Housing Crisis

City Council Executive Councillor for Housing, Kevin Price says housing is becoming a disaster in Cambridge and moving towards a catastrophe:

Cambridge City Council and our partners in the Greater Cambridge City Deal which was agreed in 2014 and covers the City Council Executive Councillor for Housing, Kevin Priceadministrative areas of Cambridge and South Cambridgeshire, began this year with optimism for the future. A nationally and internationally successful area, albeit it with pockets of real deprivation, the investment of £500,000,000 by government, mainly in badly needed transport infrastructure to accompany our ambitious housing plans and meet the needs of growth, were welcomed by all.

Housing affordability, in both the market sale and private rented sectors, is a significant challenge. Average market sale prices now stand at over 16 x average incomes and nowhere in the City does Local Housing Allowance match private sector rents.  The City Council houses over 7,000 households in our own stock and offers homes to over 450 new households every year, ensuring that communities across the city remain balanced and diverse.  Under the City Deal the City had committed to delivering up to 2000 new council homes by 2030, and, together with South Cambridgeshire and Cambridgeshire County Councils, to an additional 1000 more affordable homes in the Greater Cambridge area. 

However it is impossible to ignore that the government's Emergency Budget in July has changed the landscape dramatically for stock owning councils. Whilst much of the focus nationally has been on our partners in the social sector - housing associations - and the heavy impact on them of measures such as the 1% rent cut for the next four years, further welfare reform and the extension of Right to Buy to Housing Association tenants, the stark picture facing stock owning councils has been less well reported.

We began this year with a comprehensive review of the Housing Revenue Account to drive out inefficiencies and free up capital for our key goals of maintaining and improving our housing stock and services and building more social sector homes. Following the Emergency Budget many of the assumptions underpinning our Business Plan have been radically altered and have required us to rethink the Plan.

The disadvantages facing stock owning councils cannot be understated. We are being penalised through the original Right to Buy sales and the proposed extension to Housing Associations through compulsory sales of our own council stock and we cannot retain enough receipts to replace our lost stock. Under the proposals for Pay to Stay for tenants with household incomes over £30,000, the council must administer the scheme whilst it is required to pass any additional receipts onto the Treasury. Our capacity to borrow against our stock is severely constrained by the Housing Revenue Account debt cap and will shrink yet further in the future from a dwindling asset base and reducing income stream from rent receipts. The impact of the 1% rent cut for social sector tenants, reneging on a 10 year rent settlement agreed only last year, comes at a heavy cost to the Council. £14,883,000 in planned rent receipts has been lost over the next four years and an estimated £156,000,000 over the life of the Business Plan, and we will need to find ongoing savings of £6,003,000 from the base Housing Revenue Account by 2019/20. Whilst we are determined to protect our core services as much as possible there can be no doubt that these cuts will bite deep. 

Most importantly we now face not only halting our plans to build new council homes but also the loss of up to 130 ordinary 1 and 2 bed council homes every year under compulsory sales to fund the extension of Right to Buy to Housing Associations. This will deepen the housing affordability crisis in Cambridge.

At a time when our achievements and hopes are under serious threat from national policy, we must look to our partners in the social sector and the City Deal and our tenants and residents for support in challenging those policies. We must stand firm on the value of a strong social housing sector and ensure that our voices are heard at the highest levels in Westminster.

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