(Director of Communities) To consider the attached report (CHB-011-2015/16).
The Assistant Director (Housing Property & Development) presented a report to the Cabinet Committee. He advised that one of the Cabinet Committee’s Terms of Reference was to monitor expenditure on the Housing Capital Programme Budget for the Council Housebuilding Programme, ensuring the use (within the required deadlines) of the capital receipts made available through the Council’s Agreement with the Department of Communities and Local Government (DCLG) allowing the use of additional “Replacement Right to Buy (RTB) Receipts” received as a result of the Government’s increase in the maximum RTB Discount to be spent on housebuilding.
The Assistant Director advised that the schedule set out at Agenda Item 7, Appendix 1 was the current position as at 4 January 2016 with regard to the Right to Buy Receipts.
Appendix 1 (Agenda Item 7) captured the total amount of Replacement Right To Buy Receipts received and available for use for “One-for-One Replacement” on the Council’s Housebuilding Programme, as captured on the Pooling Return to the DCLG, and when it was required to be spent. It also captured the actual expenditure to date and compared that to the projected future planned expenditure profile.
Appendix 2 (Agenda Item 7) set out the amount and use of financial contributions available to the Council’s Housebuilding Programme from Section 106 Agreements, in lieu of the provision of on-site affordable housing on private development sites, and other sources of funding (e.g. sales of HRA land and non-RTB property, and external funding).
Appendix 3 (Agenda Item 7) set out the expenditure profile. This had been profiled to reflect the detailed programme that had been included elsewhere in the Agenda, which discussed the need to accelerate the house-building programme.
Appendix 4 (agenda Item 7) set out the financial modelling summary of all sites agreed by the Cabinet Committee by phase incorporating the unit mixes and numbers, updated costs and subsidy requirements.
This information had been captured and presented for monitoring purposes. However, it was noted that due to delays on the construction of Phase 1, delays in securing planning permission on Phase 2 and delays in completing legal agreements for the Barnfield S106 development, coupled with a higher than expected rate of RTB’s there will be an underspend of around £2m in Quarter 4 of 2016/17. However, this relied on Broadway Construction Ltd delivering the Phase 1 construction works by July 2016, which was their own projected completion date.
As previously agreed by the Cabinet Committee, and to avoid giving any 1-4-1 receipts to the Government that the Council had accumulated from RTB sales, it was noted that it would now be necessary to purchase street properties on the open market to utilise this underspend.
(1) That the current financial position be noted, in respect of:
(a) The amount of additional “Replacement Right to Buy (RTB) Receipts” for utilisation under the Government’s “one-for-one replacement” scheme that has been received; when it is required to be spent; the actual expenditure to date; and the future planned expenditure profile (Appendix 1);
(b) The amount and use of financial contributions available to the Council’s Housebuilding Programme from Section 106 Agreements, in lieu of the provision of on-site affordable housing on private development sites, and other sources of funding (e.g. sales of HRA land and non-RTB property, and external funding) (Appendix 2);
(c) The expenditure profile that reflects the house-building programme (Appendix 3); and
(d) A Financial Modelling summary of all sites agreed by the Cabinet Committee by phase incorporating the unit mixes and numbers, updated costs and subsidy requirements (Appendix 4).
(2) That it be noted, to avoid passing 1-4-1 RTB Receipts to the DCLG, the Council will need to spend around £2m by the end of Quarter 4 of 2016/17 on the purchase of street properties.
Reasons for Decision:
The Council’s Housebuilding Programme is a high profile, high cost activity. It is therefore essential to ensure that budgets, costs and expenditure are properly monitored, to enable corrective action to be taken at the earliest opportunity when necessary.
Other Options Considered and Rejected:
Not to have regular Financial Reports presented to the Cabinet Committee.