CLACKMANNANSHIRE COUNCIL

Report to Housing Health and Care Committee

Date of Meeting: 20 March 2014

Subject: Housing Strategy and Regeneration Report

Report by: Head of Housing & Community Safety

1.0 Purpose

1.1. This report sets out the progress on meeting the Council's strategic housing and regeneration priorities.

2.0 Recommendations

2.1. It is recommended that Committee approve:

2.1.1. targeting a wider range of properties for acquisition under the 'Off the Shelf' housing revenue account programme.

2.1.2. re-prioritisation of part of the budget identified for General Fund 'Off the Shelf' purchases to support other affordable housing projects.

2.1.3. re-phasing the Orchard Tullibody homeless project to allow a revised project appraisal to be completed.

2.1.4. and note the remainder of the report.

2.2. The Strategic Housing Investment Plan, (SHIP), sets out the Council's overall plans for delivering additional affordable housing, whilst the Strategic Local Programme (SLP) lists opportunities identified to deliver the Affordable Housing Supply Programme (AHSP) grant funding received from the Scottish Government.

2.3. The SLP includes identified resources from the Council and potential RSL partners required to support the AHSP.

2.4. The Housing Revenue Account (HRA) total capital investment in new build as part of its overall investment in 2013/14 is currently £2.195m and for 2014/15 will be £2.459m. Grant funding of £3.501M is available for 2013-15.

Progress against grant and unit target.

2.5. Spend to date is shown in the following table, along with the unit and grant targets to be achieved by 31/3/15.

THIS PAPER RELATES TO ITEM 5

ON THE AGENDA

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Project Unit

Target Competed 13/14

Target 2014/15

AHSP target spend to 2015

AHSP Spend 13/14

Target AHSP Spend 2014/15

OTS HRA 35 20 15 £0.875 £0.500 £0.375 Fairfield 19 0 19 £0.874 £0.160 £0.714 Tullis 27 0 27 £1.569 £0.180 £1.386 TBC* 20 0 20 £0.200 0 £0.125 Total 101 20 81 £3.518 £0.840 £2.675

*To be confirmed. The former Tillicoultry Community Centre site is the most likely site for development next year. This would probably be in partnership with an RSL for around 20 units.

3.0 Housing Need

3.1. From evidence of turnover, difficulty in letting certain properties, refusal rates, along with declining homeless presentations, it appears that demand has softened since the last Housing Needs and Demands Analysis (HNDA) was completed.

3.2. There has for example been a 17.5% reduction in homeless presentations compared with this time last year. The graph below demonstrates the steep fall in presentations since 2005/6.

Homeless Presentations - Financial Years(13/14 projected)

11591072

703 657719 763

708

522436

0

200

400

600

800

1000

1200

1400

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14

3.3. There are now 30 people in bed and breakfast property. Whilst this is still far from ideal it should be noted that this is less than half the number (63) in B&B at the same time last year. This reflects the use of the HRA void property, as well as the off the shelf acquisition programme. Assuming homeless presentation rates stay at current levels, with the new properties at Pine Grove and Hallpark, and continued use of HRA properties, it is intended that the numbers in B&B accommodation be reduced to single figures by the end of quarter 2 next year. The use of B&B is unlikely to be eliminated completely given the flexibility the accommodation offers during times of urgent need.

3.4. As a result of this potentially changing demand picture a new HNDA is required. Until this is completed no new initiatives can be progressed, other than those discussed in this paper. It is intended that the revised HNDA will be submitted to the meeting of this Committee to be held on 21st August.

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4.0 Housing Supply Programme

4.1. As shown in appendix two, 65 units have been built or acquired this year. A further 56 units are on site, and another 136 have funding commitment. This total of 257 additional units in a relatively short space of time represents the most significant addition to the total housing stock in many years.

4.2. The current status of the various projects is set out below.

Off The Shelf (OTS) Property Acquisitions: HRA

4.3. Twenty properties have now been purchased. The average acquisition price was £69,533 (including repairs) and £25K grant per unit was received taking the net cost to £44,233 per unit. Members previously agreed that up to 40 units should be acquired to 31st March 2015, at an average cost of £66,000.

