Review of Councils Governance of RBWM Property Company
To consider the review.
Adele Taylor said that the Property Company review had come out of the CIPFA governance review. 31Ten had produced an external report which included a series of actions that officers were advised to take.
Councillor Werner said that he was interviewed as part of the review process and he was pleased to see the report. He believed that there should be a focus on social housing which included social rent. Councillor Werner questioned if there was any point having the property company if the council did not provide the appropriate resources. He said that it was basically a property consultancy company and asked if the council wanted the property company to succeed. In the report, there was mention of ‘delivering XX number of homes’, Councillor Werner said that the council should be provided with an idea of how many homes.
The Chairman said that affordable housing was part of the National Planning Policy Framework. Affordable housing was a broad term and there were a number of different types.
Councillor Werner said that he wanted to see more homes that were affordable.
Adele Taylor said that the housing target was the business plan of the property company and they needed to consider the needs of the borough and ensure that the right mix of housing was provided. The property company would hit all the figures which had been asked for.
Emma Duncan, Deputy Director of Law & Strategy and Monitoring Officer, informed Members that if the council was renting property (outside certain specified exemptions), it could only do so through a housing revenue account which the council had recently closed down. RBWM had therefore decided if it wanted to go down the rented route, it would do so through the property company. This avoided the ‘right to buy’ scheme, which would have seen the council selling stock at a massive discount. To subsidise social rent, many housing associations were having to sell units at market rent and make market sales. The property company allowed the council to avoid doing this.
Councillor Werner said that affordable housing was a broad term but there was nothing in the property company’s vision about social housing.
Adele Taylor said that this was to recognise that affordable methods would not only be social housing.
Councillor Werner felt that having social housing mentioned in the vision would be useful.
Councillor Jones said that there was increased transparency coming through the council. She agreed with Councillor Werner’s comments and wanted to see social housing and affordable rent included in the vision. Homes encouraged thriving communities that were good places to live. Councillor Jones wanted to see the property company provide a good standard of homes in the borough.
Councillor Sharpe said it was good to have visibility of what was happening with the property company, the council should be informing the company of what they wanted to see being developed.
Councillor Muir said that he agreed with Councillor Jones on affordable rent. It was going to be a difficult time for many people and affordable housing was important.
The Chairman said that it was frustrating when developments came forward with no affordable housing as part of the application.
Councillor Werner suggested that social rent was incorporated into the vision of the property company.
Emma Duncan clarified that social rent was heavily regulated, affordable rent was different. If the Panel was asking the property company to provide social rent, it was effectively asking the property company to work within the constraints of an RSL.
The Chairman suggested that the vision should therefore be left as it was.
Councillor Jones argued that the document was a vision, delivery of affordable rent was all it needed to say.
Emma Duncan said that social rent was very specific for local authorities. If the Panel was asking Cabinet to consider making the property company a social rent provider, this would be substantially different to what it had done before.
The Chairman asked if the term affordable rent could be used instead.
Emma Duncan said that the intention of the property company was for affordable housing to be provided which included a wide variety of different types. It was up to the property company how that was best done. Emma Duncan recommended that if the Panel was trying to tell the property company which schemes it should use, then it would be difficult as the property company had to ensure that it was viable.
Councillor Werner said that the vision was setting out what the property company would be doing. Including affordable rent in the vision would send the property company a signal.
Councillor Sharpe said that the property company was one element of the housing stock solution, there were other organisations which would provide affordable housing.
Emma Duncan said that the property company was not treated differently to any other developer. Therefore, the council’s policy was affordable housing would apply to any site that was developed on. Affordable housing would be part of the application which would be sold at a reduced rate to a social housing provider. Emma Duncan was concerned that the Panel was asking for the property company to become a social housing provider.
Councillor Jones explained that the Panel was not suggesting that the property company became a housing association, it was just suggested that there was a focus on affordable rent. RBWM had not produced enough affordable rent in the past six years, shared ownership was not the same thing. It was important that the council gave residents the option of affordable rent.
The Chairman suggested the wording ‘a mix of tenures, to include affordable rent’.
Emma Duncan said it was important that the property company was not continually making a loss, so a mix of tenures was appropriate.
A motion was put forward by Councillor Werner to recommend to Cabinet that the wording ‘a mix of tenures, to include affordable rent’ was included in the property company’s vision. This was seconded by Councillor Jones.
A named vote was taken.
RESOLVED UNANIMOUSLY: That the Corporate Overview and Scrutiny Panel recommended to Cabinet that the wording ‘a mix of tenures, to include affordable rent’ was added into the property company’s vision.
Adele Taylor said that the Panel would have the opportunity to consider the business plan of the property company going forward.
Councillor Werner asked how detailed the business plan would be.
Adele Taylor said it would be between what had been suggested and what the Panel currently had before them, it would show the overall direction of travel for the property company.
Councillor Werner was pleased that the governance arrangements around the property company were a lot stronger than they had been.
Councillor Sharpe said that the business plan would evolve over time, it would be interesting to see the schemes as they came through.
RESOLVED UNANIMOUSLY: That the Corporate Overview and Scrutiny Panel noted the report and:
i) Offered any comments or suggested areas for further consideration.
- Review of Council's Governance of RBWM Property Company, item 144. PDF 108 KB
- Review of Council's Governance of RBWM Property Company - Appendix, item 144. PDF 152 KB