Agenda item

Discussion paper.                                                                                 (Enclosure)

The Directors presented the paper circulated with the agenda, which asked Members for an indication of what they considered an acceptable return (including monetary returns against the bottom line, other income for the Council and wider additional benefits for the Council Tax payer). The Directors would use this as the basis for assessing which potential future projects to bring before the Committee.

Members were mindful of the need to deliver new housing in the district and of the opportunities for the Council to generate income. In addition to the return on investment, other benefits the Council might enjoy could include additional income from Council Tax, Section 106 contributions and income from re-charges paid by the company for officer time. Developments could also provide wider social benefits, including the development of land that would not otherwise be developed and disrupting the housing market; this type of benefit was more difficult to quantify than the monetary returns but Members suggested that there should be some form of measure so that they could sell the benefits of any particular scheme both to the wider Councillor cohort and council tax payers.

An example was given of the Wherry’s Lane development which was being undertaken by the company; while the return on investment was projected to be lower than initially indicated, by developing the site the company had disrupted the local housing market by developing a site that may not otherwise have been developed.

Members stated that they were not unhappy with the existing rates of return against which projects were assessed, noting that some schemes that offered low rates of return could bring greater community benefits. Questions were asked about how any future projects would be funded; the possible options were through Council reserves or by the Council borrowing the funds and lending those to the company on a commercial basis.

The Committee also discussed opportunities for development through the Housing Revenue Account (HRA) and whether the Council could use the company as the delivery vehicle for HRA projects.

Members were also asked for their thoughts about whether the company should explore the rental market. Members were supportive of the principle of renting out houses however further work would need to be done to determine an appropriate vehicle through which this could be delivered.

The final matter the Directors asked the Committee to consider was the idea of changing the company’s name to bring it in line with the Council’s other companies. It was suggested that this meeting provided a timely opportunity to consider its name before the marketing of properties at Wherry’s Lane began. Following brief debate, Members proposed, seconded and agreed to change the name of the company to Homes SK.

Decision:

The name of the company should be changed from Gravitas to Homes SK

The Directors agreed that they would come back at the next meeting of the Committee with potential schemes that conformed to the returns and benefits that the Committee had indicated would be acceptable.

Committee Members discussed the refresh of the company’s business plan. The original Gravitas business plan had recently been recirculated for reference. Members asked for the development of an up-to-date, forward-looking business plan that incorporated project plans, together with targets and milestones that were challenging but deliverable.