RECOMMENDED TO COUNCIL
The approval of bringing forward lending of £13 million to Ermine Street Housing into 2018/19 by re-phasing the Capital Programme and bringing forward budget from future years to enable the Company to continue the business expansion as agreed by Cabinet and Council in November 2015.
Appendix A to the report of the Head of Finance contains exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972 (as amended). The press and public are likely to be excluded from the meeting during any discussion on this confidential appendix.
Council AGREED to bring forward lending of £13 million to Ermine Street Housing into 2018/19 by re-phasing the Capital Programme and bringing forward budget from future years to enable the Company to continue the business expansion as agreed by Cabinet and Council in November 2015.
Council AGREED that Appendix A to the report of the Head of Finance contained exempt information, namely information relating to the financial or business affairs of the Council (and/or landowner), and that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.
The Chairman accordingly indicated that in the event of any discussion on the exempt appendix it would be necessary to exclude the press and public.
Councillor John Williams proposed the recommendation of the Cabinet, at its meeting held on 7 November 2018, with regard to the re-phasing of lending to Ermine Street Housing. He noted that the Council had approved a business plan for Ermine Street Housing in November 2015 which provided for the Council to lend the Company up to £100 million to acquire a portfolio of 500 properties over a 5 year period. The pace of acquisition had increased in the current year and approval to re-phase the lending was now being sought to enable the Company to complete the acquisition opportunities currently presented.
Councillor Dr.Tumi Hawkins, in seconding the motion, commented on the positive work of Ermine Street Housing and noted that the proposal did not involve providing additional monies, rather a re-phasing of lending already agreed by the Council.
Councillor Peter Topping referred to comments in paragraph 10 of the report regarding the opportunities in the housing market arising from uncertainty surrounding Brexit and asked whether in view of the potential risks associated with turbulence in the market, re-phasing the lending was a wise approach. He also requested the Lead Cabinet Member for Finance to comment further on the proposal in the context of reference previously made to the desirability of adopting an ethical approach with regard to Ermine Street Housing.
Councillor Nick Wright referred to earlier indications that the future of the Ermine Street Housing would be reviewed and questioned whether the proposal to facilitate the business expansion reflected a change in the administration’s approach to Ermine Street Housing.
Councillor Mark Howell spoke strongly in support of the proposal and of the work of Ermine Street Housing.
The Executive Director advised that the Council was being invited to lend to property assets and that this represented a long term hold strategy. It was anticipated that there would be fluctuations in the market but if there was no need to sell the assets in a downturn, the long term hold strategy would secure that they continued to generate a return that was acceptable to the Council.
Councillor John Williams remarked that any good business ought to be subject to regular review and that there was a need to look at the objectives of Ermine Street Housing to ensure that they aligned with the revised objectives of the Council. The new administration had different housing and investment strategies and therefore it was appropriate to review how these strategies could be delivered. The future role of Ermine Street Housing would form part of the new Housing Strategy. It was important that Ermine Street Housing continued to trade successfully and the purpose of the recommendation was to seek the Council’s agreement to bring forward lending to enable the Company to progress with the acquisition of houses already in pipeline. The uncertainties in the housing market associated with the implications of Brexit had presented the opportunity to acquire more properties than originally anticipated and Ermine Street Housing had taken advantage of that opportunity. Councillor John Williams reiterated however that it was proposed to review Ermine Street Housing to ensure that it would deliver the objectives of the Council.
Council by affirmation
To bring forward lending of £13 million to Ermine Street Housing into 2018/19 by re-phasing the Capital Programme and bringing forward budget from future years to enable the Company to continue the business expansion as agreed by Cabinet and Council in November 2015.