Agenda item

Councillor Lesley Kelly, Cabinet Member for Housing & Public Protection, introduced the report

The report before Cabinet concerned the use up to £932,600 of unallocated commuted sums taken by the Council from Barratts housing developer in lieu of on-site affordable housing provision on the former Dolphin site in Romford town centre.

It was reported that a number of potential uses which could potentially meet the Council’s corporate goals had been explored. The proposed approach was to use the resources to buy a number of properties on the open market and, if necessary, bring them up to the Decent Homes Standard. It was noted that the properties would be held in within the Housing Revenue Account and so could then be sold to Havering families on a shared ownership basis, yielding a receipt which could be recycled by the Council for housing or regeneration purposes and/or let to households on the Council’s Housing Register.

Reasons for the decision:

The Council’s Housing Service had been keen to maximise the corporate benefits of the commuted sums available to it.

Options considered:

The Council’s Housing Service had explored a wide range of possible options in turn:

a)        Development of supported housing schemes for Adult Social Care clients to minimise residential placement. The option was not followed because through discussion between Adult Social Care and housing associations, brokered by the Housing Service, is was found that it would be quicker and more cost-effective to provide for this client group through other means, notably renting homes in the private sector and nominating Adult Social Care client to existing housing association properties.

b)        Purchase of larger properties in the housing market for conversion for use by disabled people / families identified by Adult Social Care’s Occupational Therapy team.This option was not followed because although the Occupational Therapy team is currently working with a number of disabled people needing specific accommodation, joint working with the Housing Service is able to provide suitable within the Council’s own stock for these households at a lower cost than having to purchase additional units.

c)         Amendment to the Squirrels Heath Gardens (former Snowdon Court) tenure specification. While consideration was given to amending the tenure specification for the Squirrels Heath Gardens extra care to provide more affordable units rather than outright sale, thus potentially benefiting Adult Social Care, prior to start on site, the Homes and Communities Agency provided additional grant to ‘convert’ the proposed 17 outright sale units to social rent. This gives a scheme 78 affordable rented units and 20 shared ownership homes which is considered to appropriate to the borough’s needs. Thus, the option of further amending the tenure was not pursued.  

d)        Provide grant to a housing association to develop affordable rented properties in return for nomination rights. In considering this option, the Council needed to have regard to value for money as this would be an investment taking place outside of existing funding agreements between Registered Social Landlords, RSLs, and the HCA which control the financial aspects of mainstream RSL development programmes. The Council would also need to pay grant at the commencement of the scheme rather than with 50% on completion secured by a nomination agreement. This approach would also see the value of the S106 resources passed to the RSL. These factors taken together meant this option was not pursued.

e)        Acquire properties for retention within the Housing Revenue Account for sale as shared ownership or rent. With the implementation of HRA self-financing from April 2012, the option of using the commuted sums to acquire properties has just become far move attractive to the Council. There is now no longer any pooling of debt and so all rental income is retained locally. Thus, the acquisition of units held in the HRA can yield additional rent to pay off debt, fund further borrowing or pay for HRA service improvements. Alternatively, should the Council raise a capital receipt from these properties, perhaps by selling some on a shared ownership basis, the capital could be recycled by the Council for housing and regeneration purposes. For these reason, this approach is proposed.

Cabinet AGREED:

1.                 To use up to £932,600 of unallocated commuted sums held by the Council to increase the stock of housing held by the Council for sale to Havering families on a shared ownership basis and/or for the provision of affordable housing to be let to households on the Housing Register.

2.                 To the addition of this scheme to the HRA Capital Budget, and to refer this addition to Council.

3.                 To delegate to the Cabinet Member for Housing & Public Protection and Cabinet Member for Value, acting with advice from the Head of Housing and Public Protection and Director – Finance and Commerce, the authority to decide on the number, location and type of properties acquired and the tenure with which to make them subsequently available to local people.