gloriana thurrock limited - eelga may 2016...gloriana thurrock limited matthew essex head of...
Post on 08-May-2018
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• Target of 18,500 new homes to support 26,000 new jobs (2001-2021)
• Housing delivery rates have never been good enough. In 2005 there were c.1,000 completions. In 2009 it was c.75!
• 8,000 consented homes not built• Housing development was generally of poor quality and was
increasingly in the green belt – moving away from town centre locations and reducing the benefit to our wider regeneration ambitions
• Recognise that securing a range of good quality housing was critical to supporting aspiration for more high value jobs
• Recognise the clear link between good quality housing and improved health outcomes
An appetite for Growth
• Proximity to London and connectivity to the capital and wider south east
• Capacity within the General Fund to borrow• Significant asset base within both HRA and General Fund• Growing capital project capacity within the Authority• Clear focus on delivering real change within our Growth Hubs
– particularly within Purfleet, Grays and Tilbury• A strong demand for housing
• Necessity breeding innovation – we needed to be able to generate our own capital and revenue flows
Strengths on which to build
• We wanted to get more directly involved…
• Increase housing supply rates across all tenures in response to local needs
• Encourage improvements in housing design and construction• Provide local labour and contracting opportunities• Support our regeneration ambitions by bringing forward the
right mix of housing in the right locations• Maximise the value of Council assets and borrowing capacity
• Prove to the private sector that good quality housing has a value in Thurrock
Genesis of Gloriana
Options:• HRA, Leasing, Development Partner or General Fund?
Clarity of control and risk:• Wholly owned – so separate but no third-party stakes or
interests
Clarity of funding:• General Fund borrowing – use of prudential
Clarity of purpose:• About housing but not HRA housing - no secure tenancies• About development and growth – a catalyst but not a
competitor
Gloriana: Why a Wholly Owned Company?
Gloriana: Company Structure
GlorianaWholly Owned
Company
Shareholder(Council represented by
General Services Committee)
Directors (Council Staff):Corp. Dir. Env. and Place
Head of EnvironmentSenior Financial Officer
SecondedThurrock Staff(as required)
Agency Agreements with Council
Gloriana is a lean organisation – most functions & services provided by Council as agent
Gloriana: Commercial Structure
Thurrock Council (GF)
Prudential Borrowing Issued
share capital
Loan funding
Loan and equity funding
Loan repayment and interest
Wholly Owned Housing Company
Loan repayment and interest and distributions
Land
D&B contractorM&M contractor
(HRA)
Construction contract
M&M contract
Private for sale housing
Shared Equity Properties
Affordable Rent properties
Rental income and open market sale receipts
Sale receipts
Sale receipts
• Established in 2014/15 with a Business Case for 350 homes
• Operates alongside our AHP, JVs and other GF activity – it is not the only show in town
• One project on site – St Chads in Tilbury. First of 128 new homes completing in October 2016
• Second project in planning – 80 units in Grays
• Pipeline is growing. Two further sites in feasibility which could deliver a further 300 units
• c.£50m currently deployed - anticipated return (debt and equity) is c.£18m
Achievements so far
• Consultants need close management and direction – there is no limit to what you could spend looking at options
• Governance, Governance and…Governance
• You need an answer for the inevitable: “But I’m a Councillor…”
• Building is relatively easy, development is less so
• Skills mix is critical – do you even know what/who you need?
• You will make mistakes and they will cost you money
• Principles are great but they don’t always generate a return
Lessons learned (to date…)
• 1% reduction in Council rents means that Gloriana is increasingly our preferred/default development route – it will do more than we originally thought possible
• Council land is available now but it will eventually run out –Gloriana needs to mature to be able to viably develop where it has to acquire land
• The ability to use Gloriana alongside other programmes –Estate Regeneration and Starter Homes etc
• Why just housing? Increasing opportunities around commercial and mixed use schemes
Opportunities and challenges ahead
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