SHEFFIELD CITY COUNCIL Cabinet Report 8 Report of: Executive Director, Place ______________________________________________________________ Date: 24 August 2011 ______________________________________________________________ Subject: Review of the 2010-14 Local Investment Plan ______________________________________________________________ Author of Report: Karen Lythe, Programme Director, Place ______________________________________________________________ Summary: This report updates the position re the housing investment proposals submitted to the Homes and Communities Agency as part of the Sheffield Local Investment Plan in March 2010. The report specifically focuses on the new housing investment environment and identifies key projects and initiatives to be progressed. _____________________________________________________ Recommendations: That Cabinet: 1. notes the scale of the change made to the housing investment funds available from the Homes and Communities Agency since March 2010, with Homes and Communities Agency resources now estimated to be £70.8m over the period 2011-15, a four year period, as opposed to the 2010 bid submission for £134.4m over three years. 2. supports the revised set of projects for which the Council now expects or is seeking funds from the HCA to 2015, including the development by Registered Provider partners of new affordable housing, as set out in Appendix C 3. endorses the city wide, cross tenure strategic approach to housing investment going forward which targets activities to the specific needs of each area. 4. notes the work underway on option appraisals for projects at Arbourthorne Fields, Park Hill and Scowerdons, Weaklands and Newstead which will be the subject of separate cabinet reports ______________________________________________________________ Background Papers: The Sheffield Local Investment Plan 2010-14 Cabinet Report – 24 March 2010 Category of Report: OPEN Statutory and Council Policy Checklist Financial implications YES/NO Cleared by: P Schofield Legal implications YES/NO Cleared by: Andrea Simpson Equality of Opportunity implications YES/NO Tackling Health Inequalities implications YES/NO Human rights implications YES/NO : Environmental and Sustainability implications YES/NO Economic impact YES/NO Community safety implications NO Human resources implications YES/NO Property implications YES/NO Area(s) affected ALL Relevant Scrutiny Board if decision called in Safer and Stronger Communities Is the item a matter which is reserved for approval by the City Council? NO Press release Yes/No Review of the Local Investment Plan 2010-14 1 Summary This report updates the position re the housing investment proposals submitted to the Homes and Communities Agency as part of the Sheffield Local Investment Plan in March 2010. The report specifically focuses on the new housing investment environment and identifies key projects and initiatives to be progressed. 2 What does the report mean for the people of Sheffield? The report will show residents in the city how the Council and other housing Registered Housing Providers plan to invest in new affordable homes over the next four years to help meet the demand for affordable homes. It will also show how the Council intends to do more to help people into home ownership, reduce the blight of empty homes on their streets and move forward on key regeneration projects. 3 Outcomes and sustainability The outcomes from this report will be a clear statement by the Council on its strategic city wide and cross tenure approach to housing investment including the priorities of new affordable homes and improving conditions and sustainability in the private housing sector. 4 The Local Investment Plan 2010-14 (i) On 24 March 2010 the Council approved a Local Investment Plan 2010-14 submission to the Homes and Communities Agency (HCA). The Council entered into a Local Investment Agreement for the first year of that period, 2010/11, with the HCA. The proposals for the remaining three years, 2011/12- 2013/14 were to be the subject of a further agreement after the Comprehensive Spending Review due in October 2010, when future levels of funds available to the HCA would be made clear by Government. (ii) A copy of the 2010-14 submission can be seen on the Council’s website at Your City Council-Council meetings-Cabinet-Agenda March 24 2010. Appendix 2 to the document showing a list of the projects previously proposed for funding in the 2011-14 period is attached to this report at Appendix A. 5 The Comprehensive Spending Review (CSR) October 2010 (i) Between March 2010 and October 2010 the national Government changed, and the CSR report reflected the new Government’s approach to investment and its clear priority to reduce public spending so as to reduce the national deficit. There were a number of very significant changes made to the previous funding streams for housing investment. A summary of the changes is set out at Appendix B. (ii) In summary, the HCA no longer has