Agenda item

David Smith (Director of Economic Development) and Steve Grimshaw (Strategic Programme Manager) were in attendance for this item.

1.    Mr Dance (Cabinet Member for Economic Development) introduced the report that set out the No Use Empty (NUE) initiative and commended the scheme on its success.

2.    Mr Grimshaw provided Members with an update on the initiative, its future plans and sought the Committee’s support for the continuation of the scheme, including the authority to bid for additional sources of funding which would help contribute to the delivery of good quality housing in the county; and that the authority be delegated to the Director of Economic Development to ensure appropriate governance was applied when entering into legal agreements. Mr Grimshaw addressed the achievements of the NUE initiative and said that 5,911 properties had reverted back into use and that there had been a 40% reduction in empty homes since the launch of the scheme.

3.    The officer responded to comments and questions as follows:

(a)    Mr Grimshaw said that Kent County Council (KCC) took every opportunity to provide funding across the entire county, however the highest concentration of empty properties remained within the East. He assured the Committee that the NUE initiative had a proven track record and had been recognised nationally for its contribution in bringing long term empty properties back into use through other projects and funding opportunities that offered different loan products. This included interventions such as the Affordable Homes Project whereby the Homes and Communities Agency awarded £ 750,100to KCC for the NUE initiative to deliver an affordable homes scheme and Live Margate whereby the NUE was allocated £2m in 2018 from the Live Margate Project to bring long term empty properties back into use.

(b)  With regard to the renovation cost of commercial properties, Mr Grimshaw said that the average cost of renovation projects was between £50k to £60k per unit. He informed Members that the money from the growing places fund offered greater flexibility than the parameters set out within the main residential scheme.

(c)     In response to queries regarding the delegation of authority for spend, Mr Grimshaw said that the current delegation arrangements in place for Economic Development was that Mr Smith (Director of Economic Development) was permitted to approve spend up to £1m, Mr Grimshaw as the officer could approve up to £500k, however in terms of the loans themselves, Mr Grimshaw said that most of the loans were significantly smaller and would be managed within the parameters and regulations imposed by KCC Finance. Mr Grimshaw assured Members that there was a process for assessment and approval, all of which required sign off by the appropriate delegated officer, the Head of Service or Director to ensure full control over spend.

(d)  In terms of the ability to provide funding for empty sites, Mr Grimshaw said that if a building had been demolished and that site was vacant, providing it had the relevant approval to create a commercial or residential property then Kent County Council would welcome the project.  Mr Grimshaw reminded Members that whilst Kent County Council offered a range of loan products, funding was limited, and approval of such projects were reliant on outstanding loans being repaid and recycled.

(e)  Mr Grimshaw said that regardless of whether the loan was issued by KCC or other District Councils, the loan would be treated as one application under the name of KCC and only one charge would be applied to that property. Mr Grimshaw said that KCC had a service level agreement with the three district councils (Tunbridge Wells, Dover and Folkestone & Hythe) which provided money to KCC to cover risk should any loan fail to be repaid.

(f)    With regard to defaulted Top Up Loans, Mr Grimshaw said that there had only been two cases to date, with a combined  loss of £143k which represented 0.6% of the £27m that had been awarded,  but because the same loans charged interest and there were charges for delayed  repayments,  sufficient income had been generated to eradicate the bad debt.

(g)  In response to queries regarding EU funding, Mr Grimshaw said that discussions around potential EU projects had ceased. Whilst the UK Government had provided assurance that an EU funded project would continue to receive funding for the duration of that project’s lifespan, European counterparts had received the misinformation that funding would no longer be provided and therefore KCC could not progress any further.

(h)  With regard to Top Up Loans, Mr Grimshaw assured Members that other district and borough councils had put money into the scheme. Thanet District Council offered a different loan product that KCC administered on their behalf which was the Thanet Owner Occupiers Loan Scheme  which had been established to encourage people to move into specific wards in Margate (primarily Margate Central and Cliftonville) in an attempt to lift that area`s profile. The terms and conditions of the scheme was that a £20k interest free loan could be made available to be repaid on a monthly basis and secured as a first or second charge with a repayment time of seven to ten years (depending on the type of application). Mr Grimshaw said that several similar projects had been taken forward and discussions were currently underway with Thanet District Council to review whether additional money was available to broaden the scheme across Thanet. In terms of other district councils, Mr Grimshaw assured the Committee that every opportunity continued to be taken to seek further money from other district councils to expand the scheme, but due to limited budgets and conflicting priorities, further funding was not always possible. Mr Grimshaw welcomed further funding and said that there was an opportunity to attract business rates money that may not have been identified for future use to deliver new homes, shops and create new council tax to benefit the future economy.

(i)    Members commended the scheme and the work of the officers involved in helping to deliver it.

4.    RESOLVED that the proposed decision (19/00046) to be taken by the Leader and Cabinet Member for Health reform to:

(a)  agree to the continuation of the NUE initiative as approved in the Budget Book 2019-20 to at least 2021-22 with a further update to be provided at that time; and

(b)  agree that authority be delegated to the Director of Economic Development for the NUE initiative to take appropriate actions including, but not limited to, KCC entering into legal agreements (loan agreements, legal charges, personal guarantees, equity loans, joint ventures, deed of priority, deed of postponement), consider and approve requests which may require KCC consent and discharge of legal charges, recovery of loans through legal action, as necessary to implement this decision,

be endorsed.