Agenda, decisions and minutes

There were no declarations of interest pursuant to the Council’s Code of Member Conduct.

To confirm the minutes of the last meeting of the Committee held on  4 February 2013.

RESOLVED:

That the minutes of the last meeting held on 4 February 2014 be taken as read and signed by the Chairman as a correct record.

(The Director of Communities) To consider the attached report (CHB-014-2013/14).

The Director of Communities presented a report to the Cabinet Committee with regard to a Leader Decision that had extended the Committee’s Terms of Reference. It was anticipated that the Council may wish to seek Investment Partner status with the Homes and Communities Agency (HCA) and to submit funding bids for grants in the future.

This extension of the Cabinet Committee’s Terms of Reference empowered the Cabinet Committee to authorise an application for Investment Partner status and submission of funding bids.

Resolved:

To note the Leader Decision to extend the Cabinet Committee’s Terms of Reference with an additional paragraph (Paragraph 12).

Reasons for the Decision:

To ensure that all members of the Cabinet Committee are aware of the extension to the Terms of Reference.

Other Options Considered and Rejected:

None – for noting only.

(The Director of Communities) To consider the attached report (CHB-015-2013/14).

(1)        That the report from CIH Consultancy on the options for funding an accelerated Council Housebuilding Programme and the associated implications be noted;

(2)        That, in accordance with its terms of appointment, the Council’s Development Agent, East Thames, be asked to update the Council’s Development Strategy, once the outcome of the Council’s bid to the HCA is known, taking account of any decisions made to accelerate the Housebuilding Programme and other relevant decisions made by the Cabinet Committee and Cabinet since the time the current Development Strategy was produced; and

(3)        That the outcome of any decisions to accelerate the Housebuilding Programme be included within the Council’s HRA Financial Plan 2014/15, when it is reviewed and updated at the end of Quarter 1 of 2014/15.

The Director of Communities presented a report to the Cabinet Committee. He advised that at the last meeting, the Cabinet Committee requested a report to this meeting on how an accelerated and extended Housebuilding Programme could be funded, and the associated implications.

The Council’s HRA Business Planning Consultant, Simon Smith from CIH Consultancy had produced a report on this issue, together with advice on the maximum amount for which HCA funding should be sought, in order to ensure that all 1-4-1 Receipts from Right to Buy sales are spent within the required 3 years of receipt and that none were passed on to the Government, with interest.

Simon Smith was in attendance to pre sent his report, annexed to the main report, and to answer members’ questions.

Based on the information within CIH Consultancy’s report, the recommendations set out at the commencement of the report had been formulated by the Director of Communities, most of which would require endorsement by the Cabinet.

Recommended:

(1)     That the report from CIH Consultancy on the options for funding an accelerated Council Housebuilding Programme and the associated implications be noted;        

(2)     That the following recommendations be made to the Cabinet:

(a)     That the Council seeks to increase the number of affordable homes developed in Phases 3-6 from 20 to 30 per year;

          (b)     That HCA funding be sought, initially, for Phase 2 of the Housebuilding Programme at Burton Road, Loughton for 40 homes - based on a 56-home development, with the remaining homes in Phase 2 being funded from 1-4-1 Receipts and the other resources made available within the HRA as a result of the other recommendations within the CIH Consultancy report;

          (c)     That further bids for HCA funding be made in future years for future phases of the Housebuilding Programme, should the amount of 1-4-1 Receipts be less than forecast within the CIH Consultancy report, provided that the receipt of such HCA funding would not result in any 1-4-1 Receipts having to be passed to the Government;

          (d)     That, as a policy, the minimum balance held in the HRA be reduced from £3 million to £2 million; 

          (e)     That the Council’s HRA Self-Financing Reserve be re-profiled, to release funds for the Housebuilding Programme in earlier years of the HRA Business Plan by increasing contributions to the Reserve in later years (closer to the HRA’s first PWLB loan maturing in 2021/22), whilst ensuring that sufficient resources have been accumulated within the Reserve to repay this first loan on maturity (subject to no further borrowing being undertaken to extend the Housebuilding Programme, as referred to in Recommendation 2(h) below);

          (f)      That 30% of the Council’s accruing HRA attributable debt balances be utilised to help fund the accelerated Housebuilding Programme;

          (g)     That the HRA’s contribution to the Housing Improvements and Service Enhancements Fund between 2019/20 – 2021/22 (Years 7-9) be reduced by a sufficient amount to enable Phases 2-6 of the Housebuilding Programme to be funded (currently estimated at a reduction of £2.09 million - £2.24  ...  view the full minutes text for item 29.

