Agenda item

As detailed in the recommendations.

The Chief Officer (Community and Enterprise) introduced the report on the approval of lending to NEW Homes to fund a development of 62 affordable new homes in Flint. 

The proposed re-development of The Walks would bring to the town a significantly improved housing offer, utilising traditional construction methodology which would provide thermally efficient, well planned and secure properties for the current and future residents of Flint.

The overall vision for marketing The Walks would be to create a united marketing strategy that reinforced the partnership between the Council and NEW Homes.  The marketing of The Walks would encompass developing a single brand that was easily recognised by local people.

Flintshire County Council had commissioned an independent valuation for The Walks from the District Valuer.  The open market value of the proportion of the site to be developed by NEW Homes was £771k.  There were projected abnormal site costs of £584k and when deducted from the valuation, left a net sale price to NEW Homes of c£187k.  This was the same process which was utilised for land disposed of recently to Pennaf Housing Group and Betsi Cadwaladr University Health Board for the development sites in Flint.  An application for consent to transfer the land to NEW Homes had been made to Welsh Government (WG) with a formal response expected.

A number of funding solutions had been identified to finance the development.  The NEW Homes Board met on 26^th April 2016 and agreed in principle to proceed with The Walks development with the preferred funding provider being Flintshire County Council.  Details of the options available, including an appraisal of each, were outlined in the report.

The Local Government Act 2003 provided the Council with the powers to lend finance to NEW Homes and if agreed, could provide the Council with a new revenue stream alongside enabling NEW Homes to help the Council meet the identified need for more affordable properties in the County.

It was recommended that delegated authority be given to the Council’s Section 151 Officer in conjunction with the Monitoring Officer to agree the terms of a loan and the rate of interest to be charged to NEW Homes, following receipt of external specialist advice.

In response to a question from Councillor Kevin Jones, the Chief Officer explained that the Council could either lend at commercial interest rates, and therefore provide no State Aid to NEW Homes, or it could consider lending at interest rates lower than commercial rates which would constitute State Aid.  Lending at lower than commercial rates was lawful provided that the purpose of the loan qualified for a State Aid exemption and certain criteria were not breached.  The Council had received legal advice indicating that the provision of homes for rent qualified for a lawful State Aid exemption.

Members welcomed the report on an enterprising scheme to meet the housing demand in the County.

Councillor Kevin Jones asked for an update on the application to suspend Right to Buy properties.  The Chief Officer explained that the application had been submitted ahead of the WG elections and she expected it to be signed off following the appointment of the relevant Minister.

RESOLVED:

(a)       That it be noted that NEW Homes wishes to develop 62 affordable properties on The Walks at Flint at a build cost of £7.397M following the board agreeing to seek approval from the Council to provide capital finance to fund the development;

(b)       That responsibility be delegated to the Section 151 Officer and the Monitoring Officer for a:-

·         approval of the terms of the loan as described in paragraph 1.50 of the report

·         and approval of the terms of the loan agreement and any associated documents following satisfactory due diligence

(c)        That the inclusion of the NEW Homes Walks development costs in its Council’s Fund capital programme in 2016/17 to be funded by prudential borrowing be approved;

(d)       That the changes to necessary strategies and policies including: Treasury Management Strategy, Prudential Indicators, Minimum Revenue Provision Policy and Accounting Policies be recommended to Council;

(e)       That the HRA land at The Walks be disposed to NEW Homes (subject to Welsh Government consent) for c£187k, subject to final valuation of abnormal costs; and

(f)        That it be noted that NEW Homes will develop a joint Marketing and Estate Management Strategy (including a Local Lettings Policy) with the Council for The Walks.

Councillor Attridge left the meeting during consideration of the item.