Agenda item

The reports sets out options for funding and carrying out the remedial works identified as required at the Granville Road, Princess Road, and Canterbury Road blocks (otherwise known as Granville New Homes) and potential disposal of these blocks from First Wave Housing Ltd to the HRA.

Having considered and noted the recommendations made by the Community & Wellbeing Scrutiny Committee held on 7 October 21 in relation to their pre decision scrutiny of the proposals, Cabinet RESOLVED:

(1)     To note the options analysis and agree that disposing of the blocks at Granville New Homes to the Council’s Housing Revenue Account was the best option, subject to a consultation with residents being carried out.

(2)     To approve commencing a consultation with residents on the proposed option 1C as set out in sections 5 and 6 of the report.

(3)     To delegate authority to the Strategic Director of Community Wellbeing in consultation with the Director of Finance and the Lead Member (the Deputy Leader) for a final decision regarding the disposal of the properties, subject to the outcomes of the consultation with residents.

(4)     To delegate authority to the Director of Finance to renegotiate the terms and payment of the loan between Brent Council and First Wave Housing Ltd.

Councillor McLennan, as Deputy Leader & Lead Member for Resources, introduced a report which set out options for funding and carrying out remedial works identified as required at the Granville Road, Princess Road and Canterbury Road blocks (otherwise known as Granville New Homes) and potential disposal of these blocks from First Wave Housing Ltd (FWH Ltd) to the Housing Revenue Account (HRA).

In considering the report, members noted that the Granville New Homes comprised a total of 110 out of the 326 properties managed by First Waved Housing Ltd as one of the Council’s wholly owned housing companies.  These consisted of 84 social rented properties, 25 intermediate rented properties and one leasehold property.  The development had been constructed in 2009 with the properties initially being purchased and managed through Brent Housing Partnership (BHP) and subsequently FWH Ltd’s portfolio. As a result of subsequent problems experienced in terms of water ingress and other issues identified in relation to the design and construction of the blocks as well as in relation to cladding and fire safety FWH Ltd had commissioned a report from Ridge Consultants to investigate the remedial works required to remediate the issues identified, the results of which had been summarised within section 3 of the report.  The estimated cost of the remedial works identified had totalled £18.5m, which members noted would make the FWH Ltd Business Plan unviable.

As a result the Council (as Guarantor) and FWH Ltd had been required to explore options for funding the works whilst protecting the ongoing viability of FWH Ltd, balancing costs with the HRA and ensuring the works were undertaken as quickly as possible and with minimum disruption for residents.  The options considered had been detailed within section 4 of the report with the recommended option (disposal of the blocks to the HRA) and further detail on the structure of the proposed transaction having been set out in sections 5 and 6 of the report along with a review of the relevant implications for tenants, FWH Ltd, the General Fund and HRA.

Members were assured that subject to approval of the final option a full consultation process would be undertaken with residents to seek their views prior to any final decision being made to move forward.

Cabinet were also advised that the issue had been considered at the Audit & Standards Advisory Committee on 22 September 21 as part of a regular update received on FWH Ltd.  As a result, it had been recommended that the Community and Wellbeing Scrutiny Committee should be invited to consider and comment on the implications for Brent Housing Management (BHM) and the HRA arising from the recommended disposal option identified.  The Community and Wellbeing Scrutiny Committee had met on 7 October 21 to consider the proposals and as a result had made a number of recommendations to Cabinet, which the Deputy Leader advised included a number of proposals to ensure the necessary due diligence had been undertaken in relation to an assessment of the options and in procuring and monitoring the design and build quality of any similar types of construction work in the future.  In noting the recommendations, Cabinet were advised these would be taken forward as appropriate with the relevant services across the Council.

In terms of other comments raised, Cabinet noted the external legal and tax advice confirming that the preferred option identified within the report (Option 1c) would be technically viable along with the associated financial implications in relation to the HRA and FWH Ltd.  In terms of the affected tenants, this would involve the 84 social rented tenants becoming secure council tenants and one leaseholder becoming a council leaseholder with members assured that this would not represent any greater level of risk to the HRA in terms of rental income, Right to Buy or stock maintenance and management costs than posed through the existing HRA portfolio. The 25 intermediate tenants would become i4B tenants.

Having noted the recommendations made by the Community & Wellbeing Scrutiny Committee on 7 October 21 along with the assurances provided in relation to risk, the viability of the preferred option, engagement process and outcomes being sought for the affected tenants and leaseholder, Cabinet RESOLVED having also considered the information provided within the exempt appendix accompanying the report:

(1)    To note the options analysis detailed within the report and agree that disposing of the blocks at Granville New Homes to the Council’s Housing Revenue Account was the best option, subject to a consultation with residents being carried out.

(2)    To approve commencing a consultation with residents on the proposed option 1C as set out in sections 5 and 6 of the report.

(3)    To delegate authority to the Strategic Director of Community Wellbeing in consultation with the Director of Finance and the Lead Member (the Deputy Leader) for a final decision regarding the disposal of the properties, subject to the outcomes of the consultation with residents.

(4)    To delegate authority to the Director of Finance to renegotiate the terms and payment of the loan between Brent Council and First Wave Housing Ltd.