Agenda item

[Report of the Chief Operating Officer. To be introduced by the Cabinet Member for Housing, Regeneration and Planning.]

This report sets out the proposed rent and service charge levels that will be set for users of the Broadwater Lodge shared facility hostel which will be used as emergency accommodation for families presenting themselves as homeless to the borough. The report will provide an overview of the costs associated with the scheme and how these are recovered through rents and service charges.

The Cabinet Member for Housing, Regeneration and Planning introduced the report which sought approval of the proposed rent to be charged for a new shared facility hostel at Broadwater Lodge, Higham Road N17. In addition the report recommended that the rent level proposed for Broadwater Lodge be agreed as the model to be applied to all future shared facility hostels under development.

This report and proposed decision responded to previous concerns about the cost, provision, and quality of temporary accommodation. The Council had an ongoing programme examining Council owned buildings that could be available to provide housing support in the current housing crisis. This was the first building to be converted for TA which the Council can manage and have control on the quality and safety of the accommodation . The rents were in accordance with local housing allowances rates and would be applied to future buildings being converted for similar use. Application of LHA meant that this was affordable for residents on benefits.

RESOLVED

1.    To approve the rent level for shared facility rooms at Broadwater Lodge to be set at the one bedroom Outer North London Broad Rental Market Area rate (Local Housing Allowance subsidy rate). As set out in paragraph 6.6.

2.    To approve the rent level for the self contained mobility standard unit at Broadwater Lodge to be set at the two bedroom Outer North London Broad Rental Market Area rate (LHA subsidy rate). As set out in paragraph 6.6.

3.    To approve all future shared hostels to have their rent set at the appropriate LHA subsidy rate. As set out in paragraphs 6.6 and 6.9.

4.    To approve that all operating models for future hostels ensure the service costs do not exceed the appropriate LHA subsidy rate recoverable. As set out in paragraph 6.7.

5.    To approve that any surplus generated from the rental income of hostels is reinvested in the general fund. As set out in paragraph 6.8.

Reasons for decision

R1and R2. Setting the rent level for Broadwater Lodge at the Outer North London Broad Rental Market Area rate (LHA subsidy rate). As set out in paragraph 6.6.

·           Broadwater Lodge is scheduled to ‘go live’ in January 2017.

·           Rent level setting is an Executive function of Haringey Council and a Key Decision as the income and expenditure will exceed £500,000 (As set out in paragraph 8 Legal comments).

·           The proposed rent level is within the permissible LHA subsidy rate and will generate sufficient income to make the facility cost neutral both in terms of day to day running costs and the initial capital set up cost (As set out on the last page of Appendix A).

·           As the proposed rent level is within the permissible LHA subsidy rate it represents an affordable option for the clients we are seeking to place in the facility, in the event that the client cannot claim full benefit we will seek a Discretionary Housing Payment where possible (As set out in paragraph 6.7).

·           Failure to set a policy by December 2016 will mean the Council cannot open the facility resulting in a requirement to use more first stage private sector accommodation exacerbating the budget issues in this area.

R3 and R4. Approve all future shared hostels to utilise the same operating model and rent setting policy recommended for Broadwater Lodge. As set out in paragraphs 6.6, 6.7 and 6.9.

·           Cabinet approving this recommendation will allow Homes for Haringey, on behalf of the Council, to identify and put in place these facilities in the most efficient  manner.  This assists  the Council to meet its statutory requirements to provide first stage emergency accommodation without placing additional budgetary pressure.

·           All of these facilities will only be considered and taken forward if they comply with the following principles:

-    The day to day running costs can be funded entirely from within the rental income generated

-    The rent levels do not exceed the Local Housing Allowance subsidy rate claimable

-    The net total of the day to day running cost and initial capital cost to make the facility useable is less than the cost of providing similar accommodation via alternative existing mechanisms (i.e. the facility is at least cost neutral).

·           Where required these facilities will be subject to a change of usage application for planning permission.

R5. Any surplus generated from the rental income of hostels is reinvested in the general fund. As set out in paragraph 6.8.

·           Reinvesting any surplus generated in the General Fund will assist the Council to manage its finances effectively and, where appropriate, fund more schemes of this nature further easing the budgetary pressure and improving the supply of good quality affordable temporary accommodation.

Alternative options considered

Alternative options in terms of setting the rent outside of the possible Local Housing Allowance subsidy were not considered as this principle was agreed as part of the planning permission granted for Broadwater Lodge.

Various options for what could be claimed via Local Housing Allowance subsidy were considered by the Council’s Shared Services Benefits team but were rejected as the accommodation doesn’t meet the criteria for the relevant subsidy rate. The options considered included the Outer North London Broad Rental Market Area rate shared room and 2-3 bedroom rates.

The option to procure accommodation of this type has been considered and whilst similar options are available in the private sector it is estimated that putting in place a comparative provision could cost the general fund in the region of £400-500k more per annum than the estimated cost of Broadwater Lodge.

The option to do nothing was not considered as this risked operating costs being generated that couldn’t be recouped via the rental income resulting in a deficit for the general fund