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Agenda Item No.: 6 Finance Sub-Committee Finance Sub-Committee 24 February 2009 New Build Programme Report by: Asset Manager 1. Options previously identified and reported to Finance Sub- Committee to resolve the new build viability issues are being actively explored in relation to Beavers Lane, Heston Area and Convent Way and are set out here. 2. Expenditure to date this year in relation to new build totals £211k and details are provided here. 1. Recommendations. 1.1. That the Finance Sub-Committee note the contents of this report. 2. Overview 2.1. The funding identified to support the four projects is set out in Appendix 1. Three of the four new build projects are supported by Area Renewal funding from the LDA; Convent Way is self-financing. 2.2. The projected 2008/2009 expenditure profile against budget for each scheme is set out in Appendix 2. There has been significant slippage due to delays in taking each project forward. Current spend profiles are indicative and subject to making good progress from now on. 2.3. To date some £527k has been spent in total in relation to New Build and is set out below. Some £243k of this spend has been coded to capital codes and this will need to be moved onto the company’s balance sheet code before the end of the year. convent beavers heston manor Other total 2006/2007 hh 35,010.32 12,149.50 3,037.38 3,037.38 53,234.58 capital 0 0 0 0 - Total 2006/2007 35,010.32 12,149.50 3,037.38 3,037.38 53,234.58 2007/2008 hh 3,456.83 11,079.53 19,108.90 6,239.64 39,884.91 capital 27,107.22 28,066.30 144,612.70 23,241.85 223,028.07 Total 2007/2008 30,564.05 39,145.83 163,721.61 29,481.49 262,912.98 2008/2009 hh 18,804.21 113,948.04 43,969.65 13,498.51 500.00 190,720.41 capital 2,679.87 5,481.29 8,482.25 4,037.31 20,680.72 Total 2008/2009 21,484.08 119,429.33 52,451.90 17,535.82 500.00 211,401.13 Total all years 87,058.45 170,724.66 219,210.88 50,054.69 500.00 527,548.69 2.3 All four schemes are dependent on income from private sales, falling sales values and have therefore been affected adversely by current market conditions. The table below sets out the actions that are being pursued. These are being reported to the New Business Working Group of the Board. Project Issue Action Convent Cost Plan Deficit of LBH Affordable Housing Fund Way £1.05m Panel have agreed to support – cost plan now viable Beavers Cost plan deficit of Homes and Community Agency Lane £1.4m plus a further grant proposal for £2.8m has been £1.45m at risk due to made formally and HCA response lack of demand for awaited leaseholder reprovision units. Manor Unfavourable Planners direction being sought – it Lane response from may be possible to free up grant for planners indicates allocation elsewhere original 100 unit scheme may be unfeasible Heston Cost plan deficit of up An analysis of regeneration works is Area to £5.4m has been being undertaken and this may identified by identify additional grant for new developer build, HCA grant bid being developed, HH borrowing being actively explored. 2.4 Hounslow Homes and LBH are analysing the implications presented by the HCA Grant agreement and have agreed the appointment of a legal representative. 3. Convent Way 3.1. The Council agreed in January 2009 to support the project from AHFP monies up to a maximum of £1.1m. This means that the cost plan is now viable and work is underway to get the project on site this financial year. 3.2. Secretary of State consent for the transfer of land from LBH to Lovells and HH has been agreed but will need to be resubmitted due to amendments to the financing. Confirmation that this submission has been made is being sought from the Council. 3.3. The various legal documents that are required to enable this project to commence on site are now practically complete and it is hoped that subject to CLG being satisfied with revised proposals, we will shortly be in a position to exchange contracts with the Council and Lovell Partnership. The following issues were reported as outstanding at the last capital strategy meeting and are still outstanding. Work is progressing with the Council’s solicitors to try to ensure a speedy resolution: Unilateral S106 Agreement. Council issued a revised agreement which has been heavily amended following a delay of around 6 months. Trowers and Lovells solicitors have reviewed. Additional qualitative standards have been added in which will require