Decision Maker: Cabinet
Decision status: Recommendations Approved (subject to call-in)
Is Key decision?: Yes
Is subject to call in?: No
This paper provides an outline strategy for
delivering a robust business case and the associated high-level
costs. This is the first phase of reviewing the properties for
development and, subject to approval, further exercises will
commence during the next 6 months.
Further to Minute No 99 of the meeting held on 9 January 2020, the Cabinet considered the report of the Assistant Director of People (Communities) which provided an outline strategy for delivering a robust business case for the use of two properties for use as temporary accommodation and the associated high-level costs.
The report indicated that two properties are most suited for use as temporary accommodation, and that they can be configured into the following temporary accommodation units:
· Site 1 - 6 self-contained flats
· Site 2 - 7 self-contained flats
Across both sites this would deliver 8 x 1-bed units and 5 x 2-bed units.
This is the first phase of reviewing the properties for development and, subject to approval, further exercises will commence during the next six months.
Decision Made: That
(1) approval be given to the progression of a robust business case for this invest to save proposal and for officers to develop the implementation plan, subject to the completion of surveys;
(2) approval be given to the development of the financial plan which will include financing the project through one, or a mix, of the following capital funding options:
a) Grant funding
b) Borrowing; and
(3) it be noted that progress updates will be provided to Cabinet in Summer 2023.
Reasons for the Recommendations:
(i) The project will reduce significant revenue costs in order to use those funds upstream on homeless prevention activities. Increases in homeless prevention will improve outcomes for households in Sefton by preventing evictions and homelessness.
(ii) Increasing the portfolio of emergency temporary accommodation reduces the need to use nightly rate accommodation (e.g., hotels) which is subject to market demand. At times of high demand for this type of accommodation in Sefton, homeless households may need to be placed out of borough and at higher cost.
(iii) Both properties are currently out of use and the condition is poor and in need of development.
Alternative Options Considered and Rejected:
1. Sell the assets on the open market.
Independent valuations (February 2022) of the sites reported that the following capital receipts could be achieved, were the properties to be sold for the conversion of the properties to residential uses:
Site 1 £110,000
Site 2 £225,000
Risk: The impact is threefold.
Firstly, there would be the loss of potential accommodation for the most vulnerable in the community as the properties would likely be developed privately and yield unaffordable rents or sold on for profit.
Secondly, with the current cost of living increases it is highly likely that more households would have difficulty covering their accommodation costs leading to more evictions and increased homelessness. If savings on temporary accommodation are not realised, less prevention activity will be delivered.
Finally, temporary accommodation (e.g., hotels or other nightly rate accommodation) is currently funded through grants from the Department for Levelling Up, Housing and Communities (the Homelessness Prevention Grant). If this grant was to reduce in future years, the cost of providing temporary accommodation to statutory homeless households would fall on the local authority.
2. Purchase similar sized accommodation across Sefton to use as temporary accommodation.
Properties on the open market (December 2022) of similar size and location to the units in this proposal are priced at between £100,000-£130,000 per unit. Based on purchasing 13 units the cost of this option could range between £1.3m-£1.69m.
Risk: The above figure is solely based on purchase price alone and many of the properties will need additional refurbishment work carried out to bring them up to standard. Acquiring this volume of properties could take much longer.
Report author: Allan Glennon
Publication date: 14/03/2023
Date of decision: 09/03/2023
Decided at meeting: 09/03/2023 - Cabinet