Agenda item

To explore options that are available to the Council in order to deliver additional social housing and ensure that it achieves Members target of delivering 1,000 units of social housing by 2030.  Recently several issues have arisen which are directly impacting the traditional mode of delivery for affordable housing locally and nationally.

The Committee considered the report (Agenda Item 7) which described the options available to the Council for the delivery of additional social housing with the aim of achieving the target of delivering 1,000 units of social housing by 2030. The report also outlined several issues which had arisen which directly impacted upon the traditional mode of delivery for affordable housing locally and nationally.

Councillor Denise Gaines (Portfolio Holder for Planning and Housing) presented the report. She stated that affordable housing was defined by the charity Shelter as being the provision of decent, safe and secure homes.

The provision of affordable housing was a high priority for the Council. There was awareness of the difficulties faced by residents in getting on the housing ladder in a high cost area, and therefore the need for affordable housing provision. 1300 applications for social housing were currently on the Common Housing Register. Some of these were families in particular need.

The Council had a target of providing 1,000 affordable homes by 2030. 538 had been provided at Q2 in 2023. However, new Government requirements meant that targets would need to increase.

Information was presented on the number of affordable housing completions by tenure type and by Registered Provider (RP).

It was the case that there were limited development opportunities across West Berkshire. Key issues for West Berkshire also included:

·       RPs focusing their financial resources on improving and retrofitting their existing stock to meet the Decent Homes Standards, energy efficiency targets and regulatory requirements to invest in their stock.

·       Viability issues were presenting a significant barrier to RPs providing schemes. Increased construction costs, material shortages and rising labour costs had all detrimentally impacted the viability of new build schemes.

·       RPs not willing to invest in schemes that did not deliver significant scale.

·       RPs unable to agree to the specification of units with developers and refusing to purchase as RPs sought to future proof their acquisitions in anticipation of building regulation changes meaning they were only looking for s106 properties that exceeded current standards.

·       RPs unwilling to secure s106 affordable housing unless a Designated Protected Area (DPA) waiver was agreed for schemes in rural areas to allow shared ownership units to be staircased up to 100%.

·       Developers requiring more flexible s106 clauses with cascade mechanisms to allow for alternatives and avoid the need to vary s106s.

There were however future opportunities and they included:

·       A framework agreement to help facilitate affordable housing delivery.

·       A key deliverable of the Berkshire wide Prosperity Board was affordable housing.

·       Potential partnership opportunities through the emerging Local Government Reorganisation.

·       The need to consider variations to s106 Agreements in cases where viability issues raised by developers had been clearly evidenced.

·       Greater acceptance of commuted sums, in the absence of an affordable housing contribution. To date, the Council had been focused on obtaining affordable housing on site.

·       Petitioning the Government through MPs. Discussions had been held in this regard with Lee Dillon MP, who was on the relevant Government Select Committee.

A presentation was provided to Members by the representatives from Sovereign Network Group (SNG). Those attending were Ruari Laidlaw (Strategic Asset Management Director), Luke Bingham (Customer and Neighbourhood Director), Becky Morgan (Regional Director Localities), and Jenny Grote (Land and New Business Director – South). The following points were highlighted below (the full presentation could be accessed here: https://youtu.be/aDHDdoW76ik?list=PL6cepKKElwne9h0GajvDRG65M2AG0Wn_U&t=4479)

·       The three key workstreams were retrofit, regeneration, and dispose/replace. Homes were placed into the relevant category according to a dashboard model.

·       Retrofit properties included those with a pathway to achieving net zero.

·       Homes identified for regeneration were located within areas of a high social value.

·       A decision to dispose of a property was not taken lightly and was subject to rigorous scrutiny. Where disposal was the decision, the capital receipt was reinvested into other work streams.

·       It was the ambition of SNG to provide as many high quality affordable and social rent properties as possible.

The slides would be circulated to the Committee and Members afforded the opportunity to raise queries on the presentation as it was not provided in advance.

A lengthy question and answer session followed, and the following points and comments were made:

·       Members sought to understand whether SNG would reinvest the capital receipt from disposals into the same area of the District. Mr Bingham explained that efforts would be made to replace homes within the local authority area. It was not always possible to replace homes in the same precise area.

