Purpose of report: to ask the Shareholder and Joint Venture Group to review and approve the refresh of Oxford City Housing Company’s (OCHL’s) 10 year Business Plan.

The Managing Director, Michelle Thomas, introduced the business plan refresh and outlined the key changes.

The Shareholder and Joint Venture Group resolved to approve the OCHL Strategic Business Plan at Appendix 1 to the report.

Purpose: to ask the SJVG to consider the overview report, agree the recommendations, and agree the refreshed OCHL Strategic 10 year Business Plan 2020.

Recommendation: to agree the recommendations contained in the report.

This item was discussed in private session. The SJVG approved the business plan as submitted.

Cllr Clarkson left during this item.

Updated 11 September 2020

This item is withdrawn from the agenda at the request of the OCHL Company Board and will be resubmitted to a future meeting.

Reports from Oxford City Housing Limited had been withdrawn prior to the meeting to allow for further work to take place on them. They would instead be considered at a future meeting of the SJVG.

The Interim Managing Director of the Housing has submitted a report to introduce the OCHL Strategic 10 year Business Plan and explain the changes since the Draft Strategic Business Plan of September 2019.  The Shareholder is asked to endorse the OCHL Plan.

Detailed recommendations are set out in the report.

Richard Connolly spoke to the report which set out to introduce the OCHL Strategic 10 year Business Plan and explain the changes since the Draft Strategic Business Plan of September 2019.

The Shareholder and Joint Venture Group resolved to:

1.    Endorse the OCHL Strategic Business Plan (subject to certain conditions);

2.    Note the specific points raised in this report, since endorsement of the Draft Strategic Business Plan on 25 September 2019; and

3.    Agree 

                      I.        there should be an agreed on-going level of annual dividend;

                    II.        arrangements to  reduce debt.

To receive a report detailing the progress made by the Housing Group on the delivery of the housing development projects.

The report will also be considered by the Companies Scrutiny Panel on 12 December 2018.

Recommendation:

The Shareholder is invited to consider the report, and make any comments or recommendations as appropriate.

The Shareholder received a presentation and report detailing the progress made by the Housing Group on the delivery of the housing development projects.

This item was considered in confidential session.

To consider a report which has been submitted to the Housing Group Shareholder detailing the progress made by the Housing Group on the delivery of the housing development projects.

The report will be considered by the Housing Group Shareholder on 17 December 2018.

Recommendation:

The Companies Scrutiny Panel is invited to consider the report and make any comments or recommendations as appropriate to the Housing Group Shareholder.

For the purposes of providing a public minute, a summary of the discussion had in private session is provided here.

Alan Wylde gave a presentation on the each of OCHL’s sites for development. Sites were at different stages in the process: some were still at pre-planning stages; others were at the stage of tendering for building contracts. Some sites had been redesigned to increase the number of units. All sites complied with the policy of having 50% affordable housing: the site at Rosehill would be entirely affordable units. OCHL were discussing options with the Low Carbon Hub for generating low-cost solar power on the Rosehill site.

He reported that 43 homes and flats in Barton Park would transfer to the Council (not OCHL) between January and April 2019.

OCHL had taken 7 homes transferred from the Council’s HRA stock. These would be extended to provide larger houses, or on larger plots additional homes would be built, or both. OCHL and the Council’s housing team regularly reviewed vacant properties to see which could be redeveloped to increase the social housing stock either through the HRA or through OCHL

OCHL was contracting with Oxford Direct Services to carry out some construction work to allow both companies to test the capacity of ODS to deliver good quality homes on small sites, with a view to scaling up ODS’s construction operations.

Key lessons were:

1.    Not to underestimate the length of time it would take to get a development from initial scoping of the site to starting work;

2.    To engage properly and early with planning services, and make good use of the pre-application advice service to assess initial outline designs;

3.    Consider carefully the implications of planning conditions on the speed of delivery as well as on the costs and complexity;

4.    All across the construction industry in the south east there were persistent difficulties in finding tradesmen and professional services across all specialities and across all sectors;

5.    Procure building services for batches of small sites due to start at similar times to create a more attractive contract;

6.    To develop a list of contractors who can provide good quality consistent work;

7.    Consider the use of novel building methods including modular homes to give a higher quality build, on constrained sites, or to counteract labour shortages.

The Panel recommended to the Housing Group Shareholder:

·         that the Directors should continue to revise the 5-year plan, and also revise the profit and loss account, to take account of actual and likely slippage and the contributory factors.

·         for cash flow management the forecasts should show which units were intended for direct sale to the Council’s HRA and which would be retained by OCHL.

To receive a presentation concerning progress made by the Housing Group on the delivery of the Business Plan. This presentation will also be considered by the Companies Scrutiny Panel on 7 June. The Shareholder is invited to consider the presentation, and make any comments or recommendations as appropriate. The presentation will be circulated in advance of the meeting.

