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The Royal Borough of Kensington and Chelsea Tenant Management Organisation Limited

(the “Company”)

Agenda

A meeting of the Board of Directors (“Board”) of the Company to be held at 346 Kensington High Street, London, W14 8NS

on the 20th of November 2014 at 6.30pm.

Agenda Item

Report Name Presenter Enclosure

PART A - OPEN

1. Notice, Apologies and Quorum Company Secretary -

2. Minutes of the meeting held on 11th September 2014

Chair √

3. Matters Arising Company Secretary √

4. Chief Executive’s Report Chief Executive √

5. RBKC Mid-Year Review Chief Executive √

6. Financial Report Executive Director, Financial Services & ICT

√

7. Performance Report Executive Director, People and Performance

√

8. Corporate Risk Map Policy & Improvement Manager √

9. Complaint Compensation Policy Policy & Improvement Manager √

10. HRA Commercial Portfolio – Q1 & Q2 2014/15

Business Development Manager √

11. ASB Update Executive Director, Operations √

Notes:

(1) Board Members unable to attend physically can attend by teleconference (dial-in details to be provided). (2) Board Members can send in their apologies to the Company Secretary by email or by calling on 020 7605

6399. * Every member of the Board has a duty under Section 182 of the Companies Act 2006 to declare any interest in any transactions or arrangements with the Company under consideration, or section 177 of the Companies Act 2006 to declare any interest in any proposed transactions or arrangements with the Company under consideration in accordance with the Company’s Articles of Association. Any interests should be declared to the Company Secretary on, or before the meeting.

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Agenda Item: 2

THE ROYAL BOROUGH OF KENSINGTON & CHELSEA TENANT MANAGEMENT ORGANISATION LIMITED

(the ‘Company’)

Minutes of a meeting of the Board of Directors (‘Board’) of the Company held at 346 Kensington High Street, London W14 8NS

on the 11th of September 2014 at 6.30 pm

PRESENT: Resident Board Members Ms Fay Edwards Chair Mr Tony Annis Ms Anne Duru Mr Kush Kanodia Ms Deborah Price Council-Appointed Board Members

Councillor Judith Blakeman

Mr Jeff Zitron Independent Board Members Mr Simon Brissenden Mr Peter Chapman APOLOGIES: Ms Mary Benjamin Mr Brendan Tracey Councillor Maighread

Condon- Simmonds

Mr Peter Molyneux Mr Anthony Preiskel IN ATTENDANCE: Mr Robert Black Chief Executive Ms Rupa Bhola Assistant Director, Financial Services Ms Yvonne Birch (YB) Executive Director of People and

Performance Ms Sacha Jevans (SJ) Executive Director of Operations Ms Fola Kafidiya (FK) Head of Governance and Company

Secretary Mr Peter Maddison, Director of Assets and Regeneration

(PM) Mr Anthony Parkes Executive Director of Financial

Services and ICT Ms Jane Clifton Executive Office Manager (Minutes)

,

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1. DECLARATIONS OF INTEREST 1.1 The members of the Board present confirmed that they had no interests which they were

under a duty to disclose. 2. BOARD COMMITTEE MEMBERSHIP 2.1 The Board was invited to approve the nomination of Kush Kanodia to the Finance, Audit and

Risk Committee and appoint him to the committee. 2.2 The Board was further invited to note the resignation of Peter Chapman from the

Appointments and Remuneration Committee, and approve the nomination and appointment of Anthony Preiskel to the Committee.

2.3 The Board RESOLVED THAT:

(i) Kush Kanodia be and is hereby appointed as a member of the Finance, Audit and Risk

Committee; and (ii) Anthony Preiskel be and is hereby appointed as a member of the Appointments and

Remuneration Committee. 2.4 The Board noted that the committees would appoint their chair and vice chair at their next

scheduled meetings. It was further noted that the Terms of Reference for the committees would be reviewed, and considered at a future Board meeting.

3. MINUTES OF CONFIDENTIAL MEETING HELD ON THE 24TH JULY 2014 3.1 The Board RESOLVED TO approve the minutes of the meeting, Part B, held on the 24th July

2014 as a correct record of the meeting subject to the deletion of Kush Kanodia from the list of attendees.

4. MATTERS ARISING 4.1 Business Planning

Following the e-mail to Board members about their preferences for involvement, there was an update on the agenda.

4.2 Mutual exchanges

It was intended to report to the next meeting of the Operations Committee. 4.3 Communications strategy

The strategy had not been required since there had been no PR incidents following the resignation of Iain Smith from the Board.

5. CHIEF EXECUTIVE’S REPORT 5.1 The Chief Executive presented his update report.

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5.2 It was noted that as at the date of the Board meeting, 988 members had voted ahead of the

AGM. The number of members voting in comparison to previous years had increased because of the efforts of an employee telephoning members to encourage them to vote and this had provided a personal touch. There had also been some door knocking undertaken by UK Engage, accompanied by staff, on World’s End Estate and in the north of the borough in the week.

5.3 It was agreed to circulate a copy of the programme for the residents’ conference to the Board.

It was noted that Laura Johnson was the guest speaker, and the Mayor would also be attending together with the Leader who would be holding an ‘Ask Nick’, question and answer session.

5.4 Jeff Zitron was asked how many members there were, and it was confirmed that there was

approximately 4,500 members. It was confirmed that there would be a small reception for Board members and the Executive Team following the AGM.

5.5 With reference to the preparations for Notting Hill Carnival, Councillor Blakeman commented

that some of the boarding had been put up far too early, and confirmation was given that this had already been addressed.

5.6 It was confirmed that there were two new apprentices who were local residents. 5.7 Clarification was sought on the membership of the Resident Asset Management Panel. Peter

Maddison confirmed that members were still signing up to the Panel; however Tony Annis was already a member.

5.8 Councillor Blakeman raised the subject of the removal of the ramp at Grenfell Tower as part

of the regeneration project. She was concerned that this had caused the removal of the disabled access for Grenfell Walk and the adjoining blocks. The RBKC Planning department had looked at this issue on her behalf, but Peter Madison reiterated that it appeared that Councillor Blakeman had been given information based on an earlier planning submission.

5.9 It was recognised that there had been insufficient consultation with the residents of the finger

blocks about the changes to the building and although the removal of the ramp had initially been part of the KALC project plans for the new play area, there would still be level and stepped access to Latimer Road.

5.10 No specific complaints had been received from residents about the changes apart from one

resident who was being provided with access down to street level. The Company was still carrying out consultation with the residents of the finger blocks on the works being undertaken to these blocks, and there would be an opportunity for residents to raise any concerns about access at the same time. Councillor Blakeman confirmed that in addition to the one formal complaint, others had raised concerns, particularly a wheelchair user who had used the ramp. Peter Maddison undertook to speak to those concerned, and apologised for the lack of information about the changes. He also undertook to discuss any concerns with the residents association.

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5.11 Kush Kanodia asked for further information about the company’s sharing of good practice with others. The Chief Executive explained that Capita had done some development work on a programme for shared ownership accounting, and the Company had benefited from free consultancy hours for piloting the updates to their programme. Kush Kanodia further questioned whether the Company went to look at examples of best practice elsewhere. Sacha Jevans confirmed that the Company did this, and some employees were about to visit Liverpool to look at a CRM system being used. It was also stated that the Company had been visited by organisations looking at how Repairs Direct had been set up.

5.12 It was confirmed that a workshop on energy efficiency would be set up for Board members

before the November Board meeting. The business planning discussions on the customer strategic objective would pick up the ageing population issues.

5.13 The Board noted how RBKC and other London boroughs diverged from the national trend on

an increase in evictions for rent arrears. This good performance was due to the work done by RBKC and the Welfare Officers in this area.

5.14 The Board NOTED the report. 6. GOVERNANCE PLAN 6.1 The Company Secretary presented a governance plan which followed on from the Board

away days held in June. She had been mandated to produce a governance plan which was being presented to the Board in three strands:

1. Self-assessments; 2. Company governance compliance check list; and 3. A 360 degree Board Assessment exercise.

6.2 Jeff Zitron commented on the structure of the self-assessment form, and asked if a slot for

any additional comments could be included. Although there would be an opportunity to provide comments during the 360 degree exercise, he felt that the self-assessment form should also provide an opportunity.

6.3 Kush Kanodia asked whether participation in the exercise would be voluntary or mandatory

for Board members, particularly for future Board members. It was confirmed that participation would be mandatory as the constitution stipulated continuous development, and this was a way to comply with that requirement. It was confirmed that support would be provided to Board members by the Company Secretary to help them with the exercise. Assurances were also given that the assessments would be confidential, and the results would be anonymised. Clarification was also given that the self-assessment was for existing Board members, and there would be no penalties for areas for development being highlighted. Future Board Members would be recruited based on their skills and the skills required to complement the existing Board hence the self-assessment was for ongoing Board membership.

6.4 Kush Kanodia questioned whether it was possible to state the particular skills being sought

when recruiting Board members. Confirmation was given that this was the current practice. 6.5 Councillor Blakeman suggested that grading on the self-assessment questionnaire should be

5

amended to ‘outstanding strength with few areas for improvement’ rather than ‘no areas for improvement.’ Kush Kanodia proposed that ‘weaknesses’ be changed to ‘areas for improvement.’

6.6 Board members were requested to complete their self-assessments within the next month so

development conferences/seminars which would assist with continuous development could be arranged as soon as possible. The Company Secretary would send out the paperwork with amendments and timescales, electronically.

6.7 The Board RESOLVED TO agree and approve the Governance Plan subject to the

amendments highlighted; and authorise the Company Secretary to instigate the actions within the agreed plan.

7. BUDGET MONITORING 2014/15 7.1 Rupa Bhola presented the first financial update report for the 2014/15 financial year up to July

2014, and for the period to June 2014 in respect of the subsidiary, Repairs Direct. 7.2 The Company had a forecast surplus of £35k, and there had been some movement in

budgets so at the end of July 2014, there was a £18k surplus. On legal costs, £3k less was recovered than was forecasted on the savings of £75k. On staffing costs, expenditure on temporary posts had been more than the budget although the Company was recruiting permanent staff. Other savings of £40k had been made, and the Company still had cash in the bank.

7.3 Repairs Direct had a surplus of £119k against a forecast of £135k, which was an adverse

variance of £16k. The year to date position as at the end of June was a £28k loss which was due to seasonal variations as the number of jobs had gone down. However, this was the first time Repairs Direct had received this level of detail on repairs, but it was still anticipated that the volume of work would increase, and Repairs Direct would be able to recover lost income, and pay off the working capital loans.

7.4 On the HRA Managed Budgets, the forecast for the year was projected as a net income of

£36.0m against a budget of £36.6m (an adverse variance of £587k). There had been a decrease in major works’ income because of a delay in consultation for the year’s redecoration contract for the south of the borough due to a significant court case. This meant that the programme would be extended into the next financial year, and was not a real loss in income. The HRA debt had reduced by £400k and this was good news.

7.5 Peter Chapman asked about the reporting arrangements for Repairs Direct, and whether it

was possible for the Board to receive monthly management accounts. Confirmation was given that Repairs Direct accounts were presented to the Finance, Audit and Risk Committee every quarter, in addition to the Repairs Direct Board.

7.6 Peter Chapman noted that the Repairs Direct position against forecast figures was proving to

be fairly accurate. One of the difficulties was that it had not received a full financial picture from previous repairs’ contractors. Jeff Zitron commented that Repairs Direct was not meeting its forecast because it was not carrying out capital works, and the loss of income was

6

being offset by the lower than forecast salary and materials’ costs. He asked if there would have to be further expenditure on staffing as preparation for undertaking capital works. Simon Brissenden commented that there was also a risk of having too much labour.

7.7 Rupa Bhola confirmed that the original budget for Repairs Direct had been based on having a

capital programme team within the company, and achieving a small surplus so that Repairs Direct would still be viable. She also said that it was still intended for Repairs Direct to carry out capital works in future years. The revised financial plan would be presented to the Repairs Direct Board on 14th October, and if approved, it would come back to the Board. The Chief Executive explained that it was not intended for Repairs Direct to expand its business too quickly, but it was initially thought that more progress would have been made. A repairs’ service to leaseholders was also being considered.

7.8 The Board NOTED the report. 8. BUSINESS PLAN: STRATEGY SIGN-UP 8.1 Yvonne Birch presented an outline of the business plan strategies that Board members had

signed up to. Four Board members were still to indicate which strategies they wanted to be involved in. Clarification was given that the Invest strategy consisted of two elements: communities and homes. Board members were invited to state their preferences if they had any.

8.2 At present, a lot of research was being carried out on the strategic objectives, and Executive

Team would be holding brainstorming sessions so that there could be more detailed discussion at the Board away day on 7th November. Board members would then be invited to have an input, and the format for doing this would be decided by the small group of Board members working on each strategy.

8.3 Board members confirmed their areas of interest:

Councillor Blakeman: invest in homes/regeneration

Deborah Price: invest in homes and communities

Jeff Zitron: value for money

8.4 Once the Board members had indicated their preferred area of involvement, each working group would decide how they wanted to work.

8.5 The Board NOTED the report. 9. REVISIONS TO THE PARKING POLICY 9.1 The Board was reminded that the parking policy had been agreed at its March meeting;

however, since then some changes had been made to the policy to administer it. 9.2 The Board’s attention was drawn to the report which had a table on the proposed changes. 9.3 The Board was informed that there would be informal consultation on estates during October,

and plans would be provided on where all the spaces were. Drop-in sessions would be held

7

so everyone had the opportunity to find out what was happening before the statutory consultation took place in January. The new policy would come into force from 1st April 2015. John Parrott had been employed as a temporary Communications Officer to carry out this consultation who had previously worked on similar projects.

9.4 Kush Kanodia asked whether it would be possible to focus on the impact for disabled and

elderly residents, and confirmation was given that there would be individual consultation with registered disabled residents. Tony Annis asked that Tavistock sheltered scheme would retain its one visitor bay as it was well-used. Confirmation was given that contractors would not be using visitors’ bays in the future which would reduce some of the pressure.

9.5 The Board RESOLVED THAT the revised Parking Policy as presented to the Board be and is

hereby approved, and shall supersede any versions previously approved. 10. BOARD MEETING DATES 2015 10.1 The draft Board meeting dates for 2015 were presented to the meeting which had been drawn

up in conjunction with the Council’s diary. 10.2 The Board AGREED the meeting dates for 2015.

Agenda Item:3

MATTERS ARISING

NO. MEETING DATE

MINUTE NUMBER

ACTION BY WHOM

BY WHEN UPDATE

1 11/09/14 2.4 Committee terms of reference: to be revised, and brought back to the Board

FK tbc

2 11/09/14 4.2 Mutual exchanges: a report to go to Operations Committee

SJ Meeting on 1/10/14

3 11/09/14 5.9 Grenfell Tower: individuals affected, and the residents association to be consulted on the removal of the ramp

PM As soon as possible

4 11/09/14 5.11 Energy efficiency workshop: to be set up before Board meeting in November

JC By meeting on 20/11/14

Session on energy strategy was held at the Board away day on 7th November.

5 11/09/14 6.6 Governance Plan: amended paperwork to be sent out to Board members electronically

FK As soon as possible

Done

6 11/09/14 8.4 Business Plan strategies: Board member working groups to be consulted on how they wanted to work

YB After away day on 7 November

7 11/09/14 10 Board meeting dates: ARB dates to be co-ordinated with Board calendar, which would be published on the website

FK As soon as possible

Agenda Item: 4

THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA TENANT MANAGEMENT ORGANISATION LIMITED

Open

For information

Board Report 20th November 2014

Authority for decision: The Board has ultimate responsibility for monitoring the performance of the organisation.

Recommendations: For information

Regulatory/legal requirements: None

Business Plan link: Keeping abreast of performance initiatives within the organisation, and external developments affecting social housing.

Equality Impact Assessment/comment:

Equality and diversity issues are taken into consideration.

Resident consultation: Ongoing

Resource implications/VFM statement:

Keeping up to date on the latest developments in social housing is important for shaping the business. Improved performance within the organisation will help the TMO to achieve its VFM objectives.

Risk: Failure to engage with the external housing sector could have an adverse effect on the TMO in keeping abreast of developments within the sector. There is also reputational risk if performance fails to improve across the TMO.

