Welsh council may need to spend £875m on top of £546m on housing stock

Richard Youle, Local Democracy Reporter

A Welsh council has spent £546m upgrading its houses and flats – and may need to spend a further £875m to maintain them and meet new standards.

The £546m investment in Swansea Council’s stock of 13,600 council homes works out as an average of £40,000 per property, although running the project incurs various associated costs.

For tenants, it has resulted in things like new roofs, insulation, boilers, wiring, smoke alarms, kitchens and bathrooms.

A council scrutiny panel heard the project to meet Welsh housing standards had created jobs and apprenticeships, and been funded by tenants’ rents and Welsh Government grants – not council tax.

But there was a warning that a new Wales-wide set of standards, including largely eliminating the carbon emissions buildings emit – through gas boilers for example – would be a massive challenge.

Housing officers have estimated that meeting the proposed new housing standards, plus maintaining the existing ones, could cost £875m – equating to £64,000 per property – although that figure could change.

David Meyrick, the council’s housing planning and delivery manager, said the estimate was twice as much as the council had budgeted for in a 30-year business plan.

“What this is going to mean is that it’s going to be a major financial challenge for this local authority,” he said.

Cllr Andrea Lewis, joint deputy leader and cabinet member for transformation, described it as an “extremely high price tag” and the council would have to plan “very, very carefully” in terms of its housing programme.

She said the authority has been “communicating this very strongly” to the Welsh Government, which is consulting on its new housing standards. They are expected to come into force next year.

The new standards would apply to the owners of Wales’ 230,000 social homes, such as housing associations and councils.

A Welsh Government draft consultation on the subject said: “It is acknowledged that decarbonisation will present the biggest challenge to social landlords in achieving this new standard in the short term.”

Mr Meyrick said there would also be a challenge in recruiting and training staff in the technical aspects of decarbonising homes. He said he had a hunch the proposed 10-year compliance period to meet the new standards might be extended to 15 years.

Rent increases

Cllr Paxton Hood-Williams asked how this all might impact council house rents, to which Mr Meyrick replied: “My understanding is that rents are still going to be regulated by virtue of inflation, plus one or two per cent.”

He was also asked if the council ever transferred properties to other social housing organisations. He said: “No, we don’t, in fact we have bought back properties that we’ve previously sold under ‘right to buy’ legislation.”

The planned new standards also comprise new fire safety measures. Mr Meyrick said the number of flats the council would have to inspect and risk assess would be around 10 times higher than currently.

Cllr Lewis said an in-house team had already installed sprinkler systems in council-owned high rise blocks. She reiterated that housing upgrades were not funded by council tax – a point she said was “frequently and often misunderstood”.

A report before the panel said some tenants chose not to have upgrades done, or that there could be physical constraints, which were known as “acceptable fails”.

Mr Meyrick said 70% of the council’s housing stock was now “fully compliant” with the current standards, and that 75% of tenants were positive about the upgrades.

Cllr Peter Black said he saw the results of these improvements and a daily basis and that the work was “outstanding”.

A Welsh Government spokeswoman said responses to the consultation on the new housing standards were being analysed by external consultants.

“Following careful consideration of the responses a final standard will be published some time next year,” she said.

Asked by the Local Democracy Reporting Service what financial or other support could the Welsh Government provide to social housing landlords to meet the new standards, she said: “£220m continues to be available to the sector through the optimised retrofit programme. We will continue to work with the sector to explore other viable long-term funding solutions.”