A report from the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services is attached. This should be read in conjunction with Report No.184, agenda part one refers. Note: Super Part 2 information will be tabled at the meeting under restricted circulation. (Key decision – reference number 3782)
(Report No.189)
(9.25 – 9.30 pm)
Minutes:
Councillor Ahmet Oykener (Cabinet Member for Housing) introduced the report of Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services (No.189).
NOTED
1. That Report No.184 also referred as detailed in Minute No.12 above.
2. Report No.189A containing super part 2 information together with an amendment sheet, was circulated at the meeting and collected in again following consideration.
3. The detailed financial implications of the proposals as set out in the report. Attention was drawn to section 3.16 of the report, the format of which had been amended and circulated in an amendment sheet at the meeting as part of the super part 2 report. The project was financially viable for the reasons set out in the report. A number of exit strategies had been considered should the model not be appropriate in the future. The model had been reviewed by external financial and legal experts.
4. That this represented a significant initiative and was an excellent example of the Council working as “one team”.
5. In response to a query raised by Councillor Goddard, clarification was provided on the sequence of the figures set out in paragraph 1.3 of the super part 2 report.
6. A discussion took place on the assumed rent levels and clarification was provided by Ray James (Director of Health, Housing and Adult Social Care).
7. The pressures currently being faced by the Council as set out in full in the report. It was felt that the proposed way forward would be in the best interests of the borough’s residents and tenants.
Alternative Options Considered: As detailed in Report No.184, Minute No.12 above refers and section 4 of the report.
DECISION: The Cabinet agreed
1. To note that this model offered the opportunity for the Council to realise savings and reduce pressure on temporary accommodation. For every family moved from Nightly Paid Accommodation to the proposed property portfolio there would be a temporary accommodation budget saving estimated at the figure detailed in the report (recommendation 2.1), per unit per annum based on current prices. For every 100 units purchased and used by the Council to discharge its statutory homeless duty, there would be temporary accommodation saving estimated at the figure detailed in the report (recommendation 2.1), per annum (assuming full year effect).
2. To develop a property portfolio in a phased approach, subject to individual properties meeting the agreed level of financial viability with a review of overall portfolio viability on at least an annual basis. The property portfolio would comprise up to the number of units detailed in recommendation 2.2 of the report, over a five year period with a maximum cost of the figure detailed in recommendation 2.2 of the report.
3. To agree the financial model and assumption for a percentage, as detailed in recommendation 2.3 of the report, per annum rental increase. Note the prudent assumptions of the percentage (as per recommendation 2.3 of the report) expenditure inflation and capital appreciation, as detailed in the report, and the fact that at the end of the lease term the company would have the benefit of retaining the asset.
4. To provide a start-up loan to the company so it could operate with a positive cash flow in the early years where costs were greater than the rental income to the value of the figure detailed in recommendation 2.4 of the report, so that the company had adequate cash to meet working capital commitments.
5. To delegate authority to the Cabinet Member for Finance and Property and the Director of Finance, Resources and Customer Services to access the sum detailed in recommendation 2.5 of the report, fixed rate annuity to begin the immediate purchase of suitable properties.
6. To note the key aspects of the financial model detailed in the report.
Reason: As detailed in Report No.184, Minute No.12 above refers and section 5 of the report.
(Key decision – reference number 3782)