4.4. It is recommended that Members now approve targeting a wider range of high demand property types and location. Only units that provide clear long-term financial viability for the HRA will be acquired.

4.5. The remaining funding available for these purchases is shown in the following table: -

HRA Off The Shelf Purchase Funding   HRA business plan funding 14‐15        £664,000   Reduction in required HRA Contribution to Hallpark    £123,000   Increase in HRA surplus position from February Council    £172,000   Govt Grant              £450,000   Total                £1,409,000 

4.6. This may mean a reduction in the total number of units that can be acquired. Any improvement to the HRA surplus could be used to supplement this initiative. However, as noted in the previous report, if market conditions mean that this target cannot be achieved, it will be necessary to switch the grant funding to other projects.

Property Acquisitions (OTS): General Fund

4.7. Twenty general fund properties have been purchased to date. The average acquisition price for these has been around £47,365 which as homeless accommodation is non grant eligible from the Scottish Government. Purchases slowed due to market conditions and the availability of HRA property to meet homeless.

4.8. It is recommended that the funding previously allocated to this project be carried forward to support further off the shelf purchases if considered good value, and part re-prioritised to support other affordable housing projects subject to approval of the business case.

Alva Glen Hotel: Town Centre Housing Fund

4.9. The Scottish Government announced that this project has been awarded £0.782m a result of the bid made to the Town Centre Housing Fund. This is in

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addition to the AHSP grant monies above. The proposal is to acquire and redevelop the site of the Alva Glen Hotel with 17 new flats. Additional funding in the region of £0.9m is required to support the project.

4.10. Members will be aware that the property is subject to a compulsory purchase order (CPO) currently with the Scottish Government for approval, and that the Council continues to actively to pursue this.

Fairfield School, Sauchie

4.11. The former school has now been demolished. The mix for the new development is shown in appendix 2. A site start date has still to been confirmed.

4.12. The site is currently held on the General Fund account and is to be transferred to the Housing Revenue account at an appropriate valuation, in line with any statutory approvals required.

Alva Greener Homes Innovation Scheme, Former Alva Academy

4.13. This Scottish Government sponsored Greener Homes Innovation Scheme includes off site factory construction of internal works and a high low carbon, zero waste construction of gold standard energy homes. The project is funded by the Scottish Government in partnership with Link and Paragon Housing Associations. Negotiations between the developers and the RSLs are not yet concluded which has delayed the site start.

National Housing Trust (NHT), The Glen, Coalsnaughton

4.14. The 28 'Mid Market Rent' homes on this Hadden Construction site are progressing well. The first phase release of 16 units is due to complete on 11/04/14, with the final phase of 12 units due on 22/08/14. The Council is assisting Ochil View HA and Hadden Construction Ltd in their marketing the properties, and current tenants looking for transfer and meeting the eligibility criteria will be targeted. Demand for these intermediate rent properties will also help inform the HNDA analysis discussed above.

4.15. The Council approved a £2.8m loan finance contribution to this development in August 2012. Rental income will meet the interest and capital repayments with further capital repayments as and when properties are sold after year five. The remaining £1.2m is provided by developer finance.

4.16. The Council has registered an interest in Phase 3 of the National Housing Trust scheme and further details are awaited.

Hallpark, Sauchie

4.17. Progress to date on this 25 unit £2.47M project is on track for completion around July 2014. All "Innovation and Investment Fund" Government monies have been claimed.

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The Orchard, Tillibody

4.18. The project at 29- 41 The Orchard Tullibody was approved in 2013 for the conversion of 10 maisonettes to form 18 individual flats as part of a Business Case to expand homeless accommodation. The project is part of the HRA capital programme for non-SHQS conversion works with a contribution from the GF for the provision of homeless accommodation.

