Council Plans to Buy Housing for Homeless
By Paul McLaughlin
Hastings Borough Council (HBC) has unveiled an ambitious £11 million plan to buy up to 50 properties to provide temporary housing for local residents who need somewhere safe and stable to live.
The cash-strapped local authority is already at risk of having to issue what is known as a Section 114 Notice – which essentially means that the council cannot balance its books. But its cabinet considered the acquisition programme at its meeting on 3 January and were advised that, despite its significant cost, it would make overall financial sense.
The number of homeless households in temporary accommodation in Hastings and the associated costs to HBC has been growing year on year and becoming unsustainable. The net cost of providing temporary accommodation just two years ago was £731,706 and this figure increased by over 250% in 2021-22, costing the council £2,605,324. The projected costs for this financial year (2022/23) were £3,892,758. Officers advised that such an increase in costs were “undermining the council’s effort to reduce expenditure” and “threatened [its] financial stability”.
HBC has set up a dedicated Housing and Homelessness Taskforce to identify the key drivers of the costs and to find solutions to reduce them through homelessness prevention interventions and by supporting people to move on from temporary accommodation. These measures have run up against a general lack of affordable accommodation in both the private and social housing sectors, with the supply of social housing in the town lagging far behind demand.
“Everyone In”
The council is also accommodating many more former rough sleepers as a legacy and consequence of the government’s “Everyone In” commitment introduced in response to the Covid pandemic. This is using its discretionary powers rather than statutory powers, and the cost is not being fully met from the Government’s Rough Sleeping Initiative funding.
HBC currently owns approximately 30 temporary accommodation units. However, the majority of such accommodation is sourced from private landlords. The council is able to claim housing benefit to offset these costs but, in most instances, this is capped at 90% of the Local Housing Allowance that was payable in 2011. The amount is insufficient to cover even standard rents in 2022, and temporary accommodation costs are considerably higher.
In order to buy the properties, HBC will have to borrow the money from the Public Works Loan Board in the form of a 40-year annuity loan under which it would make interest and principal repayments and would have fully paid off the debt at the end of the loan period. The on-going maintenance and repair of the properties would be the council’s responsibility. The plan assumes it will receive government grant funding from Homes England as support.
Cost and saving
The annual cost of delivering the scheme would be in the region of £396,000. However, the council could achieve an annual saving in excess of £296,000 when compared to the cost of temporary accommodation from private providers once the portfolio was fully acquired. In addition, the council would then own the homes and be able to regulate rents rather than be at the mercy of arbitrary market rental increases. Over time, this would lead to significant savings in the cost of housing within the town.
If the plan is given the go-ahead, the Council will buy properties on the open market from later in 2023 over a period of two years and bring them up to its Fit to Let standard. This will ensure they provide residents with good quality housing, which meets a minimum EPC (Energy Performance Certificate) rating of C. The council will also explore options to install insulation and renewable energy solutions which will help residents with more affordable bills.
Cllr Maya Evans, the cabinet member for housing, argued that Hastings is “experiencing a housing crisis” with some 500 households currently living in temporary accommodation; this figure is set to rise even higher. The new proposal, she stressed, would “give the council the opportunity to help hundreds of residents stay within Hastings and within their support networks, giving them safe and secure homes, allowing them to have a better quality of life.”
“Nowhere near enough”
Trudy Hampton, Chief Executive of Warming up the Homeless (WUTH), welcomed the acquisition initiative and said her organisation would work closely with the council to help it be successful. The 50 homes were desperately needed, she said, but were “nowhere near enough.” To emphasise her point, she said that WUTH has seen demand for its services increase by 262% over the last year alone, and she warned things would get “much, much worse” over the coming years before the acquisition scheme even started.
The cabinet unanimously backed the plan. It will now go forward to the next full council meeting on 8 February. The Labour group does not have majority control there, however, and the ending of the local alliance with the Green Party in October means there is no guarantee it will be approved.
Opposition councillors may be mindful of HBC’s recent track record in dealing with building projects to promote affordable housing. In 2020, the redevelopment of York Buildings in Hastings town centre saw costs increased by over one third with the council repeatedly having to approve additional funding to cover unforeseen costs. Conservative councillor John Rankin was scathing of the council’s failure to project manage a development of just six properties at that time, describing one budget increase as “an object lesson in how not to do things”.
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