News and views from Paul Bull, the Labour and Co-operative Councillor for the St THOMAS Ward of Exeter City Council. Promoted by Dom Collins on behalf of Paul Bull, both of 26b, Clifton Hill, Exeter, EX1 2DJ.
A Public Spaces Protection Order could help to tackle anti-social behaviour in Exeter city centre but would need to be enforced by the police and not the local authority, leading City Councillors have said today (Friday 11 March).
More than 1,200 people responded to an extended 4-month public consultation on whether Exeter should have a Public Spaces Protecon Order. All the responses are now being carefully considered to inform a report that will go before councillors later in the summer.
Last week City Council officers said that they were likely to recommend the removal of powers to deal with encampments on public land, conviscation of personal items, and begging from the Public Spaces Protection Order, as these were opposed by the majority of those who took part in the consultaon exercise.
Now City Council Leader Pete Edwards has said that if other powers to tackle anti-social behaviour such as street drinking, urinating in public, the taking of illegal drugs and legal highs are approved, enforcement should be dealt with by the police and not the local authority, in accordance with the views of the public.
Cllr Edwards said: “We are still very much behind finding ways to tackle anti-social behaviour in Exeter, to protect the public and businesses from a small hard core of troublemakers. One of the ways might be through a Public Spaces Protection Order, but people still see the police as the upholder of the law in this country and that is why we will be recommending that this is the way it should stay if a Public Spaces Protection Order is adopted later in the year.”
Last year there were 200 logged reports of an-social behaviour in the Exeter city centre. The gure doesn’t account for unreported incidents and is therefore likely to be a lot higher.
“I am also keen to look at how we can support the provision of a greater police presence in the city centre, especially at times when these issues are at their most prevalent,” added Cllr Edwards.
Earlier tonight, Exeter City Council met in the Guildhall to set the Council’s budget for 2016-17.
There has been a series of meeting that contributed towards the setting of the Budget since the Government announced the provisional Local Government Settlement on 17 December 2015. The Council is to receive £5.802 million in 2016/17, which is £110,000 lower than predicted within the Medium Term Financial Plan. However, it was decided NOT to revisit the budgets as the shortfall could be managed within the budget.
The Local Government Finance Settlement also set the referendum level for District Councils in the lowest quartile of Council Tax rates at no more than £5 rather than 1.99%. Exeter falls into this category and therefore has the opportunity to increase its Council Tax by £5 (3.7%). Along with the increase in the taxbase this will raise an additional £269,000.
It should be noted that in the Government spending calculations, they have assumed that all authorities in the lower quartile will raise their Council Tax by £5 and have set the spending reductions accordingly.
The Council’s revenue estimates for next year were considered during thecycle of Scrutiny Committee meetings and the final budget report was discussed at the Executive meeting on 9 February 2016.
Regulations dictates the Council holds an Extraordinary Meeting of the Council when setting its budget
In the absence of Leader Cllr Pete Edwards [LAB, Whipton Barton], the Budget speech was delivered by his Deputy, Cllr Rachel Sutton [LAB, Exwick].
Thank you Lord Mayor.
I would like to start off by paying thanks to the Officers, especially Mark Parkinson, Dave Hodgson and his team, for their help in preparing these figures, and indeed for their work throughout the year.
I would like to set the context for this year’s budget by reminding everyone – members, officers and the wider public – that the reductions in funding received by local authorities like Exeter over the last few years from central government are amongst the most severe cuts we have faced in living memory.
This Council has had a 12.6% reduction in Government Formula Grant for the year 2016/17 on top of equally drastic cuts in previous years. Last year it was a cut of 15.6%.
Between 2010 & 2015 Exeter’s government grant has dropped from £12m to £7.7m but Exeter, unlike some local authorities has not been sleep walking towards oblivion, we have been working hard to make the necessary changes and plans for a future when the money we get from central government will have been cut to a fraction of what it was if indeed it doesn’t disappear completely.
In the financial year 2014/15 we made £1.5m in savings, and we continue to streamline and modernise the services we offer to residents and businesses by finding smarter and more efficient ways of working like setting up Strata with our neighbouring councils to deliver IT services across three local authorities and gain financial savings of 7m over the next 10 years.
We are working with our partners in the NHS, the voluntary sector and at Devon County Council to offer the Integrated Care for Exeter [ICE] project that will deliver better services that meet the needs of our citizens and which will save money and resources across all the partner organisations.
But in setting the budget for 2016-17, I am proposing a balanced budget with much of the lost formula grant replaced by additional income streams guaranteed long into the future. These include the guaranteed income from the Feed In Tariff payments on solar panels fitted on the rooves of two of our Car Parks, the Museum, the Quay Climbing Centre, The Phoenix and the largest solar array in Exeter at over 7,000 panels at the Livestock Centre, which on its own will generate over £160,000 a year in income for the Council. And in addition to the financial savings we are reducing our carbon footprint .
In addition to these solar panels we have also replaced our inefficient boilers at the Civic Centre and installed LED lighting in our offices and car parks.
These projects have also delivered tangible savings without affecting front line service delivery.
Cllr Edwards joined the leaders of more than 50 Labour-run councils in pledging to make all our towns and cities across the UK 100% clean before 2050, in line with the commitments made nationally and internationally at the Paris Summit on Climate Change in December 2015.
Our new and emerging partnership with Exeter City Futures and our own ambitious plans to be an energy neutral council by 2020 will go a long way to deliver the Leader’s Green Pledge.
We continue to deliver much needed housing:
In the last year we have built 26 brand new council houses for local families and we are about to begin work on providing an additional 26 new flats for older people next door to Rennes House
Since 01 April 2014, 64 affordable homes have been delivered with 235 further affordable homes consented and in the pipeline for national house builders.
In Exeter we have seen 3,468 new homes built since 2011-12 – more than any other district in Devon, Plymouth and Torbay – earning the Council £10.2m in New Homes Bonus with a significant proportion of these new homes suitable for wheelchair users.
