The Head of Housing and Property submitted a report to the City Executive Board on 17 March 2016 which presented the business case for the establishment of a Council owned housing company, and sought approval for the Council to enter into such agreements as are necessary to enable the company to acquire the affordable housing at Barton Park in place of the Council.

The relevant draft minute of the City Executive Board meeting including the full decision is attached later in the agenda.

The Board Member will move the recommendations.

Recommendations

The City Executive Board recommends Council to:

1.    amend the Treasury Management Strategy to enable the making of loans to the wholly owned Housing Company on State Aid compliant terms of up to £12,250,000 to fund its purchase of the Phase 1 affordable housing at Barton Park and to delegate to the Chief Finance Officer approval of the terms of the loan and the terms of the facility agreement(s) and any associated documentation;

2.    agree the inclusion of an amount of £12,250,000 in its General Fund Capital Programme in 2017/18 funded by Prudential Borrowing;

3.    agree the provision of a loan facility to the Company of up to £250,000 to fund the set up costs and provide initial working capital and delegate to the Chief Finance Officer approval of terms of the loan and the terms of the facility agreement;

4.    agree the adoption of the Local Authorities (Indemnities for Members and Officers) Order 2004 in respect of officers of the Council appointed to the Housing Board in accordance with paragraph 40;

5.    agree a General Fund revenue budget of £40,000 in 2016/17 for the setting up of the Company funded from reserves.

Council considered a a report to the City Executive Board on 17 March 2016 which presented the business case for the establishment of a Council owned housing company, and sought approval for the Council to enter into such agreements as are necessary to enable the company to acquire the affordable housing at Barton Park in place of the Council.

Council resolved to:

1.    amend the Treasury Management Strategy to enable the making of loans to the wholly owned Housing Company on State Aid compliant terms of up to £12,250,000 to fund its purchase of the Phase 1 affordable housing at Barton Park and to delegate to the Chief Finance Officer approval of the terms of the loan and the terms of the facility agreement(s) and any associated documentation;

2.    agree the inclusion of an amount of £12,250,000 in its General Fund Capital Programme in 2017/18 funded by Prudential Borrowing;

3.    agree the provision of a loan facility to the Company of up to £250,000 to fund the set up costs and provide initial working capital and delegate to the Chief Finance Officer approval of terms of the loan and the terms of the facility agreement;

4.    agree the adoption of the Local Authorities (Indemnities for Members and Officers) Order 2004 in respect of officers of the Council appointed to the Housing Board in accordance with paragraph 40;

5.    agree a General Fund revenue budget of £40,000 in 2016/17 for the setting up of the Company funded from reserves.

The Head of Housing and Propertyhas submitted a report which presents the business case and seeks approval for the establishment of a Council owned housing company, and seeks approval for the Council to enter into such agreements as are necessary to enable the company to acquire the affordable housing at Barton Park in place of the Council

Recommendations: That the City Executive Board resolves to:

1.    Agree the principle of setting up a Local Authority wholly owned housing company structure (‘the company’) with the overarching aim of increasing housing supply, noting that there are a range of work-streams which the company structure can pursue, including:-

• The purchase and management and management of the affordable rented homes at Barton Park;
• The development of new affordable housing with a range of tenures;
• The purchase and management and management of high value void properties from the Council to re-provide affordable housing; and
• The undertaking of Estate regeneration schemes

2.    Delegate authority to the Executive Director, Housing and Regeneration in consultation with the Council’s statutory officers, Deputy Leader and portfolio holder for Housing, to do anything necessary to set up an appropriate company structure, including:

1. Selection of the name of the company
2. Approval of the type of company, the articles of the company and the size and composition of its board
3. Appointment of Directors and Company Secretary of the company
4. Approval of a shareholders agreement to be entered into between the company and the Council
5. Ensuring that the company will hold appropriate insurances and/or benefit from insurances that the Council holds

3.    Authorise the entry into discussions with Barton Oxford LLP and Hill Residential Ltd to enable the novation/assignment (and variation to the extent necessary) of the Overarching Agreement and the Conditional Development Agreement and all or any associated agreement warranties etc so that the company may acquire the affordable housing at Barton Park in place of the Council and the delegation to the Executive Director, Housing and Regeneration in consultation with the Council’s statutory officers of all necessary steps to achieve this, including:

1. approval of the final terms of any proposed agreements with Barton Oxford LLP and Hill Residential Ltd to give effect to the above
2. the decision whether or not to offer a Council guarantee to Barton Oxford LLP and/or Hill Residential Limited in order to enable the company to acquire the housing at Barton Park and  approval of the terms of any such guarantee
3. approval of the terms of any contracts to be entered into between the company and the Council in relation to the management and maintenance of the Barton Park affordable homes
4. approval of the terms of any nomination/allocation agreement to be entered into between the Council and the company
5. approval (in exercise of the housing and regeneration function but not so as to affect the planning function of the Council) of any proposed variation to the Barton Park s.106 agreement.

