Agenda and minutes

Joint Extra Care Housing Management Board
Monday, 12th December, 2016 3.00 pm

Venue: Room G2, Wyvern House, Winsford

Contact: Rachel Graves  Democratic Services Officer

Items
No. Item

1.

Appointment of Chairman

Minutes:

RESOLVED:

 

That Councillor J Clowes be appointed as Chairman.

2.

Appointment of Vice Chairman

Minutes:

RESOLVED:

 

That Councillor D Armstrong be appointed as Vice Chairman.

3.

Apologies for Absence

Minutes:

Apologies were received from Councillor A Claydon  and P Groves.

4.

Declarations of Interest

To provide an opportunity for Members and Officers to declare any disclosable pecuniary and non-pecuniary interests in any item on the agenda.

Minutes:

No declarations of interest were made.

5.

Public Speaking

Members of the public wishing to address the Joint Extra Care Housing Management Board on reports contained within the agenda for the meeting shall be given the opportunity to do so subject to:-

 

1        the opportunity being extended to one person to speak in support of each agenda item and one person to speak against each agenda item when called to do so by the Chairman;

 

2        an indication of the desire to speak on the agenda item being made by the person just prior to the meeting and the name supplied to the Democratic Services Officer in attendance. The first person registering to have precedence in the event of more than one person wishing to speak either for or against the agenda item;

 

3        each person addressing the Joint Extra Care Housing Management Board being limited to three minute speech;

 

4        an opportunity being provided for an expression of a contrary view, even though no prior notice has been given, when a member of the public has spoken for or against the item;

 

5        in the event of the person having registered to speak on an agenda item not wishing to take up their right to speak on the agenda item because it was deferred, the person will automatically be given the right to speak on the agenda item at the next meeting of the Joint Extra Care Housing Management Board;

 

6        the Chairman of the meeting having discretion to rule that a person wishing to address the meeting shall not be heard if, in his/her opinion, that issue or the organisation or the person wishing to make representation on that issue has received an adequate hearing.

Minutes:

No members fo the public were present.

6.

Avantage Insurance Sharing Proposals pdf icon PDF 77 KB

To consider a report on the insurance sharing proposals

Minutes:

Consideration was given to a report on the Insurance Sharing Proposals.

 

As part of the Public Finance Initiative Contract, Avantage, the PFI Contractor, must take out specific insurances on behalf of itself, the Authority (Cheshire East Council and Cheshire West and Chester Council) and other parties where appropriate.  A cost was assigned to these insurances – the Base Cost.  If the actual cost of these insurances was significantly greater or significantly less than the Base Cost, the Authority and Avantage would share the costs or savings.

 

When the first savings became payable, it was realised that there was a contradiction in the definition of Base Cost within the Contract.  The Base Cost was defined as £120,000 in the definitions of the Project Agreement but a different figure - £83,360, was used in the Base Case (Schedule 27). 

 

Avantage proposed using a figure of £49,738 for the year to January 2010 (part year) and £83,360 for each year from then on, indexed, as they felt that £120,000 was too high. 

 

Clause 1.5 Precedence of Documentation of the Project Agreement states that in the event of inconsistency between the Project Agreement and the schedules, the “body of this agreement” took precedence over all schedules and appendices.  

 

A paper was taken to the Joint Extra Care Housing Management Board in September 2012 recommending that Avantage’s proposal be rejected, the figure of £120,000 per annum indexed be used and the Authorities’ share of the Exceptional Savings claimed immediately.   

 

The Joint Extra Care Housing Management Board approved the recommendation.  Avantage then rejected this position.

 

Since then there had been many meetings between the Councils and Avantage to solve the issue.  In March 2016 Avantage proposed that a midpoint value between the Council’s position and Avantage’s position be used - £101,680.    Avantage argued that with the change of ownership of the junior debt, and the inclusion of the Avantage schemes in the new owner’s portfolio, insurance premiums had fallen by more than 50% in two year from £67,257 in 2013 to £29,437 in 2016.  The effect of this had been to increase the savings and therefore the Authority’s share of those savings by a considerable amount. 

 

If the proposal to use £101,680 was accepted, approximately £186,289 would become payable to the Authorities.  Failure to accept the proposal could lead to the formal dispute process being invoked to resolve the issue which was likely to lead to considerable costs for both Authorities and no guarantee of a successful outcome for the Authorities.

 

RESOLVED:  That

 

1        authority be delegated to officers to accept the offer from Avantage;

 

2        a value of £101,680, which is the midpoint between the Council’s position and Avantage’s position, be used;

 

3        the agreed figure be inserted in the Contract;

 

4        the agreement is backdated to the beginning of the Contract;

 

5        the figure is utilised to calculate the monies owned to the Councils; and

 

6        immediate payment of the monies owned to the Councils is requested.