Agenda item

RESOLVED: That Cabinet:

1.    Recommended to Council that a capital budget of £2.012 million is created to acquire the long leasehold interest in the six residential properties in Brackley referred to in the report and refurbish them.

2.    Subject to Council approval of the budget, authorised the Assistant Director Assets & Environment, in consultation with the Cabinet Member for Finance, to agree the terms of the acquisition and any related transactions.

REASONS RESOLVED:

1.    To allow WNC to end the historical agreement with PHA which is no longer fit for purpose and is not in line with best value objectives.

2.    To remove the requirement to pay the RSP to PHA and mitigate the Council’s exposure to annual index linked uplifts.

3.    To allow the Council to use the properties as it determined, rather than being confined by the funding agreement. This would enable the customers to receive better tailored care and support and would enable the Council to use vacant or underutilised properties to meet additional Council needs.

4.    The Council would own the properties and the interest and capital payment requirements would pay down the Council assets, rather than an asset effectively owned by a third party.

5.    The Council will have greater control over the future of the properties. If they were deemed surplus to requirements, the Council could dispose of any of them and generate a capital receipt.

ALTERNATIVE OPTIONS:

1.    Option 1 (do nothing): The Council could ‘doing nothing’, leaving the current arrangements in place, but this would mean that the customers would stay in accommodation that is not suitable for their needs and over the next 10 years the Council would pay a minimum of £1.330m in revenue support to PHA. In practice it would be higher since RPI is currently running at over 10%. In addition, the Council would continue to pay for three empty properties.

2.    Option 2 (purchase alternative properties): The Council could terminate the current arrangement and purchase alternative properties. Nothing suitable has been identified in the market. The cost of purchasing six similar properties would be higher than the £2.032m to purchase and refurbish the six Brackley properties (purchasing only three would obviously be cheaper, but the ‘surplus’ three could if not required for service purposes be sold, meaning the financial balance is still in favour of purchase). Moving the four remaining customers would also be very disruptive. They have lived in these houses, close to each other, for many years.

3.    Option 3 (leasing alternative properties). This is similar to Option 2, but the alternative properties would be leased. The estimated (average) Market Rent for these properties at the moment is around £1,895 per calendar month (£22,740pa, or £136,440pa for all six), based on a 4-bed property in Brackley. This is slightly higher than current levels of RSP. There is currently a shortage of houses in the market which is driving rental prices up further. The disadvantages of relocating the residents would remain.

4.    Option 4 (terminate the arrangement and move residents to extra care). The residents are not considered suitable for extra care accommodation at present. There currently is not any suitable extra care provision within Brackley.

5.    Option 5 (proposed purchase of PHA’s leasehold interest). This arrangement would deliver savings which grew over time, whilst enabling the Council to provide suitable care and support for the residents.

6.    The Council would also have choices about what to do with the three homes currently unoccupied. They could either be sold (thus reducing the financing costs) or used for other service purposes.

At the Chair’s invitation Councillor Matt Golby presented the report and summarised the salient points.

Councillors made the following comments.

·         It was important for the Council to be sure that it was getting good value for money.

·         The question of who would manage and live in these houses was raised.

The Executive Director Adults, Communities and Wellbeing agrees that value for money was important. These homes are due to be turned into supported living homes.

RESOLVED: That Cabinet:

1.    Recommended to Council that a capital budget of £2.012 million is created to acquire the long leasehold interest in the six residential properties in Brackley referred to in the report and refurbish them.

2.    Subject to Council approval of the budget, authorised the Assistant Director Assets & Environment, in consultation with the Cabinet Member for Finance, to agree the terms of the acquisition and any related transactions.