Agenda item

Report to follow.

The Executive was reminded that there was a need to deliver more development in the form of housing in order to secure funding from the Government, such as the New Homes Bonus. The Council, in its Key Priorities, had indicated its intention to promote construction-led development.  In order to take some of the housing orientated initiatives forward, the Council would need to deliver housing development and any subsequent management thereof through either a joint venture vehicle or a development company.  Any agreed model would have as its stated objective the development of sites within or for the benefit of the borough.

To date the Council had approached its property acquisitions as opportunities had arisen in the market.  However it was often very difficult for the Council to secure sites quickly due to the current pace of market conditions plus the ability to buy land for housing development.  As a result the Council would need to look at more flexible models of delivery, through streamlined procurement options or a company structure.

In order to ascertain whether there was interest from the construction/development industry in joint venture with the Council to bring forward development, it was proposed to undertake soft market testing.

The options available to the Council would need to be fully explored by the officers after taking appropriate technical and legal advice but could range from  a limited liability company limited by shares or a limited liability partnership. There were then variations which could include a wholly owned company, joint ventures with private partners for site specific development, or local asset backed vehicles with one joint venture partner for all potential development sites.

Where the Council was awarding contracts for goods, works or services, the EU procurement regulations would apply.  In addition, the Council would need to comply with EU state aid rules and with all local authority finance and decision making requirements.

The funding and tax arrangements for each of these structures would also need to be closely looked at so that the company was structured in the most tax efficient way.  It would also be vital to ensure compliance with best value requirements and that Section 123 tests are satisfied in each transaction.  The governance arrangements of any company were also important to ensure there was sufficient transparency about future decision-making.

The Council’s advisers were working to ensure options were tailored to the strategic interests of the economic area and Surrey Heath’s aims and objectives.  Once it was clear about the appropriate structures, this would form the basis of a further detailed report to Executive.

Resolved

(i)        to create a Land and Property Board to look at the current development opportunities within the borough and progress potential development sites within its ownership;

(ii)       that the authorisations set out in the Property Acquisition Strategy be delegated to the Board; and

(iii)      to authorise the Chief Executive to further explore, through appropriate soft market testing exercises, the appropriate procurement options and/or delivery vehicles referred to in this report to further the Council’s commitment to delivering economic growth opportunities in Surrey Heath and other commercial ventures in support of Key Priority 2.