Labour led Milton Keynes Council is challenging the two Tory MPs to come clean over housing money and to support the proper funding of new Council housing in Milton Keynes.

“How will 15 new homes help the 737 households in Temporary accommodation?”

Last week at the Conservative Party Conference the Prime Minister asked Councils to bid for a share in £2 billion of funding to build new Council houses. Milton Keynes MP Mark Lancaster has called upon the Council to put in a bid according to the MK Citizen website (6 October) which said

“City MP Mark Lancaster has urged Milton Keynes Council to bid for funding following the Prime minister’s announcement that an extra £2bn will be made available for affordable housing.”

Council Leader Pete Marland has accused the MP of misleading people, whilst consistently failing to back Labour calls to the Government to restore the Council’s right to borrow to invest in new Council housing.

The Prime Minister announced the £2 Billion covering 5 years, with a maximum of £80,000 per property subsidy available to successful bidders. That would mean a subsidy of £400 million per year for 5 years. This would fund just 5,000 new homes per year. According to Inside Housing Magazine (6 October 2017)

That means that if all 326 Councils in the Country with a housing role were successful, each would only get around 15 new homes per year. And that assumes the Councils would be able to find £60,000 per property, as new properties cost around £140,000 each.

Cllr Marland said, “Whilst £2 Billion sounds a lot. When spread across the Country with Councils and housing associations bidding, if we got the maximum money we would get around 15 new houses per year, assuming the funding would be for each of the 5 years. Yet last Friday we had 737 households in temporary accommodation (6 October).  Fifteen  new homes a year will not address the housing supply crisis facing Milton Keynes. We need the MPs to stop playing politics and support the removal of the cap on the Councils ability to borrow to invest in new Council housing. They have consistently refused to do this.”    

Sadly it gets worse. The Council is losing £2.3 million this year, with more losses in future years as a result of the Government cuts to support for the funding of people in temporary accommodation.

The Council has written to both the Housing Minister and the two MPs about this loss of funding. (see below)

Cllr Nigel Long, Milton Keynes Cabinet Member for Adult Social care and Housing said “The Government have consistently stopped us borrowing to build. Now they have changed the rules on temporary accommodation leaving the Council £2.3 million pounds short.”

 He added, “The irony is that the Government allows us to borrow to build schools, but not to build Council housing. We will put in for a share of the £2 Billion. But, even if successful, it  will not even scratch the surface of the housing crisis in Milton Keynes. Mr Lancaster is playing the same Public Relations game as the Prime Minister. He is pretending there is money to build new homes when it is peanuts and would only pay for part of a new home. Its shameful, misleading behaviour.”  

Cllr Marland concluded, “Whilst the MPs for Milton Keynes have a poor record on supporting housing investment they have the opportunity to help us reverse the £2.3 million cut to funding for temporary accommodation. And we will welcome their support in bidding for some of the £2 Billion, even though it will only scratch the surface of the housing crisis.”  

 

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Letter to Secretary of State.

 

The Rt Hon Sajid Javid MP

Secretary of State for Communities and Local Government

2 Marsham Street

London

SW1P 4DF

 

Dear Secretary of State,

Re: DCLG Flexible Homelessness Support Grant (FHSG) -; Allocations

In Milton Keynes we have seen our numbers of homeless families in temporary accommodation increase from 84 in 2009/10 to 754 in 2016/17[1]. This is an increase of 798%, which has meant the council has needed to focus on identifying and developing new homelessness solutions, which include new build properties; modular temporary accommodation; private sector landlord schemes and additional leased properties.

The information collected on the reasons for increased temporary accommodation suggest the main driver in Milton Keynes is due to the increase in private sector rental prices (20% since 2009/10), driven by the house price increase in the area (40% since 2009/10), despite the fact that there are over 1,200 new properties built in Milton Keynes each year.

The extreme increase in the demand for temporary accommodation means that the FHSG, announced 15 March 2017, falls far short of the loss to the council of the former Temporary Accommodation Management Fee and the methodology does not adequately address the necessary issues. We estimate that we will spend £1.9m in 2017/18 which would previously have been funded by the temporary accommodation management fee, and the 2016/17 allocation we have been given is just £1.0m, nearly 50% short of the total cost[2].

