THE TRANSFORMATION OF ORCHARD PARK

2 July 2008
The Communities and Local Government Agency (CLG) announces Round 6 of the Housing Private Finance Initiative (PFI). Each round is designed to allow the regeneration of council estates in deprived areas through funding in the form of PFI credits passed to local authorities by Central Government. Much of the money for PFI projects comes from the private sector (eg. banks) as loans, which are repaid from Government resources typically over a 25 to 30 year period. A local authority may provide land. The CLG has a stragetic role and allocates PFI credits on behalf of the Homes and Communities Agency (HCA).

For the sixth round, the selection process is tightened up. The CLG and HCA favour projects that should bring about tranformational change by social as well as physical regeneration of communities. Mixed tenure is intended to ‘reposition’ estates in terms of quality, diversity, reputation, and demand. A significant element of extra care for the elderly will be looked for. Refurbishment of existing homes is unpopular with PFI funders, although refurbishment is not necessarily ignored within a bid. The meeting of PFI criteria is more relevant to the bid than are local authority priorities.

The PFI route begins with an Expression of Interest (EOI). If the EOI is accepted, an Outline Business Case (OBC) must follow. Costs of preparing an OBC may be in the order of £1m. Negotiations take place and a detailed Final Business Case (FBC) is produced. Cases have to be approved by a policy review group (PRG) and endorsed by HM Treasury before any procurement by the local authority can go ahead. The procurement process, by its very nature, is usually complicated and lengthy.

27 October 2008
Hull City Council Cabinet approves the submission of an Expression of Interest (EOI), or bid, for a share of credits from Round 6 of the Housing PFI. The bid document carries the title ‘The Transformation of Orchard Park – Shaping the Place, Creating a Fruitful Future’. There are 16 sections and 29 appendices to the file. A summary draft is subtitled ‘Harvesting the Future, Shaping the Place’. The EOI asks for £141.896m. In order to regenerate the whole of Orchard Park, two or three times that figure would plausibly be needed, but success is judged to be more likely if the figure respects the HCA’s notion of an ‘ideal’ bid (£100m).

According to the bid document, transformation of Orchard Park will comprise three phases centred on the Danes (an area where a significant degree of demolition has already taken place in recent years), the Thorpes, and an area between those two urban villages. In all, 752 council houses, 255 privately owned houses, and 33 council bungalows (1040 properties) will be demolished to make way for 1020 new homes in the private sector and 680 new homes for social renting (1700 properties, satisfying a mixed tenure ratio of 60:40). The net gain of private homes will be 765 properties while the net loss of social rented housing will be 105 properties.

The Council also wishes to demolish all multi-storey flats in Orchard Park (4 high-rise blocks and 3 midi blocks). Removal of these buildings alone would mean a loss of 580 council units and 7 leasehold units. Together with the reduction through the proposed rebuilding programme, the loss to the Council rented sector will be 685 units of accommodation. The flats are deemed too expensive to bring to the Government’s Decent Homes Standard. Their demolition is complementary to the PFI regeneration scheme, not part of it. The cost of demolition of the flats, estimated in excess of £4m, would not be funded from PFI credits.

31 October 2008
Deadline for submissions of EOIs. The CLG receive Hull’s bid document.

13 November 2008
Ward councillors express concern about lack of involvement in consultation regarding the bid (Minute 83).

27 November 2008
The Northern Area Housing Board receives copies of the bid document.

Late 2008
Discussion between Hull City Council and the HCA results in the adjustment of credits allocation in principle to £159.25m. Hull City Council begins work on its first Housing PFI business case. The Council loses its Head of Housing, who is named in the EOI as Project Director.

January 2009
A PFI bid for extra care housing submitted to the Department of Health (DoH), for £23.4m to build 120 new units of accommodation in the city, is approved as an Expression of Interest. Some of the new units are planned for Orchard Park, a proposed site being Homethorpe where the Vernon House and Drake House tower blocks stood.

