Agenda item

Report of the Executive Director of Place

The Cabinet considered a report of the Executive Director of Place, which set out proposals to dispose of land interests to Whitefriars Housing Group Limited (Whitefriars) for the development of housing.

A corresponding private report detailing the commercially confidential financial elements of the proposals was also submitted to the meeting and detailed in Minute 80 below.

Since Whitefriars was formed in 2000 and the Council’s housing stock was transferred, the Council no longer held any housing stock and therefore could not directly intervene to resolve local housing needs.

However, officers from the Resources and Place Directorates investigated the options and appropriate models for how new housing could be delivered and considered alternatives by other local authorities. The work identified that there were broadly four options of a wholly owned company, a community interest company, a joint venture / land disposal, or a private finance initiative.  The advantages and disadvantages of each of the options was summarised in Appendix 1 of the report submitted.

Informal soft market testing with a number of local registered housing providers was undertaken to assess the appetite for partnership working.  In light of the current financial climate and the opportunities discussed, certain proposals required significant investment and risk. To minimise risk and ensure that the Council obtained best value under S123 of the Local Government Act 1972, the preferred method to explore was disposal of Council land to the registered housing provider to bring about amalgamation of adjoining land interests in order to maximise the delivery of new housing.

From discussions with the market, it became apparent that a land disposal arrangement with Whitefriars would be the most viable option for the Council. Following discussions with Whitefriars it was agreed that they were prepared to undertake the following:-

•  to bring forward schemes at their own design, funding and specification to the sites as detailed on the Matrix at Appendix 2 of the report to provide up to 131 houses which were mainly affordable over a five year period on sites owned by Whitefriars and Council sites to be sold to Whitefriars.

•  All development costs would be incurred by Whitefriars for the development of the 131 houses (with the exception of garage infill sites).

•  The disposal of the Council interests in land would be assessed independently by the District Valuer at a Market Value and in accordance with Section 123 of the Local Government Act 1972. 

In addition to the proposed homes outlined, Whitefriars had identified twenty six garage infill sites that potentially could accommodate 120 homes.  As these sites were uneconomical to develop due to size and the lack of opportunity for scales of economies regarding cost, Whitefriars had requested that the Council contributes a subsidy, subject to Whitefriars securing Homes Communities Agency (HCA) funding.

The financial contribution would be budgeted over a five year period but subject to a yearly threshold over the financial year.  The funds could be sought from S106 commuted sums, new homes bonus, and / or recycled capital receipts from the land disposals to Whitefriars. This contribution was proposed subject to further legal advice

With regard to the garage infill units developed with a Council contribution, the intention was to target the priority cases as identified in the Homefinder list and allocate these homes for local need.

The sites that had been identified for this project as per the Matrix could only be developed to their full potential through this land disposal programme with Whitefriars, given that some of the projects required land currently owned by Whitefriars in order to be developed.  Sites such as Gerard Avenue could not be developed as Whitefriars had control of the access into the Council’s site via a ransom strip

The governance and structure of the proposed arrangement with Whitefriars was to be documented in a Memorandum of Understanding currently being negotiated. It was envisaged that any development proposals would be submitted initially to a Project Board, where officers from both the Council and Whitefriars would sit. The Council and Whitefriars would deliberately have equal weighting on the project board, with neither having a casting vote.

RESOLVED that the Council enters into land disposal arrangements with Whitefriars Housing Group.