Agenda item

Report No: COU/SE/18/018

 

(A)    Referral from Joint Executive (Cabinet) Committee: 24 July 2018
There are no referrals emanating from the Joint Executive (Cabinet) Committee meeting  held on 24 July 2018.
(B)    Referral from Joint Executive (Cabinet) Committee: 4 September 2018
1.	Annual Treasury Management  Report 2017/2018 and Investment Activity 1 April to 30 June 2018
	Portfolio Holder: Cllr Ian Houlder
(C)    Referral from Extraordinary Joint Executive (Cabinet) Committee:18 September 2018
1.	Barley Homes: Interim Business Plan and Changes in Governance
	Portfolio Holder: Cllr Sara Mildmay-White

 

 

Council considered the Referrals Report of Recommendations from the Joint Executive (Cabinet) Committee contained within Report No: COU/SE/18/018.

 

(A)    Referrals from Joint Executive (Cabinet) Committee: 24 July 2018

 

There were no referrals emanating from the Joint Executive (Cabinet) Committee meeting held on 24 July 2018.

 

(B)    Referrals from Joint Executive (Cabinet) Committee: 4 September 2018

 

1.       Annual Treasury Management Report 2017/2018 and Investment Activity 1 April to 30 June 2018

 

Approval was sought for the Annual Treasury Management Report for 2017/2018.

 

Councillor Ian Houlder, Portfolio Holder for Resources and Performance, drew relevant issues to the attention of Council.

 

On the motion of Councillor Houlder, seconded by Councillor John Griffiths, and duly carried, it was

 

RESOLVED:

 

That the Annual Treasury Management Report for 2017-2018, attached as Appendix 1 to Report No: TMS/SE/18/003, be approved.

 

(C)    Referrals from Extraordinary Joint Executive (Cabinet) Committee: 18  September 2018

 

1.       Barley Homes; Interim Business Plan and Changes in Governance

 

(Councillors Beccy Hopfensperger and Richard Rout declared local non-pecuniary interests as Cabinet Members for Suffolk County Council.  Councillors Trevor Beckwith, Robert Everitt, Paula Fox and David Roach declared local non-pecuniary interests as Members of Suffolk County Council.  Councillors Robert Everitt and Clive Springett declared local non-pecuniary interests as Board Members for Havebury Housing Partnership. All of the aforementioned councillors remained in the meeting for the consideration of this item.) 

 

Approval was sought for a proposed way forward to support Barley Homes in delivering its objectives following Suffolk County Council’s decision to withdraw from this joint venture and transfer its interest to the West Suffolk councils.

 

Barley Homes was established by Suffolk County Council (SCC), Forest Heath District Council (FHDC) and St Edmundsbury Borough Council (SEBC) and incorporated in March 2016.  Report No: CAB/JT/18/032, which was attached to the Council referral report as Appendix 1, provided background since the establishment of the company, including that each of the two West Suffolk councils owned 25% of the company, whilst Suffolk County Council was a 50% shareholder.  A five year business plan had been agreed in December 2016, identifying four potential sites for the company to develop; however since that time, SCC had decided to undertake an open market sale of one of the sites (Wamil Way, Mildenhall), with the consequence being that only three sites remained in the Barley Homes plan, namely:

 

·         Haverhill Town Hall Car Park (owned by SEBC)

·         Westfield School Site, Haverhill (owned by SCC)

·         Castle Hill School Site, Haverhill (owned by SCC)  

 

Councillor Sara Mildmay-White, Portfolio Holder for Housing, drew relevant issues to the attention of Council, including that the complexity of operating between the Councils had been recognised and, in particular, meeting the policy and financial objectives of all parties had proved difficult.  Therefore all parties had agreed that it would be more effective and efficient for the County Council to focus on its wider strategic role in the delivery of housing in West Suffolk, whilst the West Suffolk councils would lead on local scheme delivery. SCC had therefore taken the decision to withdraw from Barley Homes with its ownership being transferred to the West Suffolk councils, in accordance with the proposed deal set out in paragraph 2.2 of Report No: CAB/JT/18/032.

 

An interim business plan, as attached as Exempt Appendix 2 to Report No: COU/SE/18/018, had been produced and, together with the recommendations set out in the report, the Cabinets had proposed that this be recommended for SEBC and FHDC Council approval. This would allow work to progress on the identified sites with the intention of a full comprehensive review of Barley Homes being undertaken, the outcomes of which would be presented to the new West Suffolk Council in 2019. 

 

Members also considered the various implications associated with proceeding with the proposal, including financial and risk implications and the changes required to the governance arrangements, as summarised in the recommendations and detailed further in the report.

 

Councillor Sara Mildmay-White then drew attention to an addendum to the report, which had been circulated to Members prior to the meeting.  This contained an amendment to proposed Recommendation 10 and had been revised as it was considered that priority should be given to developing the sites at the former Westfield and Castle Hill schools. This was mainly due to changes in market conditions, and it was considered that it was not in the best interests of Barley Homes to prioritise development of the Town Hall car park site in Haverhill and should be considered as part of the detailed business plan to be presented to West Suffolk Council in 2019.  This also provided the opportunity for further discussion to take place with Haverhill Town Council and local ward members on their aspirations for the site.

