Agenda item

The Streets, Environment & Homes Sub-Committee is asked to consider the information, to be provided, with a view to, as part of the wider budget scrutiny process, forming conclusions on the deliverability and sustainability of the Housing Revenue Account budget, as well as ensuring there is an understanding of the key risks.

The Sub-Committee considered a Cabinet report set out in a supplement to the main agenda which provided information on the Housing Revenue Account Rent Setting and draft Budget for 2022-23. The decisions set out in the report would be considered by the Cabinet on 7 February 2022 and feedback from the Sub-Committee would be reported to this meeting.

The report was introduced by the Cabinet Member for Homes, Councillor Patricia Hay-Justice, who reminded the Sub-Committee of the background to the rent setting process and how any funds would be used. It was confirmed that the proposed 4.1% rent increase was within Government guidelines and at a similar to the vast majority of other London Boroughs.

The Sub-Committee highlighted that it was a risk for the Cabinet to agree the HRA budget without having agreed the HRA Business Plan, as without this it would not be possible to make a judgement on whether the budget was sufficient to deliver the plan. It was acknowledged that it would have been preferable to have the Business Plan in place before the budget, but as it was in the process of being developed, this work had informed the budget. It was confirmed that the Business Plan would be presented to the Cabinet on 21 March 2022 for its approval. Other risks that need to be monitored included the introduction of the new IT system in the service and available staffing capacity to deliver the level of change required.

There was widespread concern across the Sub-Committee about the potential impact the rent increase may have upon residents, particularly when combined with the overall increase in the cost of living nationally. In response it was highlighted that rents in Croydon were comparatively low to other local authorities and had not increased in the past four years.  There was a backlogs of repairs, following the pandemic, which needed to be addressed and funding from the increase was needed to provide these services and deliver a balanced budget.

There was agreement amongst the Sub-Committee that it would be difficult for tenants to understand why a 4.1% rent increase was being proposed when they would not have seen any improvement in the level of service provided. Two potential mechanisms for acknowledging the views of tenants were identified by the Sub-Committee. Firstly, it was agreed that the possibility of deferring the rent increase, if only for a short period, needed further exploration to establish whether it would be viable. If it proved to be unviable, there needed to be a greater level of engagement with residents to explain why the increase was needed.

The Sub-Committee understood that there was a range of factors that might make deferring the rent increase unviable, such as the need to fund improvement work, rising inflationary costs and whether the housing regulator would permit rent to be increased later in the year. As such, the Sub-Committee agreed that work needed to be undertaken prior to the Cabinet’s consideration of the rent increase to establish whether any deferral of the increase would be viable from both a regulatory and financial perspective. In the event that deferring the rent increase was not possible, the reasons for this should be confirmed at the Cabinet meeting.

If the possibility of deferring the rent increase was viable, even if only for a short period, the Sub-Committee would recommend that the Cabinet give consideration to this option as it would be a means of acknowledging to the Council’s tenants that the performance of the Housing Service had not been at the level the Council would want for its tenants.

If the Cabinet agreed to proceed with the 4.1% rent increase, it was essential that the Council communicated clearly with tenants to outline the link between the rent increase and the improvement journey.  Communication about the rent increase needed to outline how it would help to fund the improvement journey, including the tangible benefits residents could expect to see over the next year and in the longer term. The Sub-Committee was in agreement that it was unlikely the Council would be able to bring residents on board with the rent increase without mapping out the pathway for the improvement journey.

With reference to capital projects, it was confirmed that these would be driven by the available staff capacity to deliver the programme and if necessary budgets would be carried over into the next year.

The Sub-Committee welcomed confirmation that staffing resources within the Service would be reviewed in the forthcoming year, as well as confirmation that there would be an ongoing drive to move towards a more customer focussed culture within the Service. It was agreed that both of these measures, alongside delivering improvement in process efficiency, would help to provide an improved and more efficient service for residents. It was also agreed that any review of staffing or changes to the services provided should have a key focus on ‘How will this benefit residents’. If a tangible improvement for residents cannot be identified, then the reasons for proceeding needed to be clearly explained to all stakeholders and most importantly tenants.

The Sub-Committee endorsed the move within the Housing Service towards taking a more robust, proactive approach to managing its contracts and was encouraged that there was an intention to move to a similar, proactive approach for repairs. It was accepted that this was still a work in progress and to monitor progress a set of key performance indicators were requested that would allow the Sub-Committee and residents to measure both the financial and service related benefits delivered as a result of the change to a more proactive Service.

At the conclusion of this item the Chair thanked both the Cabinet Member and the Corporate Director for Homes for the engagement with the questions of the Sub-Committee.

Conclusions

Following its consideration of this item the Streets, Environment & Homes Sub-Committee reached to the following conclusions:

1.    Overall the Sub-Committee welcomed the engagement and openness of the Cabinet Member and the Corporate Director for Housing with their scrutiny of the HRA budget. The Sub-Committee recognised that although the pace of improvement had not been as quick as envisaged following the ARK Report, there was a commitment to put the right resources in place to deliver improvement for tenants.

2.    There was significant concern about how the proposed 4.1% rent increase would impact upon the most vulnerable and it was agreed that in the first instance the possibility of deferring this increase should be explored.

3.    Given the challenges facing the service, there needed to be an increased level of engagement with residents to ensure they were kept informed of the progress made with delivering the improvement journey.

4.    If the deferring the rent increase was not possible, there needed to be urgent engagement with residents to ensure that they understood the reasons why their rent was increasing.

5.    As part of the engagement process, opportunities for the co-design of services with residents should be explored wherever possible.

6.    The prioritisation of recruiting to the vacant posts within the service was welcomed, as there was a significant risk that the improvement journey could be impacted by the capacity to deliver.

7.    There needed to be a clear pathway to communicate progress made in improving the service to residents. As such consideration should be given to creating a set of publically available key performance indicators that could be used to measure progress.

Recommendations

The Sub-Committee agreed to submit the following recommendations to the Cabinet for consideration when taking its decision on the report:

1a. That work be undertaken in advance of the Cabinet meeting to establish whether deferral of the proposed 4.1% rent increase is a viable option.

1b.  If viable, the Cabinet is asked to consider deferring the rent increase for a to be determined period of time, as an acknowledgement that improvement in the customer experience had not progressed at the pace expected. 

2.    That any communication and engagement with residents on the rent increase has to be linked with the improvement journey of the Housing Service. This should include a clearly mapped pathway for improvement and tangible outcomes residents can expect to see in the next year.

3.    A key principle for any improvement work in the Housing Service needs to be ‘How will this demonstrably benefit residents’, with a clear focus on delivering outcomes that meet this principle.

4.    It is recommended that where possible a co-design approach with residents should be used as a mechanism for delivering change within the Housing Service, to ensure that there is resident buy-in of the process.

5.    In addition to the Corporate Indicators, it is recommended that a specific set of key performance indicators are identified that will enable monitoring of the financial and performance improvement delivered by the Housing Service a taking proactive approach to contract management and repairs.