C Silva Donayre opened the item, noting that the review is to ensure that the Council is making the most effective use of its assets to support the Council's wider strategic objectives as well as its commercial strategy.
D Barrett presented the update, advising that the intention of the review is to better understand the potential that the assets have to support the Council's objectives around place and bringing forward housing and commercial opportunities that may exist. Subject to the Committee's comments and support, D Barrett confirmed that they would like to take the review to Cabinet in June. The proposal is for the Committee to consider both the review and associated funding to support the project, which is being run by a strategic asset group that has attendance for the senior leadership team.
D Barrett noted the key objectives of the project, including housing delivery, focus on regeneration activities in the town centre and neighbourhood areas, and look at future income streams. Work has been split across 3 work streams and each will require external consultant support. The 3 work streams are as follows:
- High-level review of assets
- Detailed review of each asset class
- Assessment of options to deliver work not covered by the programme
D Barrett advised that the work is costed at just over £500k, split between the HRA and General Fund, and that this work can only be partially funded at present. It is therefore proposed that the shortfall of around £211k be funded by reserves. The project will also require interim internal resource, which has been set out in the report.
Cllr Hannell commented on affordable housing and asked how much of this will be social housing, noting that the average price of a terraced house in Hemel Hempstead is currently £525,668 and a flat is currently £245,935, according to Zoopla. Cllr Hannell queried the classification of the term 'affordable'. D Barrett advised that, outside of the project, there is a current programme being delivered under the business plan for new homes, all of which are being built for social rent. This programme continues at pace with 10 construction sites open and the ambition is to bring in further social housing, with the project highlighting what housing is required. D Barrett suggested that they will look at affordable housing alongside potential private housing, though this will be confirmed by the project. A new team within the Council was recently set up to work closely with planning colleagues and this includes working with developers to bring forward more affordable housing, possibly at social rent levels.
Cllr Hannell noted the ambition of the scheme and asked if there were concerns amongst the new administration that the projected rise of Hemel Hempstead's population by 50% over the next 30 years would adversely impact the Liberal Democrats' Green Recovery Plan to save the British countryside as the majority of the new housing would be built on greenbelt land. The Chair commented that much of the work on the current report package did go through the prior administration and therefore change of policy or direction will not affect the reports. Cllr Sally Symington advised that the Local Plan is yet to be developed and that the item is not within the portfolio being discussed. Cllr Sally Symington suggested that the question therefore be taken to the Strategic Planning and Environment Overview and Scrutiny Committee.
Cllr Gale asked for further detail on why the strategic asset review is taking place now. D Barrett advised that the Council needs to identify opportunities to generate income to support its ambitions and to address the need for housing in the borough. The project will help identify the next wave of pipeline opportunities to bring forward new houses.
Cllr Gale commented that new housing has been required for some time and asked why the project was being reviewed now. D Barrett explained that the Council started building new homes around 6-7 years ago with some ready-to-go sites and a pipeline was identified for the first 5 years to bring in over 300 new homes. This pipeline will be complete in the next 2 years and therefore the intention is to prepare for the next wave. It was noted that parts of this work have already been planned and have been included in identified work plans, which is why part of the funding is already in place.
A question was raised regarding interim support and it was asked why this is a part-time role. It was stated that this role is to support the overarching strategic asset review and that consultants and other members of staff will also be involved. It was stated that it was felt a part-time role over 6 months would be most suitable.
Cllr Capozzi noted that the review would provide information to identify how much housing could be social rent, affordable rent and market rent and asked if the team would be given the Council's aspirations in terms of volumes for each of these categories to help inform their work. Cllr Capozzi suggested that the wording of 'opportunities for development or repurposing assets to support the Council's objectives should be considered' should be changed to 'must be considered as a priority' as redevelopment and repurposing would be key to avoiding building on greenbelt land. D Barrett agreed, noting that the first task will be to understand where the Council can build and that will then look at what they can viably deliver in terms of tenure.
Cllr Capozzi suggested that if tenure is considered later then this will require further review to ensure that it is appropriate for the site, stating that instead they could send out teams to consider what sites would be appropriate for each tenure. Cllr Capozzi remarked that the current contingency is too low and will likely increase. C Silva Donayre noted that work is happening in parallel to develop the pipeline and assess the demands for different types of housing that may be required. It was noted that within the second workstream, there are a number of reviews into the various portfolios, and the work is the first phase of informing future planning to make best use of the Council's assets to support its ambitions.
Cllr Capozzi referred to item 5 of the report, financial and value for money implications, and the one-off reduction to the 2023-24 HRA revenue contribution to capital, and asked if this means the capital budget will not receive £96k to deliver the project. Cllr Capozzi queried what would therefore not be delivered to the capital programme because of this. N Howcutt advised that there is an annual revenue contribution to capital of around £3m to fund future capital work, some of which are approved and others that are within the pipeline. N Howcutt explained that they are using funds as they would've done, though they will be spending them in the first year rather than putting them in reserves to use in future years.
The Chair commented that a large portfolio of assets fall under the review, though there are a number of items not within this, and suggested that the implication that it covers all the Council's property assets is incorrect. The Chair asked if they are looking at property assets that they possibly don't have a value on and suggested that they highlight the items that aren't covered by the review.
The Chair suggested that the strategic asset review may duplicate the work covered by previous stock condition surveys and asked if the costs of this have taken this into account. C Silva Donayre confirmed that they will not repeat any stock condition surveys that have already been completed and they will help inform the reviews, particularly with the garage portfolio and housing review.
Cllr Gale commented on the third work stream and asked if officers could expand on the delivery vehicles mentioned. D Barrett advised that the project is to explore all opportunities within the marketplace and that they are aware of partnership arrangements that may exist where they would work with another party to bring in skills to deliver a joint venture project. D Barrett noted that they would also look at delivery vehicles such as having a wholly owned housing company and that all opportunities will be put into a report to assess which may be best for the programme that comes forward. C Silva Donayre added that it is a short focused piece of work to ensure there is a robust basis for future decisions. Cllr Gale stated that it would be useful to have this included in future reports.
The Committee approved the proposal to take the review to Cabinet, subject to highlighting the areas not included by the review. It was confirmed that the updated report would be available to view 5 days before it goes to Cabinet.