The Cabinet Committee of Bexley Council met on Thursday 27 June 2024 to discuss the progress of BexleyCo Limited's Business Plan. The committee noted the progress made against the plan, reviewed updated dividend forecasts, and acknowledged the updated risk register.

BexleyCo Limited Business Plan 2023 to 2033 Update

The committee received an update on the progress of BexleyCo Limited's ten-year Business Plan. Jeremy Stibbe, Chairman of BexleyCo, reported that while progress has been steady, challenges remain in the planning process, viability of sites, and the delivery of affordable homes. Construction inflation has stabilised, but build costs remain high, and sales values have declined from their 2022/23 peak, with a slower rate of sales. However, there is some optimism for market improvement later in the year and into 2025.

The update highlighted the ongoing construction of 30 new apartments at West Street, Erith, with completion scheduled for April 2025. Work has commenced on the Sidcup Library site, involving the demolition of the old building and subsequent construction of 32 apartments, due to be completed by the end of 2025. The report also detailed updates on other current development sites and the identification of six potential new Council sites for BexleyCo.

Financially, the forecast development profit for identified projects has decreased by £0.696m compared to the Business Plan, primarily due to increased costs and reduced sales values. This has led to a £0.448m reduction in the total forecast profit, which will impact expected dividends to the Council. The committee noted the updated position on dividends, which forecasts a total of £34.150m compared to the previously projected £34.550m.

The committee resolved to:

• Note the progress by BexleyCo Limited against their approved Business Plan.
• Note the updated position on dividends in Section 6 of the covering report.
• Note the updated risk register.

The meeting also included a review of strategic risks, with adverse construction market conditions and housing market trends identified as the highest risks. Mitigations include careful contractor selection, contingency planning within business cases, and close market monitoring. The report also detailed the governance and resource arrangements for BexleyCo, including the composition of its board and performance appraisal systems.

The Cabinet Committee's role in this matter is to exercise the Council's shareholder functions for BexleyCo Limited, a wholly-owned company of the London Borough of Bexley. The relationship between the Council and BexleyCo is governed by a Shareholder Agreement, which mandates annual updates to the Business Plan. The Council must comply with Section 123 of the Local Government Act 1972 when disposing of land, ensuring it obtains the best consideration reasonably obtainable. Furthermore, the Council's provision of loans to BexleyCo must be on commercial terms, in line with Section 111 of the Local Government Act 1972 and the Localism Act 2011, and must consider fiduciary duties to public finances.

The report also touched upon the company's objectives, which include supporting the Council's Growth Strategy by delivering 1,200 new homes by 2033, developing exemplar schemes, providing a range of housing types, facilitating socially successful and sustainable communities, prioritising local residents for new homes, supporting the local supply chain, and meeting the Shareholder's financial return requirements.

The meeting was attended by Councillor Baroness O'Neill of Bexley OBE (Chairman), Mr David Leaf (Leader of the Council/Cabinet Member for Resources & Transformation), and Councillor Cafer Munur (Cabinet Member for Place Shaping). Jeremy Stibbe, Chairman of BexleyCo, Graham Ward, Managing Director of BexleyCo, and Susan Smyth, Director of Finance for BexleyCo, were also present.

The minutes of this meeting can be found in the Printed minutes 27th-Jun-2024 19.30 Cabinet Committee. The agenda was published in the Agenda frontsheet 27th-Jun-2024 19.30 Cabinet Committee, and the detailed reports were made available in the Public reports pack 27th-Jun-2024 19.30 Cabinet Committee.