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Wednesday 27 May 2015

Brent Council Confused Over Property

Perhaps the most interesting paper before Brent Council's next Cabinet is its new property strategy.  This marks a radical reversal of previous policy, which was to dispose of property if it was not going to be used for public purposes.

The new strategy has two apparently contradictory aims.  One is to maximise value through renting property.  The second is maximise "social value" through renting below market rates to worthy causes.  Of course this all takes place in an environment where the Council's income from fees & charges, Council Tax and government grant will all be in decline.  Inevitably, this locks Brent Council into cutting public services to the maximum extent possible, which I suspect is not a policy that the majority of those who voted in May 2014 would support (although it is very much what the newly elected Tory government supports).

A still more startling suggestion is that:

" In particular there is scope to develop the investment portfolio within the residential market (where the highest growth potential exists) in order to both support endeavours to meet housing need and deliver a revenue return."

That5 sounds like the Council wanting to become its own property developer.  The only recent example of the Council pursuing this role is in Thames Court in South Kilburn, where the Council had all sorts of cost overruns and quality problems.  In short it was not a success. Hence the Council's subsequent reliance on private developers who know more about running building projects. 

It also of course plunges the Council into the middle of the debate about affordable housing and planning gain.  Developers seek to minimise affordable housing because they make more money that way.  That would be in line with the Council's desire for a "revenue return".  That is flatly contradictory to the other aim of using the policy to "meet housing need.

Another area of concern is the arbitrariness of decisions under this policy.  We have seen before that such decisions can be based around the historical accident of where buildings happen to be, the actual of perceived strength of certain lobby groups, the closeness of such groups to particular figures on the Council, and not the rational interests or strategy of the Council.  At its worst, such an approach can lead to the kind of politics that now appears to be coming to an end in Tower Hamlets.

I am also struck by the lack of realism in some of the wording about "buying" in large stretches of the Borough.  With what precisely?  The Council's own access to capital and revenue funding is being rapidly depleted by central government, and increasingly its own decisions. Other potential partners, such as housing associations, seem likely to have their resources cut by the Tory government's policies, most notably extending the Right to Buy.  Where does Brent Council think it is going to get the money from?

Altogether, I get the impression of an institution that doesn't really have a clear idea of what its priorities are.  It just has a vague idea it wants to be nice to everyone.

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