CALDERDALE MBC
WARDS AFFECTED: ALL
7
CABINET 13 JULY 2009
NEW AFFORDABLE ZERO CARBON HOMES FOR CALDERDALE
REPORT OF THE GROUP DIRECTOR, COMMUNITY SERVICES
1.
ISSUE
1.1
The purpose of this report is to decide how to proceed following receipt of tender
submissions for affordable zero carbon homes in Calderdale.
2.
NEED FOR A DECISION
2.1
In October 2007 Cabinet approved the principle of using up to £300,000 of
commuted sums money to stimulate and add value to the development of
affordable homes in Calderdale, built to zero-carbon standards. Cabinet also
requested that a further report be submitted following the assessment of
submissions received.
3.
RECOMMENDATION
3.1
It is recommended that Cabinet authorise the Head of Housing and Community
Support to accept the tender submitted by Pennine Housing 2000.
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4.
BACKGROUND
Commuted sums
4.1
Calderdale Council normally seeks provision of affordable housing ‘on site’ as
part of larger planning applications. However, in specific circumstances,
‘commuted sums’ are agreed as an alternative. Cabinet received a report on a
proposal to support the construction of zero carbon homes in Calderdale on 29 th
October 2007. Cabinet resolved that the principle of using commuted sums to
stimulate and add value to the development of affordable homes in Calderdale,
built to zero carbon standards, be supported and up to £300,000 be allocated for
this purpose. It also resolved that Registered Social Landlords and developers be
invited to submit expressions of interest on the basis of the brief presented to
Cabinet and that a further report be submitted to Cabinet following the
assessment of submissions received.
4.2
Cabinet approved a report on 10th April 2006 on ways such commuted sums can
be deployed to secure additional affordable housing. This included providing
additional subsidy to secure the delivery of a scheme funded through Social
Housing Grant, in addition to funding provision of housing for special or specific
needs as identified in Housing Strategy 2005-2010.
Climate change and sustainable homes
4.3
It is widely recognised that climate change, caused by the build up in greenhouse
gases, and maintaining a stable and affordable energy supply in an increasingly
unstable world are the greatest environmental challenges we face today. In the
UK, the energy we use in our homes and for personal transport is responsible for
almost half of the country’s carbon dioxide emissions. Clearly housing design has
an important role to play as part of a comprehensive local response to tackling
global warming.
4.4
Government responses to the climate change challenge have included a
progressive tightening of Building Regulations, the introduction of a new Planning
Policy Statement on Climate Change and the launching of a new ‘Code for
Sustainable Homes’, which is designed to enable a step change in sustainable
building practice for new homes. Government has also recently published a new
Green Paper on housing, “Homes for the Future: more affordable, more
sustainable”. This reaffirms the Government’s commitment to all new homes
being zero carbon rated from 2016.
Zero carbon homes
4.5
The Code for Sustainable Homes measures the sustainability of a home against
nine design categories, rating the ‘whole home’ as a complete package. The
design categories are:
Energy and CO2 Emissions
Surface Water Run-off
Health and Wellbeing
Water
Waste
Ecology
Materials
Pollution
4.6
Each of the above categories includes a number of environmental issues which
have a potential impact on the environment. The issues can be assessed against
a performance target and awarded one or more credits. Minimum standards exist
for a number of categories, but apart from these the Code is very flexible,
allowing developers to choose which and how many standards they implement to
obtain ‘credits’ under the Code in order to achieve a higher sustainability rating.
Examples of completed Zero Carbon Homes at BRE Innovation Park – Insite 2009*
4.7
The Code for Sustainable Homes uses a sustainability rating system, indicated
by ‘stars’, to communicate the overall sustainability performance of a home. A
home can achieve a sustainability rating from one to six stars depending on the
extent to which it has achieved Code standards. One star is the entry level –
above the level of the current Building Regulations; and six stars is the highest
level – reflecting exemplar development in sustainability terms.
A ‘Zero Carbon’ home uses less energy than it generates over time. A carbon
footprint is calculated for the full life of the home, including the carbon dioxide
emissions created during the build process and daily energy needs. This figure is
offset by the property’s ability to produce the energy it needs itself through
renewable sources of energy.
4.8
As the development of zero carbon homes is still cutting edge there is little
definite information on the likely additional costs. For future development they
currently have been quoted from £15,000 for code level 5 and £45,000 for code
level 6. There have only been a total of 2 level 5 zero carbon homes and no level
6 built to date. The latest figures below highlights the number of post-construction
code of sustainable homes certificates issued by end of March 2009 :
Source – Parliamentary Official Report (Hansard)
Total number of code certificates issued in the UK by end March 2009
Post construction (by code level)
Registration
March 2009
>170,000
Design
1
2
3
4
5
6
1,082
0
1
32
4
2
0
Note - 2 of these completed level 4 homes are within Calderdale
*photo’s by Peter White – BRE Ltd
4.9
The above table clearly shows that using commuted sums to stimulate and add
value to the development of affordable zero carbon homes would showcase
Calderdale as a progressive and forward thinking leader on the key housing
issues of affordability and climate change. Construction would also act as an
exemplar to promote and encourage the embracing of code 5 and 6 construction
in the Borough.
