The Sutton Shareholdings Board approved the establishment of a new not-for-profit registered provider as a subsidiary of Sutton Living Limited. This new entity, a Community Benefit Society (CBS), will be responsible for acquiring and managing affordable housing, enabling access to greater funding opportunities.

Establishment of a Community Benefit Society

The Board approved the creation of a Community Benefit Society (CBS) as a subsidiary of Sutton Living Limited (SLL). This new charitable organisation will be a registered provider of social housing, allowing SLL to access grant funding from bodies such as the Greater London Authority (GLA) and the Ministry of Housing, Communities and Local Government (MHCLG). This is intended to increase the supply of affordable housing in Sutton and reduce reliance on temporary accommodation.

The proposal was presented by Therese, who explained that while SLL was originally set up as a developer, its focus has shifted to acquiring homes for affordable housing to assist the Council with temporary accommodation and homelessness pressures. The new structure will allow SLL to optimise this route and access grant funding that is currently unavailable. The Council will remain the sole shareholder of SLL, and SLL will be the parent of the new CBS.

The CBS will operate under its own constitution, known as the Community Benefits Society Rules, which were noted by the Board. A Shareholder Agreement has been established between the Council, SLL, and the CBS, outlining control mechanisms. A Ringfencing Agreement is also in place between the three parties to ensure regulatory requirements are met and to provide a framework for support if the CBS needs it. The Governance Policy for the CBS was also noted.

During the discussion, councillors raised questions about the Council's financial commitment under the Ringfencing Agreement. It was clarified that while the agreement obligates the parties to support each other in meeting regulatory requirements, there is no absolute guarantee of financial support from the Council. The decision to provide support would depend on the specific circumstances. Councillors also sought assurance that a stressed business plan would be produced to assess potential financial risks, such as interest rate changes and increased costs. Officers confirmed that a fully stressed business plan would be developed and presented to the Board.

Concerns were also raised about the board composition of the new CBS, with a note that the National Housing Federation recommends a minimum of five board members, while the initial proposal was for three. It was stated that the aim is to expand the board to five members as quickly as practically possible, with a majority of independent members required once registered with the Regulator of Social Housing (RSH).

The Board approved several recommendations related to the establishment of the CBS, including:

• Approving the establishment of the CBS as a subsidiary within the SLL group structure, subject to registration with the Financial Conduct Authority.
• Approving the establishment of the CBS for the principal purpose of becoming a Registered Provider of social housing and authorising the submission of relevant applications.
• Approving the group and governance structures.
• Noting the CBS Rules, Shareholder Agreement, Ringfence Agreement, and Governance Policy.
• Noting that minor consequential amendments may be made to documents to ensure the registration process is completed.

The meeting concluded with the Chair thanking members and officers.