The Chairman thanked those Officers in attendance and explained to Members that this item would begin in public session, but it was highlighted that should they wish to discussion the financial implications in detail then the Board would need to consider whether it was appropriate to go into private session.
The Chief Executive presented the report which provided Members with an update of the current position regarding the site and the funding application submitted to Homes England. The report also set out the conditions attached to the offer and the officers’ suggested preferred option for the site.
The Portfolio Holder for Planning and Strategic Housing advised Members that the report was a live document and that he believed that the proposal set out in option 3 – Housing Company was the best option for the Council as it would help balance out some of the current housing problems in Bromsgrove.
The Strategic Housing Manager provided background information and outlined the key issues whilst reminding Members that at the Cabinet meeting on 6th September 2017 the options available to the Council regarding developing the site at Burcot Lane had been considered. Three options had been proposed with the pros and cons of each being included within the report. The preferred option was that of establishing a housing company to manage the retained housing stock, subject to the business case for this being brought to Cabinet for approval in due course. The Strategic Housing Manager also provided Members with details of the indicative plans for the site together with the breakdown of proposed properties.
The Strategic Housing Manager also highlighted the following:
It was highlighted that the Local Housing Market currently had approximately 39k properties of which 32,000 were private, 4,000 social housing and 3,000 private rented properties. The Strategic Housing Manager also stated that it was important to explore other models to enable the Council to develop rental properties and understand the market. It was further stated that option 3 identified the model which achieved the most properties for rent and kept outright sales down to a minimum.
Members questioned the viability test and if there was any risks attached to the proposed scheme and what confidence the Council had in this test. It was clarified that a considerable amount of work had been undertaken and it was believed that the scheme was viable and would return a surplus to the Council. In response to a Member question, clarity was sought that a right to buy option was not available in the option 3 model.
Members discussed the reintroduction of a Housing Revenue Account (HRA) and the Leader confirmed that this was not a realistic option and that the introduction of a Housing Company would go some way to addressing the lack of housing that was affordable in the District..
Members questioned whether the option that was proposed within the report was that which had been made in the initial decision. Officers highlighted that the options set out in appendix 4 to the report were not in the correct order and a revised appendix was circulated at the meeting. Clarity was given that option 3 was the Housing Company and option 2 was a partnership with a Registered Provider.
In response to a Member question, the Strategic Housing Manager informed the Board that Homes England had stated in the conditions attached to the grant that it should be spent by March 2021. It was anticipated that the development would commence prior to this date pending Cabinet approval.
The Portfolio Holder for Planning and Strategic Housing confirmed that highways issues had been considered and as the Burcot Site had an existing building on it, that there should be no issues with additional highways reports. However, should the current building be demolished prior to planning permission being sought then this may impact on the highways considerations.
Members were provided with full details in respect of the costs associated with the redevelopment of the site. Officers then responded to a number of questions from Members, which covered the following areas:
· Areas to be covered by the maintenance costs.
· The Council would look to reduce the surplus cost;
· The rent would be increased by 1%.
· The role of the Shareholders Committee and the involvement of Members, in order to ensure that they had an insight into the operation of the Housing Company.
· How it was anticipated that the Housing Company would set the rent for the properties.
· How the rental figures had been calculated – it was highlighted that in the first instance a comparative figure for Redditch had been used.
· It was clarified that the properties would be available for the local people in Bromsgrove.
· The Council would look at other sites within the District for future developments once the Burcot Lane site had been established; however it confirmed that it was difficult to identify other areas at this early stage.
· Members expressed their concerns that the project was not sustainably for the Council without multiple sites being identified, as the current development for 61 properties was not sufficient. Members were advised that this was the first step and there was the potential for the project to be successful in the long term. In addition it was confirmed that the current proposals were viable as a stand alone site.
· The Board was informed that other local authorities had had a significant impact on the local market and that local businesses had also benefited from similar developments.
· Members expressed concerns that this project had not been considered in enough detail.
· It was important that long term investment was considered within this project.
· It was suggested that a Committee should be set up to look at the housing needs for Bromsgrove and to ensure that the Housing Company met these needs.
Councillor H. Jones supported the recommendations set out in the report and proposed that the matter be put to the vote without further debate.
On being put to the vote the proposal was lost.
Further debate followed, which included the discussion of a number of areas, including:
· Members suggested that a letting agency be considered as an option, it was noted that this had been a recommendation from an Overview and Scrutiny Task Group investigation previously. The Board was informed that currently there were 50 letting agencies in Bromsgrove and that Council would explore this option in the future.
· Members were informed that Homes England ad been satisfied that the Council’s application met the necessary criteria.
· The Council was aware of a number of potential sites, although further investigation was required before consideration being given to them.
· Members reiterated the view that the Cabinet should consider exploring working with letting agencies or setting up its own.
· Members suggested that there was a need for a longer term strategic plan to be developed and brought back to the Board for further scrutiny.
· Members expressed concerns that it was unclear as to how this project would be sustainable and requested further clarification in order to understand the longer term implications.
The Portfolio Holder for Planning and Strategic Housing invited Members of the Board to the Cabinet meeting due to take place on Wednesday 31st October, 2018 when the matter would be considered. He also requested that, should Members have any further questions that they email him prior to that meeting.
The Leader informed Members that a business plan of the Housing Company would be shared with the Board at an early stage. The Board was further informed that the scrutiny of the Housing Company would be reviewed by the Finance and Budget Working Group.
a) that further work be carried out to explore the options available to the housing company to allow it to act as a letting agent; and
b) that the housing company’s overarching principle be to provide “affordable” rental accommodation for local people.
(During consideration of this item Members discussed matters that necessitated the disclosure of exempt information. It was therefore agreed to exclude the press and public prior to any debate on the grounds that information would be revealed relating to financial and business affairs. However, there is nothing exempt in this record of the proceedings.)