In December 2019, Council approved the establishment of a Local Housing Company with the initial aim to complete 1,000 new homes by 2035 and in July 2020, Cabinet resolved that the name of the new company would be Alliance Homes (Rother) Ltd and agreed the Articles of Association and the Shareholder’s Agreement.  Following approval of four Members as board members of the Company in August 2020, the Articles of Association were formally registered with Companies House.  The Company Secretary was Christopher Crichton, Solicitor Legal Services for Wealden and Rother District Councils.

The Business Plan, attached at Appendix A to the report, had been developed to articulate the ambitions of the Company in its first year.  The Company would seek to accelerate the delivery of quality housing throughout the district, in addition to seeking to:

a.         deliver homes built to the highest environmental standards – reducing costs to the occupier whilst moving towards the Council’s ambitious zero carbon agenda;

b.         develop more affordable rented housing – to support the Council in meeting its statutory functions;

c.         develop housing for ownership, targeted at first time buyers including younger families;

d.         deliver stalled sites – aim to unlock sites with planning permission that have become stalled for various reasons;

e.         produce a return to the Council; and

f.          assist the Council in discharging its statutory homelessness duties, including development of interim accommodation.

Sites to be reviewed were included in the business plan and would be assessed against a series of criteria to determine their suitability to the Company.

The Company would favour modern methods of construction, including the use of modular housing, offsite manufacture and timber frame development, where mortgageable.  The Business Plan outlined the likely revenue costs for the Company over the following three financial years as well as high level capital expenditure and would be reviewed annually by Cabinet.  Costs would be met through a mixture of Share Capital and Loan Funding at commercial rates provided by the Shareholder, in agreement with the Council’s Section 151 Officer.

No capital income forecasts had been provided in the Business Plan as house types and phasing would be agreed as part of the full planning permission process, after which time negotiations with registered providers could be entered into, who would be key to providing cashflow for each scheme. Income and cashflow plans for each development would be provided to the Shareholder and updated in the Business Plan in advance of any commitments being made.

The Company would be staffed by Council staff and a fee paid to the Council through a Service Level Agreement.

Cabinet was pleased to agree the recommendations and thanked officers for their work in establishing the Company.

RECOMMENDED: That:

1)         the Business Plan 2020-2023 for Rother District Council’s Local Housing Company – Alliance Homes (Rother) Ltd, be approved as submitted;

2)         the issuance of up to 300,000 shares with a value of £1 each, to be drawn down in agreement with the Council’s Section 151 officer and the Shareholder’s Representative be approved;

3)         a £200,000 loan facility to the Company, to be drawn down in agreement with the Council’s Section 151 officer and the Shareholder’s Representative be approved; and

4)         an annual report be made to Cabinet on the Business Plan.

(Councillors Barnes, Drayson and Thomas each declared a Personal Interest in this matter as they were potential board members of Alliance Homes (Rother) Ltd and in accordance with the Members’ Code of Conduct remained in the meeting during the consideration thereof).