RBKC to tap reserves for Grenfell rehousing package

Photo: ChiralJon, Flick, CC0

The Royal Borough of Kensington and Chelsea has outlined a £75m package aimed at rehousing households affected by the Grenfell Tower disaster.

The council’s leadership team is set to meet next week to vote on funding for three separate schemes to help tenants and leaseholders find new permanent homes.

The authority has acquired 106 homes since the tragedy, but still faces a shortfall of accommodation to permanently rehouse all of those made homeless.

A report to councillors said: “There is a gap between the number of appropriate properties within the borough available to permanently rehouse residents of Grenfell Tower and Walk, and the total property needs of those residents.

“The council is pursuing acquisition of new developments and pre-existing properties where appropriate, but, in order to provide accommodation as soon as possible, it is essential to include suitable and available properties owned by registered providers of social housing in the solution.”

Housing association homes

The first scheme, if agreed, would use £40m, initially from council reserves, to secure a supply of social homes from housing associations.

The cash would be used to compensate the associations for the difference between the rent and service charges payable by former Grenfell residents and the amount they would have received otherwise.

The council has also previously agreed that former Grenfell tenants will receive accommodation free from rent, service charges, council tax and utility bills.

“Where these would be payable to the registered provider, the council will make that payment and seek to recover its costs from the government under the agreed compensation package for the Grenfell tragedy,” the report said.

Leaseholder buybacks

Next week’s meeting is also set to earmark around £15m through a second scheme aimed at compensating leaseholders for the loss of their properties.

A report on this scheme said that 17 properties were owned by leaseholders at Grenfell at the time of the fire.

Kensington and Chelsea is proposing to buy the leaseholds at the market price immediately prior to the fire.

In addition, it will offer leaseholders an interest-free loan for an additional 150% of the market value of their property.

Resident leaseholders will also be offered the option of being rehoused as council tenants.

The council said that it will seek to recover some or all of the costs of this scheme from the Department for Communities and Local Government as part of its wider claim for the Grenfell tragedy.

But it said: “At this stage it would be prudent to assume that no support will be forthcoming from government for this scheme.

“In the meantime, the council will need to set the cost of this expenditure against its existing resources so that the offer to leaseholders can proceed in a timely manner.”

Open market purchases

The council is also set to agree an initial budget of £20m from its general fund to buy houses on the open market.

“These purchases will be funded initially from the council’s reserves and their cost will be charged to the account for Grenfell-related expenditure,” the report said.

“The purchase will therefore be made with general fund resources. A decision will be made later as to whether to transfer these properties to the HRA, once the full cost of the Grenfell fire is known.”

The council is currently spending more than £1,000 per household each week on temporary accommodation following the fire, it said.

Last week, the Local Government Association said that local authorities cannot afford repairs to high rise council blocks in the wake of the Grenfell tragedy.

Salford repairs borrowing

This week, Salford City Council announced that it would borrow £25m from the Public Works Loan Board to carry out fire safety works to nine of its blocks in Pendleton.

Salford’s deputy mayor John Merry said: “The regeneration work has been carried out under a PFI contract and whilst the council is not accepting liability for the works, we do believe that it is crucial that legal disputes do not prevent essential works being carried out.”

The city’s mayor, Paul Dennett, added: “We have called on government to financially support councils and housing associations so that they can respond swiftly to legitimate public concerns.

“Residents must be able to feel safe in their home, whatever their tenure.
“This is not an easy time for local authorities – government cuts have taken a severe toll on council budgets.

“This will be a strain on our resources but it is important that we respond effectively to address safety issues raised by the Grenfell Tower tragedy and we must do all in our power to ensure that a fire such as this never happens again.”