Statement from Mike Robinson, Director for Economic Growth at Mansfield District Council on Mansfield Homes Limited: Local authorities now are able to establish housing development companies to meet local housing need and to raise income. This income is being used to deliver core council services. Around one third of local authorities have also adopted this approach.
The council’s aims in establishing the housing company were to increase the supply of housing and to generate income. Since June 2014 four public reports have been considered by council and five by the Portfolio Holder for Regeneration regarding the housing company. The council has a scrutiny function and the issue of the housing company was considered at the meeting of the Overview and Scrutiny Committee – Communities on 31 October. The council welcomes the involvement and challenge of all councillors in the development of this innovative and profitable business model.
The activities of the company are overseen by the directors and by the council, as sole shareholder. Indeed many of the critical activities of the company, such as the adoption of the business plan, require the written consent of the council. Therefore with the company being managed in accordance with the statutory requirements that govern companies and also being accountable to the council, all of the company’s activities, including investment, will be rigorously held to account.
The housing company operates by utilising council land with a receipt for this land being paid to the council along with a share of the profit from the sale of the properties. The remainder of the profit is retained by the housing company to facilitate further schemes.
Mansfield District Council agreed to make an £8.8m loan on a commercial basis to the housing company, as part the business plan. The loan will be used to fund the development of the housing company’s first project on Windmill Lane in Mansfield and this proposed scheme has recently been submitted for planning consideration for 23 homes.
The anticipated net income to the council from this scheme is budgeted at £900,000 in 2019/20. A full development appraisal has been prepared in support of these figures which are contained within the business plan and which includes a market appraisal and analysis for demand.
Additional development appraisal and feasibility work is underway on other sites which the housing company could develop, which will be aimed at family homes. This will be addressed in future versions of Mansfield Homes’ business plan.
This initiative is part of the council’s Transformation Plan which aims to create a 21stCentury authority, one which is able to respond to local need and deliver core services. Source