General Meeting

31st January 2014

Council Chamber Town Hall Extension Manchester

Attended by:

Amanda Wasilewski– Newark and Sherwood DC

Rob Main – Newark and Sherwood DC

Graham de Max – Nottingham CC

Martin Oldfield - Manchester CC

Kenny Aitchison – Wolverhampton CC

Hamida Master – Blackpool BC

Mark Ladyman – Bassetlaw DC

Tim Campbell – LB Barnet

Barbara Grant –LB Lambeth

Nicola Green – South Tyneside MBC

Rebecca Slack – NE Derbyshire DC

Neil Pryor -– LB Sutton

Helen Chard – Gloucester CC

Kas Sahota – Derby City Council

Val Watson – Derby CC

Dick Johnson – Westminster CC

Deborah McKenna - Gateshead MBC

Deborah Minns – Gateshead MBC

Clare Morton - Gateshead

Andy Thompson – Eastbourne BC

John Sheil – Shropshire CC

Mike Roberts – Manchester

Martin Stacy – Cheltenham BC

Diane Munro – Northumberland CC

Jim Simcoe – Manchester

Claire Holt – Bassetlaw DC

Alison Freeman

Richard Sorensen (p.m. only)

Ben Taylor – CIH (a.m. only)

Mark Slater – Manchester CC (part a.m. only)

Apologies for Absence:

