Issue - meetings

Report No:   CAB/SE/16/059

Portfolio Holder: Sara Mildmay-White        Lead Officer: Rachael Mann

RECOMMENDED TO COUNCIL: (20 December 2016)

That:

(1)     the five year Business Plan, attached at Exempt Appendix A to Report No: OAS/SE/16/028, be approved;

(2)     a £3m revolving investment facility, to be added to the Council’s capital programme, financed from the reallocation of the “Housing Company” pending capital budget of £2.35m and an additional £0.65m from the Strategic Priorities and the Medium Term Financial Strategy reserve, be approved;

(3)     delegation be given to the S151 Officer and Monitoring Officer, in consultation with the Portfolio Holders for Resources and Performance and Housing to issue equity and loan funding from the revolving investment facility (set out in (2) above), subject to state aid requirements;

(4)     the S151 Officer and Monitoring Officer, in consultation with the Portfolio Holder for Resources and Performance, be authorised to negotiate and agree the terms of such  loans with Barley Homes and the funding and necessary legal agreements, taking into consideration the Council’s loans policy and state aid requirements;

(5)     the sale of Council owned land as detailed in the five year Business Plan (Exempt Appendix A to Report No: OAS/SE/16/028), with outline planning permission, subject to approval by the planning authority and with Section 123 best value obligations, with the costs of planning permission being approximately £35,000 being funded from the Strategic Priorities and Medium Term Financial Strategy reserve, be noted; and

(6)     approval of the Business Plan will constitute consent for Barley Homes to issue shares and enter into debt financing, in line with the Business Plan, be noted.

The Cabinet considered Report No: CAB/SE/16/059, which sought approval for a number of recommendations relating to the initial five year business plan devised for Barley Homes (Group) Limited.

In November 2015 the Council approved the establishment of a Housing Development Company, limited by shares for the purpose of developing housing for sale, private and affordable rent. 

In principle approval was given for the Council to provide the Company (Barley Homes (Group) Limited) with funding through state aid compliant loans in line with the Council’s Loans Policy.  This in principle funding was subject to the approval of a Business Plan by the Shareholders (Forest Heath District Council’s full Council, St Edmundsbury Borough Council’s full Council and Suffolk County Council’s Cabinet). 

Councillor Sara Mildmay-Whte, Portfolio Holder for Housing, drew relevant issues to the attention of Cabinet, including that the primary function of Barley Homes was to generate profits through the development of new housing for sale and rent, on land owned by one of the Councils, initially in west Suffolk.  The establishment of the housing company was one of the many ways that the Council was looking to become self-sufficient through new income generation activities, as central government grants were reduced and eventually removed.

Councillor Mildmay-White then thanked the Overview and Scrutiny Committee for its thorough scrutiny of the Business Plan and for its subsequent recommendations for consideration by Cabinet. 

In the absence of the Chairman and Vice-Chairman of the Overview and Scrutiny Committee, Councillor Susan Glossop, Committee member, stated that the Committee had welcomed the opportunity to scrutinise the Business Plan, which was attached as Exempt Appendix A to Report No: OAS/SE/16/028, and that the Committee’s initial concerns had been sufficiently addressed.

The Cabinet considered the proposals, however, as no specific detail of the Business Plan was discussed, the meeting remained in public session.

RECOMMENDED TO COUNCIL:

That:

(1)    the five year Business Plan, attached at Exempt Appendix A to Report No: OAS/SE/16/028, be approved;

(2)    a £3m revolving investment facility, to be added to the Council’s capital programme, financed from the reallocation of the “Housing Company” pending capital budget of £2.35m and an additional £0.65m from the Strategic Priorities and the Medium Term Financial Strategy reserve, be approved;

(3)    delegation be given to the S151 Officer and Monitoring Officer, in consultation with the Portfolio Holders for Resources and Performance and Housing to issue equity and loan funding from the revolving investment facility (set out in (2) above), subject to state aid requirements;

(4)    the S151 Officer and Monitoring Officer, in consultation with the Portfolio Holder for Resources and Performance, be authorised to negotiate and agree the terms of such  loans with Barley Homes and the funding and necessary legal agreements, taking into consideration the Council’s loans policy and state aid requirements;

(5)    the sale of Council owned land as detailed in the five year Business Plan (Exempt Appendix A to Report No: OAS/SE/16/028), with outline planning permission, subject to approval by the planning authority and with Section 123  ...  view the full minutes text for item 278