(The Director of Communities) To consider the attached report (CHB-016-2013/14).

(1)     That the Cabinet Committee approves the development feasibility for the Burton Road Site, Loughton consisting of a 56-home scheme to progress to detailed planning stage, and if planning permission is received the invitation of tenders as Phase Two of the Council’s Housebuilding Programme;

(2)       That it be noted that the estimated capital investment required to deliver a scheme consisting of 56 new affordable rented Council properties in Phase Two, is around £8.9m including fees and works;

(3)       That an estimated subsidy of £1.512m  for a 56-home scheme be set aside for Phase Two in order to achieve a pay-back of 30 years with a positive Net Present Value (NPV) as required by the Council’s Development Strategy;

(4)       That a financial contribution of £18,400 to the NHS to fund healthcare should be included as part of the resultant planning permission by way of a Unilateral Undertaking, subject to the money being specifically spent on services in the Loughton area; and

(5)       That the Housing Portfolio Holder be authorised to submit a detailed planning application for the Burton Road development site.

The Assistant Director (Housing Property and Development) presented a revised report and feasibility studies regarding the Burton Road site in Loughton. Members were reminded that at the last meeting of the Cabinet Committee they had requested that the density of the site be increased and a new site design and feasibility study be brought to this meeting for approval. Officers presented the Cabinet Committee with two designs for the site:

(a)           a 42-home development; and

(b)           a 56-home development.

The Head of Development, East Thames Group stated that the Financial Appraisal models for both the Burton Road options had been formulated in line with the Council’s approved:

(i)         Development Strategy;

(ii)        Economic Assumptions Framework; and

(iii)       Affordable Rent Policy.

The costs used to formulate the appraisal had been taken from the cost build-up provided by Pellings LLP’s Quantity Surveyor.

The Head of Development, East Thames Group advised comparative information had been provided in the report to enable Members to decide between the two schemes. He stated that the information was broadly divided into two areas; financial and non-financial.

Financial

For both schemes:

(a)        Revenue first exceeds cost in Year 1;

(b)        The loan repayment was Year 30;

(c)        They each had positive Nett Present Values (NPV) of £2,196,159 (Option 1) and £3,182,344 (Option 2) respectively; and

(d)        They each had an Internal Rate or Return (IRR) of 5.34% (Option 1) and 5.46% (Option 2) respectively.

Whilst Option 2 had a higher level of capital investment it also produced a greater return (better NPV and IRR).

Option 1 had an NPV per person of £14,739 whilst Option 2 was £25,664.

Option 1 had an NPV per unit of £52,308 whilst Option 2 was £56,828.

Option 1 had a debt per unit of £130,308 whilst Option 2 was £132,558.

Option 2 had a lower build cost per square metre of £1,894 (gross floor area) as opposed to Option 1 which had a build cost per square metre of £1,685 (gross floor area). This was partly due to the fact that the level of enabling works remained broadly similar, as was the allowance for risk in the ground.

Non-Financial

Option 1 accommodates 149 people whilst Option 2 accommodates 212 people; 63 more people in Option 2.

Option 1 produces 30 family homes (2 bed homes and above) whilst Option 2 produces 42; 12 more family homes in Option 2.

Option 1 delivers 9 houses compared to 18 in Option 2; 9 more in Option 2.

The second option would therefore provide more family accommodation and hence a significantly greater child density, which was a decision making factor.

The Head of Development, East Thames Group also confirmed that Secure by Design certification would be sought as per the Council’s approved Development Strategy.

It was noted that Secretary of State consent would be required to appropriate the land for planning purposes, in order to facilitate the development.

Recommended:

(1)       That, subject to Secretary of State consent, the former garage site and associated amenity  ...  view the full minutes text for item 30.

(The Director of Communities) To consider the attached report (CHB-017-2013/14).

