To report any issues with the information below please email executivecycle@westberks.gov.uk.

Agenda item

Joint Venture with Sovereign Housing Association (EX3392)

Purpose: To seek approval to establish a Joint Venture with Sovereign Housing Association as a Limited Liability Partnership to deliver the Council’s housing objectives through the provision of additional homes, in a range of tenures, to meet housing need in the district.

Decision:

Resolved that:

 

·         The establishment of the Joint Venture (JV) with Sovereign be approved in accordance with this report.

·         Authority be delegated to the Chief Executive, in consultation with the Deputy Leader and Portfolio Holder for Planning, Housing and Waste, the Head of Finance and the Head of Legal Services, to:

·         establish a JV with Sovereign Housing structured through a Limited Liability Partnership (LLP) to support the provision of additional homes in the District;

·         agree and authorise the execution of documentation required to implement the LLP model;

·         name the LLP; and

·         make appointments to the Management Board of the JV LLP of the Corporate Director of Economy and Environment, Head of Commissioning and Legal Services Manager (Governance & Environment).

·         Agreement be given to allocate land adjacent to the Phoenix Centre, Newbury and land at Chestnut Walk, Hungerford (“the Projects”) to be developed for housing by the JV, subject to a separate decision by this Executive on the disposal to JV together with valuation of the land and approval of the business plans for the Projects. Future projects in the JV Business Plan will also require approval by the Executive including any financial appraisals, business plans and the disposal of sites.

 

This decision is eligible to be ‘called-in’.  However, if the decision has not been ‘called-in’ by 5.00pm on 21 June 2018, then it will be implemented.

Minutes:

(Councillor Lee Dillon declared a disclosable pecuniary interest in Agenda Item 8 by virtue of the fact that he was an employee of Sovereign Housing Association. As his interest was a disclosable pecuniary interest he left the meeting at 5.36pm and took no part in the debate on the matter).

The Executive considered a report (Agenda Item 8) which sought approval to establish a Joint Venture (JV) with Sovereign Housing Association as a Limited Liability Partnership (LLP) to deliver the Council’s housing objectives through the provision of additional homes, in a range of tenures, to meet housing need in the District.

Councillor Hilary Cole presented the item which was a good news story. The Council would be working with Sovereign, an established and trusted partner, to help deliver affordable housing in West Berkshire. This proposed approach would give the Council a much greater level of control over the delivery of its housing objectives. Councillor Cole highlighted the significant level of preparatory work that had been undertaken for the JV.

Councillor Cole explained that the proposal was for the Council and Sovereign to incorporate a new LLP on a 50:50 basis. The LLP would acquire, fund, develop, sell and own (as applicable) a mixture of tenures with the primary aim of achieving the Council’s housing objectives. Developments would be brought forward on the basis of individual site appraisals to deliver a range of tenures would include affordable rent, shared ownership, market rent, starter homes and rent to buy.

Subject to Executive approval of the proposal, the first two potential sites for redevelopment had been identified: a decanted supported scheme in Hungerford for circa eight homes and a site in Newbury for circa 48 homes. A separate report covering the disposal of these two sites to the JV would be placed before the Executive once the financial appraisal and business plan had been developed.

Councillor Cole placed on record her thanks to officers of the Council and Sovereign for all their work in developing the JV. Councillor Graham Jones, in seconding the proposal, added his thanks for the efforts of all involved.

Councillor Graham Bridgman endorsed the points that had been made and added his particular thanks to officers for the enormous amount of work they had put into developing the JV.

Councillor Alan Macro felt this to be a good initiative. He did however have some points of concern. He questioned the start date for the JV when considering the Council’s target of building 1,000 affordable homes by 2020. Work was needed to try and achieve this. Councillor Macro then noted that the JV could generate a financial surplus. He sought assurance that this would be ring-fenced and reinvested into affordable housing.

Councillor Jeff Brooks commented that this was a legal framework as opposed to a business plan. He queried when the business plan with details of costs etc would be provided, how this would be monitored and the frequency for doing so. An investment profile was needed.

Councillor Cole explained that the target for 1,000 affordable homes was always recognised as a stretch target. She pointed out that permission was in place for 200 affordable homes but these had not been built out by developers and this was outside of the Council’s control.

Councillor Cole then advised that this was indeed the first part of the process which rightly concentrated on legal issues. Business Plans would be provided for each project in the JV and the process would be open and transparent throughout.

In response to the question regarding a target date, June Graves (Head of Commissioning) explained that legal work would continue into the autumn of this year, with the full launch of the JV planned for early in 2019.

She then explained that the default position would be reinvestment into the JV of any surplus funds, but there would be a level of flexibility in using funds for alternative, but appropriate, initiatives.

Councillor Macro voiced his hope that any surplus funds would be spent on affordable housing and not used to support the Council’s budgets.

Councillor Cole closed the item by stating that this was a long term project which aimed to achieve sufficient numbers of affordable homes in West Berkshire. However, future circumstances could change and this was why a degree of flexibility remained for the use of any surplus funding.

RESOLVED that:

·         The establishment of the Joint Venture (JV) with Sovereign be approved in accordance with this report.

·         Authority be delegated to the Chief Executive, in consultation with the Deputy Leader and Portfolio Holder for Planning, Housing and Waste, the Head of Finance and the Head of Legal Services, to:

·         establish a JV with Sovereign Housing structured through a Limited Liability Partnership (LLP) to support the provision of additional homes in the District;

·         agree and authorise the execution of documentation required to implement the LLP model;

·         name the LLP; and

·         make appointments to the Management Board of the JV LLP of the Corporate Director of Economy and Environment, Head of Commissioning and Legal Services Manager (Governance & Environment).

·         Agreement be given to allocate land adjacent to the Phoenix Centre, Newbury and land at Chestnut Walk, Hungerford (“the Projects”) to be developed for housing by the JV, subject to a separate decision by this Executive on the disposal to JV together with valuation of the land and approval of the business plans for the Projects. Future projects in the JV Business Plan will also require approval by the Executive including any financial appraisals, business plans and the disposal of sites.

Other options considered:

·         To continue working with affordable housing providers on a piecemeal basis.

·         Establish a wholly owned vehicle, e.g. a Housing Company.

·         A procured JV

·         To do nothing.

Supporting documents: