Agenda item

(a)  That the business plan for Herschel Homes, set out in Appendix One, which seeks to establish a company that will acquire, manage and lease new build properties for full market rent be approved.

(b)  That the business plan for Slough Homes be approved, as set out in Appendix Two, which seeks to establish a company that will aim to acquire, manage and lease existing properties in a manner that will provide an offering of homes for people facing particular difficulties in accessing suitable accommodation, possibly through cross-subsidy provided from homes let at market rents.

(c)  That it be noted that both Herschel Homes and Slough Homes will be companies that are limited by shares with the Council being the sole shareholder.

(d)  That the Head of Legal Services, following consultation with the Commissioner for Housing & Urban Renewal and Leader of the Council, be authorised to seek the incorporation or acquisition of companies to be wholly owned by the Council to operate under the names of Herschel Homes and Slough Homes and to complete all necessary procedures for this purpose.

(e)  Recommend to full Council that up to £3.1m of additional capital expenditure be incurred for Slough Homes to acquire suitable properties, which will be secured on property, and that £28m is allocated to Herschel Homes and  £23.4m allocated to Slough Homes in the period to 31 March 2019 to acquire properties as set out in the business plan set out in appendices One and Two.

(f)  That authority be delegated to the Assistant Director Finance & Audit, following consultation with the Leader and Commissioner for Housing & Urban Renewal to approve the draft Heads of Terms for the Facility Agreement for the Council to provide loan and equity finance to Herschel Homes and Slough Homes and agree that the Assistant Director Finance & Audit, in consultation with the Leader of the Council is authorised to finalise the Facility Agreement and to enable up to £28m to be lent to Herschel Homes and £26.5m to be lent to Slough Homes in the period to 31 March 2019  and for a temporary cash facility of up to £50k to be available from the Council to the two Companies for the initial 18 months as ‘working capital’ (charged at the base rate plus 2%).

(g)  That the proposed governance arrangements for each company set out in Section 5 in this report and the Shareholder Agreement included as Appendix 7.4 be approved and authority be delegated to the Assistant Director Finance & Audit in consultation with the Head of Legal Service to complete the draft terms.

(h)  That the Assistant Director Finance and Audit and the Head of Neighbourhoods be authorised to agree prices for services provided by the Council (such as Housing, Property and Asset Management), between the Council and both housing companies.

(i)  That the Head of Legal Services, following consultation with the Strategic Director Housing, Regeneration & Resources in consultation with the Commissioner for Housing and Urban Renewal , be authorised to select an alternative company name for Slough Homes (which will be subject to availability at Companies House).

(j)  That the disposal of the Housing Revenue Account (“HRA”) asset at Pendeen Court and General Fund asset at High Street, Langley to Slough Homes be authorised for a sum that represents no less than best value.

(k)  That delegated authority be given to the Assistant Director Assets, Infrastructure and Regeneration following consultation with the Leader, the Council’s section 151 Officer and the Head of Neighbourhood Services to agree the final valuation sum for Pendeen Court and High Street, Langley and agree all non-financial terms.

The Commissioner for Housing & Urban Renewal introduced a report seeking approval to take the necessary steps to establish two subsidiary housing companies, Hershel Homes and the provisionally titled ‘Slough Homes’, to improve choice, quality and standards in the local housing market and to generate an income stream to contribute to the financial resilience of the Council.

Herschel Homes would focus on providing mainly new build properties for open market rent and ‘Slough Homes’ would provide affordable homes to a wide range of people to contribute to the Council’s strategic objectives in relation to housing, for example assisting key workers and addressing temporary accommodation pressures.  It was proposed to dispose of Pendeen Court and properties at High Street, Langley to Slough Homes to support the objectives of the company.  The business cases for both companies, shareholder agreements and other supporting Part II appendices all contained exempt information and were considered by the Cabinet without disclosing any of the exempt information.

