Decision details

Approval for the favoured land disposal route from the Council to CIP, and the approach for the payment by the HRA to CIP for socially rented housing.

Matter for Decision

In July 2016 Strategy and Resources approved the setting up of the Cambridge Investment Partnership (CIP) which was subsequently established in January 2017.

 

Structured in sections, the report set out the considerations, options and recommendations for land disposals between the Council and the CIP for General Fund land and Housing Revenue Account (HRA) land. The Council’s decision making process was also set out.

 

The reasons for the Council’s decision to explore the establishment of an Investment Partnership and the process by which Hill Investment Partnership Ltd (HIP) was selected as the investment partner were set out in section 3. This section also provided an explanation of the benefits the Council would derive from utilising an Investment Partnership route as the mechanism for land development; and an outline of the processes, procedures and governance framework within which the business of the CIP would be conducted.

 

The Committee were advised that section 10.4 on page 13 (separate agenda item 13 document) and Appendix 1 page 16 included typographical errors:

 

The route through the Council’s decision making processes up to the point of any land transfer to the CIP, where the Council has 50:50 representation on the board, are set out in Appendices 2 and 3 Appendix 1.

 

Report to Strategy & Resources and or Housing Scrutiny Committee

 

Decision of Executive Councillor for Strategy and Transformation

       i.          Approved the use of the preferred land disposal routes from the Council to CIP as set out in section 5.

     ii.          Noted the considerations relating to the approach to the transfer of land between the General Fund and the Housing Revenue Account as set out in sub section 4.3

   iii.          Noted the considerations arising from the Stamp Duty Land Tax (SDLT) and VAT obligations in section 7.

   iv.          Approved the approach for the payment by the HRA to CIP for social rented housing as set out in 8.

    v.          Delegated a decision to the Executive Councillor for Finance and Resources, Executive Councillor for Housing or Strategy and Transformation (as appropriate) in conjunction with the relevant Strategic Director for the final approval of a Strategic Development Brief and Proposed Land Transfer / Disposal Model to CIP for individual sites. Major sites would be reviewed at a Scrutiny Committee prior to the Executive Councillor decision to transfer the land to CIP.

 

Reason for the Decision

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

Not applicable.

 

Scrutiny Considerations

The Committee received a report from the Strategic Director.

 

Opposition Councillors made the following comments in response to the report:

       i.          Queried whether the material, financial and social risks associated with entering into an investment partnership had been thoroughly thought through. Would the relationship mean that the Council would be buying back the houses at a premium?

     ii.          Stated that the complex structure could lead to difficult outcomes, Hill Residential’s focus was on economic/financial capital and therefore their priorities would be different to ours.

   iii.          Asked if the ruling group would be willing to meet to share thoughts?

   iv.          Queried why the Council could not work independently on HRA sites like the development in Anstey Way, the houses would be built independently and rented out without the need for a third party.

    v.          Raised concern about the lack of transparency and opportunity to scrutinise decisions made. Asked whether we would use the CIP frequently?

 

The Strategic Director said the following in response to Members’ questions:

       i.          Stated that there were benefits to selling back to the HRA, the Council would benefit through the overall uplift from the surplus which it wouldn’t have normally.

     ii.          Affirmed that delays and less accurate delivery would not be accepted. The overall priorities of the two partners would align.

   iii.          Highlighted how each site would have a detailed inventory to assess if the CIP should be involved, other options would always be considered.

 

The Chief Executive highlighted that the CIP was created to introduce skill and capacity to deliver the City Council’s housing vision at speed which it could not achieve on its own.

 

The Executive Councillor for Strategy and Transformation said the following in response to Members’ questions:

       i.          The contract with Hill Residential looked complicated but had been thoroughly thought through. The deadlock partnership meant that either partner could veto a scheme which did not adhere to its interests, so one side could not be benefiting more than the other.

     ii.          The incentive for Hill Residential to successfully deliver on projects meant that it would guarantee more collaboration on complex capital projects in the future.

   iii.          Stated that 6 monthly updates could be arranged to answer any questions and report progress back to committee.

   iv.          Confirmed that he and the Executive Councillor for Finance and Resources would be happy to meet with Councillor Cantrill to share thoughts on the CIP and development queries.

 

The Committee resolved by 4 votes to 0 to endorse the recommendations.

 

The Executive Councillor approved the recommendations.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted)

No conflicts of interest were declared by the Executive Councillor.