Agenda item

The property at 1 – 3 Blenheim Road should be renovated to provide 9 x 1 bed temporary accommodation units within the borough at a capital cost of £373,500 reducing the cost of nightly paid emergency accommodation.

The Committee:

(1)          Recommended to Council the use of:

·                     The £200,000 of capital reserves previously approved for the demolition of 1-3 Blenheim Road; and

·                     UP to a further £173,500 from S106 affordable housing developer contributions.

To bring 9 x 1 bedroom flats at Blenheim Road into use as temporary accommodation, subject to first entering into a full repairing Agreement to Lease with a Social Housing Provider.

(2)          Authorises the Head of Housing and Environmental Services to negotiate and agree terms of the agreement for lease with the Social Housing Provider, following consultation with the Head of Legal and Democratic Services, Director of Finance and Resources and the Chairman of the Strategy and Resources Committee.

The Committee received and considered a comprehensive report which sought approval to renovate 1- 3 Blenheim Road to provide 9 x 1 bed units for the purposes of temporary accommodation within the Borough.

The report concluded that there had been significant changes since the previous decision taken in June 2014 by this Committee to demolish the building.  These included the continued housing pressures surrounding the Council’s statutory duty regarding homelessness and the increased costs of doing so.  In addition, previous concerns about creating a new access to the Longmead Depot had receded following alternative methods of mitigating this risk had been put forward.

The benefits of disposal by way of a lease rather than entering solely into a management agreement for the properties were noted and the rent to the Council would be geared to rents received by the Housing Association.  It was recognised that condensation had been a problem in these properties in the past and the refurbishment would centre on overcoming this issue.  The management agreement would provide for regular inspections. On-going maintenance and repair of the properties would be the responsibility of the Housing Association.  Whilst the location of this accommodation was not ideal and would not lend itself to settled accommodation, as temporary accommodation it was preferable to Bed and Breakfast.  Exemption from creating secure tenancy applied to the Council or any party discharging the function on its behalf.

It was further noted that, whilst income from residential property was exempt from VAT there was a potential VAT liability arising from the works.  The amount of VAT recoverable on expenditure related to exempt income was currently 5% of total VAT recovered.  The Head of Financial Services was optimistic that this 5% limit would not be exceeded in the current financial year but Officers would be investigating options to reduce liability on other properties by potentially exercising the opt to tax to mitigate the risk of exceeding the 5% limit.  However, it was stressed that this exemption did not reduce the overall amount of VAT incurred by the Council.

It was confirmed that Rosebery Housing Association’s only concern regarding taking on the management of these properties was over the issue of condensation.  This would form part of the negotiations over the terms of the agreement and no works would be undertaken until agreement had been reached and the lease signed.

Accordingly, the Committee:

(1)          Recommended to Council the use of:

·                     The £200,000 of capital reserves previously approved for the demolition of 1-3 Blenheim Road; and

·                     Up to a further £173,500 from S106 affordable housing developer contributions.

to bring 9 x 1 bedroom flats at Blenheim Road into use as temporary accommodation, subject to first entering into a full repairing Agreement to Lease with a Social Housing Provider.

(2)          Authorised the Head of Housing and Environmental Services to negotiate and agree terms of the agreement for lease with the Social Housing Provider, following consultation with the Head of Legal and Democratic Services, Director of Finance and Resources and the Chairman of the Strategy and Resources Committee.