£100m earmarked for new council housing
One thousand new council houses look set to be built in East Lothian after the council agreed to spend an extra £100 million on developments over the next five years.
The plan was given cross-party support at a full meeting of the local authority although the Labour group, through leader councillor Willie Innes, expressed some concerns about a "freeze" on the modernisation programme for existing tenants who would be "picking up the tab."
The council currently has around 8,000 properties, with 50 per cent of its stock having been sold under 'Right to Buy' legislation.
More than 5,000 people are on the housing waiting list while, last year, the stock turnover dropped to around 300 homes.
The funding, which is on top of the 39 million investment already earmarked for affordable housing, will mainly come from increased borrowing.
Approval
The council is also looking into recent changes in the Scottish Government's rules on council tax receipts, specifically in the areas of second homes and empty homes discounts, to increase funding.
It will be seeking ministerial approval for its plans to use this revenue of around 2 million over the five year period towards the cost of borrowing for new council houses.
David Spilsbury, Head of Corporate Finance, said the Housing Revenue Account budget would be revised to include additional investment of 100 million in new affordable housing over the next five years.
He stressed that at this stage no new deals to acquire additional houses had been agreed but the council should be ready to commit to purchase if developers showed an interest.
He explained: "The total investment that can be sustained by rents is limited and in making a budget the council strikes a balance between rent levels, maintaining and investing in existing stock, and investment in new stock.
Investment
"A substantial increase in new housing investment means reconsidering the other two factors."
Mr Spilsbury added: "In developing the revised budget, no change has been made to the rent increases approved on February 17, although given current inflation rates, this is something the council may want to review in future years.
"Similarly, the council has invested heavily in modernisation and you may wish to review the scale of that investment, alongside the size of the maintenance project."
Councillor Stuart Currie, depute council leader, said: "There is an absolute desperate need for affordable and council housing, and again we have received additional funding from the government for that."
He stressed: "There is the opportunity to put in place potential deals over the summer period which would have to come back to council or cabinet as appropriate for approval."
Full report in East Lothian News, June 26, 2009 The flexibility and decision is still a year on year decision.
“This is major investment and sends a very clear message to the people of East Lothian and the construction industry that East Lothian Council is prepared to do business, prepared to build houses, prepared to work to protect jobs and make a better lot for people who desperately require housing.”
Councillor Innes said 100 million for affordable housing had to be welcomed. He was concerned about one part of the discussion paper which stated that there was a possibility that the council could create new partnership arrangements that brought forward the additional houses for rent without them being in its direct ownership.
Councillor Innes said: “At the end of the day it could look like an element of privatisation in the housing market.”
He added: “The other area where we have a concern is, regardless of what, the people who will be picking up the tab for whatever the tab is will be the existing tenants and to freeze the improvement funds on their homes, I think, is unfair because they are the ones that are paying the bill at the end of the day.”
He also asked the administration to consider the second hand housing market.
Councillor David Berry, council leader, said it would all be a matter for debate. He said: “The principle does not need to be compromised. What will be compromised is the figures so we can adjust as we see fit. We could, for example, not hold the modernisation but that would mean there would be less money to finance what we are trying to do here. There is a balance.”
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