PAPER C
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ADULT AND COMMUNITY SERVICES SELECT COMMITTEE - 24 FEBRUARY 2005 REVIEW OF HOUSING DEVELOPMENT AND HOMELESSNESS REPORT OF THE
PORTFOLIO HOLDER FOR ADULT AND COMMUNITY SERVICES |
REASON FOR SELECT
COMMITTEE CONSIDERATION
To review the current provision of affordable housing to meet the needs of those accepted by the Isle of Wight Council as Statutory Homeless and the revenue implications to the Local Authority.
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ACTION REQUIRED BY THE SELECT COMMITTEE To review and discuss the current actions being undertaken by Housing
and Community Support Services |
BACKGROUND
1. The number of homelessness cases accepted by the Council is
11th highest out of 67 Local Authorities in the South East Region. In
2002/03 451 homeless applications were received by the Authority and 302 were
accepted. In 2003/04 756 applications were received and 390 accepted. To date
during the 2004/05 financial year 385 applications have been received and 279
accepted.
2. The Isle of Wight Council also has the 8th
highest number of families in the South East living in temporary accommodation
and is highest in terms of those living as “homeless at home”. Our Housing
Needs Survey 2004 provided evidence that this was due to house price rises,
increased rent levels on the Island and a small rented sector on the Island
(8%), with limited chance of mobility to neighbouring boroughs for residents.
3. The current number of families accepted as homeless is 544 and those who are living in some form of temporary accommodation is 346. Therefore there are 198 families who are currently making their own arrangements.
4. To comply with Government requirements the Council, in line with all other Councils in England took steps to end the long term use (in excess of 6 weeks) of bed and breakfast accommodation for families. This was achieved by April 2004 and has been maintained since. The requirement was achieved through a significant expansion in the use of private sector leased (PSL) properties.
5. Consistent with national trends, over the last eighteen months the number of households accepted as statutorily homeless has continued to increase. As long term use of bed and breakfast accommodation is no longer permitted the Council has responded to the increase in numbers of homeless households through the use of PSL properties.
6. The effects of the ending of long term use of bed and breakfast, and the increased incidence in homelessness can be illustrated as follows:
|
|
Households accepted as homeless and awaiting permanent accommodation |
Homeless households provided with some form of temporary accommodation |
PSL units in management |
|
Nov 04 |
532 |
344 |
248 |
|
Mar 04 |
506 |
319 |
213 |
|
Mar 03 |
369 |
209 |
72 |
7. The budget for bed and breakfast accommodation was reduced from £400,000 in 2003/04 to £100,000 in 2004/5 anticipating the reduced use of this form of accommodation. It is estimated that at 31 March 2005 the total expenditure will be £210,866 reflecting the fact that whilst long term use of bed and breakfast for families was ended, bed and breakfast is still used for single persons and as illustrated above homelessness has continued to increase.
8. The budget for agency expenditure (PSL’s) is £1,401,413. this is equivalent to the actual expenditure in 2003/04 plus £300,000 transferred from the bed and breakfast budget. Expenditure for the period April to December 2004 was £1,781,351 and it is estimated that at 31 March 2005 the total expenditure will be £2,159,351.
9. Income from Housing Benefit and client contributions have exceeded budget expectations. At 31 March 2005 the additional income is anticipated to be £299,423.
10. Whilst expenditure on PSL properties is exceeding budget this from of temporary accommodation is not only significantly better quality accommodation than that afforded by bed and breakfast but it is a more cost effective from of accommodation. An analysis has been undertaken into the respective costs of PSL and bed and breakfast accommodation over the period April to December 2004 and has been based on all those households accommodated in PSL properties during that period. The net cost amounted to £633,397.50. If all those households had been accommodated in bed and breakfast the net cost would have amounted to £994,545.37.
11. Whilst both the cost and incidence of homelessness has increased since March 2003 the preventative initiatives undertaken over the last year can be seen to be producing demonstrable results. Homelessness acceptances in 2003/04 totalled 390. The forecast for 2004/05 is that this will be reduced to 330. The work undertaken to prevent homelessness is slowing the rate of increase of those housed in some form of temporary accommodation. Households in temporary accommodation rose by 110 in 2003/04. The rise in the period April to November 2004 amounted to 25.
12. We have a range of prevention measures being promoted by two Homelessness Prevention Officers. These are set out at Appendix A in the document “Housing Needs” – Challenges being faced on the Isle of Wight.
13. We have analysed all of the families that we have accepted as
Statutory Homeless on the basis of their income. This analysis was undertaken
to see whether any of these families would be able to afford shared ownership
accommodation. We found that only 2% are suitable for this type of housing and
the remainder need affordable social rented housing.
14. The Regional Housing Board makes decisions over funding for
Housing in the South East and allocations to each local authority area. Funding
is allocated to Housing Associations in the form of grant assistance and to
Local Authority in the form of borrowing approval.
