Agenda item

Reference was made to article 43 of the minute of its meeting of 13 April, 2010 when the Committee agreed in principle that part of the monies from the Council Tax income from second homes and long term empty properties be used to fund the New Build Council House programme, and for officers to report back in more detail at a future meeting. The Committee now had before it a report by the Director of Housing and Environment which provided an update on the position with Section 75 contributions for affordable housing and the income received from the reduction in Council Tax discount for second homes and long term empty properties.

By way of background the report advised that Section 75 agreements negotiated through the planning process with housing developers may, on occasion, require that the developer makes a financial contribution toward affordable housing rather than delivering affordable housing on the specific site to which the planning permission applies. The report continued that agreements to date had provided an income of £1,678, 201, and that no further agreements were in place which would require a financial contribution to be provided. Payments were linked with completion, and cash flow from sales, so officers suggested that it was unlikely that any additional income would be generated in the next two years, which would be coupled with the slow down in the house building industry in the terms of completion of existing projects, new site starts, and the low level of planning applications.

In relation to Section 75 negotiations, the report intimated that in negotiating onsite affordable housing through the planning system it was important that the Council could deliver the finance required by Registered Social Landlords (RSLs) to acquire completed properties from a developer. With Scottish Government Housing Association grants tied into Devanha Housing for the next year, it was important that the Council was able to provide some level of assurance that new schemes being negotiated could be funded, as without this assurance, the planning negotiations may lead to only commuted sums being paid as an alternative to onsite provision or provision by way of Low Cost Home Ownership (discounted house prices) which was ordinarily provided by a developer rather than affordable housing for rent which was the main priority for the Council.

In considering the Council Tax discount on second homes and long term empty properties, the report reminded members that since 2005/06, the Council had used its powers to reduce the Council Tax discount to 10% for relevant properties. The income received to date for this year was £5,444,411, with an available balance of £3,960,364 after commitments of £1,484,047 being taken into account.

The report continued that the Government, following discussion with CoSLA, had changed the rules on the use of Council Tax monies in November, 2008.  Until then the money could only be provided to a RSL with the agreement of the Scottish Government, but now the Council Tax monies could now be used by local authorities for the direct provision of affordable council housing as well as grant funding for RSLs.

The report advised that the Housing Revenue Account had in effect made a contribution of £2,041,287 to this budget through the reduced discount it had received for long term vacant properties held on the Housing Revenue Account. The figure for 2009/10 was 49% of the 2005/6 figure reflecting the significant reduction in the number of long term vacant Council houses.

The report concluded that the fund for Council Tax discount on second homes and long term empty properties was currently £3,960,364, and explained that if the recommendations before members on this day were approved, £2,041,287 would be used for the Council’s new build programme, leaving a balance of £1,919,077 for affordable housing projects.

Appended to the report were details of (1) committed funding for affordable housing; (2) payments made during 2009/10; (3) affordable housing completions during 2009/10; (4) affordable housing developments currently onsite; (5) builds that had not yet commenced; (6) sites that were awaiting grant funding for the construction phase; and (7) potential new projects.

The Committee resolved:-

(i)         to instruct officers to continue to develop proposals for projects to utilise this funding whether they be Council or Registered Social Landlord led projects; and to request that the Scottish Government be asked to undertake a financial assessment of all projects to ensure value for money is achieved prior to reporting projects to Committee for approval;

(ii)        to agree that  £2,041,287 from Council Tax income from second homes and long term empty properties be used as funding for the 151 properties in the first 3 phases of the Council’s new build programme; this being the Housing Revenue Account contribution from 2005/6 to 2009/10; and

(iii)       to instruct a report back detailing options for the balance of Council Tax income form second homes (of £1.9 million), in particular exploring the possibility of the Council having the priority in terms of any spend that is made in future.