Agenda item

9.1      Report from Chair of I4B Ltd

Martin Smith, Chair of I4B Holdings Ltd, introduced the report providing anupdate on i4B Holdings Ltd.’s recent performance, 2022-23 Buisness Plan, risk register, accounts outturn, development strategy and audit arrangements.

In considering the report the Committee noted:

·                As at December 2021 i4B had housed 364 families within Brent, the majority of whom had previously been accommodated within Temporary Accommodation, highlighted the ongoing social benefit of the operation of the company.

·                In the last 18 months, i4B had expanded to provide accommodation to Key Workers in Brent at less that the market rate, which comprised of 153 units located within Wembley Park.

·                It was forecast that i4B would, from the next financial year, move into operational profit enabling further investment in the supply of good quality which properties.

·                The update provided in terms of operational performance, with the two main issues identified being major void re-let times and rent collection.  Work was ongoing with Brent Housing Management (BHM) to improve performance in relation to void re-let times based around implementation of a voids improvement action plan on which progressed continued to be closely monitored.  In terms of the reduced performance in rent collection levels this was subject to further investigation in order to identify reasons and the main drivers in terms of arrears with current processes due to be reviewed in order to identify any improvements, particularly given the impact of the current cost of living crisis and the risks posed in relation to modelling of the business plan.

·                The risk profile of i4B, which had been adjusted to reflect the company now operating as a sustainable rather than newly established venture and with the main risks identified as detailed within Appendix 1 of the report.

·                Looking forward, the development of the 2022-23 Draft Business Plan and Development Strategy reflecting the strategic objectives and key priorities for the company across 2022-23 which included not only continuing to increase the supply of affordable housing and delivery of safe and sustainable homes but also addressing the supply of accommodation for large families, as well as supporting individuals and families with disabilities.

The Committee was then invited to raise questions on the report, which are summarised below:

·                In clarifying the terms of i4B’s loan agreement with the Council, members were advised that the loan charges reflected the cumulative costs since the establishment of i4B and were not a new cost.

·                In terms of the business model, it was noted that it was more prudent for i4B to purchase properties, as it was not bound by the same conditions imposed upon the Council with the strategy structured on a commercial basis.

·                Querying the cost of upgrading energy performance of properties, it was asked what impact this would have on i4B.  In response, members were advised this had been recognised as an issue with modelling undertaken to assess the most cost effective way of undertaking the works.

·                In response to a query, further clarification was provided in relation to the financial benefits received by the Council in relation to operation and the funding of i4B, with specific focus on the reduction in costs relating to use of temporary accommodation.

·                In relation to the performance issues identified around rent collection levels and arrears, it was felt this had been mainly driven as a result of the pandemic with the potential to be further exacerbated as a result of the cost of living crisis.

·                It was asked for the number of voids in i4B’s portfolio, and it was confirmed that this number currently totally 80 properties, with 60 of these being newly purchased.

·                Noting the risks and challenges including rising inflation and the impact of the cost of living crisis, details were sought on the extent to which these had been forecast over the longer term.  On the basis that rents would also continue to increase, it was noted that inflation was not expected to represent a major risk. i4B’s borrowing costs were also fixed over the long-term, which provided assurance against rising interest rates.

·                When asked whether gas safety performance levels were an issue, it was noted that this had been reflected within the risk register with mitigating actions in place to address the issue.

·                With the global rise in energy prices details were sought as to whether these costs had been forecasted as part of future financial forecasts.  Given the recent nature of events in Ukraine these were still to be fully factored into development of the Business Plan.

As no further comments were raised it was RESOLVED to note the contents of the update report.

10.2    Report from Chair of FWH Ltd

Martin Smith, Chair of FWH Ltd, introduced the report providing and update on First Wave Housing (FWH) Holdings Ltd.’s recent performance, Business Plan 2022-23, risk register and audit arrangements.

In considering the report the Committee noted:

·                The difference between FWH and i4B which whilst operating as separate entities were both wholly owned by the London Borough of Brent and consisted of the same Board Members.  In terms of FWH’s role in supporting the pursuit of Brent’s housing objectives the company was more focused on housing management, with a secondary role as a registered housing provider.

·                The current breakdown of housing stock managed through FWH, which now included the transfer of properties at Granville New Homes, as detailed within section 35 – 3.6 of the report.

·                The update provided in terms of operational performance, which the main focus in relation to improvement of void turnaround times and repairs with a series of improvement actions and robust performance management having been implemented.

·                Financially, FWHs position was relatively stable, with the company turning over a profit, before depreciation, of around £1 million per year. It was updated that during the current year this was lower than normal, due to the costs associated with the Waking Watch as part of the programme of fire safety measures.

·                Looking forward, the development of the 2022-23 Draft Business Plan and Development Strategy reflecting the strategic objectives and key priorities for the company across 2022-23 which (as for i4B) included not only continuing to increase the supply of affordable housing but also delivery of safe and sustainable homes and provision of a consistently good housing service.

·                The risk update provided in relation to FWH which, as detailed within Appendix 1 of the report, were broadly similar in scope to those outlined for i4B.

The Committee was then invited to raise questions on the report, which are summarised below:

·                Clarification was sought as to why the repair issues identified at Granville New Homes had not been flagged as an earlier risk.  In response the Committee was advised that the full extent of works required at the Granville New Home Blocks had only became clear following extensive investigations commissioned on behalf of FWH.  Once identified work had been carried out to identify a solution that would allow the works to be completed as effectively and quickly as possible whilst also maintaining the viability of FWH which approval now having been obtained to the progress the solution in a way that was also affordable for the Council’s HRA and General Fund and also maintained the rights and rents of tenants.  Details of the approach which had been agreed were set out in section 5 of the report.

·                In response to concerns previously highlighted around fire safety at Granville New Home Blocks and the installation of fire safety measures, the Committee was advised that a waking watch had been introduced in order to address the risks identified.

·                In relation to the rating of the risks identified in relation to enhanced legal standards relating to H&S compliance members were advised that further details would be sought as to why these scores were higher within the FWH risk register than for i4B.

·                In reference to consultation with residents on Granville New Homes proposals, it was asked whether this had resulted in a reduction in rental costs to residents, to which it was confirmed that it had not.

As no further comments were raised it was RESOLVED to note the contents of the update report.