Doris Acquaah – Haringey

Kimberley Barrow – Poole

AGENDA ITEMS

ACTION
1. Introduction / Kenny Aitchison, CWAG Chair, welcomed everyone to the meeting.
2 Welfare Reform update- case study from Manchester -
Mark Slater / See presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=3891
Questions /Discussion
Q - Does the demographic profile of Manchester, and in particular the lack of suburbs, mean that there is close working with neighbouring authorities on housing transfers?
A -The focus of joint working between authorities in the sub-region tends to be strategic, around housing development, rather than on operational and management issues. The housing market in Manchester is fairly self-contained with very few people choosing to use facilities to apply to neighbouring authorities. However Partnership arrangements and joint working with RPs is very strong within the City.
Q - Discretionary Housing Payments – there are some reports of authorities struggling to spend DHP budgets – what is the position in Manchester?
A – After a slow start, the budget will be fully spent. The authority has bid for, and been allocated an additional £200k.
Q – What is the Authority’s approach to eviction?
A – There isn’t a written ‘no eviction’ policy but as a general principle if people are willing to actively engage, the ALMO will work with them to prevent eviction.
Nottingham CC and Wolverhampton CC both highlighted that they have drawn up an ‘Eviction Prevention Protocol’ which is a checklist designed to ensure all necessary actions have been taken and that there is a consistent approach across all providers. The additional benefit is that where individuals refuse to engage and go to court, there is evidence of the efforts made to assist them. In Lambeth LB although there isn’t a ‘no eviction’ policy, there is no political will to evict which is hampering the ALMOs ability to respond effectively to no payment issues.
Q – Is your ALMO raising concerns about the increasing level of resources required to manage welfare reform?
Discussion covered a number of issues and concerns.
Lambeth LB now has a dedicated welfare reform team but hampered by political intervention to prevent eviction.
Gateshead has seen increased turnover of certain property types, with two bed properties increasingly difficult to let. Gateshead is considering the use of adaptations (installing walk in showers into bedrooms) and possible reclassification of hard to let 3 bed maisonettes to 1 bed and taking a hit on rent loss.
Wolverhampton reported that although larger units can still be let, this is increasingly to band 4 priority applicants.
Nottingham – high rise flats were never intended as family housing and the authority has reclassified these as 1 bed properties.
Eastbourne reported that in their area rent arrears have fallen as the council has given a clear steer that rent collection is a priority and non- payers will face eviction.
Barnet highlighted that the additional costs associated with managing welfare reform has opened up a wider discussion on the management fee and what it is intended to be used for, raising questions about performance as well as costs.
3. HRA Business Planning –
Ben Taylor / See presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=3885
Key issues /Discussion
Despite the new pressures on business plans, the key point is that all authorities are better off under self-financing. The major benefit of self-financing is the direct linkage between the rent level and what the landlord wants to do with the income generated.
Whilst a small number of authorities face immediate pressures with lack of headroom, for most the system still works - although there is no doubt that recent changes and pressures (welfare reform, changes to rent setting, move to CPI) will all combine to reduce the capacity of the sector.
Councils now have the prospect of building again, but uncertainty remains about the terms under additional borrowing will be available. Many are concerned about the requirement to sell high value properties and do conversions to affordable rent in order to meet the HCA bidding criteria. There is also uncertainty about the role of LEPs in the bidding process.
Discussion around the rational underpinning continuing cross party support for the RTB. The policy remains politically popular despite evidence that a large volume of ex-RTB properties are now in the PRS, at significantly higher rents and increased cost in terms of HB.
Rent convergence – discussion about the impact of recent rent limit letter from CLG which seems to indicate that the limit rent will be the same as the formula rent in 2015/16.
4. How should a council manage its relationship with its ALMO?
i)Managing Relationships - Case study - Rob Main
ii) Managing Relationships
Richard Sorensen / Managing Relationships - Case study from Newark and Sherwood DC
See presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=3889
RM outlined the background and negotiations underpinning the recent signing of a new 30 year Management Agreement.
Key points:
-  The new agreement aims to provide a clear focus on what the council wants the ALMO to deliver.
-  The 30 year term was set to mirror the life of the business plan.
-  The agreement is no longer ‘arms- length’ but has been pulled the organisation back under closer control, now a ‘Local Management Company’
-  There is a clear service specification and focus on the viability of the business plan.
-  A new methodology for setting the management fee has been agreed.
-  In terms of the relationship, new arrangements have been introduced to reinforce the strategic overview role of the council and the operational focus of the N&S Homes Board.
See Presentation slides
http://www.councilswithalmos.org.uk/?page=LibraryViewDocument&itemid=388
RS set out his views on how council ALMO relationships are developing:
-  There is no longer a single agreed model for the ALMO sector, in fact the range of arrangements are now so diverse it is questionable whether the term ‘ALMO sector’ still applies.
-  Self- financing means that councils are now better resourced and considering a wider range of options and models for delivering services which may undermine the relevance of the local authority owned management model
In terms of making the relationship work, without a standard model, arrangements need to be worked out locally based on:
-  Clarity of expectations between the parties
-  Clarity and understanding of roles will reduce conflict.
-  Clarity of ambition – goals, objectives and outcomes need to be agreed and harmonised.
-  Working in Partnership rather than performance management and compliance based.
-  Parenting rather than contractual relationship – based on mutual support.
Dealing with conflict – early resolution is the key. Understand the root causes which usually stem from lack of clarity on objectives and roles of different organisations. Financial issues are also increasingly important as the ALMO may be relatively cushioned through the HRA but if there is a political imperative to ‘share pain’ the ALMO needs to understand the rationale behind this stance.
Questions/ Discussion
Q – In Lambeth the ALMO is very resistant to working with the council, it sees the council as interfering and wants to go its own way.
A – This is understandable given the history of ALMOs which under the Audit Commission Inspection regime were expected to demonstrate their independence from the council. Changes over the past couple of years have required a huge cultural shift for ALMOs which will take time to filter through to organisations and the people in them.
Discussion around the difference between an ALMO Management model and contracting out to a private sector manager such as Pinnacle.
RS stated that contractual relationships with a private sector provider would be more straightforward and contract monitoring more focussed. Monitoring structures where there is an ALMO tend to be more complex as the client function needs to ensure the strategic direction within the ALMO is aligned with the council.
RS also highlighted the potential benefits of the CoCo model but CWAG members felt that this has already been tried and failed to deliver in the case of Gloucester CC which sought authorisation from CLG and Treasury to set up a CoCo, but was ultimately directed to stock transfer as the preferred approach.
A.O.B / Attendees were asked to submit travel claims to Leeds CC before the end of February.
The CWAG website is due to be overhauled and updated – anyone with suggestions or who would like to contribute to the review or comment on proposals should contact the Policy Officer.
Next Meeting – Friday 9th May 2014 – Local Government House, London. / All

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CWAG General Meeting – 31st January 2014