4.    Recommend Council to amend the Treasury Management Strategy to enable the making of loans to the  ...  view the full agenda text for item 201

The Head of Housing and Propertysubmitted a report which presented the business case for the establishment of a Council owned housing company, and sought approval for the Council to enter into such agreements as are necessary to enable the company to acquire the affordable housing at Barton Park in place of the Council.

The Executive Board Member, Housing presented the report. With regard to the recommendations from the Scrutiny Committee he confirmed that he was happy to accept the first recommendation.  He explained that he could not accept the second recommendation as it was necessary to strike a balance between urgency and accountability. 

The Board noted that although the tenure options for housing at Barton Park was determined by the existing s106 agreement, there would be considerable scope to include a wide range of tenures in future housing projects undertaken by the housing company.

The Board thanked the Housing Development & Enabling Manager for the report and his hard work in developing the proposals for the establishment of a Council owned housing company.

The City Executive Board resolved to:

1.    Agree the principle of setting up a Local Authority wholly owned housing company structure (‘the company’) with the overarching aim of increasing housing supply, noting that there are a range of work-streams which the company structure can pursue, including:-

• The purchase and management and management of the affordable rented homes at Barton Park;
• The development of new affordable housing with a range of tenures;
• The purchase and management and management of high value void properties from the Council to re-provide affordable housing; and
• The undertaking of Estate regeneration schemes

2.    Delegate authority to the Executive Director, Housing and Regeneration in consultation with the Council’s statutory officers, Deputy Leader and portfolio holder for Housing, to do anything necessary to set up an appropriate company structure, including:

1. Selection of the name of the company
2. Approval of the type of company, the articles of the company and the size and composition of its board
3. Appointment of Directors and Company Secretary of the company
4. Approval of a shareholders agreement to be entered into between the company and the Council
5. Ensuring that the company will hold appropriate insurances and/or benefit from insurances that the Council holds

3.    Authorise the entry into discussions with Barton Oxford LLP and Hill Residential Ltd to enable the novation/assignment (and variation to the extent necessary) of the Overarching Agreement and the Conditional Development Agreement and all or any associated agreement warranties etc so that the company may acquire the affordable housing at Barton Park in place of the Council and the delegation to the Executive Director, Housing and Regeneration in consultation with the Council’s statutory officers of all necessary steps to achieve this, including:

1. approval of the final terms of any proposed agreements with Barton Oxford LLP and Hill Residential Ltd to give effect to the above
2. the decision whether or not to offer a Council guarantee to Barton Oxford LLP and/or Hill Residential Limited in order to enable the  ...  view the full minutes text for item 201

The Housing Development and Enabling Manager introduced the report and explained that it sought agreement to the principle of setting up a Local Authority wholly owned housing company and delegated authority to set up an appropriate company structure.  The overarching aim of the Company was to increase the supply of affordable housing. 

The Panel then heard from a public speaker who spoke on behalf of Homes for Oxford.

In response to a question about the merits of a Community Land Trust model of ownership, the Panel heard that initial discussions had taken place.  The Council needed to view any opportunities at specific sites on their merits and ensure best value.  The report was not seeking decisions on any sites other than Barton and nothing else was being ruled out or given a green light at this stage.  In the short term, the Company would not be doing anything the Council wasn’t planning to do anyway.  These plans included delivering homes at Barton and estate regeneration.  Other sites the Council was planning to develop would come forward in due course and be subject to separate decisions.  The Company would also enable further opportunities that may follow in future, such as developing outside the city.

In response to a question about whether the articles of the Company could preclude it from investing in alternative housing models, the Panel heard that the articles of the Company would be drawn as flexibly as possible and the Company structure would enable the Company to partner with anybody but there was a need to balance risk given that the Company would be wholly Local Authority owned.

The Panel observed that there may be merit in appointing non-executive Directors from the start in order to bring in outside expertise and high profile support.

The Panel also sought and received assurances on the following:

·         That there was sufficient officer capacity at senior levels.

·         That the Company would be able to rent out properties on a range of tenures including social and market rent.

·         Any General Fund borrowing would be prudent and affordable.

·         That the terms of the loan facility would be determined when the Company required the funding.

·         That future executive decisions would be open to scrutiny.

The Panel agreed to welcome and support the creation of the Company and make the following recommendations to the City Executive Board:

1.    That the Company articles should be drafted in such a way so as not to preclude entering into any funding arrangements or partnerships that could help to increase the supply of affordable housing, including working with alternative housing providers and models (such as co-housing or a community land trust).

2.    That consideration should be given to enabling wider member oversight and input into decisions delegated to officers, in particular decisions about the articles of the Company, shareholder agreements, and details of agreements regarding the acquisition of affordable housing at Barton Park.