Holes Bay Business Case – Bournemouth, Christchurch and Poole

In 2019, HJA constructed a full business case for a housing development of up to 830 homes on the site of a former power station at Holes Bay, Poole. The business case was delivered on behalf of Bournemouth, Christchurch and Poole Council (hereafter BCP Council) which looked to acquire the site through negotiated purchase, using funding through multiple sources including MHCLG (now DLUHC) and Dorset LEP. With MHCLG funding already secured, funding was sought for £5 million of Growth Deal funds awarded by Dorset LEP to acquire the site and progress the delivery of the scheme.

A full business case involves individual strategic, economic, financial, commercial and management cases which together form a compelling proposal for the development.

The strategic case shows the case for change and the fit of the proposed project with other plans and strategies. After outlining the background of the site, the rationale for a housing development was set out. The rationale was that more social affordable housing and middle market houses was an important priority for BCP Council, and historically, housing had not been delivered on the site despite previous public sector investment in enabling infrastructure so purchasing the site would remove some of the risks to development for the private sector. How the development would comply with local, regional and national policies was considered within the strategic case. HJA then constructed a SMART plan detailing the outputs, outcomes, constraints and risks, following by an assessment of market failure that had occurred through previous attempts at delivering housing on the site.

The economic case identified the proposal that delivers the best public value to society, through appraising a number of shortlisted options, including do nothing, buying part of the site and buying the whole site. For each shortlisted option, costs, optimism bias, funding, benefits, additionality, net present value and benefit to cost ratio was calculated and assessed. Following this, the overall value for money impact of each of the shortlisted options was calculated.

The financial case demonstrates the affordability and funding of the preferred option, which was chosen to be purchasing the whole site). A full financial breakdown of the project is set out, including capital costs, income, an affordability assessment, and constraint and risk factors. HJA created an appendix to detail the calculation of costs and benefits to support the financial and economic cases.

The commercial case involved demonstrating that the preferred option results in a viable procurement and a well-structured deal for the public sector and its service providers. Within this, we considered the feasibility and deliverability assessment which involved assessing the market and commercial demand for housing developments in recent years. Completing the management case involved showing that robust arrangements were in place for the delivery, monitoring and evaluation of the preferred option.

The Business case delivered by HJA was successful in securing £5 million funding from Dorset LEP, which enabled BCP council to acquire land at the Holes Bay site and proceed with plans to develop 830 houses.