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Report No 1252009 Council Housing Stock Transfer Post Ballot by sdfsb346f

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Report No 1252009 Council Housing Stock Transfer Post Ballot

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									                                                              REPORT NO:125/2009

                                     CABINET
                                      9th June 2009

    COUNCIL HOUSING STOCK TRANSFER: POST BALLOT
         PROJECT MANAGEMENT AND BUDGET
         Report of the Director of Adult Social Services, Health and Housing

STRATEGIC AIM         • To increase & sustain the local availability of affordable social
                        housing
KEY DECISION          YES               DATE ITEM FIRST               15 May 2009
                                        APPEARED ON
                                        FORWARD PLAN

1    PURPOSE OF THE REPORT

     1.1      On 15 June 2009 Council will be asked to approve the conduct of a ballot
              of tenants on proposals to transfer the housing stock to Spire Homes. If
              tenants approve this proposal the Council will need to incur costs to
              prepare for transfer. This paper seeks approval of the necessary project
              management arrangements and budget.

2 RECOMMENDATIONS

     2.1      That Cabinet recommends to Council approval of the supplementary
              estimate of costs set out in this paper to achieve stock transfer,
              including the appointment of consultants, subject to a positive
              tenant’s ballot result.

3 BACKGROUND

     3.1      The Council’s tenants are being consulted on proposals to transfer their
              homes to Spire Homes. This consultation process ends on 8th June 2009.
              Subject to the results of the consultation, on 15th June Council will be
              asked to approve the conduct of a ballot of tenant opinion on the proposed
              transfer.

     3.2      On 2nd September 2008 Cabinet approved cost estimates of £238,500 -
              £258,500 for the work leading up to an including the ballot of opinion
              (Report 146/2008). Officers are confident that actual expenditure for this
              part of the project will be within budget.

4 FURT       HER WORK REQUIRED

     4.1      As part of the pre-ballot work, Officers have reached Heads of Agreement
              stage with Spire Homes concerning the proposed stock transfer. This has
           been reported to Cabinet in on 21 April 2009 (Report 95/2009).

     4.2   If the tenants’ ballot approves the proposal to transfer the housing stock to
           Spire Homes, a significant amount of Due Diligence work will now be
           required. This includes:

           a)    precise definition of assets to transfer, including sites with potential
                 for development, as well as common space & paths in the curtilage
                 of dwellings and estates;

           b)    environmental surveys;

           c)    establishing a VAT shelter between the Council and Spire Homes;

           d)    obtaining necessary consents from regulators;

           e)    drawing up the terms of the transfer agreement, including
                 warranties that the Council will give to Spire Homes and its lenders;

           f)    setting up related agreements such as the operation of
                 homelessness, waiting list and nomination arrangements.

     4.3   Officers also consider that it is important to continue to support the RTLP
           in the period up to transfer to Spire Homes.

     4.4   The Head of Housing will continue to be the Council’s Project Manager for
           this stock transfer process and a ‘Stock Transfer Project Officer’ will
           continue in post.

     4.5   The Project Board will continue to be made up of the Director of Corporate
           Services, the Director of Adult Services Health and Housing, the Portfolio
           Holder for Housing, and the Chair of the Corporate Services Scrutiny
           Panel.

     4.6   The Council’s Lead Consultants, Legal Advisers and the Independent
           Tenants’ Advisers will continue to work on the stock transfer project and
           their appointment was approved by Council in September 2008. The fees
           they propose for this part of the project reflect what was agreed at that
           time.

     4.7   Spire Homes wish to appoint VAT consultants Beever and Struthers.
           Officers have been advised by Savills that their proposal is robust and
           competitive. This is a joint appointment because the proceeds of the VAT
           shelter will be shared between the Council and Spire Homes.

5 COSTS

     5.1   The estimated supplementary costs for the period between ballot and
           transfer are set out below. These costs will be set off against the capital
           receipt to the Council.
              Environmental surveys                             £ 92,000
              Consultancy fees                                  £110,000
              Project officer                                   £ 20,000
              Project expenses                                  £ 2,000
              Total                                             £224,000

      5.2     Officers have been advised that under current financial market conditions
              lenders are able to insist on environmental warranties for the housing
              stock as well as any land with development potential. To allow for this the
              budget for environmental surveys has had to be significantly increased
              and the overall budget for this part of the project is therefore larger than
              the one indicated to Cabinet in September 2008.

6 RISK        MANAGEMENT

         RISK IMPACT             COMMENTS
         Time Medium             Project management disciplines will be deployed to
                                 ensure that stock transfer is achieved by the end of
                                 2009.
         Viability High          The stock transfer proposal addresses the investment
                                 needs of the Council’s housing stock.
         Finance Low             The costs set out here will only be incurred if the transfer
                                 is to take place and can be recovered from the capital
                                 receipt from the transfer.
         Profile High            The proposal to transfer the stock will continue to attract
                                 considerable local media interest post transfer.
         Equality    Medium      The investment that a transfer would generate will
         &                       include better access and adaptations in the stock.
         Diversity

Background Papers                                         Report Author
                                                          Alastair Jackson
                                                          Head of Housing and Contracts
                                                          Tel No: (01572) 722577
                                                          e-mail: enquiries@rutland.gov.uk



A Large Print or Braille Version of this Report is available
upon request – Contact 01572 722577.

								
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