Affordable homes and affordability
4.10 The Calderdale Housing Requirements Study was published in 2005 and its
headline finding was that there was a shortfall of 720 units of affordable housing
across the district, with a high proportion (around two-thirds) of people wanting to
move unable to afford to purchase on the open market. Based upon these
findings the Calderdale Housing Strategy identifies the need for additional
affordable housing in the district and sets a target of 20% of all completions to be
affordable homes.
4.11 It is widely accepted that households should not be required to devote more than
30% of their net household income to rent and/or mortgage payments in order to
have a realistic chance of sustaining tenancy/ownership. It is thus suggested that
the properties must be affordable with reference to average local incomes.
4.12 All tenderers are Registered Social Landlords (RSLs) or have identified key RSL
partners whose rents would be set by the Homes and Communities Agency
(HCA) at an affordable level. Shared ownership units would need to be based on
local income levels to ensure affordability.
5.
TENDER PROCESS
5.1
The Procurement strategy for this project was to give a wide range of potential
providers the opportunity to tender. Background information on affordable zero
carbon homes and a Pre-Qualification Questionnaire (PQQ) were sent to all
Registered Social Landlords (RSLs) and developers operating within the
borough, in addition to developers with prior experience of developing EcoHomes and local sustainability-interest groups. Further awareness of the project
was generated through the advertisement within the Official Journal of the
European Union (OJEU)
5.2
Through the PQQ stage of the procurement process a total of 14 responses were
received. Following the scoring, audit and financial evaluations, 7 potential
providers were identified and formally invited to tender. Discussions were held
with all seven developers to confirm their interest in the project following the
onset of the ‘credit-crunch’.
5.3
From the 7 developers invited to tender, 3 withdrew due to issues with land
availability, the inability to secure RSL involvement and 2 of the developers
invited to tender made the decision to submit a joint tender proposal.
5.4
In total 3 tender submissions were received from Southdale Homes, Pennine
Housing 2000 and a joint bid from St.Vincent’s/Rok Group. These were scored in
a fair and equitable way by the tender panel based on pre-determined scoring
criteria: Number of Units, Level of the Code for Sustainable Homes achieved,
Development Time, Strategic Fit with the aims of Calderdale Council, Added
Value, Partnering and Monitoring.
5.5
The tender panel evaluated on a ‘Most Economically Advantageous Tender’. The
tender panel individually scored Pennine Housing 2000 the highest on both the
Price and Quality aspects and it is recommended that Cabinet approve the
tender submitted by Pennine Housing 2000.
6.
OPTIONS CONSIDERED
A
Do nothing
B
Choose recommended developer
C
Choose different developer
A
Do Nothing
6.1
The ‘do nothing’ option is not realistic as the commuted sums need to be used in
a creative and cost-effective manner to support the objectives within the
Calderdale Housing Strategy.
B
Choose Recommended Developer
6.2
The tender panel individually scored Pennine Housing 2000 the highest on both
the Price and Quality aspects. As such the tender submission from Pennine
Housing 2000 was found to be the most economically advantageous tender and
preferred option. Key features of the Pennine Housing scheme are mixed tenure
family houses built to Code level 5 and 6 which could make a start on site
immediately with the first zero carbon homes in the Borough predicted to be
completed by January 2010 with monitoring and great publicity opportunities.
6.3
The submission for Pennine Housing 2000 included some flexible options within
the tender and it is recommended that option 2 be approved. This option would
provide a total of 12 mixed-tenure units all built to zero carbon standards over 3
identified sites, including 10 units built to level 5 of the code for sustainable
homes and 2 units built to level 6, the highest level possible. There are additional
costs for publicity, monitoring and management of the scheme giving a total cost
of £290,000, which was also the least expensive of the submissions received.
The submission proposes the employment of a Project manager to engage with
local schools and facilitate site visits for young people to learn and complete
project work, in addition to supporting new residents and assisting with
monitoring. An apprenticeship scheme was also proposed in conjunction with
construction partners Bramall and Lovell.
6.4
In terms of deliverability, on the Cornholme site, the Zero Carbon project can
commence immediately upon receipt of a successful decision from Cabinet. The
other two sites in Hebden Bridge and Luddendenfoot are vacant and will require
planning permission to be sought, but would provide continuity subject to receipt
of complimentary financial support from the Homes and Communities Agency, as
they can be constructed straight after completion of the Cornholme site. If
Cabinet approves this proposal, the first zero carbon homes could be completed
in the borough as early as January 2010, as the units at Mount Pleasant benefit
from full planning permission to code level 4 and the site is already cleared ready
to begin construction and only minor planning amendments would be required,
although planning permission still needs to be sought for the other proposed
sites.