Appendices: 0

Total number of pages including appendices:

6

Name, position and contact details of author:

Robert Black, Chief Executive 020 7605 6311

Report title: Chief Executive’s update report

2

CHIEF EXECUTIVE’S REPORT

1. WELFARE REFORM AND UNIVERSAL CREDIT UPDATE

The Department for Work and Pensions have launched a consultation on whether the department should share information with social landlords to enable them to support tenants claiming Universal Credit. This information would enable social landlords to assess and provide support to their tenants who have made Universal Credit claims. The proposed changes will come into force in January 2015, and will be implemented from February 2015 onwards. The consultation closed on 19th October 2014. The National Federation of ALMOs (NFA), carried out a survey on the impact of Welfare Reform together with the Councils with ALMOs Group (CWAG), and the Association of Retained Council Housing (Arch). An initial survey was carried out in August 2013, a second survey in March 2014, and then a final survey in July/August 2014. A total of 31 organisations took part, 25 of whom were ALMOs, and most of the remainder were stock retaining councils. There was also an even split between different parts of the country. This research has revealed the following:

Arrears peaked in quarter 2, 2013, and have fallen since to the same level as in March 2013

There are regional variations in the level of arrears with the north of the country worst affected, and London and the south least affected

The proportion of households receiving discretionary housing payments (DHPs) has increased with 30% of those affected by the bedroom tax receiving DHP by the end of 2013/14

Just 6% of affected households have been moved to alternative social housing. A further 11% have requested a transfer but have not yet moved

Void times have not increased significantly

Most organisations have increased staff and resources to collect the rent and support tenants.

All research shows that concerns about the introduction of the bedroom tax have not materialised. Councils have evicted a tiny fraction of tenants hit by the bedroom tax in the first year of its introduction. Although one in five households affected by the benefit cut received warning letters, just 0.01% of these were evicted. In addition, fears that Welfare Reform would result in escalating rent arrears have so far failed to materialise. Landlords have been able to contain rent arrears by offering extra support to tenants, and facilitating access to discretionary housing payments. The number of tenants receiving DHPs more than tripled between June 2013 and March 2014.

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The TMO recorded its best ever rent collection of 100.84% in the first year of the bedroom tax, and also evicted fewer tenants compared with the previous three years.

2. INCREASE IN THE SALE OF SOCIAL HOUSING

The Department for Communities and Local Government has released statistics on the number of sales of social housing stock for 2013 to 2014. In addition to Right to Buy sales, sales by private registered providers have been included, not just local authorities. Key points in the release are that sales increased by 60% compared to 2012/13, with 26,376 sales of social housing. 59% of social housing sales in 2013 to 2014 were through Right to Buy, which was an increase of 8% from the previous year. The average discount, as a percentage of market value, was 47%, compared to 27% two years ‘ ago for Right to Buy local authority dwellings.

Please see below the most recent RTB data for RBKC;

This is a significant increase since the discount was increased to £100k; as

between 2008-2013 there were only 14 sales in RBKC compared to 31 sales to date in 2014/15.

The increase in applications has resulted in a greater demand on officers’ time, with no extra resource allocated. KCTMO have therefore been in discussions with RBKC about streamlining the process and addressing a disconnect between applications and sales. The primary reason for the low level of completions is property values, we have now agreed with RBKC to provide an indicative valuation at the start of the process.

3. LYONS REVIEW INTO HOUSING

Sir Michael Lyons’ review into housing, commissioned by the Labour Party, has called for 200,000 homes to be built by 2020. The report has recommended that the government make a concerted commitment to housing, including having a dedicated Housing Minister attending Cabinet. Other recommendations are:

Provision for raising HRA borrowing caps where councils present a business case and an investment plan

A review by the government on whether there should be more capacity in the longer term, and councils be allowed to borrow for housing investment

Local authorities should build on existing examples of innovation and partnerships to maximise opportunities for alternatives to borrowing under the HRA

Year Max Discount Available No of applications Properties Sold % Sold vs Applications

2013-2014 100k 116 31 27%

2014-2015 - to date 100k 69 14 20%

Right to Buy - Applications & Properties Sold

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On Right to Buy, it is recommended that councils and housing associations be able to re-invest in genuine one-for-one replacements

Increase identification and delivery of land through Local Plans which would be submitted by local planning authorities to the Planning Inspectorate within a set timeframe (December 2016). If this requirement is not met, the Secretary of State will have the power to direct the Planning Inspectorate to intervene and ensure that a plan is produced in cooperation with local residents and partners.

Local authorities should ensure that Local Plans reflect the right mix of tenures in their areas to meet local need, including increasing opportunities for shared ownership.

Reduce the risk and speed up the process for planning permissions

In order to strengthen the ability of local planning authorities to meet affordable housing need in their areas, the definition of affordability in the National Planning Policy Framework should be revised to reinstate the previous definition that affordable housing should ‘meet the needs of eligible households at a cost low enough for them to afford, determined with regard to local incomes and house prices.’

Local authorities to request the creation of locally led New Homes Corporations as delivery agents to respond to specific housing needs and provide the powers, focus, expertise and resources to deliver an ambitious development programme. These will bring together housing associations, development and investment partners and focus on the delivery of new homes.

Promote the better use of surplus public land to support new homes.

4. RESIDENT ENGAGEMENT Recent successful activities include:

The annual chairs’ get-together was held on Thursday, 23rd October 2014, at the Kensington Close Hotel. This was hosted by Lisa Wilkinson, Chair of the Resident Engagement Panel, and was the most successful of these events held in recent years. We now have 43 resident associations, and 8 compacts.

An open day for the Children’s and Youth TMOs was held on Monday, 27th October, during half term week, at the Chelsea Youth Club on the World’s End Estate, in order to attract new recruits in the south of the borough. 40 young people came.

We received an award at a Pathways into Work Charter award ceremony in the Mayor’s Parlour on Thursday, 30th October. This award recognised the work being done by the Resident Engagement team through roadshows for employment and training, and was specifically for Outstanding Partnership Working.

Resident Engagement has also successfully secured £75k from the Tri-Borough’s Public Health department to resurface the play area at Hazlewood Tower in Kensal New Town. The improved space will allow the team to run a range of activities for different age groups. The bid received strong backing from the Leader of the Council, Councillor Nicholas Paget-Brown.

Agenda Item: 5

THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA

TENANT MANAGEMENT ORGANISATION LIMITED

Open

For Information


Authority for decision: The Board is responsible for ensuring that the Company operates according to its business objects.

Recommendations: It is recommended that the Board considers the contents of this report.

Regulatory/legal requirements: The Company has a contractual obligation to be reviewed by RBKC twice a year.

Business Plan link: NA

Equality Impact Assessment/comment: NA

Resident consultation: NA

Resource implications/VFM statement: None

Risk: The rating granted to the Company by RBKC has an impact on the continuity of the Company and its business.

Appendices: 1


-


Robert Black, Chief Executive Ext 6011

Report title: RBKC Mid-Year Review

1

AGENDA ITEM 6

THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA TENANT MANAGEMENT ORGANISATION LIMITED (“TMO”)

Open

For Information

TMO Board Report – 20 November 2014

Authority for decision: The Board has overall responsibility of monitoring the outturns against the annual budget.

Recommendations: It is recommended that the Board note the contents of the report.

Regulatory/legal requirements: The Board have the legal responsibility of ensuring the organisation resources are used in accordance with the agreed budget and business plan.

Business Plan link: Being competitive and increasing income.

Equality Impact Assessment/comment: None required.

Resident consultation: None required.

Resource implications/VFM statement: This is the subject of the report.

Risk: Not operating in accordance with the agreed budget and business could not put the Company at the risk of not being competitive and not achieving the budgeted surplus.

Appendices: 1


19


Rupa Bhola Assistant Director of Financial Services

Report title: TMO (including RD) and HRA Budget Monitoring April – September 2014

2


REPORT BY THE ASSISTANT DIRECTOR OF FINANCIAL SERVICES

BUDGET MONITORING 2014/15

(PERIOD 6 – September 2014)

2. Introduction

The Company budget reported in this paper is based on the 2014/15 annual budget. This report shows a forecast of £32k surplus, against the budget, being a £(3k) negative variance. The actual position to date is £27k surplus to date. In the first half year of the current financial year there have been some significant movements in forecasts against budgets but the management is working across divisions to deliver the overall surplus position. The main areas of variance are staffing costs that are forecast to be £(224k) over budget. The savings that have been identified to offset the additional costs is mainly in legal costs of £147k, depreciation charges of £26k and consultant costs £85k. The variances are explained in more detail below.

3. Directorate Budgets 3.1 Lancaster West – £(18k) deficit forecast and £(8k) year to date adverse

variance.

The Lancaster West out-turn is expected to be £(18k) below budget. This deficit position for Lancaster West mainly arises due to the changes in staffing introduced in the recent months. The long term temporary positions in the area are being made permanent as part of the review to allow for continuity and good service to customers.

1. Purpose of the Report 1.1 The purpose of this report is to update the Board on the financial position of the

Company including its subsidiary and the HRA for the 2014/15 financial year.

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3.2 CEO – £(21k) adverse variance to budget and £29k favourable variance to

date.

This is a small adverse variance to budget, and is mostly due to the recruitment of a post to help the membership drive. However savings have been identified in other areas of the business to offset the costs.

3.3 Operations – £(12k) adverse variance to budget and £(11k) adverse

variance to date. People costs are forecast to be above budget by £(171k). A number of

senior posts are currently being filled on a temporary basis while permanent recruitment of these posts takes place. Over the year the forecasted variance is expected to reduce as the posts are filled permanently however there will be some recruitment costs incurred. The directorate also, currently, has to cover for two posts on maternity leave. The saving of £75k in consultant costs are being utilised to offset the increase in some of the staffing costs.

Legal costs are forecasted at a saving of £75k based on spend in the first

half of this financial year and the court fees awarded back to TMO of £66k. 3.4 People and Performance – £35k favourable variance to budget and £3k

favourable variance to date.

People costs are forecasted to be £23k below budget due to a number of vacant posts. This saving is partly offset by an increased forecast for recruitment costs for the year with a number of permanent posts being filled in the year.

3.5 Financial Services (Includes Home Ownership) – £12k positive variance

to budget and £3k favourable variance to date. People costs are forecasted to be £(35k) above budget due to both

maternity and long term sickness cover. However savings have been identified below to offset the staffing costs.

Savings have been identified in legal costs of £65k offset by the reduction of £(52k) in legal cost recovery leaving a net impact of £13k savings. Furthermore savings of £27k have been identified in depreciation costs and £10k in accommodation.

4

4 Balance Sheet on 30th September 2014. 4.1 Trade debtors – Decrease of £14k. This reflects the collection of the

majority of CAS charges by direct debit and payment for the majority of quarterly and annual bills having been received.

4.2 Cash at bank and in hand – Increase of £13k. This is a very small

increase and reflects a steady level of cash at bank. 4.3 Trade creditors – A decrease of £47k since 31st March 2014. Reflects the

payment of invoices for quarterly recharges raised at the start of Q2. 4.4 Defined benefit pension scheme liability – The value is based on the

FRS17 report dated 31st March 2014. 5. Kensington & Chelsea TMO Repairs Direct Limited 5.1.1 The revised financial plan proposed for the period covering 1st April 2014 -

31st March 2019 was sent to the Finance, Audit & Risk Committee and Repairs Direct Board in October 2014. A summary of the approved plan is attached. The original budget for the current financial year has now been replaced with the revised budget for 2014-15 as per the approved financial plan. As at 30th September 2014 there is nil variance for outturn against revised budget for the full financial year.

The is based on the details of the split of in-house and subcontracted works expected to be undertaken by Repairs Direct, the proposed staffing structure, the recharge costs from TMO for back office services and the fleet costs. The plan has been prepared in conjunction with the Partnering team at the TMO and ties in with the revenue stream from RBKC. It is anticipated that by the middle of 2018-19 the full loan to TMO would have been repaid. The financial plan forecasts Repairs Direct to make a surplus of £120k in the current financial year (2014-15) rising to £290k by 2018-19. That is a net surplus of 2% rising to 5%.

The year to date position as at the end of September 2014 is a surplus of

£36k. The full year surplus of £120k is expected for the current financial year.

5

6. HRA Managed Budgets (Revenue) The forecast for the year is projecting a net income of £35.71million

income against a budget £36.60million, this is an adverse variance of £(887k).

The variances are explained in more detail below: 6.1 Total Income 6.1.1 The revised forecast shows an income of £56.97 million against the budget

of £58.43 million which is an adverse variance of £(1,497k). 6.1.2 Dwellings Rents have been forecast down by £(401k). This is mainly due

to due to the number of right to buys taking place since the last quarter of 2013/14. It has an impact of £(185k) on the current year’s income and the void loss for the year is projected to be £(167k) higher than the original budget. The percentage of voids is 1.175% which is still below the 2% level assumed by the government in Self Financing determination. The budget was based on 0.75%.

6.1.3 Tenant Service Charges has a decrease of £(176k) reflecting the actual

costs of services provided to tenants. A small proportion of this is attributable to the right to buys that have taken place since the last quarter of 2013/14 financial year. The remaining is due to the actual costs being incurred for the services chargeable to tenants that have remained stable in the current year rather than the expected increase anticipated at the time of budget setting for 2014/15 of £113k.

6.1.4 Leasehold Service Charges have been forecast down by £(684k). This is

due to a decrease in major works income of £(843k) as some months after the budget was approved we had to review the charging mechanism in light of a significant high court case (Woelke vs LB Southwark). The result was that this year’s redecoration contract for the south of the borough was not ready in time to serve statutory notices before the start of the new financial year.

As a result we were therefore unable to charge for these works through the four quarters of 14/15, resulting in the amount being raised on final account in 15/16.

This variance is offset by a £170k increase in the forecast for final accounts for leasehold service charges in 2014-15.

6.1.5 Heating and Hot Water Charges income has been forecast downwards by £(236k). This partially reflects the reduction in gas prices passed on to the tenants when the KDR was set in November 2014 of £50k split between leaseholder and tenants. The remaining is due to the tenant charge budgets being based on budgets from last year and not the actual outturn

6

charges for 2013-14 for the amount of £207k. The income is based on the 3 year unit price and consumption levels.

6.2 Total Expenditure 6.2.1 The revised forecast is £21.32 million against the budget of £21.83 million

which is a favourable variance of £517k. The variance are explained in more detail below:

6.2.2 Planned Maintenance is forecast to be under spent by £388k. This

comprises of:

Individual Heating Works – expenditure is expected to be £150k less than the budget as the planned domestic boiler renewals are of a capital nature and will therefore form part of the main capital programme.

External Decorations – expenditure is forecast to be £140k less than the original allocation. The progress on the external decorations has been good however a valuation of the works expected by the end of 2014-15 has resulted in a small saving.

Estate Lighting – forecast expenditure is £50k below the original budget. This is due to the contract being re-procured after a number of issues with the previous contractor. The new contract will also result in savings in the next financial year 2015-16.

Individual Heating – forecast expenditure has reduced by £40,000. This reflects the revised planned maintenance contract and some portion of the work falling into the capital programme.

6.2.3 Provision for Bad & Doubtful Debt has been forecast downwards by £250k.

This is mainly because for this is that the impact “The Bedroom Tax” policy has had on the debt levels has been less than anticipated because of the employment of two welfare support officers and claims being made for Discretionary Housing Payments (DHP). This is a positive impact on the forecast surplus at the end of the year as collection rates have been maintained at a better level than was expected.

6.2.4 General Management forecasts an adverse variance of £(59k). RBKC have agreed an amount of £50k to be included for the Communications Officer for the parking review. There are some small further variances within this area totalling £(9k).

7. HRA Managed Budgets (Capital Programme) The approved budget for 2014/15 is £9.75 million, with the current forecast for the year projecting the same.

7

8. Conclusion 8.1 The Board is asked to note the contents of this report.

Rupa Bhola Assistant Director of Financial Services

NOTE

BALANCE SHEET 30th Sep 2014 31st Mar 2014

FIXED ASSETS

Tangible assets 1,296 1,296

CURRENT ASSETS: amounts falling due within one year

Trade debtors 1 56 70

Less: provision for bad debts (4) (4)

52 66

Other debtors 26 244

Prepayments and accrued income 1,329 495

Debtors 1,406 806

Investment In Repairs Direct 712 716

Cash at bank and in hand 2 663 650

2,781 2,171

CREDITORS: amounts falling due within one year

Trade creditors 3 146 187

Corporation tax 34 34

Other taxes and social security 682 371

Other creditors 20 16

Accruals and deferred income 939 630

1,821 1,239

NET CURRENT ASSETS 959 933

TOTAL ASSETS LESS CURRENT LIABILITIES 2,255 2,229

NET ASSETS BEFORE DEFINED BENEFIT PENSION SCHEME LIABILITY 2,255 2,229

Defined benefit pension scheme liability 4 (5,816) (5,816)

TOTAL NET LIABILITIES, INCLUDING DEFINED BENEFIT PENSION SCHEME DEFICIT (3,561) (3,587)

CAPITAL AND RESERVES

Profit and loss account excluding pension scheme deficit 2,255 2,229

Defined benefit pension scheme liability (5,816) (5,816)

Members' funds (3,561) (3,587)

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING BALANCE SHEET

MANAGEMENT REPORTING FOR PERIOD ENDED 30th September 2014All figures in £'000

POSITION AS AT

A C D (C-A) E(D/A) I J K(J-I) E(D/A)

Managament Fees 10,210 10,210 (0) -0% 5,105 5,105 0 0%

Capital Programme Fee 525 525 0 0% 263 261 (2) -1%

CAS Income 486 486 0 0% 243 249 6 2%

Legal Costs Recovered 285 233 (52) -18% 143 127 (15) -11%

Other Income 1,061 1,093 32 3% 530 515 (15) -3%

Digital TV Income 480 480 0 0% 240 240 0 0%

TOTAL INCOME 13,047 13,027 (20) -0% 6,524 6,497 (26) -0%

Staff Salaries (8,680) (7,919) 761 9% (4,340) (3,576) 764 18%

Agency costs 0 (933) (933) -100% 0 (688) (688) -100%

Staff Related Costs (217) (269) (52) -24% (108) (168) (59) -55%

TOTAL PEOPLE COSTS (8,897) (9,121) (224) -3% (4,448) (4,431) 17 0%

Accommodation (811) (801) 10 1% (405) (396) 9 2%

CAS Service Costs (84) (83) 1 1% (42) (45) (3) -7%

Communication & Publication (147) (137) 10 7% (73) (83) (9) -13%

Consultants (250) (165) 85 34% (125) (82) 43 35%

Depreciation (395) (369) 26 7% (197) (185) 12 6%

Digital TV (480) (480) 0 0% (240) (240) 0 0%

Facilities Costs (119) (122) (3) -3% (59) (59) 0 0%

ICT Service Costs (535) (537) (2) -0% (268) (267) 1 0%

Legal Costs (Non SLA) (280) (348) (68) -24% (140) (199) (59) -42%

Legal Costs (SLA) (360) (145) 215 60% (180) (135) 45 25%

Service Delivery (371) (374) (3) -1% (186) (179) 6 3%

SLA Costs (excluding Legal) (284) (297) (13) -5% (142) (155) (13) -9%

TOTAL OTHER COSTS (4,115) (3,857) 258 6% (2,058) (2,025) 33 2%

Surplus/(Deficit) before Tax ex Lanc West 35 50 15 42% 18 41 24 135%

Lanc West 0 (18) (18) 0% 0 (14) (14) -100%

Trasfer From Reserves 0 0 0 0% 0 0 0 0%

Surplus/(Deficit) before Tax inc Lanc West 35 32 (3) 42% 18 27 9 135%

Variance from

Budget to Date% Variance % Variance

DESCRIPTION Budget

(2013-14)

Forecast (Current

Month) Variance Budget YTD

Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING TMO BOARD REPORT


ANNUAL FORECAST POSITION TO DATE


Managament Fees 367 367 0 0% 183 184 0 0%

Other Income 0 0 0 0% 0 0 0 0%

TOTAL INCOME 367 367 0 0% 183 184 0 0%

Staff Salaries (268) (300) (32) -12% (134) (147) (13) -9%

Agency costs (2) (16) (14) -100% (1) (10) (9) -100%

Staff Related Costs (5) (0) 5 97% (2) (0) 2 98%

TOTAL PEOPLE COSTS (274) (316) (41) -15% (137) (157) (19) -14%

Communication & Publication (1) 0 1 100% (0) 0 0 0%

Consultants (1) 0 1 100% (0) 0 0 0%

Facilities Costs (40) (29) 11 27% (20) (22) (2) -11%

ICT Service Costs (11) (6) 5 45% (5) (3) 2 9%

Legal Costs (Non SLA) (1) 0 1 100% (0) 0 0 0%

Service Delivery (38) (34) 4 11% (19) (16) 3 15%

TOTAL OTHER COSTS (92) (69) 23 25% (46) (42) 4 10%

Surplus/(Deficit) before Tax 0 (18) (18) 0% 0 (14) (14) -100%

Variance from


DESCRIPTION Budget

(2013-14)

Forecast (Current


Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING LANCASTER WEST DIVISION




Managament Fees 10,138 10,138 0 0% 5,069 5,069 0 0%

Other Income 36 36 0 0% 18 18 0 0%

TOTAL INCOME 10,175 10,175 0 0% 5,087 5,087 0 0%

Staff Salaries (841) (869) (28) -3% (420) (345) 75 18%

Agency costs 0 0 0 0% 0 (48) (48) 0%


TOTAL PEOPLE COSTS (859) (899) (40) -5% (430) (416) 14 3%

Consultants (140) (130) 10 7% (70) (64) 6 8%

Facilities Costs (45) (48) (3) -7% (23) (25) (2) -11%

Legal Costs (Non SLA) (15) (8) 7 47% (8) (0) 7 96%


TOTAL OTHER COSTS (264) (245) 20 7% (132) (117) 15 11%

Surplus/(Deficit) before Tax 9,052 9,031 (21) -0% 4,526 4,555 29 1%

Variance from


DESCRIPTION Budget

(2013-14)

Forecast (Current


Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING CEO DIVISION



% Variance


Capital Programme Fee 525 525 0 0% 263 261 (2) -1%

CAS Income 486 486 0 0% 243 249 6 2%

Legal Costs Recovered 150 150 0 0% 75 66 (9) -12%

Management Fees 72 72 0 0% 36 36 0 0%

Other Income 399 401 1 0% 200 202 2 1%

TOTAL INCOME 1,632 1,634 1 0% 816 813 (4) -0%

Staff Salaries (5,011) (4,456) 555 11% (2,505) (2,056) 449 18%

Agency costs 0 (726) (726) -100% 0 (450) (450) -100%

Staff Related Costs (5) (5) (0) -0% (2) (1) 1 65%

TOTAL PEOPLE COSTS (5,015) (5,187) (171) -3% (2,508) (2,507) 1 0%

Accommodation (70) (70) (0) -0% (35) (35) 0 0%

CAS Service Costs (84) (83) 1 1% (42) (45) (3) -7%


Consultants (110) (35) 75 68% (55) (17) 38 69%

Depreciation (9) (9) 0 4% (5) (7) (2) -41%

Facilities Costs (4) (4) 0 0% (2) (4) (2) -81%

ICT Service Costs (2) 0 2 105% (1) 0 1 100%

Legal Costs (Non SLA) (145) (250) (105) -72% (72) (164) (91) -126%

Legal Costs (SLA) (300) (120) 180 60% (150) (99) 51 34%



TOTAL OTHER COSTS (1,137) (978) 159 14% (569) (577) (8) -1%

Surplus/(Deficit) before Tax (4,520) (4,531) (12) -0% (2,260) (2,272) (11) -1%

Variance from

Budget to Date% Variance

DESCRIPTION Budget

(2013-14)

Forecast (Current


Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING OPERATIONS DIVISION




Other Income 104 124 20 0% 52 65 13 25%

TOTAL INCOME 104 124 20 0% 52 65 13 25%

Staff Salaries (1,305) (1,242) 63 5% (653) (560) 93 14%

Agency costs 0 0 0 0% 0 (24) (24) 0%


TOTAL PEOPLE COSTS (1,484) (1,461) 23 2% (742) (724) 18 2%


Depreciation (23) (25) (1) -6% (12) (12) (0) -3%

Facilities Costs (1) (1) 0 10% (0) 0 0 100%

Legal Costs (Non SLA) (20) (20) 0 1% (10) (13) (3) -27%

Service Delivery (92) (109) (17) -18% (46) (67) (21) -47%

SLA Costs (excluding Legal) (1) (1) 0 8% (1) 0 1 100%

TOTAL OTHER COSTS (234) (242) (8) -3% (117) (145) (28) -24%

Surplus/(Deficit) before Tax (1,614) (1,578) 35 2% (807) (803) 3 0%

Variance from


DESCRIPTION Budget

(2012-13)

Forecast (Current


Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING PEOPLE AND PERFORMANCE DIVISION




Legal Costs Recovered 135 83 (52) -39% 68 62 (6) -9%

29 Other Income 521 532 11 2% 260 230 (30) -12%

Digital TV Income 480 480 0 0% 240 240 0 0%

TOTAL INCOME 1,136 1,095 (41) -4% 568 532 (36) -6%

Staff Salaries (1,523) (1,352) 171 11% (762) (615) 147 19%

Agency costs 0 (206) (206) -100% 0 (165) (165) -100%

Staff Related Costs (15) (15) 0 0% (8) (4) 3 44%

TOTAL PEOPLE COSTS (1,538) (1,574) (35) -2% (769) (784) (15) -2%

Accommodation (741) (731) 10 1% (370) (361) 9 3%

Communication & Publication (20) (20) 0 0% (10) (5) 5 46%

Depreciation (362) (336) 27 7% (181) (167) 14 8%

Digital TV (480) (480) 0 0% (240) (240) 0 0%

Facilities costs (69) (69) 0 0% (34) (31) 4 10%

ICT Service Costs (533) (537) (4) -1% (267) (267) (0) -0%

Legal Costs (Non SLA) (100) (70) 30 30% (50) (22) 28 56%

Legal Costs (SLA) (60) (25) 35 58% (30) (36) (6) -19%



TOTAL OTHER COSTS (2,480) (2,392) 88 4% (1,240) (1,186) 54 4%

Surplus/(Deficit) before Tax (2,883) (2,871) 12 0% (1,441) (1,438) 3 0%

Variance from


DESCRIPTION Budget

(2013-14)

Forecast (Current


Spend/ Income

YTD

TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING FINANCE DIVISION



A C D (C-A) E(D/A) I J K(J-I) E(K/I)

DTD Income 3,600 3,600 0 0% 1,800 1,797 (3) -0%

Capital Income 300 300 0 0% 150 148 (2) -1%

Voids Income 1,000 1,000 0 0% 500 552 52 10%

Electrical Works 150 150 0 0% 75 10 (65) 0%

Aid & Adaptations Income 167 167 0 0% 83 96 12 15%

TOTAL INCOME 5,216 5,217 0 0% 2,608 2,603 (5) -0%

Staff Salaries (1,418) (1,418) 0 0% (709) (659) 50 7%

Agency costs (204) (204) 0 0% (102) (51) 51 50%


TOTAL PEOPLE COSTS (1,665) (1,664) 0 0% (832) (738) 95 11%

Accommodation (20) (20) 0 0% (10) (10) (0) -2%

Communication & Publication (3) (3) 0 0% (2) 0 2 100%

Consultants (20) (20) 0 0% (10) 0 10 100%

Depreciation (80) (80) 0 0% (40) (38) 2 4%

Corporate Insurance (8) (8) 0 0% (4) (4) (0) -1%

ICT Service Costs (96) (96) 0 0% (48) (45) 3 7%

Legal Costs (Non SLA) (14) (14) 0 0% (7) 0 7 100%


Salary Recharges from TMO (403) (403) (0) -0% (201) (197) 4 2%

Subcontractor Costs (1,941) (1,941) (0) -0% (971) (1,167) (197) -20%

Materials Costs (568) (568) 0 0% (284) (260) 24 8%

Vehicles Costs (234) (234) (0) -0% (117) (99) 18 15%

TOTAL OTHER COSTS (3,432) (3,432) 0 0% (1,716) (1,829) (114) -7%

Surplus/(Deficit) before Tax 120 120 0 0% 60 36 (24) -40%

KCTMO REPAIRS DIRECT DIVISIONAL REPORTING REPAIRS DIRECT BOARD REPORT



Variance from

Budget to Date% Variance % VarianceDESCRIPTION Budget

(2014-15) Revised Budget Variance

Revised Budget

YTD Spend/ Income YTD

DESCRIPTION DETAIL REF 2014-15 2015-16 2016-17 2017-18 2018-19 5 Year Total % Inflation

In-house Income Based on number and outturn costs for repairs 1 2,887,500 2,974,125 3,063,349 3,155,249 3,249,907 15,330,130 3%

Subcontract Income Subcontracted works 2 2,329,000 2,244,370 2,311,701 2,381,052 2,452,484 11,718,607 3%

TOTAL INCOME 5,216,500 5,218,495 5,375,050 5,536,301 5,702,390 27,048,737 3%

Subcontracted Specialist Trades Subcontract work3 (1,941,280) (1,859,125) (1,905,603) (1,953,243) (2,002,074) (9,661,324) 2.5%

Material cost Material costs as a 18% proportion of the in-house

sales value4 (561,750) (575,794) (590,189) (604,943) (620,067) (2,952,743) 2.5%

Based on agreed staffing structure (1)

Tansport Costs For example, Van leae, fuel, insurance and tracking 7 (234,000) (239,850) (245,846) (251,992) (258,292) (1,229,981) 2.5%

ICT Set Up Costs Capital Cost - Assumed spread over 5 years 8 (80,000) (80,000) (80,000) (80,000) (80,000) (400,000) 0.0%

ICT Overhead Annual Revenue Cost 9 (65,000) (66,625) (68,291) (69,998) (71,748) (341,661) 2.5%

Annual Overhead For example, leasing of plant and equipment, offices,

legal, external support.10 (189,200) (191,092) (193,003) (194,933) (196,882) (965,110) 1.0%

Net Surplus before Tax After Recovery of TMO Overheads 120,459 160,951 202,036 245,021 289,977 1,018,443

TAX @ 20% (24,092) (32,190) (40,407) (49,004) (57,995) (203,689)

Net surplus after Tax 96,367 128,761 161,629 196,017 231,982 814,755

TMO Loan Balance from £700k @ end of year 603,633 474,872 313,243 117,227 0

2% 3% 4% 4% 5% 4%

Note 1 . One-Off Electrical Works of £150,000 in 2014/15, subcontracted costs of £127,500

TENANT MANAGEMENT ORGANISATION REPORTING

MANAGEMENT REPORTING FOR PERIOD ENDED 30th September 2014

KCTMO REPAIRS DIRECT - REVISED FINANCIAL PLAN

(410,907) (415,017)

Direct ISP staffing costs 5 (1,622,000) (1,638,220) (1,679,176) (1,721,155)

Overhead (Staffing costs) Indirect Staffing and additional staffing through TMO6 (402,811) (406,839) (419,167) (2,054,741) 1.0%

(1,764,184) (1,808,288) 1.0%

HRA MANAGED BUDGETS

Budget (Original)Forecast (Current

Month)

Variance

Forecast Budget

from Original

% Variance

Forecast from

Revised Budget

Original

Budget YTDSpend/Income YTD

Variance

from Budget

to Date

% Variance

A C E (B-A) F (C/B) H I J (I-H) K (J/H)

Dwelling Rents 42,344 41,943 (401) -1% 21,172 20,071 (1,100) -5%

Tenant Service Charges 4,423 4,247 (176) -4% 2,212 2,033 (179) -8%

Leaseholder Service Charges 5,363 4,680 (684) -13% 2,682 2,107 (575) -21%

Heating & Hot Water Charges 2,445 2,209 (236) -10% 1,222 1,027 (196) -16%

Commercial Properties Rent Income 3,039 3,039 0 0% 1,519 2,230 711 47%

Garage Rent Income 727 727 0 0% 364 369 5 1%

Other Charges for Services & Facilities 65 65 0 0% 33 13 (20) -61%

Supporting People Contract Income 26 26 0 0% 13 13 0 100%

Total Income 58,432 56,936 (1,497) -3% 29,216 27,862 (1,354) -5%

Rents, Rates, Taxes and Other Charges (141) (141) (0) -0% (71) (87) (17) -24%

Planned Maintenance (7,096) (6,708) 388 5% (3,548) (1,825) 1,723 49%

Responsive Maintenance (5,696) (5,714) (18) -0% (2,848) (2,079) 769 27%

Planned Response Repairs (150) (120) 30 20% (75) (20) 55 73%

Electricity, Heating & Hot Water (3,610) (3,620) (10) -0% (1,805) 196 2,001 111%

Provision for Bad and Doubtful Debts (723) (473) 250 35% (362) 0 362 100%

Legal Costs (210) (210) 0 0% (105) 0 105 100%

Contract Cleaning (2,250) (2,269) (19) -1% (1,125) (974) 151 13%

Pest Control (239) (246) (8) -3% (119) (67) 52 44%

Refuse Collection (154) (154) 0 0% (77) (71) 6 7%

General Management (664) (723) (59) -9% (332) (203) 129 39%

Supporting People expenditure (220) (257) (37) -17% (110) (154) (44) -40%

Digital TV Costs (480) (480) 0 0% (240) 108 348 145%

Area Revenue Works (199) (199) 0 0% (100) 10 110 110%

Total Expenditure (21,833) (21,315) 517 2% (10,916) (5,168) 5,748 53%

Transfer To/From Reserves (HRA) 0 92 92 0% 0 0 0 0%

Net Income/(Expenditure) 36,600 35,713 (887) -2% 18,300 22,694 4,394 24%

TENANT MANAGEMENT ORGANISATION REPORTINGHRA BOARD REPORT



Cause for concern Room for Improvement Good

PROJECT NAME Budget 2013-14 Forecast (Current Month)

Capitalised Repairs 450,000 455,597

Contingency 150,000 150,000

Sheltered Scheme - Renewals 50,000 50,000

Salaries - 11,918

Professional Fees 250,000 250,798

Boroughwide Commercial Properties 100,000 91,179

Major Voids 200,000 200,000

Aids & Adaptation Works 460,000 503,394

Environmental - Various Environmental Improvements 100,000 99,928

Cavity Wall Insulation - Boroughwide 10,000 1,678

LWE/Verity Close - Windows Replacement - 33

Kitchens and Bathrooms Replacement Programme - Swinbrook Estate 620,000 616,540

Domestic Electrics - Rewiring Upgrades To Tenanted 600,000 592,204

Door Entry Systems Upgrade - Boroughwide 80,000 50,000

Tavistock Road - Lift Renewal 90,000 76,988

Renewal Of Individual Gas Boilers - Phase 2 150,000 149,860

Communal Electrics - Testing and Upgrade Of Commun 100,000 100,000

Procurement Of Lift Works 10,000 10,000

Communal Heating - Feasibility Study (Options Stud 140,000 139,631

Cremorne Estate- Fire Stopping and Asbestos Remova 110,000 110,000

Ann Lane - H&S Roof Guard 60,000 75,000

Emergency lighting 50,000 50,000

Lancaster West - Garage Doors 50,000 50,000

3 Oxford Gardens - Fire Alarm System 20,000 20,000

Lowerwood Court - Renewal Of Communal Boilers 500,000 500,000

Trellick Tower Phase 6 - Refurbishment Of Services 194,000 186,980

Trellick Towee Phase 7 - External Fabric Repairs 26,300 28,565

Wiltshire Close: Lifts 215

Fire Risk Assessments (Boroughwide) 1,226

Capitalised External Decs 2011-12 199

18 Pembridge Crescent - Structural Works 50,000 46,772

Flooring To Communal Areas (Boroughwide) 15,000 12,262

70-80 Tavistock Road - Capitalised External Decs 2 - 1,027

Fire Risk Assessment Works 90,000 91,565

Ad Hoc Kitchens 110,000 107,512

155 Notting Hill Gate - Repairs To Boundary Wall 10,000 9,115

Roof Renewal and Associated Works 1,600,000 1,577,370

38 Eardley Crescent - Roof Renewal 41,000 42,053

CAPITAL - External Redecoration Programme 2013/14 370,000 369,526

CAPITAL - External Redecoration Programme 2013/14 580,000 585,037

Capitalised External Decoration 2012/13- South - 8,402

Kitchens and Bathrooms, Electrics and Associated W 1,400,000 1,405,283

Kitchen and Bathroom Replacement Programme 2014/15 910,000 910,000

Boroughwide Kitchens & Bathrooms Replacement Progr 1,700 10,143

GRAND TOTAL 9,748,000 9,748,000

TENANT MANAGEMENT ORGANISATION REPORTING HRA - CAPITAL PROGRAMME MONITORING

MANAGEMENT REPORTING FOR PERIOD ENDED 30th September 2014

Last 4 Years

Description End March End March End March End Mar End April End May End July End Sep

2011 2012 2013 2014 2013 2013 2014 2014

£ £ £ £ £ £ £ £

Tenant 1,053,849 1,222,862 1,131,681 1,641,700 1,213,393 1,333,281 1,343,152 1,490,893

Leasehold - Service Charges 1,350,147 1,193,813 1,279,928 1,344,666 820,480 528,958 896,392 595,092

Leasehold - Major Works 3,126,213 2,236,309 1,599,319 1,478,768 1,518,581 1,440,061 1,247,111 1,331,550

Total Debt 5,530,209 4,652,984 4,010,928 4,465,134 3,552,453 3,302,300 3,486,655 3,417,535

Current Payment Plans At 30th September 2014

Leasehold - Service Charges £124,027

Leasehold - Major Works £370,530

Total £494,557

TENANT MANAGEMENT ORGANISATION REPORTINGMANAGEMENT REPORTING FOR PERIOD ENDED 30th September 2014

HRA DEBT POSITION

All figures in £'000

CURRENT YEAR

Agenda Item: 7


Open

For information


Authority for decision: The Board is responsible for overseeing the performance of the organisation.

Recommendations: It is recommended that the Board consider the contents of this report.

Regulatory/legal requirements: Reporting performance is a regulatory requirement.

Business Plan link: Developing organisational competence


Resident consultation: The TMO’s Performance Indicators and Business Plan have been developed with the full involvement of staff, management and the Board, and in consultation with residents, key stakeholders, and partners, of which the Royal Borough is paramount.

Resource implications/VFM statement: We are committed to achieving top quartile performance with value for money

Risk: Decline in organisational performance could result in could result in reputational risk and action from RBKC.

Appendices: 1


13


Yvonne Birch Executive Director of People & Performance, 020 7605 6478

Report title: Performance Update (Quarter 2)

2

PERFORMANCE UPDATE – QUARTER 2 (2014-15)

Purpose The purpose of this report is to advise the TMO Board of the TMO’s

performance for the period April – September 2014.

1 Introduction

1.1 This report and the attachments give an overview of the performance of the TMO in key business areas during the reporting period.

2 Strategic Performance Indicators

2.1 The traffic light indicators use the usual colours to indicate the status of the year to date performance against target.

3 Responsive Repairs

3.1 For the period April to September targets have been exceeded for the

percentage of emergency repairs completed in target, void repairs completed in target and the number of recalls.

3.2 There was a drop in performance in September for the number of emergency repairs completed in target.

3.2.1 A new web portal was recently launched whereby sub contractors can

submit completion dates for TMO jobs. Feedback from Repairs Direct indicates that a number of the failures for September relate to incorrect completion dates being entered via the portal. This is being reviewed with the contractor in question.

3.3 Following recruitment within Repairs Direct to the post of Customer

Complaints Officer, satisfaction monitoring resumed in July. Approximately 15% of residents were surveyed following completion of responsive repairs to their homes. Satisfaction levels improved across the three months and for the quarter stood at 91.1%.

3.4 The post inspection process resumed in Quarter 2. The percentage of

post inspections that successfully passed was below our target of 90%. We are currently analysing the data to understand the reasons and agree actions to address this.

4 Voids & Lettings

4.1 The average time to re-let a general needs property (excluding major

works period) for the period April to September was 26.60 days.

4.2 Performance decreased in quarter two as a number of long term properties were re-let following completion of works.

3

4.3 A review of the voids process is currently being undertaken in light of a

number of issues impacting on our re-let periods and the increased levels of voids. This is with a view to refining and clarifying the workflow processes and lines of responsibility.

5 Customer Contact Centre

5.1 At the end of Quarter 2 the Customer Service Centre (CSC) had answered 90.8% of all calls received between April and September. This remains below our new 2014-15 target of 95%.

5.2 The CSC experienced a high turnover of staff during Quarter 2, with three permanent members of staff leaving together with a number of temporary staff.

5.3 We carried out a recruitment exercise via an assessment centre process

and four new permanent members of staff joined us at the end of September. An early review of October performance has shown that some improvements in performance have already been achieved.

5.4 Following the departure of the interim CSC Manager, Vicky Gilbey in

early September, Olivia Hutchison was appointed to the post of Head of Customer Service Centre. Olivia commenced her new role in early October.

6 Rent Collection 6.1 At the end of September our secure tenant rent arrears stood at £1.017

million, off target by £57,893.

6.2 Arrears at the same point in 2013 stood at £1.124 million. As the chart below shows, collection patterns continue to reflect previous trends.

4

6.3 The Rent Income Team currently has a number of high-level cases

where they are waiting for a bailiff warrant or a court hearing. It should be noted that cut-backs in the courts from April this year have resulted in delays in obtaining court hearings and eviction dates.

6.4 Further work is being undertaken to address performance and look at ways to maximise income and reduce the arrears debt. With Christmas soon approaching it is anticipated that a campaign will be introduced to reiterate the importance of paying rent to ensure there are no risks to tenancies during the festive period.

Former Tenant Arrears

6.5 Between April and September our Sundry Debts Officer collected

£43,166 in former tenant arrears, just short of the target of £45,797.

6.6 An additional £4661 of owed Housing Benefit was also secured. Welfare Reform Please note that the figures below relate to performance at the end of August.

Social Sector Size Criteria

6.7 At the end of August there were 329 households impacted by the social sector size criteria housing benefit deductions, a drop of one since June. The average weekly deduction applied is £22.84.

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

£1,400,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

Current Tenant Arrears (2014-15) - Borough Wide

Arrears 14-15 Target Last Year

5

6.8 The rent collection rate for the 329 households at the end of August was 96.03% compared to the overall TMO collection rate of 98.90%. This represents an overall increase in the group’s arrears of £2069.

6.9 The percentage of households in receipt of discretionary housing

payments (DHP) has decreased further to 33.7% (from 36.7% at the end of June). Benefit Cap

6.10 At the end of August there were 18 households subject to the benefit

cap, with an average reduction in housing benefit of £57.28 per week.

6.11 There has been a drop in the number of households receiving DHP. This has yet to significantly impact on overall rent arrears levels although there has been an increase in the number of households with low level arrears.

7 Leasehold Collection

7.1 All targets for service charge and major works collection up to the end of September have been surpassed.

8 Asset Management 8.1 The latest available figure for the percentage of non-decent TMO homes

is 17%, with no movement since the last quarter.

8.2 The average SAP rating is 67.2, an energy performance increase of 0.7 since June resulting from the 2014-15 cavity wall insulation programme.

8.3 The above KPI measures have been reviewed for 2014/15 and it is the

intention to report on the new KPIs below in future. This will provide more meaningful returns on progress.

1. The number of properties successfully brought up to the agreed

TMO Standard during the period.

2. The percentage of properties with an Energy Performance Certificate (EPC), and the SAP improvement achieved by our current programme.

8.4 Gas servicing compliance as at the end of September was 100%. The

average number of properties without a valid Landlords Gas Safety Record (LGSR) over the quarter was zero.

8.4.1 Our consultant, GCS continues to administer the gas safety contract and with ongoing improvements in the implementation of the TMO Gas Access Policy and Procedure, 100% compliance has been achieved for every month in the second quarter.

6

8.5 The procurement process for the new gas repair, maintenance and installation contract has commenced and it is anticipated that the new contract will be place from 31st January 2015.

8.6 With regard to the 2014-15 capital programme, the programme will fully utilise the agreed capital allocation of £9.748 million.

9 Resident Engagement

Key Events

9.1 Our annual Residents’ Conference was held on the 13th September at the Royal Garden Hotel, Kensington. The event was very popular with 322 residents attending, an increase of 82 on last year’s event. Resident Associations

9.2 During Quarter 3 the Resident Engagement Team supported the launch

of one new Residents’ Association and two new Compacts.

Grove House Residents’ Association

32 Golborne Road Compact

34 Oxford Garden Compact Children’s & Youth TMO

9.3 At the end of September the TMO had recruited 24 new members to the

Children’s TMO.

9.4 Recruitment to the new Youth Forum had reached 8 members by the end of Quarter 2; however, a further 17 members have since been signed up in October.

10 Complaints

10.1 The TMO continues to maintain above target performance for the

percentage of complaints answered in target. For the year to date we have answered 93.3% of Stage One complaints in target, and 100% of Stage Two complaints.

10.2 The number of complaints being escalated to Stage Two remains low, with just three complaints closed at the stage so far in 2014/15.

10.3 During Quarter 2 we saw an increase in the number of new complaints

received. There have been increases in the number of complaints received by the TMO’s Repairs Team, the Contact Centre and the North Neighbourhoods Team; however, the data set is too small to observe any specific trends at this time. New complaints will continue to be monitored over the coming months.

7

11 Governance

11.1 To date 87 residents have become new members of the TMO.

11.2 Responsibility for the recruitment of members is held jointly by the Resident Engagement Team and the Company Secretary, Fola Kafidiya.

11.3 Fola will be working with the Resident Engagement Team during the

coming months to review our position and to develop our recruitment strategy going forward.

11.4 Our Annual General Meeting was held in September. In total 1089

Members voted, including both those who voted prior to the meeting and those who attended in person on the day. Compared to our 2013 event this is an increase in participation of 62%.

12 Recommendations

12.1 The Board is invited to comment on the content of the report. YVONNE BIRCH DIRECTOR OF PEOPLE & PERFORMANCE

1

Agenda Item: 8


Open

For Decision


Authority for decision: The Board of Directors has the overall responsibility to monitor the scope and effectiveness of the internal controls and systems established to identify and assess all material risks to the Company.

Recommendations: It is recommended that the Board pass the following resolution: “The Board RESOLVED TO adopt the Corporate Risk Map proposed to it by the Finance, Audit & Risk Committee.”

Regulatory/legal requirements: A corporate risk map is an internal audit requirement.

Business Plan link: All sections of the Business Plan apply.

Risk: The lack of a corporate risk map would result in a substantive lack of monitoring of the risks of the Company and would be considered to be a lack of effective controls and risk management in the Company.

Appendices: 1


4


Janet Seward Policy & Improvement Manager 0207605 6350

Report title: Corporate Risk Map 2014/15

CORPORATE RISK MAP 2014/15

2. INTRODUCTION AND BACKGROUND 2.1. This draft Corporate Risk Map was considered by the Finance & Audit

Committee on 16th October 2014 and has been referred by that committee to the Board for adoption.

2.2. The risk map outlines items that the management consider to be the corporate

risks applicable for the coming year. It covers risks in the short, long and medium term. The map includes risks to the Business Plan such as potential risks to the Growth Strategy (items 1 and 5) as well as more general risks around compliance and health and safety (8 and 11).

2.3. The risk map, once adopted by the Board, will be monitored by Finance & Audit

at meetings at regular intervals throughout the year.

3. CORPORATE RISK MAP 3.1. There are eleven risks listed. Nine have been rated as low risks and two as

medium risks. Overall, the risks are the same as last year although there are more detailed risks relating to the investment programme (1, 2 and 3) and some risks have been introduced such as the risks relating to the newly-formed Company’s subsidiary, Repairs Direct (item 6).

4. RECOMMENDATION

The Board is requested to consider the recommendation on the front of this report.

Janet Seward Policy & Improvement Manager

1. PURPOSE 1.1 The purpose of this report is to present the Corporate Risk Map for 2014/15.

Agenda Item: 9



Open

For Decision


Authority for decision: The Board is responsible for overseeing the Company’s responsibilities to its stakeholders.

Recommendations: It is recommended that the Board pass the following resolution: “The Board RESOLVED TO agree and adopt the revised Compensation Policy and Procedure.”

Regulatory/legal requirements: A compensation policy and procedure is good practice.

Business Plan link: Customers at the Heart and Deliver, Excellent Good Value Services.


The policy and procedure has been reviewed in conjunction with RBKC legal department.

Resident consultation: The policy was reviewed in order to make it more transparent for residents.


