Decision details

The Cabinet Member for Housing Services presented a report regarding delivery of the Local Authority Housing Fund Round 4 (LAHF R4), which provides capital funding to increase the supply of high-quality temporary accommodation to reduce reliance on Bed and Breakfast (B&B) placements for homeless families, and support accommodation for households under the Afghan Resettlement Programme providing long-term affordable assets for the Council. Members voiced their support in the invest-to-save approach, reducing pressures on Council budgets while providing benefits to residents. In response to Members’ questions it was noted that a breakdown of waiting lists would be provided to Members outside the meeting.

Decision:

Cabinet:

1. Approved the use of £701,000 from the total £1,176,000 combined grant allocation and match funding from the General Fund Capital Programme of £1,051,500 for 2026/27 delivery, to enable the acquisition of eight properties; and
2. Noted that, based on current interest rates of circa 6.44% for 30-year PWLB money, the estimated interest cost of borrowing will be just below £0.068m per annum or £0.204m over the first three years. This will support the reduction of reliance on unsuitable and high cost temporary accommodation over the longer term. (The Council used this approach for the delivery on the previous round of funding under LAFH R3).

Reasons for the decision:

Approval is needed for the 60% General Fund Capital Programme match funding required under the LAHF R4 agreement to support the purchase of eight properties. Rents will be set at affordable rent levels. This approach supports long-term sustainability reflecting an invest-to-save model, reducing reliance on expensive Bed and Breakfast placements. Estimated reductions are approximately £0.170m over the first three full years. This compares favourably to the debt interest costs of £0.204m over the same three-year period for borrowing from PWLB to fund the match contribution. In addition, the properties will be let at Affordable Rent, which over an extended period estimated at 37 years will recover the initial principal costs incurred to purchase them. The proposal aligns with LAHF R4 grant conditions enabling the Council to meet its statutory housing duties while easing financial pressure.

Alternative options considered and rejected:

Do nothing: These properties will provide long-term, financially sustainable temporary accommodation for the borough, with the council contributing only 60% of the acquisition cost. If this option is not pursued, the council may need to continue relying on expensive bed and breakfast placements, which would not support a cost-effective, invest-to-save approach.