Agenda item

The Strategic Business Case for a Housing Delivery Company

Please find attached a report by Nick Hooper (Service Director – Housing Programmes). Members of the Place Scrutiny Commission have also been invited to attend for this item.

Minutes:

Officers noted the above report and the following points were made by Councillors (with responses as required by officers) as follows:

 

(1)        Officers confirmed that as much of the report as possible would be put into the public domain at the Cabinet meeting. Where it was not avoidable, some commercially sensitive information would not be included;

(2)        In response to Councillors’ questions about the Joint Venture Partners and the need for the Council to retain transfer and ownership of assets, officers confirmed that further detail was required concerning the Strategic Business Case. Whilst the organisational values of the organisation were significant, Housing Development expertise was also important – a private developer could provide investment or a quasi-commercial body such as a Housing Association. Any land asset arrangement was likely to be freehold;

(3)        Officers confirmed that it was anticipated that 30 % to 40% of the arrangement would be some form of social housing – one possible approach would be to assess the value of the asset and then sell it on to the Housing Association. Approximately 100 hectares of City Council-owned developable land is available. The operations of the new vehicle are not planned to be restricted to the city boundary;

(4)        In response to Councillors’ concerns about any potential difficulties that could be caused by a mix of partners being chosen to deal with different scales of housing developments, officers stated that, whilst City centre sites would have higher end values, all sites had been assessed as providing a potential return to Bristol City Council and any potential Joint Venture Partner, subject to market conditions and specifics of the development;

(5)        Councillors pointed out that developers primarily wanted high density small flats and, for this reason, any Joint Venture arrangement could cause difficulties. Therefore, it would be better for BCC to retain a controlling share in the Company. In response, officers pointed out that the single partner approach had not been pursued since it locked BCC into one partner and it was, therefore, felt appropriate to operate on a scheme by scheme basis. In addition, Bristol City Council has no experience of being a developer and managing risk.;

(6)        In response to a members’ question, officers confirmed that the 3 modelled sites had been chosen to allow cross financing;

(7)        In response to a members’ question concerning Right to Buy, officers confirmed that primary legislation would need to be passed to require an arms length holding Company to offer Right to Buy properties;

(8)        Officers confirmed that the long-term maintenance would be a consideration at the detailed business case stage;

(9)        Officers confirmed that there would be a procurement process for the partner and that BCC would also invest cash as well as land.. It was explained that the scheme had arisen following a series of workshops, and consideration by the Executive Board, which had agreed the objectives and criteria for the scheme from which 3 short listed options had emerged. The Business case had been very clearly developed on a coherent and rational approach;

(10)      Councillors pointed out that the balance between objectives and costs was important. There was a major housing problem in the city which needed to be addressed. Officers pointed out that this scheme would improve what the Council already had control of. It could not solve, on its own, the long-term problems of lack of housing that the city faced

(11)      Councillors indicated the need for other organisations to be involved in this project, such as Bristol Energy and Bristol Waste and also pointed out the need to look at measures taken elsewhere, for example Amsterdam where waste is held below the pavement;

(12)      In response to Councillors’ questions, officers confirmed that the target of 30/40% affordable social housing was a total figure for the whole programme, rather than a specific requirement for each site. Councillors expressed concern that that officers should consider that it might be difficult to sell developments if this was strictly enforced;

(13)      Officers noted a question from Councillors concerning the extent to which the programme would achieve community and self-build housing. It was explained that, although achievement of increased housing in this area was a Council policy, this had not been specifically factored into the business case;

(14)      Councillors stressed the importance of short to medium term innovative solutions for housing to ensure structures were built as quickly as possible to sufficiently acceptable standards. Officers stated that, whilst the scheme was neutral about construction methods, if it made sense to use off-site manufacture, this could take place;

(15)      Officers noted comments from Councillors that there was no mention of a Metro Mayor. However, the devolution arrangements were mentioned in the Strategic Business Case and there were opportunities for involvement in West of England Combined Authority development corporation.

 

Resolved – that the report be noted.