PORTFOLIO HOLDER - SOCIAL SERVICES AND HOUSING

1. SUMMARY/PURPOSE

1.1 To update Members on the current position with regard to this project and to seek agreement to proceed on the basis outlined in the report.

2. BACKGROUND

2.1 A report on this matter was presented to the Executive on 23 April 2002. Briefly, this project concerns the building of a new residential respite care home for children with a disability to replace the current facility at Cowes, which is owned and operated by the Isle of Wight Healthcare Trust.

2.2 Members will recall that considerable work has been undertaken to a stage where Detailed Planning Permission and Building Regulations Approval have been obtained. The scheme assumes the involvement of a private sector partner in achieving the necessary capital investment.

2.3 The 23 April report outlined an approach, which Members endorsed, to deal with identified legal constraints under Section 22 of the Local Authorities (Capital Finance) Regulations 1997. Legal advice indicated that certain conditions would need to be complied with in order to proceed:-

· A development agreement incorporating a building contract, which provides for repayment of costs over a specified period

· A facilities management lease to a registered landlord, to maintain the fabric and running of the building with a licence to an operator

· A Contractual Agreement with an operator to provide the care service

2.4 Work has been undertaken in the intervening period to progress matters:-

· Preparatory legal work has been undertaken to develop the necessary contract documentation, including a Building Contract; Lease to a Registered Social Landlord and a License to allow the operation of a service.

· Expressions of interest from Registered Social Landlords have been invited. A qualifying submission has been received from South Wight Housing Association and is currently the subject of detailed discussion.

· The Council’s consultants Drivers Jonas (Chartered Surveyors) have been commissioned to assist with the marketing process and identification of suitable

· potential developers for this project. Fees of £12,000 would become payable upon securing a suitable Developer and these have been included in the estimated costs of the scheme.

· Advice received has recommended that the marketing process be undertaken in one operation commencing in mid-September.

· A period of eight weeks would allow for detailed proposals to be developed by prospective developers.

· The aim would be to select and agree a contract with a developer by the end of the year.

· The Executive of the Isle of Wight Healthcare NHS Trust have been briefed on progress and have confirmed the capital commitment to the project arising from the proceeds of the current building.

· Work is being undertaken to draft the necessary Service Level Agreement for the provision of the service in the new building.

· Plans and details of the scheme are available should Members request them and will be displayed at the meeting.

3. FINANCIAL IMPLICATIONS

3.1 The total cost of the scheme is now estimated to be £1.33m and currently approved resources include:-

132,000 Isle of Wight Council, Capital Programme

157,460 Social Services & Housing 2001/02 contribution

207,665 Social Services & Housing 2002/03 contribution

50,000 Education Directorate commitment

125,000 IW Healthcare Trust Contribution from capital proceeds

£672,125

3.2 A capital finance bid under the Joint Investment Plan for Learning Disability was submitted earlier this year and the project has been successful in gaining a grant allocation of £250,000. This will increase the resources available or committed to £922,125. The grant will assist in absorbing some of the anticipated increase in development costs arising from the delays to the scheme. However, it may be prudent to assume that any shortfall will continue to reflect rising costs. The final structure of the funding will be dependent on the financial arrangements with the developer.

3.3 As part of the process to seek a potential developer it will be necessary to indicate in the draft contract potential options for structuring financial proposals. This financial structuring will allow a developer to structure the cost to the Council of paying back the outstanding costs of constructing the building over the determined period of up to 20 years, with an initial capital payment. The outstanding payment for the construction of the building would then be paid to the Developer by the Council in phased payments over a set period of time.

4. RECOMMENDATIONS

4.1 The Committee note the content of this report and endorse the continuation of the process in accordance with Section 22 of the Local Authorities (Capital Finance) Regulations.

4.2 Endorse the proposal in terms of the procurement of a suitable Developer and the proposed capital funding arrangement as outlined.

4.3 Agree to receive a further report in November setting out the detailed contract arrangements.

5. BACKGROUND PAPERS

Executive papers 18 January 2001

Social Services & Housing Select Committee 21 December 2000

The Local Authorities (Capital Finance) Regulations 1997

Contact Point : Jimmy Doyle, ( 520600

C WADDICOR

Strategic Director

Social Services and Housing

R MAZILLIUS

Portfolio Holder for

Social Services and Housing