Agenda item

[Report of the Director for Housing, Planning and Regeneration. To be introduced by the Cabinet Member for Housing and Estate Renewal.]

A report to provide an update on progress towards the Council's aim to deliver 1,000 Council homes. 

The report will also seek Cabinet approval:

• On a list of development sites to be included in the Council's housing delivery programme.

• The acquisition of 11 s106 units at Hornsey Town Hall

• Variation to the total cost of land assembly at Cranwood  at the corner of Woodside Avenue and Muswell Hill Road

• To enter into a funding agreement with the GLA to accept revenue funding to support the Council housing delivery programme

The Cabinet Member for Housing and Estate Renewal introduced the report, which provided an update on the Council housing delivery programme since May 2018, including the delivery of new homes funded through the Greater London Authority’s (GLA) Building Council Homes for Londoners programme, and progress on sites, which have previously been approved.

The Cabinet Member underlined that investing in Council Homes saved lives and produced safety of tenure in order to enable residents in the borough to thrive. The report provided an update to Council colleagues and residents on the Council’s latest position to deliver 1000 homes by the end of this administration.

 The Cabinet Member outlined the challenges around land, money, and capacity to deliver on this commitment. She referred to the list of Council owned sites which was the first phase of the Council’s direct delivery programme and was pleased to have started meeting with ward Councilors to consult on existing identified sites and to seek information on any site additions to the programme. In relation to money and funding the building of the homes, the huge contribution of the GLA was referenced. The Council was pleased to accept £60m of funding for the housing delivery programme and a further half million has been granted to support increased capacity. This additional funding would help ensure the Council have the right people with a range of expertise to deliver this programme. There was great enthusiasm to deliver this programme, which would be a huge challenge. Although, many other local authorities were in this position.

In response to questions from Councillors Bull, Barnes and Davies, the following was noted:

-      Further to setting up meeting with White Hart Lane ward Councillors, there were further ward meetings to be scheduled and opportunities for other ward Councillors to put forward suggested sites for usage. The Cabinet Member welcomed correspondence containing suggestions for sites, keeping in mind that not all suggestions would be taken forward, if they were investigated and found not appropriate to do so. It was noted that there would be a wider consultation on proposed sites and opinions were welcomed.

-  With regards to the acquisition of homes from developers for use as Council homes, the Cabinet Member was pleased to have the opportunity made available for private land to be converted to public land and saw municipalisation as a positive outcome. Although, this was not a low cost method, the Council was in a better position to invest in the homes. There was also a clear benchmark followed when the homes were purchased and which would need to pass best value and best consideration tests.

-  It was noted that all the Council tenants had been decanted from Tangmere block at Broadwater Farm and the Council were in a negotiation process with the remaining leaseholder.

-  It was clarified that there would be wide consultation involving residents as the sites were across the borough and would also include key housing stakeholders. A Communications and Engagement Strategy was being drawn up which will set out how all engagement on the housing delivery programme will be carried out. This will be incorporated into the Development Procedures to ensure that consultation is carried out across all types of housing schemes at the right time and at the correct levels.

-    In relation to the capacity of the Council to deliver the programme, the first priority had been to get the project management skills into the team rather than to focus on e.g. architects or other professional skills, which would initially be commissioned from external firms. Currently, there were 18 staff in the housing delivery team and some already had experience of delivering schemes in the housing association sector. Less experienced staff would be learning from experienced members of their team to fulfil this project management roles in the future. It was noted that all local authorities were in the same position in trying to deliver housing programmes and build up expertise and capacity.

RESOLVED

           Council housing delivery programme

a)    To note progress to date on the Council housing delivery programme, including the capital and revenue funding, the capacity being built within the Council, the processes and systems being put in place, including those for consultation and engagement and progress to date on the previously approved development sites – as set out in paragraphs 6.1 to 6.36.

b)    To approve the Council entering into a funding agreement with the GLA to access £546,000 revenue funding, which has been allocated to the Council from the GLA’s Home Building Capacity Fund – as set out in paragraphs 6.37 to 6.41.

c)    To approve the new sites, as set out in paragraphs 6.42 to 6.49, which have been identified as potentially appropriate for new build development to be brought forward in the Housing Revenue Account, including approval to progress design and consultation work associated with these sites.

           Hornsey Town Hall

a)    To approve total project costs and the acquisition of up to 11 affordable homes at the Hornsey Town Hall Development of £2,065,249 - of the total scheme costs, the acquisition will cost £1,890,594; and give delegated authority to the Director of Housing, Regeneration and Planning, in consultation with the Director of Finance and after consultation with the Cabinet Member for Housing and Estate Renewal to agree the final mix and number of affordable homes, the final heads of terms of the acquisition and the final contract. This is detailed in paragraphs 6.50 to 6.55.

