MD3424 Receipt and expenditure of revenue funding, from Homes England and the Ministry of Housing, Communities and Local Government, for housing delivery projects

Homes England funding

1.1.    Since the enactment of the Localism Act 2011, Homes England (HE) has not had a legal power to operate in Greater London. Since then, the GLA has been responsible for housing and regeneration in London. 

1.2.    HE is proposing to provide up to £660,000 of grant funding for expenditure on the projects and matters identified below, to facilitate housing delivery. Up to £130,000 of this total will be allocated to the London Borough of Newham (LB Newham); the GLA will therefore receive a total of £530,000. It is an HE condition that all of this funding is spent in accordance with the terms and conditions of the Grant Funding Agreement by 31 March 2026.

1.3.    The full HE grant funding of up to £660,000 is for research focused on unlocking strategic sites for housing development and undertaking capacity, feasibility, phasing and delivery studies on strategic sites in London, to unlock housing delivery. The research and funding is assigned to the Making Best Use of Land programme (see the table at paragraph 5.4 for breakdown by project). Funding is allocated to the following research:  

•    Up to £230,000 to the GLA for procuring services to undertake feasibility work on consolidation and densification of public assets on two large public-sector sites in LB Bromley and LB Southwark. The study will explore using this public land more efficiently; and, ultimately, will identify opportunities to release surplus land parcels for housing delivery.

•    Up to £150,000 to the GLA for procuring services to undertake feasibility work on transport-led residential development along the Bakerloo Line Extension growth corridor. This work will focus on land strategies (e.g., site assessments, masterplanning, design-led capacity studies, options and scenario testing, etc.) to de-risk and accelerate housing delivery.

•    Up to £130,000 to LB Newham, to undertake feasibility work on releasing parts of a large council-owned site for housing redevelopment. The study would also examine the opportunities to use the site more intensively, to re-provide and upgrade existing social infrastructure, as well as exploring potential additionality from the consideration of neighbouring public-sector sites.

•    Up to £150,000 to the GLA for procuring services to undertake deliverability work on transport-led residential development associated with the DLR extension between Beckton Riverside and Thamesmead. This work will focus on the financial viability and funding options for both the DLR extension and the associated housing and necessary infrastructure; the aim is to de-risk and accelerate housing delivery.

1.4.    Because this proposed funding is for projects within London, HE cannot provide it without a delegation of the GLA’s relevant statutory powers. The Mayor is asked to approve such a delegation to HE in this Mayoral Decision (MD). It is considered that delivery of these projects will further the promotion of social development, economic development and wealth creation in Greater London, which is consistent with the general powers of the GLA set out in section 30 of the Greater London Authority Act 1999 (the GLA Act). HE’s written consent to the proposed delegation must be obtained for the delegation to become effective.

1.5.    The Mayor is asked to approve receipt of the proposed £530,000 grant from HE to the GLA. Subject to this MD being approved, the GLA and HE will enter into a Grant Funding Agreement, under which funding will be drawn down on a project-by-project basis, following submission of a claim form to HE. As the full terms and conditions of the agreement are yet to be finalised, the Mayor is asked to approve receipt of this funding by the GLA. This is subject to the terms and conditions being approved by the GLA’s Executive Director, Housing and Land, by way of a written record. 

Ministry of Housing, Communities and Local Government (MHCLG) funding

1.6.    MHCLG is proposing to provide the GLA with up to £400,000 of grant funding for delivery of research focused on: expanding the GLA’s role in driving forward housing delivery; and preparing strategic locations for development. The research and funding is assigned to the Making Best Use of Land programme (see the table at paragraph 5.4 for breakdown by project). Funding is allocated to the following research: 

•    Up to £200,000 to the GLA for procuring services to develop strategies for large-scale, transport-led residential developments in sustainable locations across London. New capacity for housing needs to be brought forward in the most sustainable locations, and at optimum densities. This includes areas near public transport nodes with the highest potential to promote high-density, low-car sustainable developments. This work will focus on land strategies (e.g., masterplanning, land assembly, indicative phasing, etc.) to de-risk and accelerate housing delivery. It is an MHCLG condition that all of this funding is spent by the GLA by 31 March 2026.

