§  To update Cabinet on the outcome of progress of the Local Regeneration Fund (LRF) schemes, delivering significant regeneration projects in the District’s town centres incorporating:

o  Carnarvon Terrace in Clacton-on-Sea (formerly Levelling Up Fund (LUF)): 28 homes, re-provided multi?storey car park, commercial space and public realm; and

o  Homes for Dovercourt (formerly Capital Regeneration Projects (CRP1)): including town centre car park improvements at Milton Road and eight new social homes on Victoria Street;

§  To recommend next steps in taking the projects forwards and confirm Cabinet’s continuing commitment to delivering the schemes;

§  To seek authority to grant two unilateral undertakings (UU) to the Planning Authority:

o  to secure obligations relating to the Recreational Disturbance Avoidance and Mitigation Strategy (RAMS) in relation to the Victoria Street development; and

o  to update the UU for Carnarvon Terrace to reflect its delivery as 100% affordable housing.

RESOLVED that Cabinet formally –

a)       approves progressing the Carnarvon Terrace and Homes for Dovercourt projects and reiterates the Council’s commitment to the delivery of the schemes whilst recognising the ongoing delivery risks;

b)       approves an underlying policy direction and associated ‘in principle’ approach that the tenure mixes of the housing at Carnarvon Terrace be 100% socially rented and for the future management of the scheme to be led directly by the Council, subject to a future full report to Cabinet;

c)       notes the omission from the Carnarvon Terrace budget of £390,000 of grant funding previously identified for Electric Vehicle charging and reported to Cabinet as not secured, for reasons of feasibility attached to the funding terms and conditions;

d)       notes the value engineering underway and authorises the Portfolio Holder for Economic Growth, Regeneration and Tourism, in consultation with the Portfolio Holder for Housing and the Portfolio Holder for Leisure & Public Realm, to approve the submission of amendments to the planning consents as required, to the extent that amendments remain within the parameters of the Memorandum of Understanding with MHCLG and as approved by Cabinet to date;

e)       approves that the Council, in its capacity as landowner and developer, grants an Unilateral Undertaking (UU) to the Planning Authority to discharge the RAMS payment in lieu of a Section 106 agreement for obligations in relation to application reference 24/01911/FUL (“the Victoria Street Development”); and

f)         approves that an application is made to the Council’s Planning Services for the Unilateral Undertaking (UU) dated the 15^th July 2025 given by the Council in respect of planning permission reference 24/01890/FUL for the development at Carnarvon Terrace (‘the Planning Permission’) to be discharged and that a new replacement UU be entered into by the Council for the purposes of securing RAMS, Biodiversity Net Gain Monitoring fee, and 100% Affordable Housing in respect of the Planning Permission.

Cabinet considered a comprehensive report of the Economic Growth, Regeneration & Tourism Portfolio Holder (A.10) which:-

(i)       updated Cabinet on the outcome of progress of the Local Regeneration Fund (LRF) schemes, delivering significant regeneration projects in the District’s town centres incorporating:

·     Carnarvon Terrace in Clacton-on-Sea (formerly Levelling Up Fund (LUF)): 28 homes, re-provided multi?storey car park, commercial space and public realm; and

·     Homes for Dovercourt (formerly Capital Regeneration Projects (CRP1)): including town centre car park improvements at Milton Road and eight new social homes on Victoria Street;

(i)       recommended next steps in taking the projects forwards and confirmed Cabinet’s continuing commitment to delivering the schemes; and

(ii)      sought authority to grant two unilateral undertakings (UU) to the Planning Authority:

·     to secure obligations relating to the Recreational Disturbance Avoidance and Mitigation Strategy (RAMS) in relation to the Victoria Street development; and

·     to update the UU for Carnarvon Terrace to reflect its delivery as 100% affordable housing.

It was reported that, in accordance with previous decisions of the Cabinet, procurement exercises had been undertaken on the TDC-led schemes in late 2025, which had been unsuccessful as only single bids had been received, and which had not adequately demonstrated value for money. Following this, a new approach had been developed, utilising recent changes in procurement legislation.

This approach had been tested with the market in February 2026 through a ‘Pre-Market Engagement’ exercise. This exercise had –

§  demonstrated strong interest from the market in the projects, largely from regional medium scale organisations;

§  established support for the revised procurement approach, which targeted an open process, rather than frameworks, as in the previous unsuccessful attempt, and two stage procurement; and

§  provided detailed feedback on the project programme and budget, including value engineering opportunities.