           Cranwood

a)    To approve an increase to the total cost of land assembly at Cranwood agreed by Cabinet on 11 September 2018 by up to 10%, to take account of fluctuations in the market since then. The Director of Housing, Regeneration and Planning, after consultation with the Director of Finance, has been delegated authority to agree the purchase and the terms of the acquisition. This is detailed in paragraph 6.59.

Reasons for decisions

The Council’s recently adopted Borough Plan commits to delivering 1,000 Council homes at Council rents by 2022. This report invites Members to note and comment on progress towards meeting this target, both in terms of outputs achieved to date and the capacity and processes being put in place to deliver the programme. It also sets out the key milestones that should be achieved in the coming year towards meeting the 1,000 homes target, including the 500 homes where planning consents are expected to have been achieved and the 345 homes that should have started on site. As such, it provides Members with information to hold the Council to account for this delivery as well as to help shape that delivery.

The GLA’s Home Building Capacity Fund will make a valuable contribution to these aims, as this will be used to support the capacity the Council needs to put in place to deliver the 1,000 Council homes. The monies that have been allocated to the Council will fund the revenue costs, which support the housing development process, including the recruitment of key support staff, training and development.

The identification of new sites for the Council housing delivery programme is essential if the Council is to build a sustainable pipeline of sites going forward into the next administration and the next GLA funding round. Most of the sites identified in the report’s Appendix are at an early stage of development. However, this is the first of three stages at which Members have the opportunity to take formal decisions in relation to any given site in the programme. The next stage would be when a site comes forward for planning, at which point members on the Planning Sub Committee would make a decision. Finally, all sites will come back to Cabinet before any contracts are let to build or to purchase homes. This would also be the point at which any decision to formally appropriate any site from the General Fund into the Housing Revenue Account would be taken. Therefore, this decision is the first of three stages in a triple lock, ensuring Members have full oversight of the delivery programme. In addition, Ward Members will be engaged on all sites in their ward before any detailed proposals are worked up or any consultation is undertaken with the public, and will be kept informed about the project’s process through to delivery.

The acquisition of up to 11 affordable homes on the Hornsey Town Hall site will allow the Council to maximize the benefits of the existing development partnership and s106 agreement with Crouch End FEC by securing the delivery of Council owned homes. It is intended that these homes will be used to provide much needed housing for adults with learning difficulties and funding is being sought from the GLA’s Specialist and Supported Housing Fund to support this acquisition.

Alternative options considered

The alternative to the Council building Council rented homes itself, on its own land, would be to dispose of the sites and for another organisation to deliver homes instead. This was the model adopted in the Cabinet decision of 23 January 2017; to dispose of sites to Sanctuary Housing Association. That decision was revoked at the Cabinet meeting on 13 November 2018, which also determined that the Council should set up its own housing delivery programme to deliver the Borough Plan target of 1,000 Council homes.

The alternative option for delivery would be for that development to be delivered through the General Fund via a Wholly Owned Company (WOC). The setting up of a WOC was approved on 17 July 2018. However, the need for a WOC to deliver the housing programme no longer exists following the Government’s decision to lift the Housing Revenue Account (HRA) borrowing cap. As a result of this, the Cabinet decision of November 2018 was that the Council housing delivery programme would be focused on delivering Council rent homes via the HRA.

The WOC will instead primarily be used to hold the types of homes that the Council cannot hold in the HRA, such as private rented housing and forms of intermediate rented housing, should the Council determine it wishes to deliver these types of homes. The WOC will be set up in due course to undertake this role.

The other option considered would be for the Council not to develop these sites at all. This would undermine the Council’s own Borough Plan target to deliver 1,000 Council homes, as well as its ability to hit its overall housing targets and to tackle the needs of over 10,000 households on the housing waiting list.

The alternative option to accepting the GLA Home Building Capacity Fund would be not to accept it. However, this would both hinder the Council’s ability to deliver on its housing commitments and damage the Council’s wider financial position. This is because, without this funding, the speed of delivery is likely to be reduced as less resources may be available to the programme, while wider revenue budgets would be put under unnecessary pressure.

The alternative options to identifying sites for the housing delivery pipeline would be either to rely solely on purchasing affordable homes available under s106 agreements, rather than the Council building out its own sites, or to postpone identifying new sites until new funding is announced. The former would not be acceptable, as purchasing homes from developers, rather than the Council building them itself, means that controls over quality, cost and certainty of delivery are weakened and the new homes would not always be additional affordable homes for the borough. Waiting to identify further sites until there is more funding announced could result in the Council not being in a position to put forward a credible bid, which may result in a significantly smaller share of the available funding than it was awarded in the current GLA funding round.

The alternative option to the Council acquiring the 11 affordable homes at Hornsey Town Hall would be for a Registered Provider (Housing Association) to acquire the 11 homes instead. In this alternative the Council would still retain nomination rights to the homes but would not have ownership of these homes, would not benefit from the rental income stream, would not be able to set rents at Council rent levels, and would not be able to ensure they are the type of supported housing now intended for the scheme.