Agenda item

·  GRE5 (Nova House)

1.  That the Business Plan for GRE5, as at Appendix 1 to the report be approved.

2.  Approved an increase in the loan facility by £5m to allow the work programme to continue in advance of any recovery via the legal proceedings, future grant from Homes England or leaseholder recovery. 

3.  Agreed to regular, at least quarterly, reports being presented to the Cabinet Committee updating on progress and risks and for a future report recommending approval of an updated shareholder agreement.

The Cabinet considered the recommendations of the Cabinet Committee for Asset Disposals from its meeting on 16^th March 2023 relating to Nova House/Ground Rent Estates 5 Limited (GRE5).

The report included the GRE5 business plan for the five years to March 2028 and an update on the refurbishment works at Nova House to address the fire safety defects identified.  The Executive Director Property & Housing summarised the current position and stated that works had been paused until the funding issues had been resolved.  The refurbishment had taken longer and cost more than the Council had originally envisaged due to the scale of defects identified.  The Council was being asked to increase the loan facility by £5m to enable works to continue.  The current total cost estimate for the works and all other costs was £28.4m.  It was noted that Homes England had provided funding and had indicated it would put more in if the Council’s contribution was agreed.  The status of the insurance claim was noted and was set out fully in the exempt appendices which were considered without disclosing any of the confidential information.  The loan would be required to be repaid to the Council from any settlement on the legal claim.  Assurance was provided that all legal and other options to minimise the financial exposure to the Council were being pursued.

The Cabinet was given a verbal update of the detailed discussion that had taken place at the Cabinet Committee meeting.  Lead Members reiterated the concerns they had previously expressed about the original acquisition and the condition of the building.  However, it was recognised that in the existing circumstances it was important to finish the works and the only viable option to fund the remainder of the refurbishment included increasing the loan from the Council as well as pursuing the other funding options set out in the report and appendix.  Lead Members asked about the engagement that was taking place with the residents to make sure they were well informed about the situation and it was noted the GRE5 directors were conducting regular liaison with them.

At the conclusion of the discussion the recommendations from the Cabinet Committee were agreed.

Resolved –

(a)  That the Business Plan for GRE5, as at Appendix 1 to the report be approved.

(b)  Approved an increase in the loan facility by £5m to allow the work programme to continue in advance of any recovery via the legal proceedings, future grant from Homes England or leaseholder recovery. 

(c)  Agreed to regular, at least quarterly, reports being presented to the Cabinet Committee updating on progress and risks and for a future report recommending approval of an updated shareholder agreement.