Waverley Borough Council Committee System - Committee Document
Meeting of the Council held on 16/10/2001
Waverley Homes - Business Plan 2002 and beyond
BUSINESS PLAN 2002 and BEYOND
In 2000, the Government laid a requirement on all local authorities which own and manage housing for rent to produce a ‘Business Plan’ which considers all aspects of the landlord role and function.
This document is the second such ‘Business Plan’ and builds on the work undertaken last year. It relates to the Council’s Housing Revenue Account activities. This document provides the framework through which the Council’s landlord ‘business’ will be further developed and sets out the strategic direction.
Guidance from the Department of the Environment, Local Government and Regions requires HRA Business Plans to expressly comment on the various options open to the Council in relation to stock investment, including stock transfer. In looking at the issues facing the landlord role – not least dealing with backlog repairs in the housing stock – the Council considered the option of stock transfer in 1999. In July 2000, tenants voted to remain with the Council as their landlord. This Business Plan, therefore, is developed on the premise that stock transfer is not an available option.
In the summer of 2001, the Council resolved to restructure the Housing Department and to make a clear distinction between its role as a landlord and its role as a strategic housing authority - this is described more fully in this Plan. For purposes of distinguishing the Council’s landlord role from its other housing functions – of enabling, housing advice and homelessness and private sector housing – we have called the housing management function ‘Waverley Homes’. Throughout this document, therefore, the term ‘Waverley Homes’ relates to the Council’s role as a landlord and the activities it carries out which are funded through the Housing Revenue Account. Waverley’s Housing Strategy Statement covers the Council’s wider strategic intent as a statutory housing authority.
We would welcome any comments or observations from our tenants and other partners on this Business Plan and how we can improve its usefulness in the future.
David L January FCIH
Director of Housing
Waverley Borough Council
Surrey GU7 1HR
Tel: 01483 – 869361
Fax: 01483 - 869050
THE BUSINESS - WAVERLEY HOMES
The main purpose of Waverley Homes is to manage, maintain and improve affordable homes for people in the Borough of Waverley who need them.
The prime role and function of Waverley Homes is the ownership and management of housing and related properties which involves the following:-
Community Warden Service
Rent Arrears Recovery
Adaptations for People with Disabilities
At 31st March 2001, Waverley Homes owned 5,333 properties to rent. There are also another 98 shared-ownership properties in management. In addition, the HRA owns and manages some 1,360 garages and four shops.
Waverley Homes also manages 10 houses on behalf of the Council’s General Fund and a further 16 bungalows on behalf of the Council as Trustee of the Ewart Bequest.
is a map of the Borough and illustrates the distribution of properties across the Borough. Generally speaking, it is relatively easy to let property, as there is a considerable demand/need for housing. There are virtually no long-term void properties as a result of difficulty in letting them.
Nearly 35% of the homes managed by Waverley Homes are designated for the elderly. Of the 5,333 properties, 404 are sheltered housing and a further 831 are part of Community Warden schemes for the elderly – this comprises some 23% of the stock. In addition, there another 628 properties – usually bungalows and low-rise blocks of flats which, historically, have been designated for the elderly. Some of the elderly persons accommodation is proving difficult to let – especially bedsits and flats on the first floor or above without lifts.
Waverley in Context
Waverley is one of eleven district councils in the County of Surrey. It is situated in the south-west corner of the county and covers approximately 133 square miles (33,534 hectares) and has common boundaries with Hampshire and West Sussex. The Borough is predominantly rural in character, but with a blend of historic towns, attractive villages, heather-clad commons, dense woodlands and rolling hills. There are four main areas of population - Cranleigh, Farnham, Godalming and Haslemere and sixteen rural parishes.
The Local Economy
Waverley is a prosperous place with less than 1% unemployment. The local economy includes agriculture, some manufacturing and service industries, research, the professions and administration. Being within easy commuting distance of London and other large regional towns, a high proportion (47%) of residents work outside the Borough. Around 50% of the working population are employed in the service sector. The Borough has demographic characteristics typical of the outer metropolitan area and a high proportion of households are in the professional and managerial categories (56.3%).
Health and Social Well-being
The population enjoys a relatively good level of health, with higher than average life expectancy than in England and Wales as a whole.
NHS Performance Indicators: Standardised morality rates – Compendium of Clinical Health Indicators: July 2000
Whilst the Jarman Index (which measures deprivation in populations) indicates little deprivation, there are pockets of social deprivation. Public transport links across Waverley are generally poor, leading to potential isolation for older people and for people with physical, sensory and learning disabilities. Accessing services can, therefore, be a real issue for some people.
Waverley has a resident population of 113,212 (1991 Census). The mid-year estimate for 1995 shows that 114,700 people live in Waverley. This indicates an increase in population of 1,488 (1.3%) over a four year period. Population distribution:
Farnham - 36,284 (32%)
Godalming - 20,086 (18%)
Haslemere - 15,250 (13%)
Cranleigh - 11,479 (10%)
Rest of Area
The ethnic profile shows a predominantly white population with all other ethnic groups making-up only 1.3% of the population. This is a significantly lower representation than the national average.
