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York Council debts mounting as housing borrowing plan pushes finances to the brink

By the end of the year the York Council will have debts of over £318.2 million, up £52 million compared to 12 months earlier.

Nearly 14% of taxes paid to the authority now go on interest and principal repayments on loans.

The authority owes £139 million in historic debt on Council housing programmes.

The overall exposure is partly offset by investment balances which stand at £75.7 million (down from £91.6 million in 2017)

Debts have increased because of several projects. One of the most expensive is York’s share of the Allerton Park waste processing plant. Money has also been borrowed to fund aspects of the York Central development.

The financial assessment is due to be discussed at a meeting later this week.

The same meeting will consider the Council’s policy on funding new housing.

Included in the plan is a proposal which would see the Council borrowing £10 million to fund the development of the Lowfields site. This means the Council will have housing debts of £145 million, close to the legal debt cap of £146 million.

The Lowfields proposal involves building on a sports field which will be controversial and may lead to legal challenges. A promised “start on site” early in 2019 looks optimistic.

There is also the problem of development expertise in the Council. It has a woeful recent project management record with cost escalations on several major projects including the Community Stadium and the refurbishment of the Guildhall.

Lowfields – Plan to build on sports pitches

There are some good features in the new housing plan, but the Council will be sailing very close to the financial wind if it accepts the officer recommendations without amendment.

The report fails to address the problem of unlocking disused Council land like the site behind the Acomb Library or private sector “land banks” like the prime location next to the Barbican.

It would be more than ironic if the planning committee was bullied into accepting the Lowfields plans which, green space provision aside, feature straight geometric lines of 3 bed semis – a discredited layout abandoned by other Councils over 50 years ago

Housing hyperbole helps no one.

Call by MP for York Local Plan to be rejected was irresponsible and poorly researched

Claims by Rachel Maskell MP that people do not live in high-value, luxury apartments built in the City Centre, and that the homes were purchased as “an investment, or they are used just for holidays and race days or weekends”, don’t seem to be rooted in fact.

Maskell also claimed the push for more City centre accommodation is “an experiment in social cleansing”, relying entirely on anecdotal evidence to support her assertion.

She repeated her claims last week

Publicly available statistics confirm that,of the 1036 homes built in the first 6 months of the current financial year, 637 were aimed at students. Student needs reflect in both housing targets and outturns. Most of the flats were built on Lawrence Street. They are hardly “luxurious” or “expensive” but they do not count as affordable housing (because it is tied accommodation)

Provision of specialist accommodation of this type reduces the pressure to convert family accommodation into student lets.

Between April 2017 and September 2017 planning permission was also granted for 892 new homes. These included large developments at The Barbican, Nestle, and Hungate. (Only 3 were for student accommodation)

The emerging Local Plan provides for 867 new homes to be built each year. This compares to an average of 686 completed over the last 5 years. At least 20% will be “affordable”.

Historic figures (see below) reveal that there has been a spurt in house building in the City over the last 3 years. Before that, five years of recession took a toll on house building numbers.

The housing waiting list has stabilised at 1200 (excluding those seeking a transfer) with people waiting on average for 12 months for a new home. The number of homeless, presenting to the Council, is now around 100 a year (down from a 10-year peak of 258).

Lack of land clearly is not an issue impacting on the granting of planning permission for new developments in the City.

The Council might be criticised for not releasing funding to buy properties on the open market to increase the social rent pool. It had run a surplus of over £20 million on its housing account for over 6 years (although very recently it agreed to release some of the surplus to ease social housing demands).

In addition, the total amount of unspent payments in lieu of affordable housing that the council currently holds is £4.325m.

There are issues to be addressed. The apparent spike in “rough sleeping“ has previously been highlighted.

Over the last few months the Council has guaranteed a hostel bed for anyone found sleeping on the streets. It is an initiative that seems to have worked during the recent period of cold weather.

York desperately needs a Local Plan.

Funding the endless revisions has debilitated the Council’s budget with an estimate of £10 million already having been devoted to the process.

Arguing that the current proposals should be abandoned is both reckless and shortsighted.

Some revisions to the text might be expected, but the basic thrust of the document is right and, most importantly, deliverable.

Housing completions still falling in York

The Council is obliged to produce an “Annual Monitoring Review” which looks at how it’s performance compares to its targets.

The latest available is for the 2011/12 year. It can be viewed here.

The number of homes completed in the City in each of the last 10 years is as follows

2003 – 669
2004 – 1193
2005 – 949
2006 – 875
2007 – 557
2008 – 502
2009 – 606
2010 – 572
2011 – 354
2012 – 171 (first 6 months excluding specialist student units)

Of the 171 only 29 were classified as “affordable”.

The Cabinet member with responsibility for housing in the City is expected to come under pressure at the Council meeting later this week.

She will have to explain why it looks like the total number of affordable homes provided will be the lowest for at least 6 years.

At the same time the waiting list for homes has reached an all time high.

Planning permissions granted for home construction fell to only 198 in 2011. The Council have declined to forecast what the outturn for the current financial year will be.

Some commentators are forecasting that the number of (unimplemented) planning permissions will fall to an all time record low this year.

As at September 2011 the figure stood at 3120.

Tomorrow we’ll look at which of these permissions are on stalled developments and why.

York Council debts rising

In a report to the Councils executive this week, officials report an increase in the debts of the Council.

It was not unexpected.

The report reveals that the general fund debt increased from £110.1 million to £151.6 million last year.

£51.5 million in new loans were taken out with only £10 million paid off. Some of the new loans will attract interest payments for 20 years at rates of around 2%.

The Council’s average investment balance has fallen from £48.7m to £15.7 million.

