Agenda item
Registered Social Landlord Performance
- Meeting of Partnership and Place Overview and Scrutiny Committee, Tuesday 26 July 2011 7.30 pm (Item 5.)
- View the declarations of interest for item 5.
The second report on the performance of Joint Commissioning Registered Social Landlords was presented to Overview and Scrutiny on 9th February 2010. This report provides an update on their average performances during 2010/2011.
Minutes:
Councillor Hirani declared an interest as he was on the board of Fortunegate housing.
Tony Hirsch (Head of Policy and Performance) presented a report updating the committee on the average performance of the Joint Commissioning Registered Social Landlords (RSL) during 2010/2011. The report outlined performance information for a number of areas including antisocial behaviour, repairs, lettings, complaints and member enquiries, governance, tenant satisfaction, decent homes and grounds maintenance. Tony Hirsch advised that the report arose out of work with Brent’s West London Local Authority partners and Joint Commissioning partners, to address concerns regarding performance. He added that this did not include all of the council’s housing partners. In addition, as the performance data was collated from a range of organisations all of which had different policies, practices and means of measuring performance, it was not always possible to obtain all areas of information from all organisations.
Following his introduction of the report, Tony Hirsch drew members’ attention to paragraph 5 which listed a number of housing reforms proposed within the Localism Bill, and the implications of these for the local authority. These proposals included the introduction of the Affordable Rent tenancy for Registered Providers, which allowed RSL’s to charge rents of up to 80% of market levels; A new “flexible tenancy” for local authorities, providing greater leeway regarding the term of future tenancies; A duty on councils to publish a strategic tenancy policy; Greater flexibility for local authorities to manage waiting lists and other measures to facilitate moves within the social housing sector, and; the ability for local authorities to discharge a homelessness duty into the private rented sector without the applicant’s agreement. Tony Hirsch advised that as the strategic housing authority, the council would have an interest in how these proposals were implemented both by providers and internally within the council. Consequently, the council might wish to review its approach to monitoring the comparative performance of providers and the committee was asked to consider if there were other areas for which it wished to see performance data. The committee further heard that officers were currently working to develop a Tenancy Strategy and a report was due to go to the Policy Coordination Group shortly.
Parallel to this process, partner organisations would also be considering their responses. Draft guidance to the Regulator also envisaged a greater role for tenants to empower them to be involved in the scrutiny of their landlord’s performance. This was supported by guidance stipulating that registered providers should welcome scrutiny via a tenant panel, should be required to provide timely, useful performance information to tenants in order to support effective scrutiny and to submit an annual report of performance to tenants.
The Chair welcomed Dave Woods (Development Director – Octavia Housing) and Eusebio Barata (Chief Executive - Stadium Housing) and invited them to comment on the challenges posed to RSLs by the proposed housing reforms. Dave Woods advised that significant changes to the funding climate had/would result in great challenges for RSLs in developing further housing provision. Specifically, reduced funding opportunities/grants from central government would mean that RSLs would be required to borrow greater sums and increase rental charges to fund further development. This in turn would lead to more modest housing development programmes being followed. At present, Octavia housing had a bid with the HCA to develop 600 homes in London, with rents to be charged at 60% of the market rate. Dave Woods noted that Octavia Housing’s policy was aimed at trying to ensure that properties remained affordable for those in receipt of Universal Benefit. An affordable rent model encompassing part buy/part rent schemes was in place for smaller properties to target those entering the buyer’s market for the first time.
Eusebio Barata (Chief Executive of Stadium Housing) added that in terms of funding, Stadium Housing had been advised that it was a good lending prospect but had been cautioned with regard to expanding or assuming greater risk. A significant outcome of the housing reforms would be the pursuance by RSLs of a wider range of different types of housing development projects and, in addition to this, a greater differential in rental prices. Stadium Housing intended to work with stakeholders to ensure that the reasons for such changes were understood.
Eusebio Barata advised that a further issue of great significance to RSLs was the departure from the issuing of life-long tenancies. It was anticipated that this would have a considerable impact on the social housing market and could also affect how RSLs envisaged their roles within a community. RSLs were currently having to decide upon the criteria for reviewing flexible tenancies, as this had to be set out within the terms of tenancy agreements from the time they commenced. A further factor requiring immediate decisions to be made by RSLs regarding these criteria was they need to commit to delivering certain revenues as part of funding bids. As local authorities had one year from the date that the Localism Bill was enacted to establish a Tenure and Tenancy Strategy, RSL partners currently had to make decisions on these criteria within a political vacuum. Eusebio Barata acknowledged that this might lead to tensions later on if the criteria set by RSLs were not in accord with the local authority’s strategy.
