Agenda item

Report of Corporate Director for Growth and City Development

Councillor Hayes, Portfolio Holder for Housing, introduced the report.

Cath Stocks, Head of Housing Options, presented the report and stated the following:

a)  the report sought approval to commence a procurement process for the supply, delivery and installation of residential equipment and furniture, such as cookers, washing machines and beds, to enable the council to provide furnished tenancies for council tenants;

b)  the provision of furnished tenancies supported tenancy sustainment for many vulnerable and disadvantaged citizens allocated Council housing by providing an affordable option for tenants needing to furnish their new home, many of which have no furniture or appliances when they sign up for a tenancy, nor the savings to purchase them. This could either delay moving in, incurring rent arrears, or tenants resorting to credit, incurring high-cost borrowing and long-term debts;

c)  an inability to fund the essentials to make a home, or being burdened with rent arrears or high debts to do so, can reduce tenancy sustainment levels, incurring additional cost for the Council’s HRA in void turnaround costs, rent loss and potentially a subsequent homelessness duty;

d)  the cost of renting basic furnishings in a furnished tenancy is eligible for Housing Benefit and Universal Credit housing costs, making it affordable for all tenants that need it;

e)  tenants can choose a fully furnished home or just kitchen appliances depending on their requirements and, in the year to 1 April 2023, 885 current council homes had furnished tenancies (3.5% of council tenancies);

f)  furnished tenancies contribute to the Council’s Housing Strategy and the Together for Nottingham Plan through the provision of good quality, affordable housing for Nottingham families and citizens, including Council Plan outcome nine - Better Housing: We will tackle poor-quality housing in Nottingham, regardless of tenure, and continue to drive up housing standards in the city, ensuring sustainable communities and neighbourhoods for residents.

Resolved to

(1)  approve undertaking a procurement exercise to identify a supplier and issue an open tender, in accordance with the Council’s Constitution, for a 5-year contract at a maximum cost of £2.7m;

(2)  delegate authority to the Corporate Director for Growth and City Development to enter into contracts with the successful supplier;

(3)  delegate authority to the Head of Service to set up Contract Purchase Agreements (CPAs) to cover the works to be delivered, and to raise purchase orders under the signed contract, including CPAs for the duration of the contracts.

Reasons for recommendations

a)  Nottingham City Council has provided new tenants with the option of a furnished tenancy since 2016. The provision of furnished tenancies supports tenancy sustainment for many vulnerable and disadvantaged citizens allocated to Council housing. It provides an affordable option for tenants needing to furnish their new home, many of which have no furniture or appliances when they sign up for a tenancy, nor the savings to purchase them. This can either delay moving in - incurring rent arrears, or tenants resorting to credit - incurring high-cost borrowing and long-term debts;

b)  there is provision in the HRA budget for the continuation of the furnished tenancy programme and provision has been made for future expenditure. The 2023/24 budget is £529,400. The 2024/25 budget is £555,870;

c)  the current contract to supply large kitchen appliances and furniture has come to an end and we need to tender and issue a new contract for the supply of household furnishings and large kitchen appliances in Council furnished tenancies;

d)  the contract will cover the delivery and installation of residential furniture and large kitchen appliances, and the removal and correct disposal of old equipment and furnishings where required;

e)  the internal business case to continue with furnished tenancies and the ongoing HRA budget was approved in September 2023 by the Corporate Director for Growth and City Development;

f)  the provision of furnished tenancies is a demand-led service. Take-up has increased dramatically in recent years as the hardship of Covid, lost jobs, homelessness and the cost-of-living crisis have contributed to a rising inability to fund essential items for the home. As of 1 April 2023, 885 current Council homes had furnished tenancies (3.5% of Council tenancies); 75 dating from prior to 2018 and 810 from that point on;

g)  this service provides all new Council tenants with the option to have an un-furnished tenancy or a furnished tenancy prior to sign-up. The furnished tenancy can be either kitchen appliances (cooker, fridge-freezer, washing machine) only or a fully furnished home (kitchen appliances, settee, dining table/ chairs, beds, wardrobes and drawers);

h)  furniture cannot be added to an existing tenancy. It can only be added at the beginning of a new tenancy, but it can go with a tenant if they transfer to a new home and therefore a new tenancy;

i)  with a furnished tenancy, tenants also rent the furniture and kitchen appliances, with service charges levied to recover the costs. Furniture and appliances remain the property of Nottingham City Council and cannot be gifted or sold to the tenant at any time under benefit regulations. Variable charges are levied in addition to the tenant’s rent, dependent on the furniture package needed;

j)  tenants pay a weekly service charge to rent the furnishings and/ or kitchen appliances to repay the investment. Nottingham City Council levies the service charge through the tenant’s rent account and the charges are fully eligible for Housing Benefit / Universal Credit housing costs for qualifying tenants. Weekly furnished tenancy service charges recoup the original investment, cover losses, wear and tear, early tenancy terminations, electrical testing and provide modest surpluses for future investment and to ensure furnished tenancies are not subsidised by all tenants;

k)  furnished tenancies are reviewed at the 5^th anniversary of the commencement of the tenancy. At that point, the tenant has the option to continue with a furnished tenancy – and items subject to wear and tear can be replaced – or switch to an un-furnished tenancy. With the latter, the furniture and appliances and their associated charges are removed. Tenants cannot be gifted or sold the furniture and appliances;

l)  the furnished tenancy programme is on-going, and provision has been made for future expenditure in the Housing Revenue Account (HRA) budget. The 2023/24 budget is £529,400. The 2024/25 budget is £555,870;

m)  the current contract to supply large kitchen appliances and furniture has come to an end and we need to tender and issue a new contract for the supply of household furnishings and large kitchen appliances in Council furnished tenancies;

n)  the contract will cover the supply, delivery and installation of residential furniture and furnishings such as cookers, washing machines, fridge freezer, beds, dining tables and sofas. The intended supply contract is for a period of three years plus the option to extend the contract a further two years subject to satisfactory performance reviews. The estimated spend within the contract for the HRA is £2.7m over a maximum five-year period.

Other options considered

a)  none, as the Council has a duty to supply, deliver and install the items required in council-owned furnished residential properties.