Conservative councillors have challenged a decision to lease out council homes built for market sale as private rented accommodation.
The decision to lease out 48 homes on the Abbey Road and Maiden Lane estates to the council-owned company Camden Living, which was made by Cllr Danny Beales (Lab, Cantelowes), cabinet member for investing in communities, was ‘called in’ to the 28 May housing scrutiny committee.
The committee has the power to approve Cllr Beales’ course of action, recommend a different decision, refer the matter to the council for debate, or decide to consider the matter in further depth.
The call-in notice, signed by four Conservative councillors, reads: “We believe the decision is outside both the budget framework and the policy framework of the council.
“The Budget for 2019/20, adopted by the Council on February 25 2019 made no allowance for this decision, which has a material impact on the finances of the council. It is not of a nature that justifies emergency spending outside the Budget framework.
“Our Camden Plan commits the Council to building ‘as many genuinely affordable homes as we can’, but the financial constraints imposed by this Decision would undermine this commitment.”
Conservatives argue that not selling the properties, which fall under the council’s £1bn Community Investment Program which building homes for market sale to reinvest into the borough, but waiting seven years until planned leases expire, could cost the Town Hall £600,000 a year in borrowing.
The group of councillors (Cllrs. Oliver Cooper, Gio Spinella, Maria Higson and Henry Newman) also argue that the value of the properties could depreciate in that time, and that the homes should be sold.
Council officers responding to the call-in said: “The impact on revenue in 2019/20 will be that the housing revenue account will benefit from additional income via the lease payment, which will help offset financing costs that would be incurred had the units remained unsold, or sold below at expected values.
“The proposals have few direct costs and these will primarily be incurred by the council’s wholly owned company, Camden Living – for example in marketing the properties – and which based on advice of external property consultants are anticipated to be entirely covered by the rent paid from tenants of the units.”
The call-in has postponed any decision until the scrutiny committee has considered the proposals.