The Borough has a higher proportion of elderly people with 21% of the population being over retirement age compared with 19% countywide. The number of residents over the age of 75 has risen by more than a third since 1981. There also appears to have been a net loss of young people, with nearly 3,800 fewer residents aged 20 to 29 than there was in the 10-19 age group in 1981.
Housing Demand in Waverley
There is a strong local demand for all types of accommodation in the Borough. There is a healthy owner-occupied sector (81%)
Source: Housing Investment Programme: Housing Strategy Statistical Appendix 2001
. House prices are more than double the national average. Waverley’s close proximity to London means that people leaving the capital can afford to pay more for property. Many people commute to London each day and are able to command London-weighted salaries. The high cost of properties in Waverley means that people on modest and low incomes are not able to access the home-ownership market. Indeed, to access home-ownership, household incomes need to be in excess of £30,000 per annum. Businesses and other service providers (e.g. NHS Hospital Trusts) are finding it difficult to recruit staff because of the high cost of home-ownership and the relatively small and expensive private rented sector.
Demographic issues also impact on the demand for housing in Waverley. It is generally recognised that the structure of the ‘family’ is now changing and that there are more split families and single households. There is also an ageing population with people living longer. The census statistics show a steady decline in the number of people living in the Borough who are in their late teens and twenties – primarily because they are unable to access the housing market.
The Council’s Housing Needs Register (HNR) shows a continuing demand for homes for rent and shared ownership. At 1st April 2001 there were some 1,201 households on the HNR, of which 182 households required specialised dwellings (e.g. elderly or disabled), 492 were households with or expecting children. At 31st March 2001, there were 133 homeless households in temporary accommodation.
An independent Housing Needs Study
Waverley Housing Needs Study 2001 – David Couttie Associates
undertaken in 2001 revealed 2,252 individuals in some 1,600 concealed households, that – is to say, children living with their parents, or households with grandparents or lodgers. Many of these ‘children’, however, were in their 30s and 40s, and in some cases there were three generations of a family living in over-crowded accommodation. Many of those had
applied to the Council for affordable housing. Our potential customers have a clear appreciation that there is a long wait (impossibly so in some cases) for Council housing.
It is fair to say that Waverley Homes is unable to meet the need/demand that prevails locally. To illustrate the point, the following accommodation became available to let to households on the Housing Needs Register:
16 x 3-bedroom properties;
1 x 4-bedroom properties;
45 x 2-bedroom properties;
133 x 1-bedroom properties (mostly designated for the elderly); and
20 x bedsits (all designated for the elderly).
Waverley Homes is not in a position to make significant investment in building new homes. However, it recognises that there are benefits if developing a small number of two-bedroom bungalows into which older people under-occupying 3- and 4-bedroom accommodation can move. The completion of a development of 13 such units in Farnham and Milford in 2001 has had a significant impact on the housing prospects of a range of people this year.
Waverley Homes – the Context in which our Business Operates
In order for any business to operate successfully, it is necessary to know and understand something of the social, geographic, political and economic environment in which it operates. This section of our Business Plan therefore identifies some of the factors influencing our housing business.
Waverley is a prosperous part of southwest Surrey. The economy is currently buoyant and there is nearly full employment. House prices are second only to those in London
Waverley Housing Needs Study 2001 - David Couttie
. These factors have given rise to:
very high demand for general needs housing;
less demand for accommodation for elderly people and higher expectations of the type of housing wanted (i.e.
local businesses and public services finding it increasingly difficult to recruit staff
Surrey Local Government Association “Housing to Underpin Economic Success” 2001
building firms appear to have plenty of work and can ‘pick and choose’ jobs, which, in turn, means that we are experiencing some difficulty in getting repairs/maintenance work done in a timely fashion, and costs are rising.
Operating as part of local government, Waverley Homes is affected to a considerable extent by the political environment – particularly legislation, central Government policy, directives and guidance in relation to housing matters. There are a number of issues that Waverley Homes will have to address over the coming years, which are a direct result of Government initiatives. These are:
re-structuring rents across the HRA housing stock;
responding to the implications of ‘Supporting People’ and, as a first step, disaggregating the rent pooling, of sheltered housing stock;
responding to the Governments expressed wish (as outlined in the Homes Bill 2001) that public sector landlords should better meet the housing needs of vulnerable groups – particularly 16/17 year olds, and people leaving institutions including prisons and the armed forces.
Modernising Local Government
At a local level, in February 2001, the Council agreed to pilot new arrangements for decision making with a new structure comprising:
an Executive Committee of nine Councillors; and
three Overview and Scrutiny Committees – Corporate, Community and Environment.
As part of the Council’s on-going commitment to tenant involvement, the Executive has created a ‘Special Interest Group’ comprising equal number of Councillors and Tenants to advise and inform the Executive on tenant involvement. The Council further agreed to co-opt two tenants onto the Overview and Scrutiny Committee for Community to ensure that tenants voices are clearly heard through the decision-making and scrutiny processes.
