Stoke-on-Trent's £1bn plan signals the return of the council house
NEW council houses could be built as part of private housing estates to help generate more rent.
Stoke-on-Trent City Council is in talks with housing developers over 'joint venture' deals which would see the authority sell its own land cheaply in exchange for a proportion of new estates being set aside for council housing.
The move would increase income from rent, and guarantees offered by the developer on new homes would mean only small increases to the maintenance bill in the short-term.
The Sentinel reveals today how almost £1.2 billion will have to be spent repairing and maintaining homes over the next 30 years after the council took on full responsibility for its houses.
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It means the council is now in charge of raising its own money for housing instead of sending rent payments to the Government and receiving a grant in return.
Income from rent on houses and garages, which has to be spent on housing and is separate from regular council spending, will rise to £68.2 million in 2013/14.
But it must also use the money to pay off its £163.6 million in debt and interest on its 'mortgage' from the Government, and a predicted rise in rent arrears triggered by benefits cuts and 'right to buy' deals reducing house numbers will heap pressure on the budget.
The authority said it has a solid business case for its housing stock and believes the new control over its rental income offers an unprecedented opportunity to invest in residents' quality of life.
Councillor Janine Bridges, left, cabinet member for housing, said: "No property is a liability. What people have to recognise is that in this social and economic climate, this is a big opportunity to improve our housing stock and make Stoke-on-Trent a place that people really want to live.
"Now we have control we can improve our housing stock and invest in the future.
"We have also got a lot of interest from joint venture companies interested in working with us to build new housing stock to create extra revenue from rents.
"I can tell you now that it won't be the same as it used to be with large council-only housing estates. Those days are gone. The climate won't wear it.
"But it will be selected developments in sites of five acres or so where we would go into joint venture with companies like Kier and other building developers.
"That would be virtually all income as they would be under guarantee and not require maintenance." The council says it will also be able to unlock substantial Government and energy firm grant funding to invest in housing, including ongoing projects to refit ageing former British Industrial Steel properties with cutting edge energy efficiencies.
Innovative schemes, such as the £1 houses project in Cobridge and Tunstall, will help lever in further funding and bring empty properties back into use.
The council will target investment in properties where short-term spending can prevent properties slipping into a condition where they would need major improvements in later years – helping to reduce the overall bill.
Mrs Bridges added: "One provider would not have been able to buy our houses at the going rate and they would have gone for less than they are worth.
"This was to protect tenants who tell us we provide a better service than social landlords, but also take advantage of an investment opportunity to improve the standards of housing by reinvesting rent back into our housing to improve the condition of the whole stock."
Planned maintenance including new kitchens, boilers, bathrooms and electric wiring will cost almost £548 million.
Surveyor Daniel Arnold, of Meir, said: "Given the number of council houses the bill isn't as unreasonable as it may sound, but obviously there are going to be other pressures on that budget.
"Over 30 years they'd be looking at replacing every kitchen at least once and every boiler will probably be replaced twice. That's without thinking about wiring, walls, windows and paths. It's a big burden."
Dave Conway, right, leader of the opposition City Independents, who oversaw housing in his role as a scrutiny committee chairman, raised concerns about people not paying rent due to bedroom tax and council tax benefit cuts.
He said: "The housing benefit is also going to go directly to tenants and that is going to create even more problems.
"With the rents continuing to go up and people being asked to do more of their own repairs the value of the houses could go down, and we're asking people to pay more for less. This is not what social housing is about."
Councillor Abi Brown, Conservative leader on the city council, said: "If you look at what neighbouring councils have done, selling housing stock to social landlords, and at the backlog of maintenance on some of our properties, you do have to wonder whether the right decision was made – not just for tenants but all of our taxpayers."
Epic Housing in Bentilee wants the council to devolve control of more houses and buildings to target investment in community benefits without hurdles caused by council red tape.
Director Len Gibbs said: "We need to understand how neighbours in Stoke-on-Trent are the building blocks of the city.
"We should look at this as an opportunity to work out how better collaboration with existing organisations can use investment and housing stock to build a secure future for neighbourhoods.
"Housing is not just to be treated as an investment but also as part of a bigger picture in improving neighbourhoods and their schooling, employment opportunities and stabilising the population with the right mix of people."