Agenda item

To seek approval from Members to proceed with the acquisition of seven additional temporary homes, including approval for the capital funding required to make up the remaining cost after the grant awarded is considered.

The Chair invited the Interim Head of Housing to present the report to members.  He drew attention to the challenging timescale required to ensure the seven temporary homes, intended for use by Afghan and other refugees, were ready for use by March 2024 in order to receive funding towards the project.

The Chair then invited members to make comment or ask any questions.  Members indicated their overall support for the project.  Responding to a suggestion to buy back ex-council houses sold on the housing market, the Interim Head of Housing advised that the intention was to buy new properties, as the assets were newer with less depreciation.  Ex-Council houses were likely to be older properties and require renovation, so may not be ready in time to meet the funding deadline.  With regards to the borrowing of the balance required to fund the project, there were a number of options available, such as the Public Works Loans Board or internal borrowing. 

A member referred to the Committee’s previous discussions with officers concerning interest rates and the cost of borrowing and expressed concern that officers had not reported back to members updated information, in light of recent interest rate rises.  There was no clear understanding of financial commitment or explanation of the project’s cost over time or the full financial costs, and it was requested this information should be brought before the Committee, so the financial implications were understood before a final decision was made.   The Interim Head of Housing advised that the recommendations were designed to mitigate the challenges.  Once suitable properties were identified and a price agreed, the council’s evaluation software would evaluate the entire life cost of the project. The recommendation asked members to agree that once the elevation was completed the Section 151 Officer is given delegated powers, in consultation with the Leader, Opposition Leader and the Chair of the Housing and Wellbeing Committee, to approve the acquisition if a positive financial appraisal was received, which would ensure completion by March 2024. 

A member asked officers to consider arranging a special meeting so that the decision could be made by the Committee as a whole and make the decision based on the financial commitment before them. The Interim Head of Housing asked the Committee to note there may be difficulties in arranging a special meeting, as when suitable properties were found it was likely there would be a short time frame to secure their purchase.    

A non-member of the committee was allowed to make comment and ask questions.  He outlined the reasons why, as the Opposition Leader, felt uncomfortable being asked to consider approving the urgent decision following an expression of interest, having been given a short deadline to make his decision with a lack of financial information.  He recalled that a previous meeting of this Committee, members raised concern as to the impact of borrowing costs to the council.  He had been assured by the Section 151 Officer that the project would not progress if assessments found there was no financial business case and told that rigorous financial testing would be undertaken by the Finance Service before advice was given to the Committee. He expressed concern that the initial approach provided to him had changed.  The Interim Housing Manager referred to an email he had since sent to the Opposition Leader setting why a different approach was being taken and included an invitation to discuss why a new approach was now being offered, and to speak to him if he had any concerns.

The recommendations were then proposed by Councillor Walsh and seconded by Councillor Bence.

The Committee

                     RESOLVED that

(a)  progression of the LAHF award of £1,092,000 to acquire seven additional homes for use as temporary accommodation be approved;

(b)  the use of HRA borrowing as match funding of a minimum 60% (up to £1,640,000) be approved;

(c)  Subject to recommendation (d), the acquisition of seven new homes for up to a maximum total cost of £2,730,000 for use as temporary accommodation and in accordance with the LAHF grant conditions be approved; and

(d)  Delegates authority to the Group Head of Finance (Section 151 Officer), in consultation with the Leader, Opposition Leader and Chair of this committee, to provide final written approval of the acquisition subject to the Group Head of Finance being in receipt of a positive financial appraisal.

(e)  Noted that an appraisal of the LAHF scheme will be brought to this committee once it is completed and in use.

RECOMMENDED TO POLICY AND FINANCE COMMITTEE

(f)   that this scheme is included within the Council’s capital programme at a total cost of £2.73M, with £1.09M to be funded from central government grant and £1.64M to be funded by the Council through additional borrowing.