To consider the Motion on Notice received from Councillor Lindsay:
This Council resolves to:
Proposer: Cllr Robert Lindsay
Seconder: Cllr Trevor Cresswell
Minutes:
231.1 The Chair of the Council invited Councillor Lindsay to move his Motion.
231.2 Councillor Lindsay said that a lot of money and time had been spent on CIFCO with the best of intentions by both officers and Councillors and that it therefore could be difficult to stand back and admit the Council was wrong in continuing to invest in CIFCO. Even if the Council had spent time and money, it did not make it right and he urged that the Council did not do that with CIFCO. He had no concerns of the way CIFCO had been managed and he recognised that the Council had earned some money from the investments pre-Covid-19. However, he was convinced that building property in the District would be better for the Council’s residents and provide for the genuine housing needs in the District. The profit from the sale of market homes could be used to build social housing in the District. By building locally the Council would put money back into the local economy. The additional housing would also count towards the Five-year Housing Land Supply and the Council would take charge of the Council’s own housing supply rather than leaving this to the private sector. Private developers build for profit and not for need. However, there were examples in the District of houses built with far better environmental standards and isolation than building regulations required, and he hope the Council would pursue this. The time and effort spent on CIFCO could be spent instead to identify sustainable sites for homes in the District. The Council already had the vehicle for doing this with Babergh Growth and the joint venture with Norse, which currently only focused on developing the old Headquarters in Hadleigh. Leaving house building entirely to the private sector was a mistake and he felt that the Council was shirking from its responsibility to its residents and he asked that the Council embrace change and supported the Motion.
231.3 Councillor Lindsay then referred to Motion 14b as detailed in the Agenda:
231.4 Councillor Lindsay PROPOSED the Motion, which was SECONDED by Councillor Cresswell.
231.5 Members debated the Motion including:
· That it was a good idea to invest in the District and that Babergh Growth was the vehicle for this.
· That investing in the purchase of land and building properties, would require further loans, it took time and would delay the generation of income for the Council. This would also affect the General Fund Budget.
· The income generated from CIFCO was instant, and this income was invested in the District and benefits residents.
· That the old HQ site in Hadleigh would be providing 60 units for market sale upon completion.
· That there was a Housing and Home Action Plan under development which set targets for delivering 214 new homes by 2022 and there was a further number of properties, either required or at planning application stage throughout the District.
· That new developments included 35% affordable housing developments.
231.6 Councillor Jan Osborne detailed Babergh’s current housing development for both market and social housing. She also detailed the various housing offers available to the residents of the district.
231.7 Councillor Ward reminded Members that they had just voted for the budget, which included the income from CIFCO, he also disputed the premise that the investment was risky in the current market. He added that it was not lack of ambition but a reflection of finding suitable sites, which affected housing developments in the District. He felt that the Motion was not an honest reflection of the actual situation and he could not support it.
231.8 Councillor Malvisi was concerned that the proposed amendment suggested that the Council spend taxpayer’s money to build property to sell to property investors, which she felt was lining private investors pockets and was an unsuitable use of taxpayer’s money. The Council borrows money to invest in property which provides immediate rental income and therefore an income to the Council.
231.9 Councillor McCraw admitted that he had expressed concern when CIFCO was first discussed and that the reason behind it had been the fear of losing money. However, the Council was now making money. The Overview and Scrutiny Committee had scrutinised CIFCO’s governance structure and CIFCO’s business plan. The Committee had raised many of the concerns, which were being discussed at this meeting. The consideration had been the short, medium and long-term income from CIFCO and the responsibility to provide a service to residents. He explained that the Council borrowed money at a low rate and invested this to provide an income, which included the repayment of the loan. In addition, the income was invested back into the District, and this was the purpose of CIFCO.
231.10 Councillor Davis supported Councillor McCraw and agreed that the income was spent in the District.
231.11 Councillor Cresswell used his right to speak as seconder and agreed with Councillor Lindsay and felt that it was not appropriate to invest outside the area. There were empty properties in the District and unused sites, which could be redeveloped for housing. He felt that nothing was being done and that the housing plan did not solve the issues for everybody.
231.12 Councillor Lindsay addressed the points made by Members and said that the amendment did not suggest cutting the income from the Council and that the Motion was proposing that the Council halted all future investment in CIFCO. He added that he did not suggest that the Council sold the properties already acquired, as this would be financially unwise. He referred to a hotel project in which the Council had borrowed money to develop a hotel for a private company, which had been a policy at the time, so they could line their own pockets. However, now the Council was unwilling to follow the same policy for building market houses to sell to property investors, which would benefit the Council and its residents.
231.13 Councillor Beer pointed out that Councillor Malvisi had not used the last sentence in this context.
231.14 Councillor Lindsay responded had he had understood that Councillor Malvisi had said that one of the proposals in the amendment would be lining the pockets of private investors. He felt that there was nothing wrong with that, as this was business and had been a policy for the Council at the time. However, he continued that for the June quarter, 65% of rent had not been collected and it was not known when this would be collected. He added that that the Council should stop investing outside the area and that Councillors and officers should focus on investing in the District.
231.15 The Motion was put to Members for voting and the vote was LOST.
It was RESOLVED:-
That the Motion was lost.