However it must be pointed out that the Housing & Planning Bill currently going through parliament might put much of these plans in jeopardy threatening our ability to make decisions about how we run our Housing Revenue Account and plan for future building of council houses
We have provided new floodlights for the new and improved Flowerpots Skatepark so that the young people who use it can get the maximum benefit from the facilities
New businesses are now moving on the Exeter Science Park
Work is now progressing on a landmark building to house the Met Office’s £97m High Performance Computer.
Job creation continues to increase with new businesses relocating to the city – our own team have helped create 476 jobs in the city.
We continue to be an ambitious Council and are determined to ensure that the City achieves its potential and our residents receive quality services. We continue to support the City ensuring it stays at the forefront of economic recovery and will support the delivery of:
• A new Leisure Complex built to Passivhaus standards that the City will be proud of
• A modernised Bus Station fit to meet the needs of travellers to and from the City for many years to come;
• Two major events in and around the City in 2016 have already been announced – the Radio 1 Big Weekend at Powderham Castle and the European Rugby sevens event at Sandy Park. The Rugby sevens event will be held at Sandy Park for the next three years and building on the success of the Rugby World Cup, last year will further enhance the reputation of the City.
And all this is without the need to increase our overall borrowing requirement.
As a Council we have also supported greater investment in the infrastructure of the City.
We have this year agreed to provide:
• £1.3 million towards the delivery of the new railway station at Marsh Barton;
• £1.025m towards the delivery of a fully operational junction at Sandy Park to enable further development in the area;
• Over £200,000 towards the improvement of our car parks and to provide a permanent electricity supply to Exeter Farmers market.
Finally, for next year’s budget we have made further efficiency savings in the region of £1.1m.
We have again managed to achieve this without a reduction in front line services.
Lord Mayor, Councillors – the budget that I am proposing to you this evening aims to deliver a balanced budget that will protect and maintain the services which the citizens of Exeter need the most.
I therefore propose to you the recommendation set out in the papers before you in terms of the approval of both the revenue estimates and capital programme for the year 2016/17 and which will result in the setting of a District Council tax of £140.05 for a Band D property.
This is an increase of £5 a year for a Band D property less than 10p a week and still means that Exeter sets the 4th lowest Council Tax of any district.
I so move.
There was then a debate on the Budget.
The Leader of the Tory Group, Cllr Andrew Leadbetter [CON, St Loye ] agreed that central Government were cutting funding – but at the same time were enabling local authorities to find other ways to raise money to fund revenue budgets
However, he felt that his group would have to abstain because, although there were some good things in the Budget, there were other things in it that he and group couldn’t support.
Cllr Phil Bialyk [LAB, Exwick]said that imaginative leadership is taking this Council forward. He was pleased that the Budget proposed by the Labour Group had no additional cuts to frontline Council services. He pointed out that there was all that extra investment – all for an extra fiver a year.
Cllr Rob Hannaford [LAB, St Thomas] pointed out that the Council were working to best practice. He thought that we are still leading the way in delivering an ambitious programme despite the risks in the future – reduced revenue support grant, challenges to the self-financing of Housing Revenue Account, welfare reform cuts, unexplained programme of business rate retention following a futrure NNDR revaluation, devolution, and more. He concluded that he would be supporting a good, balanced and robust Budget.
Cllr Rosie Denham [ LAB, Whipton Barton] looked at one element of the Budget – the role Exeter City Futures will make in the work of the Council and the impact that will have on all of us, and our residents. She was grateful for the cross-party support for the initiative and hopes that the project, by taking a strategic approach, would tackle concerns over traffic congestion, health and the environment. Rosie was adamant that we should always think carefully over proposed schemes, programmes and policies, and noted that we are in the incredibly lucky position to be able to come up with imaginative and creative ways to balance our Budget but we shouldn’t take any of this for granted. She concluded that other local authorities were so fortunate and was frightened for the state of the roads, the schools, heath and social care elsewhere.
Cllr Stella Brock [LD, St David’s] questioned the no cuts message of the Budget and questioned the spending on the Bus Station development site [having voted against it at the outline planning stage].
In reply, Cllr Sutton said that the changes to services highlighted by Cllr Brock were not cuts per se but changes to work in smarter and more efficient ways. Rachel also pointed out that without the planned interventions from ECC, the Bus Station development site wouldn’t have levered in an investment of over £75m from the Crown Estate and TH Real Estate and would remain a blot on the landscape of the city centre.
In concluding the debate, Cllr Sutton said she was disappointed that NO alternative proposals were coming forward from the Conservative Group, describing it as lazy opposition. Indeed, she pointed out that we know what they are against, but they never state what they are for.
The meeting voted and RESOLVED:-
(1) That the following, as submitted in the Estimates Book, be approved:-
(a) the Revenue estimates for 2016-2017
(b) the Capital programme for 2016-2017;
(2) that it be noted that, at the meeting of the Executive on the 26 January 2016, the Council calculated the figure of 35,429, as its council tax base for the year 2016-2017 in accordance with the Local Authorities (Calculation of Council Tax Base) (England) Regulations 2012 made under Section 33(5) of the Local Government Finance Act 1992;
(3) that the following amounts be now calculated by the Council for the year 2016-2017 in accordance with Sections 31A of the Local Government and Finance Act 1992:-
(a) £103,925,695 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(2)(a) to (f) of the Act;
(b) £98,963,864 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(3)(a) to (d) of the Act;
(c) £4,961,831 being the amount by which the aggregate at (3)(a) above exceeds the aggregate at (3)(b) above, calculated by the Council, in accordance with Section 31A(4) of the Act, as its council tax requirement for the year;
(d) £140.05 being the amount at (3)(c) above divided by the amount at 2 above, calculated by the Council, in accordance with Section 31B(1) of the Act, as the basic amount of its council tax for the year;
(e) Valuation Bands
(4) That it will be noted that, for the year 2016-2017, Devon County Council, the Office of the Police and Crime Commissioner for Devon and Cornwall and the Devon and Somerset Fire and Rescue Authority have stated the following amounts on precepts issued to the Council, in accordance with Section 83 of the Local Government Act 2003, for each of the categories of the dwellings shown below:-Being the amount given by multiplying the amount at (3)(d) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation band D, calculated by the Council, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.
