1. Housing Delivery Vehicle Option Appraisal Joe Reeves Director www.pwc.co.uk Cornwall Council February 2011

2. PwC Introduction Our scope of work -Despite loss of Housing PFI Credits, Cornwall Council is still keen to promote and develop suitable housing across Cornwall -Cornwall Council wishes to assess the suitability of a range of delivery vehicles that support the future delivery of affordable housing in the county and meet other corporate objectives -PwC have been commissioned to undertake an options appraisal on a range of delivery vehicles to identify a preferred option that best achieves the Council’s corporate objectives What is a Delivery Vehicle? -The means by which investment is delivered -Defines the relationship between the Council and other contracting parties (roles, responsibilities, obligations) -Council defined objectives drive the selection of the most suitable option -It does not have to be a newly formed entity i.e. can include an in house option -Outright sale of land to a developer for a guaranteed residual value -A wholly owned DevCo -A joint venture between the Council and a Private Sector Partner (PSP) -A council owned PromoteCo to condition the land before it is subject to a development agreement -A council commisioned PromoteCo to condition the land before it is subject to a development agreement -An enabling SPV co-owned between the Council and PSPs to condition the land before it is subject to a development agreement PwC have prepared a financial model which quantifies the cashflows and funding requirements associated with each delivery option PwC have also set out the key principles, commercial considerations and accounting and tax issues relevant to each option for the Council to consider Cornwall Council - Affordable Housing Delivery Vehicles 2 February 2011

3. PwC Introduction Key criteria for appraising delivery vehicles -Promote and deliver mixed community housing development with a range of tenure choice -Integrate developers’ commercial acumen with the Council’s local knowledge of Cornwall -Develop a model that creates an equitable risk & reward structure -Enable the Council to have sufficient influence in the place making agenda Options -Outright sale of land to a developer for a guaranteed residual land value -A wholly owned DevCo where Council acts as developer -A joint venture between the Council and a Private Sector Partner (PSP) to jointly develop -A council owned PromoteCo to undertake planning activities before released to the market -An enabling PromoteCo co-owned between the Council and PSPs to undertake planning activities before released to PSPs under a mini competition Cornwall Council - Affordable Housing Delivery Vehicles 3 February 2011

4. PwC Introduction Process -Financial Model - PwC have prepared a financial model that quantifies the cashflows and funding requirements associated with each delivery option -Commercial issues - PwC have also set out the key principles, commercial considerations and accounting and tax issues relevant to each option for the Council to consider -Shortlist - The initial analysis of each option based on the quantitative and qualitative issues will be presented to senior officers to arrive at a short list or preferred option -Soft Market Testing - The short list or preferred option will be subject to soft market testing -Business Case - A full business case will then be prepared prior to any subsequent decision and procurement (if required). -Delivery! Cornwall Council - Affordable Housing Delivery Vehicles 4 February 2011

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