Meeting Details

Meeting Summary
Scrutiny Panel
16 May 2024 - 18:00
Occurred
  • Documents
  • Attendance
  • Visitors
  • Declarations of Interests

Documents

Agenda

Part A
1 Welcome and Announcements
The Chairman will welcome members of the public and Councillors and remind everyone to use microphones at all times when they are speaking. The Chairman will also explain action in the event of an emergency, mobile phones switched to silent, audio-recording of the meeting. Councillors who are members of the committee will introduce themselves.
2 Substitutions
Councillors will be asked to say if they are attending on behalf of a Committee member who is absent.
3 Urgent Items
The Chairman will announce if there is any item not on the published agenda which will be considered because it is urgent and will explain the reason for the urgency.
4 Declarations of Interest

Councillors will be asked to say if there are any items on the agenda about which they have a disclosable pecuniary interest which would prevent them from participating in any discussion of the item or participating in any vote upon the item, or any other registerable interest or non-registerable interest.

 

5 Minutes of Previous Meeting
The Councillors will be invited to confirm that the minutes of the meetings held on 13 February 2024, 26 February 2024, 12 March 2024 are a correct record.
465
RESOLVED that the minutes of the meetings held on 13 February 2024, 26 February 2024 and 12 March 2024 be approved as a correct record.
6 Have Your Say!
The Chairman will invite members of the public to indicate if they wish to speak or present a petition on any item included on the agenda or any other matter relating to the terms of reference of the meeting. Please indicate your wish to speak at this point if your name has not been noted by Council staff.
7 Decisions taken under special urgency provisions
The Councillors will consider any decisions by the Cabinet or a Portfolio Holder which have been taken under Special Urgency provisions.
8 Cabinet or Portfolio Holder Decisions called in for Review
The Councillors will consider any Cabinet or Portfolio Holder decisions called in for review.
This report sets out the background for the review of a decision taken by the Portfolio Holder for Housing on 24 April 2024, to accept updated Viability Assumptions, used for HRA affordable housing delivery.
  1. pdf Item 8. Call in of Portfolio Holder decision on Update for Viability Assumptions used for HRA affordable housing delivery (88Kb)
    1. pdf Item 8 Appendix A. Record of decision taken - Update for Viability Assumptions used for HRA affordable housing (44Kb)
    2. Item 8 Confidential Appendix B. Decision Report - Update for Viability Assumptions used for HRA affordable housing
      • This report is not for publication by virtue of paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (financial / business affairs of a particular person, including the authority holding information).
    3. Item 8 Confidential Appendix C. Outline of reasons for the call-in, provided by Councillor William Sunnucks
      • This report is not for publication by virtue of paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (financial / business affairs of a particular person, including the authority holding information).
466
Councillor Dundas attended and, with consent of the Chairman, addressed the Panel to argue that the call-in was not about the housing shortage, but was rather about the Council being realistic. The updating of assumptions was welcomed, but queried as to whether it was done correctly and realistically. Councillor Dundas argued that the housing market was more complicated than the report implied, and that incorrect assumptions would mean higher financing costs, leading to higher rents and less money spent on repair and maintenance. The paper assumed rent rises of 25% in real terms, over the long term, but this would be higher if the assumptions were incorrect. Councillor Dundas asked if the discount rate assumption was realistic, when it diverged from the Altair figure given. The Panel was asked whether the decision would stand up to public scrutiny and was asked to minimise the risk to tenants.

Councillor Naylor attended and, with consent of the Chairman, addressed the Panel to emphasise the importance of getting the decision right, with assumptions being the foundation on which new housing would be built. The Panel was asked to consider whether the assumptions would allow the building of necessary homes, and to focus on the need to maintain the trust of residents and tenants.

The Chairman introduced the decision, which had been called in by Councillor Sunnucks for the reasons set out within the report. The decision must be taken in line with the conditions of 12.02 of the Council’s constitutional articles, and the objectives of the Strategic Plan. The timeline was given, from call-in being received and accepted as valid, to the mediation session held prior to this formal meeting, where resolution had been sought but not agreed. The rules of a call-in hearing were covered, as were the options open to the Scrutiny Panel.

Philip Sullivan, Chief Executive of Colchester Borough Homes [CBH], explained why it was recommended that this item be taken into Part B confidential session for discussion. A theoretical scenario of the Council buying five properties was used to show how, if the Council’s assumptions were made public, this would affect negotiations and potentially increase the prices set by developers or owners. The Council would not want sellers to know what the Council could pay for properties or land, as this would leave the Council at a financial disadvantage in negotiations.

A member of the Panel argued that the Council was a public organisation and should publish its assumptions, claiming that previous assumptions had been published and that others could guess as to how these had changed, and establish the Council’s limits anyway. The view was given that the commercial downside was outweighed by the importance of openness.

The Chief Executive of CBH argued the need to keep the assumptions as commercially sensitive, to protect the Council’s financial position. Some data was in the public domain such as sales values, but the Council’s assumptions used for viability assessments that inform negotiations with developers and landowners were not. The example which had been given had been a generic model. In some cases, the Council could be in competition with other bidders.

Another Panel member argued in favour of moving into confidential session. Developers could guess at what the Council’s assumptions might be, but that did not mean that the Council should not pursue being as competitive as possible. The Council had to be seen to be as careful as possible with investing public money. A Panel member noted that the consultants had advised that none of their other housing clients published their assumptions and data.

A Panel member stated that the issue was about tenants and residents getting confidence that the Council was doing the right thing, and what was in the taxpayers’ best interests. Spending must be wisely done, getting best value. If the issue could not be considered in public, due to competitors gaining a major commercial advantage, then the item must be considered in Part B of the agenda. If that was what was decided, the Panel member requested that the Panel be given a chance to scrutinise the full Housing Revenue Account [HRA] model in the future, including how the assumptions were used, later in the municipal year. The Council’s approach to the HRA was currently under review, so the Panel had the opportunity to review the whole process in open session in the future. It was noted that the Portfolio Holder for Housing was expected to provide a briefing to the Panel during 2024-25, and suggested that such a review could be timed to occur at that meeting.

RESOLVED that this item be further considered in confidential session, under Part B of the agenda.

[The record of the further consideration of this item is recorded as confidential minute 467.]
 
9 Items requested by members of the Panel and other Members
(a) To evaluate requests by members of the Panel for an item relevant to the Panel’s functions to be considered.

(b) To evaluate requests by other members of the Council for an item relevant to the Panel’s functions to be considered. 

Members of the panel may use agenda item 'a' (all other members will use agenda item 'b') as the appropriate route for referring a ‘local government matter’ in the context of the Councillor Call for Action to the panel. Please refer to the panel’s terms of reference for further procedural arrangements.
468
The Chairman expressed his hope that the next Portfolio Holder briefing from the Portfolio Holder for Housing could be scheduled for early in the 2024-25 municipal year, where the additional information requested by the Panel at this meeting could be discussed.

RESOLVED that an additional item be added to the Scrutiny Panel work programme for 2024-25, for scrutiny of the HRA [Housing Revenue Account] model and the current review of the HRA.
 
10 Exclusion of the Public (Scrutiny)
In accordance with Section 100A(4) of the Local Government Act 1972 and in accordance with The Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations 2000 (as amended) to exclude the public, including the press, from the meeting so that any items containing exempt information (for example confidential personal, financial or legal advice), in Part B of this agenda (printed on yellow paper) can be decided. (Exempt information is defined in Section 100I and Schedule 12A of the Local Government Act 1972).
Part B

Attendance

Apologies
NameReason for Sending ApologySubstituted By
Councillor Tracy Arnold Councillor Venessa Moffat
Councillor Sam McLean Councillor Kayleigh Rippingale
Absent
NameReason for AbsenceSubstituted By
No absentee information has been recorded for the meeting.

Declarations of Interests

Member NameItem Ref.DetailsNature of DeclarationAction
No declarations of interest have been entered for this meeting.

Visitors

Visitor Information is not yet available for this meeting