(1)     That East Thames, in consultation with the Director of Communities, be authorised to submit a bid to the Homes and Communities Agency (HCA) for Affordable Housing Grant as part of the Affordable Homes Programme 2015-18, before the 30 April 2014 deadline, initially to fund 40 homes at Burton Road, Loughton, based on a grant of £12,500 per home and based on affordable rent in line with the Council’s Affordable Rent Policy, with the remaining 16 homes, plus the 23 homes included in Phase 1, being put forward with nil grant;

(2)     That, as part of the bid for HCA Affordable Housing Grant, the Council reaffirms its intention to charge affordable rent on all new homes, but to retain social housing rent for existing housing stock and not convert vacant properties to affordable rent on re-let;

(3)     That, subject to a successful grant application, East Thames be authorised to prepare an application on behalf of the Council for HCA Investment Partner Status so that the funding can be drawn at the appropriate time; and

(4)     That it be noted, due to the amount of time between the meeting and the 30 April deadline to submit a bid to the HCA for Affordable Housing Grant, the Chairman of Council has agreed to waive the call-in procedure for this item.

(NB. This decision is not subject to call-in due to the time constriction in submitting the bid by noon on the 30 April 2014.)

The Assistant Director (Housing Property and Development) presented a report to the Cabinet Committee. He advised that following the launch of the 2015-18 Affordable Homes Programme Bid Prospectus by the Homes and Communities Agency (HCA), the Council now had the opportunity to bid for an Affordable Housing Grant to subsidise the Council’s Housebuilding Programme. The Prospectus signals the start of the Bid Round, which would close at 12 noon on 30 April 2014. The Prospectus prescribes that any bids must be made based on an executive decision.

Further documentation would need to be prepared in relation to the design and training standards that the HCA expects. These standards had not been published by the HCA yet but East Thames was monitoring this situation and would work with the Council to deliver these statements on time.

Once the bid was submitted, the HCA expected to confirm successful bids by Mid July 2014. It was recommended that, should the Council’s bid be successful, then East Thames be authorised to lead on the process of gaining investment partnership status with the HCA.

The advantage to bidding for grant from the HCA was that, if successful, more affordable homes could be provided within the Housebuilding Programme than otherwise would be the case.

Due to the limited amount of time between the meeting and the 30 April deadline to submit a bid to the HCA for Affordable Housing Grant, the Chairman of Council had agreed to waive the Call-in Procedure for this item.

Decisions:

(1)     That East Thames, in consultation with the Director of Communities, be authorised to submit a bid to the Homes and Communities Agency (HCA) for Affordable Housing Grant as part of the Affordable Homes Programme 2015-18, before the 30 April 2014 deadline, initially to fund 40 homes at Burton Road, Loughton, based on a grant of £12,500 per home and the provision of affordable rents in line with the Council’s Affordable Rent Policy, with the remaining 16 homes, plus the 23 homes included in Phase 1, being put forward as part of the bid with a nil grant requirement;

(2)     That, as part of the bid for HCA Affordable Housing Grant, the Council reaffirms its intention to charge affordable rents for all new homes, but to retain social housing rent for existing housing stock and not convert vacant properties to affordable rent on re-let;

(3)     That, subject to a successful grant application, East Thames be authorised to prepare an application on behalf of the Council for HCA Investment Partner Status so that the funding can be drawn down at the appropriate time; and

(4)     That it be noted, due to the amount of time between the meeting and the 30 April deadline to submit a bid to the HCA for Affordable Housing Grant, the Chairman of Council had agreed to waive the Call-in Procedure for this item.

Reasons for the Decision:

In order for the HCA to consider any bids for Affordable Housing Grant, it requires the bid to be supported  ...  view the full minutes text for item 31.

(The Director of Communities) To consider the attached report (CHB-018-2013/14).

