Kensington & Chelsea RBC is set to spend up to £75m on securing new homes for victims of the Grenfell Tower fire disaster.
About £20m is being earmarked for buying permanent homes, while up to £40m is due to be set aside to secure permanent accommodation at social housing rents from registered providers.
A further £15m is to be made available to 17 leaseholders, whose properties were destroyed in the fire, as an interest-free loan from the council that will enable them to buy another property. This is on top of insurance payouts to 14 leaseholders of between £138,000 and £178,000.
While the council, which had £263m reserves in its housing revenue account at the end of March 2017, intends to try and recover some of the costs in relation to leaseholders from the government it has decided “it would be prudent to assume that no support will be forthcoming” on that front.
Reports outlining the business case for releasing these funds are due to go before councillors on Thursday.
More than 100 households were left homeless by the fire which devastated Grenfell Tower in June this year. The council is currently spending more than £1,000 per household each week on temporary accommodation.
None of the reports state exactly how many properties the council intends to purchase.
However, Richard Egan, director of corporate property, said in his report proposing the release of £20m to buy homes in the north of the borough that market research had “identified a range of properties within a price range of £500,000 - £1,500,000”. There will be a “focus on 1 and 2 bedroom properties”, the report said.
It is anticipated £20m will cover all professional and legal fees and stamp duty costs in relation to the property purchases.
To secure permanent accommodation at social housing rents from registered providers, interim chief executive Barry Quirk, in consultation with director of finance Kevin Bartle and director of housing Maxine Holdsworth, is to negotiate compensation agreements with housing associations worth “up to £5m per scheme or development”. This would cover the difference between social housing rents and what the registered providers would have expected to receive, the report said. Should any compensation agreement exceed that threshold it would require councillors’ sign-off.
“A number of registered providers have expressed their commitment to making their new build properties and existing voids available to Grenfell residents,” the report said. It added some residents have been told they “may be able to stay” in the temporary accommodation they were placed in after the fire “if they wish”.
While the council believes it is able to use its money for this purpose under section 24 of the Local Government Act 1988 which allows the provision of financial assistance to buy homes, “confirmation will be sought” from communities secretary Sajid Javid “and if necessary an application for specific consent” will be applied for.
Once the accommodation has been secured, tenants “will receive accommodation free from charges for rent, service charges, council tax and utilities bills” in the first year. The report said the council will pay for them “and seek to recover its costs from the government under the agreed compensation package for the Grenfell tragedy”.