London councils will join government-funded homelessness scheme
London councils are preparing to join a scheme to provide accommodation for homeless people with government funding that could save them more than £100m.
Capital Letters, a company being set up by local authorities in the capital, will rent or lease properties to move households from temporary accommodation into affordable private rented homes.
The homes will be a mix of private rented sector properties let by the property owner to households nominated by the councils and properties leased directly from landlords or managing agents.
As well as receiving £38m over three years in grants from the Ministry of Housing, Communities and Local Government, it is intended to save councils money by enabling them not to compete with each other when buying homes.
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The vehicle will also be able to access 100% Local Housing Allowance from the Department for Work and Pensions, which across London is on average £35 a week higher than the current rate for borough-let temporary accommodation.
Brent, Tower Hamlets, Haringey and Waltham Forest councils have declared their interest in joining the programme, but it is understood that the number of local authorities eventually joining will be in double figures.
Listen to an episode of The Housing Podcast discussing the cost to local authorities of temporary accommodation
Inside Housing understands that around 15 London boroughs will present reports to their members concerning possible membership before the end of 2018.
The number of homes allocated to each participating local authority will be calculated proportionately to the number of staff it seconds to the company.
Before the end of the year, the government is expected to announce the number of councils to have joined in the first phase, with the scheme set to go live in early 2019. A year later, the scheme will allow more London boroughs to join in a second phase.
According to papers submitted to Tower Hamlets Council, it is envisaged that by the end of the third year, Capital Letters will have a staff of 270 officers and an annual income of £238m. By this point, it is also expected to have secured almost 20,000 properties.
The same papers estimate that the aggregate financial benefit to London boroughs collectively is £116m in terms of cost savings.
The Capital Letters proposals were the result of a working group of 22 London boroughs set up by the group London Councils and developed with MHCLG.
