Manchester City Council Item 11 Council 28 March 2012 Manchester City Council Report for Resolution Report to: Executive – 15 February 2012 Council – 28 March 2012 Subject: Stock Transfer of Residual Properties Report of: Director of Housing Summary To update Members on the progress of the proposed Small Scale Voluntary Transfer (SSVT) of Council-owned dispersed “miscellaneous” homes and seek approval to changes to the original proposals. Recommendations 1. To authorise the City Solicitor to obtain the consent of the Secretary of State (SoS) to the transfers of the tenanted and void properties. Wards Affected: Ancoats and Clayton, Baguley, Bradford, Charlestown, Cheetham, Crumpsall, Gorton North, Harpurhey, Miles Platting, Moss Side, Northenden, Sharston Community Strategy Spine Summary of the contribution to the strategy Performance of the economy of Enhanced opportunities for the attraction and the region and sub region retention of economically active residents and workers by offering a range of products including affordable homes . Reaching full potential in The receiving landlords will work with contractors education and employment who will endeavour to employ local trades people and engage local young people as apprentices to promote employment and education in the local area. This ensures the best possible opportunity for local people to obtain training and/or employment, which directly helps to promote economic development in the local area, by developing the local workforce and delivering improvements for the whole community. Individual and collective self Improving residents’ homes to bring them up to esteem – mutual respect the Government’s Decent Homes Standard will improve individual and collective self esteem. Manchester City Council Item 11 Council 28 March 2012 Neighbourhoods of Choice The delivery of high quality refurbishment works, the provision of local management and the offer of affordable homes will encourage people to stay in their local areas and enable positive housing choices to be made by residents. Full details are in the body of the report, along with any implications for: • Equal Opportunities Policy • Risk Management • Legal Considerations Financial Consequences – Revenue The revenue costs associated with the professional fees around setting up the transfers are estimated to be around £130k, and these costs will be funded from within existing budgets within the Housing Revenue Account (HRA). There will be an annual loss of rental income of around £237k per annum, although this will be offset by reduced costs in respect of management and maintenance. As members are aware the HRA is to change from April 2012, and DCLG are to make a one off debt settlement to each authority, which is based on property numbers as at April 2012. DCLG have not made any adjustment to the City Council’s debt settlement to reflect this stock transfer, and there is around £0.7m of debt associated with these properties that will need to be serviced. The annual costs of servicing this debt will be around £34k per annum. The self financing guidance states that any receipts received should be used to pay down the associated debt. Financial Consequences – Capital There are no direct capital implications arising from this report, although the City Council may receive a capital receipt in the future if some of the properties are sold. The City Council will be expected to pay down associated HRA debt from any receipt. Contact Officers: Name: Paul Beardmore Position: Director of Housing Telephone: 234 4811 E-mail: [email protected] Manchester City Council Item 11 Council 28 March 2012 Name: Martin Oldfield Position: Head of Investment Telephone: 234 3561 E-mail: [email protected] Name: Sheila M Connor Position: Project Manager, HIO Programme Telephone: 234 4806 E-mail: [email protected] Background documents (available for public inspection): The following documents disclose important facts on which the report is based and have been relied upon in preparing the report. Copies of the background documents are available up to 4 years after the date of the meeting. If you would like a copy please contact one of the contact officers above. • Report to Executive March 2009 - Proposed Disposal of Eight Former Vacant Miscellaneous Properties, Openshaw, Bradford Ward • Report to Executive 10 th September 2009 - Housing Capital Programme 2009-12. • Report to Executive December 2010 – Stock Transfer Proposal for Residual Properties • Report to Executive June 2011 – Disposal of 5 empty Council-owned miscellaneous properties Manchester City Council Item 11 Council 28 March 2012 1.0 Introduction 1.1 The purpose of this report is to update Members on the proposed transfer of miscellaneous properties across the city. The proposal is to transfer all of the properties whether tenanted or void in order to create affordable packages for the receiving Registered Providers (RPs). 