At its meeting on 29 May 2019, the City Executive Board will consider a report on the future strategic direction for the Council's group of housing companies. This item provides an opportunity for the Committee to comment on the report and make recommendations to the City Executive Board if it wishes. Please note that the Companies Scrutiny Panel will also be considering the corresponding Shareholder report on this issue on 28 May 2019, prior to the Shareholder meeting on 30 May.

At its meeting on 29 May 2019, the Cabinet would consider a report on the future strategic direction for the Council's group of housing companies. This item provided an opportunity for the Committee to comment on the report and make recommendations to the Cabinet.

The Head of Financial Services  introduced the item by reminding the Committee that the report was a response to recent government policy changes which  had, helpfully, removed restrictions on the ability to borrow within the Housing Revenue Account (HRA). This in turn necessitated a review of the approach previously adopted by the Council and the future role of Oxford City Housing Limited (OCHL).

The Housing Development & Enabling Manager drew attention to a minor change to recommendation 6 which would appear in the version of the report which would be considered by Cabinet.

The Cabinet Member for Housing said it made good sense to manage new social housing within the HRA and it was good to be able to start developing a series of potential sites  rather than the previous practice of one ‘task and finish’ project followed by another

It was suggested that the list of development sites might be over ambitious. The Housing Development & Enabling Manager pointed to the number of developments for which planning permission had been granted and said that steps were being taken to maintain and expand relationships with developers.  Some developments were being bundled together to make them more attractive to bigger developers; the smaller developments presented more of a challenge.

In a wide ranging discussion about the importance of reducing carbon  footprints and energy efficiency,  the Housing Development & Enabling Manager said that OCHL insisted on conditions which were over and above the legal minima.  In relation to the potential OCHL sites identified in the report there would be 2-3 years in which to consider and develop proposals for a move to houses with an ever decreasing carbon footprint. Thought was already being given to making larger sites more energy efficient and would involve not just OCHL. Oxford Direct Services, for example , was already planning for a reduction in its capacity to service gas boilers.

Given the increased capacity to borrow it was suggested there was no reason not to accelerate the  move to houses with a reduced and, ultimately,  zero carbon footprint .

The Cabinet Member for Housing said  OCHL would have to look at what was possible and the Council, as lender, would need to decide what it was willing (and what would be prudent) to pay for.

The report noted that the review of the future role and activity of OCHL might extend to the purchase of land.  The  Cabinet  Member for Housing fully expected that this would be the case although, not necessarily within the City. While the new opportunity for prudential borrowing was very welcome he reminded the Committee that it was not free and accompanied by an element of risk which OCHL had to consider carefully . There was, also, the possibility of the current government policy being reversed at some point in the future. On balance however the risks were considered to be manageable.

The ability to respond swiftly to potentially advantageous land or property purchases was recognised as important. The best means of securing additional funds for this purpose at short notice would probably be via the urgency provisions in the Constitution.

The emerging strategy did not include proposals for self-build, partly as a result of other resource priorities and partly because the practice elsewhere had shown its success to be patchy (particularly where land is at a premium).

There was a discussion about whether the proposals would be compromised in the event of a future failure of the Growth Deal to progress according to plan. Officers confirmed that in that event alternative funding sources would need to be identified to replace grant from the deal. This could involve an application to Homes England.

The Chair drew the discussion to a close, saying that the Committee welcomed the change in Government policy and that the proposals contained in the report represented a good response to them.

As a result of the discussion the Committee agreed to make two recommendations to Cabinet:  

Recommendation 1: That the Council ensures that the feasibility assessment and design phases of future OCHL developments align with the Council’s carbon neutral and environmental ambitions. These stages should also consider the need for appropriate disability access. More broadly, the environmental objectives of the Council should align with all aspects of OCHL’s work.

Recommendation 2: That the Council, through OCHL, establishes a standalone and unallocated funding pot to enable rapid property and land acquisitions. Consideration should be given to other ways that the same outcome might be achieved, such as through urgent decision procedures.