The financial implications were set out fully in section 4 of the report and in the appendices.  The Cabinet was asked to recommend to full Council additional capital expenditure of up to £3.1m for ‘Slough Homes’ to acquire suitable properties and that £28m be allocated to Herschel Homes and £23.4m to ‘Slough Homes’ to 31^st March 2019 to deliver the objectives detailed in the business plans.

Commissioners welcomed the proposals for both companies which had the potential to contribute to a range of housing objectives such as support for key workers and care leavers; address long standing issues with the provision of temporary accommodation; and generate revenue income for the Council.  Councillors Amarpreet Dhaliwal and Swindlehurst spoke under Rule 30, raising a number of issues about the detailed governance arrangements; the financial profile and risks to the Council; and the balance between income generation and strategic housing objectives.

After due consideration, the Cabinet agreed the recommendations set out in the report to take the necessary steps to establish the two housing companies as proposed and to recommend the capital expenditure to full Council at the next meeting on 31^st January 2017.

Resolved –

(a)  That the business plan for Herschel Homes, set out in Appendix One, which seeks to establish a company that will acquire, manage and lease new build properties for full market rent be approved.

(b)  That the business plan for Slough Homes be approved, as set out in Appendix Two, which seeks to establish a company that will aim to acquire, manage and lease existing properties in a manner that will provide an offering of homes for people facing particular difficulties in accessing suitable accommodation, possibly through cross-subsidy provided from homes let at market rents.

(c)  That it be noted that both Herschel Homes and Slough Homes will be companies that are limited by shares with the Council being the sole shareholder.

(d)  That the Head of Legal Services, following consultation with the Commissioner for Housing & Urban Renewal and Leader of the Council, be authorised to seek the incorporation or acquisition of companies to be wholly owned by the Council to operate under the names of Herschel Homes and Slough Homes and to complete all necessary procedures for this purpose.

(e)  Recommend to full Council that up to £3.1m of additional capital expenditure be incurred for Slough Homes to acquire suitable properties, which will be secured on property, and that £28m be allocated to Herschel Homes and £23.4m allocated to Slough Homes in the period to 31 March 2019 to acquire properties as set out in the business plan set out in appendices One and Two.

(f)  That authority be delegated to the Assistant Director Finance & Audit, following consultation with the Leader and Commissioner for Housing & Urban Renewal to approve the draft Heads of Terms for the Facility Agreement for the Council to provide loan and equity finance to Herschel Homes and Slough Homes and agree that the Assistant Director Finance & Audit, following consultation with the Leader of the Council is authorised to finalise the Facility Agreement and to enable up to £28m to be lent to Herschel Homes and £26.5m to be lent to Slough Homes in the period to 31 March 2019  and for a temporary cash facility of up to £50k to be available from the Council to the two Companies for the initial 18 months as ‘working capital’ (charged at the base rate plus 2%).

(g)  That the proposed governance arrangements for each company set out in Section 5 in this report and the Shareholder Agreement included as Appendix 7.4 be approved and authority be delegated to the Assistant Director Finance & Audit following consultation with the Head of Legal Service to complete the draft terms.

(h)  That the Assistant Director Finance and Audit and the Head of Neighbourhoods be authorised to agree prices for services provided by the Council (such as Housing, Property and Asset Management), between the Council and both housing companies.

(i)  That the Head of Legal Services, following consultation with the Strategic Director Housing, Regeneration & Resources in consultation with the Commissioner for Housing and Urban Renewal , be authorised to select an alternative company name for Slough Homes (which will be subject to availability at Companies House).

(j)  That the disposal of the Housing Revenue Account (“HRA”) asset at Pendeen Court and General Fund asset at High Street, Langley to Slough Homes be authorised for a sum that represents no less than best value.

(k)  That delegated authority be given to the Assistant Director Assets, Infrastructure and Regeneration following consultation with the Leader, the Council’s section 151 Officer and the Head of Neighbourhood Services to agree the final valuation sum for Pendeen Court and High Street, Langley and agree all non-financial terms.