None – amounts of compensation are not significantly different.

Risk: None

Appendices: 1


2


Janet Seward Policy & Improvement Manager

Report title: Compensation Policy and Procedure

KCTMO Compensation Policy and Procedure

2. INTRODUCTION 2.1. The original KCTMO compensation policy was agreed in May 2011. 3. CURRENT POSITION

3.1. The document has been revised as to address the statutory compensation

schemes in respect of both the 1994 Right to Repair legislation and the1994 Compensation for Improvements Regulations.

3.2. The revised compensation procedure now has three distinct sections:

3.2..1. Statutory compensation for tenants’ improvement; 3.2..2. Statutory compensation for right to repair; and 3.2..3. KCTMO’s discretionary compensation policy.

4. CONSULTATION 4.1. The Council’s Policy Board agreed the policy and procedure on 11th September

and the Operations Committee agreed it on 1st October. The document has been produced in consultation with RBKC’s legal department.

5. CONCLUSION

5.1. That the Board consider the recommendations on the first page of this report.

Janet Seward Policy & Improvement Manager 0207 605 6350

1. PURPOSE 1.1 The purpose of this report is to up-date the Board on the KCTMO

Compensation Policy and Procedure. 1.2 The Board is requested to agree and note the revised KCTMO

Compensation Policy and Procedure.

Version 5 29th November 2013

1

KCTMO Compensation

Policy and Procedure

November 2013 V5

Action Date

Revised November 2013

Agreed Policy Board 11th September 2014


2

1. Purpose

1.1 This document sets out KCTMO’s approach to dealing with compensation

payments. KCTMO aims to provide excellent services and to resolve any issues

before the need for a compensation payment arises. If services fail or fall below

published standards then KCTMO will put the matter right and apologise as

quickly as possible. The purpose of this document is to provide guidance for

dealing with applications from residents applying for compensation/refunds.

Whilst each case will be considered upon its own merits and circumstances, the

Compensation Policy promotes a consistent approach across the organisation

when dealing with compensation claims.

1.2 The aims of the KCTMO Compensation Policy are to ensure that;

Problems are resolved quickly and efficiently.

Practical solutions are explored to remedy the situation.

Where financial payments are appropriate they are proportionate to

the loss or inconvenience caused.

Financial payment is considered against clear guidelines.

All residents are treated fairly.

2. Scope

2.1 KCTMO will consider refund and compensation payments to residents affected by service failures where these are directly attributable to the TMO and its staff. Awards will be made in accordance with the criteria set out in this document.

2.2 This Policy gives guidance for statutory and discretionary types of

compensation which are;

The Secure Tenants of Local Authorities (Right to Repair) Regulations

1994.

Discretionary Compensation

The Secure Tenants of Local Authorities (Compensation for Improvement) Regulations 1994.

2. 4 Other than in exceptional circumstances, claims for compensation will only be

considered within 3 months of the problem occurring.

2.5 RBKC Legal and Insurance Sections must be consulted at the earliest opportunity in respect of all compensation claims as inappropriate payments could prejudice the TMO and RBKC’s legal and insurance positions. Personal Injury, Property Damage and Disrepair claims are not considered in this policy.

2.6 This compensation policy does not take the place of home contents insurance

which all residents are strongly recommended to get. A National Housing Federation “My Home” Contents Insurance Scheme is available to KCTMO residents at competitive rates.


3

2.7 Costs payable by the TMO when tenants have to be moved temporarily or permanently to allow for repairs to be carried out are not considered in this policy and the KCTMO Decant Policy should be referred to for guidance on this.

3. The Secure Tenants of Local Authorities (Right to Repair) Regulations 1994

3.1 The right to repair scheme is designed to ensure tenants can get certain repairs

completed quickly and easily. The scheme covers small urgent repairs costing up to

£250 which if not carried out within the specified period are likely to cause damage to

the health, safety or security of the resident. If the repairs are not completed in time

the tenants have the right to ask the TMO to use an alternative contractor and, if the

repair is still not completed within a certain period, to claim compensation.

3.2 Qualifying Repairs

The scheme only covers qualifying repairs which cost less than £250 to carry out and

are detailed in the table below;

Table 1

Repair Timescale (working days)

Total loss of electric power 1

Partial loss of electric power 3

Unsafe power or lighting socket, or electrical fitting 1

Total loss of water supply 1

Partial loss of water supply 3

Total or partial loss of gas supply 1

Blocked flue to open fire or boiler 1

Total loss of space or water heating supply between 31st October and 1st May.

1

Total or partial loss of space or water heating supply between 30th April and 1st November.

3

Blocked or leaking foul drain, soil stack, or (where there is not other working toilet in the dwelling house) toilet pan.

1

Toilet not flushing(where there is no other working toilet in the dwelling house)

1

Blocked sink, bath or basin 3

Tap which cannot be turned 3

Leaking from water or heating pipe, tank or cistern 1

Leaking roof 7

Insecure external window door or lock 1

Loose or detached bannister or handrail 3

Rotten timber flooring or stair tread 3

Door entry phone not working 7

Mechanical extractor fan in the internal kitchen or bathroom not working

7

3.3 The tenant will lose the right to claim compensation if they advise that they no longer

want the repair to be carried out or fail to provide access for the repair to be carried

out.


4

3.4 Guidance on Right to Repair Compensation

If the repair is not completed in the prescribed time detailed in the table above the

tenant can request that the TMO appoints another contractor to complete the repair.

If the repair is not completed by the end of the second prescribed period the tenant

will be entitled to compensation at £10 plus £ 2 per day for every day that the repair

remains outstanding up to a maximum of £50.

4. Discretionary Compensation

4.1 Discretionary compensation is for use to deal with occurrences that fall outside of the

statutory Right to Repair compensation. Examples when discretionary compensation

may be given are;

When there is a failure in service delivery where a tenant has suffered loss or

major inconvenience due to expected standards not being met.

When the organisation’s policies and procedures have not been followed.

Failure to carry out repairs within timescale and missed appointments.

Failure to carry out repairs in a satisfactory manner.

Failure to diagnose the correct repairs required.

Occasions when Tenants have been severely inconvenienced by the actions

of the TMO undertaking their landlord responsibilities.

Loss of services provided by the TMO to the Resident’s home, such as

heating/hot water services where the TMO is responsible and between

October and April.

Loss of amenity such as a room.

4.2 Where a service that is provided to a number of residents fails for example a

communal heating system and compensation is deemed applicable , the TMO will

pay all residents affected irrespective of whether they have made a compensation

claim or not..

4.3 Discretionary compensation must not be used in place of statutory compensation.

Guidance on how to calculate discretionary compensation for service failure is

attached at Appendix B.

4.4 The maximum value of a discretionary compensation is £2000 and may be paid as a

one-off payment or added to a payment granted under a statutory compensation

claim.

5. Procedure for assessing Compensation for Right to Repair and Discretionary claims 5.1 All compensation claims will be considered on a case by case basis taking into account the individual circumstances of the claimant. 5.2 On receiving a claim for compensation the Service Manager will take the following steps;


5

1. Undertake a detailed, evidenced investigation to assess how and when the failure occurred, assess the actual loss and then compare with what the claimant is asking.

2. Consideration must then be given to “putting things right” and placing the applicant in the position they would have been in if the incident/service interruption had not occurred.

3. Before any financial award may be awarded, consideration must be given to a range of remedies that may be appropriate. It

is good practice to seek the view of the applicant about “how to put things right”, but the TMO Service Manager should use their own judgement to ensure the outcome is consistent with the policy. Putting things right” could include;

An explanation giving a full answer to all points raised in the compensation application

An assurance that every effort will be made to ensure that it does not happen again

Action taken to put things right – This means demonstrable action to show that the matter is/has been taken seriously

Reviewing policies and procedures if appropriate.

Follow up staff guidance or training if appropriate

4. If specific action is insufficient to put the claimant back in the position they would have been in, if the incident/failure had not occurred then compensation may be the best option.

5. If the decision is made to consider awarding compensation then it is

essential to check the claimant does not have an outstanding disrepair or insurance claim or is in rent/service charge arrears,

6. The Neighbourhood Management Team Leader/Home Ownership Manager must be notified and will check if there are any disrepair or insurance claims relating to the claimant. If there are then advice should be sought from RBKC Legal/Insurance as to whether a TMO offer of compensation would be prejudicial.

7. The Rent Income Team Leader/Home Ownership Manager must be

notified and will check if there are arrears on the rent/service charge accounts that must be offset against any compensation offered.

8. Using the compensation guidance table attached at Appendix A an offer can be calculated. The following officers should be notified prior to making the offer;

- Neighbourhood Management Team Leader/Home Ownership Manager

- Complaints Manager - Head of Service for the area where the problem has occurred.

9. Using the offer letters attached at Appendices C and D the claimant

should be notified of the decision regarding their claim within 28 days. If


6

payment due to a claimant who is in rent or service charge arrears then the offer letter must state that the payment due has been applied to their rent or service charge account.

10. All offers of compensation are to be made ‘without prejudice’ and ‘without admission of liability’ to protect the TMO and the council’s position.Details on how the settlement figure was calculated and the basis on which it was reached, for statutory and discretionary compensation should be attached for both the claimant and the TMO’s records.

11. If the offer of compensation is not accepted, the claimant is advised to contact the Complaints Manager to take the matter further under the Complaints Procedure either in writing to at; KCTMO, Network Hub, 292a Kensal Road, London W10 5BE or via email: [email protected], clearly stating grounds for refusal.

12. If the claimant accepts the without prejudice/without admissions to liability

letter they should be asked to accept the offer in full and final settlement in an open letter. An open letter for the claimant to return is attached to Appendix C.

13. Once the letter accepting the offer is received from the claimant the pro- forma which is attached at Appendix E must be completed by the Service

Manager and signed off by the appropriate Manager who can authorise the amount of compensation agreed. The form should then be forwarded to the Finance Section to raise a cheque payment. This form must be copied to the Complaint’s Manager who is responsible for reporting on overall compensation matters and maintains a central record of

compensation paid

14. The cheque should be sent to the claimant along with a copy of the letter attached at Appendix F which confirms that the claimant has accepted the payment which is full and final.

15. Copies of all documents/emails relating to the claim must be sent to the

Neighbourhood Officer/Home Ownership Officer for the file,

6. The Secure Tenants of Local Authorities (Compensation for Improvement)

Regulations 1994

6.1 The Leasehold Reform, Housing and Urban Development Act 1993 gives secure

tenants the right to compensation for specified tenant financed improvements that

have had the written permission of the TMO.

6.2 The right to compensation for improvements is subject to certain qualifying criteria

and regulations contained in the Secure Tenants of Local Authorities (Compensation

for Improvements) Regulations 1994.

6.3 Entitlement

The following criteria must be satisfied to be eligible to make a claim for

compensation;

The tenancy must be secure.


7

Sole tenants or one of both joint tenants including those who succeeded to

the tenancy or were assigned the tenancy.

Tenants who are transferring or carrying out a mutual exchange.

The work must have been carried out on or after 1st April 1994.

Written consent must have been given by KCTMO before the improvement

work was carried out.

6.4 Reasons why compensation would not be carried out

Compensation will not be paid if;

The compensation payable is less then £50.

The tenancy has ended as a result of an eviction.

The tenancy ends due to the tenant exercising their Right to Buy.

The property is re-allocated to a person qualifying for the compensation.

The notional life of the improvement has expired.

6.5 Qualifying Improvements

Entitlement relates only to a “qualifying improvement”. This is the installation or

replacement of any of the specified items;

Table 2

Improvement Notional Life

Bath or shower 12

Wash hand basin 12

Toilet 12

Kitchen sink 10

Storage cupboards in bathroom or kitchen 10

Work surfaces for food preparation 10

Space or water\ heating 12

Thermostatic radiator valves 7

Insulation of pipes, water \tank or cylinder 10

Loft insulation 20

Cavity wall insulation 20

Draught proofing of external doors or

windows

8

Double glazing or secondary glazing 20


8

Rewiring or provision of power and lighting or

other fitting, including smoke detectors

15

Any object that improves security (not alarms) 10

6.6 Calculation of Compensation for Improvements The amount of compensation payable is calculated according to the following formula, which takes into account wear and tear and depreciation. C x (1 –Y/N) C = original cost of the improvement (Any financial assistance such as a grant will be deducted from the cost) Y = the number of complete years the improvement has been in place starting on the date the improvement was completed and ending on the date the compensation is claimed N = the notional life of the improvement The maximum payable is £3000. The request for compensation must be made in writing 28 days before the tenancy ends and up to 2 weeks after. 6.7 Compensation Claim Process for Improvements All compensation claims must be made in writing and contain the following information;

Name and address

Contact telephone number

Details of the improvement that has been made

How much the improvement cost

The date the improvement work was completed

A copy of the invoice to show the cost

A copy of the letter from the TMO giving consent for the work 6.8 Once the claim is received a TMO Surveyor will visit the property to inspect the improvement and to make a decision on the outcome of the claim. 6.9 The tenant will then be written to within 28 days of the visit to explain the outcome including details of how the claim has been calculated if it decided that compensation is payable. 7. Responsibility for Approving Compensation Claims 7.1 The Service Manager should complete the compensation form which is attached

at Appendix E and seek the appropriate Manager’s authorisation which must be retained.


9

This pro-forma must be completed in full and issued to the Finance section to raise a cheque. No payment will be made without the completion and submission of this pro-forma to Finance. 8. Payment Authorisation 8.1 For Statutory Payments;

Service Managers may authorise payments up to £300. The relevant Assistant Director/Head of Service can authorise

payments between £301 and £500. Payments above £500 must be authorised by a Director of Service/

Executive Team member.

8.2 For Discretionary Payments;

The relevant Assistant Director/Head of Service can authorise payments up to £500.

Payments above £500 must be authorised by a Director of Service/

Executive Team member.

The maximum payment that can be considered under this policy is

£2000.

9.0 Third Party Responsibilities 9.1 Where service breakdown was primarily due to a third party such as contractors’ working for the TMO, the TMO will pursue the service provider and will expect them to pay compensation for their failure to provide services on time and to a satisfactory standard. Where contractors do not have their own compensation policy they will be expected to follow this policy and be required to remedy the situation and/or settle any compensation payments via the TMO, with the TMO making settlement direct with the Tenant. 10.0 Equality and Diversity 10.1 The TMO is committed to promoting equality and diversity among our residents and staff regardless of disability, race, colour, nationality, gender, sexuality, age, religion or other belief. 10.2 In meeting the aims of this policy, the TMO will provide information that is accessible and available in appropriate formats including interpretation and translation services, large print and audio formats. Contact the Equality and Diversity Officer if you require any of these services. 10.3 Where appropriate, staff will provide support to residents in order to help them understand the process and if necessary, assist in completing an application for compensation/refund.


10

Appendix A – Statutory Compensation Guidance Table

Service Fault

Measured by Compensation due Eligibility

THE SECURE TENANTS OF LOCAL AUTHORITIES (RIGHT TO REPAIR) REGULATIONS 1994

Schedule of Rates/Response Repairs/Engineering Response Repairs Second failure to carry out specified repair within prescribed period.

List of specified repairs is included at Table 1 Application by the tenant with evidenced actual loss and/or significant inconvenience. The tenant must have kept the appointment and ensured that they have given the contractor the opportunity to undertake the work.

£10 plus £2 per day for every day that the repair remains outstanding up to a maximum of £50.

Tenants


11

Appendix B – Discretionary Compensation Guidance Table

SERVICE DELIVERY FAILURE

Schedule of Rates/Response Repairs/Engineering Response Repairs Missed appointment by the contractor/ failure to turn up for an emergency

Application by the tenant with evidenced actual loss and/or significant inconvenience. The tenant must have kept the appointment and ensured that they have given the contractor the opportunity to undertake the work.

£20 voucher Tenants and Leaseholders

Cost of using Dehumidifier Operation cost of Dehumidifier provided by the TMO to remove moisture within residence.

Service Manager to ensure payment based upon operation period and energy consumption of unit

£2.00 per day to cover humidifier running costs.

Tenants and Leaseholders

Loss of Amenity (Uninhabitable Rooms) Where any room is uninhabitable/ unavailable for use as a result of the actions/inaction of the TMO

Unable to use the room Confirmed by TMO Surveyor (unless previous notification provided i.e. for Planned/Capital works). Will not be paid if the tenant is provided with temporary accommodation.

