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

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Northampton Borough Council Housing Stock Options

Housing Revenue Account Baseline Analysis

Appendix 4

What is the Housing Revenue Account

Agenda

Is current spend reasonable? Housing service performance assessment Conclusions Value for money – break out session

What is the Housing Revenue Account

• Housing repair expenditure
• Day to day repairs
• Gas servicing
• Void work
• Contribution to costs of major

works

• Housing income
• Rents
• Service charges
• Garages and shops
• Other small sums
• This is the account the Council must use

to charge all income & expenditure the Council has as a landlord

• Landlord income and costs ring fenced

within Housing Revenue Account (HRA)

• Housing management expenditure
• Housing officers
• Rent Arrears
• ASB
• Tenant involvement
• Service costs

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?

• How we identified similar Councils
• Councils of similar size and in similar

areas

• E.g. exclude London boroughs
• Small district councils

Council Stock (2011/12) A Northampton 12,144 B Basildon (ALMO St Georges Community Housing) 11,318 C Chesterfield 9,697 D Dacorum 10,543 E Ipswich 8,145 F NE Derbyshire (ALMO Rykneld Homes) 8,141 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 last two years.

• Over half of other councils increased

costs by more than 5% in April 2012 reflecting the increase in resources following self financing. Northampton increased by 2%.

• The amount paid to the Council’s General

Fund from the HRA for services such as accounting, legal, HR, IT and corporate

• verheads is broadly similar to other

Councils – although detail may differ

Figure 1 Source: Published Statement of Accounts for each Council 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 E F C G H I D A B £ per property

Management and Maintenance expenditure comparisons

2011/12 expenditure 2012/13 expenditure

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 group

• However, Northampton spends less
• verall on housing services than

government estimates it needs

• Conclusion
• Even though Northampton’s costs

appear high when compared with similar councils, the costs are at a reasonable level based on local need as assessed by Government

Figure 2: Source: CLG HRA self financing model

500 1,000 1,500 2,000 E F C G H I D A B £ per property

Management and maintenance comparison of expenditure v Gov't assessment

2012/13 expenditure Gov't assessment

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
• Measures of “corporate health” e.g. Staff

sickness and turnover

• Repair performance e.g. Cost, completion

times, appointments made and kept

• Key housing services necessary for

financial strength e.g. Rent lost from empty properties, rent arrears

• Two years’ performance analysed
• Compared with all English local

authorities who subscribe to Housemark, and with comparator councils who are members of Housemark

• NE Derbyshire (Rykneld Homes)
• Dacorum BC
• Stevenage Homes
• Chesterfield BC
• Norwich City Council

Housemark comparisons 2010/11

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

Housemark comparisons 2010/11

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

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