The Mayor's Executive Decision Making committee was scheduled to consider a proposal for a long-term lease of Luke House to provide hostel accommodation. This decision was presented as a key element of the council's strategy to maximise income from temporary accommodation.

Temporary Accommodation Income Maximisation – Long-Term Lease of Luke House

The committee was scheduled to discuss a proposal to enter into a long-term lease for Luke House, located at 7-9 Canton Street, London, E14 6JG. This property is currently used by the council to provide hostel accommodation for homeless single residents and rough sleepers with complex needs, with support from the homelessness charity St Mungo's. The report indicated that securing a long-term lease of over 10 years would allow the council to reclaim 100% of the Local Housing Allowance (LHA) rate through Housing Benefit subsidy, rather than the capped 90% of the January 2011 LHA rate that is currently reclaimable.

The report highlighted that the council is currently forecast to spend £13.3 million on Housing Benefit Subsidy loss in the current financial year. This loss occurs because the council pays 100% of the rent for temporary accommodation but can only reclaim a maximum of 90% of the LHA rate from the Department for Work and Pensions (DWP). The proposed long-term lease with Shuttleworth UK Ltd, the owner of Luke House, is intended to address this financial gap.

The report stated that the council needs to house approximately 200 single-person households in hostel accommodation at any one time, and securing Luke House on a long-term lease would maintain stability of supply within the borough. It was also noted that the rent charged to residents would not change as a result of this lease agreement, and the impact on affected households was assessed as neutral. The report indicated that the council has a statutory duty to achieve Best Value and secure value for money in its use of resources.

The recommendations presented for the Mayor's consideration were:

• To agree to the council entering into a long-term lease arrangement with Shuttleworth UK Ltd for the provision of Temporary Accommodation at Luke House.
• To delegate authority to the Director of Housing Options and Homelessness to agree the contractual start date of the lease and any other minor contractual issues.

The report was classified as PART EXEMPT, with Appendix 1 being exempt under paragraph 3 of Schedule 12A of the Local Government Act 1972, relating to information about the financial or business affairs of any particular person. The decision was deemed a Key Decision due to the expenditure cumulatively exceeding £1 million. The report also noted that special urgency and Call-In Urgency procedures were proposed for this decision.