·       Members were concerned that homes were not being replaced in the same area, making it difficult for people to stay living in their local area. Mr Laidlaw explained that it was always the preference to retrofit or regenerate existing homes. However, if a home became obsolete then disposal would take place and the capital would be recycled.

·       Ms Grote advised of areas where new homes had been/were being built (Windmill Court in Mortimer and Paradise Way in Chapel Row) being two examples. However, it was not financially viable to replace standalone properties. Mr Bingham added that requirements to achieve net zero meant that some locations were less feasible.

·       Nick Caprara (Housing Service Lead) explained that the Windmill Court development was a partnership effort between the Council and SNG. While there was a net loss of affordable housing units, the site had been largely obsolete and all homes on the site were affordable/social housing.

·       The length of time it took from the start of a process in identifying a site to new homes being lived in was queried as were any obstacles in doing so. Ms Grote acknowledged there were challenges and felt this could be improved by working more closely with the Council. She referenced the need to vary s106 agreements as one example where improvements could be made by SNG and the Council, with the time taken to resolve legal matters. Councillor Gaines commented that there had been numerous issues to resolve with Windmill Court, including covenants in place on the land, the removal of which would have been detrimental to the Council. This was an area where the two parties had needed to work together to resolve.

·       It was commented that residents had benefited from being issued with heat pumps for their properties.

·       Councillor Ross Mackinnon referred to the recommendations in the report, one of which was to continue engaging with the local MP. He queried why both of West Berkshire’s MPs were not being lobbied. Councillor Gaines explained that Lee Dillon, MP for Newbury, was being engaged with as he sat on the Government’s Housing Select Committee and was therefore ideally placed. However, Councillor Gaines agreed that lobbying would be extended to include Olivia Bailey, MP for Reading West and Mid-Berkshire.

·       Mr Laidlaw confirmed that there would be close liaison with those residents whose homes had been identified for retrofit/regeneration.

·       Plans to regenerate two specific buildings within the Nightingales Estate in the Newbury Greenham Ward were described. Councillor Erik Pattenden requested that he and other Ward Members be engaged with on developments.

·       Members voiced concern that viability for the inclusion of affordable housing in a scheme was often raised as a concern by developers. This was regularly the case at planning committees. It was also often the case that a planning application would be approved by a planning committee, but developers then sought to amend planning conditions and the original decision made at planning was not always adhered to.

·       Development in more deprived areas was discussed. Investment was needed in these areas, but it was important to ensure that areas of high deprivation were not worsened.

·       The option of accepting commuted sums was a particular concern for Members, with no guarantee that the sum obtained would be used for development in the area concerned. This could particularly impact on areas of deprivation.

·       Councillor Gaines was not supportive of commuted sums, but stated that it was an option to take into consideration if no affordable homes could be provided on a site. Clare Lawrence (Executive Director for Place) explained that commuted sums was one of a number of tools that could be utilised in the delivery of affordable homes and a level of flexibility was needed to achieve some form of affordable housing in cases where it could not be provided on site. This was a challenging area and the issues being experienced were sometimes outside of the Council’s control.

·       The comment was made that the management of smaller sites were challenging for RPs to manage. Ms Grote explained that SNG had a finite set of resources available. West Berkshire was a high priority area for SNG with much stock held in the area and was an area they wanted to invest in. However, resource limitations made it difficult to manage smaller sites, particularly those in more isolated locations. SNG could access Government funding to assist with some projects. A new Government funding programme for affordable/social housing was due to commence in February 2026. SNG would be submitting bids for this funding.

·       Councillor Richard Somner agreed that a degree of flexibility should be employed during pre-application work. However, this should not come after a decision had been made on a planning application. If the different options/tools were to be taken forward then Planning Members would need to be made aware through training. This would be requested for inclusion in planning training when appropriate.

·       Ms Morgan would provide a dedicated e-mail address that Members could use to raise any queries.

·       The positive work of Connecting Communities in Berkshire was referred to. This included discussions on rural exception sites. It was noted that the Policy Development Group had been discussing viable villages and had formed a sub-group to look at affordable housing. This work would include looking at existing policy requirements. Connecting Communities in Berkshire would be invited to join this work. All Members should be made aware of the work of this organisation.

