THURROCK Council's leading councillor for housing has given details of his plans to change the social housing structure of Thurrock, saying his scheme will save the borough millions and bring an end to housing misery for borough families currently being housed outside the area.

Cllr Luke Spillman, portfolio holder for housing, delivered a speech to tonight's meeting of the council's cabinet (Wednesday, 8 September) giving details of the council's new strategy which has seen them partner with a commercial company that is buying up properties and leasing them back to the authority.

The scheme began in April but has largely been downplayed by the council until it was highlighted by Thurrock Nub News last month. It is reported that the council has agreed terms to lease more than 70 properties, which it will eventually own when a financial contract is completed.

Though the initiative was not listed on the agenda this evening, Cllr Spillman gave a briefing to cabinet, describing it as an 'outstanding financial initiative' but one that provided a 'compelling' case for social reform.

Despite the bullish rhetoric, Cllr Spillman did not present a huge amount of detail on the scheme, referring just twice in his address to Phi Capital Investments, the investment company that the council has linked up with.

The last financial statement posted at Companies House shows PHi making a loss of more than £1.358 million and it had assets totalling just £387,453.

It is not clear where the company has raised the finance to buy the 70 or so properties it is now leasing to Thurrock Council, though sources close to the council have told Nub News that PHi is underwritten by another company registered offshore on the British Virgin Islands.

Cllr Spillman has conceded that there are a number of 'outline risks' associated with his proposal.

His full address to tonight's meeting began with him saying: "As you are aware since the start of the municipal year the council has embarked upon a fundamental restructuring of the way temporary accommodation is being delivered.

"The strategy behind this is simple. Replace hugely expensive, and often out-of-borough, private nightly let temporary accommodation with in-borough, council-owned and leased accommodation, costing less than the income the council is able to generate in rent.

"Replacement of these units will be achieved with a combination of three approaches, all of which have passed through Housing Overview and Scrutiny Committee, Cabinet and Council without objection."

He outlined the three areas as

• Purchasing stock directly from the market utilising prudential borrowing repayment terms less than the LHA rate income each unit will generate.
• Further utilising the Phi lease scheme on terms less than the Local Housing Allowance (LHA) rate income each unit will generate.
• Repurposing a decommissioned sheltered accommodation complex already under council ownership.

Cllr Spillman continued: "In 2020/21, Thurrock Council spent £1.2 million from the general fund in 'top up' payments to private sector landlords to house residents needing temporary accommodation. The current 'run rate' on spend is circa £100,000 per month.

"These payments cover the shortfall between the maximum amount of Local Housing Allowance claimable, through housing benefit, and the rent charged by the landlord. Such accommodation is always charged at a far higher rates than normal market rents.

"As a result of this combination of directly purchasing stock, additional use of the Phi leasing scheme and repurposing a decommissioned housing scheme, the Council will soon no longer be dependent on nightly let accommodation.

By implementing this policy rapidly the Council is also set to make substantial savings to the General Fund during this municipal year.

"Furthermore, by letting these properties at the LHA rate, the rental income, which is largely housing benefit, is greater than the borrowing, lease and maintenance costs combined. This excess could even allow the entire homeless service to become cost neutral by the end of 22/23if things go to plan and will deliver in year savings during this municipal year as well.

"Whilst the financial case for this policy is outstanding, I am of the opinion that the social case for these reforms is even more compelling. Implementing the policy should in time effectively end 'out of borough' temporary accommodation placements and ensure that all temporary accommodation is provided within borough, except in cases where safeguarding requires an out-of borough placement.

"In cases where it is not safe for an applicant to remain in Thurrock, out-of-borough placements will of course be provided.

"Like most things, these changes cannot be implemented over night. However, I have set the department an ambitious target.

"Based on the data I have been provided, we will work to a date of the end of 2022.

There is of course risks to such an ambitious target, such as a significant spike in homeless applications and not being able to purchase enough properties. For instance, there are considerable concerns among many housing policy professionals that we will see an unprecedented spike in the number homeless applicants as result of the pandemic and eventual end of the ban on evictions.

"Mitigating this risk, as well as the longer term savings, and ending out-of-borough placements, is at the core of the policy.

"Despite the outline risks, I feel that it is my responsibility to set this firm and challenging target.

"We are not going to waste the huge efforts officers and former cabinet members have put in to transform Thurrock's housing department over the last five years.

"I hope that this presentation demonstrates the ambition this administration has for housing in Thurrock. Excellence is the level that both cabinet and housing staff are aiming for, nothing less is good enough.

"Quality services, delivered with value for money and in a far more human way. In this case, temporary accommodation that will keep families together, save taxpayers many millions of pounds over future years.

"I would like thank cabinet for their support in this endeavour, especially Cllr Barry Johnson, whose ground work last year has made this option possible.

"I would also like to thank officers for their efforts and fantastic work. However, one swallow does not make a summer.

"This is just the first of several big announcements, with more regarding rough sleeper provision and housing development to come. I again strongly advise everyone with a keen interest in housing to watch this space."

Cllr Spillman's presentation was described as a 'phenomenal piece of work' by council leader Cllr Rob Gledhill, who added: "You have to be congratulated on making a start and setting 'really good ambitious targets to get this done quickly'.

He added that London boroughs might well be 'jollied up' to follow Thurrock's example and not move families out of the local areas.

Previously published papers shows that the council is planning to to invest around £8 million which it has bank from selling council properties under the right-to-buy scheme to support its new policy. However, despite Cllr Spillman's assertion that details of the scheme 'have passed through housing overview and scrutiny committee, cabinet and council without objection" Nub News can find no previous detailed mention of the initiatives he has unveiled this evening - six months after the scheme began.

The closest reference to the scheme appears in Cllr Spillman's June report to cabiet which says: "In the 2020/21 financial year the council entered into a partnership agreement to purchase and lease properties to be used within the council's housing stock.

"This project has enabled the council to maximise its Right to Buy receipts, increase levels of housing stock and avoid returning any unspent receipts with compound interest payments to central government. Through this approach, the council is currently aiming to increase its housing stock by approximately 90 properties."

There has been no challenge to Cllr Spillman about that statement from opposition parties who have recently expressed concern about the PHi connection.

Cllr Spillman has referenced the following documents to Nub News:

Housing delivery approach.

An overview of the range of housing services and of the department's performance in 2020/21.

Housing Revenue Account - Business Plan and Budgets 2020/21.

Housing Revenue Account - Business Plan and Budgets 2021/22.

Housing Revenue Account - Business Plan and Budgets 2019/20 Onwards