£773,000 extra required for Haringey Council letting agency Move51degreesNorth

The council has set up the Move51degreNorth private sector lettings agency. It will be run by Homes for Haringey on a commission basis.

Further details from the item 9 paper at the Cabinet meeting on Tuesday 20th October.

http://www.minutes.haringey.gov.uk/ieListDocuments.aspx?CId=118&...

The aim of the project is to transform the rental market through providing a better service to renters and set an example to competitors to behave fairer. Move51degreesNorth

Ok, here are the funding figures.

In the council's Medium Term Financial Strategy £200K over two years had been allocated to the project with an expectation the investment would be paid back by year 3.

Now, financial modelling by the council has revealed the £200k will be spent by January 2016.

The modelling shows the project requires £475K and the pay-back is in year 5.

In terms of the council;s Medium Term Financial Strategy the additional funding required to the assumptions is £773,000.

The chief finance officer comments:

"Although the Lettings Agency is still assumed to make a surplus in the longer-term, this will now take longer to achieve and given that the initial set-up costs are now higher there is a greater risk that the surplus will not be achieved."

The Assistant Director of Corporate Governance and legal implications comments:

" the creation of the Agency could potentially amount to noticeable State Aid – that is aid from the Council or Homes for Haringey which exceeds EUR 200,000 over any period of three fiscal years"

Further:

"...that care also needs to be taken over not breaching EU procurement rules in the
context of the Agency letting and managing Council properties."

The first £200,000 will be treated as investment and the additional funding provide as a loan on commercial basis.

Move51degreesNorth are based at Floor 4 of the council's 48 Station Road office in Wood Green, and the website is http://www.move51.london/

If you are wondering; why 51degreesNorth? The answer is that 51 degrees north is the latitude for Haringey. So, we are more than an attitude. Haringey is a latitude.