Hastings Borough Council’s financial woes have been mainly attributed to the increasing costs of their statutory duty to house residents who become homeless and must be housed in temporary accommodation until suitable permanent homes can be found. The council’s budget is in a precarious position, with temporary housing costs being one of the main reasons the council are in financial difficulties.
This upward trend in temporary accommodation costs was highlighted all the way back in a cabinet report in October 2018. But it wasn’t until last year that the seriousness of the situation was fully comprehended, and a special task force was set up to look at drastic options to reduce the council’s costs. A number of cost saving initiatives have been implemented, and all seem sensible, but should have been in place years ago.
A cornerstone objective of the council’s new task force was to see an increased supply of social and affordable housing coming on stream, with some of the bigger developments in Hastings due to completed in the next three years. A total of 279 affordable homes were anticipated to be built within the next three years, which would help support both direct and indirect move-ons for households in temporary accommodation. Half of those homes earmarked were to be provided by a company called ilke Homes.
ilke Homes were a modular house builder based in North Yorkshire. Houses were built in a factory and then put together on site which can dramatically speed up the process of construction.
In an unpopular and controversial move, the Labour administration sold off the playing fields in Harrow Lane to ilke Homes so that 140 affordable and social housing units could be built. However, the company was relatively new, did not have a proven track record of delivery and had never made a profit.
Last Friday (30th June) ilke Homes went into administration, with nearly £1 billion of orders on their books. They are understood to have approached major volume house builders to bail them out but couldn’t tempt them to make an offer even after inviting bids of anything over one pound.
Any delay in building out the Harrow Lane site will have financial repercussions for the council. With ilke Homes in administration it is unknown how long the receivers will take to sell Harrow Lane playing fields on to a new owner. A big question mark hangs over whether any new developer will be obligated to build social housing in the same numbers or at all.
The collapse of ilke Homes will have a huge impact on council budget projections and Labour’s promise to build 500 affordable homes by 2027.
