Agenda and minutes

(a) To approve as an accurate record, and the Chairman to sign the minutes of the meeting of the Housing, Health & Adult Social Care Select Committee held on 14 November 2012.

(b) To monitor the acceptance and implementation of recommendations as set out at Appendix 1.

(c) To note the outstanding actions.

RESOLVED THAT:

The minutes of the meeting held on 14 November 2012 be approved and signed as an accurate record of the proceedings.

Apologies were received from Councillors Iain Coleman, Oliver Craig and Steve Hamilton.

If a Councillor has a disclosable pecuniary interest in a particular item, whether or not it is entered in the Authority’s register of interests, or any other significant interest which they consider should be declared in the public interest, they should declare the existence and, unless it is a sensitive interest as defined in the Member Code of Conduct, the nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

At meetings where members of the public are allowed to be in attendance and speak, any Councillor with a disclosable pecuniary interest or other significant interest may also make representations, give evidence or answer questions about the matter.  The Councillor must then withdraw immediately from the meeting before the matter is discussed and any vote taken.

Where Members of the public are not allowed to be in attendance and speak, then the Councillor with a disclosable pecuniary interest should withdraw from the meeting whilst the matter is under consideration. Councillors who have declared other significant interests should also withdraw from the meeting if they consider their continued participation in the matter would not be reasonable in the circumstances and may give rise to a perception of a conflict of interest.

Councillors are not obliged to withdraw from the meeting where a dispensation to that effect has been obtained from the Audit, Pensions and Standards Committee. 

There were no declarations of interest.

Cabinet will present their revenue budget and council tax proposals to Budget Council on 27^th February 2013. As part of the budget process savings targets have been set for departments and transformation programmes. This report provides an update on how the targets will be met for the services covered by this select committee. An update is also provided on budget growth proposals and proposed changes in fees and charges. 

Hitesh Jolopara presented the Cabinet’s proposals for the Council’s budget and Council Tax for 2013/14. The new funding regime included: the introduction of a local business rates retention scheme; the replacement of formula grant with a lower level of revenue support grant; 10% reduction of funding for Council Tax; and changes in funding streams.

There would be a £6m (8.9%) reduction in funding from Government in 2013/14 with a further £13m reduction forecast for 2014/15. Over a four year period from 2011/12 total cash grant from the Government would have been reduced by £48m. It was thought likely that the Council would lose a further £4.1m from the localisation of business rates, largely due to the high level of ratings appeals at Westfield. The reduction in Council Tax benefit funding would be absorbed within the budget although the affordability of this would have to be kept under review year on year.

£3.1m of growth and £22m of savings had been identified in 2013/14 and the budget for the year was balanced, although there currently remained projected funding gaps of £6m in 2014/15 and £14m in 2015/16. The Council debt was forecast to be reduced to £73m in 2015, down from a peak of £176m in 2004. A reduction of 3% in Council Tax levels would see the Band D charge brought down to £758 in 2013/14, compared with a peak of £917 in 2006.

Mr Jolopara responded to queries that setting of business rates remained outside Council control, and that the reduction in Council Tax had been offset by charging full Council Tax on empty properties.

Rachel Wigley supported by Prakash Daryanani presented the growth and savings proposals for Adult Social Care. A common set of eight outcomes had been developed to achieve the Tri-borough Service vision to support more integrated partnership working. In the long term, and particularly with a growing older population, the most effective approach was to enable people to stay independent for longer.

The 2013/14 budget for Adult Social Care would reduce from £72.7 million to £67.2 million. Savings of £4.6 million were set out in Appendix 1 of the report. Adult Social Care was in line to deliver £25 million of efficiencies between 2009/10 and 2013/14.

The general uplift for fees and charges would be 3.2%, with the exceptions of home care charges, which would remain at £12, and the meals service, which it was proposed to increase from £4.30 to £4.50.

Officers clarified the following points:

·         the 11% staffing spend was in respect of those staff directly employed by the Council, both front line and back office;

·         the savings in residential and nursing care would be found by preventative care to keep people at home for as long as possible, instead of expensive residential and nursing care on which Hammersmith & Fulham was one of the highest spending councils;

·         there would be  a 10% reduction across third sector grants, achieved by commissioning across the three boroughs, and the level of support would remain as  ...  view the full minutes text for item 34.

This report will follow.

This item was taken before item 34.

Ms Corbett presented the report in respect of:

·         Management of the Housing Revenue Account (HRA) post  HRA reform;

·         The HRA Financial Strategy, the HRA MTFS for the five years, 2013/14 to 2017/18, and the HRA Revenue Budget for the year 2013/14; and

·         The proposed increase in dwelling rents for 2013/14.