Early 2009
The HCA hopes to finish the consideration of Expressions of Interest for Round 6 in March which will allow the CLG to declare the results of the bidding at the end of April or the beginning of May.

Up to £1.87bn in total is expected to be released. In all, 24 authorities submit bids to a total exceeding £4bn, more than twice the amount of credits available for this round. (Previous Housing PFI rounds, the first in 1998, have allocated £1.3bn to 25 schemes.)

17 July 2009
Housing Minister John Healey confirms the outcome of applications for Round 6. An anxious wait ends with good news for ten of the bidding authorities, who stand to share £1.7bn of PFI credits. One of the ten is Hull City Council.

The PFI award allocated to Hull is reported as £156m. This amount is for council housing build and maintenance over the PFI period. There will be additional private housing investment drawn in – a figure of around £233m is mentioned. Manchester’s Grove Village, in 2003 the first Housing PFI scheme in the country to be contractually signed, was funded from a £37m bid to become a £100m project. The ratios are similar.

July 2009
First upload of this web page.

9 September 2009
Within the context of a wider programme of transformation for Orchard Park, planning application is approved to build a Northern Academy on the Princess Elizabeth playing fields (plan).

28 September 2009
City Cabinet agrees the following:

to approve a report on project governance and resource arrangements;
that a £1m reserve be released from the Housing Revenue Account;
that an Orchard Park PFI Advisory Board be set up to include ward councillors, community and tenant board members.

Autumn 2009
A first newsletter is distributed by the Council to all homes within the proposed intervention areas (printing was delayed because of errors on the included map).

12 November 2009
A stop-off at Orchard Park by the Housing Minister is cancelled because of a required presence in Parliament.

17 December 2009
The Portfolio Holder for Regeneration and Housing Strategy responds to a written question regarding the consultation process surrounding regeneration plans for Orchard Park.

18 December 2009
A £14m Neighbourhood Integrated Service Centre is opened. Adjacent to the new complex, The Orchard Park shopping centre has received partial remodelling.

Late 2009
Diana Johnson MP for Hull North conducts an Orchard Park Housing Scheme Survey.

15 January 2010
The results of a survey by Diana Johnson MP suggests a core of opposition to a net loss of council stock as a result of transformation.

February 2010
The three ward councillors for the Orchard Park & Greenward ward jointly issue a ‘5-point plan’ for the PFI:

All of Orchard Park must be included, not just [Wimpey] no-fines houses;
No maisonettes;
Money for refurbishment, not just demolition;
Every council property demolished must be replaced with a new council property;
Resident-led, not Council-imposed plan.

9 February 2010
Inaugural meeting of the Orchard Park PFI Advisory Board, organised by the Council in partnership with Gateway. A revision to the original PFI bid is presented. Changes include an 18% reduction in housing density and a shift in proportions of home sizes towards the provision of more 3- to 5-bedroomed properties. The ‘pepper-potting’ of estate design, preferred by many urban designers, is considered unlikely in favour of clusters (see the best mix for explanation of terms).

11 February 2010
Junior Housing Minister Ian Austin MP accompanied by Diana Johnson MP meets with ward councillors, the chair of the Area Housing Board, and representatives of Orchard Park resident associations at the Thorpes Resource Centre. The Minister takes note of concerns regarding the PFI proposals (picture).

Special meeting of the Orchard Park PFI Advisory Board to discuss issues regarding the bid. A resolution is passed for three options to be considered:

Accept the original bid without change;
Submit the revised proposals [see 9 February 2010];
Assemble a new package to include refurbishment of existing housing stock (internal and external), some demolition, some new build; environmental work.

Residents to be asked which option they would prefer.

15 February 2010
Drop-in session where ward councillors hear views on issues of local concern, including the proposed regeneration of Orchard Park (results not released).

Special meeting of the Orchard Park PFI Advisory Board (the third meeting within a week) to discuss the imminent phase of community consultation.