Waverley Homes - Mission Statement
Although a home is a vital part of our lives, we recognise that the area where our home is located has a major impact on the quality of life. Our mission statement recognises, therefore, the importance both of home and place, and the wider role that Waverley Homes has in helping to build community life.
Working in Waverley to meet the need for quality affordable homes,
valuing the environment and contributing to community life.
Key Aims and Objectives
Waverley Homes aims to maintain and improve services for tenants and future customers by:
being committed to tenant participation and consultation
See the Waverley “Tenant Participation Compact”
being committed to equality of opportunity for all
providing a high quality and responsive repairs service
keeping rents affordable
being robust about anti-social behaviour
striving for quality and best value in all that we do
adopting innovative approaches to everything we do
recognising the changing needs of our existing residents and future customers
consulting and listening to those with whom we deal
working in partnership with others to achieve common goals
working in the interests of local communities
Waverley Homes - Service Development and Priorities for Action
New Structure for Waverley Homes
In 2001, the Council resolved to restructure the Housing Department to ensure that there is a very clear distinction between the Council’s role as a strategic housing authority, and its role as a landlord running the Housing Revenue Account ‘business’.
Waverley Homes is led by the Director of Housing, David January, who is supported by John Swanton, the Assistant Director of Housing. Two divisions within the Housing Department manage Waverley Homes:
Housing Management – headed by Bernard Nichols; and
Repairs and Maintenance – headed by David Simmons.
A structure plan of the organisation is attached as
The restructuring also positions the Council’s housing service so that it can actively consider the benefits and opportunities afforded by the ‘Arms-Length Company’ option for housing management. However, it is unlikely that this route will be pursued in the near future as the Council is ‘debt-free’ – and so the borrowing approvals are, at this stage unattractive - and the cycle of Best Value Reviews in the housing department have not yet been completed and inspected.
Priorities for Action
The prime reason for the restructuring is to improve services to our customers and to ensure more efficient and effective ways of working. We know that we have more to do in particular areas and our key priorities over the coming years will be:
improving our repairs and maintenance service to tenants;
developing new ways in which to involve tenants in our work and decision-making processes;
improving the housing management service;
aiming to achieve the Government’s target of letting properties within 25 days of them becoming vacant (including sheltered and community warden schemes);
reducing rent arrears and improving rent recovery;
encouraging tenants who are under-occupying family homes to move into smaller accommodation and providing opportunities for those who want to do so;
exploring whether some of the ‘designated elderly’ housing stock (for which there is a low demand) should be de-designated and used for other categories of people; and
maximising our resources by selling ‘assets’ which are not appropriate to our social housing ‘business’.
Waverley Homes - Tenant Participation and Consultation
Waverley Homes is committed to involving its tenants as far as is possible in the management of their homes. The Council and the Tenants Panel produced a Tenant Participation Compact which details a three-year action plan to develop and integrate tenant involvement. The main features are:
engaging in active consultation and participation by:
encouraging and supporting new and existing tenants and residents groups
producing regular newsletters explaining what Waverley Homes is doing
supporting and recognising the Waverley Tenants Panel and their independent newsletter
a commitment to support and develop tenant participation
providing opportunities for training and empowering of tenants
working with other social landlords to examine best practice and develop new methods of involving tenants
In the spring of 2001, the Council appointed the Tenant Participation Advisory Service to help review the existing arrangements for tenant participation; to advise on how tenant involvement can be developed further; and to help revise the Tenant Participation Compact.
Tenant Satisfaction Survey - 2000
In the autumn of 2000, a Tenant Satisfaction Survey
Waverley Borough Council - Tenant Participation Survey 2000. Copies of the Report are available on request from Laura Johnson, 01483 - 869491
was undertaken on behalf of the Council by specialist consultants - PPCR. This survey was conducted in accordance with the requirements set out by the DETR. The survey was sent to 2000 randomly sampled tenants on 25th October 2000. The survey closed on 24th November 2000.
In addition, PPCR also conducted two focus groups in January 2001 of those tenants who expressed most and least satisfaction in their responses to the survey. The key message from the focus groups related to the repairs service, which is considered by tenants to need improvement. Tenants did not know how to get involved in decision making and wanted opportunities to have face-to-face discussions with staff.
1,248 tenants, out of 2,000 sampled, returned the questionnaire. This is a response rate of 62.4%, which comfortably achieved the DETR required sample return of 625 responses.
The results for the two national Best Value performance indicators are shown below:
(i) Satisfaction of tenants of council housing with the overall service provided by their landlord.
Neither satisfied or dissatisfied
Combining the ‘very’ and ‘fairly satisfied’ the table shows that
of tenants are satisfied with the overall service provided by the Council. Only 12% of tenants expressed dissatisfaction.
(ii) Satisfaction of tenants of council housing with opportunities for participation in management and decision making in relation to housing services provided by their landlord.
