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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 12/07/2005
Provisional Programme of Capital Works for Repairs and Maintenance to the Housing Revenue Account Properties



Summary & Purpose
To seek approval from the Executive for the Provisional Programme of Work for Repairs and Maintenance to the Housing Revenue Account Properties.

Quality of Life Implications
Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe Communities
Local Economy
Natural
Resource Use
Pollution
Prevention and Control
Biodiversity
and Nature
Local
Environment
Social
Inclusion
Safe, Healthy
and Active
Communities
Local
Economy
N/A
Positive
N/A
Positive
Positive
Positive
Positive


APPENDIX P
WAVERLEY BOROUGH COUNCIL

(HOUSING SPECIAL INTEREST GROUP -15TH JUNE 2005)

EXECUTIVE – 12TH JULY 2005

Title:

PROVISIONAL PROGRAMME OF CAPITAL WORKS FOR REPAIRS AND MAINTENANCE TO THE HOUSING
REVENUE ACCOUNT PROPERTIES

[Wards Affected: All]

Note Pursuant to Section 100B(5) of the Local Government Act 1972

The annexes to this report contain exempt information by virtue of which the public is likely to be excluded during the item to which the report relates, as specified in Paragraph 8 of Part 1 of Schedule 12A to the Local Government Act 1972, viz:-

Summary and purpose:

To seek approval from the Executive for the Provisional Programme of Work for Repairs and Maintenance to the Housing Revenue Account Properties.

Quality of life implications – social, environmental & economic (sustainable development):

E-Government implications:

There are no E-Government implications.

Resource and legal implications:

The Council is required to undertake Capital Works to meet mandatory, health and safety and Decent Homes Works. If the Stock Transfer occurs, the new Registered Social Landlord will become responsible for delivery management of these works and contracts will be transferred or ‘novated’ to them.

The expenditure profile in (Exempt) Annexe 1 reflects the Stock Condition needs and current aspirations of tenants. It is expected that the RSL would meet all mandatory, health and safety, decent homes and agreed improvement works.

If the stock transfer does not proceed, there are serious financial implications for the Council which will have to consider how it meets its statutory responsibilities and it appears unlikely that it will able to meet the Decent Homes Standards by 2010/11 ((Exempt) Annexe 2 refers). The implications appear more fully in the body of the report.

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Background

1. A stock condition survey is being undertaken to identify work required to properties within the Housing Revenue Account. This survey is now approximately 90% complete. The information from this survey has been used to predict the amount and timing of repairs and maintenance work required.

2. A Procurement Strategy is being prepared which will provide the framework detail of how these works will be procured to meet the needs identified in the survey.

3. The model produced from the stock condition survey has been further developed in accordance with the Procurement Strategy to identify the likely contractual packages. A copy of this provisional programme is contained within (Exempt) Annexe 1.

4. In the event that tenants vote against stock transfer, a very limited programme of works would be provided based on the available HRA resources (see (Exempt) Annexe 2). The underlying assumptions are that the Council would need to dispose of expensive voids to a RSL under a ‘Trickle Transfer’. It is estimated that this could be some 80 properties a year generating about 1m. This would reduce the Council’s work liability but would clearly impact on available income from rents and MRA.

Proposed Improvement Programme

5. The provisional programme includes enhancements to the original model including or bringing forward items that the tenants indicated in the opinion survey to be beneficial as follows:-

Providing double glazing to all properties that currently have single glazing within the first six years of the programme.

Bringing forward half of the fencing replacement work planned in years 6 to 10 to the first five years.

Providing smoke alarms to those properties that do not currently have them within the first five years.

Procurement

6. It is proposed to procure the contractors for this work in accordance with Waverley Borough Council Contract Procedures Rules applying the Best Value alternative. The proposed ratio for assessing price and quality is 50.50. The detailed evaluation criteria would be approved by Chief Officer Group in accordance with Contract Procedure Rules.

Contract Novation

7. Should the Council's Tenants vote for the Stock Transfer, provision for transfer or novation of these contracts would be necessary. Provision will be made for this within the specifications. Similarly, the new Housing Association would need to be agreeable to the novation of this contract and the proposed arrangements within it. It is recommended that the Shadow Board of the new organisation be asked to approve these proposals. These contracts will not be awarded until late 2005 or early 2006. It will be a condition of the contract award that the stock transfer takes place, otherwise sufficient funding is unlikely to be available.

Financial Implications

8. The provisional works programme at (Exempt) Annexe 1 is an indication of what the Council could include in its offer to tenants as part of the stock transfer proposals. The new Waverley RSL will be contractually committed to deliver these works having purchased the stock at Tenanted Market Value (TMV) which allows for such cost. The works include all mandatory, health and safety, decent homes and improvement works over a 30 year period.

9. In the event of tenants voting against the proposed transfer, it is likely that the Council will only have resources for a much reduced programme of works in which mandatory health and safety work must take priority. One way of minimising works liabilities will be to trickle transfer to an existing RSL those properties that become void and need significant amounts spent on them. The basis of valuation for trickle transfer would be TM with nomination rights and it is estimated that up to 80 properties a year might become available generating 1m capital receipts with only 250,000 being spendable. Transferring this number of properties on an annual basis, together with ongoing right-to-buys, will impact on the rental income stream – a loss of some 400,000 per annum at current rent levels. Additionally, the severely curtailed capital works programme will inevitably impact on the demand for responsive repairs. These factors will put severe pressure on the viability of the HRA in a stock retention situation, and potentially the General Fund which supplies services to the HRA.

10. It is assumed that the HRA will be maintained over this period with any reduction due to stock losses being offset by inflationary increases. (Exempt) Annexe 2 illustrates the shortfall of capital resources to meet both statutory requirements and the decent homes standard.

Special Interest Group (SIG) Consideration

11. The SIG supported the approach in the report and endorsed the provisional repairs programme.

[Note: The Shadow Board will be considering the programme at its next meeting.]

Recommendation

That the Executive notes the Provisional Repairs Programmes to the Council's Housing Revenue Account Properties, as detailed in the (Exempt) Annexes to this report.

Background Papers (DoH)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

CONTACT OFFICER:

Name: David Simmons Telephone: 01483 523374

E-mail: dsimmons@waverley.gov.uk

Comms/Executive/2005-06/058