By the end of the 2023/24 financial year, the borrowing requirement is expected to hit £355 million. Around 19% of the York Council taxpayer’s annual bill will then be used to service this borrowing (i.e. pay interest and redemption charges)

We doubt that the report will get much attention from either the Councils Executive or the responsible scrutiny committee. “Live now, pay later” has become a way of life for many local authorities.

York has at least avoided some of the catastrophic investment strategies seen in other places (failed local power companies, incautious property speculation etc).

York has, however, set up several arms length organisations including its own housing development company – reports on which have been thin on the ground recently. Against the background of a very buoyant housing market, that may not be a matter of immediate concern.

Longer term, who knows?

York Council claims over 50% of complaints answered within 5 days

…we don’t think so!

The Council has published its latest financial and performance update. It reveals that it could overspend this year’s budget by as much as £1.5 million. The expectation is that the Council will outturn on target.

A major source of complaint is paradoxically complaint handing. The Council claims to have answered “50% of complaints within 5 working days”.

Maybe!

….but we have a current instance of a complaint registered on 27^th December 2018 which hasn’t even been acknowledged yet. The Council needs to improve its exception reporting systems and inject some fresh drive into its customer relationship processes.

Another key concern is the impact that the Council is having on delayed discharges (bed blocking) at the hospital. “The total number of days that patients resident in York have been delayed, for all reasons, during the last twelve months for which statistics have been published (November 17 – October 18) was 10,655 which equates to, on average, 29 beds each day occupied because of DToC across the health and social care system. From August to October 2018, this figure was 2,967 days which equates to 32 beds each day”. The Council says that the closure of two large nursing homes in the city has impacted on the ability of Adult Social Care to place patients quickly, as well as considerable pressures in both the residential and homecare markets.

The future of the Greenworks section of Yorkcraft has also never been properly explained. The Council is reducing the budget by a further £160,000 for adult social care workers, in supported employment, during the next financial year. So the future looks bleak for some of the workers who are a familiar sight as they deliver newsletters to various parts of the City.

Following the decision by the Council to suspend its housing modernisation programme the number of Council homes not meeting the decency standard has soared to 546.

It was zero two years ago

York Council investment programme slips

A Council report shows an out-turn of £35.751m on the Council capital investment budget compared to an approved budget of £52.428, an overall variation of £16.677m.

Community stadium start slips

The biggest slippage (£3.5 million) was on the York Central project although there were also delays in other areas including school maintenance, housing construction, the Glen Lodge extension, waste disposal, IT development and upgrades to buses.

The report shows that expenditure on the Community Stadium has also slipped again with the bulk of the work now expected in 2018/19. In total, the Council will spend £36 million on this project although this figure does not include the substantial sums spent to date or the (privately funded) commercial elements of the project.

The report goes on to say;

Mansion House cost up by £150,000

that the Mansion House restoration scheme has an outturn position of £1.031m in 2016/17, requiring re-profiling of £515k of funds from 2017/18 into 2016/17. The work is now expected to be completed in August 2017. The report goes on to say that “as the works contract has progressed a number of areas of additional work have been identified as necessary to safeguard the future of the Mansion House, these essential restoration works will cost an additional £150”.
the Tenants Choice programme saw 120 properties have their kitchens, bathrooms and wiring updated through the year. This is significantly lower than the 220 properties that were planned. This is due to problems with tenants refusing works, delays due to damp problems and delays with kitchen deliveries. The scheme under spent by £416k in 2016/17
the proposed developments at Newbury Avenue and Chaloners Road have also been delayed. The development now proposed is for 5-6 bungalows and “will be submitted for planning approval in July”. The development of homes at Chaloners Road was postponed when the developer withdrew from the contract. A revised scheme will be submitted for planning approval in late summer 2017

A summary of the Councils £1/4 billion investment plans can be found below

Big York Council Departmental overspends in 2013/14

Council took £1.8 million in spy camera fines which may have to be refunded

Social care budgets were over spent by £1.3 million last year with Environmental Services (mainly waste collection) clocking up a £443,000 and Children’s Services/Education a £309,000 loss.

Overall York Council Departments spent £1.7 million more than had been budgeted.

The budget broke even only because of a £2 million surplus on “centrally administered” budgets.

The figures are revealed in a report to be considered by the Councils “Cabinet” tomorrow (Tuesday)

As previously reported, the biggest problems arise in Social Care where the Council reveals overspends on community support (£236k) due to a higher number of customers than forecast, a continued increase above forecast level in the number of customers taking up Direct Payments (£129k), increased use of external placements for emergency and short term breaks (£252k) and a higher than budgeted number of customers in residential nursing placements (£718k).

The Councils financial position was saved only because it continued to enjoy the benefits of low interest rates on its borrowing (equivalent to a £990,000 budget saving).

It achieved only 73% of its planned capital investment programme storing up a massive £83 million backlog in work which it says it will try to address during the current financial year.

The government gave the City an extra £732,000 to reduce the Rate burden on small businesses although there has been a slow take up on this important concession.

The position is also masked by £1.765 million in fines income received from spy camera use in the Lendal Bridge and Coppergate.

The Council has now admitted that the trials cost a whopping £718,000 to implement. £1.047 million has been put in a reserve account which will presumably be used to refund fines imposed unlawfully.

The balance would have to come from Council taxpayers (the equivalent of a 1% rise in Council Tax levels).

The spy cameras on Lendal Bridge have been removed while those on Coppergate were switched off on 1^st April.

The housing revenue account (Council house rents income) showed a £12.1 million surplus at the end of the year.

The report to the Cabinet pointedly fails to contain performance data on the quality of public services being provided to York residents.

NB As at April 1^st 2014, 6717 York Council Taxpayers had arrears of £ 4,769,989.36