15. For the 2004-06 financial years the Island attracted £9.336M
in Housing Corporation funding for Housing Associations. For this period only
£4.968M was for affordable social rented housing.
16. The Isle of Wight Council received borrowing approval for the
2004-06 amounting to £3.471M. This funding was allocated to Housing Renewal
programmes and the provision of affordable housing. For the 2004-06 period
£1.979M of this total funding was allocated to affordable rented social
housing.
17. Therefore for the 2004-06 the Island received funding of
£6.947M to provide affordable social rented housing. The current average grant requirement needed to provide one unit
of affordable housing is £57,608. This means that the Island can fund the
provision of 60 units per year of rented housing through the grant assistance
it receives.
18. The Isle of Wight Council can secure affordable housing
through section 106 agreements on private developments. We are currently in the
process of negotiating over 20 section 106 schemes which should bring forward
133 additional units of mixed tenure over the next four years. Analysis of
these section 106 schemes shows that 28 of these units will be for shared
ownership.
19. Section 106 schemes currently require developers to provide
affordable housing in tranches, dependant on the completion of a proportion of
the private housing on the development. It is not feasible for the Isle of
Wight Council to insist that developers provide all of the affordable housing
prior to the private housing being developed. This would have cash flow
implications for the developer and as such would compromise schemes from being
built out.
20 The Isle of Wight Council is therefore reliant on private
house builders commencing development before units are completed for people to
occupy. This can delay completion of some units by up to 40 weeks.
21. The current planning policy H14 - affordable housing, requires that private house builders dispose
of the units to a Housing Association at 50% of open market value. Due to house
price rises over the last five years this discount method is proving hard for
developers and Housing Associations to achieve.
22. Housing Associations have a maximum price that they are able
to purchase properties at, dependent on unit size, their own borrowing capacity
and their ability to generate the revenue needed on rents that are currently
being restructured.
23. Housing Associations can afford to purchase units of
affordable housing a slightly enhanced premium for shared ownership properties,
however these type of units do not assist the Isle of Wight Council in reducing
the revenue budget spent on Homelessness.
24. The Housing Department therefore has a key role to play in
ensuring schemes are, wherever possible, built for general needs rented
housing. The only method that can ensure this is for the department to allocate
grant funding to schemes, where cost effective, to ensure that shared ownership
properties are converted into rented housing.
25. The Housing Department makes provision, within its Capital
funding plan to ensure that when completion of the development takes place the
Isle of Wight Council has the resources available to provide the right type of
units to meet our homelessness objectives. A full breakdown of all the schemes
in full negotiation can be found at Appendix B.
26. Housing Associations have development sites that are in their
own ownership, or in negotiation with landowners. In order for a new scheme to
be developed there is a need to undertake a consultation exercise, obtain board
approval and ensure that the overall scheme meets the needs of the Local
Authority and the Regional Housing Board.
27. In order for developments to be built each Housing Association
needs to have written evidence that when the units are complete the necessary
Capital Grant Funding, whether provided by the Housing Corporation or by the
Isle of Wight Council will be available.
28. Housing Associations are able, in certain instances, to
forward fund schemes but need evidence that on completion they will receive a
reimbursement for the capital outlay they have made from their own resources.
29. Development schemes that are allocated funding now will either
have to go through stages, such as land acquisition, scheme design and
consultation or will have to have funding set aside in the Local Authority
Capital Programme so that when they complete there are enough Local Authority
resources to provide the units. This does mean that in some financial years
there will be an underspend until the units are completed.
30. Appendix B shows, in yellow, the commitments that we
have made as a Local Authority for the delivery of affordable housing over the
next five years.
31. The Council has accepted a housing duty to a significantly
higher number of households than has previously pertained (532 in November
2004; 369 in March 2003). Of those to
whom a duty has been extended 344 have been accommodated in some form of temporary
accommodation compared with 209 at March 2003.
A significant “silting up” of households in temporary accommodation has
developed which will only be reverse by increase of preventative work and a
greater availability of permanent accommodation. Both approaches have to be taken, but whilst preventative work
can be shown to reduce the incidence of homelessness the longer term solution
to reducing dependency on temporary accommodation has to be a greater supply of
permanent accommodation.
RELEVANT PLANS,
POLICIES, STRATEGIES AND PERFORMANCE INDICATORS
Homelessness Strategy 2003-2008
In preparing this report information was drawn from the following sources:
FINANCIAL, LEGAL,
CRIME AND DISORDER IMPLICATIONS
There are financial implications for the Isle of Wight Council in terms
of Housing Capital, these are outlined in Appendix B.
APPENDICES
ATTACHED
Appendix
A – Housing Needs – Challenges being faced on the Isle of Wight.
Appendix
B – Isle of Wight Council
Housing Department Capital and Development programme.
§
Homelessness Strategy
2003 - 2008
Contact Point: Contact Peter Griffiths, Housing Development and
Initiatives Officer, 01983 823058, e-mail:peter.Griffiths@iow.gov.uk.