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; the Housing Group would support the funding of this post through the Service Level Agreement with the Property and Regeneration team.

Resource constraints in the Council’s planning service had resulted in some delay in obtaining pre-application advice for the housing development schemes. This was a potential threat to the delivery programme for current and future schemes.  The Housing Group was in discussion with the planning service management team to identify a solution to the problem; one option would be to set up a planning partnership agreement as other corporate developers had done.

Housing Group status

It might be advantageous for the Housing Group to assume Registered Social Landlord status in order to access grant opportunities but this would have significant implications for the Business Plan and the Council’s Medium Term Financial Plan.  A report detailing these issues and recommending a course of action would be presented to the Shareholder at a future meeting.

The Shareholder resolved to:

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