Partnered Home Purchase: generating income while supporting communities

Chesil Lodge care home in Winchester – example of partnership working

Winchester City Council is helping its residents through schemes which are also boosting its income, says Joseph Holmes.

The need for councils to transform how they operate has been a hot topic for some time.

While there has been much concern at the loss of central government funding to local authorities, a number of innovations have arisen as a result of the changing, and challenging, financial environment.

Councils are becoming more innovative in how they use technology, deliver services, manage change, and solve problems to meet the needs of residents, businesses and other local stakeholders.

The drive to be more commercial and utilise technology further has cast a spotlight on the finance function at councils, as highlighted at the recent CIPFA annual conference.

As a current chief finance officer, and having spent the past ten years in local government, I have watched the role of council finance teams changing.

Finance professionals are stepping out from their traditional “accountancy” roles and becoming more active, working alongside their colleagues to come up with innovative viable, growth-generating solutions.

There are many examples where councils up and down the country are creating financial value, a number of which we have read about on Room 151.

I think the big change, however, is that many of these initiatives are now centred on, and are emerging from, the finance teams.

Perhaps the increasing use of technology has managed to change us all into more advisory services, or perhaps almost a decade of significant funding reductions is  spurring on new ideas.

Whatever the reason, finance certainly appears to be much more at the centre of our organisations than in the past.

Helping residents onto the housing ladder

Here at Winchester City Council, we are all looking to achieve a “win-win”- growing our income as well as supporting our local communities.

As part of using an outcome-based budgeting process, we have set ourselves the task of ensuring there is an integrated approach to service and financial delivery. One of our four outcomes is headed “Delivering quality housing options”.

Earlier this year, we launched our Partnered Home Purchase scheme.

Residents can choose a property on the open market and the council then shares the purchase with them.

The council takes on a substantial stake in the property and subsequently charges rent on the element it owns.

In an area of the country with a very high property-price-to-earnings ratio, we hope our pilot scheme will support up to 10 households and provide a financial return to the council.

There is, of course, an element of risk for us investing in the local property market.

However, we have modelled a variety of scenarios and see this very much as a long-term investment based around the ongoing annual income returns, rather than expecting any increase from rising property prices.

This would be an additional financial benefit.

At the same time, the scheme can also assist those who have reasonable income levels, but struggle to save a large enough deposit for a house while they are renting properties. The first home in this innovative scheme is due to complete imminently.

Care home partnership

The council also recently opened its  extra care housing scheme, Chesil Lodge.

We developed this council-owned site, which was originally in the general fund but was then transferred to the HRA, taking the direct lead, with some funding contributions from Hampshire County Council, Homes England, and a gift from a local resident.

The £16m scheme blends individual living space with communal facilities and care services provided locally.

It has been great to see the development being built out, and it is a really positive example of partnership working.

Taking the lead, as well as some risks, provides benefits to the council and the residents we serve.

It would have been easier for the council to just sell off the land, or retain it as a surface level car park.

However, by using a different approach, one that is entrepreneurial in seeking opportunities, we are trying to establish a greater benefit while, at the same time, enhancing the services we provide to Winchester residents.

The challenge, especially with no revenue support grant, is to keep coming up with and supporting new proposals to help meet the financial challenge, whilst focussing on changing levels of demand and the many other pressures we face.

Joseph Holmes is corporate director (professional services) at Winchester City Council