Devon County Council
Office of the Police and Crime Commissioner for Devon and Cornwall
Devon and Somerset Fire and Rescue Authority
(5) That, having calculated the aggregate in each case of the amounts at (3)(e) and (4) above, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby set the following amounts as the amounts of council tax for the year 2016-2017 for each of the categories of dwellings shown below:-
Although the amended legislation came into force on 25 February 2014. there was anexpectation of the Government that authoritiesholding their annual budget meeting before this date will adopt the new ruling when setting their annual budget and council tax. ECC used a named vote at their budget setting meeting in 2015.
Cllr Bialyk, Cllr Branston, Cllr Brimble, Cllr Bull, Cllr Buswell, Cllr Choules, Cllr Denham, Cllr George, Cllr Hannaford, Cllr Hannan, Cllr Laws, Cllr Lyons, Cllr Morse, Cllr Owen, Cllr Packham, Cllr Pearson, Cllr Raybould, the Deputy Lord Mayor [Cllr Robson], Cllr Sheldon, Cllr Spackman, Cllr Sutton, Cllr Wardle, Cllr Vizard and Cllr Williams
Cllr Baldwin, the Lord Mayor [Cllr Foggin], Cllr Harvey, Cllr Holland, Cllr Leadbetter, Cllr Mottram, Cllr Newby, Cllr Prowse, Cllr Shiel and Cllr Thompson
Work commitments meant that I’m in Hexham as the special meeting of Exeter City Council set the Budget – and so I missed the “State of the Union” address by the Leader, Cllr Pete Edwards.
The minutes of that meeting will outline what Pete said in his Budget speech, but no worries – I received a copy of what he said
Leader’s Budget Speech
24 February 2015
Lord Mayor, I hold out this Vision for Our Future (Exeter Vision…Our City, Our Future, Exeter Vision Partnership, 2003) to remind us all of the journey we have been on as a city for over a decade, to remind everyone that this city has enjoyed the highest level of growth of productivity of any city in this country and we do not shy of taking difficult decisions.
The city centre is the engine of our local economy and requires disciplined action over the long course to ensure we continue to do what is necessary to direct investment in the city centre.
I am committed to delivering a swimming pool and leisure complex on the Bus and Coach Station site in line with our Corporate Plan and previous decisions taken by this Council.
We continue to work with Crown Estates to deliver a comprehensive redevelopment that will ensure Exeter remains the destination of choice by investors.
Turning now to the Budget, I would like to again remind Members, Officers and the wider public that reductions in Central Government funding are amongst the most severe cuts we have faced in living memory. The Council has contented with a 15.6% reduction in Government Formula Grant in setting the budget for 2015/16 and will have to completely reshape itself in order to deliver these ad the additional £3m worth of savings required over the next few years.
An ambitious Council
In spite of this, we are still an ambitious Council and are determined to ensure that the City achieves its potential and our residents receive quality services. We continue to support the City, ensuring it is at the forefront of economic recovery and have supported the delivery of:
– 3,468 new homes since 2011-12 – more that any other district in Devon, Plymouth and Torbay – earning the Council £10.2m in New Homes Bonus
– Since 01 April 2014, 64 affordable homes have been delivered with 235 further affordable homes consented and in the pipeline for national house builders
– 20 new Council homes will be completed by June 2015, with a further 26 under construction for completion later in the year.
Last year the Chamber of Commerce reported the highest increase in business confidence. This is reflected in strong performance in the property market, both commercial and housing, the visitor economy, and investment in the city centre.
Over the previous tow years:
– visitors to Exeter have increased by 10.3%
– visitor spend has increased by 14.31%
Plans for the redevelopment of the Guildhall Shopping Centre are full-steam ahead, and we have seen new companies such as Jamie’s Italian, Byron Burger, etc moving into Exeter.
There has been a significant increase in demand for industrial units and a number of large car showrooms have committed themselves to the new Matford Green Business park.
The amount of secondhand office accommodation has shrunk by a half. Indeed, we are now hearing from the property sector that we will have a shortage of supply, such is the demand for accommodation.
It is also important that we recognise the scale of investment that continues that continues to be made in the city by the University of Exeter, the most recent example being the Living Systems building, a £52m capital investment on the University campus.
The most significant investment over the year has been the decision by the Met office to invest over £100m in the new Supercomputer at Exeter Science park. This will be a tremendous boost to our local economy and will mean the early opening-up of the Science Park.
There are a number of other investments that are being made at the Science Park on the back of this decision, and with the support of the Local Enterprise Partnership.
As members will be aware we are investors in the Science Park hub and we play an important part in the Exeter & Heart of Devon Growth Board which administers funding and steers the strategic projects.
On a more local level, we are supporting the development of a local currency – the Exeter Pound – to support local small businesses and independent traders. It is anticipated that the organisation and the currency will be up and running by September 2015 in time for PWC 2015.
As the economy grows we face a shortage of workers in the construction sector. To address this ECC, EDDC and MDDC are due to sign a Construction Skills Concordat. The Concordat will ensure that when the Councils award contracts for capital programme and maintenance work, they give favourable consideration to those companies that have a clear and well evidenced approach to supporting the development of a skilled workforce – for example, in terms of taking on apprentices and recruiting locally. We will work with partners to support the roll-out of the Construction Industry Training Board’s Client-Based Approach.
We wil continue to offer apprentices, develop work experience for those with disabilities, mental health problems and other barriers to work, and work with employers to expand these schemes.
We have 8 apprentices working across the Council and we have appointed 2 apprentices into full-time employment.
Flood Protection Scheme
As a Council, we have also invested in the infrastructure of the city; we have contributed the £3m promised towards the £32m flood defence scheme.
Sport…and the Rugby World Cup
Turning now to a sporting theme, I am sure everybody will share with me in singling out for praise for Jo Pavey this year for her outstanding achievements, and as a fitting tribute we have completed the improvements to Exeter Arena with a completely new running track.
Sticking with the sporting theme, the Rugby World Cup 2015 will be a major event for the city and something we can be proud of.
It is estimated that Exeter being a Host City will generate an extra £39m of economic activity for the city. The city is expected to welcome an additional 120,000 visitors to the city for the duration of of the Rugby World Cup [Source: Ernst & Young]
What members may be less aware of is the work that is going on to build a legacy programme fro the event.