Next steps

Cabinet was cognisant that delivery of significant regeneration projects of this scale presented challenges to the developer with risks including financial, programme and quality. The level of risk reduced as the project moved through delivery but remained significant at this stage until a contractor was secured for construction. Bearing this in mind, the outcomes of the aforementioned Pre-Market Engagement offered the Council the confidence to move forwards with the projects by suggesting a likelihood of success of a future procurement exercise and the deliverability of the schemes within the existing funding envelope. Risks attached to the funding envelope would be further reduced once an award of contract had been made.

What changes are proposed to the schemes?

Members were informed that alterations to the scheme had been considered as part of the re-procurement strategy, including where value engineering could support value for money and ensuring the projects were deliverable within the available funding.

The general principle was to seek simplification and savings whilst retaining the overall design concept and layout of the schemes, as set out within the funding and planning consent. This meant changes were limited to material and non-material amendments. Key alterations were as follows:

§  delivering Carnarvon Terrace as a 100% affordable housing scheme had the potential to deliver savings by delivering economies of scale through more standardised unit layouts;

§  refining material specifications to target durability and longevity, using off-the-shelf where possible to drive savings without compromising quality;

§  working with the main contractor and local supply chains to take advantage of simplified structural solutions, informed by more a more detailed understanding of site conditions following the demolition of the derelict structure at 20 Victoria Street.

Management & operation of Carnarvon Terrace

Cabinet was reminded that the planning consent set out that the 28 housing units at Carnarvon Terrace would be 40% affordable rent, 60% market rent, in line with the Council’s policies in the adopted District Local Plan.

For this to be operated, market rent would need to be managed by a Registered Provider (RP). Engagement with RPs had demonstrated that they would only be able to operate the asset as 100% affordable and there was no interest in operating a mixed tenure scheme at this time. If the asset was 100% affordable, this could be managed directly by the Council, which eroded the benefit of entering an agreement with an RP, which was not an approach the Council had taken on any other sites to date.

Members recalled that a mixed tenure scheme had been originally supported because of the mixed community this would offer. An alternative way to ensure a level of diversity within the residents was to have a broader mix of unit sizes, which was possible through rationalising the floor layouts.

Victoria Street had been designed as 100% affordable housing from the outset, and as the land was bought for housing delivery, the land was already held within the HRA.

It was also highlighted that, as part of developing the project, it had been recognised that sales provided from the originally planned mix of tenure would have acted as a potential contingency sum and therefore would partly have ‘underwritten’ the financial risks associated with the scheme. By potentially moving to a 100% affordable housing scheme held within the HRA, this option would no longer be applicable.

Further investigation / review of this potentially revised approach was therefore required alongside the wider activities e.g. the outcome of the tender process. All elements of the scheme therefore needed to be considered collectively as part of taking a robust / value for approach forward to delivery. However, at this stage, it was helpful to consider an ‘in principle’ approach to enable the project to be further developed with an underlying policy direction, which was reflected within the Portfolio Holder’s recommendations.

Having duly considered the reasoning behind the report’s recommendations together with the alternative options available; all as detailed within the Portfolio Holder’s report (A.10):-

It was moved by Councillor Stephenson, seconded by Councillor Baker and:-

RESOLVED that Cabinet formally –

a)       approves progressing the Carnarvon Terrace and Homes for Dovercourt projects and reiterates the Council’s commitment to the delivery of the schemes whilst recognising the ongoing delivery risks;

b)       approves an underlying policy direction and associated ‘in principle’ approach that the tenure mixes of the housing at Carnarvon Terrace be 100% socially rented and for the future management of the scheme to be led directly by the Council, subject to a future full report to Cabinet;

c)       notes the omission from the Carnarvon Terrace budget of £390,000 of grant funding previously identified for Electric Vehicle charging and reported to Cabinet as not secured, for reasons of feasibility attached to the funding terms and conditions;

d)       notes the value engineering underway and authorises the Portfolio Holder for Economic Growth, Regeneration and Tourism, in consultation with the Portfolio Holder for Housing and the Portfolio Holder for Leisure & Public Realm, to approve the submission of amendments to the planning consents as required, to the extent that amendments remain within the parameters of the Memorandum of Understanding with MHCLG and as approved by Cabinet to date;

e)       approves that the Council, in its capacity as landowner and developer, grants an Unilateral Undertaking (UU) to the Planning Authority to discharge the RAMS payment in lieu of a Section 106 agreement for obligations in relation to application reference 24/01911/FUL (“the Victoria Street Development”); and

f)         approves that an application is made to the Council’s Planning Services for the Unilateral Undertaking (UU) dated the 15^th July 2025 given by the Council in respect of planning permission reference 24/01890/FUL for the development at Carnarvon Terrace (‘the Planning Permission’) to be discharged and that a new replacement UU be entered into by the Council for the purposes of securing RAMS, Biodiversity Net Gain Monitoring fee, and 100% Affordable Housing in respect of the Planning Permission.