Neither satisfied or dissatisfied
No opinion/don’t know
Combining the ‘very’ and ‘fairly satisfied’ shows that 61% of tenants are satisfied with the opportunities for participation in management and decision-making.
Main Findings of the Survey
81% of tenants are satisfied with the overall service provided by Waverley as a landlord;
89% of tenants are generally satisfied with their accommodation;
84% of staff were considered helpful;
78% of tenants are satisfied with the repair and maintenance service.
Household composition of tenants
63% of households contain a resident aged over 60; 59% of these are in general needs housing;
44% of tenants live on their own; the average household size is 1.21; 33% of general needs housing consists of single-person households.
Issues for tenants
36% felt there were outstanding issues regarding repairs and maintenance;
51% felt replacement windows were the main priority for improvement;
87% of tenants would like an appointment service for repairs;
32% would like the option to pay their rent by direct debit.
46% of tenants would be prepared to pay an additional charge for assistance with tree/hedge cutting or garden maintenance.
61% of tenants are satisfied with the opportunities for participation in management and decision-making; 22% had no opinion on the subject;
50% of tenants had no knowledge of Tenant Participation Compacts; lack of knowledge is substantially greater amongst younger tenants - 76% aged 35-44; 78% aged 25-34 and 90% those aged under 24.
Future Strategy and the Survey Results
The survey indicated that the tenant population is getting older. This could result in:
a peak in demand for specialised accommodation for the elderly then a possible subsequent decline as a change in the characteristics of the tenant population occurs over the next 20 years;
a continued, if not rising, need for disabled adaptations to existing properties if tenants wish to remain in their own home;
an increasing under-occupation of the general needs housing stock; and
difficulty in maintaining levels of tenant satisfaction (as shown by the survey) as older, more satisfied people, are replaced by younger tenants who have greater expectations.
Waverley Homes needs to consider how best to ‘communicate’ with tenants – especially younger ones – who appear not to know about opportunities for participation. Previous research conducted by the Council shows that people who read official publications tend to be older people, rather than younger people. Whilst opportunities for participation are made known through
magazine and the Tenants’ Panel has also publicised their work, clearly messages are not ‘getting through’.
Conscious of the need for further work in developing opportunities for tenant participation, Waverley Homes has commissioned the Tenant Participation Advisory Service (TPAS) to work with it and tenants to determine how best to meet the needs and expectations of tenants in respect of involvement and participation.
It is interesting to note that whilst 51% of tenants see replacement double-glazing as a priority, the Council has been required to focus its programme maintenance budget on backlog repairs – in line with Government expectations and the Major Repairs Allowance (MRA). There might be a need to explain more fully to tenants the Council’s decision to focus on backlog repairs and, indeed, what backlog repairs are.
Best Value Reviews
Information from the survey on: quality of repairs; delays in completion of repairs; tenants’ priorities for the service e.g. appointment system for repairs, will feed into the Repairs and Maintenance Best Value review. The survey also revealed an interest in a decorating service for tenants – at an additional cost – and this will also be explored as part of the Best Value Review of repairs and maintenance.
As part of the Best Value review of Allocations and Nominations, the characteristics of Waverley tenants reported in the survey will be compared with the characteristics of the people on the Housing Needs Register now; properties that are becoming available to let and properties in the greatest demand.
The timetable for Best Value Reviews in the Housing Landlord Service is:
Disabled Adaptations (Completed)
Letting of Properties
Managing Empty Housing Properties
Rent Arrears recovery
Community Warden Service
Full-sheltered Housing Service
Right-to-Buy and Service Charges
Waverley Homes - Equality of Opportunity
Equality of Opportunity in Service Delivery
The Council recognises that it serves a diverse community and that there are categories of people within the community that it serves who are likely to have different needs and different approaches to how they require their needs to be met. Waverley will endeavour to ensure that our services are open and accessible to the community such that no one is disadvantaged because of their personal characteristics.
This commitment also applies to the services provided by our partner organisations where Waverley has made a significant resource contribution to their activities.
Equality of Opportunity in Employment
Waverley Borough Council believes that it is in the best interests of the Council and the community that the Council serves to make the optimum use of the talents of all its existing employees and to seek to recruit from the widest possible pool of human resources available in the community to enhance the Council’s skills and knowledge base.
To that end, Waverley Borough Council resolutely endorses the principle of equality of opportunity in employment and opposes all forms of unlawful and unfair discrimination.
In all its recruitment and selection activities, the Council will adopt practices and procedures that will seek to ensure that no person receives less favourable treatment, whether directly or indirectly, on grounds of race, ethnic or national origin, sex, marital status, disability, age, political or religious belief or any other personal characteristic that has no bearing on their ability to perform a job.
monitoring systems will continue to be developed across housing services
adopting the Good Practice Guidance in respect of Racial Harassment
Waverley Homes – Running the business on a day-to-day basis
Lettings and Transfer
Waverley Homes will let its homes in accordance with the Council’s Allocation Policy to ensure that those in greatest housing need are given priority. It will aim to make the best use of its housing stock by actively assisting transfers and exchanges within its properties. It will participate in HOMES and HOMESWOP schemes to assist people to move to homes they require outside of Waverley.
