Wednesday 29 June, W16 - delivering new housing stock - Sukvinder Kalsi


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Housing is a key priority for councils and with reform of housing finance currently on the agenda now is an opportune time to consider how local authorities will secure investment for the future.

The Local Government Group has long called for reform of housing finance. We have argued that receipts and rents should be retained locally so they can be spent locally, that housing needs to be properly funded to ensure long-term investment, and that financial self-determination should be in place to allow investment in housing and the local economy.

But what picture is emerging as reform takes shape and how certain are we that we can achieve the investment we need to let us look to the future with confidence? This session will explore what reform means for councils and consider what is needed to secure the resources needed to fund the delivery of new stock.

Cllr Jonathan Glanz, Cabinet Member for Housing and Property, Westminster City Council
Cllr Tony Newman, London Borough of Croydon
Sukvinder Kalsi, Birmingham City Council
Chair: Cllr Mike Haines, Teignbridge DC

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Wednesday 29 June, W16 - delivering new housing stock - Sukvinder Kalsi

  2. 2. Introduction <ul><li>Overview of Local Authority Housing Finance Reforms </li></ul><ul><li>The ‘Big Picture’ Implications of the Reforms </li></ul><ul><li>Opportunities for Investment and the Issues for Consideration by Local Authorities </li></ul><ul><li>Summary and Conclusions </li></ul>
  3. 3. Overview of Local Authority Housing Finance Reforms <ul><li>A Brief Recap of the Context… </li></ul><ul><li>Current Overall Framework Established in 1989 </li></ul><ul><li>- National Subsidy System </li></ul><ul><li>- Ring Fencing of Housing Revenue Account </li></ul><ul><li>Some Periodic Tweaks… Business Planning, National Receipts Pooling and New Build Exclusions (Housing & Regeneration Act 2008) </li></ul><ul><li>Concerns of Members/Tenants - Review Launched in December 2007 </li></ul>
  4. 4. <ul><li>The Proposed Reforms… </li></ul><ul><li>Dismantling of the HRA Subsidy System </li></ul><ul><li>Introducing a Devolved Self-Financing System (local rent retention and a national debt reallocation) </li></ul><ul><li>Retention of HRA Ring-Fence </li></ul><ul><li>Continuation of National Pooling of Receipts </li></ul><ul><li>Establishing a ‘Debt Ceiling’ for Each Council </li></ul>Overview of Local Authority Housing Finance Reforms
  5. 5. ‘ Big Picture’ Implications for Local Authorities <ul><li>Local Rent Retention based on RPI+2.5% to 2015/16 and RPI+0.5% thereafter </li></ul><ul><li>Resources to Maintain Decent Homes (Uplift of 27% on Current Allowances) </li></ul><ul><li>Resources for Management & Maintenance (Uplift of 5% on Current Allowances) </li></ul><ul><li>Resources for Adaptations for Council Stock </li></ul><ul><li>Additional Debt Allocation of £7.6billion </li></ul><ul><ul><li>£13.2billion Allocated to 134 Local Authorities </li></ul></ul><ul><ul><li>£5.6billion Cancelled for 34 Local Authorities </li></ul></ul><ul><ul><li>National Average Debt of £16,000 Per Property </li></ul></ul>
  6. 6. Opportunities for Investment <ul><li>National Context… </li></ul><ul><li>Significant Waiting List > 4.5million </li></ul><ul><li>National Ambitions to Deliver More Homes </li></ul><ul><li>Current and New Opportunities… </li></ul><ul><li>Challenge Fund 2009 to 2010 - £350million </li></ul><ul><li>Backlog of Decent Homes - £1.6billion </li></ul><ul><li>Affordable Rents 2011 to 2015 - £2.2billion </li></ul><ul><li>New Homes Bonus - 2012/13+ </li></ul><ul><li>Additional Potential Long Term Investment - £50billion (PWC & Smith Institute Report) </li></ul>
  7. 7. Key Issues for Consideration <ul><li>Compare and Evaluate Actual Expenditure & Income to Assumptions of the Settlement </li></ul><ul><li>Review and Update HRA Business Plan </li></ul><ul><li>Establish Asset/Service Management Strategy </li></ul><ul><li>Develop HRA Debt Management Strategy </li></ul><ul><li>Identify the Scale and Phasing of Potential Headroom for New Investment </li></ul><ul><li>‘ Stress Test’ HRA Business Plan </li></ul>
  8. 8. Summary and Conclusions <ul><li>Support for Reforms and New Framework...? </li></ul><ul><li>(29% accept, 58% accept with reservations) </li></ul><ul><li>A Fair Offer & Issues for Further Negotiation…? </li></ul><ul><li>(pooling of RTB receipts/debt ceiling) </li></ul><ul><li>A Sustainable Long Term Future…? </li></ul><ul><li>(strong service plans/fiscal discipline) </li></ul>