Harrogate council approves creation of its own housing company

The council could provide the new company equity and a working capital loan of up to 750k.
The council could provide the new company equity and a working capital loan of up to 750k.
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A new commercial housing company wholly owned by Harrogate Borough Council has been given the tick of approval.

The move will allow the council to manoeuvre with greater freedom in the local property market as a private business - including allowing the council to operate as a private sector landlord.
All housing currently owned by the council is registered with the Housing Revenue Account, which has legislation restricting the type of activity that can be undertaken with it – such as the type of leases the council can offer to tenants.

Ahead of approving the proposal, HBC cabinet members said the move would allow more flexibility with building housing, including affordable homes, and would provide the council with additional revenue streams.

Cabinet member for housing and safer communities, Coun Mike Chambers, said he was confident the company would be a "profitable venture" for the authority.

"We virtually have now a housing company on the horizon which I think will prove a profitable venture for this council,” he said.

Fellow cabinet member Coun Graham Swift said "whilst the reality of this is probably slower than we want it to be", it represented a significant step forward for the commercialisation of council.

Early outlines for the company are that council will provide equity and a working capital loan of up to £750k to get the business started.

Council will also provide temporary loans of up to £1m as necessary in the future – with council to act essentially as an “overdraft” facility.

A council report on the proposal confirms that the council has already explored the setting up of subsidiary companies to compliment the housing business, including the establishment of a letting agency.

The council initially approved template documents for a company in December 2015.

Among the details set out are that the company would have its own legal identity and have the benefit of limited liability.

Lachlan Leeming, Local Democracy Reporter