MEMORANDA
Memorandum by Waverley Borough Council
(LGB 01)
DRAFT LOCAL GOVERNMENT BILL—JUNE 2002
This letter is Waverley Borough Council's representation
on [clause 10(1)(a)(ii)] of the draft Local Government Bill relating
to the "pooling" of a proportion of housing capital
receipts by debt free local authorities, as detailed in the explanatory
notes to the Bill and the text of the White Paper, Strong Local
Leadership—Quality Public Services.
1. Providing affordable homes for the residents
of Waverley is a key objective of Waverley Borough Council. For
many years we have provided affordable homes within the constraints
of the local government finance system through local housing associations.
This has been extremely challenging given the Government's capital
receipt set-aside rules and the level of local house prices. The
average price for all houses in the Borough in December 2000 was
£220,317 and this has risen dramatically since that time.
With recent price increases, a very modest family home now costs
£190,000. This is well beyond the reach of teachers, police
officers, nurses and other key workers.
2. In addition to "key workers"
, there is a huge need for affordable housing in the Borough:
— In March 2002, there are over 1,300
families and single people on the Council's Housing needs Register
— Over 580 households already living
in Council or housing association homes are looking to transfer
to another home
— Each year some 400 households approach
the Council as homeless or at risk of becoming homeless and are
living in temporary accommodation
— At any one time there are 130 households
who are homeless and living in temporary accommodation
— Over the last year only 370 council
properties became available and of these 159, or 49 per cent,
were one-bedroom flats which are designated for people over 50
or the retired
3. To maximise the investment in affordable
housing and improvements to the standard of its council houses,
the Council focussed its financial strategy on achieving a debt-free
position. By adopting sound financial management over a number
of years, this position was achieved at the start of 2001-02.
However, the priority that the Council placed on this policy was
at the expense of other potential capital schemes in the Borough
but the benefit of using 100 per cent of the capital receipts
was a goal worth pursuing. New long-term borrowing was avoided
for many years, despite receiving borrowing approvals and, in
the four years leading to the achievement of debt free status,
the amount of borrowing foregone amounted to £4.2 million.
It appears now that the anticipated benefits of this prudent approach
will not materialise.
4. Being debt free has allowed us to allocate
£3.2 million for 64 new affordable homes in 2001-02 and 2002-03,
as well as increasing spending on the essential backlog of repairs
on Waverley's council homes.
5. In spite of this initial success and
the potential to build on this in the future we were advised in
the White Paper, Strong Local Leadership of the Government's intention
that debt-free authorities should not be exempt from the requirement
to contribute a proportion of their HRA receipts to a re-distributive
pool. In the explanatory notes to the draft Bill, it is stated
that spending power can be redistributed to authorities in areas
with a greater need for new housing investment. As I have set
out, there is clearly a significant need for new housing investment
in Waverley. This proposal will dramatically reduce this, and
many other Councils' ability to provide affordable new homes and
decent well maintained Council homes.
6. If the Government proposal is adopted,
the result will be that local authorities like Waverley will have
to find alternative funds through additional local taxation. Because
a significant number of Waverley's residents are only slightly
above benefit levels, the result of this increased taxation will
be highly regressive.
David Harmer
Leader of the Council
21 June 2002
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