A number of issues were raised during members’ discussion. Councillor Naheerathan commented that in many developments the size of the rooms were very small. He further noted that with changes to the housing benefit system, Brent would experience an influx of people who could not afford to live in other parts of London and added that he felt that Brent needed to adopt a strong approach to this issue. Councillor Harrison noted that housing benefit was now paid direct to claimants rather than their landlords and queried whether any issues had arisen from this change.
In response to the queries raised, Dave Woods explained that Octavia Housing had two types of schemes; those for which a separate developer was contracted and those where Octavia Housing acted as the developer. In the former, a contracted developer might often build to minimum standards; Octavia Housing however, built to 10% above the minimum standards. He added that the Mayor of London had retained the London plan which stipulated that new developments were required to be built to 10-15% above the national minimum standards and that all new schemes had to conform to this plan. As a result of the London plan, it was likely that there would be fewer new developments in the future but that those built would be of a higher quality.
Addressing the question of the impact of a potential inflow of people to Brent resulting from the changes to the housing benefit system, Eusebio Barata advised that Stadium Housing was currently in dialogue with the council regarding the level of rents to be charged, noting that this would largely be influenced by how the project in question was funded. Ultimately, it was likely that there would be a range of higher and lower priced properties, depending on a range of factors. It was anticipated that in some areas on average rent levels charged by Stadium Housing would equate to 80% of the market rate; however, in other areas it would be approximately 60% of the market rate. Rental charges would vary according to what Stadium Housing determined could be reasonably achieved from residents. Eusebio Barata added that the Local Housing Allowance should prevent an excessive burden being placed on housing benefit and that considerable work across the UK was conducted to prevent fraudulent housing benefit claims. Tony Hirsch highlighted that housing benefit was a national policy and that it was important that Brent develop its tenancy strategy with due consideration to the approaches adopted by other London boroughs.
Councillor Hirani sought further information regarding the number of three and four bedroom properties being developed. Eusebio Barata advised that Stadium Housing would be excluding properties of three bedrooms and larger from the affordable rent model and consequently there should be no adverse effect on families in receipt of housing benefit. However, Stadium Housing would be reducing provision of three to four bedroom properties, as the economic model did not work for larger families. Tony Hirsch advised that both the Mayor of London and Brent Council’s strategy emphasised the current need for the development of larger homes but that this demand was not at present being met for Brent or London as a whole. Unfortunately, changes to the way in which RSLs could access funding for developing housing provision would not help to ensure a greater number of larger properties were built.
Councillor Hirani commented that where rental charges increase for social housing but remain at affordable levels for those in receipt of housing benefit, the cost of housing benefit would increase overall. He added that most people in Brent who were in receipt of housing benefit were currently in work and suggested that the Committee ask that this be examined by the Executive. The Chair advised that officers were at present engaged in work regarding this issue and that a report would be presented shortly to the Budget and Finance Committee. Tony Hirsch added that this would be considered within the development of the council’s Tenancy Strategy, a draft of which would be distributed for consultation in September. Cathy Tyson added that this was a critical policy area and that the council was currently collecting data and mapping trends regarding the impact of the housing reforms. She added that the people moving into an area placed pressure on a range of services, beyond just those of housing.
Turning to the question of repairs and maintenance, Councillor Naheerathan commented that a considerable number of repairs and maintenance issues required referral by a Councillor before being resolved Councillor Patel queried if there was any information regarding the numbers of repairs required due to irresponsible use or intentional damage to properties by tenants. Eusebio Barata commented that most organisations would have an appropriate split between responsive repairs and planned maintenance and that it was in the interests of a landlord to maintain a property. It was highlighted that the number of repairs and maintenance works were in the tens of thousands and that the number of referrals from councillors was comparatively minor. With regard to emergency repairs, these could encompass a range of different circumstances, including repairs or replacements required because something had reached the end of its natural life. It was anticipated that damage caused by tenant abuse had had a revenue cost of £500k for Stadium Housing. Attempts were made to recharge the tenants responsible for such damage; however, this was often difficult to do successfully. In severe cases, tenant abuse of a property could result in the loss of the tenancy. For programmes of planned maintenance, despite significant sums of money being directed towards various projects, demand for works was still greater. The committee was advised for instance that Stadium Housing had been conducting a programme of bathroom and kitchen renovation on which £850k had been spent so far; despite this, there were many people still waiting. As part of an organisation’s asset management strategy, it would be considered whether it was in the best interest of the RSL to repair or sell the property.
