Agenda item

Decision:

Salford City Council - Record of Decision

 

I Paul Dennett, City Mayor, in exercise of the powers contained within the Council Constitution do hereby:

 

(1)   Grant authority for the Council to enter into a contract with Mears Housing Management Limited & Plexus UK (First Project) Limited – a registered provider wholly owned by Mears and not for profit - to utilise Bramall Court for the provision of affordable general needs and temporary accommodation for a 15 year term (with an optional break clause at year 10) as outlined in the table below, and

(2)   Delegate authority to the Head of Housing and Strategy to finalise commercial terms.

 

Detail required

Answers

Title/Description of Contracted Service/Supply/Project

Bramall Court – affordable general needs and temporary accommodation

Name of Successful Contractor

Mears Housing Management Limited & Plexus UK (First Project) Limited

Supplier Registration Number

(to be supplied by Corporate Procurement)

 02519234

Type of organisation

(to be supplied by Corporate Procurement)

Private Limited Company

Status of Organisation

(to be supplied by Corporate Procurement)

Non-SME

Contract Value

£1,043,868

Per Annum (estimated average)

Contract Duration

 15 years

Contract Start Date

TBC

Contract End Date

TBC

Optional Extension Period 1

Optional break clause at Year 10

Optional Extension Period 2

Who will approve each Extension Period?

Choose an item.

Contact Officer (Name & number)

Andrew Leigh 0161 793 2155

Lead Service Group

Place

How the contract was procured?

(to be supplied by procurement)

Direct Award following Market Engagement

Framework Details (where applicable)

(procurement body, framework reference & title, start/ end date

n/a

Funding Source

Revenue Budget

Ethical Contractor

Mayor’s Employment Charter

Committed to sign up to charter

No 

Yes

 

 

Accredited Living Wage Employer

No

The Reasons are

Entering into a partnership with Mears Housing Management Limited & Plexus UK (First Project) Limited to repurpose Bramall Court provides significant opportunities to increase the availability of affordable housing in the city and increase the throughput of people moving out of temporary accommodation into more settled accommodation.

 

Assessment of Risk - Medium

 

The source of funding is Homeless Prevention Fund

 

Legal Advice obtained – Tony Hatton, Principal Solicitor

 

When commissioning contracts for the procurement of goods, services or the execution of works the Council as a ‘contracting authority’ must comply with the Public Contract Regulations 2015 (PCR) ), which require that contracting authorities treat candidates equally and in a non-discriminatory way and act in a transparent manner. In addition, the Council is required to comply with the requirements of its own Contractual Standing Orders (CSO’s), Financial Regulations and the duties of Best and Social value failing which a contract may be subject to legal challenge from an aggrieved provider.

 

For contracts of this nature and value the Council would usually undertake an exercise to advertise the opportunity for bidders to submit formal sealed tenders on the Chest portal. As set out in the report, in March 2021, the Council sought expressions of interest via the Chest to test wider market opportunities for the provision of a minimum 115 properties to be used for discharging homeless duty and a small proportion to be used as temporary accommodation.  Only one such expression of interest was received from Mears Housing Management Limited & Plexus UK (First Project) Limited and the Council has accordingly complied with the requirements of the PCR.

 

In further support of the award to Mears, Regulation 32 of PCR allows a direct award of a contract without publication (a direct award) “(b) where the works, supplies or services can be supplied only by a particular economic operator …. (because) competition is absent for technical reasons”. As only one expression of interest was received, it is certainly arguable that (b) applies.

 

The risk of a challenge is therefore very low, and the Council has genuine robust reasons for the award of the contract to Mears.

 

Legal Services will continue to work with SCC officers to develop the proposals, the Heads of Terms and Nominations agreement, the tenancy agreements and licences required for the different types of rent, together with the agreement with the Mears to deliver the provision of general needs and temporary accommodation services, for which a concession agreement arrangement may be the most appropriate method of contracting, ensuring the Council’s interests are protected as far as possible and that the “property and lettable standards” devised by officers are maintained by the provider.

 

Financial Advice obtained – Stephen Thynne, Strategic Finance Manager

This report requests approval to enter into a contract with Mears to use Bramall Court for the provision of affordable general needs (100 units) and temporary accommodation (15 units) for a 15 year term with a break clause at 10 years. A programme of refurbishment will be undertaken by Mears at a cost in excess of £2m with no cost to the Council. Rents will be collected directly by Mears – the service has confirmed there will be no housing benefit subsidy loss as general needs units will be let at LHA rates and the temporary accommodation units will be fully recoverable. The Council will however be responsible for void losses after 10 working days of a unit being made available. An estimate of the most likely costs of this has been made by the service based on a 3% void loss and this equates to circa £20K per annum – if higher levels of voids are experienced the level of risk and cost will increase proportionately. In relation to the temporary accommodation units the Council will also receive a payment for support of £69 per unit per week which will negate the need to fund support for these units from other sources. There is also a possibility of a reduction to the level of housing benefit subsidy loss incurred by the Council. An indicative estimate of the levels that might be achieved (based on average costs) are in the region of £274K per annum – it should be noted however that if a reduction in the use of less cost effective provision of accommodation (i.e. B&B) from existing levels is not seen or if the avoidance of more costly provision is at a lower weekly cost the reduction in subsidy loss is unlikely to be realised at the levels indicated.

 

Procurement Advice obtained – Deborah Derbyshire, Procurement Category Manager

 

The opportunity was advertised as a market engagement to test the market to see if there were any other companies able to offer the same number of units and services as Mears had proposed.  Following this advertisement, the council only received the one interest from Mears and there were no other expressions of interest. This therefore complies with the contractual standing orders.

 

HR Advice obtained – N/A

 

Climate Change Implications obtained – N/A

 

The following documents have been used to assist the decision process – The relevant documents contain exempt or confidential information and are not available for public inspection

Contact Officer: Andrew Leigh

Telephone number: 0161 793 2155

 

This matter is also subject to consider by the Statutory Deputy City Mayor and Lead Member for Housing, Property and Regeneration. The Statutory Deputy City Mayor / Lead Member has been consulted and is supportive of the proposed contract.

 

The appropriate Scrutiny Committee to call-in the decision is the Growth and Prosperity Scrutiny Panel.

 

Signed:  PAUL DENNETT                      Dated: 1st September 2021

                    City Mayor

 

*         This decision was published on 1st September 2021

*         This decision will come in force at 4.00 p.m. on 8th September 2021 unless it is called-in in accordance with the Decision Making Process Rules.

 

Supporting documents: