Decision Maker: Executive
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
To consider different options and propose the
most appropriate future management arrangements for residential
properties purchased by Downshire Homes Limited, with funding
provided by Bracknell Forest Council, recognising that a similar
number of properties are owned directly by the Council. Operational
management of both portfolios is provided by the Council’s
Housing Team.
i. to consolidate the ownership and management of the Council’s housing portfolio by transferring (at market price) the Downshire Homes Ltd properties to the Council by March 2024 is agreed.
ii. that the 4 properties currently occupied by tenants holding assured shorthold
tenancies (ASTs) are offered for sale to registered social landlords is agreed, noting that they will be included in the transfer of properties to the Council if sales cannot be secured in the timescale above.
iii. to facilitate the consolidation in the most tax efficient way, supports the director(s) of DHL to progress a solvent liquidation of the company, through which its assets will transfer to the Council as shareholder and agrees to indemnify the directors, the company and the appointed liquidator against any potential claims arising from this act.
iv. a key factor in the proposed approach will be the value of the existing
loans from the Council to DHL compared with their original purchase price and funding from Council loans and that current expectations based on indicative valuations of a sample of the properties are that the sums will broadly match;
v. in the event that the value of the properties has increased materially at the time of the transfer compared with the original purchase price, its agreed that the Executive Director: Resources be authorised to use Council reserves to settle any resultant capital gains tax liability, as set out in paragraph 5.20.
vi. the Legal Services Manager be authorised to conclude the appropriate legal
agreements to enact the proposals above.
The transfer of stock from DHL to the Council is recommended on the basis that this
will facilitate a more streamlined and simplified approach to managing temporary
accommodation and the small volume of supported housing properties held in the
DHL portfolio, reducing the administrative burden and additional overhead costs
created by the current arrangement.
i. Do nothing - retain housing stock both with the Council’s wholly owned housing company DHL and with the Council directly. This is not recommended since the proposed approach enables the benefits obtained by having the DHL housing stock to be retained at a lower overall cost to the Council.
ii. Trickle transfer – to gradually transfer properties from DHL to the Council over time. This option has been discounted due to the additional costs that would be incurred in Stamp Duty Land Tax, which can be avoided by taking the recommended approach.
iii. To transfer the Council’s directly owned housing stock to DHL. This is not
recommended because the Council would need to undertake additional borrowing to on-lend to DHL for the company to fund the purchase of its properties for “best consideration”. In addition, the company needs to pay VAT on its expenditure which the Council does not, meaning that such a transfer would cost more than currently, with no added benefit.
None
Reason Key: Affects more than 1 ward;
Wards Affected: (All Wards);
Financial Impact: The financial implications of options identified will be included in the report alongside operational implications of different arrangements.
Declarations: None
Subject to Urgent Proceedings: No
Making Representations: in Writing to the Executive Director: Resources
Other reasons / organisations consulted
Representations are invited in writing to the
Executive Director: Resources / Assistant Director: Early Help and
Communities
Consultees
All Councillors
Contact: Stuart McKellar, Executive Director: Resources Email: stuart.mckellar@bracknell-forest.gov.uk Tel: 01344 352205.
Report author: Stuart McKellar
Publication date: 17/10/2023
Date of decision: 17/10/2023
Decided at meeting: 17/10/2023 - Executive
Effective from: 25/10/2023
Accompanying Documents: