The developer who built Altrincham’s £24m empty health centre under a ‘badly flawed’ NHS deal is in line for a £13m loan from the Greater Manchester Combined Authority.
CityBranch Healthcare completed the south Trafford health and wellbeing centre last autumn, having been signed up for the project by local NHS leaders several years earlier.
It has never been used by any patients, because the rent proved too high for the health services that had been due to move in.
Review reveals 'catastrophic' failings over new £24m health hub that has NEVER treated ANY patients
As a result Trafford’s clinical commissioning group has been left with a £2m-a-year-bill for the empty building following a string of ‘avoidable’ blunders by lits leaders, according to an independent investigation published earlier this month.
They failed to properly scrutinise the financial deal into which they were entering with CityBranch, it found, or complete the necessary business case, although it did not make any direct criticisms of the developer itself.
It has now emerged that the same firm is set for a £12.93m loan from the Greater Manchester Combined Authority, due to be approved on Friday, to build new homes across the road from the empty hub.
The loan - which would come from the region’s Housing Investment Fund - would help pay for the construction of 70 apartments at the Chapel Square development on Regent Road, 100 yards from the health centre.
Just under half those, planning permission for which was secured last March, are expected to be sold to a housing provider for ‘affordable rent’.
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It will also provide a new 300-place car park to serve Altrincham town centre.
The loan comes from the £300m recyclable housing fund provided to Greater Manchester under its 2014 devolution deal, aimed at kickstarting projects on former industrial land where developers cannot get capital through other routes.
CityBranch requested the support just over a year ago, a spokesman for the GMCA said.
“Citybranch initially approached the GMCA to consider providing a loan from the Greater Manchester Housing Investment Fund in February 2018,” it said.
“This would support the construction of 70 apartments at the Chapel Square development, Regent Road, Altrincham. 34 of the units are currently anticipated to be pre-sold to a Greater Manchester based Registered Housing Provider for affordable rent use.
“All loan applications are subject to robust due diligence both before and after approval, as part of the Greater Manchester Housing Fund’s governance.
“Should this process highlight any issues the GMCA would not issue a loan.”
CityBranch were appointed to build south Trafford’s new health centre in around 2014, according to a subsequent investigation into the project commissioned by Greater Manchester’s Health and Social Care Partnership, which is itself partly overseen by members of the GMCA.
The resulting financial deal was not scrutinised properly by Trafford CCG, found the review.
It found ‘no evidence of due diligence being performed on CityBranch’ in the normal manner, although the firm said that that work had taken place.
The investigation, by auditors EY, also found CCG leaders signed off the plan without completing a full business case, understanding the levels of risk involved or confirming that local health services - including local GPs - would definitely be moving in.
When those health services said they could not afford the rent, the CCG was left with an empty building and a £2m-a-year bill.
The review pointed to ‘repeated failures’ by NHS leaders from inception of the programme through to July 2018’ but found no wrongdoing on CityBranch’s part.
A spokesman for CityBranch said: “Greater Manchester Combined Authority has conducted robust due diligence on Citybranch for the loan from the Greater Manchester Housing Investment Fund, which will support the construction of a residential development on Regent Road.
“We delivered Altrincham Healthcare Hub exactly as was agreed with NHS Property Services, the CCG and Trafford council, and we are disappointed to see the difficulties that have arisen with the project. The CCG and Trafford council were responsible for identifying providers for the building, and we have sought to support in trying to resolve the tenancy issues as far as we are able to.
“As with the Altrincham Hub project, we look forward to delivering the Chapel Square project on time and on budget, as agreed with GMCA, as we have across dozens of successful projects since the business was established.”
The GMCA loan is due to be discussed at its monthly meeting tomorrow.
