Cllr Tatler on the 'perfect storm' facing Brent Council finances

 Cllr Tatler made no bones about it at Brent Scrutiny last night: Brent Council is facing a 'perfect storm' regarding its finances:

 

 

As already reported by Wembley Matters the combination of increased homelessness (150 families a week seeking help from Brent Council), inflation, rising interest rates, rising private sector rents and reduced private sector rental properties as a result of landlords exiting the market; combined has led to a £13m overspend by the Council.

The Resources and Public Realm Scrutiny Committee delved deeper into the repercussions and possible mitigations last night.  

One focus was the 600 plus empty properties that could easily house the 500 families and single people (858 people in all) currently in expensive bed and breakfast accommodation.  The challenge was how to contact the owners so that the Council could lease the property.  Some councillors there were more than 600 empty properties and asked how the  Council collected the figures. A councillor asked if this coudl be checked against the most recent census. In response Cllr Tatler said that the Council could reactivate the campaign to ask residents to report empty properties.

Contact Empty Property Team

Opening hours: Monday to Friday from 9am to 5pm

Phone: 020 8937 2384 option 1 then option 4

Email: empty.property@brent.gov.uk

 

There are also 600 empty council properties on the South Kilburn estate in blocks that are due to be knocked down. However, officers said many are not habitable and were needed for decanting.

There was a need to look at buying new properties and building on existing council land.  There was a corporate exercise across the Council to ensure it is not missing out on potential subsidies but subsidies were also reducing:

Extract from Officers' Report

The loss of subsidy cost is forecast to rise to £8.6m in 2023/24 (from £3.7m in 2022/23) as rents increase but the Local Housing Allowance  remains unchanged at its current level. Benefits paid to those living in Temporary Accomodation  is limited to 90% of the 2011 LHA rates which, particularly since the pandemic, is significantly less than rents being charged by most private sector landlords today. A percentage of the Housing Benefits subsidy received from DWP when compared to the total amount paid to residents is forecast to reduce by 14% when compared to the average over the last three years (67% versus a 81% average). 

Councillors also asked about loss of Business Rates with commercial properties left empty. Could the Council charge double if left empty for more than 2 years as with empty homes? They were told that was not currently within the Council's powers. Cllr Tatler said that 90% of Brent businesses are SMEs (small and medium enterprises) who had been badly hit and thus no longer viable. Chair Cllr Conneely agreed with Cllr Malloy that she would rather be asking profit-making businesses to pay more than hard-pressed residents.

Cllr Malloy said that he knew of a commercial property in South Kilburn where the big property company owner had smashed all the toilets so they they could claim the property was unusable and therefore not pay business rates. This resulted in an interesting exchange with Brent Council leader Muhammed Butt:

 

 

 Questioned about the possible use of reserves to help meet the deficit the Head of Finance said that Brent's reserves around the mid-way point for London Councils. Much was earmarked for projects and it was prudent to have reserves available for unexpected events such as a pandemic. However, there was a case for a review of use of reserves that were not earmarked. Cllr Tatler pointed out that if reserves were spent they would have to be rebuilt in subsequent years. More information on the status of reserves will be included in the Budget report in February.

 

The Head of Finance noted the cross-party  'Eastbourne letter' to the government published on Wembley Matters LINK from 119 council leaders about temporary accommodation costs. It was signed byu Muhammed Butt.

 

Recommendations:

 

1. Council to lobby government on business rates.

2. Council to have a clearer plan on effective collection of business rates.

3. Council to investigate use of census data to help identify empty properties.

4. Council to work on ways of turning empty properties into usable properties.

Information requests:

Detailed information of subsidy loss.

Data on voids.

List of empty properties if data legislation allows.