MIDDLESBROUGH COUNCIL
EXECUTIVE REPORT
Housing Capital Allocation and Prioritisation Report 2010/11
Executive Member for Regeneration and Economic Development
Director of Regeneration: Kevin Parkes
Date: 17th August 2010
PURPOSE OF THE REPORT
1. The purpose of this report is to seek the endorsement of the Executive for the profiled spend of approved capital resources to undertake a programme of activities for housing improvement, demolition and acquisition in the town throughout 2010/11.
SUMMARY OF RECOMMENDATIONS
2. It is recommended that the Executive notes the capital resources available in 2010/11 for housing improvement, demolition and acquisition and approves the proposed spend of resources on the themes set out in this report.
IF THIS IS A KEY DECISION WHICH KEY DECISION TEST APPLIES?
It is over the financial threshold (£75,000) / aIt has a significant impact on 2 or more wards /
X
Non Key / X3.
DECISION IMPLEMENTATION DEADLINE
4. For the purposes of the scrutiny call in procedure this report is
Non-urgent / aUrgent report /
X
If urgent please give full reasons
Resource Availability
5. Approximately £7.6m has been identified for investment in the town’s housing stock for 2010/11. The resources for the capital programme have been obtained from a number of funding streams including: the Single Housing Investment Pot (SHIP); Housing Market Renewal Fund (HMRF); the Working Neighbourhood Fund (WNF) and, the Council’s own resources. This report sets out a brief background to the sources of funding focused around four delivery themes and puts forward broad proposals for how it will be spent. Table 1 provides a summary of available funds by source.
Table 1: Summary of total capital allocations 2010/11 and funding source
Funding Source / 2010/11£
Middlesbrough Council Grant Resources
Housing Market Renewal Funding (HMRF) / 1,569,236
SHIP Obj 1 (Housing Regeneration and Housing Market Renewal) / 1,731,612
SHIP Obj 3 (Private Sector Improvement) / 161,943
SHIP Obj 4 (Community Housing Needs and Adaptations) / 317,839
SHIP Ring-fenced regional loans contribution / 302,045
Disabled Facilities Grant (DFG) / 653,628
Working Neighbourhood Fund (WNF) / 700,000
Developer Contributions* / 2,868
MBC Capital** / 491,476
Loan Income / 101,271
Sub Total / 6,031,918
Non-Council Resources
Homes and Communities Agency (National Affordable Homes Programme) *** / 1,562,000
Total Resources
/ 7,593,918* The developer contributions are resources received from third parties in respect of demolitions that the Council organises on their behalf.
** The MBC capital is made up of £441,476 contribution towards DFG and £50,000 carried forward from the Regeneration land acquisition budget.
*** The Homes and Communities Agency funding for 2008-11 is estimated at £4,686,000, but could be added to throughout the three years, as regular market engagements will take place where Registered Social Landlords can bid for additional funding. The funding has been divided equally across the three years of the programme for reporting purposes and is subject to review.
6. The capital resources are dedicated to specific initiatives and the achievement of associated outputs. The proposed allocation of resources is set out below under four themes:
a) Housing Regeneration and Housing Market Renewal;
b) Private Sector Improvement;
c) Community Needs and Adaptations; and,
d) National Affordable Housing Programme.
Housing Regeneration and Housing Market Renewal (£3,453,716)
7. The SHIP allocation of £1,731,612 for Housing Regeneration and Housing Market Renewal is complemented by HMRF awarded to Tees Valley Living by the Homes and Communities Agency (HCA). A total of £1,569,236 has been allocated to Middlesbrough from HMRF. The HMRF resources are reduced from those received last year as a consequence of Middlesbrough bringing forward £900,000 of the 2010/11 funding to prevent an underspend across the Tees Valley programme. The HMRF budget has been further reduced by a 17.482% cut to the national programme announced by the new Government. The resources are supplemented by a £100,000 award from WNF and a sum of £50,000 from MBC capital resources, which has been carried forward as it was possible to fund the acquisition of the former Accent land at St Hilda’s from SHIP. A further £2,868 has also been carried forward from developers’ contributions in 2009/10 to support housing regeneration activities. The total capital allocation under this theme, from all sources, is therefore approximately £3.4m.