4.19. The project has been delayed due to design issues relating to compliance with sound transmission requirements. This provides an opportunity to reconsider the value of this conversion in light of possible changing patterns of demand, the units already added to the stock, and potentially more cost effective options to meet the needs of this client group. It is therefore recommended that work be re-phased to allow completion of the HNDA and a revised project appraisal.

Tullis, Tullibody (Kingdom HA)

4.20. As agreed at the Housing Health and Care committee at Council on 16th January 2014 work is ongoing to conclude the sale of 1.3 acres of this site to Kingdom Housing Association for 27 new social rented homes.

4.21. The District Valuer has provided a valuation that satisfies statutory requirements and falls within Kingdom Housing Association's financial viability criteria. The land transfer is subject to approval at the Council meeting of 13th March 2014.

Former Community Centre, Tillicoultry

4.22. The Council is considering options for the use of the former community centre in Tillicoultry. The site offers potential for mixed commercial and residential opportunities, and could also include RSL rented housing.

Local Authority Mortgage Scheme (LAMS)

4.23. The previously reported delay in the Local Authority Mortgage scheme by Lloyds Bank appears to have been resolved following guarantees on the Westminster Help to Buy Scheme. For Clackmannanshire the initial proposal was for up to £1m in funding be made available in Council Indemnity, aimed at facilitating 33 mortgages at £30k indemnity per deposit (20%) on a property whose maximum value is £150k allowing for a 5% deposit by the client. This will be the subject of future consideration by Council.

Empty Homes Initiative

4.24. The work of the Empty Homes officer is to be absorbed within the Strategy Team. The project has brought 13 empty homes back into use for owner occupation with 3 in the pipeline. The Scottish Government Grant of £75k will be rolled forward into 2014/15 and the Government has relaxed its use for local authorities from 1st April 2014.

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5.0 New Energy Efficiency Standard for Social Housing (EESSH)

5.1. A new Energy Efficiency Standard for Social Housing (EESSH) will be introduced by the Scottish Government in 2015 which will set new energy efficiency targets to 2020. It is intended to help tenants to reduce their energy consumption, alleviate fuel poverty and reduce the emission of greenhouse gases. The standard is in line with requirements set out in the Climate Change (Scotland) Act 2009, which incorporates aims to reduce carbon emissions across the Scottish economy and society by 42% by 2020, and 80% by 2050.

5.2. The standard was developed during 2012/13 by the Scottish Government and social housing stakeholders, including COSLA, Local Authority representatives, tenant groups, Energy Action Scotland and the Scottish Federation of Housing Associations.

5.3. EESSH differs from the Scottish Housing Quality Standard (SHQS) because it does not prescribe a rigid set of measures which must be installed in all housing stock. Instead, it sets a minimum energy efficiency rating for a dwelling that varies by stock type and fuel source, to ensure it is achievable. In theory, the local authority will have maximum flexibility to determine which measures to install, taking account of local priorities and available funding.

5.4. The housing stock is over 99% compliant with the current energy efficiency

element of the Scottish Housing Quality Standard. This will achieve an estimated 60% plus compliance with the EESSH. This puts the Council in a good position for achieving compliance within the 2020 EESSH deadline. A full briefing paper has been distributed to all members.

6.0 Clackmannanshire Housing Strategy 2012- 2017 update

6.1. A five year Housing Strategy for Clackmannanshire, as required by the Housing (Scotland) 2001 Act, was endorsed by the Clackmannanshire Alliance and approved by the Council in Autumn 2012. The Strategy links with a number of other key plans and strategies, such as the Single Outcome Agreement (SOA), the Social Housing Charter and the Council's own corporate priorities. The Actions are reflected annually in the Housing and Community Safety Business Plan.

6.2. Annual updates will highlight priories and new actions required to achieve the outcomes set out in the LHS. The annual update is underway at present and will be presented alongside our Business Plan update for 2013/14. This process will allow us to ensure that the Strategy remains relevant to current priority issues and that:

• achievements are highlighted, • priorities are continuously reviewed, • the Strategy is on track, • any policy changes or new priorities are incorporated.

