Dragon Interview: Sarah Creedy GBC’s Housing Supremo

Published on: 18 Sep, 2014
Updated on: 21 Sep, 2014

Housing and the need for housing is an especially hot topic at the moment. There are more than 3,oo0 local people on the council list for those with a housing need and no sign that the need will decrease. After many years the council is committed to build new houses for this sector.

Sara Creedy (Con, Holy Trinity) is the lead councillor with the responsibility of overseeing this area of work at Guildford Borough Council (GBC). Here she talks to The Guildford Dragon NEWS about herself, the role and the current situation…

Questions asked by Martin Giles

Cllr Sarah Creedy

Tell me something about your background.

I was born and went to school in Kent, studied law at Cambridge, finishing with a year at Guildford Law College. I married my husband Adrian who was also a solicitor and now have three children, the eldest of whom is married, the youngest still at school. I took articles with Linklaters, a city firm, qualified as a solicitor and worked in commercial property department there, finally leaving when second child was born.

What about your working life?

Worked on development agreements, financing for larger property schemes, including the Channel Tunnel and shopping centres and worked part-time for a Guildford firm when we moved here in 1995. I gave up practising law altogether when I get more involved in local politics; as a mother of young children either sleep or the job had to go.

What made you decide to become a councillor?

I wanted to get more involved in local politics because there are only so many times you can complain about how something is done before getting on and doing it yourself.

Why did you choose the Conservative party?

Because the Conservative party recognises responsibilities as well as rights, but also recognises the need for society to support those who are unable to support themselves.

How many hours a week, on average, do you spend on council business?

I am fortunate not to have work outside the home so am therefore relatively free to give as much time as is required to council work.

Council business roughly falls into two halves. Firstly, time spent dealing with constituents, reading papers and preparing for and attending council meetings: executive, scrutiny, planning, working groups etc, and giving policy direction to officers in my portfolio area of responsibility. Secondly, being involved in other organisations which only contacted me because I was a councillor, these include: being chairman of governors at the RGS and Lanesborough, trustee of Guildford Poyle Charities and governor at Abbot’s Hospital. So taken together “council” work takes about 30 to 35 hours each week, including three to four evenings each week.

Guildford is an affluent town why do we need social housing?

Guildford is an affluent town but with pockets of real deprivation – Dr Helen Pocock did a useful piece of research some years ago entitled Hidden Surrey which highlighted this. So there is an absolute need for social housing for those with exceedingly low incomes.

But there is also a growing need for some form of housing assistance to those people who while in work, many of them full time, are still unable to access market housing because of its high costs. The Draft Local Plan sets out the stark statistics on this – the Guildford affordability ratio is 10.89 compared to a national figure of 6.45 – which means half of all Guildford residents cannot rent or buy on the open market.

The council owns around 5,100 social housing units so we house about 10 per cent of the borough. But we have around 3,400 households on our joint housing needs register, 2,500 of whom have an urgent and significant housing need. In practice this can be a family of two working parents, with two children living in a one bedroom flat and facing a wait of up to four years before they receive a two-bed home. I could give many other examples from our waiting list.

It’s also important to realise that affordable housing comes in several shapes and forms. Social housing, owned by GBC, can be let on social rents which are typically around 50-60 per cent of market rent levels, or on affordable rents, which are up to 70 per cent of market rents, or the relevant local housing allowance rate, whichever is lower.

Other social housing providers such as housing associations also let on affordable rent levels. Then there is intermediate rent, about 80 per cent of market rents, and shared ownership where the occupier pays mortgage for part of the freehold and rent for the remainder, hopefully gradually increasing his/her share of the freehold over time. Hence a huge spectrum of tenants in affordable housing from those existing solely on benefits to those in fairly well paid jobs.

Cllr Sarah Creedy welcoming new residents to a social housing project at the former White Hart Court site in Ripley.

How does the financing of social housing work? How big is the budget and where do the funds come from?

Since 2012 the financing of social housing has been under local management. This was brought about by Housing Revenue Account (HRA) reform, which is a whole subject in itself. Put simply, the council, went from paying “rent” to having a “mortgage” for the council owned stock. We “bought” ourselves out of a negative subsidy system where by we were regularly sending £12million per annum to central government, for a one off payment of £196 million.

I hasten to add, we had no choice in this matter although it has actually proved to be advantageous to GBC and our tenants here in Guildford. This was funded by a loan secured on our existing stock on which the annual interest payments are around £8 million. From our existing stock we collect rents of approximately £29 million. These are then used to provide for interest payments, maintenance and improvement of our current homes and provision of new homes.

Each year we typically spend up to £10 million on the former and add £7-8 million to our reserves for the latter. The council is now in a position to directly deliver its own social housing. We currently have 65 new homes in development on site with plans in place to provide up to 150 over the next couple of years. We also work with other social housing providers and commercial developers who provide affordable housing as part of larger development schemes.

Is more social housing the only way to give preference to those with a local connection?

All of our social housing is allocated as fairly and as openly as possible on the basis of peoples need. We have recently revised our allocations policy and emphasised the significance of a local connection, obtained through either living or working within the borough. In some rural sites the local connection is defined even more tightly.

Providing new social housing is only one way of housing those in need. The other important way is to ensure best use of our existing stock. Before reforms in 2012, all social housing was let on tenancies for life. We are now able to grant fixed term tenancies. This means we have slightly more ability to ensure homes are only available for as long as they are needed. But the majority are still occupied under the old regime.

What do you think of the “bedroom tax”?

