Agenda item - Housing Supply Update

Report of Executive Director for Neighbourhoods, Communities & Housing (copy attached).

That the Housing & New Homes Committee:

(1)      Notes the work programme to date to increase the supply of affordable housing in the city and proposals to increase cross council resources to support expansion of the programme to realise the council’s ambitions to increase housing supply.

(2)      Agrees (subject to government guidance) for the council to utilise HRA borrowing flexibilities to deliver future New Homes for Neighbourhoods Schemes.

(3)      Notes that as a result of current forecast underspend in the HRA, the month 7 Budget Monitoring report to Policy Resources & Growth Committee will propose that £1.5m will be used as a revenue contribution to the capital programme to support further housing delivery via the Home Purchase Scheme for 2019/20.

44.1   The Committee considered a report of the Executive Director, Neighbourhoods, Communities & Housing which sought to provide an update on the delivery of new affordable housing by the council, and future plans to escalate delivery by utilising the recently announced Housing Revenue Account borrowing flexibilities and revenue underspends in the HRA. The report also incorporated information on the capacity and resources to expand public housing following the Notice of Motion presented and noted at the 13^th June 2018 Housing & New Homes Committee.  The report was presented by the Housing Strategy & Enabling Manager, accompanied by the Head of Housing Strategy, Property & Investment.

44.2   Councillor Mears thanked officers for the detailed report. She asked for clarity regarding paragraph 5.3 on page 153 relating to key additional resource requirements. Did this refer to new staff or existing staff in the council? Were they consultants or full time staff? Councillor Mears referred to paragraph 3.4 and stated that she did not support the Whitehawk Urban Fringe Scheme. She supported the rest of the work.

44.3   The Head of Housing Strategy, Property & Investment stated that seconded staff might be used. Consultants would not be used. More details would be supplied to the Estate Regeneration Members’ Board.

44.4   Councillor Hill considered that there were excellent proposals in the report. The Government’s announcement of lifting the borrowing cap was very welcome.  She was excited about the cross directorate housing supply team and pleased that most of this would be funded mainly by capitalisation.  Councillor Hill was pleased at the additional £1.5m mentioned in paragraph 2.3.  If agreed by Policy, Resources & Growth Committee this was additional money that could be spent in the short term.

44.5   Councillor Gibson welcomed the report and the identification of resources as a swift response to the Notice of Motion. It was an urgent matter to use the capacity and create homes the city needed.  He welcomed the progress made in terms of identifying the resources. Councillor Gibson considered recommendation 2.3 was confusing. Councillor Gibson questioned whether this was the right way to fund the programme. There were other ways of funding capital programmes and he was sure that Housing & New Homes Committee and Policy, Resources & Growth Committee would bear in mind those options.  

44.6   The Chair commented that Housing & New Homes Committee would have felt very hard done by if they had not seen the month 7 monitoring report and only Policy Resources & Growth Committee had made a decision on it.

44.7   Councillor Wares was concerned that paragraph 3.6 referred to an HRA revenue underspend as there was so much that needed to be done on the council’s estates. The £1.5m underspend was recommended to be used as a revenue contribution to the capital programme as stated in recommendation 2.3.  Councillor Wares’ concern was that revenue money could be put into capital but the council could not reverse that money back into revenue. pCouncillor Wares questioned whether the whole £1.5m revenue should be transferred in this way and suggested it would be better to do this on a piecemeal, project or purchase basis.

44.8   The Head of Housing Strategy, Property & Investment the Officers explained that the underspend that had been identified was from a range of factors. One factor was that so much had been invested in the stock. There were two elements of financial underspend. One was projected receipt from service charge received from leaseholders towards major work costs. Another was a trend of spending less money on responsive repairs. A great deal of the investment into council stock to improve it had reduced the repairs spend. 

44.9   The Principal Accountant answered a number of other technical questions raised by Councillor Wares as follows.

·                 Some of the underspends in the HRA were due to the fact that responsive repairs costs were reducing because of the extra capital programme works that had been going on over the last few years. 

·                 Councillor Wares had referred to paragraph 3.6 and questioned why £1.5m would be put against the capital scheme.  That was not an issue as officers would be setting up a budget for £1.5m which is the planned capital spend  but if that was not spent by the end of the year then there would only be a need to fund the actual capital expenditure incurred from a revenue contribution to capital. So any remaining budget could be used for other HRA capital schemes or re-profiled into the next financial year (with the appropriate level of approval by officers and/or members). Or it could be reported as an underspend thereby leaving the remaining funding that could in fact still be used for revenue purposes either in- year (by way of a revenue budget virement) or in future years as any unspent revenue budget is by default added to the HRA general reserves.

·                 With regard to paragraph 4.3 where it mentioned borrowing against £81m, some of that £81m was already included in the £29m. It was not an additional £56/57m as suggested.

44.10  Councillor Wares stated that the report was not clear regarding the £81m and asked for some clarification post committee. The Principal Accountant undertook to provide clarity and an email response was sent to all members of housing committee.

44.11  The Chair stated that the number of initiatives to increase the housing stock in the city for those that needed it was impressive. When people made comments that the council were not moving quickly enough, she reminded them that the council had a committee system and that it took time to implement initiatives.

44.12  RESOLVED:-

          That the Housing & New Homes Committee:

(1)      Notes the work programme to date to increase the supply of affordable housing in the city and proposals to increase cross council resources to support expansion of the programme to realise the council’s ambitions to increase housing supply.

(2)      Agrees (subject to government guidance) for the council to utilise HRA borrowing flexibilities to deliver future New Homes for Neighbourhoods Schemes.

(3)      Notes that as a result of current forecast underspend in the HRA, the month 7 Budget Monitoring report to Policy Resources & Growth Committee will propose that £1.5m will be used as a revenue contribution to the capital programme to support further housing delivery via the Home Purchase Scheme for 2019/20.