Cabinet Member for Housing

It wasRESOLVED:-

1.1     The potential or likely variations in relation to the HRA both Revenue and Capital compared to the Budget be noted.

1.2     That, subject to any further budget variations that arise during the rest of the financial year, the increase in funds of £299k, referred to in section 5.6 of the report, be transferred to the Strategic Priorities reserve, as referred to in 2a.

Reason for Decision:  To ensure that Members are kept informed of the current budgetary position for both the HRA Revenue and Capital Budgets.

Alternative Options Considered and Rejected:

1.1     Transfer funds of £299k to the Strategic Priorities reserve.

1.2     At this stage in the year, make no recommendation for the transfer of funds to reserves.

Any Declarations of Interest declared:  None

Any Dispensation Granted:  None

132.1    Councillor Osborne, Cabinet Member for Housing, introduced report BCa/18/72 and stated that the HRA was reporting a surplus of £544k at the end of December 2018 which was a favourable variance of £299k for the year and a favourable movement of £724k since August.  The main reasons for these variances were:

·             Rental income was predicted to show an adverse variance of £84k for the year, and adverse movement of £64k from the August report which was due to higher than anticipated voids and the reallocation of homeless rental to the General fund. 

·             Planned maintenance, heating costs were £100k higher than budget mainly due to increases in material costs and the amount of work required to be carried out, this was a favourable movement of £14k since the August report. 

·             Asbestos surveys were showing an adverse movement of £15k from August which was an adverse variance of £80k for the year, this was due to an increase in the requirement to carry out these surveys due to higher than anticipated planned works, remedial works and tenant friendly asbestos reports. 

·             Void repairs were now anticipated to show a favourable variance of £125k for the year, an improvement of £58k since August, this was due to a review of the revenue costs and subsequent reallocation of some of these to capital. 

·             Responsive repairs were anticipating an adverse variance of £169k for the year, an adverse movement of £134k, this was due to an increase in material costs and the number of repairs anticipated to be carried out.

·             BMBS were showing an adverse variance of £512k for the year this was an adverse movement of £324k from the August report.  The main reason for these were an increase in external contractor’s work being carried out on voids and timing delays in recharging these back to the relevant service area. 

·             General management costs were £32k higher than the budget however this was a favourable movement of £101k mainly due to savings on salary costs and professional fees. 

·             Sheltered accommodation was now anticipated to show a favourable variance of £43k for the year, a favourable movement of £115k since August and this was mainly due to a savings on salaries of £40k and lower than anticipated repairs carried out by BMBS of £64k.

132.2    Councillor Osborne reported that following a review of the depreciation calculations within the business model to align them to 17/18 outturn an increase of £514k was anticipated for this year, revenue contribution to capital spend was showing a favourable variance of £1.6 million for the year, a favourable movement of £1.4 million from August.  The variances were explained in more detail in paragraph 5.6 of the report. 

132.3    Councillor Osborne MOVED the recommendations which Councillor Ridley SECONDED.

132.4    Councillor Ridley stated that BMBS was becoming a long-term challenge and enquired if they were adequately staffed and able to retain staff.

132.5    Councillor Osborne agreed that BMBS continued to have challenges and staffing issues was one of them.  Regular meetings were being held with staff to identify what their issues and problems are.  Councillor Osbourne stated that she would ask the Corporate Manager for BMBS to email members to keep them informed. 

132.6    Councillor Ward welcomed the offer of more detailed updates particularly around the issue of sickness and morale.

132.7    Councillor Lawrenson stated that it was incumbent to make sure that that value for money was delivered as well as providing an adequate service for our tenants.  

132.8    Councillor Maybury raised that when there was an ongoing problem with building maintenance there was a knock-on effect to tenants and that as it had been stated that we are having to rely on external contractors again, their costs maybe higher than anticipated which gave cause for concern.

132.9    In response Councillor Osborne stated that the problems being experienced with BMBS were the same as when the department was previously managed by the previous contractor, however there were now less complaints and the tenants were reporting that the service had improved. 

132.10  Councillor Barrett raised that self-employed workers are less likely to be off sick and questioned whether the BMBS model should be continued. Councillor Barrett suggested that Overview and Scrutiny investigate if this model was sustainable.

132.11 Kathy Nixon, Strategic Director, stated that work was being done regarding sickness absence and stress related absence in the organisation at the moment with new policies being brought in and ongoing training programmes for all managers to upskill them to deal with sickness absence and early identification of people who may be getting stressed.  The Strategic Director also reported that there had been a four-month downward trend in mental health related absence and there had been a three-month downward trend for overall sickness absence.

132.12 Councillor Ridley asked if this report just reflected Babergh’s half of the adverse variances and if this was the case, he would support Councillor Barrett’s comments that this was clearly an area that needs some very careful examination.

132.13  Councillor Lawrenson stated that the downward trend in long term sickness was to be welcomed and that the Cabinet would welcome seeing the comparable figures from the past few years before BMBS was incorporated until now.  Councillor Lawrenson also suggested that a review be carried out in a years’ time to see if there was any improvement.

132.14  Councillor Maybury agreed with the comments made and asked if spot checks were being carried out to assess value for money.

132.15  Councillor Osborne stated that issues had been raised before regarding the level of performance and the standard of the work that has been undertaken, this had been addressed and quality checks were due to be started.  An update would be sought from the Corporate Manager as to whether quality checks had been implemented.  Councillor Osborne agreed that a deadline for a review was needed and that a 12-month timeline was a sensible one.

By a unanimous vote

It was RESOLVED:-

(i)              That the potential or likely variations in relation to the HRA both Revenue and Capital compared to the Budget be noted.

(ii)            That, subject to any further budget variations that arise during the rest of the financial year, the increase in funds of £299k, referred to in section 5.6 of the report, be transferred to the Strategic Priorities reserve, as referred to in 2a of the report.

Reason for Decision:  To ensure that Members are kept informed of the current budgetary position for both the HRA Revenue and Capital Budgets.