deletion and this has been discussed with the Housing Strategy officers involved in the project at the council. North Hyde Lane – Section 106 agreement has now been received by Lovells and commented on, with LBH now to respond. Additional S106 contributions of £10k added despite the original planning permission confirming the costs at that time. The Council and their solicitors have yet to approve the final forms of the tenancy agreement, option to purchase document, nominations agreements or the HH/LBH land and development agreement. This is being chased. The PPC 2000 building contract between Hounslow Homes and Lovells has now been principally agreed although one or two areas regarding risk apportionment remain which are being finalised. LAD’s and Loss and Expense proposals following negotiations with Lovells will be addressed within a Trowers contract report for the CEO’s approval in line with the Board report recommendations. 3.4. Hounslow Homes’ legal costs have increased from the original cost plan levels, partly due to the delays in delivering this project, the additional work on the unilateral agreement and the title searches. The current 2008/09 projection is £30k (as opposed to the budgeted figure of £8k). Provision for the increased costs has been made within the cost plan figures provided to LBH and those costs are therefore covered by the AHFP grant. There is headroom within the AFHP grant of £50k should either LBH or HH costs increase further. 3.5. A start on site might still be achieved in March 2009. East and West Garage sites will be developed concurrently. Contract periods are 54 weeks (West site) and 40 Weeks (East site). The North Hyde Lane site will be moth-balled by the developer until the market improves. Financing of the scheme 3.6 The scheme costs and financing are set out overleaf. 3.7 Convent Way - Lovells Cost Plan December 2008 Variance April- As at December Dec 08 (see April 08 figures 08 notes below) Size Tenure Location Number Total Total Sales values 1 bed flat market sale North Hyde 2 £340,000 £342,434 £2,434 2 bed flat market sale North Hyde 5 £1,225,000 £959,852 -£265,148 2 bed flat market sale North Hyde 3 £720,000 £575,911 -£144,089 2 bed flat market sale Convent Way 20 £4,200,000 £3,096,355 -£1,103,645 Freehold Reversion £110,500 £127,500 £17,000 Affordable Housing Panel Grant £1,050,000 £1,050,000 2 bed flat Lovells Choice Convent Way 4 £588,000 £430,220 -£157,780 Total sales revenue 34 £7,183,500 £6,582,272 -£601,228 Construction costs Market sale & Lovells Choice Both 34 Affordable Convent Way 15 49 £5,279,065 £5,008,369 -£270,696 Selling costs Market Sale Lovells Choice £206,310 £365,483 £159,173 Overheads and Profit Market sale and Lovell Choice Affordable £1,370,080 £696,375 -£673,705 Fees LBH, HH and Redloft £150,000 £230,000 £80,000 Section 106 £29,000 £29,000 Legals and SDLT Lovells £178,045 £253,045 £75,000 Total costs £7,183,500 £6,582,272 -£601,228 Overall Developer Return 19.07% 10.58% Cash Flow Forecast 3.8 Hounslow Homes costs will be funded by S24 /25 grant from LBH (for which Secretary of State consent is required). Until grant can be paid, any costs incurred by HH are unfunded. All HH new build costs are coded to the HH balance sheet as assets under construction. It is anticipated that Secretary of State consent will be achieved this year. 3.9 The cashflow forecast for the project is set out at Appendix 2. Budget against actual 2008/09 3.10 The table below shows the total HH budget for Convent Way in 2008/09, the profiled budget and actual expenditure to date in 2008/09. There is slippage on the construction costs and legal fees (as set out above) have exceeded the original budget. Variance Total 08/09 Actual bet actual 2008/2009 projected Profiled Expenditure and budget outturn Budget to date profiled £000 £000 £000 £000 £000 Convent Way HH company expenditure Legal advice 8 30 15 14 - 1 Tax advice 6 3 0 0 - Development Fees 20 16 7 7 - 0 Client side costs 14 12 - - New Build Payment to contractor 1,100 100 - - Total HH company expenditure 1,148 161 22 21 - 1 4. Beavers Lane 4.1. Planning approval has been granted and contracts are now being finalised for Board approval. Secretary of State consent for the land transfer and grant will be required and the Council is undertaking a feasibility and value for money review. 