Issue - meetings

(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