The HRA Financial Strategy was required to:

·         finance both the annual interest and repayments of the principal debt (£217.4 million after HRA reform) as it becomes due (£9.582 million being repaid in 2013/14);

·         achieve a  viable on-going maintenance programme that maintained stock in good repair;

·         increase the HRA reserves balance to protect against future stocks or unanticipated events to circa £35 million by 2022;

·         free resources for investment on new initiatives, including new housing supply; and

·         to repay debt as it becomes due.

The strategy was set in the context of:

·         Local authorities being ‘self financing’ and having to manage their housing assets to ensure that HRA stock can be supported and maintained from HRA income;

·         General Reserves being currently less than four weeks rent;

·         Investment required in respect of previous lack of investment and elements not covered by the Decent Homes programme, for example lifts or public realm;

·         LBHF rents were lower than those of tri-borough partners and Wandsworth and there was a reliance on disposal of void properties to  fund capital works; and

·         The HRA Medium Term Financial Strategy (MTFS) transformation programme was underway, comprising market testing of: Repairs and Maintenance; and Housing Services for the South of the Borough.

The key financial risks included: the impact of welfare reforms; the impact of higher void rates of fixed term tenancies; general market risk on re-procurement of contracts; loss of income due to high levels of Rights to Buys; and additional health and safety requirements.

The HRA MTFS savings proposed £2.7 million in 2013/14, rising to £4 million per annum by 2014/15. These savings were offset by £2.2 million of growth, primarily due to increases in corporate recharges, changes in accounting rules regarding the treatment of non-dwellings depreciation, a reduction in income due to Rights to Buy and an additional budget for fixed wiring electrical testing, which is a Health and Safety requirement.

The Council’s ability to increase rents over and above the rent restructuring formulae needed to be viewed in the context of the pressures on the HRA. The rationale for reviewing the Council’s rent policy was set out in the report. The results of benchmarking Council rents against those charged in other neighbouring boroughs had demonstrated that Hammersmith & Fulham rents were considerably lower. In addition, the benchmarking had identified that current rent levels disadvantaged tenants who lived in smaller properties.

An increase in bad debt provision had been made to provide some protection against the impact on rent collection rates as a result of the various strands of the Government’s Welfare Reform Programme. It was likely that the risk would increase in future years.

Councillor  ...  view the full minutes text for item 35.

This report addresses specific concerns in relation to the current provider of Direct Payment Support, HAFAD, which was not successful in the procurement process, clarifies the procurement process and explains how the transition to a new service arrangement will be managed.

Andrew Webster introduced the report, which had been requested by the Committee as a result of concerns in relation to the current provider of Direct Payment Support, HAFAD, which had not been successful in the procurement process. The purpose of the report was to address these specific concerns and to clarify the procurement process, and to explain how the transition to a new service arrangement would be managed.

Mr Webster stated that the key issue related to a misunderstanding by HAFAD in respect of the instructions relating to how to price the service, and what should be included in the hourly rate. HAFAD had formed the view that a single hour of service should be priced to take account of an estimate of the additional hours of follow up work that might be required to deliver a particular outcome, and one hour of face to face time was priced as the equivalent of approximately four hours of work. On receipt of the initial price submission, and noting the discrepancy in relation to HAFAD, all providers had been asked to clarify their price. In response, HAFAD had retained its pricing.

The framework agreement  for Self Directed Support Services for Adults and Children and Young People had been procured by four boroughs (Brent, Hammersmith & Fulham, Hillingdon and Kensington & Chelsea), and set out four lots covering the general range of services, which the four boroughs wanted to make available. Although HAFAD had fared well in terms on quality, the price submitted had been much higher than any other providers and consequently they were not selected as one of the five preferred providers on the Adult Services framework. They were one of three providers on the Children’s Services framework, but were again significantly the most expensive.

Legal advice had confirmed that the approach taken by Council officers was in accordance with the procurement rules, and that it would have been wrong to have approached only one bidder to seek clarification on the basis that their prices seemed too high. This would have provided an unfair opportunity to reduce their prices.

The Council recognised that the support of HAFAD would be key in the transition to the new process, and a two month contract would be agreed. Officers would continue to work closely with HAFAD.

The Chairman stated that whilst she appreciated that the procurement process was a straight forward commercial process, the nature of the service had overwhelming non-commercial aspects. In addition, HAFAD and the majority of providers were not commercial, and the process should have been considered against that background. The costs submitted by HAFAD were significantly higher than those of other providers and therefore it should have been obvious that they had been calculated on a different basis. It should have been possible to alert HAFAD at a stage at which the misunderstanding could have been rectified. However, officers had followed the rules and failed to look intelligently at the whole process.