•    Up to £200,000 to the GLA for procuring services to undertake research into Mayoral Development Orders (MDOs); and supporting spatial and policy analysis. This will help the GLA to understand how MDOs can drive housing supply in the short and medium term. It will help the GLA assess how MDOs can be used as planning instruments for de-risking and accelerating housing delivery in strategically significant locations. It is an MHCLG condition that all of this funding is spent by the GLA by 30 June 2026.

1.7.    The Mayor is asked to approve receipt of the proposed grant of up to £400,000 from MHCLG to the GLA. Should this MD be approved, the GLA and MHCLG will enter into a grant agreement under which funding is drawn down, on a project-by-project basis, following submission of a claim form to MHCLG. As the full terms and conditions of the agreement are yet to be finalised, the Mayor is asked to approve receipt of this funding, subject those terms and conditions being approved by the GLA’s Executive Director, Housing and Land, by way of a written record. 

The Mayor’s approval of expenditure

1.8.    The Mayor is asked to delegate authority to the Executive Director, Good Growth to approve expenditure funded by the proposed grants to the GLA from HE and MCHLG, as set out in paragraphs 1.3 and 1.6, above. It is considered that delivering these projects will facilitate housing delivery in the long term; and help to further the promotion of social and economic development in Greater London. The research activity supports projects in the Making Best Use of Land Delivery Plan (MD3434) (listed in the table at paragraph 5.4) that contribute to the following core London-level outcomes:

•    Londoners lives in homes they can afford

•    Londoners live in neighbourhoods that are well planned and designed.
Widening an existing delegation in MD3378, the Building More Homes Delivery Plan 

1.9.    The Building More Homes Delivery Plan (MD3378) delegates authority for the receipt and expenditure of additional funding only in relation to the schemes specified in Appendix 4 of that decision. Through this MD (3424), the Mayor is asked to widen the scope of this delegation so that it extends (in relation to the receipt and expenditure of any additional funding) to all projects within the Building More Homes Delivery Plan (MD3378), ensuring consistency with the approach taken with other approved Delivery Plans.
 

2.1.    The objective of this MD is to secure the receipt and expenditure of grant funding from HE and MHCLG. The funding will make a significant contribution to the projects identified in paragraphs 1.3 and 1.6. The overarching objective is to enable and facilitate delivery of tens of thousands of additional new homes in London.

2.2.    Through this funding, the GLA and its functional bodies, and LB Newham, will enable delivery of homes and jobs; and support wider economic growth and regeneration benefits.
 

3.1.    Under section 149 of the Equality Act 2010, the Mayor and the GLA are subject to the public sector equality duty and must have due regard to the need to:

•    eliminate unlawful discrimination, harassment and victimisation and any other conduct that is prohibited by or under the Act

•    advance equality of opportunity between people who share a relevant protected characteristic and those who do not

•    foster good relations between people who share a relevant protected characteristic and those who do not.

3.2.    The protected characteristics are age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation, and marriage/civil partnership status.

3.3.    Both in the delivery of direct activity, and when procuring consultants under this MD, project managers at the GLA will ensure:

•    project briefs and specifications consider diversity and inclusion

•    appropriate indicators are drawn up to monitor the impact on different communities.

3.4.    LB Newham is also subject to the public sector equality duty and must have due regard to the above requirements.

3.5.    The proposed funding (comprising up to £530,000 from HE to the GLA; up to £130,000 from HE to LB Newham; and up to £400,000 from MHCLG to the GLA) will help facilitate housing delivery in London. This, in turn, will help to implement policies set out in the current London Housing Strategy. Londoners stand to benefit from an increase in housing, especially groups with protected characteristics. In 2021, Black, Asian, Mixed and Other ethnicities comprised 46.2 per cent of London’s population; 53.8 per cent of the population was White. Therefore, the projects listed in this MD serve a population with high proportions of Black, Asian, Mixed and Other ethnic groups, who are disproportionately likely to experience poverty and associated housing constraints; and will particularly benefit from additional housing (particularly affordable housing) and regeneration.
 

Key risks

4.1.    There is a risk of low take-up and insufficient time to deliver meaningful outcomes following the allocation of funding. This issue has been mitigated by proactive engagement at the GLA and LB Newham. The funding is currently on track to be spent within the required timeframe.

