Decision details

To consider a report on the outcomes of the Options Appraisal for a Subsidiary Housing Company.

2.1  That it be agreed in principle to implement the proposal to form a company (referred to as 'Herschel Homes' and 'HHL') as a business to be owned by the Council.

The aims of the company are:

a) To acquire land, construct, sell and/or manage high quality housing.

b) Efficiently manage its assets in a manner that reflects the organisational principles of its parent organisation.

The objectives of the company are to:

a)  Construct/acquire high quality properties for sale or rent in locations that provide the maximum financial return to the company,

b)  Provide excellent customer focussed services at a competitive price,

c)  Explore the potential for a programme of land acquisitions and site developments within Slough to maximise the business opportunities and profitability of the company; and

d)  Promote an organisational culture that balances business acumen and entrepreneurial flair with the requirement to operate within the policies adopted by the parent company.

2.2  That Herschel Homes be agreed as a company limited by shares with the Council being the sole shareholder.

2.3  That the commercial procurement strategy for Herschel Homes, in a structure that is not subject to public procurement requirements, be approved.

2.4  That a further report on Herschel Homes be made to Cabinet by April 2015 in order for the Cabinet to consider matters which it has resolved to be delegated to officers to develop and/or progress set out below:.

Delegate to the Strategic Director Regeneration, Housing and Resources:

·  the development of a detailed business plan for Herschel Homes to be submitted to Cabinet

·  Following consultation with the Head of Legal Services, the development of a Shareholder's Agreement for Herschel Homes which shall protect the interests of the Council as shareholder and also to enable Herschel Homes to operate commercially as a business,

·  Following consultation with the Head of Legal Services, the development of a draft Memorandum and Articles for Herschel Homes; and

·  Following consultation with the Head of Legal Services and the Assistant Director, Finance & Audit, the development of state aid compliant funding precedent agreements between the Council and Herschel Homes.

2.5  That the Assistant Director Finance & Audit, following consultation with the Strategic Director Regeneration, Housing and Resources, shall make proposals in the Council's next draft budget/capital programme a range of allocations of expenditure which takes into account:  Herschel Homes' draft business plan (and its assumptions concerning Council funding to it) and also provides the Council with appropriate options to adopt those assumptions or agree a different allocation.

2.6  That the Head of Legal Services, following consultation with the Strategic Director Regeneration, Housing and Resources, be delegated to develop a protocol which shall set out how to manage and avoid potential conflicts of interests and commercial tensions due to:

·  The Council's interests in Herschel Homes and similar organisations in which it has an interest;

·  Members and/or Officers sitting on the Board of Herschel and also as Council nominated Directors/representatives on other entities in which the Council has an ownership interest.

2.7  That the Head of Legal, following consultation with the Assistant Director Finance & Audit, be delegated the development of a protocol to set out good governance within the Council to avoid potential conflicts of interest between the functions of: making Council funding decisions to Herschel Homes; holding Herschel Homes financial performance to account; exercising the Council's rights as shareholder; and Members and/or Officers being a Council nominated Director of that company.

2.8  That the sites specified in section 6.5 be held with the intention of a future disposal to Herschel Homes and that the Head of Asset Management should identify additional Council owned sites that could be incorporated into the update report by April 2015.