Councillor Ginn responded that preferred providers had  ...  view the full minutes text for item 36.

This report outlines proposals for the Council to derive greater value from the disposal of surplus HRA land through the sharing in development profits, in addition to extracting land value, by establishing a housing and regeneration Joint Venture Vehicle (JVV). The JVV will take forward delivery of selected Council owned development sites to increase housing supply, particular low cost home ownership, in conjunction with a Private Sector Partner who would bring finance and development expertise to the partnership. This initiative is  a major component of the Council’s (draft) Housing Strategy, “Building a Borough of Opportunity”

Mr Barrett accompanied by Neil Kirby presented the report in respect of the establishment of a housing and regeneration joint venture, which was one of three main strands of work currently being considered:

·         Hidden homes programme for small sites, generally less than five units per site;

·         Innovative housing built using modern methods of construction for intermediate sites, generally between 5 and 20 units per site; and

·         Joint Venture Vehicle (JVV) to deliver on selected larger Council owned development sites, between 50 and 200 units per site.

In respect of the first two smaller strands, the Council would bear the full development risks, whereas the JVV would enable the Council to deliver at scale on selected larger Council owned development sites to increase housing supply and specifically low cost home ownership, whilst sharing development risks with an experienced Private Sector Partner (PSP), which would bring finance and development expertise to the partnership. The Council would share in development profits in addition to extracting land value.

The Council had appraised several Council owned development sites and it was proposed that two sites: Watermeadow Court, SW6 and Edith Summerskill House, SW6 be transferred to the JVV, once established, to be redeveloped for housing.

Mr Barrett clarified that the proposed arms length charitable body which would receive project receipts was in respect of the first two strands, where there would not be significant numbers of housing units.  The financial return from the JVV would be direct to the Council for re-investment in further housing and re-generation projects or repaying debt.

The PSP procurement included public works with a financial value about the EU threshold, thereby requiring an OJEU compliant competitive procurement process to be undertaken.

An update on the procurement process would be provided to the Committee.

Action: Mel Barrett

RECOMMENDED THAT:

The report be noted.

The Committee’s work programme for the current municipal year is set out as Appendix 1 to this report. The list of items has been drawn up in consultation with the Chairman, having regard to relevant items within the Forward Plan and actions and suggestions arising from previous meetings of the Committee.

The Committee is requested to consider the items within the proposed work programme and suggest any amendments or additional topics to be included in the future.

Attached as Appendix 2 to this report is a copy of the Key Decision List showing the decisions to be taken by the Executive at the Cabinet, including Key Decisions within the portfolio areas of the Cabinet Member for Housing and the Cabinet Member for Community Care, which will be open to scrutiny by this Committee. 

RESOLVED THAT:

The work programme be approved.

The Committee is asked to note that the dates of the meetings scheduled for this municipal year are as follows:

February 2013: date to be confirmed

09 April 2013

RESOLVED THAT:

The date of the next meeting be changed to 20 February 2013.

RESOLVED that -

The Committee is invited to resolve, under Section 100A (4) of the Local Government Act 1972, the public and press be excluded from the meeting during the consideration of the following item of business, on the grounds that it contains the likely disclosure of exempt information, as defined in paragraph 3of Schedule 12A of the said Act, and that the public interest in maintaining the exemption currently outweighs the public interest in disclosing the information

RESOLVED THAT:

Under Section 100A (4) of the Local Government Act 1972, the public and press be excluded from the meeting during the consideration of the following item of business, on the grounds that it contains the likely disclosure of exempt information, as defined in paragraph 3of Schedule 12A of the said Act, and that the public interest in maintaining the exemption currently outweighs the public interest in disclosing the information

The Committee considered the approximate outputs of each of the delivery options: disposal, JVV and direct delivery. The Direct Development option gave a significantly lower return to the Council. This had been based on the inexperience of the Council in undertaking recent large scale residential development for market sale. Lambert Smith Hampton considered that the Council would not be as aggressive as the private sector in pursuing an optimal planning consent in value terms, for example it was unlikely that the Council, as developer, would lodge a planning appeal against itself as Local Planning Authority, which was an option open to a private developer. In addition, it was considered that the Council would achieve a lower number of dwellings.

Mr Barrett responded to a query that Lambert Smith Hampton, the Council’s retained Chartered Surveyors, had estimated that, in the event of the Council undertaking direct development. it would achieve 15% less, both in terms of development density and value of development achieved.

RESOLVED THAT:

The report be noted.