4.2. The project team has identified that due to the fall in projected sales values this project is not viable without additional subsidy. Various options have been identified and the appraisal below assumes the additional £510k regen grant and that grant is used by A2/DHG to support the Shared Ownership Units. There is still a shortfall and negotiations with the Homes and Communities Agency (HCA) have begun and activity is set out below: The project team has submitted a formal application to the HCA. Should HCA indicate that they are not able to support this project an alternative source of subsidy will need to be identified. The Council and Hounslow Homes have begun to analyse the issues presented by the Grant Agreement with the HCA. The Council and Hounslow Homes have selected a firm of solicitors following a competitive process to represent us in our negotiations with HCA, ( Devonshires ). Trowers already act for the HCA. Work is ongoing to explore the best means of managing the risks inherent in bidding for HCA grant (ie that grant may be repayable and that HH performance may fall below an acceptable standard). The HCA Grant Agreement requires the Council to act as Guarantor of HH including, the repayment of grant if in the view of the HCA there are performance failures. At the present time the Council believe that means they have a contingent liability, for which they do not have budgetary scope. We are exploring a solution involving performance bonds but these require counter indemnities. We will also explore with the Council, the nature of their Contingent Liability view and will update members at the meeting on latest developments. 4.3 In the meantime tenants are being actively encouraged to transfer from the blocks at Beavers and the Council are making good progress in buying out leaseholders. The table below sets out the progress on this. There are currently 20 void properties, most of which could be let as temporary accommodation. Housing Management are to agree a contract with LBH for the management of this accommodation. Void works are likely to be required in each one before letting. Original occupancy Current Occupancy Tenants Leaseholders Void/temp Total Tenants Leaseholders Void/temp Total Block 1 260-294 Beavers 10 8 18 6 4 8 18 Block 2 324-358 Beavers 15 3 18 12 2 4 18 Block 3 13-47 Chester 12 5 1 18 9 3 6 18 Block 4 14-48 Chester 16 2 18 13 1 4 18 Total 53 18 1 72 40 10 22 72 4.4 Current indications are that not all tenants who wish to remain on the estate will be accommodated within the first phase of the affordable new build. Therefore (in order to offer the developer vacant possession of block 2), it is proposed to offer some residents a temporary decant while phase two is under construction. The additional cost of this course of action is estimated to be £5,700. This will reduce as more tenants move away from the estate and it may not be necessary at all in the end. Financing of the scheme 4.5 The developer’s current financial appraisal of the Beavers Lane scheme is summarised in the table overleaf. The project team has identified that due to the fall in projected sales values this project is not viable without additional subsidy and a formal approach has been made to HCA for grant support. Beavers Lane Estate Regeneration Development Appraisal July 2008 Planning Approval - Proposed Legal Contract Programme - With SO Grant Summary: % £ £ £ Income: Sales Revenue Private 21,605,000 LCHO 1,450,000 Shared Ownership 4,362,568 Total Sales Value 27,417,568 Other Income 4,591,000 Total Income 32,008,568 Expenditure: Land Assembly 3,681,000 Construction Cost 22,996,874 On-Costs 2,957,620 Other Costs 828,582 Total Expenditure 30,464,077 Developer Return 7.70% 1,544,491 Required Developer Return = 16% 2,980,000 Surplus/-Deficit = - 1,435,509 4.6 The proposed grant bid to the HCA totals some £2.8m, and covers the £1.4m shortfall set out above as well as provision for the 10 leaseholder units which do not appear to be required by existing leaseholders on the estate. The developer’s cost plan assumes income of £1.45m from the sale of these units. The calculation for the grant bid is set out overleaf. HCA Grant bid for Beavers Lane Costs and Grant Income Summary Leasehold re-purchasing costs (estimated) - £3,100,000 Tenant home loss and disturbance costs (estimated) - £290,000 S106 and Legal costs (estimated) - £682,000 Total land assembly and vacant possession costs (estimated) - £4,072,000 Affordable construction costs - £7,414,553 Hounslow Homes on costs (estimated) - £300,000 Total scheme costs (for HH affordable units) - £7,714, 553 Total scheme costs (for HH units) plus land assembly - £11,786,553 London Regional Housing Board Grant - £3,516,000 LB Hounslow Affordable Housing Fund - £1,075,000 Total other public subsidy / grant income - £4,591,000 Cross-Subsidy Required from Private Sales - £7,195,553 Originally assumed level leading to reduction in land value achievable: Value of free Council land for private units @£45,000 per plot - £4,300,000 Shortfall - £2,895,553 4.7 A response from HCA is awaited. 