By Joe Locker, Local Democracy Reporter
A plan to build council houses on the site of a former residential home in St Ann’s is £500,000 over-budget due to increasing building costs.
Oakdene Residential Home sat at the junction of Woodborough Road and St Ann’s Way before it closed in 2019 and was demolished a year later.
Before its closure just four of the 24 beds were in use, and Nottingham City Council decided to close the facility because it had come to the end of its economic life.
Nottingham City Homes (NCH) was then granted planning permission in August 2020 to build a three-storey building with 48 one-bedroom council flats.
But according to planning documents new proposals have since been submitted in the form of nine flats and 15 houses because the previous scheme is no longer financially viable.
If planning permission for the new scheme is granted, NCH will not have to provide a financial contribution to help improve the local area because of these costs.
Developers are typically obligated to provide a financial contribution to the local area if a scheme is given the green light, and this is known as a Section 106 agreement.
This money is put towards employment support and other improvements in the area where a scheme is planned, including the development of parks and open spaces.
However because the cost of the Oakdene scheme has risen by roughly 12.5 per cent, in excess of £500,000, it has been proposed no financial contribution to the area will be provided.
Planning documents say: “The proposed development has been subject to a protracted timetable and tendering process, during which the financial
landscape has changed significantly.
“Building costs have increased significantly, and the overall cost of scheme delivery has increased by 12.5 per cent against the November 2021 forecast.
“The revenue however does not change at the same rate as the market. The tenure cannot be changed from social to market rent and therefore cannot be increased by more than, a below inflation, seven per cent.
“Overall, the scheme has become significantly more expensive to deliver. The £63,429.22 required to meet Section 106 objectives would add to the overall costs of the scheme, already forecast to be in excess of £0.5 million against the original cost plan.”
Council documents say the extra £500,000 in costs for the scheme will now have to be met from “other resources and reserves that will in turn no longer be available to future affordable housing schemes”.
The addition of costs to meet the Section 106 objectives would “worsen this
position”, documents say.
Planning officers say it is therefore “appropriate” to waive any Section 106 contributions.
“Having regard to the benefits of the scheme, providing 100 per cent affordable housing, in a well-designed and highly sustainable development, the provision of family housing, regenerating a brownfield site, it is considered to be appropriate to waive the Section 106 requirements in this case,” council documents add.
The plans have been recommended for approval and will be discussed at a meeting on December 21.