Repairs and Maintenance
Waverley Homes intends to provide a customer focused service which is responsive to the needs and requests of tenants. The results of the Stock Condition Survey and possible resources available for investment is detailed later in this Plan. This service is being reviewed in 2001/02 as part of the Best Value Review in Housing.
Waverley Homes intends that tenants on low or fixed incomes have decent homes at rents which are affordable. The Council, however, is subject to a statutory financial regime and has to operate within Government requirements. It is likely that we will be required to take account of notional rent increases of at least RPI+1% each year for the next three years.
The Government has also issued guidance in respect of rent re-structuring which is likely to impact on the rents that Waverley Homes has to charge. It is considered that there will be ‘winners and losers’ as part of this re-structuring process – with the tenants of smaller (bedsits and 1 bedroom) properties likely to see some reduction in rent levels, but with tenants of larger properties (3- and 4-bedroom properties) seeing rent increases above inflation – although these will be capped at no more than £2 per week above the RPI+1% calculation described above.
The Council has commissioned the District Valuer to undertake a valuation of the HRA housing stock for the purposes of Resource Accounting and Rent Re-structuring. At July 2001, the fieldwork had been completed and the District Valuer’s report awaited. The Council will consider the implications of Rent Re-structuring during the autumn of 2001, assess the HRA Subsidy position and start to implement from April 2002.
The Government initiative to introduce the ‘Supporting People’ scheme will also impact on the HRA Business. The Council is currently working on the issue of ‘de-pooling’ the rents of sheltered housing schemes and calculating the ‘bricks and mortar’ costs of the rent, and distinguishing clearly the costs of ‘support’ given to elderly tenants.
Sheltered and Community Warden Service
Waverley will continue to provide sheltered housing and community warden schemes for the elderly. Consideration will also be given to extending community warden schemes to meet the needs of vulnerable groups of people – particularly as the support needs of vulnerable tenants are a cause of concern for other tenants on our housing estates. The Careline Service is currently provided by the Council as a General Fund service. It does, however, primarily serve HRA tenants and is an important service supporting people in their homes.
Waverley Homes does not intend to provide specialised or supported accommodation for special needs groups such as people with learning disabilities, or enduring mental health problems etc. There are already organisations operating in the Borough which specialise in providing supported housing which are better equipped to meet such needs.
Monitoring the Service to Tenants
Performance management systems will continue to be developed following the implementation of the new ICT system for the Housing Management function. This will assist in the reporting of performance in respect of management information, the Best Value Performance Indicators and Local Performance Indicators.
Waverley Homes has recently subscribed to ‘Housemark’ so those lessons from benchmarking exercises and good practice with other landlords can be shared.
Other Housing Providers in Waverley
In addition to Waverley Homes, there are other housing providers in the Borough that cater for people who need affordable homes. At
registered social landlords owned and managed
properties in the Borough, 15% of which are designated for the elderly. Affordable housing providers include:
Abbeyfield Housing for the elderly
Anchor Sheltered Housing
Andrew Windsor Alms Houses Housing for the elderly
Cheshire Homes Special Needs Housing
Downland Housing Group General Needs and Sheltered
Edwin Abbott Memorial Cottages Housing for the elderly (Churt)
English Villages/Rural Housing Assns General Needs (in villages)
First Step Housing Company General Needs and Shared Ownership
Haslemere Housing Association Housing for the elderly
Hewitt Homes Housing Association Housing for the elderly
Hyde Housing Association Special Needs and General Needs Housing
James Butcher Housing Association General Needs
London and Quadrant Housing Trust Housing for the elderly and General Needs
Mencap Homes Foundation Special Needs
Mount Green Association Sheltered and General Needs Housing
New Era Housing Association Special Needs Housing
Pavilion Housing Association General Needs
Pilgrim Housing Association Special Needs Housing
Raglan Housing Association Housing for the elderly and General Needs
Sampsons Almshouses Housing for the elderly
Sentinel Housing Association General Needs Housing
St Pancras & Humanist Housing Association Sheltered Housing
Stonham Housing Association Special Needs
Surrey Community Development Trust Special Needs
Surrey Heath Housing Association General Needs
Thames Valley Housing Association General Needs and Shared-Ownership
Weybank Housing Co-operative General Needs Housing
Whitmore Vale Housing Association Special Needs
Wyatt Almshouses Housing for the elderly
There is a relatively small private rented sector in Waverley – comprising some 1% of the total housing stock in the Borough. Much of this accommodation is marketed towards ‘professional people’ and is fairly expensive - with 3-bedroom houses commanding in the order of £800 per month and more (as at summer 2001).
Waverley Homes is a relatively large business operation with a turn-over in excess of £16 million per year. In addition to the revenue account, there is also a significant capital programme which aims at maintaining the fabric of the property and carrying out improvements.