On the basis of our anticipated homelessness demand and use of temporary accommodation, we expect that the total shortfall in FHSG over the level of TAMF previously payable will amount to £2.3m:

Item

	2017/18	2018/19	Total
Expected bednights eligible for TAMF	228,376	302,660	531,036
Former TAMF eligibility	£1,957,509	£2,594,229	£4,551,737
FHSG Allocation	£1,041,839	£1,198,737	£2,240,576
Shortfall in FHSG replacement of TAMF	£915,669	£1,395,491	£2,311,161

While there were engagement sessions with some councils on the overall proposal, not all were able to participate, and the sessions did not include sufficient detail to enable attendees (let alone those not able to attend) to assess and comment on the impact of the allocations and adequately inform the development of this proposal.

Our main concerns are:

1)    The lack of meaningful consultation on the distribution methodology for the allocation of £171m of “standard” FHSG. It would be been sensible to engage the sector on understanding cost drivers and current issues for this issue, as in some areas of the country the position has changed rapidly over the last year or so.

2)    £14m of “additional” FHSG has been earmarked for “current high TAMF LAs”, again without meaningful consultation on the principle or the methodology of allocation. As set out above, Milton Keynes is now a “high TAMF LA” (Milton Keynes accepted more homeless families than 11 of the authorities who did receive additional FHSG) and yet has not been offered additional FHSG or the opportunity to be considered for such an offer.

3)    It does not seem logical that £16m of the £171m “standard” FHSG (i.e., 9.3%) has been allocated to LAs with nil expected 2017/18 TAMF. Though we understand DCLG’s wish to support councils without TAMF expectations, to deliver improved models of homelessness prevention and relief, this does not align with the levels of allocation, for example ten of these LAs with nil expected 2017/18 TAMF receiving over £400k each. The largest such award, of £586k to Nottingham, is over half of the allocation to Milton Keynes, which as set out in this letter has a high current level of TAMF.

4)    Although I appreciate that DCLG has used the latest data on TAMF available to it (for the year 2015/16), I am disappointed that despite the very well-publicised rapid rate of increase in homelessness over the recent past, no more recent data was sought or captured for use in the basis of allocation. As set out above the growth in homelessness, and in particular in TAMF resulting from the consequent growth in temporary accommodation, has had a marked effect in Milton Keynes. This is not adequately reflected in a historic measure of demand, and using this measure will mean the council faces additional unmet costs or we will need to reduce the level of temporary accommodation management support available, potentially making homelessness issues in Milton Keynes worse.

5)     I am disappointed that DCLG (and DWP) have not publicly acknowledged that the replacement of TAMF with FHSG represents a significant transfer of risk from central government to local government, and that in the context of inexorably rising homelessness, the adverse impact of that risk to local authorities is both inevitable and financially significant.

I appreciate that DCLG’s objective is that LAs are to have flexibility to respond to homelessness demands in other ways than the provision of temporary accommodation part-funded through TAMF; but in Milton Keynes we are already putting additional resources into prevention and the supply of alternative forms of relief, and the likelihood of being able to recover such a huge disparity between TAMF and FHSG is very low.

I ask you reconsider the position this creates for Milton Keynes and whether any additional FHSG could be made available to support the considerable deficit we are facing as a result of these changes, in light of the recent increases in the demand for temporary accommodation.

Your faithfully,

 

Nigel Long

Cabinet Portfolio Holder for Adult Care and Housing

 

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Letter to local Tory  MPs.

Iain Stewart MP / Mark Lancaster MP

Suite 102
Milton Keynes Business Centre
Foxhunter Drive
Linford Wood
Milton Keynes
MK14 6GD

 

Dear Iain/Mark,

Re: DCLG Flexible Homelessness Support Grant (FHSG) -; Allocations

In Milton Keynes we have seen our numbers of homeless families in temporary accommodation increase from 84 in 2009/10 to 754 in 2016/17[3]. This is an increase of 798%, which has meant the council has needed to focus on identifying and developing new homelessness solutions, which include new build properties; modular temporary accommodation; private sector landlord schemes and additional leased properties.

