Agenda item

It is recommended that the committee scrutinise and comment on the content within the attached cabinet report, ref CAB3492, particularly the identified “lessons learned” which will be considered by cabinet at its meeting on the 19 November 2025.

Councillor Mark Reach, Cabinet Member for Good Homes introduced the report which provided the lessons learned from the construction of six flats at Southbrook Cottages, Micheldever. The introduction included the following points.

1. The project, which began in 2020, had an overspend of approximately 27% on total costs therefore a report to Scrutiny and Cabinet was required.
2. The properties were built to Passivhaus Plus standard as a pilot development in support of the council’s Carbon Neutrality Action Plan objectives. The report detailed the reasons for the cost overrun and proposed actions to be considered for future projects.

Councillor Caroline Horrill addressed the committee and raised several points for the committee to consider which could be summarised as follows. She stated that while she was in favour of project reviews, she felt the report lacked the full history of the project. She felt that the decision to build to Passivhaus standard meant that the scheme was over-specified. Councillor Horrill highlighted that the report failed to include the loss of revenue to the Housing Revenue Account (HRA) during rectification works and made no reference to issues experienced by the Parish Council with the contractor. She concluded that the report was a lost opportunity as it had not sought input from ward councillors or the Parish Council.

Councillor Danny Lee addressed the committee and raised several points for the committee to consider which could be summarised as follows. He congratulated the housing team on delivering the project, which supported the council’s greener faster priorities. He acknowledged the cost overrun but noted it was a pilot project with a steep learning curve. He argued strongly that full Passivhaus certification was vital for future schemes as it provided quality assurance and eliminated the performance gap between a building’s design and actual energy efficiency. He stated that choosing not to certify future Passivhaus projects would be a poor decision and suggested a future comparative analysis could be undertaken against Modern Methods of Construction (MMC).

Ian Tait addressed the committee and raised several points for the committee to consider which could be summarised as follows. He wished tohighlight that the final project cost represented a 137% increase against the initial appraisal in 2020. He stated that the figures could not be justified, noting that the cost per square metre was more than double that of a commercial developer. Mr Tait advised the committee that the expenditure was from the HRA, funded by council tenants’ rent, and that he felt that tenants wanted more decent homes rather than expensive schemes such as this.

The committee was asked to scrutinise and comment on the content within the attached cabinet report, ref CAB3492, particularly the identified “lessons learned” which would be considered by cabinet at its meeting on 19 November 2025. The committee proceeded to ask questions and debate the report. In summary, the following matters were raised.

1. A question was asked about the contract and why remedial works were not included within its original scope.
2. Clarification was sought on the typical cost uplift from a contractor for a design and build contract where the contractor carried the risk, and how this information informed the council’s decision on its own risk appetite.
3. An explanation was requested as to why the project was approved to proceed despite failing its initial viability appraisal.
4. A question was raised about the role of the Clerk of Works, as the report recommended their use as a lesson learned, yet it was understood that one had been employed on this project.
5. A concern was raised as to whether other council projects were exposed to similar risks regarding contractual control.
6. A suggestion was made to review the Woodman Close project upon its completion to assess the impact of implementing the lessons learned from Hobbs View.
7. A point was raised regarding the importance of including feedback from the Parish Council and ward members in the final lessons learned report.

These points were responded to by Councillor Mark Reach, Cabinet Member for Good Homes, Caroline Egan, Service Lead - New Homes, and Laura Taylor, Chief Executive accordingly.

RESOLVED:

1.    That the report be noted.

2.    The committee asked the cabinet to consider the following points:

a.    That future projects should include a clear assessment of the council's risk appetite to determine the most appropriate method of delivery and form of contract.

b.    That upon completion of the Woodman Close project, evaluate the effectiveness of the lessons learned from Hobbs View.

c.     That the lessons learned should include the views of residents, the Parish Council, and ward members.

d.    That future lessons learned reports provide a broader evaluation of the entire project, including all objectives, risks, and stakeholder engagement, rather than solely focusing on the constitutional requirement related to budget overspend.

e.    That a comparison of the ongoing running costs for Hobbs View and WoodmanClose properties be undertaken.

3.    That cabinet considers the committee’s comments raised during the discussion of the item.