Agenda item

RESOLVED: That the current position for the loan facility for West Norfolk Housing Ltd be noted.  

Reason for Decision

To note the arrangements being progressed for West Norfolk Housing Ltd to drawdown on the loan facility from the Council.

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The Assistant Director for Transformation and Change presented the report and advised an update on the finances of the housing companies was to be provided at each meeting to the Committee. She confirmed there was movement with the loan agreement and heads of terms for West Norfolk Housing Company. She advised the draft agreement was being reviewed by the Section 151 Officer and directors.

The Deputy Chief Executive and Section 151 Officer provided further detail to the Committee and explained there was a new officer in post and further work was being done in the background surrounding the finances. She added she was confident a detailed report could be presented to the Committee in due course.

The Chair, Councillor Beales commented the new perspective was useful and sought clarification on the process.

The Assistant Director for Transformation and Change confirmed Cabinet approved the funding offer, the directors of the company would approve the offer and consider the affordability and then an officer delegated decision by the Chief Executive was taken.

The Housing Development Manager commented the loan agreement for West Norfolk Housing Company was being prioritised as once the agreement was in place the company would be able to acquire properties. He added the heads of terms were being drafted for West Norfolk Property Ltd. He commented further the West Norfolk Housing Company Board was reviewing finances and requested the drawdown facility includes the re-financing of the existing loans which was £3 million in addition to the £15 million loan.

In response to the Chair, Councillor Beales, the Deputy Chief Executive and Section 151 Officer explained additional funding was not being offered and it was only the terms and conditions which would be revised.

The Chair, Councillor Beales questioned if this was an opportunity for further capital for the Council and if this could be explored.

In response to Councillor Ring, the Housing Development Manager confirmed around £3 million had been borrowed already.

The Chair, Councillor Beales referred to West Norfolk Property Ltd and commented market rates needed to fall for affordability and the Council’s reservations on the cashflow needed to be review.

The Deputy Chief Executive and Section 151 Officer confirmed in terms of current lease arrangement, West Norfolk Property Ltd pay 70% of the income from the leases to the Council.

The Housing Development Manager confirmed it was 65% of the lease income to the Council and there was a mechanism to review this.

Councillor Morley referred to the discount given on houses to West Norfolk Property Ltd and questioned if this was cast in stone or was it subject to review at the time of purchase.

The Housing Development Manager confirmed the discount was based on market rate and the houses being purchased in bulk. He commented this was not cast in stone and could be discussed with the Board based their affordability.

The Chair, Councillor Beales commented this was an opportunity to review and improve affordability if appropriate.

RESOLVED: The Shareholder Committee are requested to note the current position for the loan facility for West Norfolk Housing.