Agenda item

Report of Interim Executive Director Neighbourhood Services

Purpose of report

To update the Executive on Flexible Home Improvement Loans Limited and its status, the alternative governance structures proposed for the company and to agree the preferred model as stated within the recommendations.

Recommendations

The Executive resolves:

1.1           To delegate authority to the Executive Director Neighbourhood Services to enter into negotiations to form a consortium with other Local Authority members.

1.2           To delegate authority to the Executive Director Neighbourhood Services to engage with the procurement of a Financial Conduct Authority (FCA) regulated provider to undertake loan administration services on behalf of the consortium.

1.3           To authorise the Executive Director Neighbourhood Services to engage with the winding up of FHIL once the net assets have been transferred with the appropriate safeguards.

1.4           To delegate to the Executive Director Neighbourhood Services in consultation with the Monitoring Officer and Section 151 Officer the authority to negotiate and agree new contracts pertaining to the future of FHIL on behalf of the Council.

Resolved

(1)            That authority be delegated to the Executive Director Neighbourhood Services to enter into negotiations to form a consortium with other Local Authority members.

(2)            That authority be delegated to the Executive Director Neighbourhood Services to engage with the procurement of a Financial Conduct Authority (FCA) regulated provider to undertake loan administration services on behalf of the consortium.

(3)            That the Executive Director Neighbourhood Services be authorised to engage with the winding up of Flexible Home Improvement Loans Limited once the net assets have been transferred with the appropriate safeguards.

(4)            That authority be delegated to the Executive Director Neighbourhood Services, in consultation with the Monitoring Officer and Section 151 Officer, to negotiate and agree new contracts pertaining to the future of Flexible Home Improvement Loans Limited on behalf of the Council.

The Interim Executive Director Neighbourhood Services submitted a report to update the Executive on Flexible Home Improvement Loans Limited (FHIL) and its status, the alternative governance structures proposed for the company and to agree the preferred model as stated within the recommendations.

In response to a question regarding the benefits of the scheme to the council, the Head of Housing explained that numerous councils in England were involved in similar projects. Following the receipt of grant funding, FHIL had been established in 2008 as a not-for-profit company, limited by guarantee, to administer home improvement loans on behalf of its local authority members. FHIL currently had twelve members, including Cherwell District Council. Local authorities assisted residents to apply for the scheme but did not provide the loans.

The Head of Housing confirmed that all twelve partners were considering a similar report, and it was anticipated that all would agree the recommendations. The Interim Executive Director Neighbourhood Services confirmed that two thirds of the

If response to a query regarding how Cherwell residents had benefited from the scheme and how many legacy loans there were in the district, the Head of Housing undertook to provide the information to Executive members after the meeting.  

Resolved

(1)            That authority be delegated to the Executive Director Neighbourhood Services to enter into negotiations to form a consortium with other Local Authority members.

(2)            That authority be delegated to the Executive Director Neighbourhood Services to engage with the procurement of a Financial Conduct Authority (FCA) regulated provider to undertake loan administration services on behalf of the consortium.

(3)            That the Executive Director Neighbourhood Services be authorised to engage with the winding up of Flexible Home Improvement Loans Limited once the net assets have been transferred with the appropriate safeguards.

(4)            That authority be delegated to the Executive Director Neighbourhood Services, in consultation with the Monitoring Officer and Section 151 Officer, to negotiate and agree new contracts pertaining to the future of Flexible Home Improvement Loans Limited on behalf of the Council.

Reasons

The future of Flexible Home Improvement Loans Limited needs to be decided given the intentions of the host authority, Royal Borough of Windsor and Maidenhead. The decisions made need to give account to our legal obligations. Both within the Memorandum of Association and in accordance with Companies Act, due to Flexible Home Improvement Loans Limited being a Limited Company of which the Council has an appointed Director.

Alternative options

Option 1: Another member council, including Cherwell DC, takes over the role of managing Flexible Home Improvement Loans Limited (FHIL). This option is not considered viable as there are no other authorities willing to host FHIL. Cherwell DC does not have the capacity or expertise to host the limited company.

Option 2: Each Council administers its own loans. This option is not considered viable as if a local authority ceases to be a member, it is not permitted to take any funds out of the available fund for its own benefit. When borrowers pay back a loan, councils must ensure that the loan is paid back to the central lending fund.

Option 3: Do nothing. This option is not viable due to Royal Borough of Windsor and Maidenhead (RBWM) signalling its intentions in not being willing to be the host authority. RBWM considers the hosting of FHIL an unnecessary burden in time, effort and resource. This is stated in its Cabinet report.