The information collected on the reasons for increased temporary accommodation suggest the main driver in Milton Keynes is due to the increase in private sector rental prices (20% since 2009/10), driven by the house price increase in the area (40% since 2009/10), despite the fact that there are over 1,200 new properties built in Milton Keynes each year.

The extreme increase in the demand for temporary accommodation means that the FHSG, announced by the Department for Communities & Local Government (DCLG) on 15 March 2017, falls far short of the loss to the council of the former Temporary Accommodation Management Fee and the methodology does not adequately address the necessary issues. We estimate that we will spend £1.9m in 2017/18 which would previously have been funded by the temporary accommodation management fee, and the 2016/17 allocation we have been given is just £1.0m, nearly 50% short of the total cost[4].

On the basis of our anticipated homelessness demand and use of temporary accommodation, we expect that the total shortfall in FHSG over the level of TAMF previously payable will amount to £2.3m:

Item	2017/18	2018/19	Total
Expected bednights eligible for TAMF	228,376	302,660	531,036
Former TAMF eligibility	£1,957,509	£2,594,229	£4,551,737
FHSG Allocation	£1,041,839	£1,198,737	£2,240,576
Shortfall in FHSG replacement of TAMF	£915,669	£1,395,491	£2,311,161

While there were engagement sessions by DCLG with some councils on the overall proposal, not all were able to participate, and the sessions did not include sufficient detail to enable attendees (let alone those not able to attend) to assess and comment on the impact of the allocations and adequately inform the development of this proposal.

Our main concerns are:

1)    The lack of meaningful consultation by DCLG on the distribution methodology for the allocation of £171m of “standard” FHSG. It would be been sensible to engage the sector on understanding cost drivers and current issues for this issue, as in some areas of the country the position has changed rapidly over the last year or so.

2)    £14m of “additional” FHSG has been earmarked by DCLG for “current high TAMF LAs”, again without meaningful consultation on the principle or the methodology of allocation. As set out above, Milton Keynes is now a “high TAMF LA” (Milton Keynes accepted more homeless families than 11 of the authorities who did receive additional FHSG) and yet has not been offered additional FHSG or the opportunity to be considered for such an offer.

3)    It does not seem logical that £16m of the £171m “standard” FHSG (i.e., 9.3%) has been allocated to LAs with nil expected 2017/18 TAMF. Though we understand DCLG’s wish to support councils without TAMF expectations, to deliver improved models of homelessness prevention and relief, this does not align with the levels of allocation, for example ten of these LAs with nil expected 2017/18 TAMF receiving over £400k each. The largest such award, of £586k to Nottingham, is over half of the allocation to Milton Keynes, which as set out in this letter has a high current level of TAMF.

4)    Although I appreciate that DCLG has used the latest data on TAMF available to it (for the year 2015/16), I am disappointed that despite the very well-publicised rapid rate of increase in homelessness over the recent past, no more recent data was sought or captured for use in the basis of allocation. As set out above the growth in homelessness, and in particular in TAMF resulting from the consequent growth in temporary accommodation, has had a marked effect in Milton Keynes. This is not adequately reflected in a historic measure of demand, and using this measure will mean the council faces additional unmet costs or we will need to reduce the level of temporary accommodation management support available, potentially making homelessness issues in Milton Keynes worse.

5)     I am disappointed that DCLG (and the Department for Work & Pensions) have not publicly acknowledged that the replacement of TAMF with FHSG represents a significant transfer of risk from central government to local government, and that in the context of inexorably rising homelessness, the adverse impact of that risk to local authorities is both inevitable and financially significant.

I appreciate that the government’s objective is that LAs are to have flexibility to respond to homelessness demands in other ways than the provision of temporary accommodation part-funded through TAMF; but in Milton Keynes we are already putting additional resources into prevention and the supply of alternative forms of relief, and the likelihood of being able to recover such a huge disparity between TAMF and FHSG is very low.

I have written to the Secretary of State asking that DCLG reconsider the position this creates for Milton Keynes and whether any additional FHSG could be made available to support the considerable deficit we are facing as a result of these changes, in light of the recent increases in the demand for temporary accommodation, and would appreciate your support in raising this issue with Ministers.

Your faithfully,

 

 

Nigel Long

Cabinet Portfolio Holder for Adult Care and Housing