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Report No 1252009 Council Housing Stock Transfer Post Ballot
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: firstname.lastname@example.org A Large Print or Braille Version of this Report is available upon request – Contact 01572 722577.
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