Appendix 8.3: Investment and Development Committee Terms of Reference January 2021
1. Purpose
To provide oversight and assurance in relation to the delivery of the Group’s development and asset management strategies, specifically:
- Delivery of the agreed property development targets and outcomes (in terms of number of homes, financial indicators, sales, lettings, sustainability and qualitative measures)
- Acquisition of properties and or services
- Delivery of the Asset Management Strategy with particular regard to delivery of the agreed property standards and decarbonisation of our properties
- Ensuring our properties are safe and that we continuously seek to improve the safety of properties by improvement in policy, process and technology
- The overall development programme (including all developments) to ensure the cumulative risk is understood.
- Inform and help shape strategic direction on development, asset management and strategy for the Board to sign off
Additionally, the Committee will review the development and asset management strategies making recommendations to the Board on issues to consider in changing or adjusting strategic direction.
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2. Responsibilities
Development
It is anticipated that the Group, on behalf of the Board, will:
- Review the standard appraisal criteria periodically
- Review DSG and Executive decisions including all development investments
- Monitor progress with development in reaching targets (via dashboard)
- Review the pipeline of new business
- Monitor sales performance
- Review and approve business cases for development schemes over £10m (to provide Board assurance), inclusive of external validation for key assumptions (e.g. land valuation, sales and rent valuations, construction costs)
- Receive financial reports on construction costs against budget for the entire development programme
- Monitor delivery of all developments to ensure schemes reflect our desired service and tenure offer in agreed locations
- Review performance and lessons learned on new developments at stages 1 (post completion to consider construction and capital budget), 2 (after 12 months, lettings and sales) and 3 (after 24 months quality assessment including resident feedback)
- Review value for money arrangements, with particular regard to development and asset management
- Review, periodically, the Governance arrangements for Development approvals and monitoring
- Monitor impact of development on financial capacity and business plan, including assessments of impact if all committed development is reverted to rent
Asset Management and Stock Investment
It is anticipated that the Group, on behalf of the Board, will:
- Review and Monitor delivery of the agreed Housing 21 property standards
- Monitor the delivery of Stock Investment works against budget
- Review Stock Condition Survey information and inform business plan assumptions
- Review modernisation plans and receive reports on outcomes
- Receive regular updates on Property Compliance and Safety policies, processes and outcomes
- Receive an annual assessment of overall position of Courts based on agreed RAG rating
- Review five-year rolling capital (SIP) and revenue (Decorations) budget and recommend to the Board as appropriate
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3. Membership
The Investment and Development Committee comprises up to five members of the Board.
The Chief Executive, Deputy Chief Executive and the Chief Financial Officer will have a standing invitation to attend the Investment and Development Committee.
Other officers responsible for significant capital investment who will attend the committee as and when the agenda requires, are:
- Head of Compliance
- Head of Property investment
- Head of Acquisitions and Partnerships
- Head of Development
- Head of Construction
- Head of Financial Accounting
- Other officers from development, construction, asset management and finance as appropriate
The Chair of the Board will not Chair the Committee and is in attendance as a non-voting member.
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4. Meeting frequency
The committee is to meet quarterly. Timing of meetings is to be spaced between Board meetings in order to offer improved coverage for decision making on capital investments relating to development.
On occasion, there might be a need to meet virtually or as an exception to agree a property development investment or to make a funding decision that requires Board Member authority.
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5. Quorum
The meeting will be quorate if there is at least three Board Members present (including the Chair or nominated Chair).
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6. Skills
Committee members should have or ensure that they have access to the following range of skills, experience, knowledge of and a general understanding of:
- Development
- Property
- Asset Management
- Finance
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7. Delegated authority
To exercise Board delegated authority for property investment decisions above £10m that meet the agreed hurdle rates and financial parameters as set by Board (please refer to the agreed scheme appraisal criteria).
The Committee holds this delegated authority to enable timely property development and acquisition decisions outside of the normal Board meeting timetable. The Committee does not have an upper limit of delegated authority, it will however consider the cumulative effect of its decisions and escalate to the Board decisions which increase the organisations risk exposure above the Board’s risk appetite.
Board will receive a report on any decisions made by the Committee as part of the regular Development update to Board.
Any Stock Investment decisions will be managed via the budget sign off or full Board decision (as there is no expected urgency to these).
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8. Annual review of effectiveness
The committee will review these terms of reference and the effectiveness of the committee, including membership, annually.
