Agenda and minutes

There were no apologies for absence.

There were no declarations of interest.

There was no urgent business for consideration on this occasion.

The report and any associated appendices will be published in a supplementary papers pack to this agenda.

The Spadesbourne Homes Limited Business Plan 2025/26 was presented for the Committee’s consideration.

In considering the Business Plan, Members were asked to note the following:

·             The Business Plan detailed the company’s vision as well as the relationship between Spadesbourne Homes Limited and Bromsgrove District Council.

·             The company’s vision was to provide high quality private rented accommodation and to help support and complement other housing providers in the District, including Bromsgrove District Housing Trust (BDHT).

·             The Financial Regulations and Procurement Rules that formed appendices to the business plan had not been available to include in the agenda for the meeting as these had not yet been considered by the company’s Board.  These documents would therefore be provided for Members’ consideration at the following meeting of the Committee.

·             The Business Plan included selection criteria for eligible tenants.  Members were asked to note that the focus was on housing people in housing need with local links.

·             There was a lack of private rented accommodation available in Bromsgrove District and the housing units provided by Spadesbourne Homes Limited would help to address this gap.

·             A Board of Directors had been appointed, which currently comprised three senior officers from Bromsgrove District Council.  The Board was responsible for the day-to-day operation of the company.

·             A Chair was due to be appointed to the Board and it was possible that independent members would be recruited as Non-Executive Directors to the Board at a later date.

·             The company was already managing some properties and would aim to purchase more properties over time.

·             Management of the houses owned by the company had been contracted out to a specialist estate management company.

·             The Council would be providing financial assistance and ICT support to Spadesbourne Homes Limited moving forward.

·             The company was anticipating a net income of £221,000 per annum.

·             Rent levels had been identified and were detailed in the Business Plan.  Rent levels had been proposed in accordance with the size of a property.

Once the Business Plan 2025/26 for Spadesbourne Homes Limited had been presented, Members discussed the following points in detail:

·             The request that Members had made, prior to establishing Spadesbourne Homes Limited, that care leavers should be prioritised for housing.  Members were advised that care leavers were supported to receive accommodation through the work of BDHT.

·             The references to the company aiming to generate a small profit and what was intended by this.  The Committee was informed that as a company, Spadesbourne Homes Limited was operating as a commercial enterprise and needed to cover costs.  Any financial returns would be provided to the Council as the only shareholder in the company.

·             The timeframes by which financial income for the company was likely to start generating a surplus.  The Committee was informed that this had not yet occurred, although it was possible that this situation would change by the end of the following financial year.

·             The extent to which any additional Board members were likely to be recruited and whether they would receive financial remuneration.  Clarification was provided  ...  view the full minutes text for item 4.

The report and any associated appendices will be published in a supplementary papers pack to this agenda.

The Committee considered a report which focused on performance monitoring arrangements for Spadesbourne Homes Limited.  A number of proposed Key Performance Indicators (KPIs) had been suggested in the report to enable Members to monitor the performance of the company and these were highlighted for Members’ consideration.

In reviewing the content of the report, Members were asked to note that all of the properties owned by the company had been let out to tenants by the date of the Committee meeting.  There were no voids or bad debts to report as of April 2025.

During consideration of this item, Members made reference to the content of the business plan for Spadesbourne Homes Limited 2025/26, which had referred to the company’s aim to provide good quality and well managed homes.  Members suggested that it would be useful to add a KPI to the tranche of proposed performance monitoring datasets which focused on this aim in relation to health and safety implications.  To address this concern, the suggestion was made that a KPI could focus on the proportion of repairs that were resolved within a particular timeframe.  In addition, a further KPI was suggested that would compare timeframes for completing repairs to other Council companies for housing.

Reference was made to the importance of tenant satisfaction and to consulting with residents.  In this context, an additional suggestion was made by Members that there should be an annual tenant survey undertaken by the company.

In concluding their discussions in respect of this item, Members questioned whether there were any gas supplies to the properties owned by Spadesbourne Homes Limited.  Clarification was provided that there was no gas supply on site and instead heat pumps were used for the properties.

RESOLVED that, subject to incorporating the additional measures detailed in the preamble above, the proposed measures to demonstrate how Spadesbourne Homes delivered performance against priorities, including operational measures, be approved.

The report and any associated appendices will be published in a supplementary papers pack to this agenda.

The Committee considered the Budget Monitoring Report for the 2024/25 financial year and in doing so noted that the company only started to operate in December 2024.

Members were advised that the company had been established with a loan of £50,000 from the Council.  Spadesbourne Homes Limited had received income of £62,000 and had had to meet management costs of £22,000 in this period.

Payments had been made to HM Revenue and Customs (HMRC), as the company was registered for value-added tax (VAT) in July 2024.  It had taken some time to obtain suitable software to use for VAT returns and in this period, HMRC had charged the company for VAT returns.  This issue had been resolved by the date of the Committee meeting and a refund was anticipated in due course.

Discussions were in the process of being held regarding insurance and audit arrangements for the company.  Further updates would be provided to the Committee in respect of these matters in due course.

Reference was made by Members to the figures that had been recorded for management agency costs and concerns were raised that these appeared to be relatively high, at approximately a level equivalent to a third of the income from tenants.  However, the Committee was advised that the figures reported in this instance were likely to be unusual because the lettings had all occurred around the same time when the company was launched.  Over time, a more realistic picture would emerge in terms of these management costs, which were confirmed as being 6 per cent with an additional cost attached when the estate management company was required to find a new tenant.  This covered administrative costs, reference checks and processing costs associated with setting up a tenancy.  To help provide clarity to the Committee moving forward, Members suggested that it would be helpful for the management cost and the finders fee cost (for finding and processing new tenants) to be reflected separately in future budget monitoring reports.

Consideration was given to the £50,000 loan that had been provided by the Council to Spadesbourne Homes Limited when the company was established and questions were raised about the arrangements for the repayment of this loan.  Members were informed that this had been an initial loan which the Council had agreed to grant to the company.  The suggestion was made that the terms for the repayment of this loan should be reviewed further.

Finally, Members commented that Spadesbourne Homes Limited would be subject to paying ground rent to the Council for properties located on Council land.  The suggestion was made that this needed to be investigated further and to be reflected in future budget monitoring reports to the Committee.

RESOLVED that

1)          The position on the Spadesbourne Homes accounts as at 31st March 2025 be noted; and

2)          The current bank balance position for Spadesbourne Homes Limited as at 31st March 2025 be noted.