The Leader and Cabinet Member for Finance reminded Members that any discussion on the exempt Appendix Business Plan would take place in closed session.

The Cabinet Member for Housing introduced the report and said that prior to the Covid-19 pandemic a paper was considered by Cabinet, highlighting the options for the delivery of additional, affordable housing within the Borough and the establishment of a Local Housing Company (LHC) was part of that delivery.  He said that the Business Plan, governance structures and financing of the company had been carefully considered and developed by officers and members of the Cabinet. 

The Cabinet Member for Housing said the plan was for additional housing on Council-owned land, with the highest possible environmental standards that could viably be achieved.  He said that the forming of the company offered long-term opportunities for the Council to directly intervene in the housing market, along with tenure flexibility to ensure that projects were financially viable and did not place the Council in any undue, significant financial risk. The Cabinet Member for Housing highlighted that many other Councils throughout the country had successfully established their own housing companies to deliver affordable housing and long-term income for their authorities.  Finally, he said that, if approved, the proposal would be the second largest investment by the Council, after the Spirit of Sittingbourne project which had carried more risk, and the Council was fully committed to delivering additional affordable housing.

The Deputy Cabinet Member for Housing highlighted the rise in homelessness and those households in temporary accommodation in Swale, despite more recent additional resources.  He referred to previous proposals to address the homeless issue which were considered to be unviable by the previous administration, and he referred to the report which set out the viability of the proposal.  The Deputy Cabinet Member for Housing said that the proposal indicated a fundamental change in direction that was essential if the Council were to combat the effects of Universal Credit, the Covid-19 pandemic and BREXIT on the unemployment figures and their consequence.  He referred to the income stream that would be received from the LHC which would assist in the revenue budget.

The Cabinet Member for Economy and Property said that the proposal, if agreed, would be a huge investment in the Council’s time and resources but was one of the few things the Council could do to influence its housing stock.  She said that the setting up the LHC would be a milestone for the Council and would be for the benefit of the residents of the Borough.  The Cabinet Member for Economy and Property acknowledged the huge task of setting the company up but gave her full support.

The Leader and Cabinet Member for Finance reminded Members that when the coalition came into office, they wanted to make better use of the planning system to secure more affordable housing and he said that if all the planning approvals that had been granted with affordable housing were implemented over the next five years, there would be a substantial amount of affordable housing from various perspectives, in the Borough.  He said that various other options to provide affordable housing had been considered and the proposal was a substantial start to SBC’s future.  The Leader and Cabinet Member for Finance stressed that the Council would not embark on the project unless it was considered to be financially sound and viable and would not be a burden on the base budget or council taxpayers. He was certain that the property assets would grow in value and the debt and loan charges would be met by rents and that it was a financially sound investment that met the social and community aim of the administration. He hoped the Council would purchase land in parts of the Borough that desperately needed affordable housing but were not receiving it under the planning system.

The Cabinet Member for Environment welcomed the proposal and said that high-density, energy-efficient homes in the town centre where residents could live and travel without needing a car would bring vitality to the town centre.  He said that he understood the viability issues but hoped there was a way to make the houses zero or low-carbon and he gave some examples at other Councils in York and Lewes. He encouraged the use of high-energy efficiency techniques when affordable housing was built.  He referred to retaining 10% of the affordable homes in perpetuity as at paragraph 2.21 on page 215 and hoped that Council would retain a higher proportion of the properties and sought clarity on borrowing and interest rates as at paragraph 2.29 on page 216.  In response, the Cabinet Member for Housing said the 10% retention of affordable housing would be included as part of the Section 106 Agreement and whilst he too hoped for higher retention, there needed to flexibility. Responding to the question on borrowing and interest rates, he advised that state aid rules applied when affordable housing was not being built.

Resolved:

(1)  That a Local Housing Company (LHC) called Swale Rainbow Homes Ltd be created.

(2)  That Councillors Ben J Martin and Monique Bonney, Emma Wiggins and Charlotte Hudson be appointed as directors of the LHC.

(3)  That the Monitoring Officer be appointed as Company Secretary for LHC.

(4)  That the Leader and Cabinet Member for Finance, Deputy Cabinet Member for Housing, Deputy Cabinet Member for Health, Chief Executive and Chief Financial Officer be appointed to the shareholder panel.

(5)  That the business plan shown in Appendix I be adopted.

(6)  That the Council-owned land at the old bus depot (East Street), Fountain Street and Cockleshell Walk Car park, Sittingbourne be transferred to the LHC in exchange for an equity share in the LHC.

(7)  That up to £23million be loaned to the LHC to fund the Capital development.

(8)  That the Chief Financial Officer, in conjunction with the Leader and Cabinet Member for Finance be given delegated authority to allocate working capital to LHC from the North Kent Shared Business Rates.