There are a number of key assumptions that underpin the financial position of the Housing Revenue Account. These are:
A down-turn in the number of Right-To-Buy sales from an average of 80, which is estimated to fall to 70 in 2002/03; and 60 sales in 2003/04 and thereafter. This fall in sales is, in large part, a result of increases in local property values on properties that already commanded relatively high prices, coupled with the reduction in the RTB discount to £38,000.
Inflation estimated to be 2.5%
Real and notional rent increases at RPI+1%
Increases in repairs and maintenance expenditure at RPI+0.5% - based on the Government’s notification in respect of the ‘
Major Repairs Allowance
’ for 2001/03.
Voids and bad debts running at 4%
Subsidy - the major impact on the HRA will be the future HRA Subsidy position. On our current forecasts, we consider that the HRA will return to negative subsidy in 2004/05. [
Note: Negative Subsidy means that the HRA receives no subsidy from central government and, theoretically, makes a ‘surplus’ of income over expenditure which currently has to be paid into the Council’s General Fund, and
reinvested in the HRA business
The expected consultation paper on HRA Subsidy will, it is hoped, detail and example how the rent re-structuring, ‘Supporting People’ and benefits inter-relate. Longer term financial planning will prove elusive until the Government issues further guidance on these matters.
Income and Expenditure
The annual revenue budget for the Housing Revenue Account is contained in the Council’s Budget Book and a copy is attached as
. In summary, the revenue income and expenditure for 2001/2002 is estimated to be:
General Fund Contributions
Contribution from Balances
Repairs and Maintenance Fund
Supervision and Management - General
Supervision and Management - Special
‘Back-Funded’ Pensions Contributions
Rent Rebates - Standard
Rent Rebates – War Widows
Capital Finance and Capital Works Expenses
Revenue Contribution to Capital
Depreciation of Council Dwellings
In addition to the annual revenue budget, Waverley Homes undertakes a number of capital schemes each year. These are detailed within the HIP Bid.
Resources for Investment
Major Repairs Allowance
The Major Repairs Allowance (MRA) was introduced in 2001/2002 and forms part of the Housing Subsidy calculation. This has had the effect of returning Waverley to positive subsidy and it is estimated that subsidy will continue, albeit as a diminishing resource, into the foreseeable future. The injection of new cash from housing subsidy, together with maintaining the previously planned level of programmed repairs, enables Waverley Homes to achieve the expected level of investment in its stock equal to the MRA. It is estimated that at least £3 million of subsidy will be generated over a three-year period and, in order to plan the repairs programme, it is assumed that subsidy will be available at £1 million each year.
Current indications are that the MRA will continue at around £3 million per annum but as the level of subsidy reduces year-on-year, other resources will have to be found to support the required level of spend on backlog repairs. These resources could come from diverting available capital receipts from other programmed schemes or from rent increases over and above the guideline levels. Consultation is expected shortly on the major issues of the possible removal of rent rebate costs to the General Fund and the impact of rent restructuring on both the HRA and subsidy calculation. As indicated earlier, these areas of uncertainty make predicting beyond a three-year period extremely unreliable.
Use of HRA Capital Receipts
The Council has now achieved a “debt-free” status and is able to use 100% of HRA Capital Receipts. The Council does, however, need to address its responsibilities as an enabler and it is being proposed that 50% of the HRA Capital Receipts be applied to Local Authority Social Housing Grant (LA SHG) to fund new housing in the Borough, with the remainder being applied to HRA stock investment.
The current cautious assumptions of Right-to-Buy proceeds are £3.2 million per annum – i.e. £1.6 million for HRA Capital purposes and £1.6 million for LA SHG.
The Council had previously identified in its Housing Investment Programme Bid the need to redevelop/regenerate the Kilnfields estate in Haslemere at an estimated cost of over £4 million. The Council has yet to agree the details for this scheme as there are both HRA and General Fund considerations. The likely expenditure profile would appear to utilise most of the next three years of HRA capital provision, although there will be a corresponding increase in capital receipt availability as a result of debt-free status.
The second major scheme, again identified in the HIP Bid, is the refurbishment of Rowland House/Ivy Hall, Cranleigh. Rowland House represents a major challenge in that the original scheme comprises bedsits with shared bathrooms, apart from four 1-bedroom two-person flats. Residents are closely involved in a major feasibility study to identify how best to bring Rowland House up to a modern standard.
Summary of Possible Resources : 2001/2002 – 2005/2006
Usable Capital Receipts
Major Repairs Reserve
The totals above exclude any additional HRA Subsidy or HRA Capital Receipts which might be generated in addition to the basic assumptions already mentioned.
The above table shows the estimated future level of the MRA, but it is important to re-iterate that the full amount will not be represented by new cash. If Waverley is to fully utilise the MRA and seriously reduce the level of backlog repairs, resources will have to be found from elsewhere.
As a landlord it is always necessary to find a balance between conflicting interests and demands. There is a need to maintain the structure and fabric of buildings and meet the required standards in respect of Health and Safety. At the same time there are customer desires for improvements – such as double glazing, new kitchens, estate works for example.
