Role of all councillors to ensure taxpayers’ funds are property allocated

Date: Tuesday 1st August 2017

Sir, May I respond to the letter from John Owen (Herald, 22nd July) regarding the Eden District Council-owned Heart of Cumbria Ltd. (HoC) and its plan to purchase 86 properties from Persimmon using public funds running into a “few million”.

All councillors are, I believe, committed to supporting efforts to provide for suitable affordable housing to meet the needs of the district. Such housing needs to be sensibly priced, providing suitably designed accommodation that is well built and with future running costs taken into account. It is also vital that the ongoing management of the properties is of good quality and consistent.

On the surface, the HoC plans would seem to meet these demands, but one can see the issues that need to be addressed and this gives rise to many questions.

Councillors are given to understand that Persimmon has reported that there is no interest from local registered social landlords, i.e. housing associations. The first consideration therefore is to ask why there is no interest.

I have been very reliably informed that at least one housing association regards the properties on offer as being too small. This alone should raise concern. There may be other reasons why providers are not interested. We should know all this before embarking on the task of buying the properties with scarce public funds.

We should note that Persimmon has planning approval for 230 properties at Raiselands Farm in the north of the town. This development will include 30 per cent. affordable properties. Will the same issue arise and will HoC bid to buy the “affordable” properties?

We might also ask if other housing developers are going to have the same or similar issues as there are many developments taking place in Eden at this time.

Mr. Owen refers to “technical reasons” why HoC should buy the properties and not the council. This is not the case, for example, with Nuneaton and Bedworth Borough Council, which buys the properties and leases them to its private company, NABCEL. I would hope that the executive and HoC directors would have explored other options but, if so, councillors have not been informed of their deliberations.

Perhaps the clue lies in that HoC ownership avoids rent-setting rules that council ownership would be obliged to follow, thus the concern with the possibility of rent hikes above that of housing association values.

HoC is a separate legal entity to the council and for the purposes of renting out properties will be a private landlord. Current plans to charge a market rate of interest to the company for loans to buy the properties and to place this income into the general fund and not ring fence it for additional affordable housing suggest that the company will need to obtain a good income from its tenants.

Neither the council nor HoC have the facilities to manage these properties should they be purchased. This means that they will have to contract a suitable organisation to carry out this demanding task. We know that HoC/EDC have invited tenders for this and rejected at least one submission on price grounds.

This is of concern as it is vital that any contract with a provider requires excellent service quality. HoC, under the scrutiny of EDC, must have the ability to monitor performance and take any necessary action.

In his letter Mr. Owen refers to his withdrawal from formal decision-making meetings, i.e. council or executive meetings, when the company is discussed. District councillors Nicolson and Breen will also have to comply with this ruling.

What he does not refer to is the fact that private meetings are held by the executive and others and that they have no commitment to withdraw from those. This is important because, as one would note if attending an executive or council meeting, the executive members always vote the same way. One would think that the voting is already agreed.

HoC has already been granted £110,000 from public funds (councillors wait to hear how these funds have been spent), and given a loan facility of £1 million by the council, plus a significant amount of taxpayer-funded staff time has been taken up.

As yet there has been no delivery from the company and it is perhaps a factor in this proposal that HoC wants to justify itself.

No doubt executive members and the HoC board will not wish to read this, but may I remind them that it is the role of all councillors to independently question what is being planned and seek to ensure that taxpayers’ funds are properly allocated. It is therefore obvious that one of the reasons why I for one have not sought to join the HoC board is that it would clearly negate my ability and that of my colleagues to openly question proceedings. Open scrutiny of this type of operation is absolutely essential.

As an aside, our scrutiny has revealed that a number of private properties on this development are being sold as leasehold — a subject recently raised by government and reported in the media.

May I close with a plea to Mr. Owen and his colleagues to listen to what is being said and respond with the answers we seek. It is much more likely that sound decisions will be made and the right conclusions arrived at and, yes, this might even mean a review of the company’s plans and possibly a withdrawal from this project in favour of a more suitable option. Yours etc.


(Eden councillor, Penrith North)

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