A report from the Executive Director of Regeneration and Environment will be published as soon as possible. This should be read in conjunction with Report No.21, agenda part one refers. (Key decision – reference number 4298)
(This document contains exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person – including the authority holding that information) of Schedule 12A to the Local Government Act 1972, as amended)
(Report No.24)
Minutes:
Members dealt with this report following their consideration of the part one report, Report No.21, Minute No.11 above refers, and the exclusion of the press and public, Minute No.16 above refers.
Councillor Dino Lemonides (Cabinet Member for Finance and Efficiency) introduced the report of the Executive Director of Regeneration and Environment (No.24).
NOTED
1. That Report No.21 also referred as detailed in Minute No.11 above.
2. Councillor Lemonides outlined the current position, as set out in the report, and reiterated the considerable efforts that had been made to agree the way forward. He reiterated the need for review and to learn lessons from this experience. The detailed financial implications were outlined to Members for their consideration, including the delivery of homes, the impact on the Housing Revenue Account, the General Fund and on Enfield Innovations Ltd. The negative cost impact of any further delay was highlighted.
3. Councillor Taylor requested an amendment to recommendation 2.3 of the report with the addition of: “…the decision requires written advice from external legal advisors which calculates risks and liabilities of the chosen course of action”. Decision 3 below reflects this amendment.
4. Councillor Smith sought clarification of the financial implications for the Council as set out in the report. Peter George (Assistant Director Regeneration and Environment) outlined the costs in detail which related to a number of factors, the reasons for which were explained to Members.
Alternative Options Considered: NOTED, the detailed alternative options which had been considered as set out in section 5 of the report.
DECISION: The Cabinet agreed
1. To note the overall positive financial viability of the project as detailed in paragraph 6.13 of the report.
2. To delegate authority to the Executive Director of Regeneration and Environment and the Executive Director of Finance, Resources and Customer Services to negotiate a commercial settlement with Kier Property Investments (KPI) to vary the Development Agreement (DA) and conclude a revised fixed contract sum for partial completion of the Development Agreement to complete the 47 homes at the Parsonage Lane, St Georges and Tudor Crescent sites only, to be called Phase 1, for the proposed net cost as set out in recommendation 2.2 of the report.
3. Subject to the revised Agreement being entered into with Kier (as per recommendation 2.2 of the report), Cabinet recommended approval to a direct contract award as set out in the report, to complete the construction works at the four remaining sites (Phase 2 – Holtwhites Hill, Jasper Close, Forty Hill and Lavender Hill) for an agreed fixed and validated price as set out in recommendation 2.3 of the report. The decision to require written advice from external legal advisors which calculates risks and liabilities of the chosen course of action.
4. To recommend to Council to approve an additional budget, as set out in recommendation 2.4 of the report. The sum to be funded from the Housing Revenue Account (HRA), where after completion of the project and property sales there would be an estimated net cost, as set out in recommendation 2.4 of the report, to the HRA to be funded from future rental income.
5. To delegate authority to the Executive Director of Regeneration and Environment and the Executive Director of Finance, Resources and Customer Services to renegotiate the terms of the Facility Letter (funding agreement) with Enfield Innovations Ltd. (EIL) to allow for the market sale of the number of EIL units set out in recommendation 2.5 of the report, upon completion of construction of Phase 1 and the termination of the Kier Development Agreement and for the further market sale of the number of units as set out in recommendation 2.5 of the report, upon completion of Phase 2. This would allow EIL to fully recoup all expended costs to date and achieve an overall financially viable scheme which maintained the affordable homes in perpetuity for the Council. The estimated value of this disposal was currently as detailed in recommendation 2.5 of the report.
RECOMMENDED TO COUNCIL to approve an additional budget, as set out in recommendation 2.4 of the report. The sum to be funded from the Housing Revenue Account (HRA), where after completion of the project and property sales there would be an estimated net cost, as set out in recommendation 2.4 of the report, to the HRA to be funded from future rental income.
Reason: NOTED the detailed reasons for the recommendations as set out in section 6 of the report.
(Key decision – reference number 4298)
Supporting documents: