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Blog 23rd January 2017

Jan 23rd, 09:18

Blog 23rd January 2017

Last week I presented an in-house training session on right to buy, capital receipts and 1-4-1 replacement of sold homes at a local authority in Eastern England. The session was well received. Delegates said that the information provided was very relevant, the quality of the presentation was excellent and the training met their needs fully. They described the session as: practical, thorough, useful and valuable. Specific comments that were made included:

  • Insightful and useful, much appreciated. Approachable and well-presented.
  • Very useful - gave lots of supplementary information. Answered questions well. Explanations were good.
I am grateful to the local authority for inviting me to present this session. If anyone would like to enquire about in-house training please contact me at Adrian.waite@awics.co.uk
 
Local authorities are in the process of preparing their budgets for 2017/18 and as part of this are consulting their residents. I live in Cumbria, that is a two-tier area, and so took the opportunity to respond to the budget consultations of Cumbria County Council and Eden District Council.

 

In common with most local authorities, Cumbria County Council is experiencing significant budget pressures caused by reductions in government funding, restrictions on the Council’s ability to raise Council Tax and increasing need especially for Adult Social Care services. I therefore wrote in support of the Council’s proposal to raise Council Tax by the maximum increase allowed of 1.99% plus 2% to fund the additional costs of adult social care. However, I also commented on other options for Council Tax, Adult Social Care, Children’s Services, the Efficiency Strategy, the Reserves, the Capital Programme, Asset Management and inflation.

 

A copy of my response to the consultation by Cumbria County Council can be downloaded from HERE

 

Eden District Council’s budgets have been protected from the most severe reductions in local government funding ever since 2010 but in my view, they are not making best use of the resources available to them. In my response to their budget consultation I suggest that the Council consider:

  • A more significant capital programme to address especially the economic development and housing objectives that it has identified, funded through surplus reserves, prudential borrowing and more effective asset management.
  • Approving revenue budgets that do not contain ‘budget slack’, that aim to reduce reserves to an appropriate level and that focus resources on direct services.

A copy of my response to the consultation by Eden District Council can be downloaded from HERE

 

Following the government’s announcement that the Starter Homes scheme will go ahead, I had some correspondence with my Member of Parliament, Rory Stewart, that I included in my blog last week (see below). In this correspondence, Rory Stewart questioned the conclusions of research by Shelter that I had quoted.

 

Sara Mahmoud, an Economic Analyst at Shelter, has since responded by explaining their research and its conclusions as follows:

 
"It's important to note that Starter Homes will  be newly built properties, so the price of existing properties in an area is not a good measure of their likely cost. Based on the Office for National Statistics' House Prices for Small Statistical Areas for June 2016 and data from the Council for Mortgage Lenders , a typical new build in Cumbria is £205,000. With the 20% Starter Homes discount this will be £164,000 and will need a household income of £45,000 and a deposit of £25,000.
 
"The Government has argued that Starter Homes will be the same price as cheaper new build properties. Using the 'lower quartile' price of new builds in Cumbria as a likely price of this is the case still means a pre-discount price of £154,000, which needs a household income of £33,000 and a deposit of £18.000.
 

“The reference for how these figures are calculated can be found in this report: (click HERE for a copy)

 

“Housing minister Gavin Barwell has indicated that the definition of Starter Homes may be broadened to include ‘affordable rent’ homes. Shelter would welcome this change and would urge the government to make sure that rents are genuinely affordable for normal local household incomes.”

 

This supports my contention that a person on an average income in Cumbria would not be able to afford a Starter Home but is still expected to pay tax to fund subsidies for more prosperous people who can! I expect that a similar calculation in other parts of England would produce the same conclusion.

Our next seminar is on ‘All You Want to Know about Service Charges in Social Housing’ and will be held in London in 15th February. For more information or to make a booking please click HERE

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