22 February – 20 March 2010
Phase One of the consultation process. Information events are held at various venues. A comprehensive update with questionnaire is available at the events, and every home within Orchard Park receives a copy. A reminder letter dated 15 March 2010 sent to every home draws attention to the last three events.

Of the three options motioned by the Advisory Board on 11 February 2010, Option 1 (which represents the original bid proposal, and which continues to stand as the basis for the agreement of PFI funding) was removed from the consultation exercise. As far as residents are concerned, Option 2 on the 11 February list is Option 1 during consultation, and Option 3 is Option 2. In other words, residents are asked to give opinions on a choice between a revised version of the original bid and a substantially different package, one of which will be submitted to the Homes and Communities Agency for reconsideration (the HCA is aware of the situation). A ‘none of the above’ option, to disown the scheme and miss out on PFI funding, was rejected by the Advisory Board and is not included in the consultation.

8 March 2010
Special meeting of the Orchard Park PFI Advisory Board to discuss residents’ concerns, as forwarded by representatives of the Danes and Thorpes, regarding the consultation process.

18 March 2010
Follow-up meeting of the Orchard Park PFI Advisory Board at which queries and issues raised on behalf of residents at the 8 March 2010 meeting are responded to.

22 March – 21 May 2010
Residents of the multi-storey flats are visited during this period. A friend or relative may be present during the process.

12 April 2010
The Northern Area Committee hears a response on behalf of the Strategic Director Housing Investment and Renewal to Resolution 107(08/09). This requests an explanation as to why its members and those of the Northern Area Housing Board were not consulted on the compilation of the PFI bid (Briefing Note). An assurance is given that every stage of consultation will be followed before the Outline Business Case is submitted in October 2010.

30 April 2010
The Rt Hon John Healey, Minister for Housing and Planning, stops off at a home in Laxthorpe accompanied by Diana Johnson MP and meets with four representatives of the community. Issues regarding the proposed PFI project, including the process of consultation, are discussed (picture).

10 May 2010
The Orchard Park PFI Advisory Board meets to learn the responses from Phase One of the consultation process.

14 May 2010
Workshop at which the Advisory Board discusses aspects of Phase Two of the consultation process.

8 June 2010
The Advisory Board meets to disuss Phase 2 of the consultation process.

24 June 2010
Diana Johnson MP receives a Parliamentary Written Answer [4028] regarding the continuation of the Orchard Park PFI scheme.

25 June 2010
National Audit Office publishes a critical report on PFI in Housing. In response, the Housing Minister Grant Shapps orders a review.

Since the announcement on 17 July 2009 of Housing PFI funding for Orchard Park (subject to an acceptable business case), the rumour mill has been in full production. This section displays some of the questions and concerns raised by residents. Accompanying comments are based on information as it is understood at the present time.

When will building start?
A period for the preparation of the Outline Business Case has been extended from June 2010 to December 2010. Then there is the Final Business Case. Procurement can take a further three years. Given such a timescale, site work isn’t expected to commence until 2014 at the earliest. The multi-storey flats will have to be demolished before any building starts.

Is the Council going to demolish my home?
According to the original bid, most of the Danes, the whole of the Thorpes, and the potentially flood-prone (but no other) brick-built properties that join the two villages near Hall Road would be replaced. However, the proposal is in the process of being changed, from an ‘aggressive’ intervention to one more sympathetic to the community (what’s the latest?).

Why aren't the Courts included?
The Courts urban village contains the earliest built stock and it does seem odd that these properties are not in the bid. Extensive demolition within the Danes in the recent past means that some of the preparation work for regeneration there is already done; and the Thorpes area was earmarked for redevelopment under the initial Gateway programme. The official explanation is that a bid for an amount sufficient to transform every part of the estate would have been turned down, even though consultation literature insists on implying the bid is about Orchard Park as a whole. Project leaders believe the Courts will benefit indirectly from the scheme. An impact study referring to communities adjacent to the proposed invervention areas has been requested.

