Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
To consider a proposal on the Help to Own project.
Having previously declared a non-pecuniary interest in this item, Mark Taylor, Deputy Chief Executive and Ross Cook, Director of City Environment both left the online meeting whilst the report was considered.
The intention to make a key decision on the report ‘The Marches Help to Own Project’ at the meeting was not publicised in advance as required by the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012. The decision was urgent and could not be reasonably delayed for the following reason:
· This is a complex venture involving a number of partners including the West Midlands Combined Authority - the agreement on the approach has only just come through hence the need for a reduced period of time for publication
In light of the above, consent had been obtained for the key decision to be made at the meeting under the General Exception provisions
Councillor Jacqueline Sweetman presented the report on a proposal for investment in a new affordable housing product, ‘Help to Own’ which provided a rental solution to local residents that gave long term tenure security, the benefits of home ownership without the risks and complete flexibility to leave whenever the tenant wishes.
That Council be recommended to approve:
1. An equity investment of up to £5.7 million alongside a West Midlands Combined Authority (“WMCA”) investment of up to £4.78 million in a pilot for a new affordable housing product called ‘Help to Own’ (“H2O”) and that the entering into of any agreements or documents arising out of equity investment be delegated to the Cabinet Members for City Assets and Housing and Resources in conjunction with the Director of Governance and the Director of Finance (Section 151 Officer).
The Cabinet approves that:
1. Authority be delegated to the Cabinet Members for City Assets and Housing and Resources in conjunction with the Director of Governance and the Director of Finance to approve detailed agreements necessary to establish the H2O scheme and purchase the 100 units at The Marches.
2. A further report identifying the ongoing governance structure for the scheme be brought to Cabinet for approval.
The Cabinet notes that:
1. The WMCA Board would be asked to approve their investment in the project on 15 January 2021.
2. The scheme requires creation of a new Real Estate Investment Trust (REIT) or other suitable structure to acquire the units and manage the scheme. The final structure would depend upon results of detailed accounting, taxation and legal advice which is to be jointly commissioned by the WMCA and CWC.
3. The scheme requires additional debt funding of £12.7 million which would be sourced from a third party lender. The scheme is dependent upon the availability of this funding on the terms within the proposal.
4. Under the initial terms discussed it is proposed that WMCA assumes the responsibility for any losses arising for CWC from the scheme up to a capped level to be agreed and subject to due diligence.
5. The 100 units are to be purchased from WV Living, a wholly owned subsidiary company of the Council, for £20.9 million at a discount to current sales prices of £1.2 million for bulk off plan purchase.
6. The pilot would be subject to ongoing evaluation with six monthly reports of progress to Cabinet.
Report author: Fabrica Hastings
Publication date: 21/01/2021
Date of decision: 20/01/2021
Decided at meeting: 20/01/2021 - Cabinet