Decision details

To provide grant to Cross Keys Homes for the  provision of additional temporary accommodation for an initially agreed period of 5 years with a view to safeguarding the site for mainstream affordable housing provision at the end of this agreed period

The number of households presenting to the Council as homeless and subsequently being placed in temporary accommodation under the provisions of part VII of the Housing Act 1996 has doubled in the last two years, with the Council currently supporting approximately 200 households in temporary accommodation as a result of this duty. This increase has significantly outstripped the supply of suitable temporary accommodation at the Council’s disposal to meet these higher levels of need. Consequently it has been

necessary to resort to placing many homeless households in hotel accommodation through a number of contracted providers, including Travelodge. While this option may be suitable for very short stay emergency placements, this accommodation has a detrimental effect on the stability of the households if they are placed there over a longer period of time. Generally this accommodation does not have cooking facilities or basics such as internet access. Some settings also have shared bathroom facilities. 

As well as the social cost to homeless households associated with the use of hotel type settings as temporary accommodation, there is also a significant financial cost to the Council. This is because the rates charged by hotels exceed the maximum Housing Benefit subsidy that can be recovered by the Council to cover these costs, thereby placing a considerable financial burden on the Council’s temporary accommodation budget.

Elizabeth Court was purchased by Cross Keys Homes in 2016 and currently is unoccupied. Cross Keys Homes’ original intention on purchasing the site was to proceed with demolishing the existing 'outdated' 1970's 100% affordable housing sheltered housing scheme and replacing it with a mixed development of affordable and market housing. The inclusion of market housing within the new scheme would serve to cross subsidise the affordable provision and ensure the viability of the scheme.

As a pro-active response to the social and financial pressures arising from the shortage of suitable temporary accommodation in the city for homeless households, it has been identified that by deferring Cross Keys scheme for Elizabeth Court scheme for 5 years, the Council could access much needed units which would in the short term be converted to provide 'Temporary Accommodation,' prior to eventual use of the site for affordable housing. By funding the works required to make Elizabeth Court fit for purpose for use as temporary accommodation, the Council has the opportunity to facilitate access to suitable short term housing for homeless households to meet current needs but also put in place safeguards that will maximise the future provision of mainstream affordable homes for Peterborough residents in the longer term.

Short Term Benefits

This proposed use of Elizabeth Court as temporary accommodation will provide the opportunity for 53 homeless households to be offered self-contained accommodation at an estimated saving of £800,000 per year to the Council when compared against the equivalent costs of relying on 53 hotel rooms to provide a temporary accommodation offer over the course of a year. Offering these facilities will help to mitigate the most unsettling effects of homelessness by providing a suitable accommodation offer for the period that the council requires to find a suitable permanent home.     

The Council has undertaken an assessment of works and services required to enable these units to be utilised as Temporary Accommodation for Homeless persons. The works include making them wind and watertight, improve heating and security, providing updated kitchens and bathrooms and complying with current building / fire regulation regulations.

Cross Keys Homes have provided costing totalling £900,000 to undertake the identified necessary refurbishment work. The cost budget provided has been based on the current maintenance contract that they have for works to their wider portfolio of stock and the Council has been given an 'open book' access to these costings. The maintenance / void works contract that they are proposing to use has previously been market tested under normal procurement procedures and the Council is satisfied that they  offer a reasonable reflection of the market costs of carrying out these works.

Cross Keys Homes have requested a grant of £900,000 from the Council to cover the costs of the refurbishment works to Elizabeth Court.

Long Term Benefits

Cross Keys Homes have indicated that their longer term plans for the site are to replace the existing stock with a new mixed development of market and affordable homes. To ensure that the provision of affordable housing is maximised on any future scheme, the Council proposes to condition the allocation of grant for the refurbishment works so that the grant would be repayable on a pro rata basis in the event that 100% affordable housing (to be set out in the funding agreement) is not achieved on the new development.

The use of Section 106 funding to support these works will have multiple benefits:

The grant would return the vacant units to immediate use

These units of Temporary Accommodation would significantly reduce homeless budget pressures in the Council and would also potentially attract external government funding support by way of 'Empty Homes bonus'

The provision of Section 106 funding at this point in time will secure the site for long term use as an affordable scheme

Do not award funding for this project.

This option was rejected. Without the grant Cross Keys Homes will not be in a position to deliver a scheme which provides 100% affordable housing in the long term

If the refurbishment works are carried out by CKH without capital grant support,then the associated costs would be incorporated into the lease recharge to Council.  The charge per property would increase by approximately £70 - £80 per week, which would push the costs significantly above the sums we could recover via Housing Benefit and therefore maintain the significant revenue pressures on the homeless persons budget, even by using the Elizabeth Court properties. Therefore, by allocating grant at this point, it will allow the Council both to secure the units on an initial lease for 5 years as Temporary Accommodation at a significant saving to the homeless persons budget and then subsequently obtain permanent Affordable Housing provision on the site in the longer term. 

None

No additional documents were used.