Where lost of amenity, £10 one off payment plus, until resolved, % refund of the weekly rent as follows: Living Room: 10% Bedroom: 20% Sole Bedroom: 30% Kitchen/Bathroom 50%

Tenants

Lift Failure Compensation will not be paid if a lift is unavailable due to vandalism or because of a planned renewal programme

Compensation payable where lift is unavailable and Resident lives above the fourth floor, there is no access to another lift in the same block, the lift has been out of

£5.00 per week if the Complainant has no mobility issues and/or there is another lift stopping on another floor. £10.00 per week if the Complainant has



12

service for more than 5 consecutive days. Consider discretionary payment for vulnerable residents (Senior Citizens and registered disabled tenants). Those who live on the fourth floor and below are not eligible to receive compensation.

mobility issues and/or there is no other lift.

Loss of Utility Either no water or electricity supply after a continuous period of 24 hours

Where loss of supply is as a result of a failure or omission on behalf of the TMO.

Bottled drinking water will be provided. Compensation £5 per day.


HEATING AND HOT WATER

District heating and hot water system refunds Applies where landlord controlled heating supply fails during the recognised heating season (October to April) Compensation will not be awarded outside of the heating season.

Application by the tenant accompanied with evidence actual loss and/or significance inconvenience. If the communal system fails for more than 5 days a refund of the heating and hot water charges will be made to the rent or service charge account.

Studios and 1 beds £2.40 per day 2 beds + £4.80 per day These figures are based on the EDF standard price per kilowatt hour to use replacement electric heaters.


Individual heating and hot water system compensation

Application by tenant to cover the costs of an alternative heating supply.

Studios and 1 beds £2.40 per day 2 beds + £4.80 per day These figures are based on the EDF standard price per kilowatt hour to use replacement electric heaters.

Tenants


13

Guidance Notes

Where any service disruption is as a direct result of a supply authority failure, any compensation arising is not covered by the TMO

or this procedure. Tenants must approach their supply authority direct for compensation.

Version 5 29th November 2013 Appendix C

14

Name Address 1 Address 2 Address 3 Postcode

292a Kensal Road LONDON W10 5BE Your Name

Your Telephone Your email

Ref: Comp 1 Date:

Dear Recipient, Application for [Statutory/Discretionary] Compensation I am writing in response to your letter dated [insert date]. Your application for compensation has been investigated and a decision has been made.. A summary of your request is summarised as follows: [Provide summary of issue] The TMO would like to make the without prejudice offer of £[insert amount] compensation [detail how the compensation has been calculated]. This offer is not an admission of liability by the TMO and is offered in full and final payment of your application. If you would like to accept this offer please sign the attached letter and return it in the pre-paid envelope provided. If you have any queries regarding the investigation, the recommendations made, please contact me on the above telephone number. If you are not satisfied with the outcome of this investigation, you may submit an appeal which will be dealt with under the KCTMO Complaints procedure. To do this you should contact the Complaints Manager in writing at KCTMO, 292a Kensal Road, London W10 5BE or via email [email protected], clearly explaining why you remain dissatisfied and what you expect from a further review. Yours sincerely, Your Name Your job description

mailto:[email protected]

Version 5 29th November 2013 Appendix C

15

[Insert Claimant Name] [Insert Address] Dear Sirs I [Insert Claimant Name], the undersigned, of [insert address] accept the amount of £[insert amount] compensation from Kensington and Chelsea TMO Ltd as full and final settlement of my claim. I am aware that that Kensington and Chelsea TMO Ltd will make payment within 28 days of this completed form being returned. Signed ………………………………………………… Dated …………………………………………………

Version 5 29th November 2013 Appendix D

16




Ref: Comp 2 Date: Dear Recipient, Application for [Statutory/Discretionary] Compensation I am writing in response to your letter dated [insert date]. Your application for compensation has been investigated and a decision has been made.. A summary of your request is summarised as follows: [Provide summary of issue] The TMO will not be making an offer of compensation [give reasons why not]. If you have any queries regarding the investigation, the recommendations made, please contact me on the above telephone number. If you are not satisfied with the outcome of this investigation, you may submit an appeal which will be dealt with under the KCTMO Complaints procedure,. To do this you should contact the Complaints Manager in writing: KCTMO, 292a Kensal Road, London W10 5BE or via e mail [email protected], clearly explaining why you remain dissatisfied and what you expect from a further review. Yours sincerely, Your Name Your job description

mailto:[email protected]


17

Appendix E Compensation Approval Application Form

Name of Applicant: ________________________________________

Address of Applicant:______________________________________

Address of Property Involved if Different From Above

__________________________________________________________

Date of Receipt of Application for Compensation: _________________

Brief Nature Service Interruption/Failure:___________________________________

____________________________________________________________________

____________________________________________________________________

Compensation Sum Being Claimed £ _______________

Is Claim Approved in Principle £ __________________

If No, Date of Letter Confirming Refusal:____________

If Yes, Provide Compensation Sum Proposed and Basis for Calculation

£______________

Proposed By: _______________________

Budget Code to be Utilized (Application Cannot be Approved Without this Confirmation

_______________________

Approved In Principle By:

Statutory Compensation Approval

Service Manager (For Claims Up to £300) __________________ Date ________

Asst Director/Head of Service (For Claims £301 - £500) ______________ Date ________

Director/Executive Team (For Claims Greater than £500) _____________ Date ________

Discretionary Compensation Approval

Asst Director/Head of Service (For Claims Up to - £500) _____________ Date ________

Director/Executive Team (For Claims Greater than £500) _____________ Date ________

Following acceptance by Claimant to the offer, this form to be completed and sent to

Finance Section to raise cheque, with cc to the Complaints Manager for information.

Payment will not be made without submission/completion of this form.

Version 5 29th November 2013 Appendix F

18




Ref: Comp 3 Date:

Dear Recipient, [Statutory/Discretionary] Compensation Payment Thank you for your letter dated [insert date] accepting the offer of [insert amount] which is in full and final settlement. Please find a cheque enclosed [If money has been paid onto the rent/service charge account give details]. If you have any queries or concerns regarding this matter please contact me on the above telephone number. Yours sincerely, Your Name Your job description

Agenda Item: 10



Open

For Information


Authority for decision: The Board is responsible for overseeing the obligations of the Company under the Management Agreement.

Recommendations: It is recommended that the Board consider the contents of this report

Regulatory/legal requirements: The Board has a duty to ensure the Company the success of the Company by adhering to the terms of the Management Agreement.

Business Plan link: Delivering value-for-money and growing the scale and scope of the business.


N/A

Resident consultation: Residents will be consulted on any proposal to substantively change the use of any property in the portfolio.


The Company is responsible for managing HRA commercial property budgets, including ensuring RBKC Corporate Property provide value-for-money for the £180k pa fee they receive from the HRA.

Risk: The historically-weak management controls have been addressed by an improved working relationship between the Company and Corporate Property.

Appendices: 2

Report title: HRA Commercial Portfolio – 2014/15 Half-Year Report


14


David Vickerstaff, Senior Commercial Property Surveyor, RBKC Corporate Property, 020 7361 2859 / [email protected]

2014-2015 HALF YEAR REPORT

Report on the Royal Borough of Kensington & Chelsea HRA

Commercial Portfolio for KCTMO Board

Reporting for the period: 25 March 2014 – 28 September 2014

10 October 2014

Report of the Royal Borough of Kensington & Chelsea HRA Commercial Portfolio for KCTMO 25.03.14 – 28.09.14

2

Contents

The report covers all areas of management that the RBKC Corporate Property

Team undertakes on behalf of KCTMO.

1. Executive summary

2. HRA income and rent collection

3. HRA aged debt

4. HRA voids and lettings

5. Lease renewals

6. Rent reviews

7. Telecoms/Car Parks

8. SLA and MMO

9. Right to Buy

10. General Management & Development

11. Additional Objectives

12. Next six months

Appendices – KPIs for Quarter 1 and Quarter 2


3

1. Executive Summary

Headline Figures

The HRA commercial portfolio now produces an annual rental income of £3,015,091,

which is the first time the £3m pa mark has been passed.

Void levels remain at historic lows. There are five available-to-let void properties at

the end of September 2014, with two of these under offer, plus one vacant retail unit

which is currently unavailable-to-let pending major works.

Total debts over 60 days old began the year at £110,095 but had been reduced by

the end of September 2014 to £57,439, equating to 1.9% of the total rent roll.

A substantive historic backlog of lease renewals and rent reviews has been fully

resolved, with statutory now notices served on all 89 lease renewals and rent

reviews which were outstanding at the start of 2013/14 year.

Revenue from car parking sites is beginning to be a noticeable part of the rent roll

and by year end will be considerable.

In addition to the commercial portfolio, there have been 11 Right to Buy completions

in the period producing an income of £2,402,250.

Headline Activities

The management priorities for Corporate Property during the period have been to maximise income from existing lettings by reducing the level of historic aged debts and commencing lease renewals and rent reviews. There has been sustained progress in each of these areas. Additionally, Corporate Property has led a successful drive to reduce voids, and increase revenue from the portfolio. The SLA is now actively followed and KPI’s are being surpassed, helped by improved relations between Corporate Property and KCTMO. The Corporate Property Team has completed a full audit of the HRA commercial portfolio. Corporate Property now has 6 members of staff actively working on the portfolio and an internal review of Corporate Property staffing is allowing this to continue.


4

Developments of HRA stock are now being actively discussed with KCTMO and all parties are jointly identifying new sites for commercial or residential development. This includes the car parks and telecoms sites discussed in section 7.

2. HRA Income and Rent Collection There are currently 182 HRA commercial properties under the management of Corporate Property. The annualised rental income produced during the year totals £3,015,091 and is made up of £2,526,343 from commercial tenant receipts and £488,748 from internal ‘transfer’ rents from other RBKC departments (such as Adult Social Care using the Orimi Centre) and £88,275 from voluntary organisations. Following a Cabinet decision in June 2014, we are now seeking to ensure that all RBKC departmental occupiers and voluntary organisations pay a market rent, so that we can ensure the portfolio delivers best value to the HRA. This means that, as a current leases approach expiry, we will be working with other RBKC departments to ensure that rental subsidy is paid via grant from the General Fund.

3. HRA Aged Debt

The KPI requires that Corporate Property shall ensure total aged debt (invoices outstanding for 60 days or more) does not exceed 5% of the total rent roll. The graph below shows the amount of debt outstanding that is over 60 days old at the end of each month. The KPI figure using the current annualised rental is £150,000. At the start of the period, 01st April 2014, the total known aged debt for the HRA portfolio was £110,095.00. As of the end of the period, 30th September 2014, the level of known aged debt has decreased to £57,439.00. An improved rate of collection has resulted in the overall level of debts reducing by almost 50% and, moreover, as debts become aged they have been collected faster than previously. At the end of the period, the total aged debt was 1.9% of the value of the total rent roll for the portfolio, out-performing the KPI requirement of 5%. Corporate property have dedicated staff to collect arrears and all surveyors help during busy times following our service review. However each case is considered on its own merits ensuring that all tenants are dealt with equitably.


5

Figure 2 – Total debt for the HRA portfolio April 2014 to September 2014

4. HRA Voids and Lettings

As of 28th September 2014 the void properties were:

1 Curran House Studio

3 Curran House Studio

7 Fleming Studio

2 Fleming Studio

4 Stamford Bridge Studio

The percentage value of the vacant units compared to the rent roll is 1.87% All properties are marketed via agreed letting agents within a week of becoming vacant or earlier if we know of the forthcoming vacancy. The KPI allows one month for marketing to begin. There are no retail voids on the portfolio which is a great achievement although it is expected that there will be some short term voids in the retail stock during renewal periods as tenants vacate and new leases are agreed. Marketed voids are all made up of artist studios, however there is a retail unit in Octavia House that is vacant due to major water damage – this unit will be repaired and become much more valuable as the new private developments on the street are completed during 2014. Rental values achieved for artist studios have increased rapidly during 2014. This does not include derelict former basement car parks, which are separately discussed under section 7 below.

£0

£20,000

£40,000

£60,000

£80,000

£100,000

£120,000

£140,000

Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14

Aged Debt

Aged Debt


6

5. Lease Renewals

Where a lease is due to expire, Corporate Property serve notice on all tenants, once instructions to renew have been agreed by KCTMO. This allows the fund to keep pace with market conditions and inflation. As at 30th September 2014, legal notices had been served on all expiring lessees, within statutory timescales. However, this has resulted in some protracted negotiations. There are 15 outstanding renewals currently ongoing, of which five are 18-24 months past the due date. Negotiations have been linked to the wider economic climate. During the recession there has been little growth in rents and tenants have been asking for larger incentives, such as rent free periods to renew tenancies. However it is hoped that the rentals achieved will increase and the incentives granted will decrease as the property market / economy improves.

6. Rent Reviews

At the start of the year there were 20 outstanding rent reviews that had not been completed, with 16 of these over 18 month past their due date. Most are on hold due to other factors such as lease negotiations or the properties are ‘over rented’ (the current rent is above the market rent). Corporate Property continues to meet the target of making sure that all outstanding rent reviews are started before they become due. Rent reviews allow the landlord to keep up with property price inflation, which has been subdued during the recession, but is now showing signs of improving and it is therefore hoped that the fund will improve the rent collected throughout 2014.

7. Car Parks and Telecoms

The car park portfolio within the HRA fund has been under-used for resident parking and has therefore underperformed for some time and KCTMO has been leading a project to convert derelict spaces for commercial letting. This has resulted in agreements to lease former basement car parks at Acklam Road, Holmefield House and Walnut Tree House, on 20 or 25 year leases. These all have initial periods at rent-free or reduced rents, enabling the incoming lessees to cover their initial capital costs, but will produce new income totalling £462,000 pa from 2016/17 onwards. We continue to explore further opportunities on the HRA car parking sites, via the KCTMO-led project team. A Corporate Property-led review of telecoms leases has allowed us to negotiate annual income to increase from £106,240 in the year to April 2014 to £160,840 in the


7

new financial year – an increase of 51%. Discussions over the roll-out of ‘4G’ networks are ongoing and it is hoped that income from this section of the portfolio will further increase in future.

8. SLA and MMO

The Service Level Agreement between KCTMO and RBKC Corporate Property was agreed by both the TMO Board and RBKC Legal Services in early 2014. It is awaiting legal signature, as a subsidiary document to the main KCTMO Modular Management Agreement. This puts in place a framework for the regulation of service and the measurement of the service provided by Corporate Property. It shows how the fund is being managed and what progress is being made. The Key Performance Indicators are measured quarterly in a separate report, appended here for reference, and are as follows: KPI 1: Property Services to provide the following headline indicators for the quarter end date:

1. Number of properties in portfolio and total value of rent roll 2. Number of void properties and value as percentage of portfolio 3. Total aged debt and value as percentage of portfolio 4. Number of outstanding lease renewals and rent reviews

KPI 2: Property Services is to commence marketing of vacant properties as early as possible, with a deadline target of one month of the property becoming vacant, excepting circumstances where repair works are first required to put the property into a condition suitable for marketing and occupation. Required indicators:

1. Number properties falling vacant in quarter 2. Percentage marketed prior to void date 3. Percentage marketed within one month of void date 4. Exception report on all properties not marketed within one month of void date

KPI 3: Property Services is to ensure that all rent review notices are served by the rent review date, except in circumstances where the lease specifies that an alternative timescale must be adhered to. Required indicators:

1. Number rent reviews falling due in quarter 2. Percentage with notice served by rent review date 3. Exception report on all properties where notice not served by rent review date

KPI 4: Property Services is to consult the TMO’s nominated client officer prior to offering any new lease on vacant property or to existing tenants. Required indicators:

1. TMO consulted in advance of any offer of new lease to existing tenants, with a minimum of 10 working days notice? [YES/NO]


8

2. TMO consulted in advance of offering any new lease on vacant property, with a minimum of one week notice? [YES/NO]

3. Exception report on all leases offered in quarter where TMO not consulted in accordance with stated timescales

KPI 5: For lease renewals, Property Services shall serve S25 notices within the statutory timescales of no less than 6 and no more than 12 months prior to the lease end date. Required indicators:

1. Number leases due to terminate within 12 months of quarter end date 2. Percentage with notices served within statutory timescales 3. Exception report on all properties where lease due to terminate within 6 months

but notice not yet served KPI 6: Property Services shall ensure total aged debt (invoices outstanding for 60 days or more) not exceed 5% of total rent roll. Required indicators:

1. Number invoices outstanding for 60 days or more 2. Total value of invoices outstanding for 60 days or more and value as percentage

of total rent roll 3. Report on recovery actions taken for all invoices outstanding for 60 days or

more 4. Total value of all debt (including arrears less than 60 days) and value as

percentage of total rent roll

KPI 7: Property Services shall undertake valuations, site appraisals and all other reasonably required tasks to bring forward additional sites in order to generate new income for the Housing Revenue Account. All such reports to be provided to the TMO’s nominated client officer to a timescale agreed at date of instruction. Required indicators:

1. All reports provided to specified quality, to a timescale agreed at the date of instruction.

As shown in the appendix, overall the Quarterly KPIs are being achieved. We hope to improve performance further over the remainder of the year. 9. Right to Buy The first six months of the year have seen 11 Right-to-Buy completions producing an income of £2,402,250. In the whole of last year there were 32 sale completions producing an income of £5,333,227.