The Housing Development Manager gave a presentation on the Housing Group’s portfolio of development schemes and property acquisition. He explained that the slippage in the completion dates for the development sites was in part due to the delays experienced in planning pre-application process but that he was confident that the current schedule was a realistic assessment.

Harts Close

This was at an advanced stage in the planning process and was due for completion in May 2019.

Warren Crescent

Work would begin on site in January 2019 on completion of the water monitoring programme; it was due for completion in January 2020.

The Shareholder said that it was important to remind local residents that this was still a valid planning application and to ensure that there was a comprehensive communications plan to brief residents on the timescales and details for the construction phase of the site development.

The Housing Group gave assurances that a communications plan was in place and that it would address the concerns raised by the Shareholder.

Underhill Circus  

The current focus was on acquiring the maisonettes above the shops on the site; completion was scheduled for late 2020.

Two sites at Rose Hill

Due to their proximity the two sites at Rose Hill would be treated as a single development.  Pre-application feedback had resulted in a reduction in the number of deliverable units on this site.  Public consultation was due to start on site in June 2018.  Completion was due in March 2020.

Cumberlege Close and Elsfield Hall

The scheduled completion for these two sites was late 2019 – early 2020. It was proposed to treat these two locations as a combined development.  There was an Oxford Preservation Trust Covenant on Cumberlege Close. Initial pre-application feedback had resulted in a reduction in the number of deliverable units at Elsfield Hall.

The Shareholder observed that the Elsfield Hall site was in a highly sustainable location with good transport links and green space and as such should be able to support a higher level of units.

The Shareholder asked for a report to the next meeting detailing the background to and status of the discussions about the Oxford Preservation Trust Covenant on Cumberlege Close.

Between Towns Road

Pre-application feedback had resulted in a reduction in the number of deliverable units on this site.  Public consultation was due to start on site in July 2018.

Lucy Faithfull House

Demolition was underway. Initial design proposals were based on a high density scheme in keeping with its city centre location.  Design details and construction timescales for this site would be heavily influenced by the outcomes of the archaeological survey.

Barton Park

The Housing Development Manager said that the first homes were due to transfer to the Housing Group in August 2018.  He explained that the Building Cost Information Service (BCIS) index recorded a cost increase in 2017 which would impact on the Phase 1 property prices paid by the Housing Group.  This increase was expected to be within the Housing Group financial  ...  view the full minutes text for item 4

Recommendation:

That the Housing Group Shareholder resolves to:

1.       Note the exempt financial appendices to the updated Housing Group Business Plan 2017-18

The Shareholder moved to private session to discuss the Housing Group financial statements appended to the report.

The Housing Group Board of Directors has submitted a report which updates the Shareholder on the Business Plan 2017-18.

Recommendation:

That the Housing Group Shareholder resolves to:

1.       Note and agree the updates to the Housing Group Business Plan 2017-18

On behalf of the Housing Group Stephen Clarke (Director) introduced the updated Housing Group Business Plan 2017-18.

Alan Wylde (Housing Development Manager) gave a presentation on the 9 housing development schemes and their planned start dates; these were:

• Harts Close – February 2019
• Cumberlege Close – June 2019
• Rose Hill Advice Centre – January 2020
• Rose Hill Community Centre – June 2019
• Warren Crescent – January 2020 (on completion of monitoring regime)
• Elsfield Hall – April 2020
• Between Towns Road – May 2020
• Underhill Circus – late 2020
• Lucy Faithfull House – not yet programmed

The Housing Development Manager highlighted key issues including:

·       A start date for the Lucy Faithful House site would be confirmed once the archaeological significance of the site was determined

·       The viability of housing schemes within the Housing Group are measured against a number of criteria including:

-       An internal rate of return of at least 4%.

-       Payback is within 40 years.

-       A positive net present value (NPV)

·       There were opportunities in terms of; regenerating existing housing stock, the growth and housing deal, and OCHL’s borrowing capacity.

·       Key risks associated with the proposals concerned building cost inflation and capacity to deliver the schemes whilst other major infrastructure projects were taking place.

·       There was also a risk that interest rates of the Public Works Loan Board would increase, creating additional costs for OCHL.

The Shareholder discussion included, but was not limited to, the following points:

Tenure mix

The Shareholder expressed concern that the table presented at paragraph 12 indicated that the revised development programme was not policy compliant in regard to the provision of social housing. The Housing Group Directors explained that this was an evolving picture and that the final tenure mix would not be determined until further information on cost base, tender prices and planning advice was available. The intention was to deliver an overall development programme that met policy requirements. Similarly it was recognised that the shared ownership provision remained truly affordable. 

