Agenda item

A report from the Director of Regeneration and Environment and Director of Finance, Resources and Customer Services is attached. This outlines proposals for setting up a registered provider and procuring an investment partner for the registered provider. (Key decision – reference number 4205)

(Report No.113)

(8.30 – 8.35 pm)

Councillor Ahmet Oykener (Cabinet Member for Housing and Housing Regeneration) introduced the report of the Director of Regeneration and Environment and Director of Finance, Resources and Customer Services (No.113) outlining proposals for setting up a registered provider and procuring an investment partner for the registered provider.

NOTED

1.               Councillor Oykener explained in detail to Members the innovative proposals and the reasons for them, as set out in full in the report. The initial aim of the For Profit Registered Provider would be to purchase completed properties on Council led housing development schemes that it would then retain ownership of and manage with the use of contracted managing agents. In order to meet the condition for spending the retained right to buy receipts, the Council could not have a controlling interest in the new company. The opportunities that would be provided by moving forward with these proposals were outlined to Members.

2.               In addition to the proposals set out in the report, officers would continue to investigate alternative delivery models for future consideration by Members.

3.               In response to questions raised by Cabinet Members, Councillor Oykener explained in detail all of the Council’s housing elements and the roles and responsibilities undertaken through the following: Housing Gateway; Enfield Innovations; Registered Provider: and, the Housing Revenue Account. The functions of all of these elements were outlined and the way forward explained in full. In conclusion, Members expressed their support for the proposals, as set out in the report.

4.               Councillor Taylor highlighted the need to use existing examples from elsewhere to inform the way forward. It was noted that a new company name would be required.

5.               Councillor Oykener concluded that it was the Council’s intention to build more homes. He outlined the potential financial implications for the Council.

Alternative Options Considered: NOTED the detailed alternative options which had been considered as set out in section 4 of the report which included the following:

·       The Council could decide not to spend the retained right to buy receipts already received.

·       The Council could choose to withdraw from the right to buy one for one scheme now and return all receipts retained with effect from quarter 3 (December) this year.

·       The Council could attempt to spend all the money on the provision of new Council homes within the HRA

·       The Council could enter a joint venture registered provider with one or more other Councils. This option was being further considered.

DECISION: The Cabinet

1.               Noted that a budget of a maximum of £120k, was required to engage consultants to assist with the setting up of a new registered provider company, seek registration of the new registered provider company as a registered provider, and to procure an investment partner. This cost would be recouped against future corporation tax liability once the company was set up.

2.               Agreed to authorise, in principle, the setting up of a new Limited Liability Company with the intention that this new company once formed seeks to become a registered provider.

3.               Agreed that subject to the consultant’s recommendation, to authorise the Council’s Housing Development and Renewal Team to undertake a procurement exercise working with the Council’s Finance, Resources and Customer Services directorate to procure an investment partner(s), as set out in section 7 of the report, for the new registered provider company with the intention that the Council would become a non-controlling shareholder in the new registered provider company once the investment partner(s) was in place. Once the registered provider company had been formed the Council would undertake its main liaison role via the Regeneration and Environment Department.

4.               Agree to authorise, in principle, the allocation of the Right to Buy One for One receipts as the Council’s equity share in the new registered provider company once that new registered provider company had achieved registered provider status, and had an investment partner(s) in place.

5.               Agreed to delegate the selection of the investment partner, and potential other local authority partners (who might bring financial economies of scale or other advantages of joint working) to the Cabinet Members for Housing and Housing Regeneration and Finance and Efficiency, in conjunction with the Directors of Regeneration and Environment and Finance, Resources and Customer Services.

Reason: The Council had signed up to participate in the scheme and was committed to retaining the right to buy receipts in order to address the growing demand for affordable rented homes in the borough. It was clear that the Council would not be able to comply with the scheme and retain the receipts unless it could identify a solution to raise a significant proportion of the 70% match funding required outside of the HRA. Key advantages to the Council of this proposal:

·       Expenditure of right to buy receipts

·       Development of affordable homes thereby meeting housing needs and meeting housing targets

·       Attraction of new external funding that would not otherwise be available to invest in Enfield

·       Income to the Council via: potential capital receipts and/or ground rent

·       Dividend payments from the rental payments made to the registered provider.

(Key decision – reference number 4205)