Councillor Sara Mildmay-White moved approval of all 12 recommendations, as set out in the Addendum to Report No: COU/SE/18/018.  This motion was seconded by Councillor John Griffiths.

 

A detailed discussion was held and some concern was expressed regarding the following, that:

 

(a)     Barley Homes (Group) Limited had been established for 2½ years, yet no homes had yet begun construction;

(b)     the knowledge of the Directors and Shareholder Advisory Group was limited, with potential conflicts of interest, and potentially not appropriate for this commercial venture;

(c)     the housing market had changed since Barley Homes was established, which may cause further difficulties moving forward;

(d)     together with affordable housing, social housing was as much needed and another vehicle aside from Barley Homes should be investigated to deliver that;

(e)     too much capital had already been invested in Barley Homes to progress the company further;

(f)      the financial settlement proposed to be paid to SCC to enable FHDC and SEBC to continue as sole shareholders of Barley Homes was not considered appropriate;

(g)     the proposed development of the Town Hall Car Park site in Haverhill should potentially be removed from the business plan altogether and not be ‘paused’, as recommended.

 

Councillor David Nettleton proposed an amendment to the substantive motion, which was duly seconded by Councillor Tony Brown. A discussion was held on the amendment; however, with the agreement of Councillor Brown as seconder, Councillor Nettleton subsequently withdrew his proposed amendment to the substantive motion. 

 

The debate resumed on the substantive motion. 

 

Councillor David Nettleton asked a question in connection with a figure quoted in the press of £1.4 million income expected to be achieved for Barley Homes over a period of four years and where this figure was stated in Report No: CAB/JT/18/032.  In reply, Councillor Sara Mildmay-White stated that Councillor Nettleton would receive a written response, which would also be circulated to all Members for their perusal.

 

The majority of Members agreed this was a sensible proposal and given that a planning application for the Westfield site was anticipated to be submitted imminently, and that plans for the Castle Hill site were progressing well, it was considered the proposal provided a positive opportunity for the West Suffolk councils. Subject to approval, progress was likely to be made more quickly now that the FHDC and SEBC had greater control.

 

Councillor Sara Mildmay-White provided her right of reply, including responding to the concerns raised in (a) to (g) above.

 

Councillor David Nettleton, leader of the Charter Group, requested a recorded vote, which was duly supported by more than five other Members.

 

The substantive motion was then put to the vote.  Of 36 Members present, the votes recorded were 27 votes for the motion, 9 against and no abstentions.  The names of those Members voting for and against being recorded as follows:

 

For the motion:

Councillors Broughton, Simon Brown, Bull, Chester, Chung, Everitt, Glossop, Griffiths, Hailstone, Beccy Hopfensperger, Houlder, Marks, McManus, Mildmay-White, Pilley, Rayner, Roach, Rout, Smith, Speed, Springett, Stamp, Stevens, Thompson, Thorndyke, Wakelam and Patsy Warby.

 

Against the motion:

Councillors Beckwith, Tony Brown, Burns, Clarke, Clements, Fox, Hind, Paul Hopfensperger and Nettleton.

 

Abstentions:

None

 

The motion was therefore, carried.

 

RESOLVED:

That:

 

(1)     The proposal for Suffolk County Council to transfer its ownership of Barley Homes to the West Suffolk Councils be noted, and the terms of the deal as set out in paragraph 2.2 of Report No: CAB/JT/18/032, be agreed.

 

(2)     An additional working capital loan facility of £350,000 funded from the Strategic Priorities and Medium Term Financial Strategy (MTFS) reserves and as set out in section 3.4, be approved.

 

(3)     A revised total of £7.5 million (currently £6 million) revolving investment facility, be added to the Councils’ capital programme, financed from capital receipts in line with paragraph 3.3.2.

 

(4)    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 (3) above) subject to state aid requirements.

 

(5)     The S151 Officer and Monitoring Officer, in consultation with the Portfolio Holders 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.

 

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

 

(7)     The Councils’ medium term financial revenue plans in line with section 3.5, be updated.

 

(8)    The proposed shareholder representative arrangements be agreed, and authority be given for the representatives to make all necessary decisions on behalf of the shareholders as required by the Articles of Association and Shareholder Agreement as set out in paragraphs 5.4 to 5.6.

 

(9)     The Shareholder Representatives be authorised to make all necessary arrangements for the purchase of the County Council’s shareholding in Barley Homes, and the consequential governance amendments required to the Company’s Articles of Association and Shareholder Agreement, as set out in paragraph 5.2.

 

(10)   The Shareholder Representatives be authorised to agree the Interim Business Plan contained in Exempt Attachment A of Report No: CAB/JT/18/032, subject to the development of the Town Hall Car Park, Haverhill, being paused to allow for further discussions on the aspirations of the site, and priority to be given to development of the sites at Westfields and Castle Hill.

 

(11)   It be noted that a comprehensive business case for Barley Homes will be presented to West Suffolk Council in 2019.

 

(12)   Agreement be given for the Council’s Section 151 Officer to make the necessary changes to the Council’s 2018/19 prudential indicators as a result of Decision (3).