Under the old regime the under occupation penalty, which some call the “bedroom tax”, can have an impact. We have seen in Guildford a number of homes becoming available to larger households as people have been encouraged by the bedroom tax to downsize. This is clearly a huge subject but the short answer is that to a small extent the tax is working to help us make best use of limited social housing.

How do you envisage Guildford’s social housing sector a hundred years from now?

Wouldn’t it be great if there was no need for social housing in 100 years? But as prudent landowners our town and our council should plan for a continuing need, and set aside funds to keep our current stock in good repair and condition as well as money to build new properties. Our HRA business plan runs over a thirty year period as that is generally seen as a reasonable lifetime for the major components of houses, for example roofs, but it is continually refreshed so we have every confidence that Guildford’s social stock will be around for as long as it is needed.

Responses to Dragon Interview: Sarah Creedy GBC’s Housing Supremo

Roland McKinney Reply

September 23, 2014 at 11:58 am

I’m sure Cllr Creedy is a dedicated councillor, but I cannot let some of her wilder assertions go unchallenged.

I’ll start with her statement that Guildford’s high affordability ratio of 10.92 means that half of Guildford’s population cannot rent or buy on the open market. If this was accurate how can it be explained that in the 2011 census, it was recorded that there were 53,973 households in Guildford, of which 37,148 were owner occupied, with a further 702 partly owned through schemes such as part ownership?

Put another way, more than 70 per cent of Guildford households were either owned or part owned by their occupants. If her statement were true then surely there would be thousands of homeless people walking the streets of Guildford. It was a gross exaggeration and it may deceive the casual reader.

The same is true for the affordability ratio and the comparison with the rest of the UK. This comparison was largely irrelevant, it would be more appropriate to compare this ratio with the rest of Surrey – the affordability ratio for the borough is almost identical with the average for Surrey, which was 10.89.

In both Waverley and Woking, the other areas considered in the, so far unpublished, Strategic Housing Market Assessment (SHMA), the affordability ratios were higher, at 12.17 and 11.43, respectively.

Note too that this affordability ratio is based on lower quartile earnings – the section of the population least likely to buy a home. It infers the expectation that everyone in the country who has an income should be able to buy a home, an expectation that is just absurd.

On the borough’s record for providing social housing – Cllr Creedy has been a councillor since 2003: using her figures, in that period the social housing account up to 2012 produced a surplus of about £63 million, and a surplus since then (to the end of this current year) of a further £22 million. This gives a total surplus from social housing over Cllr Creedy’s tenure as a councillor of about £85 million. Cllr Creedy tells us that the council will build 65 social housing units over the next few years. Well, hooray for that!

Using Lambeth Borough Council’s figure for building costs (from 2013) of £140 per square foot (ignoring land purchase and builder’s profit) and the following property areas (similar to those used by Lambeth) of a three-bed apartment at 1000 sq ft; two-bed @750 sq ft; and a one-bed @ 500 sq ft; with the social housing surplus accumulated since 2003 – Guildford Boropugh Council could build, using land they own, 607 three-bed units, or 809 two-bed units or 1,214 single bedroom units.

Of course, builders margins would reduce these numbers, but it would appear that much of the social housing register problems described by Cllr Creedy are a consequence of inaction by her council – and that the response of building 65 units over the next few years is insignificant when compared to the surplus that has been made, and will continue to be made, on social housing in the borough.
Ben Paton Reply

September 24, 2014 at 8:50 am

The council has not explained its social housing policy in a coherent manner.

We read in this year’s draft annual report that it has invested in new social houses for the first time in twenty years. I was astonished. The first for twenty years?

The 2002/3 accounts show that the council owned 5,698 houses in that financial year. Mrs Creedy reveals it now has 5,100 houses. Where did the 600 odd houses go? What was the capital re-invested in? If the council had kept those houses it would have reduced the housing waiting list.

Mrs Creedy would have us believe that ‘the council is now in a position to deliver its own social housing’, as if anything had changed. The council, as I understand it, has always been able to build council houses. And it has relationships with Housing Associations which allow it to influence the number of houses which they build.

I find it notable that Mrs Creedy writes nothing about any of this in the council’s annual report. The 2002/3 accounts provided more information than the current set of accounts.

It is just not transparent to argue that the shortage of council houses justifies the SHMA or embarking on a strategy of wholesale changes in the green belt boundaries.

This Council seems incapable of setting out and explaining a clear strategy and getting the strategy transparently debated before seeking to implement it.

It decided to commission work to change the green belt boundaries (The Green Belt and Country Side Study) before answering the logically prior questions i. is it necessary? ii. do we have the exceptional circumstances required by law to justify the change? That was not open or transparent. It may yet prove to have been a waste of public money.

Mrs Creedy’s words in council would portray her as anxious to provide homes for the people on the housing list. If she has been a councillor since 2003 she has had over ten years to do something about it. The fact that the number of council houses owned by the council has declined over that time and that disclosure of information about these matters has deteriorated and not improved is a serious indictment. Her record speaks louder than her words.

Does Mrs Creedy support investing the council’s surplus funds into commercial property in the centre of Guildford – which is what the council is presently doing? Don’t the funds for those investments come from the surpluses generated by the stock of council houses? Should not that surplus be spent on dealing with the social housing issue and paying off the loans (taken at concessionary rates of interest, i.e. only one per cent over what the Treasury pays) in priority to buying commercial property at what may prove to be the top of the property cycle?

The policy is not coherently explained. Many suspect that that is because it is not coherent.