In introducing the report, the Chairman highlighted that a Housing Company would offer an extra tool for the Council to provide additional affordable accommodation, but it was anticipated only around 10% business would be transacted through the Company.

The Head of Housing Finance advised that £10m funding from the General Fund had been approved, with the exact mix of debt to equity to be determined.  The Strategic Director: Services (Interim) stated that a further report would be required for final approval, following further legal advice, and it was anticipated that this would be submitted by summer 2019.

Officers responded to a number of detailed questions from Members as summarised below:

·         It was confirmed that the report would also be considered by The Overview and Scrutiny Committee on 20 March and Cabinet on 25 March 2019;

·         The Council had received confirmation from its legal advisors that it would be permissible to transfer HRA land at less than market value;

·         One Member queried whether the Council had the necessary accounting expertise for the different accounting required for a Housing company.  The Strategic Director highlighted that the Council already procured external advice regarding, for example VAT, and it was intended to continue this approach.

·         The Strategic Director advised that the majority of the transactions between the Housing Company and the Council could be made public.  However, some discussions, for example regarding negotiation of contract sums, would necessarily remain exempt.

·         The Head of Housing Finance confirmed that discussions had taken place with other local authorities regarding their experiences of establishing a housing company.

·         Officers acknowledged that there were risks involved, as summarised in the report.  However, these were mitigated by limiting the investment to £10m and putting in place tests to ensure that any asset developed would be worth more than the cost of the land acquired.

·         The Head of New Homes Delivery advised that the establishment of a Housing Company would not impact on the Council searching for new sites with potential for development.  However, it would offer an additional means of financing and enable for development for a more mixed community.

·         The Council would seek to introduce a local connection criteria when establishing the Housing Company. 

Monica Gill confirmed that the report had been discussed by TACT and its members were in support of the proposals.

The Committee agreed to the following for the reasons outlined above, discussed during the exempt session, and set out in the report.

RECOMMENDED (TO CABINET):

1.         That the proposal to establish a company limited by shares and wholly owned by the Council to deliver and manage sub market rented and shared ownership accommodation, including the partnered home purchase scheme (PHP)  be approved.  A further report will be made to Cabinet and Council before a final decision is made to establish the company and start trading.

2.         That a combined loan facility & equity shareholding of £10m from the General Fund be approved to support the company’s development activity. This was previously approved in CAB2990 (HSG) 22  ...  view the full minutes text for item 5