4.8 The HRA costs on this project relate to the regeneration works to be undertaken at Clements Court. Council approval is currently being sought for Phase 1 (works to the Tower block). This will be followed by carpark demolition (phase 2), creation of a community/adult training centre (phase 3) and environmental improvements (phase 4). Phases 3 and 4 will require Finance Sub-Committee approval and this will be sought as projects come forward. Cash Flow Forecast 4.9 Hounslow Homes costs will be funded by S24 /25 grant from LBH (for which Secretary of State consent is required). Until grant can be paid, any costs incurred by HH are unfunded and sit on the company’s balance sheet. It is not anticipated that consent will be achieved this financial year. Budget against actual 2008/09 4.10 The table below shows the total HH budget for Beavers Lane in 2008/09, the profiled budget and actual expenditure to date as at period 9 2008/09. There has been some slippage on the projected decanting programme, which is now underway. Legal costs have already reached the budget level and a revised projection is being sought and must be fully funded from within the cost plan. Provision for this has been made in the grant bid to HCA. P9 Monitoring Variance Total 08/09 Actual bet actual 2008/2009 projected Profiled Expenditure and budget outturn Budget to date profiled £000 £000 £000 £000 £000 Beavers HH Expenditure HRA Regeneration Works 1,670 250 - - - Internal Fees 16 16 - - - Total HRA 1,686 266 - - - HH company expenditure Decanting 200 100 40 39 - 1 External fees - - Legal advice 36 67 57 57 0 Tax advice 6 6 6 6 - 0 Development Fees 69 23 18 18 - 0 Consultation costs - - 0 0 Clerk of works 39 18 - - Internal Fees 27 27 - - - Construction costs 1,964 - - - - Total HH company expenditure 2,341 241 121 119 - 2 Total all HH Expenditure 4,027 507 121 119 - 2 5 Heston Area Sites 5.3 The original LDA bid (and approval) envisaged a scheme of 155 units of which 87 would be for affordable use with the remaining 68 being sold for private sale to provide the necessary cross subsidy. This proposal has, however, been adversely affected by the current problems in the housing sales market. 5.4 Lovell have now produced 2 alternative proposals which are set out as a. and b. below. a. Provides 200 units (of which 87 are affordable) This proposal demonstrates that a scheme of 200 units will be needed to make the 87 affordable units viable (at the expense of future affordable housing provision). A 200 unit scheme will be dependent on the views of planners, members and residents. b. Provides 155 units (of which 87 are affordable) but which requires £5.5m of additional subsidy. Various means of levering in additional subsidy are to be explored. 5.5 The cost plan for option b is set out overleaf. 5.6 Additional subsidy could be funded by Social Housing Grant from the HCA, or from LBH’s Affordable Housing Fund, or by increasing the percentage of the LDA grant awarded for the Regeneration proposals. A further option would be to secure borrowings from a private funder which would be repaid via future rental income. Revenue sale unit type number size value total 1 bed flat 23 43 2 bed flat 16 63 2 bed house 13 65 3 bed house 12 80 4 bed house 4 105 68 £15,035,979 intermediate unit type number size value total 1 bed flat 0 46 2 bed flat 12 70 3 bed house 10 90 4 bed house 3 140 25 £4,426,548 rent unit type number size value total 1 bed flat 46 2 bed flat 28 70 3 bed house 25 90 4 bed house 9 140 62 £900,000 Freehold reversion £210,375 155 total £20,572,901 cost construction brabazon £10,370,360 northfield redwood passingham £5,190,147 norman £3,036,833 total £18,597,340 inflation £2,221,204 selling costs sale £526,259 3.5% intermediate £110,664 2.5% total £636,923 Profit £15,035,979 £2,706,476 18% £4,426,548 £663,982 15% £9,368,345 £655,784 7% total £4,026,242 legals £300,000 SD £250,000 £550,000 total £26,031,710 residual Value -£5,458,809 Grant @ £88K £5,456,000 5.7 Lovells are developing a proposal for HCA submission and this is to be looked at in detail by the project team at its next meeting with residents will not begin until a viable scheme and programme are agreed. 