Agenda item

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 proposing. It was acknowledged that there is low risk and no guarantee that it will come forward but there is a risk of inaction for our residents who are on the Housing Register and that this is an opportunity to improve the quality of housing available to them.

Councillor McAdam reiterated his concern with partnering with IS who don’t have a proven track record, asking if it made more sense to go with a Developer who has. He stated that he needs confidence which he does not feel as this comes with a risk of homes not being completed in a timely manner. The Panel heard that there is a measure of risk as this is a new approach which is being taken, and attention was drawn to page 156 of the reports pack that the individuals employed by IS have experience in delivering housing schemes and financial models. It was highlighted that the Council are trying to be innovative as they are solely reliable on Housing Associations for homes and that Huntingdonshire have a good track record in the last few years of providing affordable homes. They recognise that this cannot be guaranteed to continue so they are looking at different ways to achieve this. This is a low-risk way of trying to address the 3000 residents on the Housing Register at any given point in time.

Councillor Martin expressed his concern of choosing a Developer with no experience and considers this a risk to the Council. He asked what makes IS better than the other Developers who the Council have spoken to. He suggested providing the site and asking Developers to pitch their ideas for the space as an alternative option. He requested a firm plan be presented to the Panel as he found this report vague. The Panel heard that the Council will not be providing the land, this would be sourced by IS. It was confirmed that the business model is upfront private funding, to achieve the acquisition and build. The suggestion Councillor Martin made is a different model of housing provision but this is a contract with IS who would take the responsibility for sourcing the land. The Panel heard that IS are the best fit with HDC’s ideals, such as social consciousness, environmental sustainability and their model is not based on buying up existing housing stock but developing their own. This agreement would not commit to exclusivity or impede HDC working with other housing providers

Councillor Martin thanked the Officers for their explanation and expressed his appreciation for the work that has gone into this but he still has the concern that IS do not have the track record he would be comfortable with and wondered if this was the right time to do this as the review of the new Local Plan is underway. He requested clarification as to why this is not part of those discussions and how it will fit into it. The Panel heard this report does not have a Planning significance and anyone can bring forward houses in compliance with the current Local Plan and dealing with the housing situation should not be delayed because of the review of the Local Plan. It was pointed out that quick wins for IS would be to look at existing planning permissions that have already been granted on sites that have not come forward.

Councillor Blackwell expressed her own concerns, referencing no business plan, a basic website, no completed houses and no costs. She drew on page 155 of the report pack, commenting on there being no legal agreement. The Panel heard that UKREiiF is a legitimate setting to meet Organisations in the scope of doing business. It was reiterated to the Panel that the risk to HDC is minimal financially and not bringing this forward means missing an opportunity to deal with the housing issues the Council faces. 

Councillor Catmur mentioned the risks involved and queried the Pension scheme, asking for clarification as to whether this is HDC staff’s pension and if they have invested into it. He requested that the risk section of the report be expanded to include the additional risks raised by the Panel. The Panel heard that the Officers will reflect on the language used for the risks as they believed the points raised had been covered already. It was advised the risk is to the objective of 200 homes being provided for the next 40 years to the Council but what is the harm to the Council if that objective is not met and invites the Panel to reflect on this and to clearly explain what their concerns are.

Councillor Jennings echoed the sentiments raised by the other Panel members and advised the specific risks he sees are void and vandalism risk. He expressed concern and suggested taking a step back to see how the projects IS already have in place work out. He highlighted the issue that the housing provisions for the other Authorities in question are very different to the housing provisions of Huntingdonshire and that IS are not working with any similar District Councils outside of London. Councillor Jennings requested making an amendment to the recommendations in the report. The Panel heard again that the risk is modest and that there is no liability to the Council if the houses are not provided.

Councillor Chapman confirmed there is a need for affordable housing but there is no comparison between the London market and areas of Huntingdonshire so he does not draw comfort from this. He questioned the timing, referencing that the homes should be delivered within 36 months when the Council is facing LGR and has a potential end date of 18 months. The Panel heard that HDC are not proposing to invest a stake in these properties so this would not be the Council’s liability. The stake they do have would be purchasing the properties at a significant discount at the end of the 40 years. Regarding the timing of the project in relation to LGR, this will be completed within the 40 years of the project, and this was taken into consideration in the 200-unit figure put forward and any Local Authority who HDC could be merged with, would also need affordable housing. The risk the Officers are concerned about is the responsibility of covering the costs of the housing if we cannot provide a tenant.

Councillor Taylor expressed her support of the proposal, although she understands the concerns of the Panel, she urged them to remember why the Council are doing this and that is the need for affordable housing. She feels the risks are low but would have liked to see more figures, referencing point 3:10 that the Council would need to set aside the budget of potential void risk areas and damage caused by tenants. She sought the figures of what this would actually cost the Council. She expressed concern regarding LGR, particularly wanting to ensure these homes go to residents of Huntingdonshire as it stands now and wants clarification on how to safeguard these properties from being built outside of Huntingdonshire. The Panel heard that there are decisions yet to be taken that cannot be predicted, such as post LGR and how they will deal with the housing lists going forward. The Officers heard that they would take the request regarding budget figures away and see what they can produce.

Councillor Gleadow advised that there is further clarification that the Panel wants to see before the proposal moves forward and to come back with a more detailed proposal. The Panel heard that their comments would be taken away and reflected upon.

Councillor Blackwell commented that the Panel have been provided with a draft letter of intent and sought clarification as to the Members who do not want to proceed with this as she was concerned about the report reaching Cabinet with mixed messages.

Councillor Gleadow asked for confirmation relating to the specific wording for the new recommendation to Cabinet and Councillor Martin seconds Councillor Jennings proposed additional recommendation to the Cabinet.

The Panel hears the new Recommendation and a vote is called. 6 Members are For, 1 Against and 1 Abstainer.

Following the discussion, the Panel were informed that their comments would be added to the Cabinet report in order for Cabinet to make a decision upon the recommendations within the report, and additionally, the Panel request that the Cabinet consider adding the following recommendation to their report;

1)  The recommendation in paragraph 2.1 relating to the principle of establishing a partnership with IS has been accepted.

2)  However, for the reasons outlined above, the Panel has voted on and approved a formal proposal that the Cabinet should be RECOMMENDED not to delegate authority to Officers as set out in paragraph 2.2.