The Mayor's Executive Decision Making committee was scheduled to discuss a proposal for a long-term lease of Luke House to provide hostel accommodation. This meeting was held on Monday, 5 January 2026.

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

The committee was scheduled to consider a report concerning the income maximisation of temporary accommodation, specifically focusing on a long-term lease for Luke House. The report outlined a recommendation to enter into a long-term lease arrangement with Shuttleworth UK Ltd for the provision of hostel accommodation at Luke House, located at 7-9 Canton Street, London, E14 6JG.

The primary objective of this proposed lease is to significantly increase the Housing Benefit Subsidy income that the Council can achieve for a site already in use for temporary accommodation. The report indicated that securing a long-term lease, defined as more than 10 years, would allow the Council to recover 100% of the Local Housing Allowance (LHA) 2025 rate through Housing Benefit subsidy, as opposed to the capped rate currently recoverable. This is intended to address the Council's expenditure on Housing Benefit Subsidy Loss, which occurs because the amount the Council pays to landlords for temporary accommodation exceeds the amount it can reclaim from the Department for Work and Pensions (DWP). The report stated that the Council was forecast to spend £13.3 million on Housing Benefit Subsidy loss in the current financial year.

The report also noted that a small reduction in the starting nightly rates had been negotiated as part of the proposed lease terms. The lease is intended to be for a period of 10 years and 1 day. Luke House is an 85-room property owned and operated by Shuttleworth UK Ltd, which the Council has used for hostel placements since 1999. Currently, 50 rooms are used for single residents and 35 for rough sleepers with complex needs, with support provided by the homelessness charity St Mungo's.

The report suggested that entering into this long-term lease would have minimal impact on the residents of Luke House, as the rent charged to residents would not change. It was also highlighted that securing this in-borough accommodation would maintain stability of supply for the approximately 200 single-person households the Council needs to house in hostel accommodation at any one time.

The report indicated that an equalities impact screening assessment had been undertaken and found no negative or positive equalities impacts, as the proposed changes were neutral for affected households. The Council's Temporary Accommodation placement policy is operated in line with the Public Sector Equality Duty, with affordability considered before placements are made.

The Chief Finance Officer's comments indicated that the longer lease would reduce the Council's current costs and provide certainty around future expenses. Legal Services confirmed that the Council, as a local housing authority, is authorised to provide housing accommodation and can acquire land by agreement for its statutory functions, including leasehold interests. They also noted that the Council has a legal duty to achieve Best Value and secure value for money.

The report recommended that the Mayor agree to the Council entering into the long-term lease arrangement with Shuttleworth UK Ltd and delegate authority to the Director of Housing Options and Homelessness to agree the contractual start date 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. This decision was considered a Key Decision due to the expenditure cumulatively exceeding £1 million. The report also noted the intention to use special urgency and Call-In Urgency procedures.