Councillor Patel sought additional details of the level of rents that would be charged by RSLs in relation to future housing developments. Councillor Clues sought further details regarding the criteria likely to be established to review flexible tenancies. Eusebio Barata advised that the criteria for reviewing fixed-term tenancies which was currently being decided upon by RSLs might include; the suitableness of the property in relation to the tenants, for example property and family size; the behaviour of the resident towards the property and their neighbours and possibly economic circumstances. With regard to the latter criterion, it was acknowledged that there was some concern that including a condition of this nature might act to de-incentivise some tenants from improving their economic situation. RSLs were currently examining the range of possible criteria and Stadium Housing was holding discussions to garner residents’ views. He noted that the flexible tenancies could be between two and five years although Ministers had indicated that a two year tenancy would be expected to be used only in exceptional circumstances. He further explained that RSLs had the option to make no changes to the length or terms of tenancies.
Councillor Clues further queried what form tenant empowerment would assume following the implementation of the proposed housing reforms and further to this, what contingencies, both in terms of the provision of support and financial contingencies, had been established to deal with issues arising out of tenants failing to pay rent and falling into debt. Councillor Patel asked what actions would be taken by RSLs to tackle issues arising from domestic violence and antisocial behaviour. Eusebio Barata explained that it was anticipated that there would be an increase of tenant bad debt in the foreseeable future due to a range of factors including housing reforms and changes to the housing benefit system. As a consequence Stadium Housing would be doubling its debt provision for its affordable housing model. RSLs catered for lots of vulnerable tenants and in addition to housing reforms, other changes to public services, including the cessation of many supportive services could lead to poor outcomes for such tenants. Tenant bad debt could eventually result in evictions and in turn, a greater pressure on homelessness. Stadium Housing offered a range of support services to tenants. Eusebio Barata highlighted that the expected increase in vulnerable tenants would lead to higher levels of incidences of domestic violence and anti-social behaviour. In order to effectively tackle such issues it was important that landlords reported these incidents. It was felt that the greater numbers of domestic violence incidences recorded by Stadium Housing reflected better reporting procedures. Tony Hirsch added that it would be of greater concern where there were no recorded incidences of domestic violence.
Eusebio Barata further advised that the model for tenant empowerment that RSLs were required to adopt, closely followed on from the move towards co-regulation of the Tenant Services Authority (TSA). Whilst approaches would vary between organisations, RSLs were required to demonstrate that tenants were provided with adequate opportunity to develop effective scrutiny. Stadium Housing had created eight neighbourhoods which together covered its total area of operation. Each neighbourhood had a neighbourhood Panel, the aim of which was to scrutinise Stadium Housing and the use of the budget for the area. These Panel’s had been established in April 2011 and were still evolving; currently 62 residents were taking part.
The Chair queried whether RSLs could benefit from engaging in partnerships to provide further housing developments which would allow the associated risk to be spread between the partners. He further queried whether RSLs could just manage housing developments and not act as the developer. He sought further details regarding the expected length of the flexible tenancies. With regard to the performance data provided within the report, the Chair commented that comparison data for previous years should be provided.
In response to the questions raised by the Chair, Dave Woods advised that organisations could use the sale of properties to subsidise the development of properties for the social housing market. This was echoed by Eusebio Barata who further noted that the increase in the cost of borrowing further restricted options, however, in the past other options pursued included where the local authority had gifted land or use had been made of 106 agreement payments. He further explained that some small RSLs did not act as a developer; however, most RSLs were predicated on supplying units and if they did not do this it was likely that the local authority would have fewer units to let and would have to assume the risk of developing additional housing units. Partnerships with the local authority and other partners had worked previously. Tony Hirsch advised that local authorities could cease to operate an open waiting list for social housing and could put in place a qualification demanding that an applicant live or work in the borough. A further qualification that could be put in place was that for those applicant’s with no realistic chance of success be excluded from the waiting lists. As there would be many implications of implementing any such qualifications, officers would be exploring all options before bringing a recommendation to members.
The Chair thanked Dave Woods and Eusebio Barata for attending the meeting and answering the members’ questions.
The Chair requested that for future reports BHP provide their performance data and Tony Hirsch advised that he would ensure this took place.
RESOLVED: -
- that the report be noted
- that future performance reports include comparison data for previous years.
- that the proposals for housing reform, set out in sections 5 of the report, and the potential impact on future performance reporting, be noted
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