Agenda item

Report of the Cabinet Member Housing and Safety

Having declared a personal and prejudicial interest in this item Councillor Colin Hay left the room and did not participate in the debate.

The Cabinet Member Finance and Community Development highlighted that there were major changes in social housing including the introduction of a new housing finance system, changes to Welfare reform and changes in provision of funding for new social housing.

He explained that under the new housing finance system CBC would borrow an amount at which the housing stock was valued minus current housing debt, and pay a one off capital amount back to central government funded by borrowing from the Public Works Loan Board. This would mean the Council would have control over how rental income was spent locally. This could over the next 10 years make the Council £15.4m better off at today’s values. This would then enable the Council to invest a net amount of £12.2m.

The business plan advocated the following approach to spending this:

• Continue with new build – particularly involving St Paul’s phase two at Crabtree Place, Cakebridge Place and Garage sites.
• Invest in existing stock and in particular to improve local environments such as Neighbourhood works
• Improve services to tenants – particularly to invest in community development initiatives in order to address anti-social behaviour, financial exclusion and unemployment.

The business plan also had took account of:

• Rent restructuring – this would continue with the expectation that all rents would be at the Government formula level by 2015/16 and thereafter increase at RPI plus 0.5%.
• The introduction of affordable rents (80% of private sector market housing) with which to finance new build – in future the Homes and Communities Agency will insist that if councils and Housing Associations are to ‘qualify’ for HCA funding they must operate on the basis of affordable rents.
• Changes to the benefits system. This was of the greatest concern as Government policy was set to increase rents at the same time as reducing benefits, and over 70% of tenants were in receipt of benefits.

The Cabinet Member welcomed the autonomy that the Council would have which would enable it to continue the new-build initiated in St Paul’s five years ago, and improve the quality of life for CBH tenants as a result. He also wished to thank officers and those at CBH for their valuable contributions to this work.

Bob Dagger, Assistant Chief Executive CBH informed Cabinet of two recent policy announcements. Firstly, there would be a discounted rate of 85 basis points below the prevailing rate for local authority borrowing from the Public Works Loan Board. This would provide additional confidence to the social housing market. Secondly, the right to buy discount had been increased to make it more attractive to council housing tenants who wished to buy their homes. The money raised from the sales would be used to repay debt and reinvest in new affordable homes.

Significant changes to council housing finance meant that the Council could be innovative in its housing. It could now have a long term sustainable plan for housing and CBH had plans for a comprehensive consultation process on the way forward.

The Assistant Chief Executive also informed the meeting that DCLG had given an indication that the settlement figure would be announced on 11 November and this was likely to be higher than anticipated due to the increase in the Retail Price Index announced on 18 October.

The Leader of the Council said that this was a key moment for housing in Cheltenham. He welcomed the self financing approach and the comprehensive consultation over the coming months.

The Cabinet Member Finance and Community Development was positive about the future of social housing in the town. There was however a risk in terms of rents being increased whilst benefits were decreasing and he emphasised that particular attention should be paid to this.

RESOLVED that

• the draft strategy be endorsed and used as a basis for consultation with a range of stakeholders.
• following consultation the strategy be brought back to Cabinet before final approval by Council in February 2012.