Already this has seem the establishment of a women’s team and recently the holding of a rugby empowering and employment programme.
I am also delighted by the decision of the RFU to host the 7-a-side European Region tournament at Sandy Park on 11 & 12 July.
All bodes well for our local economy. Indeed, Exeter’s economy continues to go from strength to strength, and the momentum of growth we have worked so hard to keep going has now firmly taken hold.
Health & Wellbeing Board
A key part of the legacy work is increasing activity to make Exeter the most active city in the South West. We are working with the Exeter Health & Wellbeing board and other partners to increase levels of physical activity in the city, and to promote the sustainable use of the river, canal, and other green spaces for outdoor leisure activities. Last summer saw a highly successful Ping! Exeer project in the city.
Energy Saving Measures
We continue to work hard to invest in projects that will reduce our revenue running costs without affecting frontline services, and have begun the programme of delivering £4m worth of energy saving projects using solar panels on our buildings and car aprks, along with replacing inefficient boilers and lighting in our offices.
These projects will deliver tangible savings without affecting frontline service delivery.
Looking to the future
I think it is important that I single out the recent initiative we have taken with the leaders of Teignbridge and East Devon District Councils to develop greater collaboration between us for the sake of the greater Exeter area.
This is a strategic partnership that offers a better way going forward to plan for our economy and I am sure greater collaboration will be the call from National Government of whichever party forms the next Government.
For next year’s Budget we have made another £1.4m of savings to the revenue cost of the Council by a combination of restructuring and efficiency savings. We have again managed to achieve this without a reduction in frontline services but this will be evermore challenging over the next four years.
Finally Lord Mayor, Councillors – the Budget that I am proposing to you this evening aims to deliver the necessary savings, and to protect and maintain as far as possible the services which the citizens of Exeter need most. I therefore propose to you the recommendation set out in the papers before you in terms og the approval of both the revenue estimates and the capital programme for the year 2015-16.
This will result in the setting of a District Council Tax of £135.05 for a Band D property, an increase of 1.99% over the previous year, an equivalent of £2.63 per year, or 5p per week. This will mean we will still have the lowest District Council Tax in Devon.
Exeter City Council Labour Group’s proposals for Labour Party manifesto on “How to involve councils in increasing housing supply
In order to substantially increase delivery of new homes there is a need for some innovative and collaborative working between the public and private sectors as well as the charitable sector.
When considering the increase in housing supply it helps to consider the headline issues affecting the housing market and the context in which any market interventions are to be introduced.
Affordability (lack of it)
Growing demand (demographic changes, immigration, Help to Buy scheme etc.)
Supply (not enough being built, Right To Buy increasing)
Risks e.g. welfare reform
Subsidy is required somewhere, whether capital or revenue
Availability of land / high expectations from landowners of land value
We ought to be building around 220,000 homes per year. Housing output has remained around 120,000 for the last four years.
Current under supply arguably largely due to the planning system limiting the amount of developer land and the small number of volume house builders with developable land managing the amount of houses they bring to the market to maximise returns to shareholders.
The government is already doing quite a lot to stimulate development and locally there is evidence that the market is now working with houses being sold off plan for the first time since the recession. However, the challenge is how we make a step change in delivery and how do we release the public sector’s potential to increase supply.
Previous draft RSS – required Exeter’s growth with urban extensions including Cranbrook new town in East Devon (in excess of 22,000 homes at the PUA with 12,000 homes within the city). Exeter is running out of land, requires cooperation of neighbours.
Cranbrook, within East Devon, (up to 6,000 homes) successfully delivering this year 600 units. Within Exeter we are also on course for 600 units this year.
Exeter has built 94 affordable homes in total in the first eight months of this financial year and currently 351 affordable properties have started on site. 20 new Council Own Build properties are due to start on site in February 2014 with a further 200 units potentially being built in the next three to five years.
HRA borrowing cap headroom of £4.7m fully employed
Lessons from Cranbrook and Exeter’s Urban Extensions
In recent years Exeter City Council has been involved in a growth partnership with East Devon District Council. Exeter’s future housing growth has been directed in large part to the east of Exeter in East Devon District Council. This followed Regional Planning Guidance and Structure Plan policies. Following an initial period when East Devon was opposed to meeting this growth in 2003 East Devon begun to plan for delivery of a new town known as Cranbrook. 3,500 dwellings in a first phase, and eventually planned to accommodate 6,000 dwellings.
Outline planning permission was granted in 2005 and delivery finally commenced in 2011 following significant public sector intervention. Housing sales have been strong and approximately 450 starts this year. The public response has been broadly supportive, although at the local plan stage 14,500 letters of objection were received.
Cranbrook and other urban extensions (Monkerton, Newcourt and South West Exeter) being delivered in Exeter provide useful lessons in addressing the fundamental question of how we improve the supply of housing building in this country.
There is a long lead in time for delivery – Cranbrook was originally identified in the Devon structure plan and RPG10 in the late 1990s. The long lead in time adversely impacts on housing land supply and creates uncertainty in the local housing market. Strategic sites work against a local authorities land supply calculations and are far more challenging to deliver than more modest allocations. However, the prize in strategic allocations is they should be capable of delivering community infrastructure and self containment.
In Cranbrook’s case the public sector was required to de-risk the project by front funding infrastructure (£12m regional infrastructure funding and £40m of other funding); and removing third party ransom issues. Without the public sector de-risking the development the private sector would not have commenced development, and yet the land owners and house builders make a very healthy profit. The public sector simply achieves housing provision. However the house builders still control supply of new starts as per the more conventional sites. For example they could open up the site in more than one location to increase supply but they do not.
In terms of non housing uses this has only come forward because of public sector support.
Arguably Cranbrook was deliverable only through the emergence of the Regional Infrastructure Fund and investment from the HCA and the Local Infrastructure Fund. These measures are not typically available to local authorities. It demonstrates that the public sector can unlock problems and deliver strategic sites with the appropriate tools. However, it is not a good return to the public sector. The public sector has conferred value on the land owners because of the planning system and the public sector has de-risked development through RIF etc. Arguably a better model would be for the Councils to have power to identify an allocation and have the powers to CPO land at existing use value to assemble the land to deliver a strategic allocation and to use the increase in land values to off set the cost of infrastcrure and for the local authorities to deliver land parcels for the volume house builders. Thereby removing strategic land developers from the process of strategic sites. This will allow councils to provide land for self build on a larger scale and to increase supply of land coming forward.
