Agenda item

Minutes:

Gareth Bradford reminded the Board that the report on the Affordable Housing Collaborative Delivery Vehicle, which had been noted at the last meeting had been ‘Called in’ by the WMCA Overview and Scrutiny Committee and at the meeting of that Committee held on 23 November 2020 the report had been referred back to this Board for further consideration. Tim Martin reported that, unfortunately, neither the Chair or Vice-Chair of the Overview and Scrutiny Committee were able to attend this meeting to outline the reasons for the decision of that Committee.

 

Rob Lamond read out to the Board a letter from Councillor Lisa Trickett, Chair of the Overview and Scrutiny Committee to the Chair of this Board as follows:

 

Dear Cllr Bird,

 

Re: Affordable Housing Collaborative Delivery Vehicle: Progress Update

 

As you know the Overview & Scrutiny Committee called-in the decision of the Housing & Land Delivery Board held on 2 November 2020 relating to the proposals for an affordable housing collaborative vehicle.  The reason for the call-in was stated as:

 

The panel was not made aware of the extent of need and possibility of specifying a purpose to deliver on social housing requirements. Our concern is that members have not been given the information required to make an informed decision and that this report unduly fetters the opportunity to use such a vehicle to deliver on housing need in the region.

 

Thank you for attending Overview & Scrutiny Committee on 23 November to discuss and answer questions in relation to the above.  The committee concluded that:

 

“The Affordable Housing Collaborative Delivery Vehicle: Progress Update report be referred back to the Housing & Land Delivery Board for further consideration in order that the members of that board can be assured that the proposals and the full business case provided sufficient evidence that the proposals would deliver on the intended objectives as stated at this committee by the Chair of the Housing & Land Delivery Board and the Director of Housing & Regeneration”

 

I understand that you will be re-considering the Affordable Housing Delivery Vehicle report at the next meeting of the Housing & Land Delivery Board on 13 January which, in accordance with the provisions of the WMCA’s constitution, I am able to attend and report on the findings of the Overview & Scrutiny Committee.  Unfortunately I am not able to attend due to a clash of meetings but would welcome a summary of the conversation from your reconsideration of this item.

 

Thank you.

 

The Chair reminded the Board that work on the preparation of a Full Business Case for the Affordable Housing Delivery Vehicle was on-going and that, in his opinion, the ‘Call In’ had been premature.

 

Gareth Bradford reported that the report presented to this meeting was more detailed than that submitted previously and included information on the history and context of the proposal and addressed the issues raised by the Overview and Scrutiny Committee insofar as it explained the position with ‘affordability’ with it being measured against the regional definition. He emphasised that, at this stage, the WMCA was not being asked to commit any resources in terms of finance or land and (any such decisions would be made by the Investment Board) that any concerns raised at this meeting could be included within the Heads of Terms. He assured the Board that work on the governance arrangements for the Delivery Vehicle were progressing to ensure that they were sufficiently robust.

 

He advised that any allocation of resources to the Delivery Vehicle would be subject to the WMCA’s governance requirements and that the intention was to achieve ‘additionality’ i.e. the provision of affordable housing over and above what could be delivered normally on difficult to develop sites. He also reminded the Board that in respect of ‘Housing Needs’, this was a matter for each local authority, in their role as Local Planning Authorities, to determine through the Local Plan process albeit that the WMCA worked in collaboration local authorities worked in collaboration with the WMCA with local authorities to support the delivery of such proposals particularly those on brownfield land.

                                                                             

Councillor Angus Lees concurred with the views now expressed as no decision was required at this stage with the Full Business Case still in the development stage. He suggested that this be presented to the Overview and Scrutiny Committee in the first instance for consideration. He queried how the Management Board of the Delivery Vehicle, once established, would be held to account. The Chair commented that the Delivery Vehicle would be comprised of and operated by a number of Housing Associations, all of which would be subject to their normal governance arrangements and contracts with Homes England.

 

Councillor Jacqueline Sweetman commented that the development of the Delivery Vehicle was still in an embryonic stage and that this Board had the opportunity to shape its form. She drew to the attention of the Board that many brownfield sites were often unviable for development and asked whether the WMCA would contribute to the remediation and development costs in order to off-set the negative value. She also asked, in the circumstance of loan funding, whether the WMCA would be providing guarantees for this finance. Gareth Bradford explained that the Delivery Vehicle would act as a project Sponsor and, in the same way as any other organisation, would be required to comply with the Single Commissioning Framework to access any funding. He explained that there were rules and restrictions imposed on those funds by Government and these would have to be complied with e.g. the amount of money that could be put into any one development. He gave the example of the Housing Deal Land Fund which required the WMCA to deliver 8,000 dwellings in return for £100 million. This required the average support per unit to be no greater than £12,500 across the programme as a whole (although there could be significant variations on the level of grants within individual projects).and this matter was the subject of regular reports to the Investment Board. Currently, the WMCA was on track to deliver on the target. Any applications for loans would need to be applied for in the normal way with funding only being accessed with the approval of the Investment Board. Any decisions made in respect of funding would be subject to reports to the appropriate Board in the usual way.

 

Neil Taylor asked why the vehicle was needed and what value it would add.  Gareth Bradford explained that on some sites, the risk for the development industry were just too high.  He explained that, if housing associations worked together and with the WMCA, they could achieve more than if working independently.

 

Councillor Sharon Thompson commented that given the housing need in the region the development of the Delivery Vehicle should be supported.

 

Kevin Rodgers explained that the intention had always been for the Housing Associations to work collaboratively with the WMCA with a view to providing more social housing units than defined in their respective business plans and contracts with Homes England. Subject to the approval of the Full Business Case, the Affordable Housing Delivery Vehicle would assist in fulfilling this aspiration. He explained that the majority of housing association homes were provided as social or affordable rent, or as shared ownership.  Sites that could not readily be undertaken by individual housing associations could be developed by housing associations provided that the risk was shared.  The available expertise of the 26 members of the Partnership, anchored across the West Midlands, would allow more affordable homes to be provided across the region as a whole.  By working with the WMCA, the Partnership would be able to deliver new homes on sites that the private sector would not be prepared to develop or on which they would provide only private sector housing.  He concluded by saying that the WMCA would be a member of the partnership and the delivery vehicle would be owned 50% by the WMCA.

 

Councillor Ian Courts commented that if the Delivery Vehicle could deliver more homes and sites it should be supported although a strong risk assessment process would be required to be in place.

 

Rob Lamond drew particular attention to elements of the report which addressed the concerns of the Overview and Scrutiny Committee in relation to the definition of affordable housing and the role of Housing Associations. He highlighted that social rented housing was an important offer of the affordable housing delivery vehicle and that the partnership very much reflected the shared values and objectives of both the WMCA and the housing associations.

 

Resolved:

1.    That the background, strategic context and rationale for developing a proposal between the WMCA and the West Midlands Housing Association Partnership for a collaborative Affordable Housing Delivery Vehicle to address the pressing housing affordability challenge of the West Midlands be endorsed;

2.    That the development of a Full Business Case to be prepared for the March 2021 Housing and Land Delivery Board be agreed;

3.    That it be noted that any WMCA investment into the proposed Affordable Housing Delivery Vehicle would be subject to Investment Board consideration and approval and the robust gateway approval and assurance processes for all investments made via the WMCA’s Single Commissioning Framework.

 

 

 

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