Shropshire housing stock company could be replaced
An organisation that manages more than 4,000 council properties could be replaced or merged as the authority seeks to limit the impact of Government policies on housing stock.
Councillor Malcolm Price, Shropshire Council's portfolio holder for housing, told an environment and services scrutiny committee, that other options may have to be considered to protect housing stock currently managed by Star (Shropshire Towns and Rural) Housing.
Star is a council-owned "arms length management organisation", which looks after 4,200 of its properties, mainly in the Bridgnorth and Oswestry areas.
In a presentation given by Sue Adams, the company's managing director, it was explained that the initiative had proved successful since it was set up in 2013, but that changes in legislation could lead to a significant increase in costs – with a knock-on effect on the ability to provide housing.
Ms Adams told the committee, sitting at Shirehall in Shrewsbury, that a rent cap of one per cent for four years would cost the organisation £56 million over the next 30 years.
She said: "That is money we do not invest in homes or services."
The committee also heard that a "pay to stay" policy was likely to have an impact on finances, while a Government policy on the sale of "high value voids" would put 400 homes at risk and would cost the authority around £58 million over the next few decades.
Pay to stay is a policy where households earning more than £30,000 will have to pay more for their rents towards the market cost – on a scaled basis.
But Ms Adams said that the Government had not finalised the details of the policy, which may yet prove less onerous for the company.
She said: "There will be we believe a reduction in homes we have to manage, and that will affect the housing revenue account available to fund new stock. That undermines the ability to deliver services and investment in stock to maintain the Decent Homes Standard."
Councillor Price said that the situation means the council is considering a number of options including merging with another organisation.
He said: "I think STAR was the right thing at the time but I think we now need to revisit it.
"The accounts are stable but in time they will dwindle. Is that the best way to maintain the stock?"
Councillor Price said that the increase in rents was good for the tenants in the short term but would affect the type of housing available in the long term.
He said: "It is good for renters but results over four years in a 12 per cent loss of income which is not insignificant."
