Agenda item

Report of Chief Executive Officer

Lead Cabinet member: Councillor Alan Shuttleworth

(KDGE) (1) To agree a loan of up to £1,700,000 be made by the Council to Aspiration Homes LLP (AH), such loan to be used for the purpose of enabling AH to purchase land at Northbourne Road from Eastbourne Housing Investment Company Ltd (EHICL) and to develop the same for affordable housing. (2) To agree to accept repayment of the total drawn down loan previously made by the Council to EHICL for the purchase of land and pre-construction costs for the Northbourne Road scheme. (3) To authorise the Deputy Chief Executive, in consultation with the Lead Member for Finance, to determine the terms of any loan which is to be offered to Aspiration Homes LLP (4) To note that officers will ensure that a “Funding Agreement” and a “Deed of Entrustment” are entered into so that right to buy receipts are appropriated in accordance with legislative requirements (5) To note the emerging temporary accommodation options.

The Cabinet considered the report of the Chief Executive seeking Cabinet approval for a loan to be made by the Council to Aspiration Homes LLP (AH), to accept the repayment of a loan previously made by the Council to Eastbourne Housing Investment Company Ltd (EHICL) and to note the temporary accommodation options.

The report followed on from the establishment of Aspiration Homes Limited Liability Partnership with Lewes District Council on 1 July 2017 and recommendations approved by Cabinet on 22 March 2017 to allocate up to £30 million in the Council’s capital programme to progress the next phase of delivery for EHICL (£20 million) and first phase delivery for AH (£10 million).

It was envisaged that the proposed scheme at Northbourne Road, detailed in the report, would form part of a larger programme, tackling homelessness and housing need.  Deadlines around the right to buy receipt utilisation meant that this transaction required approval before any future report on the larger programme could be considered by the Cabinet.

Resolved (key decision general exception):

(1) To agree a loan of up to £1,700,000 be made by the Council to Aspiration Homes LLP (AH), such loan to be used for the purpose of enabling AH to purchase land at Northbourne Road from Eastbourne Housing Investment Company Ltd (EHICL) and to develop the same for affordable housing.

(2) To agree to accept repayment of the total drawn down loan previously made by the Council to EHICL for the purchase of land and pre-construction costs for the Northbourne Road scheme.

(3) To authorise the Deputy Chief Executive, in consultation with the Lead Member for Finance, to determine the terms of any loan which is to be offered to Aspiration Homes LLP.

(4) To note that officers will ensure that a “Funding Agreement” and a “Deed of Entrustment” are entered into so that right to buy receipts are appropriated in accordance with legislative requirements.

(5) To note the emerging temporary accommodation options.

Reason for decision:

The Council is one of three partners in this proposed arrangement, the other two being AH and EHICL. The Council has previously made a loan to EHICL to enable that company to purchase land at Northbourne Rd for re-development.

With the establishment of the newly created AH it makes better sense for AH to carry out the re-development as AH can make use of right-to-buy receipts in doing this. This is not an option which is open to either the Council or EHICL.

It is therefore proposed that EHICL repays the loan received from the Council and that the Council instead makes loan monies available to AH for the re-development of the site for affordable housing.

Cabinet should note that any payment of the loan to AH will be dependent upon EHICL and AH themselves first agreeing the terms of the transfer of the Northbourne Rd site from EHICL to AH and upon AH agreeing to take a loan from the Council on the terms offered.

(Note: Councillors Tutt and Ungar declared a prejudicial interest in this item (see minute 47 above). Both withdrew from the room and Councillor Mattock chaired the meeting for consideration of this item.)