The current programme indicates the total housing provided per scheme as well as the net gain of affordable rented council homes. The HRA Account Report to this committee includes all financial information for respective scheme budgets and net cost to the council’s Housing Revenue account.

Cost increases on approved projects

Likelihood: 5 (certain)

• Risk of increased budget requirements due to COVID-related delays/rescheduling, Brexit, Ukraine War and now inflation and supply chain cost increases.
• Staffing and materials shortage and delays on Start on Sites due to funding uncertainties increase potential for this risk.

Impact: 4 (significant disruption)

• Committee approval needed for additional capital funding.
  Unplanned public expenditure.
• Loss of value for money.
• Reputation risk to council.
• Reduction in overall delivery achievable.

Mitigation

• Cost plans are regularly reviewed and updated, and contracts are fixed price to the council.
• Latest budgets consistently reviewed as part of Budget Setting Report.
• Regular updated risk management budgeting completed as part of risk reviews work across the Council. Supply chain and materials concerns under close monitoring.
• Committee approval to progress schemes ahead of firm grant certainty mitigates cost increases ahead of entering into build contracts.
• Depending on the extent of the additional cost this may be managed within scheme level contingencies approved in Budget Setting Report.

Securing Planning Permission on new schemes

Likelihood: 2 (some possibility)

• Failure in obtaining planning permission would cause delays and increase costs for a revised application.
• Delays in receiving a planning decision lead to increased costs being incurred and delays in submission of Funding Bids.
• Additional time and effort required to redraft plans.

Impact: 3 (noticeable effect)

• Schemes are developed with planners through the pre-application process. Lack of planning resource and Planning Department staff shortages or substitution would lead to delays in arranging for the pre app meetings, and subsequently planning submissions and approvals.

Mitigation

• Pre-app process used effectively, and schemes aim to be policy compliant.
• Build in of additional lead time where required to ensure schemes progressing within target schedules.
• Insuring officers and councillors are involved in decision making from project early stages

Sales risk – exposing council cash flow forecast

Likelihood: 3 (strong possibility)

• Deceleration of sales/purchase/acquisition cycle while City Council is reliant on sales income to support programme currently, however bulk of sales now completed on committed sites.
• Depreciation of assets.

Impact: 3 (noticeable effect)

• Housing market fluctuations are beyond council control and current circumstances may exacerbate such fluctuations or delay buyer activities in the short-medium term.
• Market sales have however performed well with all plots at Mill Road now sold and over 80% of properties sold at Cromwell Road.

Mitigation

• Regular updates received in the market for sales of sites.
• All homes at Mill Road are now sold and Cromwell Road sales are progressing with reporting through CIP processes on sales.
• Currently values are being achieved in line with appraisal and sales rate in line with expectations.
• Close engagement with market through private sector partners.
• Share risk with private sector partners.
• Financial and sensitivity analysis for the new project site selections, before project starts.

Decanting residents and leaseholders

Likelihood: 3 (strong possibility)

• Regeneration schemes will not be progressed if residents are not decanted.
• Complication in buybacks where Leaseholders face difficulties for obtaining new mortgages for their onward purchase, in non-portable cases.
• Redevelopment of estates with high % Leasehold ownership poses greater risk of CPO proceedings being required

Impact: 3 (noticeable effect)

• Full decant of schemes within the 500 programme has now been reached.
• Decant of Schemes under the 1,000 programme is on-going and if this is not achieved on time there will be impact on the costs of the project.

Mitigation

• Decant and rehousing officer regularly liaising with residents requiring decanting to ensure successful rehoming.
• Decanting and liaison with tenants started early on in the development process.
• CPO and NOSP process outlined to be proceeded as necessary on future schemes.
• Additional resource to support this work allocated.

Not securing necessary grant for new schemes

Likelihood: 2 (some possibility)

• In case the grant is not secured or at a lower level the business plan may need to be reviewed and the level of housing and tenure delivered may need to change.

Impact: 3 (noticeable effect)

• HE Grant funding now secured on 7 of the 13 schemes approved under the new 10-year programme, with additional funding allocated from separate streams at Fanshawe Rd, Aylesborough, and for Refugee housing.
• Remaining grant across new programme schemes not yet secured, other than that committed by the council.
• The business plan for the MTFS assumed grant.

Mitigation

• Continual discussions with Homes England and other funding bodies are providing greater security on grant funding ability.
• Issues in securing the level required to support the costs of developing in Cambridge are an issue, and we will continue to review assumptions in the business plan as negotiations develop.
• A recent report from DLUHC has additionally highlighted major risk to the governments Affordable housing programme if grant rates remain static against current inflation.

Labour market, materials and build prices increasing

Likelihood: 5 (certain)

• Situation is being proactively managed and is currently seen as a short-term risk, which must be managed, but may impact programme if not price.

Impact: 4 (significant disruption)

• Services or materials shortages may lead to delays in project delivery and an overall increase on programme cashflow.
• Fixed price contracts where utilised are minimizing cost risks which lie with CIP.

Mitigation

• Fixed price contracts and liaising working closely with Hill to ensure all materials are placed and ordered as soon as reasonably possible and stock-piled on site or using additional storage as required.
• Key packages are being procured as early as possible. Hills existing supply chain relationships are being used to ensure service.

Insufficient project management resource to complete programme

Likelihood: 1 (little chance)

• Inability to properly manage projects.
• Council entering into contractual obligations without proper oversight.

Impact: 3 (noticeable effect)

• Too many schemes brought forward to be managed by existing team and staff overworked.
• Also there are increased need in adding data and compliance and fire safety statuary requirements to the projects.

Mitigation

• Appointment of new consultants.
• Resourcing fund for new recruitments to ensure capacity.

Future anti-development campaigns

Likelihood: 4 (probable)

• Potential for reputational damage for HDA and Cambridge City Council.
• Unexpected extended time frame for the project.
• Complications in submission of the scheme for planning consideration and funding approval.

Impact: 3 (noticeable effect)

• Increase in number of leaseholders/freeholders in new larger schemes increases risk of push back against potential redevelopment activities.

Mitigation

• Establishing focussed steering groups early where necessary.
• Focus on early public engagement via different events and consultations.
• Potential development to be informed by detailed options appraisals