Issue - meetings

Report of the Cabinet Member Housing

The Cabinet Member Housing introduced the report which set out what the Council planned to do in order to bring about the required step change in the delivery of housing. He stated that if approved, these proposals would provide a range of benefits to Cheltenham, not least an increase in the provision of affordable homes and the delivery of private rented homes to be let on a long-term basis, thereby providing more households with greater security of tenure.

This was against the background of a national housing crisis. Social housing delivery was low, and affordable homes had become more unaffordable as house price values continued to rise. Ultimately this had led to a phenomenal growth in the private rental sector but this had still failed to deliver enough homes.. The Cabinet Member stated that since the self-financing changes in 2012 relating to the housing revenue account the council and Cheltenham Borough Homes had endeavoured to provide more homes in the town, albeit few in number. Demand for homes therefore remained high.

To address some of the issues, working within the system the council was now proposing to invest £100 million to enable a significant step change in the delivery of homes.

The proposal for delivery was outlined in the report.  Entering into the private sector of the rental market represented a new step, but one which was significant and needed. He made reference to a motion brought to Council by Cllr Wilkinson highlighting the plight of the under 35’s. With this broad approach and larger investment, it would provide the council with more flexibility in delivering larger viable schemes, which in turn would present more opportunities for sustainable communities through a blended and balanced tenure mix where possible. In his view this was ultimately not only investing in bricks and mortar but also  in shaping communities.

In terms of financing, the Cabinet Member referred to section 5 of the report containing details of a  loan facility and grant from this council to Cheltenham Borough Homes.

The £300k grant from unapplied capital receipts  would be used to fund additional CBH officer support and external professional fees.  It was envisaged that the loan funding would be used wholly or in conjunction with existing housing capital receipts, commuted sums as well as any available grant funding depending on the nature of the individual proposals.

Governance proposals were set out in section 6 of the report and he outlined as follows :

·    Cabinet Member Working Group, which would provide oversight and challenge and focus on priorities and outcomes

·    Strategic Housing Development Group (SHDG)  comprising senior directors from CBC and CBH to develop business cases for review by the Working Group on an individual basis.

·    CBC-CBH Housing Supply Review Group (operational) comprising officers to consider all potential supply opportunities, details and evidence.

He emphasised that final approval would be required from the CBH Board, CBC S151 Officer, the Managing Director Place and Growth, Cabinet Housing and the Cabinet Member Finance.

He believed that  through this  ...  view the full minutes text for item 11

Report of the Cabinet Member Housing

RESOLVED THAT

1 ) Council be recommended to:

a)  approve a grant of £300,000 to Cheltenham Borough Homes Limited (‘CBH’) to enable it to fund the costs set out in section 3.2 of the report to support the development of this initiative.

b) subject to tax and treasury management advice being provided to the satisfaction of the Executive Director Finance and Assets (Section 151 officer), to approve the council entering into an appropriate credit / loan agreement with CBH for up to £100 million to finance the capital costs of delivery of the new housing by CBH.

c) delegate authority to the Executive Director Finance and Assets to, in consultation with the Borough Solicitor and Cabinet Member Housing, agree the use of commuted sums paid to the council in lieu of affordable housing to enable the provision of ‘additionality’ as detailed in section 2.5 of the report.

d) approve the council sourcing loan finance of up to £100 million to be used for onward lending to CBH to finance the capital costs of it delivering the housing as set out in this report.

2 ) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Managing Director Place and Growth and Cabinet Member Housing and Cabinet Member Finance, sign off viability assessments received from CBH

3) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Cabinet Member Housing and Cabinet Member Finance, approve the drawdown of funds by CBH

4) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Managing Director Place and Growth and Cabinet Member Housing and the Borough Solicitor, prepare and conclude the required agreements between the council and CBH.

In the absence of the Cabinet Member Housing the Leader introduced the report. He reported that there had been a considerable amount of work between CBH and CBC resuming building of council houses, whilst the sites and numbers have been modest both parties were keen to scale this up. The next stage was to source loan finance of up to £100million to be used for onward lending to CBH to finance the capital cost of delivering over 500 homes across the full range of tenures.  He explained that there were two elements to the plan, firstly for Council to approve a grant of £300k to CBH to enable it to fund the costs set out in section 3.2 of the report to support the development of the initiative and secondly for Council to source loan finance of up to £100m to finance the capital costs of delivery. Council would be considering the report at its October meeting.

Members supported the proposal, acknowledging the desperate need for housing in the borough and recognising that house building would create jobs and skills in the county.

Finally, the Leader thanked all officers from CBH and CBC in bringing this proposal forward.

RESOLVED THAT

1 ) Council be recommended to:

a)  approve a grant of £300,000 to Cheltenham Borough Homes Limited (‘CBH’) to enable it to fund the costs set out in section 3.2 of the report to support the development of this initiative.

b) subject to tax and treasury management advice being provided to the satisfaction of the Executive Director Finance and Assets (Section 151 officer), to approve the council entering into an appropriate credit / loan agreement with CBH for up to £100 million to finance the capital costs of delivery of the new housing by CBH.

c) delegate authority to the Executive Director Finance and Assets to, in consultation with the Borough Solicitor and Cabinet Member Housing, agree the use of commuted sums paid to the council in lieu of affordable housing to enable the provision of ‘additionality’ as detailed in section 2.5 of the report.

d) approve the council sourcing loan finance of up to £100 million to be used for onward lending to CBH to finance the capital costs of it delivering the housing as set out in this report.

2 ) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Managing Director Place and Growth and Cabinet Member Housing and Cabinet Member Finance, sign off viability assessments received from CBH

3) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Cabinet Member Housing and Cabinet Member Finance, approve the drawdown of funds by CBH

4) Authority be delegated to the Executive Director Finance and Assets to, in consultation with the Managing Director Place and Growth and Cabinet Member Housing and the Borough Solicitor, prepare and conclude the required agreements between the council and CBH.