RESOLVED:

A. That Cabinet noted that the programme-level viability deficit of identified by Clarion Housing Group (Clarion) in April 2020 in relation to their proposed regeneration of the High Path, Ravensbury and Eastfields estates represents a significant barrier to delivery;

B. That Cabinet agreed that the Council remains supportive of Clarion’s delivery of the Merton Estates Regeneration Programme (MERP) and the objectives of Merton’s Estates Local Plan 2018 to improve the lives of existing residents and provide new homes;

C. That Cabinet agreed to support the proposed adjustment of the Sales Clawback mechanism in the Stock Transfer Agreement to suspend the Council’s eligibility to the 5% Sales Clawback mechanism so long as MERP is in the course of being delivered and remains in a deficit position at programme-level. The mechanism will be triggered only if MERP’s financial performance reaches or exceeds a break-even position.

D. That Cabinet agreed to support an amendment to the Stock Transfer Agreement to commit Clarion to delivering Decent Homes Standard upgrades linked to any failure to achieve regeneration delivery milestones to ensure these works are guaranteed to be delivered within a specified timeframe irrespective of the status of MERP;

E. That Cabinet agreed to support an amendment to the Stock Transfer Agreement to specific partnership working arrangements between Clarion and the Council to include open book business plan progress updates and monitoring and regular identification, management and mitigation of risks to viability and deliverability with forums to be established at operational (Officer) and strategic (Senior Officer and Member) levels with Clarion counterparts. This approach is proposed to ensure proactive management and monitoring of future risks.

F. That Cabinet delegated authority to the Director of Environment and Regeneration in consultation with the Cabinet Member for Housing Regeneration, and the Climate Emergency, to conclude any documentation, including, without limitation, amendments to existing agreements between the Council and Clarion, necessary to implement the recommendations C-E above on the best terms which in their view are reasonably achievable .

G. That Cabinet agreed that the 2010 Nominations Rights Deed will be preserved and that the council will continue to receive 100% nominations to true voids but that a protocol between Clarion Housing Group and the council be drawn up so as to assist Clarion in meeting its regeneration ambitions and ensuring that the council can continue to discharge its statutory housing duties and protect the public interest. Any such protocol will be jointly prepared between the council and Clarion Housing Group and be delegated to the Director of Community and Housing in consultation with the Cabinet Member for Housing, Regeneration and the Climate Emergency.

H. That Cabinet asked officers to continue to consider options for a freehold asset to the Council that may reflect some value of the claw back suspension and, should a mutually agreeable asset transfer be agreed, to delegate authority to the Director of Environment and Regeneration, and the Director of Corporate Services to conclude that transfer in consultation with the Cabinet Member for Housing Regeneration, and the Climate Emergency and the Cabinet Member for Finance.

Cabinet also approved the recommendations within the exempt report.

The Cabinet Member for Housing, Regeneration and the Climate Emergency presented the report and recommendations. The regeneration scheme would deliver 2550 homes with commercial and community space and outline planning permission had been granted by the Merton Council Planning Applications Committee in 2018.

The first stages of the Ravensbury estate had been completed with the first stages of the High Path development to be completed shortly.

The Cabinet Member gave an overview of the recommendations with the report noting the amendments sought to the stock transfer agreement. If approved, Clarion would commit to progressing with design development and public and stakeholder engagement. The application for the first detail of the Eastfields estate would come forward later in the year if the report was approved as well as the third stage of the High Path regeneration.

The Cabinet Member thanked the Sustainable Communities Overview and Scrutiny Panel for the discussions on the report which had taken place the week prior to the Cabinet meeting. (Post meeting note: This decision was subsequently called-in and will be heard at a call-in Scrutiny meeting on 19 October 2021).

The Cabinet Member also thanked the Future Merton and Housing needs team for their work on the report.

The report would also be brought to the Council meeting on 15 September.

RESOLVED:

A. That Cabinet noted that the programme-level viability deficit of identified by Clarion Housing Group (Clarion) in April 2020 in relation to their proposed regeneration of the High Path, Ravensbury and Eastfields estates represents a significant barrier to delivery;

B. That Cabinet agreed that the Council remains supportive of Clarion’s delivery of the Merton Estates Regeneration Programme (MERP) and the objectives of Merton’s Estates Local Plan 2018 to improve the lives of existing residents and provide new homes;

C. That Cabinet agreed to support the proposed adjustment of the Sales Clawback mechanism in the Stock Transfer Agreement to suspend the Council’s eligibility to the 5% Sales Clawback mechanism so long as MERP is in the course of being delivered and remains in a deficit position at programme-level. The mechanism will be triggered only if MERP’s financial performance reaches or exceeds a break-even position.

D. That Cabinet agreed to support an amendment to the Stock Transfer Agreement to commit Clarion to delivering Decent Homes Standard upgrades linked to any failure to achieve regeneration delivery milestones to ensure these works are guaranteed to be delivered within a specified timeframe irrespective of the status of MERP;

E. That Cabinet agreed to support an amendment to the Stock Transfer Agreement to specific partnership working arrangements between Clarion and the Council to include open book business plan progress updates and monitoring and regular identification, management and mitigation of risks to viability and deliverability with forums to be established at operational (Officer) and strategic (Senior Officer and Member) levels with Clarion counterparts. This approach is proposed to ensure proactive management and monitoring of future risks.

F. That Cabinet delegated authority to the Director of Environment and Regeneration in consultation with the Cabinet Member for Housing Regeneration, and the Climate Emergency, to conclude any documentation, including, without limitation, amendments to existing agreements between the Council and Clarion, necessary to implement the recommendations C-E above on the best terms which in their view are reasonably achievable .

G. That Cabinet agreed that the 2010 Nominations Rights Deed will be preserved and that the council will continue to receive 100% nominations to true voids but that a protocol between Clarion Housing Group and the council be drawn up so as to assist Clarion in meeting its regeneration ambitions and ensuring that the council can continue to discharge its statutory housing duties and protect the public interest. Any such protocol will be jointly prepared between the council and Clarion Housing Group and be delegated to the Director of Community and Housing in consultation with the Cabinet Member for Housing, Regeneration and the Climate Emergency.

H. That Cabinet asked officers to continue to consider options for a freehold asset to the Council that may reflect some value of the claw back suspension and, should a mutually agreeable asset transfer be agreed, to delegate authority to the Director of Environment and Regeneration, and the Director of Corporate Services to conclude that transfer in consultation with the Cabinet Member for Housing Regeneration, and the Climate Emergency and the Cabinet Member for Finance.

Cabinet also approved the recommendations within the exempt report.