In the absence of co-operation between local authorities growing urban areas like Exeter would need support to deliver strategic growth in neighbouring areas. A small number of new town type corporations under local authority control would provide a useful model to achieve delivery. The New Growth Points governance model provided a useful incentive to achieve growth but the initiative alone was not sufficient to make a real difference. The regional development agency and the HCA provide real capacity and financial resources to make a difference. Knowledge, capacity and funding mechanisms are essential to achieve a step change in delivery.
In Cranbrook the HCA investment in affordable housing is now returning receipts as a consequence of overage payments.
Local authorities negotiating position with developers can be weakened by a requirement to deliver housing. The community can lose out but Community infrastcrure levy will address this in part.
Providing councils with greater resources and powers to deliver their strategic sites in the manner of new town corporations and urban development corporations would provide a powerful alternative to the current model.
Land supply methodology makes it more challenging for strategic sites because of assumptions on build rates.
The public sector needs to find a way of realising the value from the land as a consequence of the planning system. This is particularly so for large scale sites as the cost of infrastructure is disproportionate to conventional sites.
Suggested points for the manifesto
Provide a strong policy commitment to CPO land for strategic sites to enable local authorities to acquire at existing use value, and to provide mechanisms for provision of early infrastructure to deliver development parcels to the market to overcome the rational behaviour of volume house builders in limiting supply
This type of intervention has to take place before the planning system allocates land or grants planning permission in order to capture the uplift in value to provide the required infrastructure. This type of approach has been used in the past with new town development corporations.
In terms of Councils building more:
Life the HRA borrowing cap for local authorities
Permit sharing or trading borrowing headroom between councils
Change the classification of debt so that it’s not included in national debt figures (ie use the General Government Financial Deficit Mode
The following highlights a number of initiatives for increasing housing supply, much of which is addressed by the CLG Parliamentary Committee report which considered options for local authorities to increase housing supply.
Encouraging the release and use of public sector land for development, through a ‘build now, pay later scheme’
The Affordable Homes Programme investment framework, which the government estimates will provide 170,000 new affordable homes by 2015
New Homes Bonus to incentivise local authorities to support development
Reforms to the planning system
Receipts from sales of properties under right to buy, ploughed back into reinvestment in new affordable homes
Get Britain Building Investment Fund providing finance on stalled sites that are ‘shovel ready’
New Build Indemnity Scheme to improve access to mortgages for new build properties in England
Conversion of office accommodation to residential (without the need for planning permission)
Council self-financing (HRA Reforms) since April 2012
It is worth dwelling on the self-financing ability of Council as this is one of the significant areas of housing growth that has the potential to be untapped subject to reform of the cap on local borrowing. Below are some salient points on self-financing and its potential impact on the housing market:
Councils now have self-financing since April 2012. According to ARCH [Association of Retained Council Houses] 71% of stock holding local authorities plan to develop new council housing – 20,000 to 25,000 units over the next five years.
Of those authorities that have indicated they are planning to undertake new build, 50% are planning to use Affordable Rents to help finance the new homes. The other 50% are planning to continue to use Social Rents.
The self-financing settlement also involved the imposition of a caponlocalborrowing. The cap is set significantly below the amount of borrowing councils could safely afford to repay. Most councils have some headroom within the cap to undertake additional borrowing, but some do not. The availability of headroom bears no relation to a council’s need for additional borrowing or to its housing needs.
A significant number of local authorities (39%) are considering new build outside of the HRA although many of these schemes are at an early stage. These include building through Arms Length Management Organisations [ALMOs], through Housing Association partners and through special purpose vehicles (SPVs).
ARCH, together with the LGA (Local Government Association), NFA (National Federation of ALMOs) and CWAG (Councils with ALMOs Group) are arguing for restrictions on borrowing to be removed to enable councils to gear up their investment programmes to meet housing need. ARCH estimates that, with the cap removed, councils would have the capacity to deliver up to an additional 60,000 homes over five years. This would require an additional £7 billion of borrowing which would be well within what councils could reasonably afford to borrow.
Examples of Councils developing within and outside their HRA and using different funding models:
Oxford City Council owns and manages around 7,800 properties and has borrowing headroom of some £19m. Prior to the implementation of self-financing, the council had already established a Limited Liability Partnership with developers Grosvenor to develop up to 1,000 new homes at Barton, 350-400 of which will be affordable.
The LA new build scheme, though limited to 108 homes, bred success in terms of the next phase of bidding to the HCA: AHP grant of £2.5m towards 112 affordable rent properties. The HRA is able to finance the balance of expenditure for these homes entirely from revenue in the early years of the business plan.
Through ongoing prudent management of the existing stock, significant resources are potentially available to be allocated within the HRA business plan in the medium term to acquire some or all of the affordable Barton properties upon completion. Purchase of the initial 60 properties has been provided for in 2015, again from revenue.
The focus is heavily on using the HRA as the delivery vehicle for LA build, taking advantage of future rent income for reinvestment. The future could potentially be one in which Oxford could add over 5 per cent additional stock to the HRA over the next 10 years.
The London Borough of Barking and Dagenham manages over 19,000 properties. The Council is embarking on a ground breaking venture with a private equity firm to deliver 477 new units by April 2015 on estates that have already been demolished as part of the options appraisal process. The scheme requires a Special Purpose Vehicle to be set up and will run for 60 years in conjunction with the equity grant and will let properties at a range of between 50 per cent and 80 per cent of market rent levels. The HRA will provide the day to day management of the units. In addition both HCA and LGA funding has been secured to deliver 285 HRA units at slightly above existing social rent levels to be built on sites where no previous housing has stood.
