Plans to dissolve Luton council's partnership with social lettings agency shelved

Plans to formally dissolve a partnership between Luton Borough Council and a social lettings agency have been deferred for now.

Confirmation of the end of their collaboration was set to be endorsed by the local authority’s executive this week. But the item was dropped from the agenda without detailed discussion during Monday night’s (November 6) committee meeting.

Set up in July 2019, the joint venture partnership between LBC and lettings agency Squared Housing Association was meant to help manage the private rented sector market and assist with homelessness, according to a report to the executive.

The housing association has 107 properties in management, where the council has discharged its homeless duty, explained the report.

It stated: “These tenancies will continue until they naturally come to an end. Squared will then decide if they should be renewed or the tenants leave.

“The partnership’s targets included raising property standards in the private rented sector and securing lower market rents for low income households.”

The report continued: “There was also an ambition for Luton Lets Squared (LL2) to take on sales of homes, while the initiative attracted £628,000 of set-up government funding from the Department for Levelling Up, Housing and Communities.

“A recommendation from council officers was accepted at that time to create a joint venture company with the housing association which can deliver estate agency sales services locally.

“This would generate extra income to protect the financial viability of lettings activity under LL2. Unfortunately, since the executive decision, nothing has moved forward on the sales front with LL2.

“With the government grant almost spent except for £32,000, the viability of the joint venture wasn’t sustainable. No actual company was formed, so the partnership remained an entirely voluntary arrangement.

“Squared Housing Association exercised its option to serve notice to the local authority to leave the partnership with effect from July 31st 2023.

“Council officers didn’t contest this, as it wasn’t felt appropriate to put any funds at risk and considered to be the correct decision.

“This was to dissolve the partnership effectively and to manage any challenging issues,” added the report. “The arrangement was governed by a memorandum of understanding, but didn’t create a separate legal entity.

“It was always acknowledged that taking on property sales would help to sustain the agreement into the future, but for various reasons this hasn’t happened.”

The joint venture had “run into difficulties sustaining itself beyond the government grant, as additional money wasn’t being generated from its activities”, it was said.

The report continued: “Given that there was going to be an issue about financial sustainability and that Squared issued notice to withdraw, officers felt that it was appropriate to let the partnership end.

“While the partnership has been dissolved, there are still 107 properties accommodating families in need of suitable housing and this will continue.

“A chance exists to reshape the service operating in the LBC housing service to offer better options in the private rented sector. This is being explored through the proposed reorganisation of the temporary accommodation team.”

The executive has delayed endorsing the dissolution of the joint venture partnership.

SOURCE: Luton Borough Council executive committee (November 6) meeting.