4.2.    The key risk for the GLA projects lies in meeting the spending deadlines for the funding. The GLA has already briefed TfL’s Procurement and Commercial team to begin preparing for the procurement pipeline. As a result, the risk of underspend within the required timescale is considered low.

4.3.    Subject to approval of this MD, HE and LB Newham will enter into a grant agreement that requires the full £130,000 to be spent by 31 March 2026. There is a risk that LB Newham cannot procure the proposed outputs, or spend this grant, by the deadline. However, the risk is low as the LB Newham deems the project a priority, and progress is critical.

Consultation

4.4.    The GLA has consulted with internal stakeholders – including those working on planning, policy, regeneration, design, housing and public land – on the projects listed in this MD, and on the use of HE and MHCLG funding.

4.5.    HE, MHCLG and LB Newham have all been consulted in regards of proposals for the respective projects listed in this MD.

Links to Mayoral strategies and priorities

4.6.    The table below highlights the links to key Mayoral strategies and priorities:

Conflicts of interest

4.7.    There are no identified conflicts of interest from any officer involved in the drafting or clearance of this MD.

Subsidy control

4.8.    The provision of the proposed HE and MHCLG funding to the GLA is considered an intra-public transfer of funds between public authorities. It does not involve the provision of financial assistance to an enterprise, and on this basis, is not a subsidy.

4.9.    Officers are aware that any additional funding, secured for additional projects under paragraphs 1.9 and 1.10 of this MD, must comply with all subsidy control requirements. 

5.1.    This MD seeks Mayoral approval for receipt and expenditure of £530,000 from HE and £400,000 from MHCLG. Both the funding and expenditure are expected to be complete by the end of 2025-26. HE will grant-fund LB Newham £130,000 directly. 

5.2.    Paragraphs 1.3 and 1.6 provide details of the expenditure. Paragraphs 1.5 and 1.7 mention that funding agreements will be in place between HE and the GLA, and MHCLG and the GLA, for their respective funding. All claims for expenditure to HE and MHCLG should be made in line with the terms and conditions of the agreement. Should expenditure slip beyond the timeframes of the agreement, then approval should be sought from the funding body. Year-end accrual procedures and guidelines should be followed.

5.3.    The consultancy contracts and funding will be managed by the Housing and Land, and Good Growth directorates. The budgets and funding referred to in this MD will be monitored against the Housing and Land: Strategy and Policy budget code, and the Good Growth: Regeneration and Growth Strategies budget code. All appropriate budget adjustments will be made and budgets will be monitored with regard to specific project and programme parameters.

5.4.    The table below sets out how the research activities included in this MD support projects detailed within the Making Best Use of Land Delivery Plan (MD3434 Appendix 2).

Relevant legal provisions 

6.1.    Section 30 of the GLA Act gives the Mayor a general power to do anything that he considers will further any one or more of the principal purposes of the GLA. The principal purposes, as set out in section 30(2), are: promoting economic development and wealth creation in Greater London; promoting social development in Greater London; and promoting the improvement of the environment in Greater London. 

6.2.    Section 32 of the GLA Act provides that the power under section 30 is exercisable only after consultation with such bodies or persons as the GLA considers appropriate in this particular case. Section 33 of the GLA Act requires the GLA, when exercising the section 30 power, to make appropriate arrangements with a view to securing that there is due regard to the principle that there should be equality of opportunity for all people. In addition, section 149 of the Equality Act 2010 (the public sector equality duty) requires the GLA and the Mayor to have due regard to the need to eliminate unlawful discrimination, harassment and victimisation, and any other conduct prohibited by or under the Act; and to advance equality of opportunity, and foster good relations, between people who share a protected characteristic and those who do not (see section 3 of this report above).

6.3.    Section 34 of the GLA Act allows the Mayor, acting on behalf of the GLA, to do anything which is calculated to facilitate, or is conducive or incidental to, the exercise of any of the functions of the Authority (including the functions under section 30).

6.4.    There are limits on the power contained in section 30(1) of the GLA Act. The Mayor may not use this power to incur expenditure in doing anything that may be done by TfL, the Mayor Office for Policing and Crime, or the London Fire Commissioner. However, this prohibition does not prevent the Mayor from using the section 30 power to incur expenditure in doing anything TfL may do, where this is for the purposes of, or relating to, housing or regeneration (see: section 31(5B) of the GLA Act. In determining whether to exercise the power conferred by section 30(1) of the GLA Act, the GLA must seek to secure that it does not incur expenditure in doing anything that is being done by a Mayoral development corporation (see: GLA Act, section 31(1A)). However, the GLA can use its section 30 power to incur expenditure in cooperating with, or facilitating or coordinating the activities of, such bodies. 