The debate on lifting the borrowing cap has been ongoing and a CLG Parliamentary Committee was formed to consider options for Local Authorities to increase housing supply. Following a committee meeting on 7 May 2012, the committee concluded that:
We have seen that local authorities, working in partnership, have the potential to make a significant contribution to the financing of new housing supply. There is, however, a risk that local government will not be able to make the most of this potential because of constraints placed upon it by central government. The moves towards self-financing under Housing Revenue Account reform are positive and could significantly increase the finance available for housing supply. However, the cap upon borrowing, the refusal to allow councils to share headroom, and the centrally-imposed Right to Buy proposals will all place restrictions on councils’ ability to finance the building of new homes. The local government sector should be trusted to manage its own finances in accordance with the Prudential Code. We urge the Government to give councils the freedoms they need to provide finance for new housing supply.
The committee addressed a number of suggestions and below is a summary of the Committee’s response to suggestions:
SUGGESTION 1) Lifting borrowing caps
Committee conclusion: ‘We recommend that the Government lift the cap on local authorities’ borrowing for housing, and allow councils to borrow in accordance with the Prudential Code. We are also concerned at the Government’s warning that it will “take action” if public borrowing increases as a result of Housing Revenue Account reform. It is important that it does not place any further constraints upon local authority borrowing for housing. The cap is already unnecessary, and further borrowing restrictions would have a detrimental impact upon the contribution councils can make to new housing supply’.
SUGGESTION 2) Sharing/trading borrowing ‘headroom’ between councils
Committee conclusion: ‘We are disappointed that the Minister (Shapps) has ruled out allowing local authorities to pool or swap Housing Revenue Account borrowing headroom. Such arrangements could help to make best use of councils’ borrowing capacity, enabling more homes to be built. In our experience, the Government is usually enthusiastic about local authorities collaborating, sharing services and pooling resources to achieve better value for money; we consider that it should take a similar attitude to joint working on housing finance. We recommend that the Government consult on proposals to enable local authorities to ‘trade’, swap and pool borrowing headroom. This should be subject to councils’ agreeing that any borrowing under these arrangements will still be in accordance with the Prudential Code’.
SUGGESTION 3) Change constitutions of Arms-length Management Organisations
Three models proposed by National Federation of ALMOs:
The first model involved “the ALMO having a much longer contract and on the local authority having a one-third (rather than sole) interest in the ALMO’s ownership”.
The second model was similar but also involved the transfer of some vacant properties or land, thereby giving the ALMO an asset base.
The third, and most radical, model involved a transfer to a “Community- and Council-Owned Organisation (CoCo)”. This model would see the ALMO becoming “the owner of the stock, but on a different basis to current stock transfers”
In Models 1 and 2, the ALMO is primarily still a management vehicle, but no longer majority-owned by the local authority. The authority could no longer award the management contract to the ALMO without a tendering process that complies with EU procurement rules. They would need to assess the risk that potentially another housing management provider could be awarded the contract. In Model 3, where the ALMO takes ownership of the stock, there is no requirement for a tendering process. But it would mean that tenancies would no longer be secure council tenancies. However, legal steps can be taken which effectively give all tenants the same security in future as they enjoy now.
Committee conclusion: ‘We consider that Arm’s Length Management Organisations should be free to adopt one of the new ownership models, subject to approval from the council and tenants. As well as promoting the involvement of tenants in the management of their housing, these models could also enable ALMOs to raise additional finance for the building of new homes (although any borrowing should continue to be affordable and sustainable). We are encouraged by reports that Gloucester City Homes will be consulting its residents on proposals to establish a ‘community owned, council owned’ organisation. We recommend that the Government give its support to those ALMOs wishing to adopt the new models, which would enable them to borrow prudentially to build more homes’.
SUGGESTION 4) Changing the classification of debt
Change the way Council’s debt is classified, so that it was not included within the national debt figures.
Use of what many European states use- the GGFD (general government financial deficit) model, which means that trading activities, such as housing, are viewed as off-balance sheet, off the national debt figures.
Committee conclusion: The Government argues that a cap on local authority borrowing for housing is necessary because of the need to reduce the deficit; by implication, a cap would not be necessary under the GGFD rules as such borrowing would be outside of the national debt. We are not convinced that the existing accounting treatment, or the cap, is justified. A change of rules would bring the UK in line with other European countries and enable councils to borrow on the same terms as housing associations. As we have already established, the provisions of the Prudential Code should be a sufficient control upon council borrowing. We recommend that the Government thoroughly examine a move to the General Government Financial Deficit rules and then consult on proposals.
Another means of potentially increasing new build homes would be to release public land for self-build initiatives.
The Coalition Government is a great supporter of self-build, they have set out their priorities and intentions for Self-Build in their 2011 policy doc ument Laying the Foundations: A Housing Strategy for England
‘The Custom Build industry is important for our national economy. It is worth approximately £3.6 billion a year, safeguarding and creating new jobs, strengthening the construction supply chain and making a real contribution to local economies. Currently custom home builders are building as many homes each year as each of our individual volume house builders, with around 13,800 custom homes completed in the UK in 2010/11’. (p.14)
The Government proposals to further self-build include:
Supporting the industry-led Action Plan  that has identified a wide range of proposals to help custom home builders and enable the sector to become a mainstream source of housing provision.
To unlock the growth potential of the custom homes market and double its size over the next decade, to create up to 100,000 additional Custom Build Homes over the next decade and enable the industry to support up to 50,000 jobs directly and indirectly per year. The Government intend doing this by:
Asking councils to establish the demand for Custom Build Housing in their area, and take positive steps to facilitate it
Helping home builders to access land which central government is releasing as part of its accelerated public land disposals programme. As part of this we will maximise, where possible, the use of our innovative Build Now, Pay Later model if there is market demand, it presents good value for money and is affordable
Continuing to work closely with industry to establish a one-stop-shop for advice and support to would-be custom home builders, helping them to take the first steps in building their futures
Appointing a Custom Homes champion to raise greater public awareness of the benefits of custom home building
Making up to £30 million available to support provision of short-term project finance to this sector on a repayable basis.
In order to assess the impact of the Government’s proposal the action plan drawn up in 2011 (see reference 2 above), the National Self Building Association has undertaken two updates, the second and most recent in August 2013. Their conclusions were:
Self build completions remain depressed.
