Independent councillor points out flaws in new EDDC housing company project

Owl says: One flaw NOT pointed out is how useless EDDC is at running large projects. Knowle relocation – bungled; Exmouth regeneration – bungled; Section 106 payments – bungled and all handled with secrecy and minimal information to the public and non-Cabinet councillors, including those in their own party.

If they can’t control these projects what hope do we have of them controlling bigger ones? And as for which developers they will choose …

A housing company that could allow council bosses to better respond to market pressures has received early support – but a Sidmouth councillor argues there are ‘huge risks’ to taxpayers that need to be tightly controlled.

Agenda papers say an East Devon District Council-owned (EDDC) company, free from red tape, could play a key role in increasing supply of homes and meeting demand when private developers fall short.

However, Councillor Cathy Gardner raised concerns that it is not a ‘local’ housing company and will in fact be able to develop anywhere in the country.

She said: “EDDC has been good at looking after its council houses, but this isn’t about developing council houses. They may decide they want to build elsewhere in the country where they can make more profit. That might be all right if it was limited to building ‘affordable’ housing here, but that’s not written into the terms.

“It needs to answer so many questions – is the company being set up to meet housing needs in East Devon or is it more about profit, because it can take that money into its general funds? Where is the money coming from to set it up? EDDC may have fantastically good intentions, but the devil is in the details.”

Cllr Gardner also voiced concerns about the ‘huge risk’ in speculating on the property market and said it is dependent on house prices remaining high.

Cabinet members backed the creation of East Devon Homes last week and officers will now prepare an initial business plan, identify the first projects and report back to the council.

If approved, the company will be financed by EDDC and any profits would come back to the authority. It could sell land to the company at market value – or potentially gift it – and then borrow money to finance projects.

The report says the company, run by a board of directors, will be able to operate on commercial terms, free of the ‘continual interference’ from central government.

Supporting the proposals, Councillor Jill Elson, EDDC’s portfolio holder for homes and communities, said: “This presents a wonderful opportunity for the council to play a more active part in the local housing market.

“We have researched the proposal carefully and fully, looked at the risks and rewards, and decided that the local housing company model is a suitable model for the council to deliver its housing ambitions.

“We are seeing high levels of demand for housing in the area and see this as a way of increasing supply consistent with the Government’s growth agenda.”

http://www.sidmouthherald.co.uk/news/eddc_housing_company_could_develop_anywhere_in_country_warns_sidmouth_councillor_1_4935216

2 thoughts on “Independent councillor points out flaws in new EDDC housing company project

  1. Should there not have been some public consultation here for such a radical plan? Whose money are they planning to gamble with? Of course I forgot it is ours!

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  2. Definitely worth listening to BBC iplayer for Radio 4, Tues 21 March 2017, File on Four – Councils in Crisis. Clear description of what these companies are all about – plugging the funding gap before councils go bust in 2020. Some have the skills to make these commercial enterprises work, others don’t. Some are already losing money, and its our money.
    This is what government wants, councils have to be self-financing with no government grants. For areas with low business rates income and lower council tax revenues this will mean financial disaster. Do we trust our councils to do well with our money and services?? Is this the way we want local government to work? Its conservative party policy, your choice on May 4!

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