The Stock Condition Survey identified a need to ensure that the 5-year repairs backlog in properties is addressed as a priority. To delay such investment will, in the long run, cost more.
It will be necessary to continue the programme of day-to-day responsive repairs, the programmed and cyclical maintenance regime on Council houses. In addition, as the Council is minded to continue capital developments such as Kilnfields and the refurbishment of Rowland House, the resources left available to deal with backlog repairs will be only £1.8 million without increasing rents beyond the RPI+1% level as assumed.
Waverley Homes - Housing Stock Condition
The Council commissioned Hunter and Partners to undertake a stock condition survey during January – March 2000. The survey comprised a 15% sample survey of Waverley’s housing stock, together with desk research and produced an estimate of repairs and maintenance required over the next 30 years. Details of the methodology, sampling, caveats and limitations are contained in the Final Report July 2000. The survey did not account for the DETR requirement to assess the “decency standard” issued in September 2000.
The maintenance categories are presented under the following main headings –
Catch-up or Backlog Repairs Years 1 – 5
Future Major Repairs Years 6 – 30
Cyclical Maintenance Years 1 – 30
Responsive Repairs Years 1 – 30
The cost basis for prices of works is 1st Quarter 2000 and does not include contractors preliminaries.
There are significant pockets of shrinkable clay that give rise to subsidence, particularly in the Cranleigh and Farnham areas. Provision is made for future costs of such works not yet visible from year 11 at £50,000 per annum.
Asbestos costs were included on the basis of information available during the Stock Condition Survey. A separate Asbestos Survey had not been completed at the time of the Stock Condition Survey and so a provisional assessment of the anticipated costs has been made.
A range of works to improve properties was also costed on the basis of achieving such improvements within 5 years. These works included replacing kitchens and bathrooms, upgrading central heating, double glazing, roof and wall insulation and various other works. If these improvements were undertaken, there would be corresponding savings to the maintenance budget in future years. Alternatively, if not undertaken, these savings will not be achieved and maintenance expenditure will still be required. In addition to the housing stock, the Council also owns and needs to maintain ‘related assets’ i.e. unadopted roads, footpaths, services and garages.
The Stock Condition Survey identified that the following levels of investment in the housing stock was required over a 30-year period
1 – 5
1 - 5
6 – 30
1 – 30
1 - 30
1 – 30
1 – 30
1 – 30
1 – 5
6 – 30
The total investment required in the housing stock and related assets is estimated as at in the order of £210 million over the next 30 years.
As indicated above, some £19,560,000 needs to be invested in ‘backlog repairs’ – these are defined as “
repair or maintenance works required to an element, or part of an element, that has materially failed. These failures will adversely compromise the integrity or performance of the building and there are attributed a priority rating, indicating when the work should be carried out.
Over £7 million of the sum relates to work to structure, roof and windows; £6 million relates to electrics, heating and kitchens; £1.8 million to external walls and fences and a further £1.67 million to related assets. These works are considered urgent and it is essential that they be addressed over the next five-years. This being the case, the Council will be focusing its available resources on the backlog repairs.
After the initial 5-year catch-up of backlog repairs, there is a continuing need over the next 25 years to continue investment in the order of £93 million. This sum includes £12 million for disabled adaptations.
The net refurbishments costs for Rowland House/Ivy Hall, Cranleigh; Rolston House, Haslemere; and Dorlcote, Witley; are in the region of £4,680,000, although it is recognised that such improvements would result in maintenance savings in the long term.
The Stock Condition Survey showed that there was a need for improvements to the rest of the housing stock – e.g. double glazing, central heating, kitchen and bathrooms. These again have been costed over a 5-year period at £12,550,000. However, it is estimated that over a 30 year period maintenance savings of £6,290,000 could be achieved (e.g. not having to repaint windows which have been replaced with double glazing). In all cases, if these improvements are not undertaken as indicated, the maintenance savings will not arise.
These are estimated at £13,600,000, largely to deal with subsidence, unadopted drainage and fabric of properties. This is probably an underestimate of the costs of such works and further work is needed to achieve a more robust figure and make appropriate provision in the major repairs category.
Responsive and Cyclical Works
It is assumed that, as long as backlog repairs, improvement works are undertaken, the current level of responsive works could be reduced. The sum estimated for responsive repairs is £37,640,000. The sums for cyclical works will continue to be required over the long term and is estimated at £27,575,850 over a 30 year period.
Policy Statements and Statements of Intent/Action
Listening to our Customers
Waverley Homes takes the views of its customers seriously. In 2001, we are working with the Tenants Panel and TPAS to explore how Waverley Homes can better develop opportunities for tenants to be involved and help in the decision-making about their homes and places where they live. The 2000 Tenant Satisfaction Survey told us that:
36% felt there were outstanding issues regarding repairs and maintenance; and
87% of tenants would like an appointment service for repairs;
– these issues are being addressed through the Best Value Review currently underway and tenants are being involved in the review process.