·       It was noted that the lack of settlement boundaries could be restrictive to identifying areas for development.

·       The suggestion was made that almshouses could be a wider consideration for affordable housing, this could be taken forward with the Chair of the Almshouse Association. Councillor Gaines agreed this could be explored. Mr Caprara explained that he was in discussion with the Chair of the Lambourn Junction Community Interest Company with regard to having new almshouses in that area.

·       The suggestion of greater flexibility with s106 agreements was a concern for Members as it could result in requirements being avoided by developers. Linked to this was the concern, referenced in the report, of waivers being sought for a DPA. Ms Grote explained that this was sought to allow for shared ownership properties.

·       The potential for the Council to own more properties was raised with the number managed to ensure this did not result in the Council needing to form its own housing company. This would be an option enabling the Council to directly assist some residents. The threshold was 199 properties. Councillor Gaines advised that 27 units had been purchased in the past two years using Council and Government funding. She would like to increase the number as this would give greater flexibility to the Council.

·       Targets to 2030 had been noted, but the targets for the Local Plan period (to 2041) were requested. This figure would be confirmed to the Committee.

·       It was noted that during the time taken between permission being granted and a scheme being built out, standards could change. New carbon neutral requirements introduced in 2025 was an example of this.

·       The situation with a particular site (Newbury House on the Andover Road, Newbury) was queried. Planning permission had been granted for affordable housing but the site had been sold by SNG. Mr Laidlaw agreed to explore this matter and report back to the Committee.

·       Councillor Carolyne Culver felt it would be useful for a forward plan to be in place for identified affordable/social housing units. Ms Lawrence explained that information could be provided on specific projects, but there was not a set pipeline of units becoming available. The Council often had to be reactive to possibilities as they became available. Councillor Culver requested the information on specific projects.

·       Progress in taking the options outlined in the report forward were queried and how this would impact on policies. It was explained that the options were part of strategic level discussions at this stage.

·       It was queried why the Chestnut Walk Joint Venture (JV) between the Council and SNG had not progressed. Councillor Gaines explained that two planning permissions had been granted in 2021 and 2022. However, viability became an issue due to a number of factors. These included high construction costs and a significant drainage issue. The JV was not therefore progressed. Further detail on this would be provided to the Committee.

·       The level of engagement between SNG and its tenants was returned to. Ms Morgan explained that officers in the housing support team worked closely with customers, offering support across a wide range of areas. Customers were provided with single points of contact to discuss any issues.

Actions:

·       Planning Members would need to be provided with information on the different options/tools that would be taken forward, subject to agreement. This would be requested for inclusion in planning training when appropriate.

·       Ms Morgan would provide a dedicated e-mail address that Members could use to raise any queries.

·       Connecting Communities in Berkshire would be invited to join the work of the Policy Development Group. All Members should be made aware of the work of this organisation.

·       The suggestion was made that almshouses could be a wider consideration for affordable housing, this could be taken forward with the Chair of the Almshouse Association. Councillor Gaines agreed this could be explored.

·       The targets for the Local Plan period (to 2041) would be confirmed to the Committee.

·       Information would be provided on specific projects that were expected to come forward for affordable/social housing units.

·       Further detail would be provided to explain why the Chestnut Walk JV had not progressed.

RESOLVED that officers would continue to proceed with reviewing the preferred options (the toolkit) outlined in the report to help facilitate increased delivery of affordable housing locally. The toolkit, subject to a revision to bullet point 4, included:

·       The establishment of a RP Framework with partner local authorities in order to formalise and incentivise development partners.

·       Exploring the implications of accepting commuted sums on sites and to undertake further modelling on how this may affect delivery through key strategic relationships with RPs locally.

·       The acceptance of a flexible approach to s106 agreements Implications and Impact Assessment.

·       Continuing to engage with Lee Dillon MP and commence engagement with Olivia Bailey MP to lobby government and providers to tackle significant barriers to delivery at the current time.

·       Not to proceed with the development of a Housing Company due to financial viability issues remaining significant.