Sheffield Council agrees to build 3,100 new council homes despite budget pressures

Sheffield Council has pledged to build 3,100 new council homes, overturning a proposal to cut that figure because of soaring construction costs.
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The decision came during a debate at this week’s full council meeting on the housing revenue account, which the council uses to manage expenditure and income on its housing stock.

Housing policy committee chair and Green group leader Coun Douglas Johnson moved a motion to approve the housing revenue account budget, seconded by council and Labour group leader Coun Terry Fox.

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That also confirmed a decision to increase rents for council homes, temporary accommodation, sheltered accommodation, furnished accommodation, garages and burglar alarm charges by 7 per cent.

New social housing in Darnall, Sheffield that was built in 2017 - Sheffield City Council has voted to build 3,100 new homes despite fast-rising construction costsNew social housing in Darnall, Sheffield that was built in 2017 - Sheffield City Council has voted to build 3,100 new homes despite fast-rising construction costs
New social housing in Darnall, Sheffield that was built in 2017 - Sheffield City Council has voted to build 3,100 new homes despite fast-rising construction costs

A hardship fund will increase by £300,000 to £450,000 and the community heating charge remains the same.

Construction costs

The original proposal from the housing policy committee was to cut the figure of new homes being built in the stock increase programme to 2,310, which was what the sum available would cover, because of huge increases in construction costs following the cost-of-living crisis.

The estimated cost of building the full 3,100 homes is an extra £200 million. Coun Johnson told the strategy and resources committee earlier this month that servicing that borrowing would cost £10 million a year.

Sheffield Labour councillor Fran Belbin argued that the city's council stock needs investmentSheffield Labour councillor Fran Belbin argued that the city's council stock needs investment
Sheffield Labour councillor Fran Belbin argued that the city's council stock needs investment
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Coun Johnson told the meeting: “I think we can all be proud that we are a council that maintains its housing stock. We have 219 more council homes this year. It’s obviously not enough but we are able to build on that.”

Later in the debate he said no-one had brought forward a way to finance £200m to bring the numbers up. He said that Bristol had cut its building target from 2,000 to 1,700 homes, “which is broadly in line with the decrease we want to bring in”.

Coun Fox said: “We have missed a real opportunity. The figure of 3,100 houses didn’t just come out of the air – 20,000 people are on the waiting list, needing a home.”

He added: “Bristol took up the challenge and borrowed £1.8bn to build homes. That is where we need to be.”

LibDem councillor Penny Baker said Sheffield City Council should "tread water" on building council homes and concentrate instead on getting 1,300 empty houses in a fit state to let againLibDem councillor Penny Baker said Sheffield City Council should "tread water" on building council homes and concentrate instead on getting 1,300 empty houses in a fit state to let again
LibDem councillor Penny Baker said Sheffield City Council should "tread water" on building council homes and concentrate instead on getting 1,300 empty houses in a fit state to let again

Advisory panels

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He said that the council also needs to set up housing advisory panels with tenants, which could help to engage younger tenants.

A Labour amendment to Coun Johnson’s motion was made by Coun Fran Belbin and seconded by Coun Denise Fox.

Rather than cut the homes target, it argued that options including “prudential borrowing, re-capitalisation/reprofiling, and different ownership models must instead be considered to not only retain the figure of 3,100 but to go further still.”

The motion also said the council should not accept a sub-standard repairs service and investing more now to upgrade homes would “ultimately prove cost effective in bringing down the long-term repairs bill”.

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It proposed setting up housing advisory panels linked to local area committees and social housing providers.

Coun Belbin said: “I think the housing chair is right in saying that we did spend a lot of time looking at the housing revenue account and housing budget, which is only right when we are talking about some quite substantial cuts and a seven per cent rent increase.

Facing difficulties

“Unfortunately I do think we could have spent a lot more time on what we were actually spending our money on, and our capital expenditure, and how we can use that more effectively to mitigate against future cuts and to support our residents to have decent homes and create thriving neighbourhoods.

“We know that our repairs bill is disproportionately high compared to other cities. It’s clear our stock needs improvement, it needs investment, and it has what investment it needs, and it’s clear that too many of our tenants are facing difficulties.

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“Over the weekend I’ve visited a resident who had over 250 repairs to her house over the last 12 years since she’s lived there.” She said the tenant told her that half the time repair staff say they can’t fix something because of an underlying problem and it’s time and effort wasted.

Coun Fox said that at a time of rising homelessness “we cannot allow the government to stop us helping the people of Sheffield, we need more council homes. If you want to improve your home, most people have to borrow to do this but in doing so knowing that it adds value to your property, so why as a council why we wouldn’t we borrow to improve and build more council stock?”

Couns Penny Baker and Sophie Thornton moved a LibDem amendment. It said that increasing affordable housing is vital and condemned the right to buy scheme which was extended to social housing last year.

It noted the “unfortunate reduction” in the stock increase programme and said “the severe inflation of £2.4m on the Newstead site before construction has begun is illustrative of the challenges facing new-build projects.”

‘False economy’

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The motion urged the council to look at how the general fund could be used to enable more affordable homes to be built and advocated bringing vacant council homes back into a state to be let again, adding “cutting housing repairs to fund housebuilding is a false economy”.

Coun Baker said: “We all want new homes for our tenants but we want homes of quality and it doesn’t necessarily mean buying them, especially in a time when the cost of building is increasing so tremendously.”

She said the costs of some units in the south of the city have risen to £400,000: “That is extortionate, that is not the price we should be paying. We should be paying a value price for a value property, so perhaps i’s an idea to just tread water for a bit.”

She urged getting “some of the 1,300 voids (empty properties) out there up to standard and re-let. That is a lot of properties and a number of properties that will make a difference for tenants in our city”.

Coun Thornton said the Labour-led authority had previously allowed the number of new homes being built to fall behind.

Both amendments were substantially accepted.