Construction

All of the schemes were on council owned land, and the Housing Group would commission building contractors to undertake the work. The Council’s Direct Services companies would not have sufficient capacity to take on this work programme. The Housing Group was exploring the use of alternative build options (e.g. modular or volumetric) to offset the known capacity issues within the traditional building industry.  The Shareholder suggested a number of other measures such as offering multiple site construction programmes; developing relationships with local smaller construction firms; possible partnership working with local housing associations. The Housing Group confirmed that they would be considering these options. 

Member involvement

The Shareholder meeting would receive quarterly updates on the status of each of the housing development schemes. Members, and specifically ward members, would be consulted on specific schemes as part of the Housing Group’s site development procedures and as part of the planning process.

Capacity  

The Council was in the process of recruiting an additional staff member to support the Housing Development Manager;  ...  view the full minutes text for item 13

The Housing Group Shareholder on 20 March will be asked to note and agree the updates to the Housing Group Business Plan 2017-18.

The Housing Development Manager provided the Panel with a presentation on nine housing development schemes and their planned start dates. These were:

• Harts Close – February 2019
• Cumberlege Close – June 2019
• Rose Hill Advice Centre – January 2020
• Rose Hill Community Centre – June 2019
• Warren Crescent – January 2020
• Elsfield Hall – April 2020
• Between Towns Road – May 2020
• Underhill Circus – late 2020
• Lucy Faithfull House – not yet programmed

The indicative programme allowed for a maximum of 243 dwellings to be brought forward between these sites. However, this would be likely to reduce after more detailed work was undertaken due to planning constraints which were likely to impede the capacity of some schemes.

The Housing Development Manager highlighted key issues including:

·         The archaeological significance of the Lucy Faithful House site had meant that detailed design work could not yet be undertaken, and a start date had not yet been identified.

·         Architects had been appointed for the nine schemes. 

·         All of the schemes were on council owned land, and OCHL would commission building contractors to undertake the work.

·         The viability of Housing Schemes within the Company are measured against a number of criteria including:

a)    An internal rate of return of at least 4%.

b)    Payback is within 40 years.

c)    That the schemes would add value to OCHL.

·         Key risks associated with the proposals concerned building cost inflation and capacity to deliver the schemes whilst other major infrastructure projects were taking place. There was also a risk that interest rates of the Public Works Loan Board would increase, creating additional costs for OCHL.

·         Loans from the City Council are based on state aid compliant rates.

·         There were opportunities in terms of; regenerating existing housing stock, the growth and housing deal, and OCHL’s borrowing capacity.

The Panel made several observations and suggestions, including:

·         That the change from the original to the revised development programme showed a significant increase in outright dwelling sales and a decline in affordable rent dwellings. Officers highlighted that the tenure mix would change frequently depending on factors such as building costs and rates of return.

·         It would be preferable for the design of new schemes to match the built environment in which they were set.

·         Concern over the sufficiency of the immediate parking allocation at Rose Hill, and the potential for overflow into surrounding roads.

·         The chart which details the original and revised development programme could be more accessible to the public by using a key to explain the abbreviations in future reports. 

·         That the reference to capitalised interest could be interpreted in different ways.

·         Concern that the schemes being brought forward would require additional resource within the Planning Team. The Housing Development Manager explained that any additional work would be appropriately resourced.

·         Regret that only 2 of a potential maximum of 5 void dwellings were to be transferred to the OCHL in 2017/18, representing a missed opportunity for the company, which will have a detrimental impact on the finances of  ...  view the full minutes text for item 18

The Housing Group Shareholder on 20 March will be asked to note and agree the updates to the Housing Group Business Plan 2017-18.

All aspects of this item were discussed in open public session.  

Invited:

·         Cllr Bob Price – Leader of the Council / Chair of the Housing Companies Shareholder Group;

·         Cllr Mike Rowley – Board Member for Housing;

·         Jackie Yates – Executive Director for Organisational Development & Corporate Services / OCHL Director;

·         David Edwards – Executive Director for Housing & Regeneration / OCHL Director;

·         Stephen Clarke – Head of Housing / OCHL Director;

·         Nigel Kennedy – Head of Financial Services;

·         Lindsay Cane – Monitoring Officer / OCHL Company Secretary;

·         Alan Wylde – Housing Development & Enabling Manager / OCHL advisor;

·         David Watt – Finance Business Partner / OCHL advisor.

Paperwork:

·         Covering report

·         OCHL draft 40 year business plan

·         Deloitte commentary

·         Management response to Deloitte

On 28 March 2017 the Housing Companies Shareholder Group will be asked to endorse the OCHL business plan.  The business plan was developed by OCHL’s Board of Directors and sets out initial proposals for OCHL’s business over a 40 year period.  This initial business plan will be a schedule to the Shareholders Agreement. 

It is proposed (in the terms of reference) that once the business plan has been adopted the OCHL Board of Directors will present annual reports and financial accounts to the Housing Companies Shareholder Group.