Referral of proposed subsidy to Capital and Centric (505) Ltd by the South Yorkshire Mayoral Combined Authority
The Subsidy Advice Unit (SAU) has published a report providing advice to South Yorkshire Mayoral Combined Authority (SYMCA) concerning its proposed subsidy to Capital and Centric (505) Ltd.
Administrative timetable
| Date | Action |
|---|---|
| 21 December 2023 | Final report published |
| 27 November 2023 | Deadline for receipt of any third party submissions (submissions after 5pm on this date cannot be taken into account) |
| 13 November 2023 | Beginning of reporting period |
Final report
21 December 2023: The SAU has published its report providing advice to SYMCA concerning the proposed subsidy to Capital and Centric (505) Ltd. The report sets out our evaluation of SYMCA’s Assessment of Compliance of its proposed subsidy with the requirements set out in the Subsidy Control Act 2022.
- (21.12.23)
Request from SYMCA
14 November 2023: The SAU has accepted a request for a report from South Yorkshire Mayoral Combined Authority (SYMCA) for its proposed subsidy to Capital and Centric (505) Ltd. This request relates to a Subsidy of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of the DESNZ assessment of whether the scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the subsidy provided by SYMCA
SYMCA is proposing to provide a subsidy to support the construction of 550 new homes on the site of the former Cannon Brewery in the Neepsend area of Sheffield. This is a brownfield site which has been out of use since the closure of the brewery in 1999. The development of the site falls within national policy most recently set out in the Levelling Up White Paper and through the establishment of the Brownfield Infrastructure and Land Fund.
The overall development cost of the site is £143 million with a subsidy of £11.6 million. The beneficiary applied for the subsidy as part of the Funders’s Brownfield Housing Fund, an open call fund with developers of any brownfield site entitled to bring forward proposals for funding to develop their site. A public call for sites was issued between 5th September and 28th October 2022, with business cases to be assessed against the SYMCA Assurance Framework. The public call was open to private developers, local Authorities and housing associations.
The beneficiary’s application for the funding of the development of the site includes the demolition of the existing site, with the retention of buildings with significant heritage interest, and the development of residential dwellings, commercial floorspace and new public realm and infrastructure.
The application identified that there was a significant viability gap. The development would without funding return a net profit on cost of -0.41%, and with the funding a net profit on cost of 8.01%. The subsidy funded figure remains below the generally accepted profit figure for a viable development for planning purposes. The beneficiary is however prepared to carry out the development at this level. The funding will specifically cover the cost of the acquisition, remediation of the site, demolition costs, pre-construction site investigations, transport and highway works, and professional fees.
The award will be governed by a grant agreement. This will incorporate protections on the funding, including a clawback provision in the event of non/poor delivery, and profit shared at a 50/50 split between the Funder and the Beneficiary for all profits above a certain level (capped at the level of funding). These interests will be secured by a first legal charge over the site on completion of the acquisition.
The project will be monitored throughout and assessed against the Outputs and Outcomes set out in the business case and Clawback will take place in the event these targets are not met.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the SYMCA’s proposed subsidy, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submissions to us at [email protected], copying the public authority: [email protected].
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
- The SAU will only take your submission into account if it can be shared with SYMCA. The SAU will send a copy of your submission to SYMCA together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with SYMCA using the email address provided above.
- The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
- For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- SAU project team: [email protected]
- CMA press team: 020 3738 6460 or [email protected]
Updates to this page
Published 14 November 2023Last updated 21 December 2023 + show all updates
-
Referral of proposed subsidy to Capital and Centric (505) Ltd by the South Yorkshire Mayoral Combined Authority.
-
First published.