6.5.    Under section 38(1) of the GLA Act, the Mayor may delegate the exercise of any functions exercisable on behalf of the Authority by the Mayor to, amongst others, any GLA member of staff, and the Home and Communities Agency (i.e., HE). 

Delegation of power to HE

6.6.    This MD proposes that the Mayor delegates his powers, under sections 30 and 34 of the GLA Act, to HE, enabling it to provide grant funding identified in this MD to the GLA and LB Newham. As noted above, the Mayor may delegate these powers to HE by virtue of section 38(1) of the GLA Act. The delegation must be in writing, and can only be granted or varied with HE’s written consent (section 38(3 and 10) of the GLA Act). The delegation proposed in this MD is in writing. HE’s written consent to the proposed delegation will need to be obtained for the delegation to become effective.

6.7.    Pursuant to the proposed delegation, HE would have delegated functions to provide the grant funding identified in this MD, under section 30 of the GLA Act, in the following instances: 

•    if it considers that doing so would further any one or more of the GLA’s principal purposes (identified above)

•    after consultation with such bodies or persons as it considers appropriate in the particular case

•    subject to compliance with the other limits on the exercise of those powers – including the requirement, in section 33 of the GLA Act, to make appropriate arrangements with a view to ensuring due regard to the principle that there should be equality of opportunity for all people.

6.8.    The delegation of the powers in section 34 of the GLA Act will give HE the statutory powers to do anything that is calculated to facilitate, or is conducive or incidental to, the exercise of the section 30 power. This includes agreeing and entering into any relevant grant agreements for the provision of the grant.

Approval of GLA revenue funding, receipt of grant funding from HE and MHCLG and expenditure 

6.9.    This MD seeks approval for receipt by the GLA of up to £530,000 from HE, and up to £400,000 from MHCLG, as grant funding.

6.10.    The Mayor has the statutory power (see paragraphs 6.1 to 6.4, above) to approve the receipt of this funding, if he considers that the projects and activities upon which the money is proposed to be expended will further one or more of the GLA’s principal purposes. 

Delegations to the Executive Director, Good Growth and the Executive Director, Housing and Land 

6.11.    The Mayor is invited to approve, where not already covered by a delegation in an existing MD, a delegation of authority to the Executive Director, Good Growth, to approve expenditure funded by decisions 2 and 3 above, for the delivery of the projects and activities identified in this MD. The Mayor is also asked to widen an existing delegation to the Executive Director (approved in the Building More Homes Delivery Plan decision MD3378), to approve the receipt of any additional funding from the UK government, or other sources (should such funding become available), for the purposes of expanding or extending projects identified in the Building More Homes Delivery Plan decision (MD3378).  As is noted above, the Mayor may delegate the exercise of his functions to any GLA member of staff, subject to any conditions that the Mayor sees fit to impose. To this end, the Mayor may make the requested delegations to these Executive Directors. 

Procurement and contractual matters

 
6.12.    This MD also seeks approval for expenditure on, among other things, procurements relating to studies and models for the purposes of housing projects. Officers must comply with the requirements of the GLA’s Contracts and Funding Code, and the Procurement Act 2023, when they undertake the proposed procurements. Appropriate contracts should be put in place between the GLA and the relevant service providers, suppliers and/or contractors, before the relevant work commences.

6.13.    As noted at paragraph 4.8, above, the provision of funding from HE and the MHCLG to the GLA is considered an intra-public transfer of funds; and does not constitute a subsidy for the purposes of the Subsidy Control Act 2022. Any conditions placed upon the GLA’s use of the funding by those bodies must be complied with.

6.14.    Any additional funding secured for projects must be assessed for compliance with all applicable subsidy control requirements, in accordance with the Subsidy Control Act 2022 and relevant statutory guidance. Appropriate due diligence should be undertaken to ensure that any financial support provided does not constitute an unlawful subsidy; and is delivered within the permitted thresholds and exemptions.
 

7.1.    The work will be delivered according to the following timetable: