A report from the Executive Director of Regeneration and Environment is attached. (Key decision – reference number 4591)
(6.10 – 6.15 pm)
Councillor Ahmet Oykener (Cabinet Member for Housing and Housing Regeneration) introduced the report of the Executive Director of Regeneration and Environment (No.185) seeking approval to the disposal of HRA assets to Red Lion Homes.
1. That this was another innovative approach being taken by the Council supporting the provision of social housing. The Government’s Right to Buy policy was explained together with the financial implications for the Council if it was required to hand back Right to Buy receipts, as detailed in full in the report.
2. The current costs to the Council in renting properties to support the provision of social housing in the Borough to meet housing demands.
3. The proposal for the development of Red Lion Homes as a Not For Profit Registered Provider as set out in the report. Members were advised that the proposals would comply with Government regulations and, noted the ways in which the council would be able to exercise control in going forward.
4. This was an innovative proposal to support the delivery of social housing and comply with Government regulations regarding Right to Buy Receipts. Members further noted that Enfield was due to feature in a forthcoming BBC documentary on the national Housing Crisis.
5. Members expressed their support for the proposals and also acknowledged the increasing pressures being faced by residents as a result of changes to new welfare reform legislation.
6. An amendment to recommendation 2.4 of the report with the addition of the Executive Director of Finance, Resources and Customer Services to the delegated authority being sought, as reflected in decision 4 below.
7. Councillor Edward Smith, on behalf of the Opposition, raised a number of questions for clarification including the timescales involved, the funding proposals, the response of existing registered providers, and the proposals for going forward, including the formal registration of Red Lion Homes with the Regulator for Social Housing as a Registered Provider.
8. Detailed responses were provided with regard to the Council’s current situation on Right to Buy receipts and estimates in going forward. The financial implications for the Council and the increasing demands for social housing were outlined. It was intended to implement the proposals as soon as possible following formal registration. It was noted that a Cabinet Member and Council officer would be on the membership of the Board of Red Lions Homes, as detailed in the report.
Alternative Options Considered: The Council could decide not to provide Red Lion Homes with land and properties to help it establish itself for the provision of affordable housing. However, the HRA would not be able to fund all these schemes itself as there was insufficient funding within the HRA to do so. By using Red Lion Homes match funding was provided by the Registered Provider itself and meant HRA resources could be used elsewhere.
As set out in the report, the Council had had limited success in funding the other Registered Providers working in Enfield. Of 36 Registered Providers only four had schemes using right to buy receipts. The Council would continue to fund these Registered Providers as the amount of available right to buy receipts would cover a variety of approaches for providing new affordable housing supply.
Red Lion Homes owning the homes that were developed meant they would not be subject to the Right to Buy, which they would be if they remained within the Council’s ownership via the HRA.
For Red Lion Homes to continue to set up as a For Profit Registered Provider. Without the support of the Council to do this it was not seen as viable.
DECISION: The Cabinet agreed
1. That the Council provide funding to Red Lion Homes Ltd up to a value of £250,000, as “Start-Up” costs, this sum to be repaid to the Council once the new company was set up. The exact terms of the loan agreement to be approved by the Executive Director of Finance, Resources and Customer Services in consultation with the Director of Law and Governance.
2. That subject to Red Lion Homes receiving formal registration with the Regulator for Social Housing (RSH) as a Registered Provider, the following decisions were recommended and agreed by Cabinet.
3. To approve the principle of disposal of newly developed sites, at the appropriate relevant value, as set out in paragraph 3.15 of the report.
4. To delegate future decisions and the most appropriate disposal route on specific disposals of HRA assets to the Executive Director of Regeneration and Environment in consultation with the Executive Director of Finance, Resources and Customer Services, the Leader and the Cabinet Member for Finance and Efficiency subject to Property Procedure Rules and value for money.
5. To approve that Red Lion Homes, along with other Registered Providers, was an acceptable body, once registered for the receipt of Section 106 homes.
6. To approve delegating to the Executive Director of Regeneration and Environment in consultation with the Leader and Cabinet Member for Finance and Efficiency agreeing a Memorandum of Understanding about rent setting and strategic aims for Red Lion Homes in its relationship with the Council.
7. To note that the Board of Red Lion Homes had changed its Articles of Association and would change its corporate structure as appropriate to enable it to change its type of Registered Provider designation with the Regulator of Social Housing to that of a Not for Profit Registered Provider and further delegated to the Executive Director of Regeneration and Environment approval of the change to not for profit status subject to due diligence by Legal and Finance.
Reason: The Council had agreed to support/sponsor the setting up of a Registered Provider to help in the provision of affordable housing to meet housing needs in Enfield. By the direct sale of sites and newly developed properties to Red Lion Homes it and the Council could demonstrate to the Regulator for Social Housing that the Council was committed to ensure the establishment of the registered provider. By working with a Registered Provider with a close relationship to the Council, the Council was better able to expend its right to buy receipts from the Government’s One for One Replacement Scheme. It enabled the Council to provide more homes than if it had to fund all of them through the HRA itself.
(Key decision – reference number 4591)