6.3. The Strategy identifies 8 priority areas for action, agreed after a wide consultation exercise, along with priority outcomes which help to contribute to each of the Single Outcome Agreement outcomes. The 8 priority areas are;

• Ensuring new housing supply,

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• Making best use of existing housing,

• Tackling and preventing homelessness,

• Support for independent living,

• Providing specialist housing,

• Tackling energy efficiency and fuel poverty,

• Improving neighbourhoods and communities,

• Providing housing investment.

6.4. The Alliance Community Wellbeing Partnership and Business Jobs and Skills Partnership Teams each received an update in February 2014 on the Clackmannanshire Housing Strategy including an update on Actions for 2013/14. The Housing Health and Care Committee will view these Actions under the Quarter 3 Performance update also on the Agenda.

6.5. The community planning framework will develop, monitor and evaluate progress of the Strategy. The Strategy outcome monitor includes the key indicators we will use to measure and track progress. This has been loaded into Covalent, our integrated performance management system and work is underway to link the actions and indicators across the service, and the different measurement areas, so that it avoids duplication and improves efficiency. It is intended that the Outcomes Monitor for the Housing Strategy will ultimately feed in to the monitoring framework for the SOA.

7.0 Housing Scotland Bill 2013

7.1. In November a housing bill was introduced in the Scottish Parliament. The bill makes provision about the abolition of the right to buy, social housing, the law affecting private housing, the regulation of letting agents and the licensing of sites for mobile homes. A briefing note has been prepared and circulated to all members.

8.0 Sustainability Implications

8.1. The supply of new, energy efficient affordable housing helps with the Council's commitment to reduce carbon emissions. The project at Alva will provide 48 carbon zero homes to gold energy standards. Every attempt will be made to negotiate enhanced home energy standards with prospective developers for all new affordable homes. The Council will also pursue the inclusion of renewable technology where feasible in the developments it supports.

8.2. Overall the delivery of more affordable housing is central to the sustainability of a thriving and vibrant Clackmannanshire.

9.0 Resource Implications

Financial Details

9.1. The full financial implications of the recommendations are set out in the report. This includes a reference to full life cycle costs where appropriate. Yes

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9.2. Finance have been consulted and have agreed the financial implications as set out in the report. Yes

9.3. The full programme for affordable housing is set out in appendix 2. The Affordable Housing Supply Programme allocation target of £3.501 will deliver 101 units of affordable housing.

9.4. In addition, the programme assumes an HRA contribution of £3.046m from 2013 to 2015, which is approved in the HRA Capital Plan approved by Council in February 2013. This will facilitate 54 additional Council units.

Staffing

9.2. There are no direct staffing implications and all are assumed within existing resources. Any additional staffing required for the developments will be included in the direct project costs.

10.0 Exempt Reports

10.1. Is this report exempt? Yes (please detail the reasons for exemption below) No

11.0 Declarations The recommendations contained within this report support or implement our Corporate Priorities and Council Policies.

(1) Our Priorities (Please double click on the check box )

The area has a positive image and attracts people and businesses Our communities are more cohesive and inclusive People are better skilled, trained and ready for learning and employment Our communities are safer Vulnerable people and families are supported Substance misuse and its effects are reduced Health is improving and health inequalities are reducing The environment is protected and enhanced for all The Council is effective, efficient and recognised for excellence

(2) Council Policies (Please detail)

The SHIP helps to deliver the priorities identified in Clackmannanshire's Housing Strategy 2012-17, approved by Council on 20 December 2012.