6.5
Pennine Housing 2000 are already a key partner, Calderdale’s largest locally
based RSL and an active member of Calderdale Forward Local Strategic
Partnership. Pennine Housing 2000 and development partners also have a
wealth of experience developing eco-homes and recently completed two units in
Illingworth, which were the first in the country to achieve level 4 of the Code for
Sustainable Homes.
6.6
There is a tremendous potential for publicity for an affordable zero carbon
scheme for both Calderdale Council and development partners. Pennine Housing
2000 are proposing a strategic marketing plan involving publicity opportunities
with local media and specialist housing and building publications. Lettings would
take place through Calderdale’s established Choice Based Lettings system,
‘Keychoice’ and liaison between with key partners.
C
Choose Different Developer
6.7
Although all the submissions were of a high standard, choosing a different
developer is not recommended on the basis of the tenders received. The tenders
have been scored on a fair and equitable basis with all five members of the
tender panel individually scoring Pennine Housing 2000 the highest on both the
Price and Quality aspects. As such the tender submission from Pennine Housing
2000 was found to be both the most economically advantageous tender and
preferred option for quality.
7.
CONSULTATION
7.1
The proposed uses of commuted sums set out in this report are consistent with
the objectives set out in the Calderdale Housing Strategy 2005 - 2010 which, in
turn, incorporate the findings of the Calderdale Housing Requirements Study
2005. Both of these documents were based upon extensive consultation and
research with the public, Councillors and stakeholders.
8.
FINANCIAL IMPLICATIONS
8.1
An amount of £300,000 has been allocated to this project through commuted
sums obtained through planning obligations for affordable housing. These
financial receipts available from the Section 106 agreements can only be used
for affordable housing provision, and must be spent in accordance with the
specific terms of each agreement. There is no extra cost to the Council, other
than the staff resource required to secure commuted sums and develop
proposals for their use, which is only a small part of the housing enabling role.
8.2
The project will drive forward the Council’s commitment to both affordable
housing and sustainability agendas. It will also secure additional local investment
from RSLs as they will be utilising their own resources and finances in addition to
Council funding and over £500,000 social housing grant via the Homes and
Communities Agency (HCA), contributing to the regeneration of the Borough.
9.
CORPORATE IMPLICATIONS
9.1
The Calderdale Local Area Agreement (LAA) contains actions and targets aimed
at addressing housing needs, including the securing of affordable housing
through the planning system and meeting the particular needs of the rural parts
of the Borough. Similarly, the Calderdale Community Strategy (Futures Plan)
acknowledges the importance of increasing access to good quality affordable and
sustainable housing in the Borough.
9.2
The provision of affordable housing helps to create mixed and sustainable
communities, and homes that meet zero carbon standards are in line with the
Council’s Environmental Policy, in addition to contribution towards the LAA
indicator NI186 which aims to tackle climate change through reduced carbon
emissions.
9.3
The Calderdale Housing Strategy seeks to address the housing requirements of
all members of the community, and recognises that some individuals and
communities will have different needs. The Housing Strategy’s objectives are
organized to support broader Council priorities including regeneration, supporting
vulnerable people and improving community safety.
9.4
In terms of equality implications, no adverse impacts have been identified from
the proposed initiative and it will have positive effects in terms of increasing
access to affordable housing for people with lower incomes and ensuring the
design will incorporate accessibility to Lifetime Homes standards.
10.
CONCLUSION
10.1 On the basis of the tenders received it is recommended that Cabinet approve
acceptance of the tender submitted by Pennine Housing 2000. By using
commuted sums to stimulate and add value to the development of affordable
homes in Calderdale, the Council would encourage the early construction of ‘zero
carbon’ homes in the area, and take a lead in acting locally to tackle a global
issue, whilst addressing the key housing issues of affordability and climate
change.
Ref: MD
Date: 31 July 2017
KERSTEN ENGLAND
GROUP DIRECTOR, COMMUNITY SERVICES
FOR FURTHER INFORMATION ON THIS REPORT CONTACT:
Mark Dowson, Affordable Rural Housing Officer – 01422 393266.
[email protected]
DOCUMENTS USED IN THE PREPARATION OF THE REPORT:
Calderdale Housing Strategy 2005 - 2010
Cabinet report 10th April 2006 : “Use of S106 commuted sums for affordable housing”
Cabinet Report 29th October 2007 : “New affordable zero carbon homes for Calderdale”
The Code for Sustainable Homes, Communities and Local Government, February 2008
Tender Documents
DOCUMENTS ARE AVAILABLE FOR INSPECTION AT:
Northgate House, Halifax.