'Difficult decisions' ahead for East Devon's debt-ridden housing department

Many properties in disrepair

East Devon District Council is looking at how it can afford to run its housing service in the coming years.

The council requested nearly £12 million in extra borrowing last month to help fill a black hole in its housing department’s finances. Now it faces some difficult choices.

“There will not be easy decisions for any member of cabinet,” Catrin Stark, East Devon District Council’s interim director of housing and health, told the authority’s housing review board.

“There will be difficult decisions about the viability of retaining the stock as a local authority, especially given that other local authorities are stating an average cost of £50,000 being required per property to ensure it meets current requirements and standards.”

Councillors want more timely financial information about its housing service, given that the housing review board was, at its August meeting, assessing data for the last financial year that ended in March.

There were also questions about how the service would save £250,000 a year.

Cllr Christopher Burhop (Independent, Newton Poppleford and Harpford) who sits on the housing review board, said the group “needed to see financial indicators… given where we have found ourselves.

“We have to reassure ourselves and rebuild confidence that we, collectively, are in control of this,” he said.

“That information should be brought to this board for us to scrutinise, as I know it is available and so it should be part and parcel of these meetings.”

He said that in mid-March, the review board had been told the overspend in the housing department would be nearly £5 million for the year, “but it ended up, just 17 days later, being a [much larger] overspend”.

Cllr Colin Brown (Conservative, Dunkeswell and Otterhead) asked whether it would be more prudent for the council to sell its empty properties – known as voids – rather than invest in bringing them back into service.

Ms Stark noted that a “disposal process” would be among the options put to councillors in the autumn.

The council is expecting a report into the state of its housing stock soon, potentially by the end of the month.

Officers said roughly 87 per cent of its properties had now been surveyed, and work was ongoing to ensure the information could be easily uploaded onto the council’s system.

It is hoped this will illuminate how many properties are in disrepair, and the  work needed to bring them back into use.

The council has acknowledged it has a “significant number of long-term voids”, something that represents a problem through lost rent to the council, and potentially larger repair bills than homes that have been lived in more recently.

It has budgeted £2.5 million this year on bringing void properties back into service.

Officers also noted that the council had paused any purchases of properties available on the open market, those which tend to be ‘right-to-buy’ homes.

Before the request for extra borrowing, East Devon's housing revenue account already had nearly £85 million of debt, which costs £2.8 million in annual interest payments.