Northampton Borough Council Housing Stock Options Housing Revenue - PowerPoint PPT Presentation

Appendix 4 Northampton Borough Council Housing Stock Options Housing Revenue Account Baseline Analysis savills.com

Agenda What is the Housing Revenue Account Is current spend reasonable? Housing service performance assessment Conclusions Value for money – break out session

What is the Housing Revenue Account  This is the account the Council must use  Housing repair expenditure to charge all income & expenditure the  Day to day repairs Council has as a landlord  Gas servicing  Landlord income and costs ring fenced  Void work within Housing Revenue Account (HRA)  Contribution to costs of major works  Housing management expenditure  Housing officers  Housing income  Rent Arrears  Rents  ASB  Service charges  Tenant involvement  Garages and shops  Service costs  Other small sums

Is current spend reasonable?  Is current expenditure reasonable?  How does it compare to others?  How does it reflect local circumstances?  Do residents (and the Council) receive value for money for that expenditure?  Our analysis includes  Comparisons made with similar councils  Comparisons made with what government has considered reasonable  Costs used were taken from published accounts and budgets  Performance and satisfaction as measured by surveys and compared using Housemark

How do NBC’s costs compare with similar landlords? Council Stock  How we identified similar Councils (2011/12) A Northampton 12,144  Councils of similar size and in similar areas B Basildon (ALMO St Georges 11,318 Community Housing)  E.g. exclude London boroughs C Chesterfield 9,697  Small district councils D Dacorum 10,543 E Ipswich 8,145 F NE Derbyshire (ALMO Rykneld 8,141 Homes) G Norwich 15,744 H Stevenage 8,271 I Welwyn Hatfield 9,308 Average 10,368

How do NBC’s costs compare with similar landlords?  As shown in figure 1 Northampton (Council A) has the highest expenditure when compared with other Councils over Management and Maintenance last two years. expenditure comparisons  Over half of other councils increased 2,000 1,800 costs by more than 5% in April 2012 1,600 reflecting the increase in resources £ per property 1,400 1,200 following self financing. Northampton 1,000 increased by 2%. 800 600  The amount paid to the Council’s General 400 200 Fund from the HRA for services such as 0 accounting, legal, HR, IT and corporate E F C G H I D A B overheads is broadly similar to other 2011/12 expenditure 2012/13 expenditure Councils – although detail may differ Figure 1 Source: Published Statement of Accounts for each Council

What spend is reasonable for Northampton?  Government assessment for self financing allocated a level of debt that was considered affordable based on the Government’s assessment of the need to spend which varied by type of property and local circumstances  Examples of reasons for higher expenditure in Government assessment  Property types and age in general, especially larger, older houses  A high proportion of flats – particularly medium and high rise  High turnover  High crime rates (especially property)  High deprivation  Self financing came in on April 2012 and councils have to work within that system

What spend is reasonable for Northampton?  Government has assessed Northampton (Council A) as having the highest assumed expenditure need out of the Management and maintenance group comparison of expenditure v Gov't assessment  However, Northampton spends less 2,000 overall on housing services than £ per property 1,500 government estimates it needs 1,000  Conclusion 500  Even though Northampton’s costs appear high when compared with 0 E F C G H I D A B similar councils, the costs are at a 2012/13 expenditure Gov't assessment reasonable level based on local need as assessed by Government Figure 2: Source: CLG HRA self financing model

Like for like comparison or apples and pears?  What are the true costs of services at Northampton?  Looking at management costs we have found that 2012/13 costs include one off costs  E.g. Stock options appraisal, stock condition survey  Looking at maintenance costs we have found that 2012/13 costs includes costs that don’t pay for day to day expenditure  E.g. Costs of delivering major works programmes  Looking at service costs we have found that there may be significant costs which are not recharged through service charges

Like for like comparison or apples and pears?  In Northampton day-to-day spend looks like it is higher than it is really by some £2m each year  So Northampton’s spend is in reality lower than Government assessment of need and, possibly, lower than other councils  The Council can consider whether an increase in funding for services is reasonable – particularly in the light of what is emerging from the stock options review  The Council can also consider whether there is more scope to charge tenants for services received by them – freeing up more of the general management cost budget for services for all tenants.

Performance – tenant satisfaction  Tenant satisfaction measured by October 2012 MORI survey  Majority of residents satisfied with overall service  Satisfaction rates lower than other providers  Key areas for improvement  Repairs and maintenance  Overall quality of home  How much views are taken into account  Anti social behaviour

Performance - tenant satisfaction over time  Evidence of recent decline  Particularly focussed on whether tenants’ views are taken into account and satisfaction with neighbourhood  Lack of decent homes investment will be a factor (for example quality of home) but the key indicators relate to day to day services not condition of homes

Performance - Housemark  Landlord v landlord comparisons  Compared with all English local authorities who subscribe to Housemark,  Measures of “corporate health” e.g. Staff and with comparator councils who are sickness and turnover members of Housemark  Repair performance e.g. Cost, completion  NE Derbyshire (Rykneld Homes) times, appointments made and kept  Dacorum BC  Stevenage Homes  Key housing services necessary for financial strength e.g. Rent lost from  Chesterfield BC empty properties, rent arrears  Norwich City Council  Two years’ performance analysed

Housemark comparisons 2010/11 Data set NBC performance Quartile Corporate health 31 st of 52 Average working days lost to sickness per employee Middle lower 42 nd of 56 Staff turnover Middle lower Repair performance 56 th of 65 Total cost per property of responsive and void repairs Lower 49 th of 56 Average days to complete repair Lower 28 th of 35 Appointments made as a percentage of repairs orders Lower 33 rd of 37 Appointments kept as a percentage of appointments made Lower 42 nd of 59 Repairs completed on time Middle lower 47 th of 53 Respondents very or fairly satisfied with repairs and Lower maintenance 43 rd of 52 Satisfaction with quality of home Lower

Housemark comparisons 2010/11 Data set NBC performance Quartile Key housing services necessary for financial strength 54 th of 65 Rent loss due to void properties Lower 46 th of 63 Percentage of units available for letting but vacant Middle lower 52 nd of 62 Percentage of units unavailable for letting and vacant Lower 53 rd of 58 Current tenant rent arrears net of unpaid HB Lower Tenant satisfaction 40 th of 53 Respondents very or fairly satisfied with housing Middle lower management 22 nd of 53 Satisfaction with neighbourhood Middle upper 5 th of 6 Respondents very or fairly satisfied with repairs and maintenance 5 th of 6 Respondents very or fairly satisfied with housing management

Housemark comparisons 2011/12  2010/11  Northampton in lowest, or middle lower quartile on all measures analysed  2011/12  Corporate health (as measured by number of working days lost to sickness) moved from middle lower to bottom quartile  Repairs shows slight improvement, but still lower quartile/middle lower  Key financial indicators - rent lost from rent arrears continues at lower quartile  Key financial indicators - rent lost from empty properties small improvement with move from lower to middle lower quartile  Question - is underfunding leading to poor performance?

Conclusions  Northampton spends more on housing services compared to other similar landlords  Government assessment of need considers it reasonable that Northampton spends at this level  Ongoing day to day expenditure is lower than it first appears  Performance and satisfaction is poor, and getting worse  An underfunded service performs poorly – no surprise?  An increase in funding is reasonable – but how much can be afforded and what would that deliver?

Break out session – value for money  How would you measure good value?  Where is good value demonstrated?  Where is it not