Agenda item

The report presents the i4B Holdings Ltd (i4B) Business Plan 2019/20 to Cabinet for Shareholder approval.

NOTED the additional comments from Akintoye Durowoju representing the i4B Board and Councillor Johnson in relation to the report.

RESOLVED that Cabinet:

(1)    Approve, on behalf of the Council as Shareholder, the i4B Business Plan as set out in appendix 1 of the report.

(2)    Approve the alignment of PRS phase two loan funding, as set out below:

(a)    £24m of phase two funding be used to purchase 60 street properties;

(b)    £86.5m of phase two funding be used for the purchase of a block of 153 units and the purchase of new build opportunities; and

(c)    depending on the viability of new build schemes, the Board be given the discretion to increase/decrease the amount of street properties and new build opportunities purchased.

(3)    Approve increasing the amount of PRS phase one and two properties purchased in Greater London.

(4)    Approve giving the i4B Board the authority to dispose of lower yielding Home Counties properties.

(5)    Approve the updated financial model.

(6)    Approve the financial modelling, as set out below:

(a)        Based on current modelling, for the purchase of 360 street properties and the key worker Wembley DMS block:

·             i4B’s maximum cumulative loan will be £140m;

·             i4B’s maximum working capital will be £6.7m (£7m recommended for contingency);

·             i4B will break even on an annual basis by 2023/24 and break even on an overall basis by 2035/36; and

·             i4B’s forecasted 30 year cumulative profit will be £11.4m.

The Leader of the Council, Councillor Muhammed Butt, welcomed Akintoye Dorowju (i4B Board Member) to the meeting and invited him to introduce the report setting out the i4B Holdings Ltd (i4B) Business Plan 2020/21, for shareholder approval.

In presenting the report, Akintoye Dorowju outlined how the 2020/21 Business Plan had been developed to recognise performance in relation to the 2019/20 Plan along with external market factors. As a result, the main focus in terms of priorities within the 2020/21 Business Plan had remained on growth and diversification with the strategic aims identified including the PRS acquisition programme and incorporation of key worker accommodation into the wider i4B portfolio of properties; developing a portfolio of new build accommodation, including working with the Council to develop on Council owned land and with Registered Providers or private sector developers on sites purchased from the market.

Councillor Robert Johnson was also invited by the Leader of the Council to speak on the report.  In highlighting the work undertaken by the Affordable Housing Scrutiny Task Group, Councillor Johnson advised he was keen to ensure that the recommendations made in relation to the affordable nature of housing being provided through i4B, FWH or via Registered Providers were recognised.

In considering the report and progress being made by i4B, Councillor Muhammed Butt, as Leader of the Council, and Councillor Eleanor Southwood, as Cabinet Member for Housing & Welfare Reform, highlighted the need to recognise the long term and evolving nature of the Business Plan in seeking to grow and diversify the company’s portfolio, strengthen its balance sheet and spread risk in order to increase capacity.  This was as part of an overall strategy to own and manage properties to support the Council in tackling pressures in relation to homelessness and reducing the reliance on Temporary Accommodation through the provision of permanent, secure and affordable housing.  Whilst the specific recommendations from the Task Group had not been referenced within the Business Plan the approach adopted by the Council had included a range of measures including the purchase of properties from Housing Associations and developers as well as provision of funding to support i4B in terms of their acquisition programme.

In considering the recommendations detailed in the report, the Cabinet noted that Appendix 1 of the i4B Business Plan had been classified as not for publication on the basis it contained the following category of exempt information as specified under paragraph 3, Part 1 of Schedule 12A of the Local Government Act 1972, namely “Information relating to the financial or business affairs of any particular person (including the authority holding that information)".

RESOLVED that Cabinet:

(1)    Approve, on behalf of the Council as Shareholder, the i4B Business Plan as set out in appendix 1 of the report.

(2)    Approve the alignment of PRS phase two loan funding, as set out below:

(a)    £24m of phase two funding be used to purchase 60 street properties;

(b)    £86.5m of phase two funding be used for the purchase of a block of 153 units and the purchase of new build opportunities; and

(c)    depending on the viability of new build schemes, the Board be given the discretion to increase/decrease the amount of street properties and new build opportunities purchased.

(3)    Approve increasing the amount of PRS phase one and two properties purchased in Greater London.

(4)    Approve giving the i4B Board the authority to dispose of lower yielding Home Counties properties.

(5)    Approve the updated financial model.

(6)    Approve the financial modelling, as set out below:

(a)        Based on current modelling, for the purchase of 360 street properties and the key worker Wembley DMS block:

·             i4B’s maximum cumulative loan will be £140m;

·             i4B’s maximum working capital will be £6.7m (£7m recommended for contingency);

·             i4B will break even on an annual basis by 2023/24 and break even on an overall basis by 2035/36; and

·             i4B’s forecasted 30 year cumulative profit will be £11.4m.