Agenda item

Report No: CAB/FH/15/048

Lead Officer: Simon Phelan

(For reference purposes, St Edmundsbury Borough Council’s Report Number is CAB/SE/15/070)

RECOMMENDED TO COUNCIL (Extraordinary meeting - 17 November 2015): That the following be approved:

(1)     The establishment of a Housing Development Company incorporated as a company limited by shares that will be jointly owned by Suffolk County Council (50% of shares), Forest Heath District Council (25% of shares) and St Edmundsbury Borough Council (25% of shares).

(2)     Forest Heath District Council’s full Council assumes the role of Shareholder in Forest Heath.

(3)     A Shareholder Advisory Group be established with the purpose of advising each Council when exercising its role as Shareholder consisting of two elected members from Forest Heath District Council, two from St Edmundsbury Borough Council and four from Suffolk County Council, with advice provided by senior officers of all Councils. The identification of Forest Heath District Council’s nominations to the Shareholder Advisory Group be delegated to the Leader of Forest Heath District Council acting in consultation with West Suffolk’s Lead Member for Housing.

(4)     The composition of the Company’s Board of Directors to be one director from Forest Heath District Council who shall be an officer of West Suffolk Council, one director from St Edmundsbury Borough Council who shall be an officer of West Suffolk and two directors from Suffolk County Council (anticipated to be officers of Suffolk County Council), with up to an additional three directors appointed by the unanimous decision of the Shareholders.

(5)     The recommendation of Forest Heath District Council’s Overview and Scrutiny Committee held on 15 October 2015 that the criteria for selection of the three additional directors as specified in the fourth bullet of paragraph 3.24 in Appendix A be amended to read “up to three additional directors unanimously approved by the three Shareholder Councils. These will be ‘independent’ individuals selected for their relevant expertise and experience”.

(6)     Authority to nominate Forest Heath’s director be delegated to the Joint West Suffolk Chief Executive, in consultation with West Suffolk’s Lead Member for Housing or the Leader of Forest Heath District Council.

(7)     That the approval of the Memorandum and Articles of Association be delegated to the Head of Housing and the Monitoring Officer acting in consultation with West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(8)     Authority to negotiate and finalise the Shareholder Agreement be delegated to the Head of Housing and the Monitoring Officer, acting in consultation with the West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(9)     That the naming of the Housing Development Company be delegated to the Head of Housing acting in consultation with the Service Manager (Corporate Communications), West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(10)   Authority to complete and submit the necessary documentation for incorporation be delegated to West Suffolk’s Monitoring Officer acting in consultation with West Suffolk’s Head of HR, Legal and Democratic Services and Head of Housing and officers from Suffolk County Council.

(11)   That in principle agreement is given to the disposal of Forest Heath District Council’s assets (land and/or buildings) to the Company at market rates.

(12)   That in principle agreement is given to provide to the Company funding through state aid compliant loans in line with Forest Heath District Council’s existing Loans Policy.

(13)   A contribution of £125,000, funded from Forest Heath District Council’s Strategic Priorities and Medium Term Financial Strategy reserve, to a total working capital loan of £500,000 subject to contributions from all Councils in the following proportions; Forest Heath District Council (25%), St Edmundsbury Borough Council (25%) and Suffolk County Council (50%).

(14)   That authority to negotiate and approve any staffing or TUPE matters arising in the future in connection with the Company’s operations be delegated to the Head of HR, Legal and Democratic Services acting in consultation with the Head of Finance and Resources (s151 officer) and appropriate Suffolk County Council officers.

(15)   Once the Company’s first Annual Business and Delivery Plan has been submitted to Shareholders (Forest Heath District Council, St Edmundsbury Borough Council and Suffolk County Council) and approved by the Shareholders (Forest Heath District Council’s full Council, St Edmundsbury Borough Council’s full Council and Suffolk County Council’s Cabinet), the Company may start trading

(16)   The detailed financial modelling contained in the exempt Appendices B, C and D, be noted and the financial viability of the exemplar sites appraised, be noted.

