Decision details

There are confidential appendices to this report, which are exempt by virtue of paragraph 3 of Schedule 12A of Part 1 of Schedule 12a of the Local Government Act 1972 because they contain information relating to the financial or business affairs of any particular person (including the authority holding that information).

To approve the acquisition of the properties on individual leasehold interests of 3
years each and to permit the concurrent grant of individual underleases for 3 years less 2 days
to Fairhive Homes Limited.

Afghan Relocations and Assistance Policy (ARAP) scheme was set up in April 2021. It is for Afghan citizens who worked for or with the UK Government in
Afghanistan and who are in danger of Taliban reprisals because of their association with the British military campaign. British and American military forces withdrew from Afghanistan in August 2021 and the Taliban seized control of the capital city of Kabul at this point. After the militants’ takeover, HM government promised to resettle 20,000 refugees and evacuated
15,000 Afghans as part of Operation Pitting.

More than 300 local authorities pledged to find homes for those who qualify under the scheme, Buckinghamshire Council was one of them. Afghan citizens who are eligible for relocation to the UK under the ARAP scheme may relocate with a partner, dependent children and additional family members.
Buckinghamshire Council does not have its own social housing portfolio, because the legacy Councils undertook housing stock transfers between 1999 and 2011. The Council does own ad hoc residential properties, but these are for specific purposes, such as service accommodation for schools, parks and cemeteries or where the properties are required by
the Children’s Services or the Adults & Health directorates. It is therefore necessary for the Council to acquire new residential housing stock if it wishes
to fulfil its pledge to find homes for 30 Afghan families. The lack of a social housing portfolio is also the reason why the Council would not have the skills or capacity in house to manage the letting of these homes to Afghan refugees, so whilst the Council need to acquire
properties to fulfil the requirement, it will also be necessary to underlet the properties to a
registered social landlord (RSL), who will handle the letting and ongoing management.

The Council has already accommodated some of the families on an alternative scheme, but has also been offered 9 residential properties by the Ministry of Defence (MoD), to help meet the overall target. The Asylum & Migration and Property & Assets teams have
therefore been working with the MoD to agree terms for leases of the properties and have also been in negotiations with Fairhive Homes Limited, formerly known as Vale of Aylesbury Housing Trust (VAHT). VAHT received the Aylesbury Vale District Council housing stock transfer.

The aim of the negotiations was to ensure that the property acquisition and disposal process would be cost neutral for the Council, but also to ensure that the Council would be able to underlet the property to an RSL. This means that the RSL must be able to fund the
management of the properties, including the cost of repairs and statutory compliance, whilst receiving a rent that is no more than the local area housing allowance in each case. The Council’s Asylum & Migration team have funding for a package of support for the refugees, to help furnish the houses and to assist the refugees with orientation and integration, but there is no funding available for day to day management of the properties, so this has to be shouldered by the RSL and be paid for out of the rent they can collect.

The MoD have agreed to hand over each property in a state that demonstrates compliance with statutes concerning gas safety, electrical safety, energy efficiency, legionella risk and fire safety. Fairhive have agreed that during the term of the lease they will be responsible for maintaining statutory compliance at their own cost. There will also be a schedule of
condition for both sets of leases and each party has agreed to bear their own legal costs.
The Council has undertaken condition surveys of the properties and they are all in fair condition and capable of being occupied immediately, subject to all statutory compliance certificates being provided up front.

Instead of granting underleases to Fairhive,
the Council could have decided to try to grant the occupational tenancy agreements itself and
to therefore benefit from the profit rent that is potentially achievable. The issue with this
alternative option is that the Council no longer employs teams of specialist housing officers and so resource would have to be found from other teams, which would compromise existing work loads and introduce the risk of the properties not being managed correctly. Similarly, if the Council was to be the party responsible for granting occupational rights, the Council would
be responsible for repairs and statutory compliance, but not on a large scale, so the unit cost
of this would likely be higher for the Council than it would be for Fairhive. It makes sense to have a specialist let the properties to the refugees, because they have the requisite skills set to be able to do the job. Buckinghamshire Council could also have sought to charge a higher rent to Fairhive than it proposes to pay to the MoD (known as profit rent), because the properties are being let to the Council at rents that are below the market value. However, if the Council had done this, Fairhive would not have agreed to take responsibility for management, repairs, maintenance
and statutory compliance checks, which would leave the Council with the obligation instead. The reality of this option is that Fairhive are likely to handle these tasks more easily than the Council, because they manage a large portfolio of residential properties and they have systems that enable them to discharge these responsibilities efficiently,routinely and at scale.

It therefore makes more sense from both a practical and a financial point of view, to pass on the responsibility for meeting these obligations onto Fairhive, allowing them the ability to cover their costs from the profit rent. It is also worth mentioning here that Fairhive were not initially enthusiastic about assisting the Council in this project, because they had concerns
about financial viability. If Fairhive were not able to cover their costs, they would not have agreed to be involved and it’s unlikely that any other RSL would have wanted to either. Lastly, Buckinghamshire Council could have tried to source the properties from the private rental market rather than from the MoD. Had it done so, the Council would be paying much
higher rents, the project would then be unlikely to be cost neutral and not viable as a result.
The MoD clearly wants to try and assist in this situation, because Afghan citizens have helped
British armed forces, so it is fortunate that they are willing to work with Buckinghamshire Council on the project.