The Cabinet Lead Member for the Housing Development Company and oneSource Management, Councillor Ron Ower, introduced the report to Cabinet.  Thanks were given to the hard work of officers for what has amounted to a huge project producing the MLH Business Plan for 2017.

MLH aims to provide a long term revenue stream as a return on investment to the Council.  Since the inception of the property company a 65 unit scheme, Cathedral Court, has generated significant revenue for Havering.  The objectives for the company remain the same and will ensure a mix of housing provision best suited to the needs of Havering.

It was noted that this was a very encouraging report and following general discussion,

Cabinet:

1.               Agreed that the Leader of the Council after consultation with the Cabinet Member for Housing Company Development & oneSource Management, Director of Legal and Governance, the s151 Officer and the Director of Neighbourhoods and following completion of all due diligence will review and approve the detailed business plan and viability assessments relating to individual schemes within the business plan to enable them to proceed.

2.       Agreed in principle to provide further capital funding to MLH up to a maximum of £58.45m in respect of North Street and Quarles projects through a combination of equity investment and state aid compliant loans. This expenditure to be met from the capital budget for Regeneration and Development within the Approved Capital Programme to be funded from prudential borrowing.

3.       Noted the estimated gross income, capital financing costs and net income to be generated for the Council in relation to delivery of the MLH business plan as set out in section 7 of this report; and that subject to completion of due diligence, these sums will be used to update the MTFS prior to 2018/19 budget setting in February 2018.

4.       Agreed that the Leader of the Council after consultation with the Cabinet Member for Housing Company Development & oneSource Management, the Director of Legal and Governance and the s151 Officer will agree the Heads of Terms of all loan agreements. 

5.       Agreed that the negotiation and finalisation of the loan agreements, provided they are broadly consistent with the Heads of Terms, and the decision to release funding subject to satisfactory financial due diligence,  be delegated to the Section 151 officer in consultation with the Director of Legal and Governance.

6.       Agreed in principle to the disposal of assets (land/buildings) to MLH for best consideration except where it is possible for the Council to accept less than best consideration in which case the sum to be paid will be not less than market rate and delegate to the Director of Neighbourhoods, following consultation with the Director of Asset Management, the Director of Legal and Governance, and the Section 151 officer, authority to determine the principles and processes by which the said assets shall be disposed of and the terms of disposal.

7.       Delegated to the Leader of the Council following after consultation with Cabinet Member for Housing Development Company & oneSource Management after consultation with Director of Neighbourhoods and the s151 Officer, the exercising of the Council’s rights as shareholder to give effect to the above recommendations.

8.       Agreed that the Council as a shareholder of MLH to the following changes to MLH’s Board so it consists of the following Council officers, as well as an external unconnected individual who has relevant experience in the house building sector, alongside MLH’s own staff:

a.     Mercury Land Holdings Development Manager

b.     Mercury Land Holdings Project Manager

c.     Mercury Land Holdings Finance Officer

d.     Chief Executive London Borough of Havering (Managing Director of MLH)

e.     Head of Property Services, oneSource.

f.      Independent expert with experience in the sector