5.8 An umbrella agreement linking individual sites/estates to the intentions of the project as a whole and to enable planners to take the whole project into consideration as they receive individual applications is in development. Planners are still to take legal advice on the suitability of the proposed framework and LBH officers are to chase progress on this. 5.9 Apollo are to deliver the environmental improvements on each estate and are undertaking feasibility exercise at the moment in consultation with staff and residents. As a result of this we may be able to identify that some of the grant earmarked for regeneration can be redirected to support the new build. Currently some £5.5m worth of grant is identified for the regeneration works. 5.10 In view of the ongoing difficulties with asbestos and security at Passingham House Lovell have been instructed, by way of letter of intent, to procure the removal of the asbestos in the short term, and the securing of the site prior to demolition, ahead of the signing of contracts. In order to progress the project, LBH have separately agreed to finance the design costs for the new build at Heston Farm Estate. This needs to be formally written into the Council’s underwriting agreement. Cash Flow 5.11 Hounslow Homes’ costs will be funded by S24 /25 grant from LBH (for which Secretary of State consent is required). Until grant can be paid, any costs relating to the new build and incurred by HH are unfunded. 5.12 A cash flow forecast will need to be developed once the programme and cost plan have been agreed. It is not anticipated that any spend on new build construction will be achieved in the current financial year, neither will there be significant expenditure on regeneration activity. Budget against actual 2008/09 5.13 The table overleaf shows the total HH budget for Heston, the profiled budget and actual expenditure to date in 2008/09. The original budget included a provision for construction costs, it is no longer anticipated that spend on the new build will be incurred in 2008/2009. Variance Total 08/09 Actual bet actual 2008/2009 projected Profiled Expenditure and budget outturn Budget to date profiled £000 £000 £000 £000 £000 Heston HRA Regeneration Works 79 60 - - External fees 17 29 - - Internal Fees 47 47 - - Total HRA 143 136 - - - HH company expenditure External fees 50 25 - 0 0 Legal advice 165 42 27 25 - 2 Tax advice 6 6 - 0 0 Development Fees 68 42 27 27 - 0 Internal Fees 32 32 - - Construction costs 235 - - - Total HH company expenditure 556 147 54 52 - 2 Totall all HH Expenditure 698 283 54 52 - 2 6 Manor Lane 6.3 Following significant amendments suggested by planners to the original Manor Lane project, the developer has sought proposals from architects and discussions on those proposals are now being held with planners. In particular their views are sought on the acceptable treatment of the adjacent play area. 6.4 An indicative cost plan has been put together by the developer. It assumes that fewer units can be developed on the site (as a result of planners’ comments). Should this prove to be the case, there is some potential that regeneration grant for Manor Lane could be freed up to support the Beavers Lane project. 6.5 In the meantime, as Moss Gardens presents a potential security risk, planning permission for its demolition has been sought. Planners have indicated that they have some queries for Council officers. Demolition can take place as soon as planning has been agreed, subject to LBH signing an underwriting agreement. 