Provide an impact and financial appraisal of funding the increase from different sources; and

C.            Keep, amend, or cancel the Gill Street scheme after a transparent impact and financial appraisal.

Councillor James King on behalf of the Call-in Members then formally presented to the Committee the reasons for the call-in and above-mentioned alternative course of action which also indicated:

D.            Tower Hamlets Council Strategic Plan 2022-2026 : Priority 2 states an ambition to ‘deliver a minimum of 1000 social homes for rent per annum’. Priority 8 states the council will ‘Deliver a balanced budget, innovate to improve value for money, deliver modern services, and improve customer satisfaction across council services. This Mayoral Decision does not provide value for money when £849,000 of spend is to be scrapped.

The discussion on the Call-In can be abridged as follows:

The Committee:

v    Noted that the Call-In asks why an uplift of £4.49 million to fund the Arnold Grove site and an uplift of £3m Bancroft Tenant Management Co-operative (TMC) and Wickford Street garages site could be funded from alternative sources e.g.  including but not limited to underspends within the Housing Revenue Account (HRA), reserves within the Housing Revenue Account, commuted sums from off-site affordable housing contributions which have not yet been spent.

v    Noted that the Call-In states that (i) the cancellation of the Gill Street site is unexplained and not necessary in order to free up HRA funds; and (ii) the report provides no appraisal of the risks and outcomes of this decision.

v    Noted that the cancellation of the development at Gill Street loses 15 units for social and affordable rents, a new community space and other new community facilities for the St. Vincent’s Estate in Limehouse.

v    Noted that the Call-In indicates that it is felt that the decision cancels a scheme on which £848,000 has already been spent and was considered by those councillors who had called in the report to be a waste of council resources.

v    Noted that the Budget Monitoring report that had been presented to July’s Cabinet had indicated that there is an £8.3million underspend in the Housing Revenue Account, which will be allocated to Reserves if not used by the end of the year. (Appendix A - 2021-22 Period 12 Budget Monitoring Report refers).

v    Noted from the Call-In that it was felt that this deficit could easily absorb the proposed increase in the Arnold Grove and Bancroft Tenant Management Organisations (TMOs)/Wickford Street contracts without having to cancel an existing scheme.

v    Understood from the Equalities Impact Assessment (EqIA) within the report that it is recognised that whilst there was a need to build 62 units at Arnold Grove and 33 units at Bancroft/Wickford Street failed to assess the cancellation of the loss of 15 units at the Gill Street site.

v    Noted that the call-in requisition from the Councillors had provided the following alternative course of action to (1) fund the increase in the contract for the Arnold Grove and Bancroft TMO/Wickford Street Schemes from Housing Revenue Accounts Reserves; (2) provide an impact and financial appraisal of funding the increase from different sources; and (3) keep, amend, or cancel the Gill Street scheme after a transparent impact and financial appraisal.

v    Noted that the Councils Strategic Plan 2022-2026 (a) Priority 2 states an ambition to ‘deliver a minimum of 1000 social homes for rent per annum’; and (b) Priority 8 states the Council will ‘Deliver a balanced budget, innovate to improve value for money, deliver modern services, and improve customer satisfaction across council services.

v    Noted that the Call-in Members felt there was sufficient money available in Housing Revenue account to pay for the uplift in Arnold Rove and the Bancroft and Wickford St Garages development and then Gill St Development would be part of the broader review of the housing Review Account Capital program, which would then come later in the year and then that would give all the stakeholders and potential stakeholders more time to scope out (1) what would be the best use of that site, (2) how the Council pays for it; and (3) how to not waste the £850,000 that the Council's has already invested in this scheme.

v    Noted the impact on capital program of the volatile economic situation which has reduced growth prospects and heightened uncertainty about the future. This means that, the Council does not have the money in the capital program to deliver all three programs and has had to go for the programs that will deliver the largest amount of social housing units.

v    Noted that whilst the Tower Hamlets has had seven years of a non-volatile economic situation the Council is now having to confront increasingly stringent budgets and has to be prudent how it operates within the established three-year capital program.

v    Noted that whilst a refresh of the approved HRA new council homes programme is due to be presented to Cabinet in October 2022, where new schemes will be added, and budget allocations adjusted within the overall budget envelope that is affordable within the HRA Business Plan. However, with the planning consent for these schemes are due to expire in four months, approval for an increase in the budget is required sooner than October 2022 to ensure the development of new homes for social rent on this site can proceed and any delay will have an impact on overcrowded households and those living in temporary accommodation, many of which fall into one of the protected groups. 

As a result of a full and wide-ranging discussion

The Chair Moved  and it was:-

RESOLVED

That the decisions be reaffirmed in regard to:

v  No. 302 - 3-5 Arnold Road: Approval to increase project budget to enable build contract to be awarded. 8th September 2022; and

v  No. 303 - Redevelopment of Bancroft and Wickford Street Garages, Mayor's Executive Decision Making - Wednesday, 14th September 2022