Agenda item - Strategic Risk Focus Item: SR21 Housing Pressures; SR23 Developing an Investment Strategy to refurbish and develop the city's major asset of the seafront; and SR27 Devolution

Report of the Executive Lead Officer, Strategy, Governance & Law (copy attached).

1)            That the Audit & Standards Committee notes the Strategic Risk Assessment Report at Appendix 1

44.1      The Executive Director, Economy Environment & Culture provided a verbal update and answered Members questions for SR21: Housing Pressures, SR23: Developing an Investment Strategy to Refurbish and Develop the City’s Major Asset of the Seafront and SR27: Devolution. The Executive Director was accompanied by the Head of Housing Strategy for presentation of SR21 and the Head of Sport & Leisure for the presentation of SR23.

44.2      The Chair asked what risks were presented by the shortage of housing in the city and if the issue could realistically be resolved in the near future.

44.3      The Executive Director, Economy, Environment & Culture stated that the central risk was that it would hinder the ability of the city to attract workers particularly in the public sector and that there could be an increase in homelessness. Resolving the issue in the near future would be a challenge but work was in progress and there were upcoming proposals to mitigate the potential impact.

44.4      Councillor Taylor noted that there were 32,000 students based in the city and that figure was expected to rise to 40,000 by 2020. Councillor Taylor stated that whilst students made a superb contribution to the city, 90% were housed in private property meaning that 4,000 housing units were subject to council tax exemption. Councillor Taylor asked what actions were being taken to manage the issue.

44.5      The Executive Director, Economy, Environment & Culture stated that there had been a recent increase in purpose built student accommodation that had eased pressures but that a further increase would be required to address the expected rise in need and growth. The issue would form part of the City Plan 2 in the context of the wider Housing Strategy.

44.6      In reference to the Joint Venture with Hyde Housing to deliver 1,000 new lower cost homes, Councillor Druitt stated that these should be genuinely affordable homes. Councillor Druitt asked if the council had sourced the necessary financial expertise for the venture and whether a low rate of return and therefore lower rents for the properties would present risk to the council.

44.7      The Executive Director, Economy, Environment & Culture clarified that the council had used external resource where it did not have the necessary expertise in-house and this mainly related to legal matters. The Executive Director, Economy, Environment & Culture added that the rate of return on the properties needed to balance two objectives: to bring forward new homes that were as affordable as possible for those on low incomes and balance the risk to the council in making that financial investment. The Executive Director, Economy, Environment & Culture stated that studies had been undertaken into a variety of different rates of return and a report would be considered by the Housing & New Homes Committee on 16 November 2016 with proposals that struck a balance between financial risk and housing delivery.

44.8      Diane Bushell enquired as to the local impact of the Welfare Benefit Cap and the introduction of Section 24 of the Finance Act (No. 2) 2015 due in 2017.

44.9      The Executive Director, Economy, Environment & Culture explained the Welfare Benefit Cap had a phased introduction and analysis had been undertaken to identify the households this would affect in order to take preparatory steps to provide support to those residents through measures such as a change in accommodation or short-term discretionary payments. In relation to Section 24, the Head of Housing Strategy stated that the matter had been discussed with representatives of the private sector and would be monitored closely during its four year phased introduction.

44.10   Councillor Sykes stated that the issue of high rents in private sector housing was a particular concern in his ward and across the city but there appeared no reference in the report on the issue. Councillor Sykes added that engagement with the two universities was listed as a risk action and asked if a response had been provided by either on the issue. Furthermore, Councillor Sykes asked if any impact was expected or known in relation to the emergence of the Airbnb service.

44.11   The Head of Housing Strategy responded that the city currently had approximately 3,000 licensed Houses in Multiple Occupation (HMO’s) and a possible extension of that scheme was being considered. The Head of Housing Strategy added that whilst there were elements of private sector housing that were outside council control, a report would be considered by the Housing & New Homes Committee on 16 November recommending the council to join the Rent Smart Partnership that was a citywide partnership promoting an increased awareness of rights and responsibilities amongst private renting tenants and promoting a rating system for landlord agencies. The Executive Director, Economy, Environment & Culture clarified that the universities had responded positively and sensitively and were looking at ways they could assist the council. The Executive Director, Economy, Environment & Culture stated that he understood there were currently 800 properties citywide listed on the Airbnb website. Currently that was not cause for concern but the figure would need to be monitored.

1)            RESOLVED- That the Audit & Standards Committee notes the Strategic Risk Assessment Report at Appendix 1