Agenda item

Brick by Brick Business Plan 2020/21

To review the proposed 2020/2021 Business Plan of Brick by Brick.

(Report to follow)


The Chief Executive of Brick by Brick presented their business plan, with a summary of the report given, during which the following was noted:


  • A working draft of the paper was presented to the Sub-Committee with a number of figures including market analysis which impacted upon forecasting due to be updated prior to presentation of the report at Cabinet.


  • Brick by Brick, had been set up to deliver new homes across variety of tenures with a view to returning a profit from development activity which would be returned to the Council on a 100% basis and used to fund other activities in the borough as needed.


  • Achievements in 2019/20 included completion of 90 homes across five different sites, 62 of which were reserved for private sales and would achieve a good return despite the current economic climate. There were also 290 homes across 11 sites envisaged to be completed within the next four to six months.


  • There were 33 more proposed sites which would deliver between 600-800 homes depending on planning permission.


  • The company focus for the 2020/21 business plan was on sustainability, which was different from previous business plans. The company strived to be a leader of the ‘one planet living action plan’ by adopting its principles as well as working to complete and be audited on set priorities.


The Sub-Committee was given the opportunity to ask questions on the content of the report.


A Member enquired about the financial relationship between the Council and Brick by Brick as the Council was a sole lender with an agreement on borrowing which was made up of 75% debt and 25% equity. The officer explained that the Council was a sole lender to Brick by Brick which was deliberate as it enabled all monies generated to be spent solely in the borough. Brick by Brick would pay a high rate on its debt, the equity element would go into shared capital.


It was asked what had prevented the completion of the 414 homes for 2020 as proposed in the 2019/2020 business plan. The officer stated that it had been anticipated that more homes would have been delivered as projected but there had been difficulties with some sites not coming forward as quickly as expected, as a result 90 homes had been delivered with 240 further homes set to complete within the next 4 months.


Clarity was sought on how decisions were made to develop one site over another. The officer said that each site went through a decision making process, with detailed site analysis and access taken into consideration.


It was further asked what community based consultation and engagement was undertaken following site identification, prior to development. Officers said that public consultation was undertaken where appropriate, individual dialogue took place with the community including discussions with Councillors and Ward Members. The board had evaluated suggested sites for possible development, highlighting any identifiable issues many years prior to the commencement of work.


There was concern that often, residents only awareness of development of a site was when they received a letter and it was suggested that Brick by Brick should explore other avenues of engagement. Additionally their approach to consultation and engagement needed to be clear, with feedback from residents carefully considered. Officers said they were open to and always exploring different ways to improve engagement and that public events as well as the use of social media were utilised to inform the public of site development ahead of letters being sent to residents.


It was asked if details on value for money and individual projects costs could be shared or made public. Officers advised the Sub-Committee that this could not be made public due to the commercially sensitive nature of the information. Information related to the costs of every scheme was provided to the Council in its position as a full shareholder. Information could not be shared beyond this remit as it could impact the Council’s business of commercial confidentiality,


Whilst the Sub-Committee acknowledged that information related to costs could not be made public due to the confidential and commercially sensitive nature of the request, Members were not convinced that the information could not be provided to the Sub-Committee. The Chair and the Sub-Committee agreed to explore how this information could be made available to Scrutiny.


A Member questioned how independent in its operations Brick by Brick was from the Council and how much oversight the Council had on procurement and contracts. The officer confirmed that the Council was not involved in the operations of Brick by Brick and the procurement of contracts took place in accordance to Brick by Brick’s internal processes which was reported in the business plan.


There was concern highlighted at the level of missing information in the report presented for Scrutiny and that this draft could have included information that would have been available at the time the report was produced.


It was suggested that the Council explore the possibility of publishing the overall RAG monitoring report discussed at monitoring meetings. The Cabinet Member agreed to take the suggestion on board for further discussion with officers.


A Member asked what was being done to build more family houses as market analysis indicated there was significant need. Officers said that they were currently looking at the viability of delivering larger units as part of future programmes. It was further questioned if there was a disparity between what was being built and housing requirements, officers said there was not, as they ensured a mix of units within each development.


It was suggested that officers include in future reports information on programme sales as well as information on the profile of costs to ensure value for money as an assurance that a rigorous quality assurance process took place throughout a scheme. It was agree that the restoration of public confidence in the benefits of Brick by Brick to the borough was vital.


At the conclusion of this item the Chair thanked the officers for their attendance at the meeting and their engagement with the Sub-Committee and questions.

In reaching its recommendations, the Sub-Committee came to the following conclusions:

  1. The Sub-Committee was disappointed with the level of information provided in the report and agreed that the Chair would work with officers when Brick by Brick was next reviewed in 2021 to refine the report.
  2. As Brick by Brick was only set-up in 2016 the Sub-Committee concluded that it was too early to draw any conclusions on its success in terms of the delivery of new affordable housing or whether it had an effective financial model.
  3. The tenure blind design approach was welcomed by a Committee for its promotion of community cohesion.
  4. Given the significant number of Brick by Brick properties planned to be acquired by the Housing Revenue Account, the Sub-Committee agreed that an item would be added to its work programme in 2020-21 to assess the effectiveness of the Housing Revenue Account’s client role.
  5. The Sub-Committee recognised that as Brick by Brick was a commercial organisation, with the Council as its sole shareholder, it was reasonable to expect a high level of public interest and agreed that a greater level of communication and transparency was needed to improve the public’s understanding of the relationship between the two organisations.  
  6. The Sub-Committee welcomed the confirmation that Brick by Brick used feedback from previous developments to refine and improve its approach to community engagement, but reflected that some of the issues incurred previously had impacted upon the public perception of Brick by Brick.
  7. The Sub-Committee agreed that a review of Brick by Brick and the Council’s engagement strategy for the development of sites would be included in its work programme for 2020-21.
  8. The Sub-Committee agreed that further explanation was needed on Brick by Brick’s financial model, including the cross-subsidisation between schemes within its development portfolio and as such an item on this would be included in its work programme for 2020-21.
  9. The Sub-Committee noted that the lending issues faced by some prospective buyers were a result of the Government’s housing regulator issuing new guidance on “housing provider” registration. Considering the potential impact upon prospective purchasers, the Sub-Committee welcomed the swift action taken to finalise the registration process and requested confirmation once this had been fully resolved.

The Sub-Committee resolved to recommend to the Cabinet Member for Homes and Gateway Services that:

  1. In the preparation of the report for the next review of Brick by Brick in 2021 that earlier engagement in the report writing process be undertaken with the Chair of the Sub-Committee to refine the report to the Sub-Committee’s specifications.
  2. Consideration be given to how to improve public understanding of the relationship between the Council and Brick by Brick, and an update provided on the work undertaken in this area when Brick by Brick was next reviewed by the Sub-Committee in 2021.
  3. An update be provided for the Sub-Committee by Brick by Brick once the registration issue had been resolved.
  4. The Council develop a ‘RAG’ monitoring approach for its housing developments, including both pipeline and on site projects and publish the report quarterly in order to further enhance transparency on housing delivery.


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