A report from the Director of Law and Governance is attached. (Report No.259 also refers, containing exempt information) (Key decision – reference number 5099)

(Report No.258)

Councillor Mary Maguire (Cabinet Member for Finance and Procurement) introduced the report of the Director of Law and Governance (No.258).

NOTED

1.            That Report No.259 (containing exempt information) also referred as detailed in Minute No.11 below.

2.            That the Council’s trading companies operated according to forward business plans, which were fully refreshed for the 2019/20 financial year and were now due for one-year rolling update. This report provided updates on Housing Gateway Ltd. (HGL) and Energetik as detailed.

3.            HGL worked to a three-year business plan which had been updated to reflect the period 2020-23; including an update to include provision of an ethical lettings agency.

4.            The detailed information set out in the report on HGL’s strategic objectives; the development of an ethical lettings agency; the core portfolio expansion proposals; and information regarding finances and equity investment. The strategic objectives, as set out in section 3.5 of the report were aligned to the Council’s plan objectives and would provide a good contribution towards and, help to improve the overall housing offer for residents. In summary the objectives included: delivering increased housing supply to the Council with at least an additional 250 units by 2023; delivering savings to the council of £1m per year; and, delivering an innovative ethical estate agency which would also lead to a reduction in the use of temporary accommodation. Members were also reminded of the achievements of HGL to date in the provision of quality housing to Enfield’s residents and in the savings achieved for the Council.

5.            The benefits of establishing an ethical lettings agency, as set out in the report and business plan of HGL which would support the aims of the Council’s housing strategy. The agency would be able to offer longer term tenancies of up to five years that were not generally found in the private rented sector. It was hoped that the work of the agency would contribute to the prevention of homelessness in the Borough, as outlined in the report.

6.            That Cabinet had considered and approved the envelope for an investment of equity funding in HGL as part of the Capital Programme in March 2020, this was further detailed in Report No.259 (Minute No.11 below referred).

7.            The updates provided within the report on Energetik, sections 3.22 to 3.25 of the report referred, relating to the Meridian Water Energy Centre and the Heat Network Expansion. Further information was also provided in Report No.259, referred to in Minute No.11 below.

8.            That the construction of the Meridian Water energy centre, which would serve phase one of the Meridian Water development, was scheduled to begin in October 2020. Members were updated on the developments relating to the heat network expansion at three satellite networks in Ladderswood, New Avenue and Alma Road/Electric Quarter. There had been some delay in the completion of the projects due to the Covid 19 pandemic with contractors working at 50% capacity; with the projects at New Avenue and Alma now due for completion in August and October respectively rather than May.

9.            Members were reminded that Energetik would provide cleaner and cheaper energy and, help to address the issue of fuel poverty. Energetik was a long-term investment which had high set up costs, in common with other such companies.

10.         That to mitigate the risk of variations arising to the detailed business plans, the Council had implemented Reserved Matters with the companies, as set out in sections 3.26 and 3.27 of the report. Any matters arising requiring Cabinet approval would be brought forward during the year as required.

11.         That the Council’s companies reported on a quarterly basis, as detailed in sections 3.29 and 3.30 of the report.

12.         The key risks as outlined in section 7 of the report.

13.         That questions and comments were invited from the Cabinet Members as summarised in the points below.

14.         That the supply of good quality housing was a major issue across London. The proposals regarding the work and further development of HGL was welcomed. It was further noted that the provision of good quality housing was a major determinant of good health and was a factor within the Council’s Health and Wellbeing Strategy. The company was making good progress and was also financially beneficial to the Council. Members were pleased to note that Enfield had not invested in commercial properties as some other local authorities had done. Assurances were given that Enfield would not be seeking to make such investments. Investments would be made to support and benefit the residents of the Borough.

15.         That the investments referred to above had been a factor in the rise in interest rates for the public works loan board, as explained at the meeting. It was further noted that rates had now lowered for infrastructure investment projects.

16.         That Energetik’s operating plan (provided in Report No.259, Minute No.11 below referred) did not require the Council’s approval as shareholder, as set out in section 1.5 of the report. In response to a question raised, it was explained (during the discussion of Report No.259) that the Cabinet was required to, and had previously approved, Energetik’s business plan. The one-year operating plan now presented flowed from the business plan and was presented for transparency.  The processes in place provided oversight by Cabinet with the company enabled to make operational decisions within specified parameters. The reserved matters, explained within the report, were also reiterated.

17.         Members asked that Cabinet be provided with regular updates from the Council’s companies as and when appropriate at future Cabinet meetings, with representatives of the companies invited to attend. The potential impact of the Covid 19 pandemic on their business plans was highlighted.

18.         Members supported the development of HGL and provision of quality housing to meet the desperate need in the Borough. The development of an ethical lettings agency was welcomed to support residents and in turn reduce the need for the provision of temporary accommodation.

19.         That the development of an ethical lettings agency was an important development which supported the Council’s overall housing strategy. The benefits of such an agency were highlighted. It would enable the Council to intervene in the private rented market and support the delivery of mixed housing options. It would help to support many residents who were not eligible for housing benefit or social housing.

20.         That this Council’s approach to the development of Meridian Water on a phased basis had secured the future of Meridian Water housing delivery and enabled Energetik to become a viable energy company.

Alternative Options Considered: NOTED, the detailed alternative options that had been considered as set out in full in section 4 of the report and summarised below:

·         For Housing Gateway Ltd. the first alternative was to do nothing and allow the company to continue with its existing business plan covering the period 2019-22. This had not been recommended for the reasons detailed in the report.

·         A complete refresh of the entire business plan.

·         For Cabinet to reject the business plan and request a revision.

·         In regard to Energetik, the shareholder did not approve the Operating Plan being presented, therefore formally there was no alternative.

DECISION: The Cabinet agreed to

1.            Approve the business plan of Housing Gateway Ltd. for the period 2020-2023, including the development and implementation of an Ethical Lettings Agency alongside the company’s core private rented business.

2.            Note and support the Operating Plan of Energetik for the period 2020-2023.

Reason: The Housing Gateway Ltd. business plan and Energetik operating plan presented would assist in achieving the Council’s corporate plan objectives, would assist residents by providing a genuine, affordable alternative to the general private market, and would help the Council financially through the recovery of interest premiums and contributions to cost avoidance in areas such as homelessness.

(Key decision – reference number 5099)