Agenda item

Business Plan in relation to Morehomes for the Bay (Investments) Ltd and Morehomes for the Bay (Developments) Ltd

(Cabinet Member with Special Responsibility Councillor Matthews)

 

Report of Head of Housing

Minutes:

(Cabinet Member with Special Responsibility Councillor Matthews)

 

Cabinet received a report from the Head of Housing that sought to approve the inaugural Business Plan for Morehomes for the Bay (Investments) Ltd, jointly with Morehomes for the Bay (Developments) Ltd, as per the Companies’ Articles of Association.

 

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

 

 

Option 1: Approve the Business Plan

Option 2: Do not approve the Business Plan

Advantages

In so doing the Companies and the Council will be able to seek to realise its strategic ambitions around increasing affordable housing provision within the Lancaster District in the future. Whilst this inaugural Business Plan does not set out any schemes, to have an approved Business Plan is a requirement of the Shareholder Agreement, and puts the Companies in the right position for when it wishes to seek to bring forward schemes at an appropriate time.

None identified.

Disadvantages

None identified.

In so doing the Council and the Companies will be unable to seek to realise or be limited in its strategic ambitions around increasing affordable housing provision within the Lancaster District to its full potential in the future.

Risks

No risks identified at this stage, however there will undoubtedly be as a minimum, resource implications in exploring opportunities and undertaking viability assessments in the future as well as requests for working capital loans from the Council. In addition, any viable schemes put forward will require borrowing from the Council to be on-lent putting additional financial pressure on the Council

and impact on the overall Capital Strategy programme. Currently there are risks surrounding all development opportunities within the current financial climate linked to increased PWLB rates and inflationary material / works costs which may make schemes previously considered viable as unviable – these details would be outlined in more detail with any future development opportunity reports.

That the Council’s ambitions as set out in the recently approved Lancaster Homes Strategy would not be realised. Additionally, if delays in approval of the Business Plan are experienced there are risks that opportunities which could present themselves would be lost.

 

 

The preferred option is ‘Option 1’ – that the Council’s Cabinet approve the inaugural joint Business Plan for Morehomes for the Bay (Investments) Ltd and Morehomes for the Bay (Developments) Ltd as detailed at Appendix 1 to the report. This would support the companies in having a working operational plan in how to conduct its’ business and lay down the parameters for bringing forward schemes in the future.

 

The report and associated Appendix outlined the requirements and need for a Business Plan and whilst there no schemes currently being put forward the documents outlined how schemes would be bought forward in the future.

 

Councillor Matthews proposed, seconded by Councillor Wood:-

 

“That the recommendation, as set out in the report, be approved.”

 

Councillors then voted:-

 

Resolved unanimously:

 

(1)        That Council’s Cabinet approve the inaugural Business Plan.

 

Officer responsible for effecting the decision:

 

Head of Housing

 

Reasons for making the decision:

 

The Business Plan is an important document so far as ensuring that the Companies, that are controlled by the Council (as majority shareholder) has appropriate checks and balances, systems and controls in place to ensure that its proposed business projects have appropriate financial viability, due diligence, systems to ensure sound management and delivery.  The initial Business Plan was approved by the Board of Directors of the Companies on 7th September 2022, and the Companies Shareholder Committee at their meeting on 25th October 2022 and now  required approval by the Councils Cabinet for final approval and adoption.

 

 

 

 

Supporting documents: