Decision details

OD/14/05 Temporary Accommodation Rents

Decision Maker: Officer Decision

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: No

Purpose:

Background: The provision of temporary accommodation has recently changed location to the new West Villa, which now provides self-contained accommodation. The net running costs for the new facility are anticipated to reduce by £25,000 to £35,000 per year, depending on actual occupancy levels. Temporary accommodation is let on a non-secure licence basis. As the type of accommodation, associated benefit arrangements and running costs have changed, it is appropriate to review the rent levels. The Officer Delegation Scheme allows the Head of Housing “to vary rents of properties let or licenced on an insecure basis” as appropriate following consultation with the Portfolio Holder.

 

Options:

The total weekly charge is based on a rent element to cover use of the property and a service charge to cover costs like maintaining communal areas, utilities, cleaning and management of the facility. Service charges are based on the budgeted costs and aim to recover these costs. The service charge continues not to charge for any cost elements that are ineligible, for housing benefit, in line with the previous Executive decision.

 

4 key options on calculating the rent elements have been evaluated. These are:

 

1)    Set rent levels at target rents based on number of bedrooms. This identifies rent levels based on local target rents. However this does not reflect the additional costs associated with the provision of temporary accommodation.

 

2)    Single rate per household. The change from shared to self-contained accommodation makes charging a single rate less appropriate. The benefit regulations for self-contained accommodation are different from shared facility accommodation and are structured on the number of bedrooms. A single rate could be interpreted as a means of unfairly reducing the differential rents for different sized properties and could result in putting the Council’s subsidy claim at risk. For this reason this option is not recommended.

 

3)    Rent levels based on uprated rates linked to number of bedrooms. In this option rents would be based on the target rents for similar property sizes in the locality and then uplifted by a fixed percentage to achieve a rent structure that acknowledges the additional costs associated with temporary accommodation. In this option the 2 emergency bed sits in the new West Villa would remain at the old West Villa rent of £172. This would be 12% uplift on target rent and the rent structure for other size flats would be calculated with a similar uplift.

 

4)    Rent Levels based on affordable rents.

These are based on the Affordable Rents from the official Valuation Office figures for Ipswich in June 2014. These rents give a similar range to the uprated target rents (option 3) and meet the housing benefit regulation requirements for differential charges dependent on size of property.

 

Key advantages of this option are that it:

 

·         Provides lower rents than Old West Villa for the majority of flat types, which are of significantly better quality accommodation

·         Bases these short term rents on official Valuation Office rent levels

·         Allows full housing benefit to be awarded where appropriate

·         Has a sound rationale and delivers Government-approved affordable rent levels

·         Decreases net cost of the service by £13,000 (based on 80% occupancy) so putting it on a more sustainable footing

 

Comparison of the Options – Weekly Rent Levels

 

Property Type

 

 

Target Rent

 

Option1

Target rents uprated

 Option 3

Affordable rent based

 

Option 4

Service Charge included in all Options +

GF bedsit

£153.02

£172.06

£167.16

£89.50

1bed wheelchair

£158.48

£178.10

£167.16

£89.50

1bed bungalow

£167.79

£188.06

£167.16

£89.50

1bed FF flat

£158.83

£178.10

£167.16

£89.90**

2bed GF flat

£165.83

£186.41

£185.36

£89.50

2bed FF flat

£166.25

£186.86

£185.71

£89.90**

3bed FF flat

£172.20

£193.60

£201.46

£89.90**

Total annual rental stream*

£157,330

 

£176,880

 

£170,350

 

* Total annual rental stream at 80% occupancy

** Increase covers additional cost including the lift

+  The figures for options 1, 3 and 4 above are the totals including this service charge

Decision:

Decision:

To set the weekly charges for Temporary Accomodation, based on current affordable rent levels, as set out in Option 4, using officer delegation 10.7d

 

To continue not to charge for any service charge elements that are ineligible for housing benefit, in line with the previous Executive decision.

 

Reason:

To ensure fair and affordable rent and service charges appropriate for this type of accommodation.

Publication date: 02/07/2014

Date of decision: 01/07/2014

Accompanying Documents: