Affordable Extra Care Housing Development - Preliminary Market Engagement

Description

Portsmouth City Council - the 'Council' - is seeking to engage with suitably experienced Providers in respect of a forthcoming contracting opportunity for Affordable Extra Care housing development and management in Portsmouth. It is envisaged this will be offered on a design, build, finance and operate (DBFO) contract, but other models will not be precluded at this stage. Following completion of the Preliminary Market Engagement process, the Council will seek approval to undertake a formal procurement process to appoint a delivery partner to design, build, finance and operate the affordable extra care housing schemes, starting with the setting known as Edinburgh House. The Extra Care Housing Delivery Programme will consist of several sites, which will initially focus on sites owned by the Council, but the programme will also consider sites that are owned by a third party and the intention is to bring them forward for consideration over the coming years. The programme will commence with the first development at Edinburgh House and will contribute to the Council's Corporate Plan 2024-26 and in particular Priority 3: ''Make sure that when people need additional help to live their lives, it is there for them by developing extra care and supported living services in the city for our older people and working age adults with care and support needs'. In addition to the personal wellbeing and community benefits of enabling people to live in their own homes for as long as possible, the expansion of affordable extra care settings in Portsmouth will also deliver financial savings for the Council and the broader health and social care system. The new Edinburgh House extra care housing setting is located at Sundridge Close, Cosham, Portsmouth, Hampshire, PO6 3JL, which seeks to provide at least 60 affordable extra care housing units. The appointed provider will be required to design a building to accommodate at least 60 units, secure a planning amendment with consent and required legal agreements, complete the detailed design, secure the necessary funding, including grant funding, if necessary, construct the new setting and then operate via housing management for a period as set out in the future lease. The site is currently owned by the Council and the intention is for the Council to retain the freehold (disposal not precluded at this point) and offer a long lease arrangement, a minimum of 130 years if external public grant is required, which will include 100% nomination rights to the Council and will be 100% affordable. Rent and service charge will be eligible for housing benefit should residents be eligible. Residents will only be eligible if they are being supported by Adult Social Care. In 2023, the site secured detailed planning approval for 50 extra care housing units and was designated with a C3 planning classification. At that time the Council had intended to construct and operate the site utilising its own available resources and expertise. However, this position has changed, and the decision has been taken to secure the support of the market. Although planning approval is in place for 50 units, a high-level massing study has been undertaken inhouse and it is believed that the site is suitable for at least 60 affordable units. The appointed partner will be expected to undertake a design review of the existing planning approval and amend accordingly to meet the Council's aspirations of securing at least 60 units. This will likely include a material amendment to the existing planning approval or develop a new application should that be needed. All design details of the existing approved scheme will be shared at the start of the tender process. The design and layout of the existing scheme does not need to be adhered to. The Council is currently seeking pre-application advice based on the revised massing study, which is being undertaken to demonstrate that a scheme with an increased number of units will be acceptable in planning terms. The Pre-Application advise will be shared when available. Heads of Terms for Edinburgh House are yet to be fully agreed; however, it is anticipated that they will broadly be set around the following: • Site Usage. Definition: For the operation of a C3 extra care setting, comprising of self-contained units with communal facilities, associated vehicle/pedestrian access, parking and landscaping.  • Lease Length. Definition: The lease will be for a term of 130 years. • Rent/Premium. To be negotiated. • Void Guarantees. To be negotiated. • Parent Company Guarantee. Only when a PC exists. • Alienation. Only sub-letting to nominated residential tenants. • Repair Definition: Full repair and maintenance. • Nominations Agreement. To be negotiated. • PCC financial contribution towards development costs. To be negotiated but not expected The development will be managed via an agreement for lease, which will be conditional on securing planning permission, securing the necessary funding and other agreed conditions. The agreement for lease will be subject to agreed longstop dates The Council will seek to appoint a long-term partner, who will design, build, finance and operate Edinburgh House and potential other sites via the subsequent formal procurement process who shares their vision for the new affordable extra care housing setting. The Council's current envisaged procurement procedure is set out below in high level summary. The Council is keen to engage with providers in order to gain input and insight which will inform the final procurement procedure and programme adopted. Under the new procurement regulations - which came into force when the Procurement Act 23 went live on 24th February 2025 - it is the Council's current view that the contract will be classified as an above threshold works contract. The procurement process undertaken to establish the contract will therefore be classed as a 'covered procurement' and will need to be undertaken in full accordance with the Procurement Act 23. The Procurement Act 23 has introduced the new 'Competitive Flexible Procedure' which will enable contracting authorities to design project specific procurement processes to align with project objectives and market norms. In order to benefit from the flexibilities that are available under the new regulations, the Council will undertake a procurement process using the competitive flexible procedure which it is envisaged will encompass the following activities: • Initial short-listing, • Pre-submission dialogue, • Interviews & presentations, • Negotiations, • 1st stage tender down-selection, • 2nd stage best & final tender submissions, • Post award pre-contract formalisation final negotiation. The Council's envisaged summary procurement programme is set out below: STAGE 1 - PRELIMINARY MARKET ENGAGEMENT AND BUSINESS CASE • Issue PME Notice on Find a Tender Service - 24th June 2025 • Publish brief and supporting documents on In-Tend system - 24th June 2025 • On-line TEAMS briefing - 3rd July 2025 10:0 -11:0 • Deadline for 1-1 meetings expression of interest - 10th July 2025 17:0 • 1-1 engagement meetings - 14th - 24th July 2025 • Business Case update - September 2025 STAGE 2 - FINALISE DELIVERY STRATEGY • Finalisation and approval of procurement strategy - October 2025 - January 2026 STAGE 3 - PROCUREMENT PROCESS • Issue Tender Notice and PSQ - 19th January 2026 • PSQ return deadline - 20th February 2026 • Issue PSQ shortlisting decision - 9th March 2026 • 1st stage tender period - 23rd March - 8th May 2026 • Negotiation and dialogue period - 1st - 15th June 2026 • 2nd stage best & final tender period - 22nd June - 10th July 2026 STAGE 4 - AWARD AND MOBILISATION • Evaluation & approvals - July - August 2026 • Issue assessment & Award Notice to Find a Tender Service - 3rd September 2026 • Standstill period - 15th September 2026 • Mobilisation (inc. finalisation of legal agreements) - October 2026 The first stage of the procurement process will invite suppliers to submit applications via submission of a Procurement Specific Questionnaire. Questionnaire responses will be assessed on a pass / fail and scored basis and will cover legal standing, financial standing, insurance, health & safety and scored relevant experience. This process will ensure that only providers with sufficient experience and scale will be taken forward to the next stage. It is envisaged that the highest scoring 3-4 applicants would be shortlisted and invited to submit detailed tender submissions. Tenderers will have the option to participate in pre-submission 1-1 clarification dialogue. Following evaluation of the 1st stage detailed tenders which will include for interviews & presentations, the Council will have the option to conclude the procurement process at that point and proceed to award. However, it will be more likely that the Council will engage in negotiations with all compliant or highest scoring down-selected tenderers prior to inviting 2nd stage best & final tender submissions. Following evaluation of 2nd stage tenders, which may encompass further interviews & presentations, the Council will seek internal approval to commence award proceedings which will encompass the issuing of assessment summaries, contract award notice and observing a standstill period. Following completion of standstill period the Council will engage in final negotiation of terms with the secured preferred bidder prior to finalising the contract, issuing a contract details notice and issuing a redacted copy of the final contract as required by the Procurement Act 23.

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