“SCDC is heading into ‘a perfect storm’ over affordable rented housing as it is hit by a triple whammy from the new government’s recent budget announcements. Firstly by having to give a 1% reduction in council rents over the next four years which will hit our ambitious council house building programme; secondly, by being forced to sell our best housing stock as properties become void to reimburse housing associations for introducing "right to buy" to their properties; and thirdly by the fact that the council will still have the £205 million loan to repay which we took out to pay off our HRA debt to the government to enable us to embark on our council house building programme. In addition to the above we are expecting to see many small landlords selling up as a result of the changes to the tax rules on ‘buy to let’ properties. Officers have warned that homelessness will rise in the district as a direct result of this government action. Therefore this council instructs the Chief Executive to draw the Secretary of State's attention to these facts and copy to the Local Government Association.”
Decision:
This motion was lost.
Minutes:
Councillor John Williams proposed the following motion:
“SCDC is heading into ‘a perfect storm’ over affordable rented housing as it is hit by a triple whammy from the new government’s recent budget announcements. Firstly by having to give a 1% reduction in council rents over the next four years which will hit our ambitious council house building programme; secondly, by being forced to sell our best housing stock as properties become void to reimburse housing associations for introducing "right to buy" to their properties; and thirdly by the fact that the council will still have the £205 million loan to repay which we took out to pay off our HRA debt to the government to enable us to embark on our council house building programme. In addition to the above we are expecting to see many small landlords selling up as a result of the changes to the tax rules on ‘buy to let’ properties. Officers have warned that homelessness will rise in the district as a direct result of this government action. Therefore this council instructs the Chief Executive to draw the Secretary of State's attention to these facts and copy to the Local Government Association.”
In presenting the motion, Councillor Williams referred to the Cabinet meeting held on 9 February 2012 where a report on the Housing Revenue Account Business Plan for thirty years was approved. This set out that the Housing Revenue Account subsidy system would be replaced by a new regime of self-financing and that through the Localism Act 2011 the Government was ceasing negative subsidy and was asking for the Council to make a one-off payment of £205.7 million. He had calculated that the interest of the loan that the Council took out to make this payment would amount to £7.2 million. This, on top of the Chancellor’s budget announcements and the impact this would have on the Housing Revenue Account, he felt, placed the authority in a very serious situation.
Councillor Williams was concerned that the Council could not now guarantee whether its Council housing scheme would go ahead as planned and felt that the Council’s political leadership should do more to represent the people of South Cambridgeshire by lobbying central Government, questioning why a recent request to write a letter to the Minister on the issue had been refused.
Councillor Bridget Smith, Leader of the Opposition, seconded the motion.
Councillor Ray Manning, Leader of the Council, agreed with the principles of the motion but emphasised that a meeting with the Secretary of State had been diarised. Long discussions had also been held with representatives of Cambridge City Council in order that the two Councils could work together to address this and Heidi Allen MP had also been supportive. A request to send a letter to the Secretary of State had been refused for the sole reason that the Leader, Housing Portfolio Holder, Chief Executive and the Director of Housing were scheduled to meet with the Secretary of State very soon.
Councillor Simon Edwards, Deputy Leader and Portfolio Holder for Finance and Staffing, highlighted that the Council did not incur any debt itself but had in fact taken on a debt.
Councillor Mark Howell, Portfolio Holder for Housing, expressed his extreme disappointment with the Chancellor’s budget announcements and the impact the resulting changes to house rent and the benefit cap would have on the people of South Cambridgeshire and the Council’s Housing Revenue Account. He reiterated the Leader’s comments about the meeting with the Secretary of State and said he would not be afraid to explain, on behalf of South Cambridgeshire’s residents, what these changes would mean for the people in the district.
Councillor Bridget Smith said that the motion was intended as a way of empowering the Council’s representatives ahead of the meeting with the Secretary of State and provide some support.
Voting on the motion, with 13 votes in favour, 30 votes against and 2 abstentions, the motion was lost.