Agenda item

6.1

Janet Sharpe, Director of Housing and Neighbourhoods Service, referred to the Government’s Summer Budget, announced on 8^th July 2015, specifically to the implications with regard to housing, from both the perspective of the Council and housing associations.

6.2

The Committee received presentations from Liam Duggan, Manager, Housing Business Plan Team, Communities, and Sharron Dyett, Housing Services Director, South Yorkshire Housing Association Ltd, on the implications for, and the proposed course of action to be taken in response to, regarding the Council and housing associations, respectively, as follows:-

6.3

The Council Perspective

6.3.1

Liam Duggan reported on the implications from the perspective of the Housing and Neighbourhoods Service, referring to the key policy changes and outlining how the Council was planning to deal with the impacts of such changes.  Mr Duggan reported on the key items in the Budget, which included changes to rent policy, higher rents for higher earners, the extension of the Right to Buy scheme, which had been announced through the Queen’s Speech, further welfare reforms and a review of security of tenure, with the key changes including:-

·                All rents reduced by 1% each year for 4 years;

·                Registered providers required by 2017/18, to charge market, or near market rents, to tenants where household income exceeds £30,000;

·                The extension of the Right to Buy to Housing Association tenants, through a new Housing Bill;

·                A reduction to the Benefit Cap, from £26,000 to £20,000 outside London;

·                A review of the use of lifetime tenancies in social housing to limit their use, and ensure that households are offered tenancies that match their needs and ensure the best use is made of the social housing stock.

6.3.2

Mr Duggan reported on the impact of the changes on the Housing Revenue Account (HRA) Business Plan and referred to a summary of the risks of the changes. 

6.3.3

Members raised questions and the following responses were provided:-

·                Officers would make every effort to ensure that tenants and leaseholders were fully briefed on the policy changes, as well as on the implications of such changes.  Officers would be meeting with representatives from local area housing fora to work through the detail, to enable them to get a good understanding of the issues.  Also, officers would be liaising with colleagues in other local authorities to see how they would be dealing with the changes.

·                Whilst it was very unlikely that the Housing and Neighbourhoods Service would be able to identify the required budget reductions by the time of the publication of the Cabinet report on the Housing Revenue Account in January 2016, officers would be looking to achieve a funded position, through slippage and other cost savings, for the next five years.  Further work would be required, through consultation with all relevant parties, to determine how the Council could achieve the required savings in the future.

·                In terms of rent reductions, the social rent element was far easier to understand as the target rent would simply be reduced by 1% each year, whereas the market rent element was more difficult as such rates inflate each year.  Whilst it was not totally clear, the guidance suggested that the Council would have to take a benchmark position, in terms of the market rent, as at 8^th July 2015, then make reductions going forward. 

·                Details of the number of 18 to 21 year olds currently in receipt of Housing Benefit would be sent to Councillor Jack Scott.

·                Due to the lack of clarity in terms of the guidance, officers were not clear in terms of how they were to adapt the HRA Business Plan.  There was a need to make sure that the Council did not rush into making any decisions at this stage, on the basis that there could be further changes in policy.

·                When asked to quantify the impact on stock numbers of the enforced sale of high value assets to fund the extension of Right to Buy, it was felt more likely, at this time, that the Council would be set a funding target, and need to generate receipts to the Government based on this amount. With this in mind, the Council would have to work very closely with housing associations to make sure the City was not left with too few properties of a certain size in any one area.

6.4

South Yorkshire Housing Association Ltd

6.4.1

Sharron Dyett reported on the impacts of the Summer Budget on housing associations, focussing specifically on the South Yorkshire Housing Association (SYHA), and on how the Association was planning to deal with such impacts.  Ms Dyett reported that the housing associations would experience similar problems to the Council, both in terms of immediate budgetary impacts regarding the rent cut and with regard to future planning.  She stated that the SYHA would be able to deal with the immediate impacts of the policy changes, but it would have a major effect on its development plans.  The changes would have a varying impact on different housing associations and it was likely that a number would be scaled down, transformed or be involved in mergers with other housing associations.

6.4.2

Members raised questions and the following responses were provided:-

·                There were concerns that some of the excellent work undertaken by housing associations in the City, such as the investment in communities by Sanctuary Housing in the Shiregreen area, may no longer be able to continue.  This could result in there being pockets of good quality housing and poor quality housing in certain areas of the City.  It was also accepted that there could be tensions in communities whereby some people would be able to pay rent based on their earnings, where others would struggle.

·                Whilst it was accepted that mainly older people would be able to exercise their Right to Buy, and that the proposed welfare changes would have a disproportionate impact on younger people, the SYHA and the Council were considering alternative housing models for younger people.

6.5

RESOLVED: That the Committee:-

(a)       notes, with concern, the impacts of the policy changes announced in the Government’s Summer Budget relating to both Council housing and social housing managed by housing associations;

(b)       expresses its thanks to Janet Sharpe, Liam Duggan and Sharron Dyett for attending the meeting and responding to questions; and

(c)        requests that Council officers and Ms Dyett attend a future meeting to update the Committee on any developments in connection with the changes.