10. General Management


9

During the course of the year, there have been a number of changes implemented to improve the way the HRA portfolio is managed so that we can build on the progress of last year. Arrears are now chased by all members of the team allowing tenant queries to be answered quickly and efficiently. KCTMO and Corporate Property are now in the process of sharing our databases to allow our data and information to be available to KCTMO at all times. Also Corporate Property are able to answer some tenant queries by viewing the KCTMO’s database without having to inconvenience KCTMO staff and their time. Telecoms income and lettings are in the middle of a review, but a further £54,600 income is to be generated in the new financial year (an increase of 51%) with potentially more to follow. Basement lettings and potential income generation has been a feature of TMO and Corporate property work over the past year and the new year will see at least £338,000pa extra increased from this area (increasing to at least £462,000 pa in 2016/17).

12. Specific Additional Objectives A summary of additional management objectives for the year-to-date is as follows: Objective 1. Continue to work on debt reductions and meet the 3% KPI. This has been met for all of the last 6 months and is a great result given the tough economic issues facing some occupants. Objective 2. Continue to build relations with Housing and KCTMO. Improved relations have enabled Corporate Property to begin reviewing the portfolio actively with everyone and seeking value wherever possible. Also more time can be spent on maintenance responsibilities. Objective 3. Undertake all reviews and renewals as soon as due. Last year’s effort of reducing the backlog of reviews and renewals has continued and with high levels of manpower committed to the HRA fund, it is hoped that this will continue. Objective 4. Exceptionally low void levels to be maintained. This is largely market driven by void levels are at a record low of 1.9% on an income basis. Objective 5. Memorandum of Occupation to be completed and all RBKC occupiers to pay a market rental


10

This has not been achieved yet but progress has been made with all RBKC, occupied units as well as voluntary and charity occupiers. Units have been allocated a market rental value agreed to roll this out over the coming quarters. Objective 6. H&S audit as well as integration of IT and management systems. Progress on these has been made with 6 monthly compliance inspections to begin shortly and all information kept on a large database. IT and management systems should be fully integrated by the year end. Objective 7. Seek to generate new income streams and maximise current income with reviews and renewals up to date. Objective 5 proceeding and a review of vacant space such as car parks should show a significant revenue increase by the end of the financial year.

13. Next six to twelve months

The priorities over the next 6 months are:

1. Maintain KPI performance levels and exceed where possible.

2. Continue to grow the total income stream from the portfolio.

3. Continue to move forward on MMO and confirming that all voluntary organisations, RBKC occupied units and charities are paying the HRA fund at market rent (often via a subsidy from an RBKC department).

4. Roll out the compliance inspections across the portfolio and actively manage the maintenance of the units.

Appendices:

1) KPIs for 2014/15 Quarter 1 2) KPIs for 2014/15 Quarter 2


11

Appendix 1 KPIs Relating to period: 25th March to 23rd June 2014 KPI 1 Indicators

Number of properties in the portfolio 182

Total rental value of the rent roll (amount in pounds)

£3,015,091

Total aged debt (amount in pounds) £104,164

Value of aged debt as % of the portfolio rent roll

3.45%

Number of void properties (total on the market inc. under offer)

6

Number of void properties (inc. those held in abeyance for development etc)

16

Value of void properties being marketed as a % of the portfolio rent roll

£62,500 (including those under offer) equating to 2.07% of the rent roll.

Number of outstanding lease renewals (notice not yet served)

0

Number of outstanding rent reviews (notice not yet served)

0

KPI2 Indicators

Number of properties becoming vacant during the quarter

1 – 3 Fleming Close

Percentage of vacant properties marketed prior to void date

100%

Percentage marketed within 1 month of being vacant

100%

Number of properties not marketed within 1 month of becoming vacant (see exceptions report for further details)

0%

KPI3 Indicators

Number of rent reviews due in the quarter

10

Percentage of rent reviews with notice served by the rent review date

100%

Number of rent reviews where notice not served by the date (see exceptions report for further details)

0%

KPI4 Indicators

TMO consultation of 10 working days given for all lease renewals

Yes No

TMO consulted in advance of offering all new leases on vacant property, with a minimum of one weeks notice

Yes No

Number of properties where new leases 0


12

offered and TMO not consulted (see exceptions report for further details)

KPI5 Indicators

Number of lease renewals due to terminate within 12 months of quarter end date.

8

Percentage of lease renewals where S25 notice served within statutory timescales

100%

Number of properties where S25 not served within statutory timescales (see exceptions report for further details)

0%

KPI6 Indicators

Number of invoices outstanding for 60 days or more.

65

Number of debtors with arrears outstanding for 60 days or more.

23

Total value of invoices outstanding for 60 days or more and value as % of total rent roll.

£104,164 equating to 3.45% of the rent roll.

Report on recovery action taken for all invoices outstanding for 60 days or more (see report on all recovery action taken).

No additional measures have been undertaken. Rent collection rates have increased by increasing resources but using the usual methods of collection.

Total value of all debt (including arrears under 60 days) and value as % of total rent roll.

£108,113.04 equating to 3.59% of the total rent roll.

KPI7 Indicators

All reports provided to specified quality, to a timescale agreed at the date of instruction.

Yes


13

Appendix 2 Relating to period: 24th June to 28th September 2014 KPI 1 Indicators

Number of properties in the portfolio 182

Total rental value of the rent roll (amount in pounds)

£3,015,091

Total aged debt (amount in pounds) £57,439

Value of aged debt as % of the portfolio rent roll

1.9%

Number of void properties (total on the market inc. under offer)

5

Number of void properties (inc. those held in abeyance for development etc)

15

Value of void properties being marketed as a % of the portfolio rent roll

£50,000 (including those under offer) equating to 1.91% of the rent roll.

Number of outstanding lease renewals (notice not yet served)

0

Number of outstanding rent reviews (notice not yet served)

0

KPI2 Indicators

Number of properties becoming vacant during the quarter

0

Percentage of vacant properties marketed prior to void date

100%

Percentage marketed within 1 month of being vacant

100%

Number of properties not marketed within 1 month of becoming vacant (see exceptions report for further details)

0%

KPI3 Indicators

Number of rent reviews due in the quarter

8

Percentage of rent reviews with notice served by the rent review date

100%

Number of rent reviews where notice not served by the date (see exceptions report for further details)

0%

KPI4 Indicators

TMO consultation of 10 working days given for all lease renewals

Yes No

TMO consulted in advance of offering all new leases on vacant property, with a minimum of one weeks notice

Yes No

Number of properties where new leases offered and TMO not consulted (see

0


14

exceptions report for further details)

KPI5 Indicators

Number of lease renewals due to terminate within 12 months of quarter end date.

11

Percentage of lease renewals where S25 notice served within statutory timescales

100%

Number of properties where S25 not served within statutory timescales (see exceptions report for further details)

0%

KPI6 Indicators

Number of invoices outstanding for 60 days or more.

64

Number of debtors with arrears outstanding for 60 days or more.

8

Total value of invoices outstanding for 60 days or more and value as % of total rent roll.

£57,439 equating to 1.9% of the rent roll.

Report on recovery action taken for all invoices outstanding for 60 days or more (see report on all recovery action taken).

No additional measures have been undertaken. Rent collection rates have increased by increasing resources but using the usual methods of collection.

Total value of all debt (including arrears under 60 days) and value as % of total rent roll.

£65,387 equating to 2.17% of the total rent roll.

KPI7 Indicators

All reports provided to specified quality, to a timescale agreed at the date of instruction.

Yes

Agenda Item: 11


Open

For Information


Authority for decision: The Board is responsible for ensuring that the Company is compliant with statutory and regulatory provisions.

Recommendations: It is recommended that the Board consider the contents of this report.

Regulatory/legal requirements: There have been legislative changes following the enactment of the Anti-social Behaviour Crime and Policing Act 2014.

Business Plan link: Providing Excellent Customer Service.


Resident consultation: NA

Resource implications/VFM statement: None

Risk: The Company has a duty of care to ensure that the safety of its residents subject to legislation.

Appendices: None


14


Teresa Brown, Director of Housing Ext 6152

Report title: Anti-Social Behaviour Update

Purpose

This report is to update the Board on the changes in legislation introduced by the Anti Social Behaviour Crime and Policing Act 2014 which came into force on the 20th October 2014 and affects the TMO’s response to Anti Social Behaviour(ASB). The report also outlines the remedies available to address issues of ASB and provides details of partnership working arrangements as they are now and improvements planned for the future.

1. Background The TMO has a significant part to play in the prevention and enforcement of ASB within the borough. We have a clear policy and procedure that sets out our response to dealing with ASB and gives guidance to staff on the timescales for responding and the remedies available to deal with ASB. Partnership working is essential to the success of our approach. Definition of ASB The Crime and Disorder Act 1998 defined ASB as behaving in a “manner which causes or is likely to cause harassment, alarm or distress to one or more persons not of the same household”. The TMO definition is; “ASB is an action that is capable of causing nuisance or annoyance to any person, which directly or indirectly relates to the way the TMO manage homes on behalf of RBKC. Persons affected by ASB can be anyone who has the right to live in a property that we manage, those living in other properties in the neighbourhood and anyone else lawfully in the property or the locality”. Types of ASB dealt with by the TMO The TMO deals with a wide range of ASB issues from minor acts of ASB to criminal offences and also breaches of tenancy. Listed below are some examples:

• Harassment and intimidation (including hate crime) • Noise Nuisance • Drugs/substance use • Neighbour disputes • Hoarding • Animal/pet nuisance • Fly tipping/littering • Graffiti/vandalism • Physical assault/violent behaviour • Anti social groups of youths • Filthy and verminous properties

The TMO are committed to investigating and resolving cases of ASB by using appropriate tools and powers which are within its disposal. In more serious cases we work with the Police and other agencies to provide evidence to help them utilise their available powers.

Noise nuisance is the most common type of ASB reported and it typically accounts for 45% of total reported ASB complaints to the TMO.

To give an indication of the scale of ASB reported to the TMO, between the 1st of April 2014 and the 30th of September 2014, 102 new cases were reported to the TMO. This compares to 138 new cases reported between April and Sept 2013. Receiving an initial report of ASB On receipt of a report of ASB, an initial interview/assessment takes place where full details are obtained of the ASB. This includes the time and date of any incident and details of any alleged perpetrator. We prioritise our response according to the seriousness of the case, any risk of harm to the individual and any potential vulnerability. For example, serious threats of violence will receive and immediate response within 24 hours and all other cases within three to five working days. A risk assessment is carried out in all cases which looks to assess the complainant’s perception of their risk. This can increase the speed of response from the TMO and other services/organisations. Remedies When dealing with ASB, there are a number of actions we can take depending on the nature of the incident: They include but are not limited to the following: Early Intervention

• Warning letters to one or both parties • Signing an Acceptable Behavior Agreement (ABA).

(This includes actions which the tenant or a member of their family must abide by. They must agree to sign it. They are often developed in consultation with the Police and any other agency involved)

• Responsible Dog Owner Agreement • Referrals to support agencies for either the complainant or alleged perpetrator.

(This could include referrals to address the underlying causes of ASB such as those related to substance abuse and alcohol dependency)

• Referral to mediation Formal Sanctions

• Serving a Notice of Seeking Possession (NoSP) setting out the details of the breach of tenancy. This is the first stage in legal proceedings and can lead to an application for possession of property on either discretionary or mandatory grounds

• Injunctions or Civil Injunctions • Anti Social Behaviour Orders (ASBO’s). • Working with other agencies to serve a Noise Abatement Notice, obtain a Community

protection Notice, Community remedy or Criminal Behaviour Order. (See later section on legislative changes)

Action plans An Action Plan is agreed with the complainant at the initial interview assessment. This sets out the actions that the TMO will take. This could include any of the remedies noted above as well as obtaining information from other organisations, Police etc. Interviewing the alleged perpetrator/s and making referrals for support for either the complainant or perpetrator if they are vulnerable. The action plan includes actions that the individual complainant will take and those that we may ask other organisations to assist with. The interviewing Officer will agree a time frame for actions and agree a review period with the complainant.

2. Partnership working Partnership working takes place on a number of levels across the organisation showing the TMO’s commitment to address issues of ASB at all levels of the organisation. Partnership work at a strategic Level

Crime and Safety Partnership Board This is the Crime and Disorder reduction partnership for the Borough and is responsible for delivery of the Community Safety Strategy. The Chief Executive of the TMO sits on this panel which meets quarterly.

Business Support Group. The TMO are represented at this group by the Teresa Brown, Director of Housing. The function of this group is to monitor performance and delivery of action plans arising from the Crime and Disorder strategy and the annual strategic assessment.

The ASB Task and Finish Group. Earlier this year, the Community Safety Team commissioned an ASB Health Check to review partnership arrangements for dealing with ASB in the borough. The TMO contributed to that review suggesting ways in which partnership arrangements could be improved. An action plan was produced and it is the role of the ASB Task and Finish Group to ensure that the recommendations are implemented and also to ensure that the requirements of the new legislation are being implemented in the borough (see Section 4 below for details of the key improvements being implemented). The TMO is represented at this group by the Heads of Neighbourhood Management, Maria Sharples and Kiran Singh.

Partnership work at an Operational Level

• Joint Action Group (JAG) The TMO are a key player is Joint Action Group (JAG) meetings which are chaired by the Police and is where complex ASB cases are discussed which affect one or more agencies. Actions are agreed and each agency is required to follow-up on these recommendations jointly, feeding back to the reporter with progress made. Currently it is the role of the Police to decide if a case referred to the group is accepted. Occasionally there are discrepancies around what the Police and the TMO agree to be priorities.

• Case Conferences These are called on an ad hoc basis where there are a number of agencies involved in a case. An action plan is often agreed to ensure that a case progresses as required and agencies are held to account for their actions.

• Referrals to other agencies. The TMO work closely with and refer to a variety of agencies to prevent and tackle ASB. Some of these agencies include:

o Police o Community Safety Team o Tenancy Support

(This is an RBKC team who help residents who need support to help them sustain their tenancy. This can include hoarding, signposting to alcohol/drug agencies, rehousing needs, vulnerabilities)

o Victim Support (This helps any resident who requires support if they are suffering ASB, this can include simple ‘hand-holding’ through the process to safeguarding them when attending court, giving evidence etc)

o Social Services o Youth Offending Team (YOT) o Environmental Health o Tri-borough Family Intervention Team. This team deals with troubled families

and offers intensive support to the whole family from daily visits to reaffirm routines, links with education, health and prevention of ASB/escalation of cases.

3. Planned improvements in partnership arrangements arising from the ASB Health Review

As part of the ASB Health Check a recommendation was agreed to review and improve a number of areas of partnership. Review the JAGs A recommendation was agreed to review the effectiveness of JAG’s, who attends, the referral process and the value of the JAG’s. The meetings are currently chaired by the Police who approve referrals to the process. Consideration is being given to whether JAGS should be more partnership led and whether they will also manage the information sharing protocol. An action plan for review is currently being implemented by the Community Safety Team and a survey of those who attend and those who do not, but should attend, will be conducted in November 2014. To restructure and expand the Community Safety Team This will ensure that they can prepare and organise the JAGS and develop a knowledge hub and centre of excellence for ASB. Introduce the Community Multi-agency Risk Assessment Conference (MARAC) The first Kensington and Chelsea Community MARAC will take place on the 19th November 2014. This involves a panel of individuals representing cross sector involvement in ASB. Frontline staff can escalate complex and high risk cases that involve either vulnerable victims or prolific offenders. The purpose of the meeting is to provide a protection plan and an action plan to tackle the problem robustly and hold agencies to account. Commission a new ASB Case Management System for partnership cases A new case management system will be introduced into the borough in December 2014 by the Community Safety Team. This will enable partners to highlight cases that require partnership involvement. The process will greatly enhance partner’s ability to share information, target prolific concerns and escalate high risk cases.

