Agenda item
Arrangements for the future of Brent Housing Partnership
This report summarises the progress made on implementing the recommendations agreed at the Executive on 18 July 2011 in relation to the future arrangements for the ownership, investment and management of the Council’s housing stock.
Minutes:
Andy Donald (Director of Regeneration and Major Projects) presented the report that summarised the progress made on implementing the recommendations agreed by the Executive on 18 July following an independent review of the council's housing stock. The decisions included:-
· Council retention of ownership of the housing stock
· Undertake consultation with tenants and residents on the preferred option to manage the housing stock through an Optimised Arms Length Management Organisation (ALMO) arrangement with Brent Housing Partnership (BHP)
· The drafting of a new management agreement between the council and BHP with full heads of terms to be completed by October 2011
· A full review to be undertaken of key functions in order to deliver improvements and efficiencies
· A joint governance review is undertaken between the council and BHP
Andy Donald advised that the proposed optimised ALMO with BHP would maintain a strong relationship with residents and facilitate input from them. The arrangement would focus exclusively on housing management with the objective of achieving top quartile performer status in both delivery of housing management services and for value for money. In order to ensure success of this model, it was essential that a redefining of the relationship between the council and BHP was undertaken, with the council remaining responsible and accountable for housing management and BHP delivering the housing management service on behalf of, and being accountable to, the council. The relationship with the council and BHP would be bought forward through the governance review which was currently at draft stage, an efficiency review and a review of the Management Agreement between the two organisations.
Andy Donald advised that whilst the independent review had identified a number of strengths in the governance arrangements, some structural weaknesses had also developed particularly in respect of the council's expectations of what BHP had been expected to deliver. Members were referred to the measures to be undertaken to provide critical improvements as set out in the report. The efficiency review required 15% savings in back office costs within BHP to be achieved over a four year period, however it was possible this could be attained in three years. It was also important that this target was reached as this saving had been assumed within the context of the current remodelling of debt repayments in relation to the Housing Revenue Account (HRA). Andy Donald concluded by stating that following the tenants and residents consultation in January 2012, the final report would be put to the Executive in February 2012 with a view to securing a formal agreement in the summer of 2012.
During discussion by committee, Councillor Brown queried whether the comparatively high number of complaints received by BHP reflected their ability to accurately record complaints. He commented that other local authorities did not operate housing stock through ALMOs and sought further information on what were the advantages of the council continuing with the ALMO arrangement. He also enquired how long it would take for the debt repayments to be paid off. Councillor Sheth sought clarification concerning staff efficiencies and whether this could impact on customer satisfaction and the number of complaints received. He also sought views with regard to the possible impact of rent increases on rent collection rates and what measures were in place to stop these rates falling. Councillor McLennan asked whether the reduction on resources would also impact upon collection rates. In respect of the 15% savings, she enquired whether this was partly due to the move to the Civic Centre and sought information concerning what the staff ratio was likely to be.
The Chair asked whether BHP's move to the Civic Centre would allow them to work closer with the council and increase efficiency. Noting that approximately a third of complaints received by the council related to BHP, he enquired what measures were in place under the new arrangements to tackle this issue. The Chair also sought clarification concerning BHP's apparent involvement in the purchasing of property in Barnet and Ealing and what measures were in place to ensure there was no repeat of such an incident.
In reply, Andy Donald advised that under the Efficiency Review, BHP would now share a number of procurement activities and back office functions. There were a number of contracts that were due to end shortly and ways of joint procurement were to be explored, including with other service areas and housing management organisations. Andy Donald explained that it was felt retaining BHP as an ALMO would help the BHP to achieve top quartile performer status. It was also possible that in the future BHP could undertake tasks beyond that of housing management, such as regeneration and an ALMO arrangement provided such flexibility. The arrangement facilitated residents' engagement and involvement and it was noted that resident involvement was already high through residents' panels and representation on the Board. There was also the possibility that moving housing services internally would have damaged the relationship enjoyed with residents who clearly valued BHP. The committee heard that it was hoped to reduce complaints through improving the performance of BHP and quality of services and a few areas in particular would be focused on. It was noted that there was a housing complaints procedure separate from the council's own corporate complaints procedure. A large number of local authorities received a significant proportion of housing related complaints. It was anticipated that the move to the Civic Centre would help harmonise the relationship between the council and BHP.
Andy Donald advised that it would take between 12 to 14 years to achieve some headroom with regard to the borrowing debt that would allow further activities to be able to be undertaken and a total of 20 years for the HRA pay-off to be completed. Although the council had been a benefactor in terms of the new funding arrangements, the funds remained ring-fenced for housing. Andy Donald explained that under the new efficiencies to be delivered, the council and BHP's finance teams would be brought together and there would be an overall reduction in back office posts. Some of these savings were attributable to the move to the Civic Centre, whilst the staff ratio was presently being discussed. Front office savings would be lesser and would be achieved mainly through a reduction in the number of contractors. Andy Donald acknowledged that rent increases posed a significant risk for rent collection rates and added to the overall reduction in benefits this was a big issue nationally. Maintaining dialogue with tenants and support services would be essential in addressing this issue and there were a number of practical measures that could be put in place to help tenants, such as arranging direct debit payments.
With regard to BHP erroneously purchasing properties in Barnet and Ealing, Andy Donald stressed that the new governance arrangements would ensure that such an event would not be possible in future. Clarity would be provided with regard to Board arrangements and the appropriate scrutiny measures would be put in place. A review of management arrangements would take place once the new Board was in place. Steps were also being taken to strengthen the relationship between the council and BHP and quarterly meetings between the two organisations were taking place.
With regard to complaints, Phillip Mears (Corporate Complaints Manager) confirmed that BHP had arrangements in place that ensured complaints were accurately reported and that it was usual for local authorities to have a large proportion of housing related complaints. However, he added that there had been a significant reduction in the number of BHP complaints and similarly with the number being escalated.
Councillor Long (Lead Member for Housing) added that there would be opportunities to review the re-structure of BHP that had taken place seven years ago. She advised that a BHP sub-committee had identified the error with regard to properties bought in Barnet and Ealing, however further consideration needed to be undertaken with regard to scrutiny arrangements.
The Chair asked that an update on the housing transformation and governance arrangements be provided at a future meeting.
RESOLVED:-
that the report on arrangements for the future of Brent Housing Partnership be noted.
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