Issue - meetings

To consider a report of the Deputy Chief Executive (S151) considering the need to create a Teckal company.

The Cabinet had before it a * report of the Deputy Chief Executive (S151) considering the need to create a Teckal company.

The Cabinet Member for Housing and Property Services outlined the contents of the report stating that there was a need to take account of the development issues at this time, the White Paper from Government was awaited, the Right to Buy was being reconsidered and that the Local Government Association was requesting further reconsideration of the issue.  He highlighted the issues as set out within paragraph 3.3 of the report.

Consideration was given to the future stability of 3 Rivers Developments Limited and the need for a portfolio of development sites, the need to consider Right to Buy and whether the Council had the resource to sustain its own housing strategy

It was therefore:

NOTED that at this point in time, there was no need to pursue the creation of a Teckal company to deliver the Council’s objectives as per the issues and current landscape referred to in paragraph 3.3 of the report.

Note:  *Report previously circulated, copy attached to minutes.

To receive a report of the Deputy Chief Executive (S151) considering the need for a Teckal vehicle in order to help facilitate a step change in the delivery of social housing.

The Group had before it a report * from the Deputy Chief Executive (S151) considering the need for a Teckal vehicle in order to help facilitate a step change in the delivery of social housing.

The officer outlined the contents of the report, highlighting the presentation attached to the agenda pack, which considered the legal framework for delivering houses through companies.  He stated that the Council needed to be clear with regard to how it wanted a Teckal Company to work and requested that Members provide a steer to the direction of travel for such a company.

The report had been considered by the Scrutiny Committee the previous day and the Chairman of the Scrutiny Committee had been invited to the meeting today to outline the thoughts of his Committee. These included the following:

·         Whether the aims of 3 Rivers Development Limited should be reviewed and rather than the aim to make money for the Council could it be set up to provide social housing

·         Why were the Council considering the setting up of a Teckal Company and what where the implications

·         The aspirations of 3 Rivers and the plans for its future

·         Did 3 Rivers have a role for the Teckal Company and had the Cabinet and 3 Rivers considered this?

·         The issue of Right to Buy and had the impact on the HRA been considered

·         The financial options had not been considered, there were affordability issues and implications from borrowing from the PWLB

·         The benefits of a Teckal Company for MDDC and what would be the desired outcomes to include any drawbacks

·         How would a Teckal Company work – how would it impact on the HRA, Right to Buy and 3 Rivers.  Would a Teckal Company dodge the Right to Buy – there was a need to see some modelling on all of these issues

·         Whether a Teckal Company would take over from the HRA with regard to replacement houses and would such a set up control the Right to Buy

·         The need to explore the issues with other councils utilising a Teckal Company and receive further information with regard to this.

The Group had listened to the questions raised by the Scrutiny Committee and were fully in support of needing additional information in order to address some of the issues raised.

Following further discussion the Group made the following additional comments:

·         The need for a cost / benefit analysis. Whilst it may be possible for a Council to retain 10% of a development profit there may also be substantial overheads incurred in the running of a Teckal company.

·         The need for clarity in terms of the aims and aspirations of a Teckal company of which there were many different types.

·         Whether there were any benefits to using a Teckal company to outsource some services. It was felt that this was fraught with complications.

·         A need to focus on practical possibilities rather than theoretical ones.

·         A request to consider various models and additional information regarding Teckal company’s set  ...  view the full minutes text for item 26

To consider a report containing information with regard to the possible creation of a Teckal compliant company prior to it being considered by Homes PDG on 14^th September 2021.

The Committee had before it a * report containing information with regard to the possible creation of a Teckal compliant company prior to it being considered by Homes Policy Development Group on 14^th September 2021.

The Deputy Chief Executive (S151) provided a response to the question raised in public question time stating that there had been a delay since the subject of a Teckal Company had been raised 2 years ago.  He had therefore highlighted the original principles within his report. He referred to a report that was presented to the Homes Policy Development Group in July and the Member Briefing that had taken place at the beginning of September which had been well received. With regard to the outcomes, value for money was a consideration, the committee would consider the report today and make their views know (verbally via the Chairman) to the Homes Policy Development Group that was meeting the next day; a report would then be presented to the Cabinet who would consider the legal and financial information and then a recommendation would be made to Council.

The officer then outlined the contents of the report, highlighting the presentation attached to the agenda pack, which considered the legal framework for delivering houses through companies.  He stated that the Council needed to be clear with regard to how it wanted a Teckal Company to work and requested that Members provide a steer to the direction of travel for such a company.

Consideration was given to:

·         Whether the aims of 3 Rivers Development Limited should be reviewed and rather than the aim to make money for the Council could it be set up to provide social housing

·         Why were the Council considering the setting up of a Teckal Company and what were the implications

·         The aspirations of 3 Rivers and the plans for its future

·         Did 3 Rivers have a role for the Teckal Company and had the Cabinet and 3 Rivers considered this?

·         The issue of Right to Buy and had the impact on the HRA been considered

·         The financial options had not been considered, there were affordability issues and implications from borrowing from the PWLB

·         The benefits of a Teckal Company for MDDC and what would be the desired outcomes to include any drawbacks

·         How would a Teckal Company work – how would it impact on the HRA, Right to Buy and 3 Rivers.  Would a Teckal Company dodge the Right to Buy – there was a need to see some modelling on all of these issues

·         Whether a Teckal Company would take over from the HRA with regard to replacement houses and would such a set up control the Right to Buy

·         The need to explore the issues with other councils utilising a Teckal Company and receive further information with regard to this

It was agreed that the views of the committee, as set out above would be put before the Homes Policy Development Group the following day.

Note:  *Report previously circulated copy attached  ...  view the full minutes text for item 53