The Interim Director of Place introduced the report in Councillor Maney’s absence. In order for Purfleet Centre Regeneration Limited (PCRL) to fulfil its role as lead developer and deliver the planned programme set out in the Development Agreement (DA) they are required to access sufficient additional levels of funding (equity, debt and grant) to bring the project forward and a well-resourced team able to effectively manage all workstreams. PCRL has insufficient equity funding and have sought investment from a number of third parties.

The persistent failure by PCRL to secure additional funding and advance the delivery programme has resulted in a ninth Reservation of Rights letter (RoR) to be issued by Homes England (HE) to Thurrock Council and the Back to Back Agreement with PCRL, in relation to the Grant Determination Agreement (GDA), covering the £75m Housing Infrastructure Fund grant.

The Council is concerned that the there is a material risk that the development milestones as set out in the GDA cannot be achieved. Given the prolonged  and continued default position there is a real possibility that Homes England will invoke  provisions with the GDA and withdraw the HIF funding  and commence legal proceeding against the Council to clawback grant expenditure to date. Officers have assessed, with external legal support, all legal remedies available to the Council to address this default situation and minimise any financial exposure to the Council. Following this assessment it is recommended that the Council agree to mutually withdrawal, with Homes England, from the GDA.  This effectively terminates the Purfleet HIF Grant Determination Agreement with Homes England and the Back to Back HIF Grant Determination Agreement with PCRL. Homes England have confirmed in writing that it will not demand or seek repayment of any funding in connection with the Funding Agreement. This is subject to the Council  agreeing to the mutual withdrawal and entering into the appropriate deed to enact this.

PCRL have continued to attempt to address the funding situation and the Council is mindful to examine alternative funding options; the latest being a proposal involving the English Cities Fund, a consortium of Homes England, Legal & General and Muse. Whilst encouraging, the response from PCRL to the current RoR letter does not contain sufficient detail for the Council to realistically conclude that the scheme can be delivered within the terms or timeframe of the current Grant Determination Agreement. However, following early engagement with PCRL and representatives of the English Cities Fund,  officers believe there is merit in examining further the current proposal. Officers are therefore recommending that that the Council work with PCRL and ECF, over a period of up to 3 months, to establish whether there are firm proposals.

In summary the HIF funding is no longer available and it will either be withdrawn with possible penalties for clawback or we mutually withdraw. There remains interest in developing the project and conversations with the English Cities Fund are ongoing but other options will also be looked at.

The Chair of the Purfleet-On-Thames Community Forum confirmed they had supported the project since its fruition and he is deeply saddened as to where it is now. A great amount of work has been put into the project and now they don’t know what is going to happen. Purfleet is at the end of the borough and there are a lot of houses but no social infrastructure. He explained that he had been a resident in Purfleet for 43 years and since then there has been a new senior school built and a new health centre however it is not fit for purpose as it is not big enough. In 1980 there were 4000 residents and there are now 12000. There has been all these developments and they have not brought any infrastructure to make things better and green spaces have been lost by the bucket load. The project was a way to rectify this. There was 75 million pounds to help support the infrastructure, 27 million has been spent and there is still no infrastructure and he wanted to know why. The Chair of the Purfleet Community Forum stated that he hopes the new Interim Director can wave a magic wand and get the project back on track.

Councillor Jefferies responded that he is also sad and angry about the project. He commented that he has seen the school and it is fantastic.

The Interim Director of Place stated that through discussions with the English Cities Fund, Homes England want to continue to support but the HIF didn’t allow them to do it through that vehicle. It is recognised that the community has played an enormous role and the infrastructure is key to the Communities ongoing involvement.

Councillor Coxshall commented that he used to be a resident of Purfleet and there wasn’t much there in the way of infrastructure. Out of all 3 projects this one shocks him the most. There has been talk of Purfleet getting a town centre for years. It is unacceptable that what has been promised has not been delivered. He confirmed he is glad Homes England are still committed and stressed that they need to get this over the line.

The Interim Director of Place confirmed that a significant amount of the expenditure can be used going forward such as the land acquisitions, remedial works and there are project designs which can potentially be taken forward.

Councillor D Arnold commented that she remembered the Chair of Purfleet Community Forum addressing a Council meeting 9 years ago speaking with the same tenacity as he did this evening about Purfleet being called Purfleet-on-Thames. Councillor Arnold urged him not to lose that tenacity. Councillor Arnold stressed that Community based decision making is what is needed.

The Vice Chair of the Purfleet Community Forum sought reassurance that any new development will not just be houses but shops and hotels and other forms of infrastructure.

The Interim Director of Place confirmed that this is the intention.

Councillor Jefferies added that the local plan is being developed now and it is not just about building houses, the administration wants to build communities that have all those things.

RESOLVED:

CABINET

1.1          Notes the financial risk assessment  and delegates authority to the Director of Place, in consultation with the Director  of Law and Governance and the Portfolio Holder for Regeneration, Strategic Planning and External Relationships and Commissioners  (1) to endeavour to  negotiate a tripartite exit agreement with Homes England and Purfleet  Centre Regeneration Limited and if that is not a viable option to agree a mutual withdrawal, with Homes England, from the Purfleet Housing  Grant Determination Agreement which will lead to the determination of the  Back to Back GDA with Purfleet Centre Regeneration Limited and (2) to take all steps necessary to terminate the Development Agreement and other associated agreements following the termination of the Grant Determination Agreement and the Back to Back GDA if he is satisfied this is the best option for the Council.

1.2          Agree to examine the development option being proposed by PCRL  and English Cities Fund and delegates authority to the Director of Place, in consultation with the Director  of Law and Governance and the Portfolio Holder for Regeneration, Strategic Planning and External Relationships to negotiate and bring back to Cabinet an alternative development proposal no later than 13^th March  2024 Cabinet Meeting. 

Reason for the decision: As outlined in the report

This decision is subject to call-in