The Acting Director of Housing presents the new structure of the Housing Division and will set out key challenges facing the Division.
Minutes:
Chris Burgin, Acting Director of Housing, presented the latest Housing Division structure chart. As outlined in the document, he set out the key service areas covered by the Heads of Service in the division.
Members were informed that a recruitment exercise had been undertaken to fill the roles vacated by Chris, and Vijay Desor who had moved to a part-time role. Caroline Carpendale and Charlotte McGraw were now Heads of Service in Housing.
Members were told the Housing Revenue Account (HRA) operated in a self-financing environment. Spending priorities were made in the context of a 30 year business plan and needed to achieve the right balance between investing in maintaining and improving the housing stock, providing landlord services to tenants, building new homes and supporting and repaying housing debt of £198m.
· The Government’s summer budget statement in July 2015 had a profound impact on assumptions about future rent increases. All housing associations and councils were required to decrease rents by 1% each year for 4 years, compared to the previous national policy of increasing rents by CPI + 1%. It would result in £2.2m less income in 2016/17 compared to previous business plan expectations, rising to £11.7m a year in 2019/20. The overall Housing budget would reduce from £85m pa to £73m pa. Over the four years, it meant that total income of some £27.3m was expected to be lost.
· The Housing Transformation Programme began a programme of efficiency savings in 2013. To date, Spending Review Phases 1 and 2 had achieved revenue savings of £3.2m and capital savings of £1.1m. Totalling £4.3m.
· It was proposed that the Executive consider the outcome of work on the HRA Spending Review Phase 3 in the summer of 2016 to identify total reductions of £11.7m p.a. by 2019/20. Further efficiency savings and options for service reductions, with an analysis of their impact, would be made. Proposing capital reductions in the 15/16 budget and deferring revenue reductions until next year and beyond allowed for a planned approach to making the required savings.
· The single Central government decision to reduce rent by 1% for four years placed the HRA under significant pressures to deliver a balance budget. A number of other external pressures and changes also brought about by Central government placed the HRA at further risk.
· The Department of Work & Pensions commenced the roll out of a new combined benefit called Universal Credit. This would place individual pressure on tenants which was likely to impact upon their income, thus impacting upon their ability to pay their rent. The rent due and collected totalled £84,900,000. This solely finances Housing budgets and spending. Currently Housing achieved excellent rent collection rates exceeding 99%. If the collection rate was to reduce, this would directly impact the budget available to run the Housing service adding further to the size of savings that would be required to achieve a balanced budget.
· The significant difference and risk for Housing with the Welfare benefit change was that over 13,000 tenants out of the 21,900 (60%) that previously had an eligibility for Housing Benefit would now receive this money personally, and would now have to manage the money alongside other benefits they received directly and would be required to pay their rent. The welfare benefit changed placed over £50m of income formally paid directly to the HRA at risk.
· In the Comprehensive Spending Review in November 2015, the Government outlined plans to extend Local Housing Allowance (LHA) to social landlords. The Government would cap the amount of rent that housing benefit would cover in the social sector to the relevant Local Housing Allowance. The new rules would apply to affected individuals who signed their tenancy from April 2016 onwards, although the LHA rate of housing benefit entitlement would not apply until 2018.
· Central Government were also working legislatively to introduce a ‘pay to stay’ scheme in local authority properties. That would require further resource, development and change in order to meet the requirements of the new scheme. The scheme would place significant burden on the Housing service to collect income details annually from tenants and calculate and implement individual rental levels for those on income levels above a specific value.
· Central Government was also imminently due to introduce a high value vacant homes levy. That might require some Leicester City Council homes to be sold when they became vacant. It was not yet known how much the levy would be or how many homes might have to be sold. Reserves might be required to pay the levy before the receipts from any sales had been received. There would also be a further impact on rental income should the housing stock numbers consequently fall at a faster rate than already anticipated.
· The Council faced significant financial pressures across its general fund with significant reductions in that budget over the coming years.
· Welfare reforms were pushing people into additional financial hardship and pressures, along with other factors, was culminating in a national increase in rough sleeping, homelessness and begging. Since 2015 the number of rough sleepers in Leicester had increased. There had also been a significant visible increase in the presence of rough sleeping and begging across the City Centre.
Members asked questions and received the following responses:
· New tenants would now pay rent through direct debit;
· People currently on Housing Benefit might have been on it for some time and would find it difficult to prioritise their money when Universal Credit was introduced. Education and communication with them was essential to make it clear that they must pay, or lose their home. It would be beneficial to all concerned to try and push people to move to direct debit payment, and take out the money the same day it went into their account;
· Where tenants were identified as vulnerable or got into arrears, payment of rent could be requested directly;
· Housing were looking at a roll-out of tablet devices to support mobile working, enabling officers to use live information, such as tenants’ rent account balance when officers visited tenants in their homes, and also reducing duplication of work;
· Phase 3 of the implementation of the Northgate software system would enable tenants to access a number of services online including rent, report repairs, make payments, report estate or other issues/problems and track progress;
Cllr Connelly thanked Chris for the information and emphasised the challenges ahead for the Housing Division. He made the following points:
· He believed the Government wanted to eradicate social housing;
· HRA was self-financing, and with the 1% reduction in rent it would make it very difficult and challenging to continue to provide affordable social housing;
· With the ‘Pay to Stay’ scheme, he envisaged more people exercising their right to buy;
· The high value vacant homes levy might force the Council to sell properties of 3/4/5 bedrooms, preventing the authority from being able to tackle the blight of overcrowding.
The Chair thanked Chris for the update. He was interested to find out more on the high value levy on voids when it became available. He also requested a future report on homelessness and hostels challenges.
The Chair requested that the overview on the Housing service be made available to any new Members of the Housing Scrutiny Commission in the next Municipal Year.
AGREED:
that:
1. further information on the high value levy on voids be provided when it became available;
2. a report on homelessness and hostels challenges be brought to a future meeting;
3. the overview on the Housing service be made available to any new Members of the Housing Scrutiny Commission in the next Municipal Year.xt Municipal Year.
Supporting documents: