Social Lettings Agency 2 Year Review
The Assistant Director, Housing and Built Environment, presented a report which advised members of the current financial position of the social lettings agency and presented options for the future of the scheme in light of recent changes to local government funding for homelessness prevention.
The social lettings agency aimed to reduce homelessness, by improving access to private sector accommodation. The scheme had secured leases to 49 units of accommodation over the past 2 years, which had provided housing for over 50 vulnerable households.
In autumn 2016, the government announced a review of funding for temporary accommodation. The acquisition of further leases was suspended until the outcome of the review was known. In March 2017, the government announced that the existing Temporary Accommodation Management Fee would be replaced for a 2 year period by a Flexible Homelessness Support Grant.
The changes to funding arrangements had necessitated a review of the social lettings agency scheme. The report set out three potential options for the future of the scheme; to continue to expand the private sector leasing scheme and increase the level of flexible homelessness support grant used to fund it, to terminate the private sector leasing scheme or to wind down the existing private sector leasing scheme and develop a business case for a new property management service that would operate on a commercial basis similar to that offered by some high street agents, in order to help sustain the current private sector lease scheme tenancies and grow the social lettings agency.
The report recommended that the third option be explored further, as this enabled the council to sustain the current private sector leases within the social lettings agency, whilst continuing to prevent homelessness by improving access to accommodation in the private rented sector. The approach also complimented the council’s broader income generation intentions, which were likely to include the creation of a new council-owned housing company.
Councillor Batsford proposed approval of the recommendations to the Assistant Director, Housing and Built Environments report, which was seconded by Councillor Beaney.
RESOLVED (by 5 votes for, to 1 against, with 0 abstentions) that:
1. Members consider the impact of the new financial arrangements introduced by central government on the operation of the current social lettings agency scheme, and;
2. Members consider the options outlined in the report and agree that option 3 should be pursued as the best way forward
The reason for this decision was:
In February 2015 Cabinet gave approval to pilot a private sector leasing (PSL) scheme as part of the development of a social lettings agency (SLA). The report to cabinet in February 2015 included a feasibility study (carried out by Shelter on behalf of the council) which recommended the formation of an SLA within which two distinct modes of service delivery could be adopted by the council:
I. Lease accommodation in the private rented sector in order to make accommodation available for people with a housing need and assist with homelessness prevention.
II. Manage accommodation on behalf of private landlords in competition with high street letting agents
The PSL scheme (described at (I.) above) was set up in April 2015. The PSL scheme was funded by the temporary accommodation management fee (TAMF). This was a demand led payment from government which paid a supplement of £60 per week, per property, in addition to the standard Local Housing Allowance rate. The TAMF payments enabled the scheme to offset the operating costs of managing accommodation. The model proved to be financially viable and was delivering a small surplus to the council on the 49 properties leased.
In March 2017, the government confirmed that the TAMF would be replaced by the Flexible Homelessness Support Grant (FHSG). This is a ring-fenced grant payment for the purposes of homelessness prevention activity. This change to the funding model has changed the nature of the PSL scheme project form an income generating initiative (which successfully provided affordable housing solutions to households) to one which now represents a net cost to the council. As such, the cost effectiveness of the PSL model needs to be compared to the full-range of homelessness prevention activity available while, in addition, its longer-term viability needs to be reviewed.