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Ken Jones (LB Barking & Dagenham), Jim Saunders (Regenter)
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Future of LondonFUTURE FINANCE
31st May 2011
HRA Reform
HRA Reform
Ken Jones Divisional Director of Housing Strategy
context
• Council Housing Stock 19,200• 33% non decent• Housing debt free • £20m negative subsidy under current HRA
regime• no desire from tenants for LSVT• no opportunity to do meaningful business
planning• heading for the rocks
Members’ and community’s aspirations
• new build social rented council housing
• accelerate estate renewal programme
• decent homes elements almost irrelevant
• general satisfaction with the Council as landlord
Council Housing: A Real Future
• positive engagement with CLG (now HCA) from the start taking £281m debt
• ability now to plan and be creative• real incentive to make efficiencies and generate
income in HRA• adjustment to debt to discount estate renewal
stock• increase borrowing facility
future shape • Council housing in LBBD on proper business
lines – Housing Asset Management Strategy and 30 year Business Plan in production
• key elements to HAMS estate renewal taking out 3 estates new build programme 850 affordable homes
(inc 350 SR) bid made to HCA – using “Affordable Rent Product” to cross subsidise with Council land
£1.3bn investment in existing homes over 30 years
Future of LondonFUTURE FINANCE
31st May 2011
HRA Reform
HRA REFORMJim Saunders
May 2011
ABOUT REGENTER
Joint Venture – John Laing and Pinnacle Regeneration Group
Primary investor in housing-led Regeneration
Market Leader in Housing PFI
In-house expertise
Family supply chain option
6 St Andrew Street, London, EC4A 3AE www.regenter.com
MARKET BACKGROUND
Age of Austerity – Focus on economic rather than social infrastructure– Zero subsidy– Traditional PFI model dead– London – unique situation
Fundamental Reform– Localism agenda– Split Market – Social Housing vs Affordable Housing
Lack of housing supply & unmet demand– Need for large scale regeneration remains
6 St Andrew Street, London, EC4A 3AE www.regenter.com
INVESTMENT BARRIERS– what we avoid
Inefficient Procurements– Costly– Too lengthy
Uncertainty – member/officer alignment
Cookie cutter approach– market constraints requires innovation & flexibility
Short Termism
Unlevel Playing Field
6 St Andrew Street, London, EC4A 3AE www.regenter.com
INVESTMENT ATTRACTIONS – what we seek
Strategic Partnerships – play to Public/Private strengths– Value creation – place-making/transformation
Proportionate “blended” returns– mixing institutional & developer risk returns– Asset “bundle” – including Land.
Secure, long-term income streams – Sustained demand– Index linkage– Local Authority covenant
6 St Andrew Street, London, EC4A 3AE www.regenter.com
HOW DOES HRA REFORM FIT IN?
HRA Reform means for us:
Fresh start – new market place. Local authority autonomy New scope for delivering complex transformational regeneration
– off balance sheet project finance– strategic use of an alternative funding source where required
Long term rent strategy Authority-backed, index-linked performance-related payment Opportunity to drive operational efficiencies
6 St Andrew Street, London, EC4A 3AE www.regenter.com
OUR CONCLUSIONS
A New “HRA Reform” Market has to be a good thing ......BUT we need to:
Keep it simple
Move quickly
Exploit London brand
Work together
6 St Andrew Street, London, EC4A 3AE www.regenter.com
Jim SaundersManaging DirectorRegenter Limited
Mobile: 07976 407 743Direct Dial: 0207 427 [email protected]
CONTACT DETAILS
For information about the Future of London Programme please visit our website:
www.futureoflondon.org.uk