1.         That, should any of the development sites identified for Council housebuilding not be developable because:

(i)      They do not receive planning permission;

(ii)      They are not financially viable for the Council to develop based on a development appraisal; or

(iii)     The Cabinet Committee considers for whatever reason, the site should not be developed for Council housing,

Officers be authorised to consider the following options and submit a separate report to the Cabinet Committee to determine the future use of the site:

a.         To sell the site for social housing to a housing association in return for a capital receipt to fund future Council housebuilding and to gain nomination rights for Council housing applicants;

b.         To sell the site for private development, either for residential or other use in return for a capital receipt to fund future  Council housebuilding;

c.         To divide up the site and sell the land to local residents to extend their private gardens in return for a capital receipt to fund future Council housebuilding;

d.         To demolish the garages, re-surface and mark out the land and to leave the site as open car parking for local residents;

e.         To sell the site to a Town or Parish Council for their own purposes (eg. public amenity space) in return for a capital receipt to fund future Council housebuilding; and

f.          To continue to market and rent the garages to local residents; and

2.         That the Cabinet Committee recommends to the Leader of the Council that the Terms of Reference for the Council Housebuilding Cabinet Committee be varied to empower the Cabinet Committee to determine the future use of garages sites and other Council owned land previously identified and approved by the Cabinet for possible Council housebuilding.

The Assistant Director (Housing Property and Development) presented a report to the Cabinet Committee regarding the approach to be taken in respect of sites in the area that are not deemed appropriate for development by the Council. He advised that the Council’s Development Agent was required to undertake a feasibility study for each of the 65 garage and other surplus sites included on the list of potential development garage sites approved by the Cabinet. The future use of any site considered either unsuitable or financially unviable, or not receiving planning permission, would need to be considered and it was considered helpful for a general Policy to be agreed in advance. Following previous informal consultation with the Cabinet Committee, the report set out the proposed approach the Council should take where sites are found to be unsuitable for Council housebuilding.

Decisions:

1.         That, should any of the potential development sites identified for Council housebuilding not be developable because:

(i)      They do not receive planning permission;

(ii)      They are not financially viable for the Council to develop based on a development appraisal; or

(iii)     The Cabinet Committee considers, for whatever reason, the site should not be developed for Council housing;

Officers be authorised to consider the following options and submit a separate report to the Cabinet Committee to determine the future use of the site:

a.         To sell the site for social housing to a housing association in return for a capital receipt to fund future Council housebuilding and to gain nomination rights for Council housing applicants;

b.         To sell the site for private development, either for residential or other use in return for a capital receipt to fund future Council housebuilding;

c.         To divide up the site and sell the land to local residents to extend their private gardens in return for a capital receipt to fund future Council housebuilding;

d.         To demolish the garages, re-surface and mark out the land and to leave the site as open car parking for local residents;

e.         To sell the site to a Town or Parish Council for their own purposes (eg. public amenity space) in return for a capital receipt to fund future Council housebuilding; and

f.          To continue to market and rent the garages to local residents; and

2.         That the Cabinet Committee recommends to the Leader of the Council that the Terms of Reference for the Council Housebuilding Cabinet Committee be varied to empower the Cabinet Committee to determine the future use of garages sites and other Council owned land previously identified and approved by the Cabinet for possible Council housebuilding, where the Cabinet Committee agrees that development is not appropriate.

Reasons for the Decision:

The Cabinet has agreed to consider the development potential of 65 garage sites, and development would always be subject to feasibility, financial viability and planning approval. Where sites are not developable, then their future use must be considered to maximise the Council’s benefit of the Asset.

Other Options Considered and Rejected:  ...  view the full minutes text for item 32.

(The Director of Communities) To consider the attached report (CHB-019-2013/14).

The Assistant Director presented a draft Progress Report for the Cabinet Committee to present to the Cabinet. He advised that, set out in its Terms of Reference, the Cabinet Committee was required to monitor and report to the Cabinet, on an annual basis progress and expenditure in relation to the Council Housebuilding Programme.

Recommended:

That the Annual Progress Report on Council Housebuilding be presented to the Cabinet.

Reasons for the Decision:

Set out in its Terms of Reference, the Cabinet Committee would be required to monitor progress and expenditure in relation to the Council Housebuilding Programme and report to the Cabinet on an annual basis.

Other Options Considered and Rejected:

This report was on the progress made over the last 12-months and was for noting purposes only. There are no other options for action.

(The Director of Communities) To consider the attached report (CHB-020-2013/14).

