COUNCIL FORCED TO MAKE SAVINGS ON HOUSING BUDGET AFTER NATIONAL POLICY CHANGES
FOLLOWING proposed changes to national legislation, Cambridge City Council expects it will need to severely curtail plans to build much-needed new council homes, and to have to take further measures to make significant savings from its housing budget, a report published this week has confirmed.
The changes announced by the government earlier this year mean council tenants are set for a 1% reduction in rents annually for the next four years instead of the anticipated rise that the council had previously budgeted for under a national rent settlement agreement agreed in 2014.
It means the council’s income from rents will be reduced by a total of almost £15,000,000 over the next four years
Another government proposal suggested that high value council homes will have to be sold when tenants move out to pay in order to pay for the extension of Right to Buy for Housing Association tenants.
The initial estimates of around 130 homes being sold per year is now expected to be imposed through a formula calculated by government, although this is still to be confirmed.
Further proposed new legislation affecting the housing budget are introducing fixed-term tenancies of between two and five years when council properties are re-let, and increasing rents for higher earning tenants – with the extra money going to the government – both of which could lead to increased tenancy management and rent collection costs for the council.
If the new legislation is passed unchanged, it is unlikely the council will be able to commit to building many new council homes in the foreseeable future, although existing plans to complete 335 new council homes to be built by 2018-19 will be fulfilled.
The Budget Setting Report for the council’s Housing Revenue Account, to be discussed by Housing Scrutiny Committee on 13 January and subject to approval by councillors, confirms that the savings identified earlier in this year for the coming financial year will need to be taken following the changes in legislation.
These changes included:
- Reducing the planned maintenance programme for council properties;
- Reducing inspections before repairs are carried out;
- Vacating the council’s City Homes South office;
- Reviewing management and other staffing costs.
The report also identifies that similar savings may need to be made in the following three years, with proposals to look at where additional income can be generated and to review spending in respect of anti-social behaviour and disabled adaptations. The council will also look at sharing housing services with other local councils , explore different ways that new homes might be able to continue to be provided in the future, and look at options to protect existing council homes.
Cllr Kevin Price, Executive Councillor for Housing, said: “These changes to government policy have meant that the council has been forced to make some extremely difficult, unwanted decisions to be in a position to balance our budget.
“National changes to social housing and welfare policy will undoubtedly impact on tenants of our 7000 homes in Cambridge, many of whom are low income or high-need households.
“This year for the first time we expect to have actually increased the total number of council homes we own through our new development programme.
“This achievement is now threatened by government policy changes, but we remain committed to protecting current and future tenants, and making the case to Westminster that Cambridge needs more, not fewer, council homes.”
The council’s Housing Revenue Account budget setting report will be discussed at Housing Scrutiny Committee on 13 January. A meeting of the full council will decide whether to approve the recommendations in the report on 25 February.
Osborne’s latest omnishambles will damage Cambridge’s housing plans says Lewis Herbert
Cambridge’s Labour Council Leader, Cllr Lewis Herbert, has denounced what he terms “the ‘Omnishambles’ of multiple new damage to Cambridge housing plans (and to South Cambridgeshire and many other Eastern region councils), ending many of our new rental build schemes and damaging our budgets for affordable council housing for rent”
Lewis Herbert points to the parallel massive damage which is happening to housing associations too, despite the House of Lords agreeing an amendment to exclude them and housing charities from Right to Buy. He adds that unless the Government changes its plans, it also makes a joke of ‘devolution’; it is pointless to ask for new ‘freedoms’ when Cambridge is losing £15m in housing funding over four years. Lewis’s list of omnishambles onslaughts includes:
- Multi million damage to housing budgets
- savaging of new home programmes
- enforced sale of council homes to investors instead of use for homeless
- planning changes to reduce/end new homes % for social rent on brownfield sites
- developers now unable to find Housing Association partners
- attack on anyone with £30,000 family income with people being forced to move from Cambridge because benefit won’t match housing costs
- removal of rights of under 25s etc
The City Council agreed a motion on housing at its meeting on 23rd July which quite remarkably was unanimously supported. Cambridge’s sole Conservative councillor, Shapour Meftah, voted for it as did all Labour, Lib-Dem, Green and Independent councillors present. Here it is:
This Council is very concerned at the implications for its tenants and housing stock (City Homes) in the Tory Government's emergency budget's housing measures. Namely:
- A benefit cap of £20,000 a year for couples and £13,400 for single people in the City;
- Housing Benefit to be withdrawn from 18 -21 year olds;
- Housing Benefit and Local Housing Allowance to be frozen for 5 years;
- Tax Credits and Housing Benefit/Local Housing Allowance only to take into account the first two children in households for children born after April 2017;
- Market rents to be charged in social housing for all households with incomes of £30,000 with additional rent receipts going to the Treasury not the Council.
The Council considers that the impact of these measures in the City will be to seriously worsen the housing affordability crisis in Cambridge and increase poverty, homelessness and the numbers at risk of being homeless in the City, particularly amongst the young and very low income families.
The Council recognises that for individual tenants who have faced significant above inflation rent increases and falling incomes over the last few years, the Budget proposal to cut social sector rents by 1% for the next four years may well be welcome. However, it also notes that a 1% rent cut will mean a loss of rental income to its Housing Revenue Account of £14,883,000 from 2016 /2017 - 2019/2020 and that loss will have very significant consequences for the Council's plans to build new homes and maintain its services to its current tenants.
The Council therefore resolves to write to the two MPs for Cambridge, Daniel Zeichner MP and Heidi Allen MP, to lay out its concerns and ask them to do all they can to highlight the impact on City tenants of these measures in Westminster.
The vivid testimony of three public Council meeting speakers and Councillor Kevin Price, Executive Councillor for Housing, was also recorded by Anthony Carpen, and may be viewed at https://www.youtube.com/watch?v=wA6x1-MkLWM&feature=youtu.be. They are Nigel Howlett, Chief Executive of Cambridge Housing Society, Diana Minns, Advice Worker at Cambridge Womens Resource Centre, and John Marais, Housing Committee Tenant Representative. Well worth a view if you have the time.
This is what The Times has to say about right to buy