Issue - meetings

(a)       That the changes to the policy on Minimum Revenue Provision as detailed in paragraphs 1.16 and 1.17 of the report be approved; and

(b)       That the changes to the Prudential Indicators 2016/17 to 2018/19 as detailed in paragraphs 1.19 to 1.28 be approved.

Councillor Bernie Attridge withdrew from the meeting at this point.

                        The Chief Officer (Community & Enterprise) introduced a report on the Minimum Revenue Provision and Prudential Indicators – Policy amendments.  She provided background information and referred to the decision taken by Cabinet at its meeting on 17 May 2016 to agree in principle to  loan funding to NEW Homes to build 62 affordable homes on the site of The Walks, Flint.  She advised that appended to the report was the Cabinet report of 17 May 2016 which explained the considerations involved in building the affordable homes and the agreement to the loan from the Council to NEW Homes.  She explained that financially the scheme would bring in a new revenue stream for the Council but that it was a low risk activity as the loan would be repaid by NEW Homes with interest and should the company default the Council would own its assets.

                        The Chief Officer explained that the changes made to the capital programme also required some small changes to be made to other policies which were required to be approved by Council.  She invited the Corporate Finance Manager to present the changes required to each policy as detailed in the report. 

The Corporate Finance Manager  advised that loans from the Council to NEW Homes for house building purposes, in accounting terms, were classed as capital expenditure and therefore needed to be included within the Council’s capital programme.  Cabinet at a meeting on 17 May 2016, had approved the loan to NEW Homes and the associated changes to the Council’s 2016/17 and future year’s capital programme.  The Corporate Finance Manager explained that there are 2 phases to the funding of any new housing development, the first being the construction phase during which the properties are built and the second being the operational phase when the properties are built, and in this case let out for the purposes as set out in the report.  He reported on the structure of the lending, the capital programme, minimum revenue provision and prudential indicators as detailed in the report.

The Chief Officer commented that this was an opportunity for the Council to continue to achieve its housing growth needs and to meet the need for affordable housing within the County.

Councillor Aaron Shotton in moving the recommendation in the report said the initiative was integral to the Improvement Plan priorities and was a good example to other Authorities in Wales of innovative financing of housing development.

Councillor Mike Peers raised questions around the loan arrangements.  He also commented on the duration of the second loan and asked if there would be an opportunity to redeem this earlier as rents increased.  He referred to the financial guarantee that the Council could have provided if NEW Homes had sought to obtain funding from another source and asked what the cost may have been to the Council to provide the guarantee.  Officers responded in detail to the queries raised and referred to the process and structure  ...  view the full minutes text for item 28