Tuesday, February 22, 2011

Earning money the right way - a suggestion for councils

” We want to make money out of it” ,  “We should have the money not them” , “We can’t afford to make loans”  this was Councillor Mark Howell of South Cambridgeshire District council on the radio this morning. He and I were both guests on the very glamorous  BBC radio Cambridgeshire breakfast show. Howell was there to talk about his council’s plan to get rid of the council tax discount it currently offers to owners of empty homes. An idea I fully support; the discount is a nonsense and does nothing to encourage landlords to make good use of their property. But Howell’s tone was dispiriting; apparently fixated on the money but seemingly uninterested in what the money could help the council achieve. I know councils are in really difficult times now. As a director of a small charity, believe me I know what it’s like to not know where the money is going to come from. But really!  Howell and many others in local government, who I have heard make similar points over the last couple of weeks could do better than this. The purpose of councils lies in what they can do for their communities not how much money they can make.

Empty homes is in fact an area where the government is actually investing more money. £100 million new targeted funding, and rewards for homes returned to use through the New Homes Bonus. Councils need to be thinking about how they can use these funds creatively to really make a difference.

Here are three ideas. Bear in mind that properties returned to use will earn the council between £7,000 and £11,000 in New Homes Bonus rewards over a six year period. In addition the council would also start receiving council tax from the reoccupied property. 

Kent County council operate a loan scheme for owners of empty property. It costs Kent about £2,700 in lost interest and administration for each home returned to use through the scheme.  Other councils from around the country could set up a similar scheme or even ask to join Kent's.

There are homes that are currently not economically viable to bring back to use, even though there are lots of low income people who want to live in them. The council could make a small grant of say £5,000 available to the owner on condition that the property were let to somebody in housing need.

There are 40,000 odd empty council owned houses in England. The council could sell these at discount on condition that the purchaser lived in it as their sole home and renovated it to an agreed condition. 

Of course all three of these ideas cost money, but crucially they all earn more than they cost. The more things like this the council does,  the more it will earn and the more homes will be created for its community. If councils want to make money surely this is a better way to do it.

1 comment:

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