51% felt replacement windows were the main priority for improvement;
– unfortunately, replacing windows does not feature as a priority in our backlog repairs programme as there are so many ‘health and safety’ related repairs which need attention. Nevertheless, we recognise that this is an issue for tenants and so are reinstating a small window replacement programme linked to external cladding/insulation programmes – these will be focused in areas of particular disadvantage (as identified in the DTLGR Deprivation Index).
32% would like the option to pay their rent by direct debit;
- the Direct Debit method of rent payment will be introduced to start from April 2002.
The Tenants Panel and tenants groups are increasingly concerned about the growing prevalence of abandoned cars on estates. A pilot project is being run during 2001 in partnership with a commercial firm to manage apparently ‘abandoned’ cars on our Council estates – should this prove successful, the project may be applied more widely across the Borough. Waverley Homes, Surrey County Council and the Police are also working with the Tenants Panel to examine areas with car parking problems and Waverley Homes has agreed to set aside £50,000 to start to address priority areas.
Over the next few years, Waverley Homes will be involved in a small number of important new-build schemes, the most significant being that at Kilnfields, Haslemere which will be a partnership with Thames Valley Housing Association as part of a wider regeneration scheme. Waverley Homes will also consider the development of a number of two-bedroom bungalows to encourage older people under-occupying family houses to move. Generally speaking, however, it is not the intention to undertake new-build to provide additional housing stock. Mindful of demands, which are not matched commensurately by resources, its priority will be investment in the existing housing stock to bring properties up to standard, rather than funding new-build projects. The Council will use its enabling role to promote additional social housing in the Borough.
A high priority is consideration of sub-standard housing stock and the refurbishment/replacement needs of the following properties:
Rowland House/Ivy Hall, Cranleigh - sheltered housing scheme
Dorlcote, Witley - sheltered housing scheme
Kilnfields, Haslemere – general needs housing estate
Oakbraes, Godalming - general needs block of flats
A priority for expenditure will be investment in backlog repairs which have been identified through the Stock Condition Survey as being urgent/essential.
As part of its business, Waverley Homes manages a number of hostels that provide temporary accommodation for homeless households. It is proposed to start a programme of refurbishment of these hostels starting in 2002/2003.
Properties Designated for the Elderly
Of the 5,333 homes managed by Waverley Homes, 35% (some 1,800) are believed to be designated for the elderly. By comparison, the vast majority of those registered on the Council’s Housing Needs Register are households with families or single people and couples and are not eligible for elderly designated properties. Some of our elderly designated properties are becoming less easy to let.
During the coming year, Waverley Homes will look at the properties believed to be designated for the elderly and will make proposals about whether some of them should be de-designated and how that can be sensitively managed over a period of time.
As part of the Council’s drive to secure more affordable housing for families, Waverley Homes will explore the viability of converting smaller accommodation into larger family properties – perhaps by converting two flats into one house. This is a long-term exercise.
Waverley Homes manages approximately 1,360 garages [as at 31st March 2001], which generate £320,000 per annum. However, the stock condition survey identified that they needed some £2 million spent on them to bring them up to standard. The Council will be considering how best to address the issue of garages – including the option of selective demolition, some replacement and what to do with any vacant sites which become available as a result.
Where there are properties that become vacant, and are found to be costly to renovate and have a relatively significant value, active consideration will be given to the option of disposal on the open market. This course of action helps Waverley Homes to avoid the need for very costly investment in particular properties and provides 100% useable capital receipts for reinvestment into the Council’s own housing stock.
The HRA owns a small number of miscellaneous (i.e. non-estate) properties which have been ‘inherited’ from predecessor authorities. As and when these properties become vacant, the Council will carry out a ‘cost benefit analysis’ and actively consider the merits of retention or disposal given the costs of major repairs against the capital value and need for that type of accommodation.
For example, in early 2001, Waverley Homes sold a small Grade II listed building which needed over £80,000 of renovation works. The property was very small and did not readily lend itself to social housing letting. Apart from realising over £140,000 – all of which is a usable capital receipt - Waverley Homes does not continue to have the long-term maintenance responsibilities for a Grade II listed building.
Sources of Information
Empty Homes Strategy
Waverley Borough Council
WBC – Karen Novell, 01483 -
Housing Investment Programme 2000: Operational Information Section 1: Needs Appraisal
Borough Housing Officer
WBC – Karen Novell, 01483 -
Housing Needs Study
David Couttie Associates
WBC – Karen Novell, 01483 - 869
Housing Strategy Statement 2002 and Beyond
Waverley Borough Council
HRA Stock Condition Survey Final Report
Hunter and Partners
WBC – David Simmons, 01483 - 869
Housing to Underpin Economic Success
Surrey Local Government Association
Surrey County Council – Peter Shadbolt, 020 8541 9846
Tenant Participation Compact
Waverley BC and the Tenants Panel
WBC – Sheila Goodall, 01483 - 869355
Tenant Satisfaction Survey 2000
WBC – Laura Johnson, 01483 - 869491