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A new method for financing council housing has been unveiled by Westminster City Council, as James Evison reveals. Large-scale council house-building in the centre of London is an unlikely project in the current climate, but Westminster City Council would beg to differ. The council has recently announced an ambitious programme to build 500 properties, made possible using a new development company and independent charity to finance the scheme, alongside a £36m Homes and Communities Agency (HCA) grant. Traditionally, it has been difficult for local authorities to embark on these schemes, as there are strict financial restrictions in place for borrowing from the private sector – although this is currently under review. So how does the structure work, and will it be a revolutionary step for managing similar projects for local authorities? Steve Moore, deputy director of housing for Westminster, explains: ‘If anyone is doing anything on this kind of scale, they need units for sale – they won't have enough money through just HCA funding to make it viable. The levels of return from rent for social housing are too low.' Therefore, the council couldn't achieve funding through the housing department. This situation resulted in setting up the development company, which was difficult and time-consuming. ‘We took detailed external advice and the result is a body very similar to an registered social landlord (RSL) structure,' Mr Moore explains. ‘The company is 100% owned by the council, even though we thought the banks might want to take ownership. But they didn't in the current climate. All money flows through the company, although, obviously, mortgages are still controlled by the banks.' As for the charity, this is going to be run independently, but with council supervision. Mr Moore explains how it works: ‘The charity has be independent, but it is council-controlled. In effect, this means that its remit is within the housing strategy, but how it gets funding is independent of the council – like an RSL parent board.' The advantage of having the charity is forward-thinking, and not tied to this single project. ‘It gives us cover in tax terms,' Mr Moore says. ‘This means we can, hopefully, bid successfully in the future for HCA funding in a more competitive marketplace, as the structure is more financially viable.' This structure has already attracted interest from other local authorities, as Mr Moore comments: ‘Although we had to go through a minefield of tax to get here, we now have a model that other local authorities can look at and potentially implement as well. ‘There is an enormous appetite for this kind of project, and a number of local authorities is aiming to set out on doing large-scale social housing developments. Our example can enable this to happen.' But, what are the specifics of the housing units, and what sustainability standard do they achieve? ‘It is a mix of social housing to reflect what is needed locally,' Mr Moore says. ‘The first phase of social housing will go to current tenants needing to be rehoused. We will also push for sons and daughters of tenants as well, alongside those working in Westminster.' And what about green aspects and the design? ‘Where and when possible,' Mr Moore says. ‘We are looking to get beyond level three of the Code for Sustainable Homes – the current government standard for social housing – and implement level four. ‘We are trying to do something more ambitious than simple social housing blocks.' And this last point is key. Mr Moore is keen to stress that adding aesthetical innovation is as important to the scheme as financing it. He says: ‘One of the core builds of the project is to construct more than 100 units on a site in Paddington. The initial designs are complete and we are quite excited about them – the building will be an iconic part of the programme.' Westminster City Council is ambitious for the future and sees this project as a launching-off point for general change, as Mr Moore explains: ‘Church Street is one the most deprived wards in Britain. Our tenants have already said the housing there is not good enough. ‘We are taking a root-and-branch approach to changing our housing stock. This is off the back of the Community Build Scheme, and we are looking at funding from the mayor's office to regenerate two to three estates built in the 1960s and which are increasingly expensive to maintain.' So, will these potential projects benefit from the current build programme? ‘Absolutely,' Mr Moore says. ‘We have been masterplanning already for this, and it is highly likely that we will use a similar model of management and funding.'

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A new building block

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