Agenda item

The report attached for the Panel will also be debated at Council on September 13^th 2018.

The Cabinet Member for Finance and Efficiency introduced the report which outlined the annual accounts of Aequus Developments Limited (ADL), Aequus Construction Limited (ACL) and he gave a verbal update on the annual accounts of Bath Tourism Plus (BTP).

ADL

The Cabinet Member explained that there were 22 units of accommodation and that the void rate was 3% which was below normal expectations. He added that the units were let at an acceptable and commercial level.

Panel members made the following points and asked the following questions:

Councillor Furse asked why there were only 2 Directors on ACL when there were 6 on ADL. The Cabinet Member explained that in reality both are run as one company with ACL being the construction element.

Councillor Furse asked what ‘relatively affordable’ meant. The Cabinet Member explained that a lot of thought had gone in to pitching this at a level which is right for the city while not being too high or significantly undercutting other landlords.

Councillor Furse asked what was meant by ‘streamline the refurbishment process’ (page 18 of the report). The Cabinet member stated that he would ask officers to brief the Panel on the details at a later date. Councillor O Brien suggested that officers could give more details on this at the Council meeting to be held the following day (13^th September 2018).

Councillor Furse asked what ‘administrative expenses’ were (page 32 of the report). The Cabinet Member explained that this did include the cost of the officer’s time

Councillor Rayment asked if any modelling had been done around letting at different levels. The Cabinet Member explained that certain groups had been targeted such as young professionals as this was where there had been an identified shortfall in available property. He explained that the low void rate showed that the level was pitched correctly.

Councillor Rayment asked if there were any plans to let at a social level. The Cabinet Member explained that the direction of travel was developing sites for new builds where the Council’s requirements for social housing will be met.

ACL

The Cabinet Member explained that ACL is the construction company and is in its first year. ACL was currently converting 95 flats in Keynsham.

Panel members made the following points and asked the following questions:

Councillor O Brien asked how many flats are for sale and how many for rent and at what level. She also asked about the level of risk involved. The Cabinet Member explained that the final breakdown (for sale/rent) is yet to be determined and that the objective was to be a good but not greedy landlord. He added that the risk would be if sales or rentals were not achieved but that so far there had been over 200 expressions of interest.

Councillor Davis asked if landlords will be prevented from making multiple purchases for ‘buy to let’ schemes. The Cabinet Member explained that every effort is being made to prevent multiple purchases but it is more difficult to prevent individual purchases. The Panel asked that a prevention of ‘buy to let’ purchases be written into the particulars (see resolution 1 below).

BTP

The Cabinet Member gave a short verbal update explaining that the information that will be presented to Council on 13^th September 2018 details the un-audited figures for a previous period of BTP where the management was not appointed by the Council. The Panel wished to recommend that Council request the audited accounts of BTP at a future meeting (see resolution 2 below).

The Panel RESOLVED to recommend the following to Council:

1.  Regarding properties developed by ACL, the Panel noted that multiple purchases were being prevented but recommended that single purchase ‘buy to let’ is also prevented and that this be written into the particulars/contract of properties.

2.  Regarding BTP (Bath Tourism Plus) annual accounts, the Panel noted that the update to Council contained figures from the previous management of BTP and recommended that the Council note them but request that the audited accounts be submitted to a future meeting.