I'm an owner occupier. Will I recover my outlay?
This is the major concern among people who have purchased through Right To Buy. Under the original bid proposals, approximately 250 private properties would be involved within the transformation boundary. The latest proposal discards neighbourhoods where the level of owner occupation is relatively high (purchase and compensation represents a significant cost to regeneration). Whatever, no one should lose out in financial terms from compulsory purchase, and there is a financial help package available. Owner compensation will not be funded from PFI credits but directly by the Council.

If I'm thinking of buying my present home, should I wait?
A lender will almost certainly decline to fund a purchase on an existing property in a neighbourhood facing demolition, and a solicitor would most probably advise against purchase. The Council can refuse to sell once an Outline Business Case has been accepted. As regards remaining neighbourhoods, experience elsewhere shows that property values tend to increase following regeneration within an estate.

Should I put off plans for decoration?
As no home moves are likely to be required within at least four years (except for flats), then go ahead and decorate if you wish. But don’t spend too much on home modifications.

What about people who live in the flats?
Residents of the multi-storey blocks have been individually consulted. The Kinthorpe and Laxthorpe older persons’ midi-blocks are likely the last to be demolished – though a rethink is taking place regarding the retention of at least one of these. It is not certain where people will be offered accommodation (previous tower block demolition saw many residents transferred to remaining blocks). Blocks may be subject to theft of fittings and vandalism as they become depleted of occupants.

Will rents be dearer?
The previous government held a full review of social housing finance and an extensive overhaul seems sure to go ahead under the present coalition. This applies nationally and is nothing to do with PFI. Implications for Hull are still being pondered. Council rents in general are increased by a small percentage annually in order that they converge with those of non-council social landlords.
The issue regarding Orchard Park is that new build has the effect of lifting market values, and all properties may then be moved into higher banding. As a result of this alone, rents and Council Tax could be more, though heat efficiencies of new homes are expected to offset the rises.

Supposing tenants want to stay, how does this square with the reduction in Council properties?
The prospect of community break-up was a major issue among residents during the first phase of public consultation. This rather contrasts with a view held by some project designers that people could not wait to leave Orchard Park (desertion of the Danes was cited, though it might be argued that poor estate management has also played a part in the area’s partial abandonment). The revised bid takes into account the degree of concern, showing a net gain of council houses (the loss of 587 units of accommodation by demolition of the multi-storey flats is not included in PFI figures). Current understanding is that everything will be done ‘to ensure any residents affected by demolition who want to stay in the area are able to do so.’

Can I expect like-for-like as regards house size?
Allocation of a Council property type (essentially defined by the number of bedrooms) depends on family size, and this will apply when new homes are ready. So, yes, there will be some adjustment, though house layout should be better. Owner occupiers will be able to choose from what is available, subject to affordability.

During the work, will local people be employed?
Under EU regulations, no legal obligation on a contractor to employ local labour can be imposed. However, assurances have been made that local labour will be favoured. (One concern cited by John Prescott regarding the North Hull HAT project was that ‘workers were shipped into the area, depriving the community of work.’)

Many of today's problems are a result of misguided planning of previous decades. How can we know that the new design will genuinely serve the community and not simply be to use up the money?
It would be a tragedy if the next generation were to look back at present planners with the same scorn as many today regard the planners of the past. Residents must think about what they want in practical terms and planners must get from behind their desks. To be avoided are initially impressive but ultimately useless ‘monuments to PFI’. Consultation has to mean more than merely being invited along to learn what’s already been decided. Comprehensive engagement with the local community is a condition of a funded scheme of this type.

Comprehensive engagement – so no repeat of 2002?
In Autumn 2002 the rumour spread that everything north of Hall Road was to be cleared, presumably to make way for another Kingswood. The Council’s poor handling of the situation left an aftertaste of suspicion and mistrust among residents of Orchard Park which still lingers. Circumstances were much different then. Evidence indicates that lessons have been learnt.

How will residents be represented?
The Orchard Park PFI Advisory Board includes community representatives as voting members. Its chair (a Council tenant) sits on the Project Board. The Northern Area Housing Board acts on behalf of all residents. Three ward councillors are available, and neighbourhood representation is through residents associations (links).

