Why didn’t SBC demand the government honour its commitment on homelessness funding?

Posted By on May 5, 2017

This is a SHAC Media release

Swindon Council has given the impression that its proposal to buy 100 homes on the market into which they will put homeless people is motivated by a concern to deal with the homelessness crisis. Look carefully at the Cabinet documents and you can see this isn’t the case. The reason they have proposed this is because the government is cutting Swindon’s funding for homelessness prevention and relief. The new grant system which is being introduced is £400,000 less than the council received in 2016-17. This is despite the fact that the government promised:

No local authority will receive less annual funding under the (new) grant than we estimate they would have received under the Department of Works & Pension fee.”

It’s therefore strange that Swindon Council failed to press the government to honour this commitment. The government statement on the new “flexible homelessness grant” was published on March 15th, together with the allocations each council would receive. Yet the council did nothing to respond to the loss £400,000 for more than five weeks. When they did eventually (on April 24th) write a very meek email to the department asking how they made their calculation, it was only after tenants pointed out the discrepancy, and pressed the council to demand that the government honour it’s commitment.

Instead of challenging the government’s allocation of the new grant they decided to propose to cover the shortfall by using £17 million from the Housing Revenue Account (HRA). Previously homelessness action has been paid for by all council tax payers (funding the Homelessness Department) and by central government which gave a management fee of £60 a week for each household placed in private rented accommodation. Using money from the HRA to buy properties specifically to house homeless families means in effect that council tenants will pay twice, through their council tax and their rent.

The fact that the council is proposing to buy 3, 4 and 5 bedroom properties is proof that the measure is designed to cut the cost of homelessness prevention for the General Fund rather than address the more general needs of those on the waiting list. How so? Because 85% of the people on the housing waiting only list qualify for 1 or 2 bedroom properties.

It is certainly true that placing homeless families in accommodation in the exploitative private sector is a waste of money. But it is the shortage of council housing resulting from the impact of Right to Buy, and the failure to replace homes sold, which is at the root of the problem. In Swindon nearly 8,000 council homes have been sold off under RTB so there is an acute shortage of homes for those on the waiting list and homeless families. The ruling administration in Swindon continues to support RTB. Since the government has ended all support for council house building this means that SBC and other councils are not even building at a sufficient level to replace the number of homes sold annually.

The only way to deal with this crisis is to begin building council housing on a large scale again. Yet Swindon Council has been content to accept a decline in the number of council homes it owns. Buying 100 properties on the market (if they can find them) will not change this. It’s a one-off measure that cannot be repeated, certainly not without hitting hard the renewal programme for council homes. The homelessness duty should be borne by all council tax payers. Funding of council housing should not be compromised by this raid on the HRA.

Martin Wicks said:

The council’s homelessness duty rests with the General Fund. What the council is doing is abandoning the principal that all residents pay for the homelessness service by way of their council tax. Instead they are proposing to pass part of the cost from the General Fund to the HRA. Their motivation is essentially to stop the General Fund having to meet the shortfall resulting from the government’s failure to honour its commitment on funding. The Cabinet document makes it quite clear that what drives this is their concern to “reduce costs on the General Fund”; the same thing which drove their imposition of parishes on non-parished areas.

The council’s failure to contest the shortfall is either the result of negligence on its part or because the shortfall gives them a convenient excuse for organising another raid on the HRA. They have recently taken £1.25 million a year income out of the HRA by a ‘transfer of assets’ to the General Fund. The only difference in this case is that they are transferring liabilities from the General Fund to the HRA.

They are proposing to use money which is meant for the maintenance of council homes to decent standards. The high level of reserves in the HRA, which they are proposing to use, is the result of the failure of the council to carry out the work which was programmed over a number of years. These reserves are monies which are the result of underspending of nearly £15 million on capital expenditure over 5 years. In other words this is money which should have been used to renew components of existing council housing. If it is used to buy homes on the open market then it cannot be spent on existing homes.

The proposal of the council is not part of a serious plan to tackle the housing crisis. It is simply a means of preventing the General Fund from paying for the shortfall of homelessness funds at the expense of the HRA and tenants. ”

With the closure of Parliament for the General Election the shortfall of homelessness funding is unlikely to be resolved this side of the General Election. Therefore, Swindon Housing Action Campaign will be pressing all the candidates standing for the two Parliamentary seats to make an unequivocal commitment to press the new government, whatever its colours, to increase the “flexible homelessness grant” to the level of funding received in 2016-17 in line with the promise that no council would receive less money.

May 4th 2017