Barbara Brownlee

Director of Housing

• Build 1000 council homes a year, deliver estate regeneration

• Encourage and promote job creation and economic prosperity;

• Deliver the good quality affordable housing required in the borough – 26,000 in 25 years to support the new industry

A place of opportunity, enterprise and excellence, where individuals, communities and businesses

flourish

Changing Landscape

• Localism Act• Continued reductions in funding

• Building half the homes we need & planning reforms not taking hold

• Overcrowding worsening & homelessness increasing

• Housing benefit bill rising & rents failing to drop

• Universal Credit is coming, welfare reform

• Falling household incomes & UK household debt levels

The Need for Intervention

Changing Landscape

• Councils own and control their HRA asset base – low gearing

• Significant financial surpluses embedded in HRA through reforms

• Self-financing of HRA ( £13m - £5m )

• Opportunity to increase values and leverage asset base to meet investment priorities

Our offer

• To strengthen the competitiveness of the place, the productivity of its businesses and the opportunities for local residents.

– We will commit over £100m of land;

– establish our own housing company to deliver directly;

– and prudentially borrow where the market is nervous.

Wholly Owned Company

• Intention for the Council to establish a General Fund Special Purpose Housing Company,

• The intention is not to compete with the private sector but rather to provide a catalyst for regeneration and to maintain the momentum of change.

• New housing will be developed through this vehicle to provide a range of tenures to help meet the regeneration needs of the Borough.

Commercial structure outline detail

• The WOC will act as an investment company, limited by shares

• Some properties may be sold for low cost home ownership and private sale.

• The WOC will be a lean organisation

•Develop on Council owned land,

•Access funding through the General Fund

Commercial structure outline detail

• The WOC structure, - revenue income covers the revenue costs,

• Once there is sufficient stimulus in the market the WOC will be able, if desired, to withdraw from development, sell its assets and wind up.

• The net rental income will service the interest on the debt balance between the WOC and the Council.

• The WOC will sell the affordable rent houses in order to repay its debt (and the General Fund’s own borrowings).

Commercial structure

Thurrock Council (GF)

Prudential Borrowing Issued

share capital

Loan funding

Loan and equity funding

Loan repayment and interest

Wholly Owned Housing Company

Loan repayment and interest and distributions

Land

D&B contractorM&M contractor

(HRA)

Construction contract

M&M contract

Private for sale housing

Shared Ownership Properties**

Affordable Rent properties

Rental income and open market sale receipts

Sale receipts

Sale receipts