Agenda item

The Homes Sub-Committee is asked to:

1.    Note the underlying principles and assumptions that will be used as a basis to develop the Housing Revenue Account Business Plan.

2.    Consider whether there are any comments it wishes to make on these underlying principles and assumptions, which can be taken into account during the preparation of the Housing Revenue Account Business Plan.

The Sub-Committee considered a report set out on pages 57 to 59 of the agenda which provided an overview of a statutory requirement for the Council to prepare a 30-year Business Plan for the Housing Revenue Account on an annual basis to set out the long-term financial position of the ring-fenced general fund account.

Councillor Hale and Susmita Sen, Corporate Director for Housing, introduced the report and stressed that it was a statutory requirement for the Council to prepare an HRA business plan, and that the Council was keen to ensure that the business plan became a more robust part of the business planning process.

The first question considered how this year’s HRA business plan compared to the last year’s one, and what were the principles and priorities coming through. It was explained that the largest priority at the moment was damp and mould. There has been around 1800 damp and mould cases that the Council had worked on. It was added that another priority was prevention of disrepair. It was stressed that there was a need to have a capital programme focused on ensuring that buildings were safe and watertight.

The next question considered the timeline for completing the remaining 75% of stock surveys. It was explained that it took approximately six months to complete a quarter of the surveys. It was highlighted that many social landlords would review 20% to 25% of stock each year. Therefore, completing this many surveys in a considerably shorter amount of time had been a challenge for the Council. By the end of December 2023, the Council would like to have completed one third of the stock surveys, and then they would like to maintain this pace for the rest of the financial year. One of the challenges has been to gaining access to the flats – at the moment the access rate was around 50%. However, in some cases data from other surveys could be used for other flats, e.g. external walls data for the block of flats placed in the same building. Also, the team has been using other opportunities, e.g. when there was a repair scheduled, to conduct surveys.

The next question considered the access rate and what was being done to increase it. It was explained that residents did not necessarily see the benefit in allowing officers into their homes. The team had been working on improving the communication and ensuring that residents were well-informed. It was also highlighted that the access rate might be affected by residents subletting their homes or the properties being vacant. However, it was added that the Council has been undertaking a programme of tenancy audits. This would be a three-year programme that was to be rolled out next month.

Another question was asked about whether the surveys were prioritised in any way. It was explained that they were not prioritised because there was very little information available. However, they had been looking into targeting large panel system blocks. At the beginning of the programme they surveyed many houses, and they would like to focus on flats and maisonettes to better reflect the Council’s stock.

The next question was asked about the risk from the Council only having one contractor and what was the plan to ensure that they delivered their services. It was explained that it had been challenging to maintain the pace and at the same time ensure that the collected data was accurate and objective. To ensure the quality of the surveys, there has been quality checking undertaken.  It was also mentioned that there was a lot of work done when the contractor was selected to ensure that they fully understood what was expected from their work. It was added that it would be important to keep the momentum going and ensure that the time between making contact with the occupier and the actual survey was as short as possible.

Another question considered what has been done with the collected data. It was assured that the data was not only stored, but also there were actions arising from them. Around 240 homes were identified as concerning and not meeting the decent home standard. Many of those houses had damp and mould, and these cases would be referred to a designated team in the Council. A supplementary question was asked about any other safety concerns. It was explained that a large proportion of buildings were built when aerated concrete was used. Therefore, there potentially might be some issues in regard to that.

Another question considered the cap on rent. It was explained that the inflationary increase on the rents could go above 7%. Although, it was highlighted that in recent years the government had kept it at 7%. It was explained that the service charge was determined based on the actual spend. This would usually be estimated based on the last full year’s spend. It was highlighted that service charge was not subject of governmental caps.

Another question considered the plans to involve residents in the asset management strategy, and what was the plan to achieve it. It was explained that when the Council worked on larger projects (e.g. a block of flats), they tried to engage residents very early on and keep them informed in regard to the investment plans. Additionally, in the near future engagement activities and surveys would be conducted. This would allow the Council to have a better understanding of what the residents would like to do. It was also added that for larger projects, the residents would be approached directly, and then they would be involved in overseeing the project.

The next question considered when there would be a reduction in the backlog of repairs and maintenance work. It was assured that the backlog was being monitored on daily basis, and overall there had been positive progress in reducing the backlog. Then an additional question considering the cost of clearing the backlog was asked. It was explained that there had been issues with the previous repair and maintenance contract. Therefore, the contract was re-procured, and there were three different companies delivering the repairs. It was acknowledged that the repairs and maintenance work was being progressed. However, the cost was higher than initially anticipated. It was assured that the overspend would not be a significant problem as the Council had enough reserves – around £50 million, and that decreasing the number of repairs was a priority. It was added that data gather through the stock condition survey, would allow the service to better plan the repairs and maintenance work in the future, and reduce the number of reactive repairs.

The next question considered legal exposure and risk in relation to disrepairs. It was explained that the Council had been profiling the disrepair budget as there was a significant number of cases. In addition, as the Council had been working on the backlog, they were prioritising cases that bore more risk than others. The cases should be cleared in 18 months. It was also assured that the Council was fully aware of that risk, therefore, it was added to the corporate risk register. Another question in regard to risk was asked – it considered the risk associated with the decent home standard. It was explained that there was lack of clarification and certainty from central government. Therefore, the Council needed to make assumptions around it, and then when more information was provided by central government, the budget would be updated accordingly. A supplementary question considering the additional resources for the implementation of the standard was asked. It was assured that the Council’s had sufficient reserves to support the annual budget. 

Then another question was asked about the development of the plan and whether the Council conducted any benchmarking and comparison exercises. It was explained that in this area it would be very difficult to benchmark across different boroughs, as the stock held could vary significantly. It was added that when Croydon’s capital spend was considered, it would be very low in comparison to other authorities. A supplementary question was asked about the in-year capital underspend. It was explained that it was predicted that the Council would overspend by £2.8 million on the revenue side of the repairs and maintenance and would overspend by £4.1 million on the capital side of HRA. It was caused by the pressured on both more minor and major works.

Actions

1.       A request was made to share the engagement strategy with the Sub-Committee members.

2.       A request was made to provide a briefing on data gathering and how it would be used in the future.

Conclusions

1.       The Sub-Committee acknowledged that there had been a significant improvement in the approach to developing the Housing Revenue Account Business Plan and the plans were promising.

2.       The Sub-Committee commended the identified priorities for the Business Plan and agreed that they reflected the current needs within the service and of residents.

3.       The Sub-Committee was reassured that the Council had sufficient reserves available to cover the overspend on the repairs backlog.

4.       The Sub-Committee agreed that the information provided through the stock survey would form a crucial evidence base for the forthcoming Business Plan and agreed that it needed to be progress as quickly as possible and include as wider as variety of housing types as possible to provide better inform the development of the Plan.

5.       The Sub-Committee noted that gaining access to properties to complete the surveys was impacted the completion rate and agreed that further work was needed in this area.

Recommendations

1.       The Homes Sub-Committee recommends that there is further engagement with residents on the benefits of the stock survey, including work with the contractor, using the social values aspects of their contract .