Measures being progressed will lead to around 3,000 additional self and custom build homes being constructed.
Below is a summary of the Government’s achievements and priorities which help formulate some suggestions in which to lobby Ministers specific to Exeter
Policy AreaKey progress
Key priorities going forward
Land and Procurement Models
• Eight HCA sites identified so far (more expected)
• Growing local council and builder/developer/enabler activity to promote self/custom build opportunities
• Published specialist Guides on custom build planning issues, how small builders and developers can get involved in custom build, and a guide to public authorities promoting the many ways of encouraging group self/custom build projects.
• Launched a new ‘matchmaking’ database to help connect housebuilders with specialist custom build developers/enablers
• Secure more site releases – encourage HCA to continue to identify more sites including some larger ones (100+ homes) and engage with councils to identify self/custom build development opportunities
• Work with Government to bring together a more comprehensive list of public land and private sector plot information for self builders
• Visit large scale European projects in Autumn 2013 and disseminate experience of different business models to local authorities to enable them to better understand the end-to-end process
Lending and Finance
• Modest increase in lender activity
• Publication of Lloyds Banking Group report and ongoing commitment to support sector
• Launch of £30m investment fund which is generating fair level of interest (about half of fund is subject to bids)
• Revised £17m community-led project support fund launched by Government
• Peer-to-peer lending facility in development.
• Ensure that the Government’s Help to Buy scheme includes self/custom builders
• Host round table with lenders to encourage more self build mortgages
• Support industry initiatives to replace Government £30m fund when this closes in 2015
Further suggestions on ways to promote greater house building include lobbying for the introduction of Land Tax.
1) Land Tax – What is it?
Land Value Taxation is a method of raising public revenue by means of an annual charge on the rental value of land.
“Land” means the site alone, not counting any improvements. The value of buildings, crops, drainage or any other works which people have erected or carried out on each plot of land would be ignored, but it would be assumed that all neighbouring properties were developed as at the time of the valuation; other things being equal, a vacant site in a row of houses would be assessed at the same value as the adjacent sites occupied by houses.
Targeted at ‘unproductive wealth and speculation’
Would incentivise those who trade and sit on empty land to develop it for the common good. It would mean that the costs and proceeds of investment were more fairly shared.
It should be levied on all land except for that which lies under ordinary people’s homes. Very wealthy homeowners should pay, but those with limited incomes could defer payment where required. For it to work, all land ownership would have to be declared.
2) Land Tax – Key proponents:
Centre for Labour and Social Studies (CLASS)
Land Value Taxation Campaign
Land Value Tax Core Arguments:
1) CLASS Report: In land revenue: The case for a land value tax in the UK ; and
2) Land Value Tax Campaign Website 
Why supporters say it should be introduced
Targets unproductive wealth, encouraging capital investment in place of land speculation.
Would remedy long-term shortage of housing, encouraging developers holding on to land to actually build properties in order to make their ownership of land financially viable.
Could moderate house price inflation by the curbing of speculation on the price of land.
By taxing the value of the land itself and not the value of the buildings upon it (like Council Tax does) , the level of Land Value Tax will always be proportional to the level of investment and prosperity in the wider area- it is right that land owners enjoying their location in faster growing areas pay more for their land. Land Value Tax, by definition, bears lightly or not at all where land has little or no value, thereby stimulating economic activity away from the centre – it creates what are in effect tax havens exactly where they are most needed.
Hard to avoid or evade as land is fixed and tangible, efficient due to fixed supply, meaning that there is no substitution effect, and thus no deadweight or distortion.
Tax on labour, buildings or machinery reduces incentives for entrepreneurial or constructive activities, whereas a tax on the value of land no matter how it is occupied would stimulate long term investment.
Would supposedly end boom and bust- speculation created unsustainable booms, often followed by damaging corrective slumps. An end to speculation means an end to this cycle.
Already used in Denmark and Australia under the name Site Value Rating.
Land has no cost of production, why should speculation and scarcity drive up its value? Should be taxed according to relative prosperity of area as it owes all that it is worth to the wider community.
3) Land Tax – In Parliament
The Land Value Tax Bill 2012-13 began it’s passage through Parliament after being suggested as a a Private Members Bill by MP for Brighton Pavilion Caroline Lucas (Green Party). The Bill died as it failed to make it through before the end of the 2013-13 session. To see a draft of the Bill follow this link .
About the Bill: The bill required the Secretary of State to commission a programme of research into the merits of replacing the Council Tax and Non-domestic rates in England with an annual levy on the unimproved value of all land, including transitional arrangements; to report to Parliament within 12 months of completion of the research; and for connected purposes.
Other suggestions worth lobbying government assistant (financial or otherwise) to enhance the delivery of house building include:
Kickstarting an off-site revolution
Due to there being an insufficient number of homes being built to meet even current levels of demand, consideration needs to be given to ways in which new homes can be built more quickly and efficiently. At present housebuilders build rate is less than one new home a week per site. Off-site solutions offer increased speed of construction on-site improved build quality, much greater accuracy, safer working conditions, predictable in-use performance, and reduced waste in the manufacturing and construction process. Off-site systems and components however require investment in manufacturing facilities, which in turn require high-volume sales to make the business viable. In some cities (could be Exeter) some developers (Housing Associations, Councils, private investors) are increasingly building medium to high rise flats or rationalising older estates and having the potential to build more homes at quite some scale. This is a market where the use of off-site solutions is likely to be attractive as homes can be completed and brought to use more quickly (and in-use performance, including energy efficiency and upfront action to mitigate fuel poverty can be incorporated).
If the government could invest in the creation of manufacturing facilities on a local or regional level then there is the scope for the private, public and charitable sectors to all benefit and housing delivery could be accelerated and the standards of construction improved for everyone’s long term benefit.
It is worth noting that institutional investors could be key players in providing the ‘scale’ to support such a venture given their desire to enter the build-to-rent development sector. In this market where new entrants are investing for the long term and looking to manage risk to achieve assured levels of income, they are seeking suppliers who can offer certainty regarding quality, construction cost and in-use performance – the kind of characteristics that off-site solutions are best to deliver.
