Issue - meetings

[Report of the Assistant Director for Regeneration. To be introduced by the  Cabinet Member for Housing, Regeneration and Planning.]Report to agree and investment in the Real Lettings Scheme, run by St Mungo's, alongside other Local Authorities and the GLA.  The fund acquires existing market properties that investors can use to discharge homelessness.  At the end of the scheme the homes are sold and each investor receives it's initial investment plus any capital appreciation, in addition to an annual dividend on the cash yield on investment.

The Leader of the Council introduced the report, which sought Cabinet agreement to take forward joint investment in the Real Lettings Fund.

This decision would aim to provide longer-term sustainable homes, with high quality management and move on to support provided by St Mungo’s. It would reduce the need to place homeless households in expensive and unsuitable emergency accommodation.

It would further involve a partnership with three other London Boroughs – Croydon, Lambeth and Westminster, with the Mayor of London also considering investing. The Fund would provide homes to be managed by St Mungo’s, which were noted to have an excellent record in supporting homeless people and assisting them to move on into settled housing.

The Leader expressed that this decision was not the whole or the only solution to the Council’s homelessness challenge. But was one of a suite of proposals, described in the report that would start to produce better outcomes for homeless households and ultimately reduce costs for the Council.

The Leader asked Cabinet to note that the report recommended investing in the Fund, with 30% of that investment (£4.5 million) being Right to Buy receipts. Cabinet noted that, although Lambeth have invested in the fund using their RTB receipts, the Council had sought QC’s advice as to whether this would be an appropriate use of these funds. This advice has now been received.

The Leader reported that the QC did not advise that the Council cannot use the funds in this way. He notes that he was not able to find any law or guidance specifically on this particular issue. Given the nature of the financial arrangements in this Fund, he advised that the Council should seek express consent of the Secretary of State to use the funds in this way. Officers would now seek to do this.

Consequently, Cabinet was asked to make the decision on whether to invest in the Fund contingent on the Secretary of State granting consent for making payments to the fund out of Right to Buy receipts as set out above.

Therefore the resolutions and decisions below were contingent on first receiving express  approval from the Secretary of State to use the Right to Buy receipts for these purposes.

Subject to receiving express approval from the Secretary of State to using Right To Buy receipts  Cabinet RESOLVED

1. To agree to the Council participating in the Fund as a limited partner and to invest a total sum of £15 million in the Fund for the purpose and objectives set out in section 6 of this report.

2. That this be funded from the capital budget for Temporary Accommodation Property Acquisition Scheme agreed by Full Council in the Capital Strategy in February 2017. Therefore this would be financed from the Councils own resources with £4.5m financed using Right to buy Receipts if permissible.

3. To agree to the Council entering into the nomination agreement with St Mungo’s. This agreement was ancillary to the Fund and is intended to secure nominations for  ...  view the full minutes text for item 219