4. Kensington and Chelsea Community Policing Team The new Kensington and Chelsea Community Policing Team (KCCPT) will be introduced in the borough on the 17th November 2014. This will consist of one Inspector, one Sergeant and six Constables, followed by a further two Sergeants and twelve Constables on the 5th

January 2015. The remainder of the Officers will be in place by the 31st March 2015. During this period the 43 Council funded PCSOs will be transferred out of the borough to other duties The Council has committed £1.4 million per year for the next four years to purchase this resource. The team will be split into four teams each led by a Sergeant and will provide coverage for seven days a week between 8am and 11pm except on Thursdays, Fridays and Saturdays when later hours will be worked. They will be based at Notting Hill Police Station on Ladbroke Road. The role of the KCCPT is to provide an additional visible uniformed presence in the borough. This will be achieved through joint tasking of the team at the Council-led weekly tasking meetings (WTM) chaired by the Chief Community Safety Officer. The team will undertake tasks agreed as joint priorities by RBKC and the Metropolitan Police Service. The team will support other enforcement teams within the Council and in particular will concentrate on ASB, licensing and street enforcement issues. The Officers will be trained and authorised to enforce the Royal Borough’s byelaws where appropriate. The TMO will be represented at these tasking meetings and will be able to bid for policing and other resources such as CCTV, licensing Officers etc to concentrate on what are considered to be high priority areas. These improvements to partnership arrangements noted above are all welcomed by the TMO and we will make sure that we utilize the opportunities offered.

5. Changes in Legislation introduced by the Anti social Behaviour, Crime and Policing Act Background and Summary The Anti-social Behaviour, Crime and Policing Act came into force on the 20th October 2014. The new Act places emphasis on putting the needs of the victim first and give consideration to the impact the ASB is having on their lives. There is also a strong emphasis on partnership working with different agencies working together, each bringing their own expertise to resolve local issues. The new Act attempts to simplify the number of powers available to statutory agencies to help practitioners decide on the best enforcement action. It should be noted however, that early intervention measures currently being used by Officers will remain unchanged and these should be used in the first instance when dealing with ASB cases. This can include warning letters, ABA’s or mediation. The illustration below highlights the old powers available (19) and the replacement powers (6). The tools highlighted in red are those specifically affecting housing providers and further detail on this is provided later, including a new absolute ground for possession.

In addition to the new tools above, the Anti-social Behaviour, Crime and Policing Act 2014 includes two new measures which are designed to give victims and communities a say in the way ASB is dealt with. Community Trigger The purpose of the Community Trigger is to give victims and communities the right to request a review of their case and bring agencies together to take a coherent, problem-solving approach. Responsibility to oversee the Community Trigger process lies with the Police and Crime Commissioners; therefore the Mayor’s Office of Policing and Crime (MOPAC) have determined a London-wide criterion for activation of a Community Trigger:

If you have reported anti-social behaviour to the Council, Police and/or a registered housing provider (social landlord) three times, about separate incidents in the last six months, and you consider there to have been no action taken. The most recent incident must have occurred in the last month.

The RBKC Community Safety Team will be the lead agency and point of contact for triggers raised and will ask relevant agencies involved to provide details of complaints and actions that they have considered and taken. These agencies will review the case and make recommendations on how the problem can be resolved. Reviews and plans will be fed back to the individual through a single point of contact (most likely a Community Safety Officer) and the Council is required to report annually to MOPAC

Anti-Social Behaviour Order (ASBO) ASBO on Conviction Drink Banning Order (DBO) DBO on Conviction Anti-Social Behaviour Injunction (ASBI) Individual Support Order (ISO) Intervention Order

Criminal Behaviour Order (CBO) The Civil Injunction

Litter Clearing Notice Street Litter Clearing Notice Graffiti/Defacement Removal Notice Designated Public Place Order Gating Order Dog Control Order Premises Closure Order Crack House Closure Order Noisy Premises Closure Order Section 161 Closure Order

Community Protection Notice (CPN) Community Protection Order (Public Space) Community Protection Order (Closure)

Section 30 Dispersal Order Section 27 Direction to Leave Dispersal Powers

on the number of triggers requested, number rejected, number accepted and number that resulted in case reviews. The TMO is working closely with the Community Safety Team and is a key player in the Community Trigger process. For more information and to review the form victims are required to complete, can be found on www.rbkc.gov.uk/communitytrigger. There is also a link on the TMO’s website referring our tenants to this page. Community Remedy The Community Remedy is not a tool which can be used by housing providers; it is a tool for the Police to use in cases of low-level crime and ASB which gives victims a say in the out-of-court punishment of perpetrators. The Community Remedy may also be used when a Conditional Caution or Youth Conditional Caution is given, as a means of consulting the victim about the possible conditions to be attached to the caution. The Community Remedy will be offered to victims in cases where there is remorse, guilt and the incident is not serious. A locally drawn up list of options will be made available where the victim can choose an appropriate action that the perpetrator must adhere to. For example attending anger management, alcohol or drug treatment, repairing any damage etc The two following sanctions are specific to housing providers and are relevant powers which the TMO can utilise. These are Civil Injunctions and the Absolute Ground for Possession. Civil Injunctions Civil Injunctions replace existing ASB Injunctions and the stand alone ASBO. They do not come into effect now until January 2015. This is because amendments are required to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (to allow applications for advocacy assistance in respect of civil injunction hearings) The existing ASB Injunction and ASBO will remain available until then. There are some key changes to the new injunctions.

Applications can be made for under 18’s (10-17 years) in the Youth Court

They can contain positive conditions as well as prohibitions

Scope of agencies able to apply for injunctions is now much wider and includes the Police

A Civil Injunction is a proven ground for the absolute ground for possession. Applications for under 18’s will be made in the Youth Court; those for adults will remain in the County Courts. Any applications for under 18’s must first be referred to the YOT. In this way, the new legislation strengthens partnership arrangements. Prohibitions or requirements in the injunction can be for a fixed or indefinite period for adult perpetrators. In the case of under 18’s, the prohibitions or requirements must have a specified time limit, and the maximum term is 12 months. When applying for positive conditions an individual or organisation must be nominated as responsible for those conditions. It is therefore important to create close links with relevant agencies to agree these conditions and management of them once a civil injunction has been granted. There are two tests for an injunction under Part 1 of the 2014 Act:

http://www.rbkc.gov.uk/communitytrigger

Non-housing related For anti-social behaviour in a non-housing related context the test is conduct that has caused, or is likely to cause, harassment, alarm or distress to any person. This will apply, for example, where the ASB has occurred in a public place, such as a town or city centre, shopping mall, or local park, and where the behaviour does not affect the housing management functions of a social landlord or people in their homes. Housing-related For ASB in a housing context the nuisance or annoyance test will apply, that is, where the conduct is capable of causing nuisance or annoyance to a person in relation to that person’s occupation or residential premises or the conduct is capable of causing housing-related nuisance or annoyance to any person. Only social landlords, local councils or the Police will be able to apply for an injunction under these provisions in the legislation. In the case of social landlords only, “housing-related” means directly or indirectly relating to their housing management function. The injunction can be applied for by the Police, local Councils and social landlords against perpetrators in social housing, the private-rented sector and owner-occupiers. This means that it can be used against perpetrators who re not even tenants of the social landlord who is applying for the order. The injunction can also be used in situations where the perpetrator has allowed another person to engage in anti-social behaviour, as opposed to actively engaging in such behaviour themselves. For example; in a case where another person, such as a visitor of lodger, is or has been behaving anti-socially, the injunction could be used against the problem visitor, lodger or owner if applicable. An agency asking to apply for the injunction must produce evidence (to the civil standard of proof, that is, ‘on the balance of probabilities’) and satisfy the court that it is both ‘just and convenient’ to grant the order. Breaches of the injunction for adults are not a criminal offence but are treated as contempt of court which is punishable by up to two years in prison. However, a breach does need to be proven to the criminal standard due to the potential severity of the penalties that the court can impose. For under 18’s breaches, proceedings are dealt with in the Youth Court and could result in a supervision order, curfew or activity requirement. For Council tenants any proven breach of an injunction can trigger the absolute ground for possession, which is explained below. The ability to apply for injunctions without notice, and ask for power of arrest to be attached to terms remains. Existing orders, such as ASB Injunctions and ASBO’s, repealed by this legislation will remain as they are for a period of five years. If the current order is to last for a longer period than five years from 20th October it will automatically revert to a Civil Injunction. The TMO have already held discussions with YOT to review how Civil Injunctions for under 18’s can be administered. Protocols are being developed with YOT which will include a referral form to a single point of contact when the TMO are considering taking such enforcement action against a minor. Discussions have also been held with the Bi-borough Legal department to confirm what information will be required from investigating Officers to pursue a Civil Injunction; this is especially relevant when applying to the Youth Courts which will be a new realm for Neighbourhood Officers.

. Absolute Ground for Possession The Act introduces a new absolute ground for possession of secure and assured tenancies where ASB or criminality has already been proven by another court. The new absolute ground will therefore be able to be used by both social landlords and private rented sector landlords. The new ground will be available to landlords in addition to the existing discretionary ground for possession set out in Schedule 2 of the Housing Act 1985 for secure tenants. The purpose of the new power is to speed up possession proceedings in the most serious of cases where ASB or criminality has already been proven. The landlord will no longer need to prove that it is reasonable to grant possession as they do with the existing discretionary grounds for possession. The court is most likely to determine cases in a short hearing. The new absolute ground is based on the existing process for ending introductory tenancies for local authority tenants set out in sections 127 to 129 of the Housing Act 1996, and existing mandatory grounds for possession for rent arrears for housing association tenants. The test for the new absolute ground is where the tenant, a member of the tenant’s household, or a person visiting the property has met one of the following conditions:

Convicted of a serious offence (specified in Schedule 2A to the Housing Act 1985)

Found by a court to have breached a Civil Injunction

Convicted for breaching a Criminal Behaviour Order (CBO)

Convicted for breaching a noise abatement notice

The tenant’s property has been closed for more than 48 hours under a Closure Order for ASB.

The offence/breach needs to have occurred in the locality of the property or affected a person with a right to live in the locality or affected the landlord or his or her staff/contractors. Secure tenants will have a statutory right to request a review of the landlord’s decision to seek possession. The TMO have developed this process in line with its review procedure for extension of introductory tenancies. This will involve the Heads of Neighbourhood Management and Policy and Improvement Manager to review the facts of the case and decide if it was proportionate to proceed with such enforcement. The review request must be submitted in writing by the tenant no later than seven days of date of issue of the notice and tenants will have the right to have a court hearing. The court has no power to dispense with service of a Notice of Seeking Possession under the new absolute ground as they can do so under the discretionary ground for ASB. Furthermore, the court will only have the discretion to suspend a possession order made under the new ground to a date no later than 14 days after the making of the order (unless it appears to the court that exceptional hardship would be caused, in which case it may be postponed to a date no later than six weeks after the making of the order). The following measures also introduced by the act are not specific tools for the TMO but will have an impact on our housing management functions. Some of the enforcement actions used below may also feed into the absolute grounds for possession as explained above. They may also link to other enforcement action which the TMO feel is relevant to pursue. Therefore partnership working is critical to this.

Criminal Behaviour Order The Criminal Behaviour Order (CBO) replaces the post-conviction Anti-Social Behaviour Orders (ASBO) and will be used against a person who has been convicted of an offence to tackle the most persistently anti-social individuals who are also engaged in criminal activity. Under the order, a person who has been convicted would be banned from certain activities or places. They would also be required to address their behaviour, for example by attending a drug treatment programme. A breach could see an adult face up to five years in prison. The test for prosecution is that beyond reasonable doubt the offender has engaged in behaviour that has caused or is likely to cause harassment, alarm or distress to any person. The Court considers that making the order will help prevent the offender from engaging in such behaviour in the future. Relevant for the TMO, a breach of a CBO can satisfy the grounds for absolute possession; again if we are satisfied that it is proportionate and reasonable to do so. It is anticipated that the revised JAG’s will be an opportunity for the TMO to be updated about any CBO’S obtained against tenants. Dispersal Power The Dispersal Power replaces the current Dispersal Orders and requires a person committing or likely to commit ASB, crime or disorder to leave an area for up to 48 hours. The new power is only available to Police and there is no longer a requirement to consult with the Council or the local community. The power allows the police to disperse anti-social individuals and provide short-term respite to a local community. Any area can be designated for the Dispersal Power for a period of up to 48 hours by a Police Inspector or higher ranking Officer. There is no longer a requirement to pre-designate an area a dispersal zone in which the power can be used, therefore it can be used more immediately. The power is also now available to disperse individuals without a requirement that two or more people are engaged in the offending behaviour. The power requires a person committing or likely to commit ASB, crime or disorder to leave an area for up to 48 hours. Police officers and PCSOs (if delegated) will be able to issue a dispersal notice to an individual. The dispersal notice must specify the area to which it relates and can determine the time and the route to leave by. Officers can confiscate any item that could be used to commit ASB, crime or disorder. A direction can be given to anyone who is, or appears to be, over the age of 10. A person who is under 16 and given a direction can be taken home or to a place of safety. Community Protection Notice The Community Protection Notice (CPN) is a completely new power and it repeals a number of litter and clearing notices under various provisions of the Environmental Protection Act 1990 and ASB Act 2003. The purpose is to stop a person aged 16 or over, business or organisation committing ASB which spoils the community’s quality of life. Council Officers, Police Officers and PCSO’s will also be able to issue CPN’s. Councils can also designate social landlords in their area to issue CPN’s, however the TMO will not be designated to carry out this function at present but will be referring any relevant cases to the

Environmental Health or Community Safety Team for joint action as they are better placed to serve these orders and deal with any breaches including issuing Fixed Penalty notices where required. Before serving a CPN:

The person must be given written warning that a notice will be served unless the conduct ceases having the detrimental effect

Enough time must be given to deal with the matter before issuing

The person issuing must inform any body or individual they think appropriate before serving

Failure to comply with a CPN is an offence. Where an individual, business or organisation fails to comply with the terms of a CPN, a number of options are available for the issuing authority. These are:

Remedial orders – require the defendant to carry out the work or allow the Council to do so

Forfeiture – give item to the Council, Police or authorised person to be disposed of or destroyed

Seizure – Police or designated person can enter the premises and remove offending items

Fixed penalty notices – paying a fine as a way of distinguishing liability (not more than £100)

The CPN enables local authorities and Police to stop persistent environmental ASB like graffiti, neighbour noise or rubbish on private land.

Public Space Protection Order Public Spaces Protection Orders (PSPOs) replace a number of area specific orders, such as Dog Control Orders and Controlled Drinking zones. They are intended to deal with a particular nuisance or problem in a particular area that is detrimental to the local community’s quality of life, by imposing conditions on the use of that area which apply to everyone. Only the Council can implement a PSPO, however, they must consult with the Police and community that the order will affect them and a draft order must first be published before the final PSPO is made. Closure Power The new Closure Power brings together a number of separate powers to close premises, such as Crack House Closures and ASB Premises Closures, into one. It is used to allow the Police or Council to quickly close premises which are being used or likely to be used, to commit nuisance or disorder and can give immediate respite to local communities The power comes in two stages: the closure notice and the closure order which are intrinsically linked. The closure notice can be used by the Council or the Police out of court. Following the issuing of a closure notice, an application must be made to the Magistrates’ Court for a closure order, unless the closure notice has been cancelled. A closure notice can close a premise for up to 48 hours out of court but cannot stop the owner or those residing there from accessing the premises. An order through the

Magistrate’s Court however can close the premises for up to six months and can restrict all access. This is very similar to the previous closure orders. Partnership working is essential to the success of such orders. As a housing provider, we would expect to be involved in providing evidence and working with the Police or Council in any application for a closure order).

6. Recommendation To note the information contained within this report and provide feedback/comments.

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