I am in London this evening prior to presenting our seminar on ‘All You Want to Know about Local Authority Housing Finance’ tomorrow. As usual this seminar has proved popular. I am grateful to all the delegates who are attending and am looking forward to meeting them tomorrow morning.

This seminar is also available as an in-house session.

Last week saw some interesting economic news:

• Mark Carney, the Governor of the Bank of England, attended a meeting of the House of Lords’ Economic Affairs Committee and appeared to suggest that the Bank would intervene in the markets to stop sterling falling below $1.22. However, he did not say whether this would be done by borrowing to buy sterling or by raising interest rates or both. Since then sterling has fallen further due to uncertainty about Mark Carney’s future at the Bank.
• The FTSE share index that has recently increased because of the declining value of sterling and record low interest rates fell back to below 7,000 points.
• The fall in the value of sterling began to cause prices to rise with a 12% increase in the price of Marmite and an estimated £900million additional cost to the National Health Service of imported supplies.
• The Resolution Foundation has calculated that the United Kingdom government has an £84billion ‘black hole’ in its finances because of reduced tax receipts.
• Consumer credit increased by £1.4billion during September including £0.5billion borrowed on credit cards.
• It was announced that Nissan would continue to invest in Sunderland as they have received unspecified assurances from the government.

The situation with the motor industry is interesting. As the former Conservative cabinet minister Nicky Morgan told the ‘London Evening Standard’:

“Big companies like Nissan don’t make commitments to build new models and to carry on employing thousands of people without there being something pretty concrete in writing.”

Nissan is not the only foreign-owned car manufacturer that makes cars in Britain to sell across Europe. For example, the United States owned company General Motors manufactures the Vauxhall Astra at Ellesmere Port in Cheshire; and are due to take decisions about future investment soon. The company has warned that thousands of jobs are at risk. Chuck Stevens, their Chief Financial Officer, told the ‘New European’ that the economic situation in Britain was:

“A speed bump on our path to where we want to take the business.”

Of course, one of the complaints that has been made about the European Union is that the rules of the single market prevent governments from providing state aid to businesses other than in specific limited circumstances. When Britain leaves the European Union, it will presumably be open to the United Kingdom government to subsidise businesses that it wishes to retain in Britain through the ‘Industrial Strategy’ that the government is now developing.

This possibility reminds me of the situation that developed around the motor industry in the 1970s. In 1974, Labour was elected to government with a proposal to establish a ‘National Enterprise Board’. The idea was that the board would have a budget to support businesses with a social purpose or with significant growth potential. However, when British Leyland (the largest British motor manufacturer at the time) ran into financial difficulties a decision was taken to use the budget to give them financial support. This policy was very costly for the taxpayer and ultimately British Leyland went out of business anyway!

None of this improves the outlook for the funding of public services including health, housing and local government. This matter was recently discussed at Cumbria County Council with a local newspaper, the ‘Cumberland & Westmorland Herald’ quoting Councillor Neil Hughes (Liberal-Democrat) as saying that:

“Cuts to local authorities have meant that very few services can be adequately supported”

And Councillor Stewart Young (Labour), the Leader of the Council as saying that:

“The prospects for local government seem to be pretty slim.”

Next week, we will be holding a seminar on: ‘Service Charges in Social Housing’ in Leeds on 8^th November 2016. For more information or to make a booking please click HERE

The full implications of the vote for Britain to leave the European Union will not be known until after the negotiations between Britain and the European Union are completed (if then) but some implications are already apparent.

This week we have published a briefing paper on the implications of Brexit for housing. It includes sections on:

While the exact implications of Brexit are far from clear, we have entered a period of considerable uncertainty, volatility and risk. There is therefore a need for housing associations and local authority housing services to ensure that they have robust business plans backed with robust monitoring and risk management processes.

YOUR copy of the briefing paper can be freely downloaded from HERE

There is also a pressing need for local authorities and housing associations to ensure that their service charges raise sufficient to cover their service costs and that the calculations that support service charges are sufficiently robust to provide an audit trail and to resist challenge. I am therefor finding myself doing a lot of work advising and assisting local authorities and housing associations with service charges.

