Agenda item

The Head of Housing and Health and the Head of Strategic Finance and Property submitted a joint report that covered the establishment of a housing company, wholly owned by East Herts Council, to provide revenue income to offset diminishing government support and grants and meet the Council’s objectives in terms of providing quality housing opportunities.

Councillor T Jackson made a number of contextual comments by way of an introduction to the report.  He explained that a number of Councils had set up a housing company as a vehicle for generating income.  The Head of Housing and Health confirmed that the housing company would act as an investment vehicle and he provided a detailed explanation of the cost modelling and cost estimates that had been carried out since Corporate Business Scrutiny Committee had met in November 2016.

Members were advised that the report included a 30 year business plan for this first stage of the proposed company’s operation drawing on advice provided by Trowers and Hamlins and PricewaterhouseCoopers (PwC).  The proposal did not cover housing development.  The Head of Housing and Health stressed that the principal aim was to generate an additional income stream for the Authority.

The Head of Housing and Health emphasised that it would be for Members to direct the use of the income stream.  Members were advised that the modelling had been stress tested and was sufficiently flexible to deliver income in a flexible housing market.  Members were invited to scrutinise the business case.

At this point, the joint meeting resolved to exclude the Press and Public on the grounds that open discussion of Essential Reference Paper ‘B’ would result in the disclosure of exempt Information as defined by paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972.

The Head of Housing and Health answered a number of queries regarding the exempt Essential Reference Paper ‘B’.  He made some explanatory points.

Officers responded to a number of other detailed questions and concerns from Members on a wide range of topics.  Members questioned whether Officers had access to the necessary skills set for the management of a housing company.  Councillor K Crofton expressed his disappointment that this was the only commercial option for Members to consider.  He felt that there might be better returns from entering the commercial property market.

Councillor G Cutting referred to the different start up positon of South Cambs in that he believed there was an existing portfolio of 200 properties.  Councillor M Casey stated that he would like to see more information regarding the financial return on the Council’s equity that was proposed to be deployed to the company.

The Director confirmed that the performance of the housing company would be reviewed yearly to ensure it delivered what was expected by Members and Officers.

Councillor G Cutting proposed and Councillor K Crofton seconded, a motion that the Executive be requested to give more consideration to the setting up of a housing company and alternatives to the proposed business plan be explored.

After being put to the meeting and a vote taken, this motion was declared CARRIED.  The joint meeting supported the recommendations now detailed.

RESOLVED – that (A) the report be received;

(B)   the Executive be requested to give more consideration to the setting up of a housing company; and

(C)   alternatives to the proposed business plan be explored.