The organisation is targeting delivery of 2,000 to 3,000 new social homes over the next decade to improve housing provision across the borough, city council chief executive Tom Stannard said.
Salford City Council’s cabinet is expected next week to sign off an official application to the Government for Derive to become a registered provider of social housing.
Dérive is currently the council’s in-house social homes division, set up in 2019, but registered provider status would enable it to operate as its own entity. Among other benefits, the organisation would gain increased access to funding from public bodies such as Homes England.
Stannard told Place North West in April that he envisaged Dérive “taking a bold step into the market” as a registered provider in the coming years. That vision is already gaining momentum, as the council works to put the legal and financial arrangements in place to create the new organisation known as Derive RP.
According to a council report produced ahead of next week’s meeting, Salford’s cabinet will be asked to approve the submission of a detailed application to the Regulator of Social Housing, a business plan for the new body – including the lending of £8.48m by the council to help Dérive RP get started – and the transfer of 104 properties across three sites once registered provider status has been granted.
Dérive RP would deliver 129 homes for social rent across four sites between January 2022 to August 2022 under the proposed business plan, according to the report. A total of 200 homes are in the company’s near-term development pipeline, Stannard told Place North West this week.
The cabinet is also expected to approve a shareholder agreement setting out the relationship between the city council and the Dérive company or companies, and the appointment of two independent board members for Derive alongside a council member to also sit on the board.
A group structure for Dérive RP has already been established – the company will be a subsidiary of Dérive Group, a wholly owned subsidiary of the council – and the regulator approved a preliminary application earlier this year. The next stage of the process involves the regulator approving the business case and other arrangements for the group’s management.
As well as the £8.48m loan, Salford proposes topping up capital expenditure for Dérive RP to £19.9m with a grant from Homes England.
“The signal we want to send to the market is that the council is deadly serious about tackling the housing and homelessness crisis in Salford – in particular, improving the affordability and accessibility of housing for residents in the long term,” Stannard said.
“The establishment of Dérive RP and everything we’re planning for it at the moment is about accelerating this ambition further.”