Issue - meetings

To consider the report of the Chief Executive & Growth Director.

Corporate Services Scrutiny Committee considered the report at its meeting on 28 June 2018 and its comments will be reported.

The Chief Executive & Growth Director presented the report seeking support to explore a solution to structural challenges of building in the city through a new sustainable financing model that puts development outcomes back into the hands of the city’s leaders, so as to deliver the outcomes that the city had been asking for.

The existing development model for Exeter was under strain and arguably broken and the private sector currently controlled the majority of development in Exeter. A city-controlled fund source could control the financing and delivery of projects and subsequently control the outcomes that deliver what the city and residents had been asking for, as well as profit retention for the city. This would be a joint venture and the setting up of a Company would enable borrowing to be at a favourable rate and enable funding from Central Government to be sought.

The Portfolio Holder for City Transformation, Energy and Transport welcomed this proposal to explore different ways to achieve and control the growth of the city.

Corporate Services Scrutiny Committee considered the report at its meeting on 28 June 2018 and its comments were reported.

RESOLVED that:-

(1)        officers commit support, time and energy into exploring the benefits, risks and mechanics of a collaboration in a City Development Fund as a means of financing and delivering future developments in the Greater Exeter region and within the city.  Developments will embrace innovative solutions and a fresh approach to the procurement process to successfully compete with the scale and agility of private sector development funds;

(2)        the City Council encourage other public sector institutions within the city to commit resources to exploring the proposal for a City Development Fund; and

(3)        it be noted that the fund would operate and be governed under the following four key principles: -

·      Publicly owned: The Fund is owned and controlled by Exeter’s public-sector institutions;

·      Impact driven: The Fund has place-making as its ultimate goal. All developments are measured for success on the basis of long term impact, outcomes and social benefit;

·      Professionally run: Experienced, world class team of fund and asset directors; and

·      Locally retained profits: All excess profits from developments are kept within the Fund and recycled back into Exeter developments.

To consider the report of the Chief Executive & Growth Director.

The Chief Executive & Growth Director presented the report which sought Member support for the opportunity to explore solutions to the structural challenges of building in the city through a new sustainable financing model.  The report set out the benefits, as well as the risks and mechanics of a collaboration to create a City Development Fund as a means of financing and delivering future developments in the Greater Exeter region and within the city. This model would be unique as it was not in existence anywhere else in the UK.

Exeter’s development outcomes, faced issues which included congestion, a lack of available and affordable housing, with planning locked and land values stalled. Although Exeter was not alone, it was felt that the existing development model was under a high level of strain with a divergence between financial gains by developers and housing that would benefit the residents of Exeter.  The creation of a financing and delivery model would help to disrupt the current housing market, increase the supply of housing and consider how to solve the fundamental problem.  The private sector currently financed the majority of developments in Exeter, controlling both the timing of the city’s developments and what was delivered.  A pooled financial source would strengthen assets, allow delivery at a set pace and reduce the financial cost of such projects.

The Head of Strategic Partnerships at Exeter City Futures, Roli Martin, was also at the meeting.  He said that there would be an opportunity with the additional financing mechanism to replicate the opportunity afforded to the private sector.  He responded to a Member’s comment of the varying influence of the stakeholders. The Chief Executive & Growth Director explained that the City Council had entered into joint ventures in the past that had been successful such as the development of Princesshay and there were other examples of working with private developers. However, strategic joint ventures had their challenges.

In response to questions from Members, the Chief Executive & Growth Director explained that the Fund could not only be used for residential housing development but also for wider commercial development and complement the City Council’s direct role in delivery in a controlled way. There would also be an opportunity to work with a range of stakeholders with significant strategic sites in the city including the University of Exeter and also the NHS and, if the assets were brought together under a single development programme and funding structure, the aggregate asset pool would create greater financial power and borrowing capacity to deliver larger scale developments at pace.

It was noted that a Member’s Briefing would be held to provide further detail. 

Corporate Services Scrutiny Committee noted the report and requested Executive to approve the following:-

(1)       officers to commit support, time and energy into exploring the benefits, risks and mechanics of a collaboration in a City Development Fund as a means of financing and delivering future developments in the Greater Exeter region and within the city. Developments would embrace innovative solutions and a  ...  view the full minutes text for item 19