Issue - meetings

Recommendation from the Cabinet Housing Panel from the meeting on 26 January 2023 on an update on Now Housing.

(1)   That Cabinet note the update and approve the Exit Strategy for the company.

(2)   That Cabinet delegate authority to the Executive Director (Finance and Transformation), in consultation with the Executive Member (Planning and Resources) to agree the asset transfer price, finalisation of accounts and any write on/off position.

Recommendation from the Cabinet Housing Panel from the meeting on 26 January 2023.

The report provides an update to Cabinet on Now Housing, and proposals for an exit strategy from the company.

The company charges up to the local housing allowance for rentals and cannot support new schemes through the use of right to buy receipts. With the increasing costs of construction, and broader cost of living crisis, it is becoming increasingly harder to deliver viable schemes for the company, as the gap between costs and income for schemes becomes wider.

The government is also proposing changes to the way the council would need to account for loans to companies, which would add further challenges to delivering viable schemes.

The company is currently in a loss-making position, which was expected at this stage. It was not envisaged the company would be in a break-even position until it held between 40 and 50 units. As the company only owns 12 units and is now seeing increasing challenges in delivering more units, it is recommended that an exit strategy is put into place before losses accumulate further.

The proposed route of exit is for the council to purchase the Chequersfield block back from the company. Existing tenants would transfer to the council, and new tenancy agreements converting tenants to social rent would be signed.

Tenants have been consulted and all have confirmed that they support the proposals for the units to be purchased by the council and for them to more to bring council tenants.

RESOLVED:

(unanimous)

(1)  That Cabinet note the update and approve the Exit Strategy for the company.

(2)  That Cabinet delegate authority to the Executive Director (Finance and Transformation), in consultation with the Executive Member (Planning and Resources) to agree the asset transfer price, finalisation of accounts and any write on/off position.