Why didn’t SBC demand the government honour its commitment on homelessness funding?

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This is a media release from Swindon Housing Action Campaign

Swindon Council has given the impression that its proposal to buy 100 homes on the market into which they will put homeless people is motivated by a concern to deal with the homelessness crisis. Look carefully at the Cabinet documents and you can see this isn’t the case. The reason they have proposed this is because the government is cutting Swindon’s funding for homelessness prevention and relief. The new grant system which is being introduced is £400,000 less than the council received in 2016-17. This is despite the fact that the government promised:

No local authority will receive less annual funding under the (new) grant than we estimate they would have received under the Department of Works & Pension fee.”

It’s therefore strange that Swindon Council failed to press the government to honour this commitment. The government statement on the new “flexible homelessness grant” was published on March 15th, together with the allocations each council would receive. Yet the council did nothing to respond to the loss £400,000 for more than five weeks. When they did eventually (on April 24th) write a very meek email to the department asking how they made their calculation, it was only after tenants pointed out the discrepancy, and pressed the council to demand that the government honour it’s commitment. More

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SBC should withdraw the proposal to introduce compulsory “affordability assessment”

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Swindon council currently offers advice and support to tenants in relation to finances, benefits and employment for anyone who wishes to receive their help. However, the council is now proposing to introduce a compulsory “affordability assessment” for all households registered on the Council’s housing waiting list, and all current council tenants applying to move to an SBC home which would have a rent higher than their existing property.

When people apply to go on the council’s housing waiting list they are subject to an assessment to see if they have an household income sufficient to be able “to afford a suitable property on the market”, whether that be private rent, a mortgage or part-ownership. If it’s judged that they can afford this then they are blocked from joining the list. The council introduced this against tenant opposition (See Throwing people off the waiting list 1). We believed it was a convenient means of cutting the numbers on the waiting list. It fell from over 16,000 households to less than 4,000.(Read on below or download a PDF here allocationschanges )
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“Statutory homelessness” in Swindon

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The statistics for 2015/16 relating to people who approach Swindon Council as homeless or being threatened with homelessness show a worsening situation.

  • In 2015/16 the number of households approaching the council as homeless was 559. Two years previously it was only 225.

  • The number of households accepted as homeless and “in priority need” (see Addendum for explanation) has risen by 50% over the last two years; from 110 to 165.

  • The number of households living in temporary accommodation has increased by 78% over the last two and a half years, from 201 to 359.

From the figures it’s clear that Swindon Council is finding it increasingly difficult to deal with what is a growing problem. In 2009/10 they managed to assist 956 households in preventing or relieving homelessness. Yet by last year they were able to achieve this in only 287 cases.

The number of households they were able to help obtain alternative accommodation (where they were faced with the loss of their existing accommodation) fell from 757 in 2009/10 to just 242 in 2015/16. (Read on below or download a PDF here homelessnessstatsswindon ) More

Why the proposal to “appropriate” HRA assets should be withdrawn

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Swindon Council is proposing to transfer assets – garages, shops and “amenity land” – from the Housing Revenue Account to the General Fund. Below I explain why the ‘legal’ justification for this proposal is wrong, how the proposal would be financially detrimental to the HRA and tenants and why it should be withdrawn.

1) Housing Revenue Account ‘ring-fence’; Background

Council housing is accounted for in a ‘ring-fenced’ account within the General Fund. The ring-fence was introduced in 1989, primarily to prevent rates being used to support council house building. However, it also meant that council rents could not be used to support other services. Prior to 1989 transfers between the HRA and the General Fund were common. Rates had been used to support council house building from the end of the First World War. What is less well known is that rents were used by some councils to support other services. In the case of Dacorum Council at one time 40% of their non-housing services were paid for with tenants’ rent. The 1989 Local Government and Housing Act changed this. “From 1st April 1st 1990 there were to be no transfers from the General Fund to make good deficits on the HRA, and transfers from the HRA to the General Fund were only allowed in certain prescribed circumstances” (The HRA Ringfence, Chartered Institute of Public Finance and Accountancy LAAP Bulletin 22).

When Margaret Thatcher introduced Right to Buy in 1980 and council homes began to be sold off to the sitting tenants, what were council estates when built began to include home owners and, later, tenants of private landlords. Services which were previously provided solely for council tenants were now provided for ‘mixed communities’. The 1989 Act included rules for determining when the General Fund should make a contribution to the HRA and vice versa. Schedule 4 Part III of the 1989 Act said that where “benefits or amenities” were shared by the community as a whole, “the authority shall” (i.e. must) make contributions to their HRA “from some other revenue account of theirs” which will “properly reflect the communities share of the benefits or amenities”. Swindon Council does not appear to have been carrying out this duty (of which more later). Read on below or download a PDF here appropriation More

HRA robbery

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Swindon Council has sent out a questionnaire on ‘2017/18 Housing Funds’. It asks for tenants’ opinions on how to deal with a shortfall of £1.34 million next year. It lists the reasons they have less money as the loss of homes due to right to buy, the 1% rent cut imposed by central government, and the need to invest in homes.

What they conveniently neglect to mention is the loss of income as a result of the proposed transfer of garages, some shops and “amenity land” owned by the Housing Revenue Account (HRA), to the council’s General Fund. Their questionnaire is silent on the fact that these transfers will mean the HRA would lose annual income of £1.309 million. Garage rents of £1.074 million and £235,000 income from shops/commercial premises will be handed over to the General Fund. Last year the garages made a surplus of £724,000 after costs are accounted for. More

Starving Council housing of funds: An update

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Swindon Council’s June Cabinet meeting had before it a Medium Term Financial Plan for the Housing Revenue Account (HRA), the separate account for Council housing. Since there is no government subsidy for the HRA it is entirely dependent for its income on rent and service charges paid by its tenants. However, the rent it charges is determined by central government. So it has no direct control over its income. For instance, the current government decided that Councils would have to cut rent by 1% each year for the next four years. This has completely disrupted planning to maintain the standard of housing. Government rent setting regulations had previously set increases for ten years at the level of the Customer Price Index + 1%. However, this commitment was abandoned and the rent cut imposed. As a result the loss of rent was expected to be £22.8 million. Subsequently the government decided to allow Councils to exclude supported accommodation for elderly and disabled people from the rent cut (at least for this year) and allow them to increase rent under the old formula. Swindon increased rent for these people by 0.9%. However, the loss of rent overall during those four years is still estimated at around £22 million. (Read on below or dowmload a PDF here starvingchupdate )
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Suspend ‘debt’ payment

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Suspend ‘debt’ payment

The heading of the Advertiser article, “Fears rent cut may hit home repairs budget” was misleading. It is not just a fear. The loss of income from rent will hit the budget for replacing components such as kitchens, bathrooms, roofs etc. The article neglected to point out how much money would be cut despite the fact that our press release included a table showing the cuts in spending for these components. For instance in 2016/17 £2.150 million will be spent on installing new kitchens. However, in each of the following two years only £1 million will be spent. The cuts over 2 years, in comparison with spending in 2016/17 will be: aids & adaptions – minus £400,000, bathrooms – minus £720,000, central heating – minus £990,400, kitchens – minus £2,300,000, roofs – minus £852,000. This adds up to a cut of £5,262,400 over the two financial years 2017/18 and 2018/19. More

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