Agenda item
ALMO Settled Homes Initiative
To ensure the delivery of the BHP’s SHI scheme, BHP has requested a £8m loan from the Council, secured using its prudential borrowing powers, in order to deliver in the region of 50 properties under tranche 1 of their acquisitions programme. This report sets out the proposed changes that are required to deliver the ALMO SHI scheme.
(Appendices also below)
Decision:
(i) that approval be given to note Brent Housing Partnership at present is not contemplating setting up a special purpose vehicle, as a wholly owned subsidiary of BHP, in order to deliver the scheme;
(ii) that approval be given to approve the delivery arrangements proposed and note the increased number of dwellings achievable from the additional £5m HCA grant support;
(iii) that approval be given to the provision of a loan facility to Brent Housing Partnership Ltd of up to £8million to facilitate the delivery of tranche 1 of SHI scheme and to delegate authority to the Director of Finance and Corporate Resources, in consultation with the Borough Solicitor, to agree the final terms and conditions of the loan facility;
(iv) that approval be given to BHP, to enter into a Grant Agreement for the SHI scheme with the Homes and Communities Agency (HCA) in respect of their £10 million funding allocation, under the Settled Homes Initiative, and delegate authority to Director of Finance and Corporate Resources to agree the terms of that Grant Agreement, in consultation with the Borough Solicitor;
(v) that approval be given provide BHP a loan facility of up to £8 million to fund the acquisition of approximately 50 properties under the tranche 1 of the SHI programme and also delegate authority to the Director of Finance and Corporate Resources to agree the final loan sum to be provided to BHP and the term over which the loan will be repayable, subject to the following conditions:
(1) The loan sum will relate only to costs directly attributable to this scheme
(2) The loan is seen to be affordable to BHP and that the agreed loan repayment schedule is substantiated within the overall business case model, and
(3) The final agreement to provision of the loan remains within the best interests of the council
(vi) that it be noted that the terms of the loan are generally neutral on the Council’s finances and provide for a nil net contribution on the Council’s General Fund;
(vii) that the Director of Housing and Community Care be authorised to seek consent from the Secretary of State under section 25 of the Local Government Act 1988 in respect of the £8m loan facility once the final terms of the loan agreement have been agreed by the Director of Finance and Corporate Resources;
(viii) that the Director of Finance and Corporate Resources be authorised to enter into a Direct Agreement with the HCA, in consultation with the Borough Solicitor in order to satisfy the grant conditions for the SHI grant allocated to BHP;
(ix) that BHP be permitted to acquire, own and manage up to 286 properties and to grant tenancies in connection with the Settled Homes Initiative;
(x) that BHP be required to agree a protocol for the use of Ground 8 of Schedule 2 to the Housing Act 1988 as a tool to evict tenants who are in rent arrears.
Minutes:
To ensure the delivery of the BHP’s SHI scheme, BHP had requested a £8m loan from the Council, secured using its prudential borrowing powers, in order to deliver in the region of 50 properties under tranche 1 of their acquisitions programme. The report from the Director of Housing and Community Care set out the proposed changes that were required to deliver the ALMO SHI scheme.
Councillor Allie (Lead Member, Housing and Customer Services) in introducing the report, raised concerns over the use of Ground 8 of Schedule 2 to the Housing Act 1988 as a tool to evict tenants who were in serious rent arrears as it could be invoked when tenants owed only two months’ rent and as it was mandatory once all conditions were satisfied. The Executive considered the feasibility of introducing a loan covenant which prevented BHP from using Ground 8 of Schedule 2 to the Housing Act 1988 as a tool or which required it to be used only as a last resort. The Executive heard advice from the Director that to prevent the use of Ground 8 would not be in line with borrowing requirements and from the Borough Solicitor that it would be unwise to fetter the action BHP felt to be appropriate. The Executive noted that BHP, as an agent of the council, was bound by requirements of the anti-poverty strategy.
It was proposed and agreed that the Director of Housing and Community Care develop a protocol setting out the circumstances for which Ground 8 would be used, similar to that in place for Granville Homes.
The Executive also had before them appendices to the report which were not for publication as they contained the following category of exempt information set out in Schedule 12A of the Local Government Act 1972:
“Information relating to the financial or business affairs of any particular person (including the person holding that information).”
RESOLVED:-
(i) that approval be given to note Brent Housing Partnership at present is not contemplating setting up a special purpose vehicle, as a wholly owned subsidiary of BHP, in order to deliver the scheme;
(ii) that approval be given to approve the delivery arrangements proposed and note the increased number of dwellings achievable from the additional £5m HCA grant support;
(iii) that approval be given to the provision of a loan facility to Brent Housing Partnership Ltd of up to £8million to facilitate the delivery of tranche 1 of SHI scheme and to delegate authority to the Director of Finance and Corporate Resources, in consultation with the Borough Solicitor, to agree the final terms and conditions of the loan facility;
(iv) that approval be given to BHP, to enter into a Grant Agreement for the SHI scheme with the Homes and Communities Agency (HCA) in respect of their £10 million funding allocation, under the Settled Homes Initiative, and delegate authority to Director of Finance and Corporate Resources to agree the terms of that Grant Agreement, in consultation with the Borough Solicitor;
(v) that approval be given provide BHP a loan facility of up to £8 million to fund the acquisition of approximately 50 properties under the tranche 1 of the SHI programme and also delegate authority to the Director of Finance and Corporate Resources to agree the final loan sum to be provided to BHP and the term over which the loan will be repayable, subject to the following conditions:
(1) The loan sum will relate only to costs directly attributable to this scheme
(2) The loan is seen to be affordable to BHP and that the agreed loan repayment schedule is substantiated within the overall business case model, and
(3) The final agreement to provision of the loan remains within the best interests of the council
(vi) that it be noted that the terms of the loan were generally neutral on the Council’s finances and provide for a nil net contribution on the Council’s General Fund;
(vii) that the Director of Housing and Community Care be authorised to seek consent from the Secretary of State under section 25 of the Local Government Act 1988 in respect of the £8m loan facility once the final terms of the loan agreement have been agreed by the Director of Finance and Corporate Resources;
(viii) that the Director of Finance and Corporate Resources be authorised to enter into a Direct Agreement with the HCA, in consultation with the Borough Solicitor in order to satisfy the grant conditions for the SHI grant allocated to BHP;
(ix) that BHP be permitted to acquire, own and manage up to 286 properties and to grant tenancies in connection with the Settled Homes Initiative;
(x) that BHP be required to agree a protocol for the use of Ground 8 of Schedule 2 to the Housing Act 1988 as a tool to evict tenants who are in rent arrears.
Supporting documents:
- H&CC ALMO Setled Homes, item 18. PDF 242 KB
- H&CC ALMO Settled Homes App 3, item 18. PDF 50 KB
- Restricted enclosure View the reasons why document 18./3 is restricted
- Restricted enclosure View the reasons why document 18./4 is restricted