6.6 The Council has begun to buy out leaseholder properties. Financing of the scheme 6.7 The monies available to finance the scheme are summarised below. These figures are based on the latest (indicative) cost plan and are subject to change. LBH Affordable Total inc Resources Available by Grant Housing HRA Capital Private Decent Decent Work Type Amount Fund Resource financing Total Home s * Home s New Build 3,540 - - 14,835 18,375 18,375 Regeneration 560 - - - 560 560 Decent Homes - - - - - 693 693 Total M anor Lane 4,100 - - 14,835 18,935 693 19,628 6.8 The developers cost plan shows that the costs of building the project might total some £17,933k, leaving some £1m available. Please note that these figures are dependent on the approval of a scheme and the treatment of the play area. The project costs (including the decent homes work) are set out below. Total Ne w Build Budge t £000 HH Legal 57 LBH Legal 22 LBH land valuation 5 Tax advice 10 HH Tax/stamp duty - CPO Enquiry costs Tenant decants 137 HH Development 100 HH Clerk of works & Contract admin 59 Quantity Surveyor 11 HH In house project team 59 Lease holder buyout 1,600 LBH leasehold advisor 8 Construction costs affordable rented 3,217 Construction costs affordable lcho 254 Construction costs affordable S/O 2,979 Construction costs private 6,057 Developer oncosts 2,026 Developer return 1,333 Total 17,933 Decent Homes Work 693 Total inc Decent Homes Work 18,626 6.9 A cashflow forecast for the project will need to be developed once the scheme has been finalised. 6.10 The table below shows the total HH budget for Manor Lane in 2008/09, the profiled budget and actual expenditure to date in 2008/09. There are no significant variances in Period 9, though some slippage is now anticipated. Variance Total 08/09 Actual bet actual 2008/2009 projected Profiled Expenditure and budget outturn Budget to date profiled £000 £000 £000 £000 £000 Manor HH Expenditure HH company expenditure Decanting 67 - - - External fees 35 - - - - Legal advice 27 11 11 11 0 Tax advice 7 1 1 0 - 1 Development Fees 50 8 5 5 0 Internal Fees 23 23 - 0 0 Construction costs - - - - Total HH company expenditure 209 43 17 18 1 7 Board engagement 7.1 The New Business Working Group continues to meet and its revised terms of reference are attached at Appendix 4. It is envisaged that this group will support the development of these projects (and any other new business developments) but that the monitoring role remains with the Finance Sub- Committee. 8 Head of Equalities Comment 8.1 The Head of Equalities has been consulted in the preparation of this report and has no further comment to make Appendix 1 – Resources available to support New Build Projects LBH Affordable Total inc Resources Available Grant Housing HRA Capital Private Decent Decent by Work Type Amount Fund Resource financing Total Homes * Homes Comments Beavers Estate £000 £000 £000 £000 £000 £000 £000 New Build 3,516 1,075 - 27,417 32,008 32,008 private from Ron Sep 08 Regeneration 2,110 - 1,000 - 3,110 3,110 Clements Court Regeneration Decent Homes and other - - - - - 2,681 2,681 Works completed - for LDA monitoring only 5,626 Total Beavers and Clements Court 1,075 1,000 27,417 35,118 2,681 37,799 Heston Area New Build 991 - - 19,582 20,573 20,573 This is LDA units only based on Steve's Dec figs Regeneration 5,559 - - - 5,559 5,559 Decent Homes - - - - - 13,682 13,682 Works completed - for LDA monitoring only Total Heston Area 6,550 - - 19,582 26,132 13,682 39,814 Manor Lane private is sales value from UHL June cost plan inc New Build 3,540 - - 14,835 18,375 18,375 developer return Regeneration 560 - - - 560 560 Decent Homes - - - - - 693 693 Works completed - for LDA monitoring only Total Manor Lane 4,100 - - 14,835 18,935 693 19,628 Convent Way New Build - 1,050 - 5,532 6,582 6,582 from Lovells Jan 09 cost plan Total Convent Way - 1,050 - 5,532 6,582 6,582 Total All 16,276 2,125 1,000 67,366 86,767 17,056 103,823 Appendix 2 – Hounslow Homes New Build Expenditure Projection 2008/2009 P9 Monitoring For LBH Monitoring Variance For new Total 08/09 Actual bet actual For capital build grant 2008/2009 projected Profiled Expenditure and invoice to claim in budget outturn Budget to date profiled LBH in year year £000 £000 £000 £000 £000 £000 £000 Beavers HH Expenditure HRA Regeneration Works 1,670 250 - - - 250 Internal Fees 16 16 - - - 16 Total HRA 1,686 266 - - - 266 - HH company expenditure Decanting 200 100 40 39 - 1 - External fees - - Legal advice 36 67 57 57 0 - Tax advice 6 6 6 6 - 0 - Development Fees 69 23 18 18 - 0 - Consultation costs - - 0 0 - Clerk of works 39 18 - - - Internal Fees 27 27 - - - - Construction costs 1,964 - - - - - Total HH company expenditure 2,341 241 121 119 - 2 - - Total all HH Expenditure 4,027 507 121 119 - 2 266 - Manor HH Expenditure HH company expenditure Decanting 67 - - - - External fees 35 - - - - - Legal advice 27 11 11 11 0 - Tax advice 7 1 1 0 - 1 - Development Fees 50 8 5 5 0 - Internal Fees 23 23 - 0 0 - Construction costs - - - - - Total HH company expenditure 209 43 17 18 1 - - Heston HRA Regeneration Works 79 60 - - 60 External fees 17 29 - - 29 Internal Fees 47 47 - - 47 Total HRA 143 136 - - - 136 - HH company expenditure External fees 50 25 - 0 0 - Legal advice 165 42 27 25 - 2 - Tax advice 6 6 - 0 0 - Development Fees 68 42 27 27 - 0 - Internal Fees 32 32 - - - Construction costs 235 - - - - Total HH company expenditure 556 147 54 52 - 2 - - Totall all HH Expenditure 698 283 54 52 - 2 136 - Convent Way HH company expenditure Legal advice 8 30 15 14 - 1 30 Tax advice 6 3 0 0 - 3 Development Fees 20 16 7 7 - 0 16 Client side costs 14 12 - - 12 New Build Payment to contractor 1,100 100 - - 100 Total HH company expenditure 1,148 161 22 21 - 1 - 161 Total All Schemes HRA Expenditure 1,828 402 - - - 402 - HH Company Expenditure 4,254 577 214 211 - 3 - 161 Total All HH Expenditure 6,082 979 214 211 - 3 402 161 Appendix 3 HOUNSLOW HOMES CONVENT WAY SCHEME – AFFORDABLE HOUSING CASHFLOW DIAGRAM A F H Receipt £1,050 k L.B. HOUNSLOW Fees Noms. Agreement S25 & Land £20k Land £1,315k-----------------------------------Note :- £2,345k Value of land has reduced following Reduction in projected sales values HOUNSLOW HOMES LOVELLS Buys Affordable Fees Units £2,201k Build Cost £2,201k £144k SUMMARY OF CASHFLOWS FOR EACH OF THE KEY PARTNERS Hounslow Homes L B Hounslow Lovells Affordable Sales Total Inflows S25 Grant from LBH £2,345 k Sale Affordable to HH £2,201 k AFH Monies £1,050 k Sale Private £ 5,465 k £7,666 k Land sale to Lovells £1,315 k Outflows Fees & Internal Costs (£ 144 k) (£ 20 k) S25 Grant to H H (£2,345 k) Purchase of Land - L B H (£ 1,315 k) (£1,315 k) Build cost Affordable (£2,201 k) Costs of Construction (£ 1,438 k) (£ 3,570 k) (£5,008 k) Fees & Internal Costs (£ 81 k) (£ 201 k) (£ 282 k) Selling Costs (£ 365 k) (£ 365 k) Profit & Overheads (£ 682 k) (£ 14 k) (£ 696 k) _________ _________ _________ _________ _________ NET “CASHFLOWS” £ Nil £ Nil £ Nil £ Nil £ Nil Appendix 4 New Business Working Group Terms of Reference Purpose The New Build and New Business Working Group is primarily a strategic group of HH Board members which will be involved in the identification of new business opportunities, engage in ‘blue skies thinking’, act as a sounding board for Hounslow Homes officers and perform an advisory and steering role in relation to new business activity taking place within the organisation (including the new build projects and associated activity). Once projects have progressed to implementation or delivery stage, the monitoring role will be passed onto the Finance Sub-Committee of the Board. The life of this group is not time-limited. Its purpose is to identify opportunities for new business activity and engage in ‘blue skies thinking’ on behalf of the organisation; support the development of new business opportunities; scrutinise the development of the New Build Programme and associated activity (during the pre-construction phase) advise officers on any component part of these and other new business projects as the members deem appropriate and make recommendations for decisions to the Board and to its Finance Sub-Committee. Its terms of reference is broadly as follows: to support the exploration of opportunities for trading and developing new service offers to support the development of future new business projects (including new build) to seek approval from the Finance Committee for expenditure or additional resources required to develop new business opportunities or to best position Hounslow Homes to take opportunities forward. Subject to available resources and approvals to appoint external consultants able to advise on new business developments. to make any other recommendations that the members deem appropriate Membership and Meetings Up to 7 members of the Board - no requirements as to which constituencies they come from. The working group will appoint a Chair and Vice-Chair at its first meeting. The frequency of meetings was agreed at the first meeting of the group as bi-monthly. Appendix 4 New Business Working Group Terms of Reference Written reports will be circulated one week in advance. The working group may occasionally receive verbal reports. The Vice-Chair to manage meetings in the absence of the Chair. The meetings are to be serviced by the Company Administration Team Members of the Group in 2008/09 are: Sukhvinder Duggal (Chair), Lee Cartwright (Vice-Chair), Alf Chandler, Mohammad Chaudhry, Graham Edwards and Paula Lewis.
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