8. The Executive Report, Gresham Review Interim Proposal recommends a number of interim actions prior to the announcement of a preferred option for the area. The report proposes that Phase 3 would be removed from the redevelopment programme.
9. The majority of the resources will be focused on the progression of acquisitions and the commencement of demolitions in Gresham. The Council owns several properties in Phase 3, bought under exceptional circumstances, which are no longer included in the clearance programme. A Homeswap Scheme is being developed to enable Council owned Phase 3 properties to be improved and brought back into use in exchange for a Phase 1 property. A small budget will also be allocated for the completion of site assembly in St Hilda’s.
Private Sector Improvement (£1,165,259)
10. The Tees Valley SHIP allocation has been reduced in order to support the development of the Regional Loans Scheme. The Sub-Regional Banker Authority has retained a sum of £302,045 from Middlesbrough’s SHIP allocation. The funds will be made available to Middlesbrough when there is a formal sign up to the Regional Loans Scheme to support the following objectives:
a) to improve and maintain healthy living conditions within private sector housing, specifically assisting those who are unable to fund repairs maintenance or adaptations from their own resources;
b) to contribute to the regeneration of areas suffering from market vulnerability and to tackle poor housing conditions where these may lead to neighbourhood decline; and,
c) to encourage owners to undertake works that will make their own homes more energy efficient and reduce the number of households affected by fuel poverty.
A report will be presented to the Executive Member for consideration shortly on this issue.
11. The Council will still receive a core SHIP Objective 3 allocation of £161,943 for Private Sector Improvement, which will be supplemented by a WNF award of £600,000. The Council has operated the Match Incentive and Loan Scheme since 2006/07 in partnership with Accent Regeneration. The Council has been repaid a total of £101,271 from loans facilitated since the start of the scheme. This income will be used to fund further housing improvement schemes in accordance with the original Executive Member approval on 15th January 2007.
12. The overall budget for Housing Improvement is less than expected and difficult decisions have been taken as a consequence. It is proposed that funding is directed to streets removed from the Gresham clearance area in 2010-11 but additional resources are to be sought to continue improvement programmes in University Ward in future years.
13. It is proposed that the facelift programme for 2010/11 could commence the improvement of selected blocks in Phase 3 (Tennyson, Pelham, Portman and Cobham Streets). These streets have been recommended for removal from the clearance programme and their improvement would give confidence to residents ahead of the announcement of the outcome of the Gresham Review later in the year.
14. The residents of Gresham have been living under the shadow of the Council’s plans to demolish their homes for the last five years. It is not unreasonable to assume that many residents may not have carried out routine maintenance as a direct consequence of the Council’s plans, and many homes could now be in a state of disrepair. A small grants package of up to £4,000 is to be developed to assist former Phase 3 owner-occupiers to undertake essential property repairs. The package will be presented to the Executive Member for Regeneration and Economic Development for consideration at the end of September and launched in early October.
15. A budget will also be allocated for the progression of the Community Energy Saving Programme (CESP), which is a Government initiative to improve energy efficiency standards. Works undertaken under the CESP scheme include external insulation, double-glazing and new heating controls and will attract up to 55% leverage from a utility company. The scheme will be targeted at a terrace around the Glebe Park area. The details will be agreed with the Executive Member for Regeneration and Economic Development. It is anticipated that property surveys and consultation on the types of work available to residents will commence in September 2010.
Community Needs and Adaptations (£1,412,943)
16. The SHIP allocation for Community Needs and Adaptations (Objective 4) is £317,839 for 2010/11. In order to maintain the reduction in waiting times achieved over the last three years the funding for this theme will continue to be focused on delivering the Council’s Disabled Facilities Grants (DFG) programme.
17. The DFG programme is also supported by an allocation of Specified Capital Grant from the Government Office for the North East. Middlesbrough’s award has been retained at £653,000 and £628 has been carried forward from 2009/10. In addition, £400,000 has been provided through the Council’s capital programme until the end of 2012/13. It has also been possible to carry forward £41,476 from the 2009/10 award, as additional resources were made available from the Primary Care Trust. The overall Disabled Facilities Grant allocation for 2010/11 is therefore approximately £1.4m. It is anticipated if staffing levels are retained in this financial year, then current waiting times of around 7 weeks for major adaptations such as level access showers will be maintained.