(Report No: CAB/FH/15/048)

Further to the joint informal discussions held prior to the meeting with St Edmundsbury Borough Council’s Cabinet on Report No: CAB/FH/15/048, Business Case to Establish a Housing Development Company, it was proposed, seconded and,

RECOMMENDED TO COUNCIL:(17 November 2015)

          That the following be approved:

(1)     The establishment of a Housing Development Company incorporated as a company limited by shares that will be jointly owned by Suffolk County Council (50% of shares), Forest Heath District Council (25% of shares) and St Edmundsbury Borough Council (25% of shares).

(2)     Forest Heath District Council’s full Council assumes the role of Shareholder in Forest Heath.

(3)     A Shareholder Advisory Group be established with the purpose of advising each Council when exercising its role as Shareholder consisting of two elected members from Forest Heath District Council, two from St Edmundsbury Borough Council and four from Suffolk County Council, with advice provided by senior officers of all Councils. The identification of Forest Heath District Council’s nominations to the Shareholder Advisory Group be delegated to the Leader of Forest Heath District Council acting in consultation with West Suffolk’s Lead Member for Housing.

(4)     The composition of the Company’s Board of Directors to be one director from Forest Heath District Council who shall be an officer of West Suffolk Council, one director from St Edmundsbury Borough Council who shall be an officer of West Suffolk and two directors from Suffolk County Council (anticipated to be officers of Suffolk County Council), with up to an additional three directors appointed by the unanimous decision of the Shareholders.

(5)     The recommendation of Forest Heath District Council’s Overview and Scrutiny Committee held on 15 October 2015 that the criteria for selection of the three additional directors as specified in the fourth bullet of paragraph 3.24 in Appendix A be amended to read “up to three additional directors unanimously approved by the three Shareholder Councils. These will be ‘independent’ individuals selected for their relevant expertise and experience”.

(6)     Authority to nominate Forest Heath’s director be delegated to the Joint West Suffolk Chief Executive, in consultation with West Suffolk’s Lead Member for Housing or the Leader of Forest Heath District Council.

(7)     That the approval of the Memorandum and Articles of Association be delegated to the Head of Housing and the Monitoring Officer acting in consultation with West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(8)     Authority to negotiate and finalise the Shareholder Agreement be delegated to the Head of Housing and the Monitoring Officer, acting in consultation with the West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(9)     That the naming of the Housing Development Company be delegated to the Head of Housing acting in consultation with the Service Manager (Corporate Communications), West Suffolk’s Lead Member for Housing and Suffolk County Council’s Director of Resources, who will act in consultation with Suffolk County Council’s Cabinet Member for Finance.

(10)   Authority to complete and submit the necessary documentation for incorporation be delegated to West Suffolk’s Monitoring Officer acting in consultation with West Suffolk’s Head of HR, Legal and Democratic Services and Head of Housing and officers from Suffolk County Council.

(11)   That in principle agreement is given to the disposal of Forest Heath District Council’s assets (land and/or buildings) to the Company at market rates.

(12)   That in principle agreement is given to provide to the Company funding through state aid compliant loans in line with Forest Heath District Council’s existing Loans Policy.

(13)   A contribution of £125,000, funded from Forest Heath District Council’s Strategic Priorities and Medium Term Financial Strategy reserve, to a total working capital loan of £500,000 subject to contributions from all Councils in the following proportions; Forest Heath District Council (25%), St Edmundsbury Borough Council (25%) and Suffolk County Council (50%).

(14)   That authority to negotiate and approve any staffing or TUPE matters arising in the future in connection with the Company’s operations be delegated to the Head of HR, Legal and Democratic Services acting in consultation with the Head of Finance and Resources (s151 officer) and appropriate Suffolk County Council officers.

(15)   Once the Company’s first Annual Business and Delivery Plan has been submitted to Shareholders (Forest Heath District Council, St Edmundsbury Borough Council and Suffolk County Council) and approved by the Shareholders (Forest Heath District Council’s full Council, St Edmundsbury Borough Council’s full Council and Suffolk County Council’s Cabinet), the Company may start trading.

(16)   The detailed financial modelling contained in the exempt Appendices B, C and D, be noted and the financial viability of the exemplar sites appraised, be noted.