Issue - meetings

To receive a report presenting the proposal to work alongside Inspired Solutions to deliver various development sites across Huntingdonshire to support housing delivery, in particular affordable housing responding to housing need.

Executive Councillor: S Wakeford.

The Cabinet

(a)  agreed in principle to establish a working partnership with Inspired Solutions to deliver affordable homes within the district on various sites – noting an initial aspiration for circa 200 homes; and

(b)  delegated authority to the Corporate Director of Finance and Resources (S151 Officer), in consultation with the Corporate Director of Place to negotiate and draft the following agreements:

(i)  Heads of Terms, Agreement for Leases and eventual Leases with Inspired Solutions

(ii)  Heads of Terms, Agreement for Underleases and eventual Underleases with a company associated with Inspired Solutions; and

(iii)  Nomination Agreements for 100% nomination rights for all residential units for the period of the underleases.

A report by the Head of Economy, Regeneration and Housing Delivery was submitted (a copy of which is appended in the Minute Book) which detailed the proposal to work alongside Inspired Solutions to deliver various development sites across Huntingdonshire to support housing delivery in particular affordable housing responding to housing need.

The Executive Councillor – Jobs, Economy & Housing, S Wakeford, in response to concerns raised by the Overview & Scrutiny Panel (Performance & Growth), explained that in the short term the costs of development would be borne by this organisation, so there may be a risk the developer’s do not get as far as building houses, but the Council would not have a long term exposure on that.

He further clarified that the cost of entering the collaboration with the developers in terms of legal fees to formalise the relationship and enter into a binding commitment would be around £20,000. He further advised that in terms of specific liabilities for the Council, these estimates were not included in the papers that were circulated for the Overview & Scrutiny Panel (Performance & Growth), but prompted by questions from the Panel, work had been done on this. He clarified that the percentage of rental income loss for bad debts that might reasonably be expected would be 3% and 0.5% for long term gaps in the property beyond the ordinary turnover. In terms of average repairs costs, it was estimated that this would be just below £6,000. The reasonable risk of exposure estimated in the event that 200 homes were built would be around £37,000 per annum, which was a reassuring figure compared with the benefit of bringing forward that number of affordable homes. Finally, he explained that the intention was that this additional information around cost and risk would be included in a paper to the Overview & Scrutiny (Performance & Growth) at its next meeting. In view of the greater clarification provided around this information, the recommendation from the Panel to not delegate the authority as laid out in recommendation 2.2 in the report was not approved by the Cabinet.

Whereupon it was

RESOLVED

the Cabinet

(a)  agreed in principle to establish a working partnership with Inspired Solutions to deliver affordable homes within the district on various sites – noting an initial aspiration for circa 200 homes; and

(b)  delegated authority to the Corporate Director of Finance and Resources (S151 Officer), in consultation with the Corporate Director of Place to negotiate and draft the following agreements:

  i.  Heads of Terms, Agreement for Leases and eventual Leases with Inspired Solutions;

  ii.  Heads of Terms, Agreement for Underleases and eventual Underleases with a company associated with Inspired Solutions; and

  iii.  Nomination Agreements for 100% nomination rights for all residential units for the period of the underleases.

The Committee is invited to consider and comment on the proposal and recommendations contained in the accompanying paper.

Executive Councillor: S Wakeford

By means of a report by the Head of Economy, Regeneration & Housing Delivery (a copy of which was appended in the Minute Book), The Increasing Affordable Housing – Inspired Solutions Report was presented to the Panel.

Councillor Gardener expressed concern in point 3:3 which advises Inspired Solutions (IS) have not completed any developments but have agreements in place for 750 homes for other Local Authorities and wanted clarification of how many homes have actually been completed. He surmised that if they have not completed any other developments, how can we guarantee that they can deliver. The Panel heard that per the report, IS have not completed any properties to date but are at various stages of completion in different areas. They confirmed that discussions with IS have been more challenging and probing because of this and have the opportunity of engagement with other Authorities who are working with IS as part of their continued due diligence. Confidence was expressed to the Panel that other Councils are ahead of Huntingdonshire, and they will be liaising with them to ensure they agree with the approach that is being taken. The Panel heard that the concepts presented to the other Authorities were innovative and new which is why they have not completed yet. The Panel were advised that the nature for the Partnership resulted in modest up-front costs and if they do not provide the units as agreed, the Council will not be liable to pay for the tenancies. This means there is a substantial limitation of risks to the partnership as set out.

Councillor Gardener requested confirmation that if there is an issue with another Authority, can Huntingdon pull out at any point without incurring additional costs. The Panel heard that the Council will continue with their due diligence throughout the project and the only costs incurred would be legal costs for this due diligence. Only once it reaches the point when they have sites that they are actively considering and entering into lease agreements, would the Council incur additional costs.

Councillor Gleadow requested further confirmation that there will be no exposure for the Council until they enter into formal agreements. This was reiterated to the Panel and it was highlighted that whilst there is risk in every partnership, this is considered low risk and reasonable against the benefit this would be for residents in the area.

Councillor McAdam praises the report and what it promises but his concern lies with IS not having completed any projects to date. He requested clarification as to how the Council reached the decision to partner with them rather than another Organisation that have experience. He made reference to the pension funds that are mentioned in the report and asked how confident the Council can be making this decision, suggesting they should take a step back to reconsider all the options available before moving forward. It was confirmed that the Council had met with other Developers but they have confidence in IS and what they are  ...  view the full minutes text for item 21