National Affordable Housing Programme (£1,562,000)
18. Registered Social Landlord (RSL) partners have successfully bid to the Homes and Communities Agency’s National Affordable Homes Programme (2008-11). The programme primarily provides resources to deliver an increased supply of affordable homes and supported housing. The allocation of £4,686,000 (£1,562,000 per annum over three years) will be augmented by RSL leverage of £6,759,683 to enhance the provision of affordable homes in Middlesbrough as part of the three-year programme. This could also be added to throughout the three years, as regular bidding rounds will take place, where RSLs can apply for additional funding from the HCA to fit local authority strategic priorities.
19. The National Affordable Housing Programme provides affordable rent and low cost home ownership via the Council’s RSL partners. These will include shared equity properties. These resources do not come to the Council but Middlesbrough residents will benefit from the new units provided by the RSLs and the Council fulfils a strategic enabling role in liaison with RSLs and the HCA. A total of 108 new additional units will be provided by RSLs in Middlesbrough over 2008-11 as part of the following schemes:
a) St Paul’s Road;
b) Acklam Green (Whinney Banks);
c) BoHo Live-Work Units;
d) Daleville Close (Grove Hill);
e) Stages Academy; and,
f) Housing for People with Learning Disabilities (HOLD).
EQUALITY IMPACT ASSESSMENT
20. As part of the development of the housing capital programme, an initial impact assessment was undertaken to ensure that there was no unjustified adverse impact on a group or community and that the Council's equality duties were considered as part of the formulation of the programme. The EIA found that the Council has a duty to consider additional steps needed to ensure equal outcomes for people with a disability and has done this as part of the programme. The other areas where additional provision has been made are focused on addressing deprived areas with the poorest housing stock. People from the BME community and older people are more likely to be living in areas where there is either generally poor housing stock or their particular accommodation is not fit for purpose and needs to be addressed. The decision is therefore likely to have a positive impact on the race, disability and age diversity strands.
OPTION APPRAISAL / RISK ASSESSMENT
21. The resources for the 2010/11 capital programme have been obtained from a number of funding streams (see Table 1) and have been provisionally allocated across the four delivery themes described in paragraph 6. Whilst some of the resources are ring-fenced to support specific initiatives under a particular theme, Councils now have the flexibility to move SHIP funds between themes in order to meet priorities. Any adjustments to the amount of SHIP funding allocated to the Housing Regeneration and Housing Market Renewal theme must be reported to Tees Valley Living to enable the overall Tees Valley HMR programme to be monitored against budget and output projections.
22. Future funding allocations may be reduced if the Council is unable to spend its capital resources. In order to reduce this risk, budget holders and finance officers meet on a monthly basis to monitor progress against expenditure targets and, if necessary, to develop contingency plans. This assists in timely intervention and reporting via the budget clinic process.
23. The 2010/11 awards of SHIP, HMRF and WNF are the last annual allocation of resources from these funding streams. Future funding mechanisms have yet to be announced and will be subject to the next comprehensive spending review. The Council has therefore been working in close partnership with the Homes and Communities Agency in an effort to secure the resources for the delivery of individual projects such as the Gresham HMR project from the anticipated simplified funding streams.
24. In order to mitigate the risks of a possible reduction in capital funding, the Council is to further develop its plans to secure an injection of private sector funding to support housing initiatives and will continue to review the overall strategy in terms of the available funding and generating income from loans.
FINANCIAL, LEGAL AND WARD IMPLICATIONS
Financial Implications
25. £7.6m will be available across Middlesbrough in 2010/11, of which £6,031,918 will be defrayed by Middlesbrough Council to assist in the delivery of Housing Market Renewal activity, the improvement and adaptation of private sector dwellings and the provision of affordable homes.
Ward Implications
26. Activity based around Housing Market Renewal and affordable housing will largely centre on the St. Hilda’s and Gresham/Middlehaven older housing areas of Middlesbrough. Activity around private sector property improvements and non-decent stock will focus on the retained areas of the Gresham Ward.