The Shareholder Committee met on Wednesday 13 March 2024 to discuss the future of the council's housing development company, Sixty Bricks. The committee noted the report on Sixty Bricks and that Cabinet would take the final decisions regarding its future.

Sixty Bricks - Next Steps Proposal

The committee noted the report concerning the future of Sixty Bricks, the council's wholly-owned development company. Established in 2017, Sixty Bricks successfully completed its Phase 1 development programme by the end of 2022, delivering 299 homes, 78% of which were affordable, including 188 social rent homes. However, due to challenging economic conditions, increased construction costs, softened sales values, and more expensive debt, the company's proposed future development pipeline requires significant council investment that is no longer considered viable.

The report outlined three options:

• Option 1: Continue as a conventional housebuilding company. This would require substantial Housing Revenue Account (HRA) investment, which is not currently affordable, and has not secured GLA grant funding for all projects.
• Option 2: Reset Sixty Bricks to focus on different development types. This would necessitate downsizing the business and requiring seed funding while a new business plan is developed and external funding secured.
• Option 3: Make Sixty Bricks dormant. This option was recommended as it would minimise financial exposure and achieve operational savings, while retaining the possibility of reviving the company in the future.

The committee noted the report, and it was confirmed that the Cabinet would make the final decisions regarding making Sixty Bricks dormant, approving a budget of £150,000 for specialist financial and legal advisory services, and delegating the final terms of dormancy to the Strategic Director of Resources.

Councillor Ahsan Khan, Deputy Leader (Housing and Regeneration), commended the phenomenal achievement of Sixty Bricks in bringing forward affordable housing, but acknowledged that the current market conditions meant the council's approach with the company was no longer relevant. He assured that the council would continue to seek efficiency savings.

Emma Osmundsen, Chief Executive of Sixty Bricks, thanked the council for its support and acknowledged the challenging business and economic environment leading to the proposed dormancy. She highlighted Sixty Bricks' achievements in social value, climate resilience, and the successful procurement for the Priory Court development.

Paul Lowenberg, Chairman of Sixty Bricks, also expressed disappointment but understanding of the council's position, noting the company's pride in delivering a high percentage of social rent housing.

Councillor Grace Williams, Leader of the Council, acknowledged the difficulty in finding a timely solution and praised Sixty Bricks for their sterling work and the invaluable homes they had provided, which had changed many residents' lives. She stressed the need to adapt to changing market conditions for the benefit of residents.

The committee resolved to note the report, with decisions on the specific actions to be taken by the Cabinet.