Agenda item

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (People) that sought approval to lease a lease a high rise development to provide temporary accommodation for homeless households.

A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposal. (Minute 86 below refers.)

The Council had an increasing financial pressure as a result of the demand for housing from homeless households within the city. The majority of the forecast pressure of £5.1m (as reported at quarter 2 this year) related to the increasing cost for temporary accommodation and the shortage of suitable and affordable permanent move on accommodation. Additional budget was allocated to support the increasing financial pressure at Budget Setting in 2018/19. The Pre-Budget Report included an additional financial provision for housing and homelessness of £2.9m, £3.4m and £3.6m over the period from 2019/20 to 2021/22. Added to the amounts included in 2018/19 Budget Setting for three years (of £2.2m, £1.7m, £1.5m), this increased the additional budget (compared to the 2017/18 level) to £5.1m for each of these years.

The Homelessness Reduction Act 2017, implemented in April this year, had started to prevent and relieve homelessness, with 992 cases being closed since April from a total of 2162 approaches to the service (based on data at 29th October 2018). It was still too early to determine the long term impact on the number of households who then went on to make a full homelessness application where priority need would be considered alongside other criteria. Demand for the Housing and Homelessness service had been higher than forecast at the start of the year. Households that were homeless and met the criteria for priority need, would be entitled to interim accommodation (under the Relief duty) up to 56 days earlier than under the previous legislation, increasing the number of households that the authority placed in B&B if no other suitable accommodation was found.  This would increase the financial cost pressure in the short term.

Currently the full cost of temporary accommodation was met by the Council or the Salvation Army. Housing Benefit (HB) could be claimed in most circumstances, however only a proportion of the HB paid out by the Council could be claimed back as subsidy from The Department for Works and Pensions (DWP). The shortfall between the cost of accommodation and the HB subsidy claimed was a financial pressure for either the Council or the Salvation Army (if either HB could not be awarded or there was only a partial award). In addition to the nightly room rate, the Council and Salvation Army currently met the cost for utilities, but would look for this to be passed onto the tenant going forward.

The report presented an option to lease a lease a high rise development to provide temporary accommodation for homeless households, mainly for small family units, with the tenant having responsibility for the utility costs. This step was to support the delivery of one of the actions from the draft Housing and Homelessness Strategy which was currently out for consultation, as agreed by Cabinet on 30th October 2018 (minute 67/18 referred).

RESOLVED that the Cabinet:

1)  Approves the proposal to lease up to 102 properties at land at the site in the Private Report for a period of no more than 5 years for use as temporary accommodation for homeless households, whilst longer term permanent accommodation solutions are being developed.

2)  Approves the use of existing funding to meet the annual lease costs, which exceed £1.5m over the life of the five year contract.

3)  Delegates authority to the Director of Customer Services and Transformation, following consultation with the Director of Finance and Corporate Services and the City Solicitor and with the Cabinet Member for Communities and Housing,  to undertake the necessary due diligence and agree the detailed terms of the lease agreement with the developer.

4)  Approves the use of capital funding to meet the costs for furniture within the accommodation, estimated to be £0.10m.

5)  Approves the use of city council funding to contribute towards the installation of a sprinkler system, and delegates authority to the Director of Customer Services and Transformation and Director of Finance to negotiate the most cost effective way of implementing this.