In September 2019, Cabinet approved the allocation of £3m to purchase accommodation for temporary use by homeless households.  To date, the Council had 81 households in temporary accommodation (TA) which was funded from the Revenue Budget, as well as nine households funded by the Rough Sleeping Initiative (RSI).  Grant funding had been received to contribute towards additional costs however, it was anticipated that the amount received would not meet the Council’s costs.  A deficit of £25,500 was expected by the end of 2020/21 and there was no indication that additional funding would be forthcoming.  The budget for 2020/21 was £1.1m offset by £508,000 from housing benefit leaving a net cost of £592,000.

Cabinet was apprised of the properties owned by the Council and offers accepted on properties across the District to accommodate homeless people and families.  The Council would also continue to use approximately 30 privately owned and well-managed TA establishments.  Appendix A to the report illustrated the number and types of households the Council had placed in TA between April 2020 and February 2021.  As a result of COVID-19, the Council was unable to predict the future demand for TA and it was possible that the levels of homelessness might reduce in the short to medium term.  Members noted that the Council was not duty bound to provide single people with self-contained accommodation; the Council would commission proper management and support services to assist with this cohort.

Appendix B to the report illustrated the average net cost of TA through private providers, per size of household.  The average stay was 51 days for single people/childless couples at a cost of £1,700 (£12,000 annually) and 66 days for families at a cost of £2,500 (£14,000 annually).

A financial assessment of income and costs associated with the Council purchasing TA had been completed.  Projections had been verified in consultation with neighbouring local authorities delivering similar schemes.  It was estimated that £5.7m would be required to purchase 35 different properties (combination of houses and flats) with an overall net cost avoidance of just under £160,000 per annum.

The TA Investment Strategy and Risk Register at Appendices C and D respectively to the report outlined the types of properties the Council intended to purchase and associated risks.  In-house and external specialist expertise would be required to oversee property management, repair and refurbishment functions.  External consultancy would be monitored in consultation with the Cabinet Portfolio Holders for Housing and Finance and Performance Management.  Currently, the Council did not have the resources, expertise or tools to manage all aspects of properties directly; this would be kept under review as the portfolio of properties grew.  A service specification was being established to commission a property management service to manage existing and future purchases.

During the discussion, it was clarified that improved energy efficiency measures were a primary focus for the Council when purchasing and retrofitting properties for TA.  Environmental innovation funding initiatives / grants were actively being sourced to assist with the installation of energy efficiency measures in all Council properties.

Cabinet was supportive of the recommendations proposed and agreed that purchasing property would provide the Council with more control over the quality of TA and ensure greater control of revenue costs.  It would also allow the Council to develop the skills and expertise required to grow a larger portfolio of properties for the future.

RECOMMENDED: That the:

1)    amended Temporary Accommodation Purchase Strategy be approved;

2)    Head of Housing and Community be given authority to purchase property for the use as temporary accommodation for homeless households up to a total value of up to £6 million to be funded from borrowing, in consultation with the Portfolio Holders for Housing and Finance and Performance Management; and

3)    Capital Programme be amended accordingly.