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Hey Houses

Hey HousesBack at the 7th May Cabinet meeting (2008) there was an 'exempt item' where the press and public were excluded from the meeting so that matters could be discussed in private.

Although these items sound suspicious - and sometimes they are - there are also legitimate reasons for private sessions. For example when there is a matter which involves a police investigation, or staffing disciplinary matters, and so on.

Either way, the secrecy itself attracts attention and curiosity, and we were especially curious at the title "Affordable Housing Redevelopment - Heyhouses"

This is the Commissar's ward, so anything here will affect his chances of re-election next time around.

Now we're not suggesting anything untoward here, but Councillors Albert Pounder and Paul Rigby declared a personal and prejudicial interest in this item (which means they left the room for it and didn't take part in the debate or the vote).

The Commissar didn't.

Unusually at the start of the item, the press and public were not excluded straight away, but two men from New Fylde Housing were invited to explain broadly what they had come for

It seemed to counterbalance the Commissar expected them not to discuss financial matters. However, it looked as though the two men had rehearsed a set-piece presentation and launched into it - with what seemed to be quite a lot of figures.

When they had finished, (but before the Politburo Cabinet members started their discussion), we were all excluded. However, we made quite a few notes for our readers first.

To make sense of what is going on, we need to cover a bit of background.

In Heyhouses ward, there is what most people would know as a council estate. It centres around the Pilling Avenue area. Except that it's not a council estate any more. It's owned by New Fylde Housing. How this came about is a long, and in our view sad, story. It's too long to go into in detail here, but briefly, as we have said before, successive governments wanted to abandon the idea of housing controlled by local councils, and starved them of money to repair and update the council houses.

As we saw in Interim Housing Policy, the only way council housing could be properly maintained was if the council handed it over to a Housing Association as part of a 'Large Scale Voluntary Transfer.'

The underlying logic seemed to be the same as the Nuremburg theory of management - if you reduce or remove the democratic element of housing provision, you can make the operation more efficient, increase rents to a more commercial level and generally make things run better.

So in order to ensure reasonable housing in their areas, many places caved in to government pressure and abandoned the democratic input. In effect council housing departments were 'privatised.' The new Housing Associations that were formed bought the properties via a commercial loan.

This happened in Fylde. The houses were sold to a company called New Fylde Housing (NFH) for around £11,000 each (when at the time they were worth around £60,000 each if they had been sold with vacant possession). In our view, this was a complete betrayal of the money paid by generations of former ratepayers, but there we are. Needs must when the devil was driving.

We also think that providing housing based on social need is best done by people who are elected to office, not those appointed to office. But the sale eventually went ahead, and the deed was done.

So the £2 million or so to buy the former council houses was raised from the banks, and New Fylde Housing came into being (having bought all the Council Houses in Fylde for about one fifth of the real value of the property).

So now it ought to be able to run on its own two feet, shouldn't it?

Well, not quite. Having set their business model on presumed rent increases and costs, the New Labour government was elected and the prospect of big rent increases evaporated as more and tighter controls and more onerous requirements were loaded onto these new Housing Associations.

Life became quite tough for them.

But New Fylde Housing survived the experience; at first holding its own, then planning some moderate expansion.

First, we had their plan to create a 'retirement village' on part of the Waddington Playing Field which generated some opposition, and was then squashed. It was alleged that when the Commissar realised there would be a big mess of building works about the time of his next election he was not a happy bunny. Although we couldn't say if that was the real reason, the plan was abandoned.

After that plan, New Fylde Housing licked its wounds and decided to embark on a major renovation of the estate.

Which more or less brings us up to date at our Politburo Cabinet meeting, at which the two men from New Fylde Housing set the scene.

They were asking Fylde Cabinet to help them financially.

They wanted FBC to use some of the commuted sums it collected from commercial builders who have coughed up cash rather than built 'affordable houses' in the middle of their own posh new housing schemes.

We understand that about half the Pilling Avenue estate has been (or is being) refurbished, and the funds for this had been in place for some time. We heard this refurbishment scheme (called 'Decent Homes' ) had seen a £1 million spent on it in the last 12 months.

But things were getting more difficult. Work was costing NFH £235,000 a year in lost rents as properties were emptied for renovation.

They had spent an extra £100,000 over what they planned to spend on the renovation work, and now had a deficit of £1.5 million in their business plan.

Fortunately for them, they had managed to refinance their previous £30 million of borrowing to £50 million just before the credit crunch had appeared (remember they only paid Fylde's taxpayers £2 million for the houses in the first place, so this is going some), but they now had £10 million of 'negative reserves' (Nice description that, don't you think?)
 

(although given the doldrums in the commercial housing market, that plan looks more financially doubtful as time goes by and the vast sums wasted with consultants keep piling up).

More ominously, they said they couldn't make things work for the longer term at the current rent levels. (The unspoken implication here is that if they can improve the properties they can increase the rents, but if not they will go bust)

According to the two men from New Fylde Housing, the problems were getting worse. When they started the renovation, they found the older half of the estate, (involving 72 units), was beyond economic repair (mostly due to subsidence) and had to be demolished. This means they will lose another shedload of rents.

But, the real problem is that a combination of the worse than expected subsidence, and overspending on the refurbishment of the first half of the estate meant that they hadn't got enough cash left to replace the 72 units on 'the other' half anyway.

What they *wanted* to do to get out of this hole was:

  1. to build replacement units for those that would be lost, and
  2. at the same time build some extra homes themselves (presumably to generate extra rents), and also
  3. build some property for sale by the developer who was going to do all the building for them.

So in outline, they wanted to sell off part of the estate to a commercial developer to build for private houses for sale (although they would have looked the same as the rented homes) to cover the cost of their rebuilding, but they wanted Fylde to stump up some cash as well - probably for some or all of the 'extra units'.

We gathered that overall, the idea was to double the number of units (using a more dense layout and going up to three stories in some cases).

FBC has money it can use for this sort of thing in its 'Affordable Housing' pot, but it is only supposed to be used for *new* Affordable Housing, not for replacing existing houses.

So what did the Politburo Cabinet decide?

Well, they agreed in principle, but the details of the decision (minutes are available from FBC's website) are so labyrinthine that even we couldn't work out exactly what was going on.

But now it seems the plans will have to be changed anyway because it looks as though the developer that was lined up to pay for much of the work has pulled out (probably because of the current market conditions), so the scheme seems to have gone back into the melting pot.

But - phoenix like - a new scheme has arisen from the ashes. This one will demolish 80 units (up from the 72 they were going to demolish in May) and provide 111 affordable dwellings. It's also more dense, and will go up to four (they call it three and a half!) storeys in the apartment blocks.

You can see details of it on FBC's planning application website (put 08/0765 into the application number search box to find it easily)

Given that New Fylde Housing didn't have the money for this in May - and their developer has now pulled out of the deal and the market conditions have got worse, you might wonder dear reader, where the cash is coming from now.

So do we.

We expect more might be needed from the Commissar's Affordable Housing fund, after all, it is in his ward, and something up to 395 happy people in brand new homes represents quite a lot of voters in time for the next election in 2011.

But these days, Lancashire County Council has to be consulted because of a new thing called 'Planning obligations.' This is simply another way of screwing even money out of developers. Based on the property numbers, LCC are asking for £135,720 toward transport costs (bus service changes), and £78,240 toward waste disposal costs (note that isn't emptying the extra bins, it's to help pay for 'better' waste management at the disposal end). You can see their letter on Fylde's website listed above.

HOWEVER, their letter (dated 8th August 2008) speaks of there being 163 social housing units in the scheme, so either someone has their figures wrong, or the real plan is to put 163 units on site, (presumably with the other 52 units (163-111) appearing later when the this set of plans has been passed, or maybe NFH still have a plan to get a developer to put 52 properties up for sale somewhere - maybe the playing field again? There is a little roadway with parking on either side that leads right up to the playing field boundary on the plans).

We asked Fylde's planning department about this on behalf of our readers and were told that the LCC figures were based on a previous plan that has now been abandoned, so the LCC figures and the costs they asked for on 8th August - and our half-formed conspiracy theory, are all to pot it seems - unless anyone knows different of course......

We also picked up another curiosity in the application. New Fylde Housing's planning application form shows there are zero social rented properties at present but 80 flats/maisonettes of "market value housing" there.

Now that's not what we expected to see. We figured at best there would only be a handful of properties that has been sold to private ownership.

Again we asked about this and were told it was a mistake on the application form. That being the case, we'd be having serious thoughts about whether to sack the architects / agents or whoever sent in the mistake on New Fylde Housing's behalf. We might also have a very stern talk to whoever is responsible in the NFH organisation for liaising and checking on the work of the architects!

But of course, if you were wanting cash from FBC's Affordable Housing fund, (which can only contribute to new properties) it might be helpful to have people think all the homes being provided were new (and not replacement) Affordable properties. That way they would all be eligible for Fylde BC's commuted sums cash. As it is, it looks as though the most that FBC will be able to pay for is the 31 or so that will be additional to the former 80.

We're curious about the funding of this little lot, so we're going to keep an eye on it.

In another area of Fylde's housing policy altogether we're privy to something which, at present, seems to be a very lax and slap-happy approach to contract management and pricing for work in connection with social rented housing. The way it looks at present, we could well be bringing you more horror stories about how our money is being spent.

As they used to say in the Saturday Club at the pictures..... "Don't miss next week's thrilling instalment."

We'll always keep our readers in the picture.

Dated:  25 August 2008 


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