At a local level, the Council and Housing Associations have the capability to work much more collaboratively with the private sector in sharing risks, especially given that most housing associations have been restructuring into group structures that incorporate the charity alongside a profit-making arm, which ‘gifts; funds in the form of donations to replace government grant. By Councils and/or Housing Associations working with private developers beyond just being affordable housing providers but as equal partners, there are greater opportunities for more and larger developments and for real mixed and sustainable communities to emerge.
Lobbying the government for the removal of the borrowing cap on Councils will assist to promote such partnerships, risk sharing and the facilitation of larger and more sustainable communities.
Exit strategy for Help to Buy
The government’s Help to Buy scheme is a welcome approach to growing demand for housing but only as long as there is a clear exit strategy that helps avoid the dangers of a housing bubble. Since its announcement in July 2013, the number of potential buyers looking to enter the market grew at the fastest rate since July 2009. At the same time, house prices rose again, at the fastest rate seen since the market peak of November 2006. The second tranche of Help to Buy could magnify what has already happened and whilst the UK economy is seeing the very early signs of recovery, the last thing needed is a housing bubble to derail this slow and steady progress.
It is reassuring that the government has instructed the Bank of England to implement a strategy for using ‘speed bumps’ and close monitoring by the Financial Policy Committee, to avoid a potential bubble, however the government could consider other measures to control the further impact. It is suggested that the government considers specific measures to ensure that the Funding for Lending scheme should be explicitly for business expansion in the small and regional housebuilders.
House prices are too high relative to average incomes. There is no quick fix to this so a longer term solution needs to be found to address affordability. Increasing the rate of housebuilding helps, and this helps contribute to the economic recovery but this takes time and whilst mortgage availability is improving the private sector developers will only develop to meet market demand, so any policy that improves mortgage availability will lead to an inevitable increase in supply. However, developers will not deliver more than market demand, so it is unrealistic to expect this ot lead to an easing of house prices.
The Barker Review target of 245,000 annual new-build completions, surpressing long-term real house price growth to 1.1% is base on outdated analysis from 2004 but provides a useful aspiration. Given that market demand is unlikely to reach those levels (it only reached 150,000 in 2007), it is left to the public sector to delivery the majority of the housing need.
The lack of realistic priced homes also leaves the private sector to act as a longer tenure for those who remain priced out.
Unlocking Land through Local Infrastructure Funding
The Government’s Local Infrastructure Fund (LIF) launched in February 2013 is purposely earmarked to unlock large sites but given that funds need to be drawn down before March 2015, only shovel-ready schemes will be deliverable. This type of funding is to be encouraged but lobbying made to extend the timeframe and to also extend the funding scheme.
Local Enterprise Partnership Involvement
In his Government-commissioned report into a path of sustainable growth for Britain, Lord Heseltine heavily advocated a transfer of both funds and decision-making responsibility to the local level. He stated that a number of current schemes initiated by the Government, for example the Growing Places Fund, New Homes Bonus and Community Infrastructure Levy, are promising steps towards the kind of local rebalancing that the British economy needs. However, he also stated that ‘we need to go further and faster to achieve an essential rebalancing of central and local power and resources, extending not just to cities, but to local areas right across England’.
His first of 81 recommendations made is to create a single funding pot for local areas, without internal ring fencing which limits the spending flexibility of local leaders. The focal point of this local investment is the Local Enterprise Partnership (LEP).
Heart of South West LEP has scope within its Strategic Growth Plans and programmes for including similar funding schemes as the Local Infrastructure Funding (LIF), so the opportunity to use this approach could be multiplied on a sub-regional basis.
Localism Act 2011
The Localism Act allows Local Authorities to act as companies, in doing so they could provide housing loans for repayment or equity to facilitate more households into home ownership (therefore increasing demand for housing and facilitating supply by housebuilders or even the LA themselves).
EXETER City Council has pledged to pay all its staff a ‘living wage’ – and is urging other employers to follow suit.
The plans will mean a pay rise for 56 of the authority’s lowest paid workers, mostly street sweepers, refuse collectors and recycling centre staff.
The move will cost around £100,000 a year – money council chiefs say they can afford after slashing senior management costs by £1m. Raising wages of low-paid staff is also expected to reduce the city’s benefits bill.
It comes after a report revealed how average earnings in Exeter have failed to keep pace with the rest of the South West and the country as a whole over the past decade.
The Living Wage Foundation campaigns for employers outside London to pay at least £7.45 an hour – equivalent to an annual salary of around £14,300 – to enable full-time workers to maintain a safe, decent standard of living and allow people to save for future needs and goals.
The legal minimum wage is currently £6.19 an hour for employees aged 21 or over, falling to £3.68 for 16- and 17-year-olds. Apprentices can be paid as little as £2.65 an hour.
Councillor Rosie Denham, the Labour-controlled authority’s portfolio holder for economy and tourism, is to lead a new forum set up to examine the issue of low wages and the cost of living in Exeter.
Explaining why the council plans to increase the wages of its lowest paid staff by up to 16 per cent, she said: “We believe this is a progressive and fair way to get people out of relative poverty and to reduce benefits. This is about the city council doing what’s right for our staff and also leading the way.
“We have an ambition to become a Living Wage city but we recognise that this isn’t necessarily going to be easy for businesses. It’s obviously a difficult economic time.
“We recognise it’s not something you can do overnight but we want to have that discussion with businesses.”
Median average annual earnings in Exeter, at £22,100, are £4,500 below the average for England and Wales.
The city lags behind Plymouth, where the average annual full-time salary is £24,000, and Bristol, where it is £25,500.
Between 2002 and 2012, average salaries rose by just 21.4 per cent in Exeter, compared with an increase of 30.4 per cent in Plymouth, 28.8 per cent in Bristol and 29.5 per cent in the South West as a whole.
Council leader Councillor Pete Edwards said: “Paying people a ‘living wage’ helps reduce poverty and dependence on benefits. It also means there is more money to be put back into the local economy.
“These are difficult financial times for everyone but there are things we can do to pull ourselves away from this challenging position and that is why we are taking a lead and proposing that all our workers are paid at least a ‘living wage’. We hope other businesses in the city might follow our example.