Agenda item

Appendix 1 to the report is in the private section of the agenda at Item 16.

The Cabinet Member for Finance, Growth and Investment presented the inaugural five-year rolling Business Plan of Be First, the Council-owned company launched on 1 October 2017 with the key objective of driving forward the delivery of the Council’s regeneration agenda.

The Cabinet Member highlighted some of the key aspects within the Business Plan which included:

·  The outline modelling for the delivery of a minimum of 9,700 new homes in the Borough by 2023, of which over 2,200 would be delivered under the Council’s Investment and Acquisition Strategy;

·  The business modelling to achieve the £10.3m financial contribution to the Council’s Medium Term Financial Strategy (MTFS) from 2020/21 onwards;

·  Outline proposals for the establishment of a Development Company (DevCo) to enable Be First to undertake development activity;

·  Broader socio-economic benefits such as the creation of new employment and training opportunities; and

·  The governance arrangements, which would ensure that transparent monitoring and control arrangements existed between Be First and the Council as 100% shareholder.

The Cabinet Member commented that the £10.3m contribution to the MTFS, coupled with other financial benefits that would stem from the delivery by Be First of the regeneration programme, such as increased Council Tax revenue, would help to protect other vital Council services and mitigate the ongoing funding cuts imposed by the Government.

Observations were made regarding the need for Be First to include all relevant partner organisations in the planning of major regeneration schemes, to ensure that the proper community infrastructure accompanied new housing, and the important role that ward councillors could play in developing plans for an area.  In response, the Cabinet Member for Economic and Social Development advised that he intended to set up a working group which would take a holistic view of the response needed to significant increases in an area’s population.  He also acknowledged the need to involve ward councillors, although he stressed that their involvement should not be seen as an opportunity to veto projects that had already been approved.

Cabinet Members commented on the fresh impetus that Be First would be able to give major regeneration projects such as Barking Riverside and it was noted that plans had been approved by the Mayor of London and TfL for significant improvements to the rail and road network serving the area.

The Cabinet resolved to:

(i)  Approve the Be First Business Plan 2018/19 – 2022/23, at Appendix 1 to the report, subject to the appropriate legal construct for the DevCo trading vehicle Be First Developments Ltd being delegated in accordance with recommendation (ii) below;

(ii)  Agree in principle to the formation of a trading vehicle ‘Be First Developments Ltd’ and to delegate authority to the Director of Law and Governance, in consultation with the Chief Operating Officer and the Cabinet Members for Finance, Growth and Investment and Economic and Social Development, to agree with Be First the appropriate legal construct and the terms of all the requisite legal documents and agreements (including a shareholder’s agreement);

(iii)  Agree that the Council provides a state aid compliant facility of up to £100m of development funding, subject to it being within the agreed parameters of investment activity as outlined in paragraphs 3.18 and 3.19 of the report and subject to ensuring that adequate security is provided for the funding;

(iv)  Delegate authority to the Chief Operating Officer, advised by the Investment Panel, to:

a)  agree the appropriate source(s) of funding for each individual approved development proposal;

b)  approve the draw-down of development funding from the £100m facility subject to:

(i)  a positive recommendation to proceed with each individual development proposal by the Investment Panel; and

(ii)  that the funding for the facility, any drawn downs and borrowing costs are provided for in the Council’s Medium Term Financial Strategy and the Chief Operating Officer is satisfied that the funding is in line with statutory guidance on local authority investments and is state aid compliant.

c)  agree, in consultation with the Director of Law and Governance:

(i)  the terms and form of such legal agreements (as are necessary) to give effect to the £100m development facility and to enter into such agreements on behalf of the Council;

(ii)  the terms and form of legal agreements to give effect to the draw-downs as referred to above, including instruments providing security to the Council, and to enter into such agreements or security documents on behalf of the Council.

(v)  Approve the allocation of an additional £700,000 funding to Be First, to be made available in the form of an extension of the Working Capital Facility agreement, subject to the Chief Operating Officer being satisfied that it is financially prudent to do so;

(vi)  Delegate authority to the Chief Operating Officer, in consultation with the Director of Law and Governance, to approve the entering into (by Be First or the Council) of any agreement or commitments required to enable the delivery of the Council’s capital programme as commissioned subject to:

a)  compliance with relevant procurement and state aid law;

b)  being satisfied as to the appropriate terms and financial implications;

c)  being satisfied that the terms of such agreements or commitments would not cause the Council to be in breach of its Constitution.

(vii)  Delegate authority to the Chief Operating Officer, in consultation with the Director of Law and Governance, to approve the entering into (by Be First or the Council) of any agreement or commitments required to enable the delivery of any approved schemes within the Council’s Investment and Acquisition programme subject to:

a)  the endorsement of the Council’s Investment Panel;

b)  compliance with relevant procurement and state aid law;

c)  being satisfied as to the appropriate terms and financial implications;

d)  being satisfied that the terms of such agreements or commitments would not cause the Council to be in breach of its Constitution.

(Part of this item was considered after a resolution had been passed to exclude the public and press from the remainder of the meeting by reason of the nature of the business to be discussed which included information exempt from publication by virtue of paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (as amended).  During the item, the Cabinet also agreed to extend the proceedings for a reasonable period beyond the 9.00pm threshold, in accordance with the provisions of Part 2, Chapter 3, paragraph 7.1 of the Council Constitution.)