That the Leader of the Council be recommended to make a Leader’s Decision to include, within the Cabinet Committee’s Terms of Reference, the authority to decide, where necessary, on the names of developments undertaken through the Council Housebuilding Programme.

The Director of Communities presented a report to the Cabinet Committee advising that some new Council developments would need to be named for postal and other purposes.

It was therefore suggested that the Cabinet Committee’s Terms of Reference be extended through a Leader’s Decision to include this provision.

Decision:

That the Leader of the Council be recommended to make a Leader’s Decision to include, within the Cabinet Committee’s Terms of Reference, the authority to decide, where necessary, in consultation with Ward Members, on the names of developments undertaken through the Council Housebuilding Programme.

Reasons for the Decision:

It was considered that the Cabinet Committee would be the most appropriate body to undertake this role.

Other Options Considered and Rejected:

(a)        To delegate responsibility to officers;

(b)        To request the Housing Scrutiny Panel to undertake this role; or

(c)        That responsibility be given to the full Cabinet.

(The Director of Communities) To consider the attached report (CHB-021-2013/14).

The Assistant Director (Housing Property and Development) presented a report to the Cabinet Committee regarding the Risk Register, which had been reviewed and updated by Pellings LLP. He highlighted risks found with part of the Phase I developments.

(a)  Marden Close, Chigwell Row - a problem had been identified with Japanese Knotweed growing on the site; and

(b)  The Former Red Cross Hall site, Waltham Abbey - the land was potentially contaminated.

At its meeting in July 2013, the Cabinet Committee considered the first iteration of the Risk Register prepared by East Thames. Since the Council’s Housebuilding Programme was a major undertaking, involving significant amounts of money and risks, it was essential that the Officer Project Team and the Cabinet Committee record, monitor and mitigate those risks.

Following approval by the Cabinet of individual developments and development packages, East Thames had, and would continue to produce and keep updated, Risk Registers for each development/package, which would be monitored by the Project Team at Project Team Meetings.

In addition, it was appropriate to have a “Programme-wide” Risk Register, which was a “live document” for the Housebuilding Programme. East Thames, and specifically Pellings LLP, who are the Architects and Employers Agent appointed by East Thames, had updated the Programme-wide Risk Register, taking account of comments made by Members at the last meeting of the Cabinet Committee.

Resolved:

That the current Programme-wide Risk Register for the Council Housebuilding Programme be noted.

Reasons for the Decision:

The Council’s Housebuilding Programme was a major undertaking, involving significant amounts of money and risks, it was essential that the Officer Project Team and the Cabinet Committee record, monitor and mitigate those risks.

Other Options Considered and Rejected:

(a)  Not to have a Risk Register – but it would not be appropriate to contemplate such an option; and

(b)  To request amendments to the format or content of the Programme-wide Risk Register.

Resolved:

That, in accordance with Section 100B(4)(b) of the Local Government Act 1972, together with paragraphs (6) and (24) of the Council Procedure Rules, the Chairman had permitted the following item of urgent business to be considered following the publication of the agenda:

(a)  Outcome of Funding Bid for the Council Housebuilding Programme.

(The Director of Communities) To consider the attached report (CHB-022-2013/14).

The Director of Communities presented a report advising the Cabinet Committee that the Council was a member of the West Essex Housing Forum, which had submitted a bid to the London-Stansted-Harlow Programme of Development (POD) Partnership Board for funding towards the costs of the Council Housebuilding Programmes of the three district councils in West Essex.

The bid for £112,000 was successful, and the Council’s share would be £37,300.

Decision:

(1)        That the successful outcome of the bid by the West Essex Housing Forum to the London-Stansted-Harlow Programme of Development (POD) Partnership Board for funding towards the costs of the Council Housebuilding Programmes of the three district councils in West Essex be noted; and

(2)        That it be noted that the Council’s share of the £112,000 total funding will be £37,300 - towards the costs of the development at Harveyfields, Waltham Abbey as part of Phase 1 of the Housebuilding Programme.

Reasons for the Decision:

For noting only.                                  

Other Options Considered and Rejected:

For noting only.

The Cabinet Committee noted that there were no items of business on the agenda that necessitated the exclusion of public and press from the meeting.