Agenda item

A report from the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services is attached. This sets out proposals to ensure that Enfield complies with the scheme and maximises its ability to provide additional affordable homes within the Borough. (Key decision – reference number 3932)

(Report No.182)

(8.35 – 8.40 pm)

Councillor Ahmet Oykener (Cabinet Member for Housing and Estate Regeneration) introduced the report of the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services (No.182) setting out proposals to ensure that Enfield complies with the scheme and maximises its ability to provide additional affordable homes within the Borough.

NOTED

1.               That the way that the right to buy one for one replacement scheme worked and its restrictions were explained fully in the report and appendices. Councillor Oykener explained the difficulties that the Council faced in meeting the Government’s funding formula.

2.               The creativity of the Council in proposing a number of schemes to allow for the provision of social housing as set out in the report.

3.               Members’ expressed their concerns over the Government’s scheme and the financial implications faced by local authorities.

Alternative Options Considered: NOTED the alternative options which had been considered as set out in section 4 of the report.

·       To decide not to spend the retained right to buy receipts already received. However, this would result in having to return the receipts to Government, with a punitive interest rate to the Council of 4% above base rate (calculated from the date of receipt). For every £1m returned the Council would be required to add a further £143k in interest payments.

·       To withdraw from the scheme now and return all receipts retained with effect from Quarter 4 (March) this year. This would mean giving up valuable resources which had been generated from the sale of Enfield’s own housing to be used elsewhere in the country.

·       To attempt to spend all the money on the provision of new Council homes within the HRA. Based on the current estimate of sales over the next three years, plus the sums already received, this would create a gap of some £40m in the HRA business plan. In addition, the Council would need to have projects identified that were deliverable within the timescales required, which it did not have at present, and the application of this scheme would have to compete against demands for addressing the repairs backlog, investment in existing stock and repayment of HRA debt.

·       Alternative options would continue to be explored for the use of retained right to buy receipts to provide affordable housing within the rules of the scheme. If these were examined and shown to deliver more benefits than the proposals outlined in the report, then a further report would be prepared for decision.

DECISION: The Cabinet

1.               Approved the proposed set of short to mid-term schemes described in paragraph 3.13 and Appendix C of the report. This would maximise the likelihood that expenditure of £19.771m would be achieved by the end of 2016/17 and prevent any return of receipts to Central Government.

2.               Approved in principle for officers to carry out checks as to the feasibility of the schemes identified as mid-long term described in the report for further development, noting that these were designed to achieve expenditure of £87.725m over the three years from 2017/18 to 2019/20. Members noted that a further report would follow with an update as regards the outcome of these checks.

3.               Noted that Housing Board endorsed this approach to spending the Right to Buy receipts.

4.               Approved a budget of a maximum £80,000 to procure legal and financial advice and procure a consultant with the expertise to advise on alternative Registered Provider models or a consortium with other Councils and set up the new delivery model quickly. This sum would be funded from the HRA business plan resources.

5.               That, in order to expedite delivery of the short to mid-term schemes amounting to £19.771m, Cabinet agreed to delegate authority to the Cabinet Member for Housing and Estate  Regeneration and the Cabinet Member for Finance (in consultation with the Assistant Director of Finance, Assistant Director of Housing, Assistant Director of Property Services, Assistant Director of Procurement and Assistant Director of Legal and Governance Services as appropriate) to:

(a)  Agree terms and enter into appropriate legal agreements with developers to purchase the affordable housing element of any new build developments within the borough subject to the Council’s Property Procedure Rules.

(b)  Agree terms and purchase HRA properties as appropriate subject to the Council’s Property Procedure Rules.

(c)  Agree the details of a scheme to grant fund Registered Providers subject to the Council’s Constitutional arrangements, Financial Regulations and Contract Procurement Rules.

(d)  Select the most suitable bidder(s) for grant funding subject to the Council’s Contract Procedure Rules.

(e)  Enter into grant agreements and nomination agreements with successful Registered Providers subject to the Council’s Constitutional arrangements, Financial Regulations and Contract Procurement Rules.

(f)    Flex the amounts spent on the various strands of the scheme depending on future Right to Buy take-up and deliverability within spending time constraints subject to the Council’s Financial Regulations.

Reason: The Council had signed up to participate in the scheme and was committed to retaining the right to buy receipts in order to address the growing demand for affordable rented homes in the Borough. Using a basket of options to comply with the scheme allowed flexibility, thereby better ensuring that steps could be taken to achieve delivery and spend within the required deadlines.

(Key decision – reference number 3932)