capital funds with which to support housing investment projects. It retains a reduced National Affordable Housing Programme, which provides social housing grant for the delivery of new affordable homes, and modest national budgets for Empty Homes and Mortgage Support schemes. This change to the funds available from the 1 HCA means that the majority of the schemes previously proposed for the 2011-14 period in the Local Investment Plan are now no longer fundable. (iii) It is now no longer essential for the Council to have a Local Investment Agreement with the HCA for the current CSR period, but the March 2010 Cabinet Report required any substantial changes to the LIP to be brought back to Cabinet for consideration. The LIP requires major revision for the period to 2015, hence this report has been prepared. (iv) The housing investment proposals now set out in Appendix C show the June 2011 position regarding projects moving forward. Over the coming months, and after the completion of the current Housing Review, it is planned to devise a new investment strategy for housing, taking into account the new opportunities which have arisen, for example the New Homes Bonus, and developing new ways of working which are less reliant on external grant from Government and make the most of the Council’s relationships with partners including Registered Providers and housing developers. (v) Appendix C does not show all the investment in Council housing, which was not part of the original LIP, and which can be seen in the 2010/11 Capital Programme report approved at Cabinet on 23 February 2011. 6 A revised Local Investment Plan 2011-15 6.1 Going forward the Local Investment Plan aims to set out a city wide, cross tenure strategy for investment in housing, targeting activity to meet the specific needs of different parts of the city. This strategy will be shaped by the current Housing Review, and will link to the developing plans for investment in new infrastructure via the Community Infrastructure Levy and work by the Council to review the use of all its assets across the city. These initiatives will combine to form a key part of the Council’s Place Making activity, supporting both community sustainability and economic growth. 6.2 The original Local Investment Plan was structured around three themes: Growth and Renewal, Existing Homes and Affordability and Accessibility. The revised Local Investment Plan (LIP) now includes the following schemes under each of these themes (see Appendix C): 6.3 Growth and Renewal This part of the LIP included proposals for delivering new homes, improving district and local centres, completing major regeneration projects and improving neighbourhood green spaces and streets. (i) District and Local Centres A series of district and local centre improvements were proposed for HCA funding. No new resources will now be available from the HCA, but in 2011/12 the Council has identified £250,000 of its own resources to fund improvements at centres at Chapeltown, Hillsborough, Gleadless, and Stocksbridge, and work is well underway with local residents and businesses to agree how these resources are best used. 2 In addition work will be completing in 2011/12 at Tinsley centre and Chaucer New Square, using the remaining Housing Market Renewal resources and s106 monies allocated to these projects. (ii) Housing development sites Works were proposed to improve the condition, marketability and value of a range of cleared housing sites. In the absence of HCA capital works on these sites cannot proceed. (iii) Scowerdons, Weaklands and Newstead project Resources had been sought from the HCA to fund the remaining property acquisitions, rehousing costs and demolitions at this project. In the absence of HCA capital, the Council is reviewing all options for funding the remainder of this scheme. A separate report on these options will be considered at Cabinet in the summer of 2011. (iv) Park Hill The gap funding required to maintain the redevelopment of the early phases of new homes is still expected from the HCA at £632,000. However, funds sought by the Council to pay for the final phase of acquisitions and the rehousing of 98 residents, and the decommissioning of the services will not now be available from the HCA. The Council is exploring the options for meeting these costs and these options will be the subject of a separate report to Cabinet in the summer of 2011. (v) Arbourthorne Fields housing redevelopment project Phase 1 of this project completed in the early part of 2011/12, with the residents of 176 homes now relocated to new homes. Funds are expected from the HCA for a bid made by Sanctuary and supported by the Council to build 45 new affordable homes for older people on the site of these former properties. However, funds of £10.9m sought by the Council to pay for phases 2 and 3 of this project, including the acquisition of a further 53 properties, rehousing of residents and demolition of 246 homes will not now be available from the HCA.