Local authority to build 20 new homes while funding is sought for more

The SIC is to go ahead with building an initial tranche of 20 new homes at Hoofields in Lerwick following its abandonment of a multi-million pound contract to build 76 houses in the area earlier this summer.

In July councillors decided to ditch plans to award the lucrative £7.7 million contract to local construction firm DITT, which had been led to believe its tender for the work had been successful, so that alternative funding avenues could be explored.

At a meeting of the social services committee in Lerwick Town Hall today, members agreed to put out a fresh tender for a contract to build 20 affordable rented homes “at the earliest opportunity”, while other options continue to be examined.

Initial ground works have been carried out at the Hoofields site and a report from head of housing Anita Jamieson estimated that the cost would be between £2 million and £2.2 million, with £600,000 of that coming from a Scottish government grant.

Ms Jamieson said the next few months would be spent “looking at what the best options are for the site, all to the good of making everybody’s resources go further if we can”. She said the number of houses to be built “may be more” or “may be less” than the 76 initially planned. The aim is to have fully fleshed-out proposals ready in time to bid for 2012/13 government funding.

According to her report, the Staneyhill and Hoofields area already has a “high concentration of rented properties”. The hope is that a combination of building new council houses, selling serviced sites to first-time buyers, developing shared ownership schemes and working with the likes of Hjaltland Housing Association can improve the mixture of housing in the area.

Ms Jamieson told councillors that many of the existing occupied chalets at Hoofields were “beyond their useful shelf life”. Many are used only for temporary accommodation and tenants will either be moved elsewhere or to one of the 20 new houses before the chalets are demolished.

SIC housing spokesman Allison Duncan said things had “moved on dramatically” since the contract was abandoned in July. Though he had been “extremely disappointed” that the work had to be postponed, he hoped further government funding which had hitherto not been available could now be levered in.

The Hoofields scheme forms part of efforts to tackle a waiting list which has been hovering around the 1,000 mark for several years. A newly-agreed housing strategy for 2011-2016 says there is a need for between 530 and 721 new homes between now and 2020, which would mean building roughly 50-70 houses a year for the next decade.

During David Clark’s short tenure as chief executive, the SIC made a commitment in principle to set aside £20 million over a five year period for house-building, but since then the local authority’s financial situation has worsened considerably.

Ms Jamieson said the new strategy was designed to demonstrate the level of need for affordable housing, putting the council in a position to bid for future government cash.

It is not clear how much the council itself will be able to contribute in terms of paying for new homes. Ms Jamieson said that between the local authority, Hjaltland and other developers’ initiatives, the building of 50-70 houses annually should be doable but would be “entirely dependent” on the availability of funding.