One problem relates to the government’s proposal to cap housing benefit at the level of the local housing allowance. My analysis suggests that this problem is most serious in low value areas where the local housing allowance is at its lowest. This is because the variation in social rents and service charges between high and low value areas is not as great as the variation in private sector rents and therefore in the local housing allowance.

For more information on advice and assistance that I can provide on service charges please click HERE

Meanwhile, the government has announced that it will support the Homelessness Reduction Bill. This Bill has been introduced to Parliament by Bob Blackman MP (Conservative). It requires local authorities to provide new homelessness services to all those affected, not just those who are protected under existing legislation.

It places a duty on local authorities to help eligible people at risk of homelessness to secure accommodation, 56 days before they are threatened with homelessness, and to provide those who find themselves homeless with support for a further period of 56 days to help to secure accommodation. The bill will also ensure that other local services refer those either homeless or at risk of being homeless to local authority housing teams.

Local authorities had expressed reservations about the Bill because of fears that it would increase local government’s responsibilities without providing the necessary resources. However, the Local Government Association has now said that it also supports the Bill.

Our next seminar is on: ‘All You Want to Know about Local Authority Housing Finance’ and will be held in London on 1^st November 2016. For more information or to make a booking please click HERE

It will be followed by a seminar on: ‘Service Charges in Social Housing’ that will be held in Leeds on 8^th November 2016. For more information or to make a booking please click HERE

I was in London yesterday to present the 2016 session of ‘Developments in Local Authority Housing Finance’. I am grateful to all those delegates who attended. Delegates said that the information provided was very relevant, the quality of the presentation was excellent and that the training met their needs fully. They described the seminar as: Useful, Thorough, Comprehensive, Interesting and Thought-provoking. Specific feedback received included:

• As always, a very useful day with the opportunity to focus the mind on some challenging areas.
• I needed a thorough refresher and documents to look back on and refer to – so Yes, Very Good. Enjoy the blogs and free downloads too.
• Good and Informative. Another Good Seminar. Thanks Adrian.

The book that accompanies ‘Developments in Local Authority Housing Finance’ can be bought separately. It contains sections on: The Political, Economic, Social and Technical Context; The New Government ; Social and Affordable Rents; Near Market Rents for Tenants with High Incomes; The Impact of Welfare Reform; Sale of High Value Council Homes; Funding of Supported Housing; Business Plans and Accounts; Risk Management, Asset Management and Right to Buy. For more information or to order a copy click HERE

Last week Damian Green, the Secretary of State for Work & Pensions made an announcement on the Funding of Supported Housing. This confirmed that, in future, Housing Benefit and Universal Credit will only meet core housing costs with the additional costs of supported housing being met by a new stream of cash-limited funding that will be devolved to local authorities in England and the devolved administrations in Scotland and Wales. The government has also undertaken to publish a consultation paper soon. I have written a briefing paper that summarises the announcement, its implications and the reaction to it from people in the sector. Your copy can be freely downloaded from HERE

Since I wrote my briefing paper Lord Porter (Conservative), the Leader of the Local Government Association has been reported as saying that £2billion of funding would be made available. I am not sure that this would be sufficient.

Philip Hammond, the Chancellor of the Exchequer, made an interesting speech at the Conservative Party conference on Monday. In it he said that:

“We must expect some turbulence… There will be a period of a couple of years or perhaps even longer when businesses are uncertain… We have to expect a period when confidence will go up and down – perhaps a bit of a roller-coaster… During that period, we need to support the economy to make sure that consumer confidence remains, to make sure that business confidence is stable, so we get the investment that keeps the jobs that keep Britain going.”

So with the economy depressed with low levels of investment and exports the government will do all that it can to maintain demand, not only by cutting interest rates to encourage private borrowing and discourage saving, but by increasing public expenditure and paying for it through increased public borrowing.

Some ministers have made comments that have encouraged people in local government, housing and other public services to hope for increased funding. However, I would advise caution. The only announcement that government has made so far is £3billion to fund housing but of this £2billion is already committed and the ‘new’ £1billion is to provide subsidised loans to private builders. If we see any significant increases in budgets for social care or social housing I would be surprised.

Our next seminar is on: ‘All You Want to Know about Local Authority Housing Finance’ and will be held in London on 1^st November 2016. For more information or to make a booking please click HERE