Report attached.

Exempt Appendices A, B, C and D to this Report are not available for public inspection as they contain or relate to exempt information within the meaning of Paragraph 3 of Schedule 12A to the Local Government Act 1972.

This report is in the exempt part of the agenda because it refers to information relating to the financial or business affairs of any particular person (including the authority holding that information) and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Report Title: Mercury Land Holdings (MLH) Business Plan and budget update 2026/27

Presented by: Councillor Ray Morgon, Council Leader

Cabinet:

1.         Approved the Mercury Land Holdings Limited Business Plan Update (see Exempt Appendix 3).

2.         Agreed to delegate authority to the Cabinet Member for Regeneration & Development, in consultation with the Strategic Director of Resources, the Strategic Director of Place and the Monitoring Officer, to approve the detailed business cases, related viability assessments and funding requirements for the individual schemes noted within the Business Plan as they may be presented during the business plan period, including the authority to enter into all relevant agreements to give effect to the schemes.

3.         Agreed that the previously allocated funding in the Feb 2025/26 Business Plan to MLH, up to a maximum of £270.1 million, is re-profiled to projects as updated in the Exempt Agenda, through a combination of equity investment and Subsidy Control compliant loans.

4.         Agreed to increase the MLH Working Capital Facility by £900,000 and to extend the term for a period of up 5 years, as appropriate, commencing February 2026, and to delegate authority to the Strategic Director of Resources, in consultation with the Strategic Director Place and the Deputy Director of Legal & Governance to enter into the relevant agreements to give effect to this decision.

5.         Agreed to delegate authority to the Strategic Director of Resources to agree, after consultation with the Director of Legal and Governance, the completion of all relevant agreements and appointments of relevant professionals relating to the provision of debt finance by the Council to MLH

6.        Noted that the individual schemes are subject to detailed business cases to be approved under delegated authority, as set out in Recommendation 2.

7.         Agreed to delegate to the Strategic Director of Resources, in consultation with the Assistant Director of Regeneration and Place Shaping, and the Deputy Director of Legal and Governance, the authority to determine the principles and processes by which any assets shall be disposed of and the terms of disposal to MLH.

Report Title: Mercury Land Holdings (MLH) Business Plan and budget update 2026/27

Presented by: Councillor Ray Morgon, Council Leader

Summary:

This report seeks Cabinet approval for the updated MLH Business Plan 2026/27 and its associated financial commitments. The Business Plan includes an update to the development programme and re-profiles the  ...  view the full minutes text for item 78

Report attached.

Exempt Appendices A, B, C and D to this Report are not available for public inspection as they contain or relate to exempt information within the meaning of Paragraph 3 of Schedule 12A to the Local Government Act 1972.

This report is in the exempt part of the agenda because it refers to information relating to the financial or business affairs of any particular person (including the authority holding that information) and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The Sub-Committee received a presentation outlining the background and purpose of Mercury Land Holdings (MLH), its original objectives and the rationale for its operational model. Officers explained that MLH was established to deliver private rented sector (PRS) homes, generate financial returns, and support wider housing supply and regeneration objectives. The Sub-Committee was reminded that MLH is not a registered provider and therefore cannot directly hold or manage social rented homes. Officers highlighted that redirecting MLH toward social housing would be financially unviable, potentially prejudicial to Council finances and unnecessary given the existing Housing Revenue Account (HRA) provision.

The revised motion under consideration removes the requirement for MLH to focus on social housing and instead emphasises delivering affordable homes after the company reaches break even. Officers confirmed that, with this amendment, the motion becomes workable. They explained that each MLH scheme already undergoes an individual business case demonstrating tenure mix, viability and affordable housing levels, and that officers will continue to explore opportunities to increase affordable provision within the constraints of viability and MLH’s financial obligations.

Officers then presented detailed updates on MLH’s completed schemes, pipeline delivery, financial position, and projected trajectory towards financial self sustainability. The Sub-Committee discussed the threshold at which MLH will break even, noting that PRS units under management are forecast to reach around 239 by 2030, enabling self sufficiency. Questions were raised about sales performance, market confidence, affordable housing percentages, the ability to restrict sales to Havering residents, and the potential for MLH properties to support reductions in temporary accommodation costs. Officers confirmed that MLH does not sell directly to other local authorities and that market sales are essential for liquidity and debt repayment.

The Sub-Committee also considered questions submitted in advance relating to MLH loans, repayment schedules, funding requirements for the agreed development pipeline, tenure breakdown, and viability processes. Officers confirmed that the current MLH programme is fully funded within existing budgets and that viability assessments follow standard policy with Havering achieving an average of 15% affordable housing across major schemes. Members also discussed alternative delivery models used in other boroughs, with officers explaining that while options exist, each has limitations and must be assessed against Havering’s financial position, borrowing capacity and strategic aims.

Following discussion, the Sub-Committee voted not to call an extraordinary Council meeting. Members agreed for the MLH business plan to proceed to Cabinet. The following comments were made for the benefit of the Sub-Committee for future update to Members:

– MLH producing a benefits dashboard showing impacts on temporary accommodation, general fund pressures and HRA implications;

– MLH incorporating social value commitments aligned with Havering’s Social Value Strategy;

– Consideration of flexibility between market sale and PRS units where viable.

Officers also presented business plan updates for Bridge Close, Waterloo & Queen Street, Chippenham Road, Farnham & Hilldene, and Rainham Park. Each update covered progress over the last 12 months, planned activity for the coming year, key financial movements, viability considerations and major risks.

The Sub-Committee noted planning permissions obtained, land assembly progress,  ...  view the full minutes text for item 104