Decision

1.        
that Cabinet notes that the existing total amount of capital grant
funding received to support the project is £5 million,
comprising £3 million from The Levelling Up Partnership and
£2 million from The Devon and Torbay Devolution Deal, and
notes that this grant funding will be used for both interim funding
of schemes before Business Cases are finalised, and for part
funding of completed schemes;

 

2.        
that Cabinet approves the principle of the funding model for the
Accommodation Repurposing Project, namely that each scheme is
funded by a combination of Homes England grant, an appropriate
level of supported prudential borrowing, with any residual funding
requirement made up from monies already received from the
Levelling-Up Partnership, the Devon and Torbay Devolution Deal (or
any other relevant affordable housing subsidy available to Torbay
Council at the time);
 

3.        
that subject to Full Council approving the £20 million
prudential borrowing, Cabinet approves the stated ambition to
create an Accommodation Repurposing Programme that is able to
deliver an average of 75 units per year and that Full Business
Cases for each scheme be presented to Cabinet for approval in due
course;
 

4.        
that subject to Full Council approving the £20 million
prudential borrowing, Cabinet provide delegated authority to the
Director of Finance, in consultation with the Cabinet Member for
Housing and Finance, to acquire sites for the Accommodation
Repurposing Programme, ahead of Cabinet consideration of a Full
Business Case (where necessary);
 

5.        
that Cabinet requests that Head of Strategic Housing and Delivery
prepare an annual report for consideration by the Overview and
Scrutiny Board and Cabinet, demonstrating progress against the
project; and
 
That Cabinet
recommends to Council:
 

6.        
that £20 million of prudential borrowing be approved to part
fund individual schemes within the Accommodation Repurposing
Programme, subject to repayment of borrowing being supported by
rental income from the schemes after deduction of projected
management and operating costs and appropriate allowances for
future maintenance cost of the properties (taking account of any
grant funding that may be available for the individual site).

Reasons for the decision

The Housing Delivery
Plan was created to bring forward opportunities over the next five
years, both for direct Council housing delivery and housing
delivery through partners.  One of the
direct interventions identified was the Accommodation Repurposing
Project, incorporating schemes designated under the title of
‘Hotels to Homes’.  This was
designed to respond to Torbay’s characteristics of having
large numbers of small urban brown-field sites many of which were
unviable leisure and holiday accommodation such as former hotels,
bed & breakfasts, and guest houses. Through this initiative,
such properties would be purchased by the Council and converted
into new homes.
 
In addition, the
Government had asked all local authorities to accelerate house
building throughout the United Kingdom. 
An increase to delivery numbers in the Accommodation Repurposing
Scheme would help Torbay towards meeting that
requirement.  Furthermore, the Council
intended to commit to this level of self-delivery through the
emerging Torbay Local Plan, as a way of demonstrating how it would
achieve its mandatory planning targets and kick-start the local
construction sector.  With the Local
Plan including this as part of the delivery trajectory for housing
(and specifically affordable housing), it was necessary to ensure
there was appropriate capital funding in place to meet this
obligation.

Alternative options considered

Option 1 – do
nothing.  This would result in under
performance against Local Plan/MHCLG delivery numbers.
 
Option 2 –
proceed with the formation of a Social Housing Delivery Programme
and associated financing.  This would
achieve all the objectives stated in this report and ensure
delivery of a large capital housing programme of new homes for the
benefit of households with a local connection to Torbay.
 
Option 3 –
partial implementation.  This was an
option however, the Council would be more susceptible to market
fluctuations in borrowing costs and potentially be unable to
upskill and increase capacity to a sufficient level, which would
impact upon the Council’s ability to deliver.  It would also not signal the right level of
commitment to the Registered Provider/private sector, which may
hinder the Council’s ability to get longer-term buy-in or
investment for wider growth.