12.0 Equalities Impact

11.1. Have you undertaken the required equalities impact assessment to ensure that no groups are adversely affected by the recommendations? Yes No

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13.0 Legality

12.1. It has been confirmed that in adopting the recommendations contained in this report, the Council is acting within its legal powers. Yes 14.0 Appendices

14.1. Please list any appendices attached to this report. If there are no appendices, please state "none".

Appendix 1: Off the Shelf Purchases

Appendix 2: New Housing Supply Programme

15.0 Background Papers

15.1. Have you used other documents to compile your report? (All documents must be kept available by the author for public inspection for four years from the date of meeting at which the report is considered)

Yes (please list the documents below) No Author(s)

NAME DESIGNATION TEL NO / EXTENSION

Kenny Hutton

Ahsan Khan

Regeneration Services Manager

Head of Housing & Community Safety

Ext 2472

Ext 2473

Approved by

NAME DESIGNATION SIGNATURE

Ahsan Khan Head of Housing & Community Safety

Garry Dallas Director of Services to Communities.

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Appendix 1-Off the Shelf Purchases at 20 January 2014 HRA Purchases 8 x 1 bedroom 6 x 2 bedroom 6 x 3 bedroom Settlement Number Properties Size Sauchie 5 1 x 1 bedroom

4 x 2 bedroom Alloa 8 5 x 1 bedroom

3 x 3 bedroom Tillicoultry 3 2 x 1 bedroom

1 x 2 bedroom Tullibody 4 1 x 2 bedroom

3 x 3 bedroom Total 20 Average Price Paid Average Estimated

Repair Cost Total Average Price

Total Average net cost to the Council

£62,699

£6,533

£69,533

£44,233

General Fund Purchases 14 x 1 bedroom 6 x 2 bedroom Settlement Number Properties Size Sauchie 3 2 x 1 bedroom

1 x 2 bedroom Alloa 8 8 x 1 bedroom

Tillicoultry 3 1 x 1 bedroom

2 x 2 bedroom Alva 2 2 x 1 bedroom Coalsnaughton 1 1 x 2 bedroom Clackmannan 2 2 x 2 bedroom Dollar 1 1 x 1 bedroom Total 20 Average Price Paid Average Repair

Cost Total Average Price

£45, 050.

£2,315

£47, 365

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Appendix 2 - Additional Affordable Units Completed, On site and Planned Completed since 1 April 2013 Site Location Complete Tenure / Owner Number Client Group

Dalmore Alva May 2013 Rented / Council 9 Particular Needs

New Mills Tullibody May 2013 Rented / Council 16 General Needs

OTS HRA Various 2013 Rented / Council 20 General Needs

OTS Gen Fund Various 2013 Temp. / Council 20 Homeless

Total 65

On site Site Location Site Completion Tenure / Owner Mix Type and Client Group

The Glen Coalsnaughton Spring 2014 NHT Market rent 8 x 2 bed Flat General Needs 12 x 4 bed House General Needs 8 x 3 bed House General Needs 28

Hallpark Sauchie Aug 2014 Homeless / Council 15 x 2 bed Flat Homeless 10 x 1 bed Flat Homeless 25

Old Library Tillicoultry March 2014 Rent / Council 3 x 1 bed Flat General Needs

Total 56

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Planned Site Location Site Start Tenure / Owner Mix Type and Client Group

Alva Academy Alva March 2015 Rent / RSL 16 x 1 bed Flat General Needs 24 x 2 bed House Mixture 8 x 3 bed House General Needs 48

Alva Glen Hotel Alva Spring 2015 Rent / Council 13 x 1 bed Flat General Needs 4 x 2 bed Flats Particular Needs 17

Tullis Tullibody Spring 2014 Rent / RSL 6 x 1 bed Flat 3 Particular Needs 8 x 2 bed Flat 4 Particular Needs 9 x 2 bed House General Needs 4 x 3 bed House General Needs 27

Fairfield School Sauchie Spring 2015 Rent / Council 8 x 1 bed Flat General Needs 4 x 2 bed Flat General Needs 3 x 2 bed House General Needs 4 x 3 bed House General Needs 19

OTS HRA Various 2014 Rent / Council 15 General Needs

OTS Gen Fund Various 2014 Temp / Council 10 Homeless

Total 133 Summary Total Units Completed / Purchased - 65 On site - 56 Planned (grant and funding committed) - 136 257

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