Are residents to be offered any training in big project participation?
The community role is vital to success. Residents have a long-term interest in the outcome, and they are the ultimate judges. But they may not have the required skills, knowledge, or confidence for meaningful participation. Opportunities for involvement in the design process are being developed through a Design Champion initiative, assisted by Groundwork.

Does the Decent Homes programme continue in areas that face demolition?
When the Decent Homes programme was started, the policy was to tackle worst properties first. Consequently, a lot of improvement work was carried out in houses that may be demolished as part of the transformation scheme. There are no formal plans for any recovery of expenditure through the disposal of fittings.

Will services likewise continue into the project?
The announcement of a large renewal project may precipitate ‘pre-regenerational neglect’ within neighbourhoods. Residents and service providers alike begin to question the point of maintenance. When the period between announcement and actual start of work is measured in years, pre-regenerational neglect tends to accumulate. There could be perceptions of deliberate neglect by authorities aimed at driving existing residents out in order to reduce compensation payments. Hull City Council has confirmed its duty to continue the provision of services in Orchard Park.

Is there enough money for the scheme as bid?
As mentioned above, the original bid was tailored in order to be considered. Accordingly, one potential threat was that of an emphasis on demolish-and-build with little left over for the environment and for social improvement. Another was that the credits would be used up before the project was finished in terms of areas covered.
The latest proposal is for a reduced intervention. Not all the money will be needed in the programme for the Danes and Thorpes. For the reason that no suitable sites exist for new build in the Courts, there will be spare capacity in the PFI funding. Project leaders have been looking at ways to repackage the bid and retain unused credits for the city, though the HCA has indicated a wish to retain area focus. Whatever, an assurance has been given that the Orchard Park scheme will have priority in the allocation of funding.

Will there be sound scrutiny?
Current contractor performance regarding repairs and maintenance of the existing housing stock along with Decent Homes work is well scrutinised. A reasonable degree of transparency will be expected within the bounds of ‘commercial confidentiality’.

Can a change of landscape really change the people?
Some regeneration projects are solely about property. The deprivation is simply moved on. An illusion of social improvement occurs because new people fill the neighbourhoods. In the declared philosophy of Housing PFI, property is one part of the regeneration package; the other is social regeneration. Improvement of the lives of existing tenants is a factor along with developer profit from house sales.
The concept of mixed tenure, the model for the original bid and an unproved example of social engineering, predicts that self-perpetuating concentrations of low esteem and expectation within the original community are broken up. Dispersal of deprivation, though, is not necessarily eradication, just as the replacement of physical structure is not necessarily an automatic cure-all for social blight. A change of landscape may be welcome and appreciated but it does need to be viewed as a basis for transformation rather than the finished job.

Is PFI a good thing?
The pros and cons of the Private Finance Initiative as a form of funding for large housing projects are beyond the purpose of this page. What has been heard repeatedly in recent times is that PFI is ‘the only game in town’. This indeed looks to be the case locally and for the present.

How does a change of government affect the scheme?
Orchard Park’s transformation project is unlikely to be postponed or cancelled through politics alone. The Private Finance Initiative as a concept was introduced in 1992 under a Conservative government and was embraced by New Labour. How cost-cutting by the Coalition Government might affect unsigned PFI schemes is not known with certainty. For a changed bid as applies to Orchard Park, the Outline and Final Business Cases will need to be convincing. Other large schemes in the area (Extra Care PFI for a sheltered housing complex, the building of a Northern Academy) are to go ahead.

And the recession?
Officially, the economy is out of recession, though a difficult era lies ahead. The environment will undoubtedly be a test for project leaders as they seek to attract the right business partners as well as co-ordinate and maximise resources.

What about...?
You can submit your own concern or comment to this page by email. Go to Contact. Your details will not be passed to any other individual or body, nor be added to a database. Please don’t expect a reply but your contribution will be considered.