2.0 Background 2.1 In December 2010 Members approved the proposed transfer of 171 miscellaneous properties in the Council’s portfolio which had not been included in any of the Housing Investment Options opportunities (see Appendix 1). This portfolio has now reduced to 116 properties (see Appendix 2). 2.2 The main reason for the reduction in property numbers is due to the fact that several void properties were disposed of to RPs under general housing consents with the prior approval of the Executive. This enabled grant funding resources to be spent in Manchester instead of being lost or allocated to a national pot. 2.3 The properties in the current portfolio are spread across parts of Manchester and in three locations outside the city as follows: North Manchester SRF 13 Central Manchester SRF 6 Wythenshawe SRF 15 East SRF 64 Outside Manchester 18 2.4 The proposal agreed by Executive in December 2010 was to transfer these properties to an RP that would provide the funding to undertake the work required to bring occupied properties up to the Decent Homes Standard and would then seek to negotiate management/lease agreements with local RPs who demonstrated a proven track record of good housing management and a strong commitment to neighbourhood working. 2.5 The chosen RP was Mosscare Housing Limited leading a consortium of 5 other RPs (“the Consortium”) who would deliver the local housing management required by way of management agreements with Mosscare. However during negotiations between the Council and Mosscare it became apparent that ownership, rather than management, of the properties by the other RPs in the Consortium was the preferred option. This proposal was discussed in detail with the residents Steering Group and fully supported. 2.6 These changes mean that the Council is now conducting six simultaneous stock transfers as opposed to a single transfer to a preferred bidder and local management arrangements with that bidder as was previously proposed. The tenanted properties will still benefit from the full improvement works and a range of solutions are still proposed for the empty properties. The allocation of properties to the Consortium partners are listed below. Manchester City Council Item 11 Council 28 March 2012 3.0 Allocation of Properties 3.1 Mosscare Housing Limited has been allocated 8 tenanted properties and 33 void properties. There are currently also 3 leasehold properties at 16/18 Bennett Road and Clough House included in the proposed transfer to Mosscare Housing Limited. However negotiations are ongoing with the lessees of the properties who have indicated an intention to purchase the properties if satisfactory terms can be agreed. 3.2 Eastlands Homes Limited has been allocated 10 tenanted properties and 29 void properties. 3.3 Parkway Green Housing Trust has been allocated 14 tenanted and no void properties. 3.4 Willow Park Housing Trust has been allocated 2 tenanted properties. It is also proposed to enter into a formal management agreement with Willow Park to improve and manage 2 further properties within the Manchester Airport Terminal 2 development, for which the approval of the Tenants Services Authority (TSA) will be required. These 2 properties were excluded from the stock transfer to Willow Park upon the advice of Corporate Property due to their strategic location. 3.5 City West Housing Trust Limited an RP based in Eccles has been allocated 6 tenanted properties with no voids. 3.6 Peaks and Plains Housing Trust an RP based in Macclesfield has been allocated 10 tenanted properties in Alderley Edge and 1 void property. 4.0 Progress to Date 4.1 Extensive consultation has taken place with tenants, the Mosscare Housing Consortium, the Homes and Communities Agency, the TSA and the Department for Communities and Local Government. Local meetings were held in each area where tenants were able to meet their proposed new landlord. The tenants also received regular visits and newsletters from both Council officers and the Independent Tenants Advisor. 4.2 The Offer Documents were issued in December 2011 and the Council received 28 “What’s your view” responses from the 64 tenants eligible to vote. 26 were in favour of the proposals and two were unsure. No tenants were opposed to the transfer proposals. The six ballots commenced on 5 January 2012 and completed on 2 February 2012. The results are shown in the table below. Manchester City Council Item 11 Council 28 March 2012 Registered Provider Tenants Votes Percentage of Yes Percentage of cast Votes cast Votes Yes Votes Mosscare 9 9 100% 8 88.9% Eastlands 13 13 100% 12 92.3% Parkway Green 19 18 94.7% 14 77.8% Willow Park 2 2 100% 2 100% City West (Eccles) 6 6 100% 6 100% Peaks & Plains 14 13 92.9% 13 100% (Alderley Edge) 4.3 Negotiations are continuing with Mosscare Housing Limited and Eastlands Homes Partnership Limited around future options for the empty properties which have been allocated to them. Mosscare propose using HCA grant funding to bring their allocated properties up to the Government’s Decent Homes Standard and then let the properties at affordable rents.