Agenda item

To receive a report from the Director of Finance, Resources and Customer Services seeking approval for new Council borrowing to be on lent to Housing Gateway Limited.                                                      (Report No:  140)

(Key decision – reference number 4406)

This report will need to be read in conjunction with the Report No:  141 on the part 2 agenda. 

Please note that the Leader has agreed under the Cabinet urgent action procedure to recommend that Council approves the new borrowing as set out in the Part 2 report. 

Councillor Oykener moved and Councillor Lemonides seconded a report of the Director of Finance, Resources and Customer Services seeking approval for new Council borrowing to be on lent to Housing Gateway Limited. 

NOTED

1.               That the report would need to be read in conjunction with report number 141 on the part 2 agenda.  See also minute ???

2.               Housing Gateway Limited had been set up in 2014, in response to housing pressures in Enfield, to provide an alternative to nightly paid accommodation for homeless people.  So far savings of £1.3m had been achieved, with a further £1m per year anticipated.  The company had been set up with exemplary landlord standards: 85% of tenants had expressed satisfaction with the accommodation.  Properties had been purchased and refurbished, providing good quality accommodation with security of tenure which had also helped improve local neighbourhoods.  The policy had been a success and had achieved more than it had set out to do. 

3.               The concerns of the Opposition in relation to:

a.     The impact on first time buyers.   Some felt that Housing Gateway was being used to thwart the policy of increasing home ownership, by re-municipalising and buying back properties that were previously social housing. It was preventing first time buyers from purchasing property as they were not able to compete with the Council at a time of 14% increases in Enfield house prices: Enfield families were being forced out to cheaper areas outside London.

b.     The increase to the Council’s capital programme particularly as the Council already had a 7.9m overspend this year. 

c.     That Housing Gateway was not adding to the housing stock as no new units were being built.

d.     Although acknowledging that it was a useful temporary approach, the scale and scope of the current scheme was felt to be too large. 

e.     That homeless people should be housed in cheaper areas outside Enfield.

f.      It would be better to build new properties rather than buy existing stock. 

g.     The Conservative Government had acted to increase stamp duty and taxes on buy to let landlords. 

4.               The responses of the majority party that

a.     The Housing Gateway scheme had been set up in reaction to Government policy, which had led to the migration of people out of inner London, and also the withdrawal of Government funding. 

b.     Not enough homes were being built.  The problem was that the Government had not been able to manage the housing crisis.

c.     Not doing this would mean that the Council would have to cut other services.  Borrowing was being used to purchase assets which were appreciating in value and borrowing limits were being monitored. 

d.     Many former Council properties had been sold through the “right to buy” legislation, and then rented back to the Council at hugely inflated prices to enable the housing of homeless people.  This was costing the people of Enfield.   

e.     When buying properties, the council was mainly competing with other councils, buy to let landlords and property speculators, not first time buyers.  

f.      Moving vulnerable families out of the borough broke up communities, their support networks and meant that children had to move schools. 

5.               Support for the scheme in terms of a means of regenerating properties which would otherwise be unmortgageable and allowing savings on the temporary accommodation budget was expressed, but also the view that it would be preferable if properties could be sold to help pay off loans while the market was rising, as it was likely that it would soon fall. 

6.               In summing up, the Cabinet Member for Housing and Housing Regeneration said he would take on board the comments made and was considering the remodelling of financial arrangements.  He said that there was scope to do some things differently, but it was not possible to move people out of the borough, unless attempts had been made to house them locally, as had been proved in a recent legal case against Westminster Council.  More homes were being built at Meridian Water. 

Following the debate the report was put to the vote and agreed with the following result:

For:  32

Against:  20

Abstentions: 0

AGREED

1.              To note that the Leader had agreed, under the Cabinet Urgent Action Procedure, to recommend to Council to agree new Council borrowing (as set out in Part 2) and on-lend this to Housing Gateway Limited (HGL) in accordance with the Facility Letter, allowing the purchase of additional units. This will require an addition to the existing capital programme fully funded by repayments from HGL.

2.              To approve new Council borrowing (as set out in Part 2) and on-lend this to Housing Gateway Limited (HGL) in accordance with the Facility Letter. This will require an addition to the existing capital programme fully funded by repayments from HGL.

3.              To note that savings are expected to be achieved from the reduction in the use of nightly paid accommodation. These will help to contain the forecast cost pressure in Temporary Accommodation budgets.

4.              To note that the terms of the Facility Letter were agreed by the Director of Finance, Resources and Customer Services; Director of Health, Housing and Adult Social Care; Cabinet Member for Finance; and Cabinet Member for Housing and Estate Regeneration in September 2014 and the HGL Board of Directors in April 2014.

5.              To note that the treasury management decisions regarding the Council’s borrowing to enable the on-lending to HGL will be subject to the Council’s existing Treasury Management Strategy.

(Councillors Achilleas Georgiou, Lemonides and Oykener had declared non pecuniary interests in this item).