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TRANSCRIPT
Draft 2 (9 Jan 2006)
London Borough of Sutton
Application for a Place on the Round 6 ALMO Programme
[March 2006]
Page 15
2
Foreword
To be provided in final draft
Page 16
3
Contents
Page Foreword 2
Summary Sheet 4
1. Option Appraisal 6
2. Scheme Outline 8
3. ALMO Funding Required 10
4. Decent Homes Delivery 11
5. Sustainability 12
6. Division of Functions 13
7. Service Delivery 15
8. Best Value Reviews 16
9. Tenant Involvement 17
10. ALMO Structure and Board 19
11. ALMO Independence 20
12. ALMO Staffing Arrangements 21
13. Strategic Context 22
14. The Local Authority’s Strategic Function 23
15. Monitoring 25
16. Timetable 26
17. Building Cost Model 27
Appendices
A Council Resolutions
B Government Office for London Option Appraisal Sign-off Letter
C Option Appraisal Executive Summary
D Test of Opinion Survey Results
E Proposed Structure for Resident Participation
F ALMO Board Role and Responsibilities
G ALMO Board Member Role Profile
H Proposed ALMO Top Management Structure
I Proposed Strategic Housing Services Housing Partnerships Structure
J Proposed ALMO Monitoring Arrangements
K ALMO Project Plan
[Above appendices to be provided in final draft]
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Summary Sheet
Local Authority London Borough of Sutton
Name of ALMO (if decided) Sutton Housing Partnership
Will the ALMO manage all or part of the stock
The whole of the stock, subject to the possible exclusion of the Roundshaw estate in the event of that stock being transferred to an RSL
If only part of the stock, name the areas covered
-
If only part of the stock, the % of the LA’s total stock
-
Number of tenanted properties to be managed by the ALMO
XXXX (estimate as at 3 April 2006)
Number of leasehold properties to be managed by the ALMO
XXXX (estimate as at 3 April 2006)
Total number of properties to be managed by the ALMO
XXXX (estimate as at 3 April 2006)
Number (and %) of properties currently failing the Decent Homes standard
XXXX (xx%)
Date by which all properties would meet the Decent Homes target with ALMO funding
2010
Total ALMO bid (£m) and breakdown by year
£xxxm £xxm pa
Average investment per dwelling £xxxxx
Timing and results of LA BV Inspections to date
Housing Management (2003).…...2*
Uncertain prospects for improvement
Supporting People (2005)………1*
Promising prospects for improvement
Timing of ALMO inspection October 2006 (anticipated)
How tenant support has been/will be demonstrated e.g. ballot/survey and dates
Ballot held in November/December 2005
Number of TMOs, if any,and number of properties covered by each
None
Brief details of structure if group structure or more than one ALMO proposed
N/A
Expected date of section 27 application January 2006
Name, address, phone and e-mail contact details for lead local authority officer
Simon Latham
Executive Head of Services, Community Living
London Borough of Sutton
Civic Offices
St Nicholas way
Sutton SM1 1EA
020 8770 4005
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Name, address, phone and e-mail contact details of lead ALMO officer (if decided)
Peter Dolan
Executive Head of Services, Housing & Regeneration
Address as above
020 8770 5672
Name, address, phone and e-mail contact details of the Council’s Chief Executive
Paul Martin
Chief Executive
London Borough of Sutton
Address as above
020 8770 5212
Name, address, and e-mail contact details of the Leader of the Council
Cllr Sean Brennan
Address as above
xxxxxxxxxxxxxxxxxx
Name(s) and e-mail address of local MPs
Paul Burstow (Sutton & Cheam)
xxxxxxxxxxxxxxxxxx
Tom Brake (Carshalton & Wallington)
xxxxxxxxxxxxxxxxxx
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1 Option Appraisal
Evidence that the formal Options Appraisal has been signed off by the relevant Government Office. Where the proposed ALMO would manage only part of the stock, an explanation of how that stock was selected should be provided, along with details of the local authority's plans for the remainder of the stock. Copies of formal resolutions supporting this decision should also be included, along with evidence of support from tenants. This might, for example, be letters from the Tenants Federation or individual associations, or a report from a conference or meetings of tenants.
The London Borough of Sutton carried out its appraisal to determine how it would meet the Government’s decent homes target during the period September 2003 to February 2005. The outcome and recommendations from this were taken through an agreed decision-making process, culminating in formal approval being given by the Authority’s Strategy Committee on 21 February and adoption by the full Council on 7 March 2005. The relevant resolutions are set out in Appendix A.
Our option appraisal main report was submitted to the Government Office for London (GOL) in March 2005. A supplementary report was submitted in May focussing on some additional consultation with residents undertaken on the Roundshaw estate in Wallington (see below). The appraisal was duly signed off by GOL on 24 June 2005. A copy of the sign-off letter is attached at Appendix B while the submission’s executive summary is included for information at Appendix C.
In accordance with the Government guidance, the option appraisal process was managed through a working group comprising councillors, resident representatives and Council officers. An independent tenant advisor (ITA) was appointed early on to advise and support resident groups and individual residents throughout the period. At the same time, the Council implemented a detailed and thorough communication and consultation strategy to ensure that residents were as informed as possible regarding the issues and the decision to be taken.
The appraisal included an assessment of housing need and demand taken from the latest independent housing needs survey (2001) and informed by an in-house supply-demand analysis of social housing in the borough. The former, which has recently been updated, revealed an affordable housing requirement of over 1,100 new homes p.a. over the next five years while the latest version of the latter indicates that number of households on the housing register (currently around 3,500 [to be updated in final version]) is likely to increase significantly over the next five years.
The second component of the appraisal was an independent stock condition survey, undertaken in 2004. This revealed a total investment need over a 30-year period (revenue and capital expenditure) of some £409m, which rises to over £600m when all on costs and the full costs of management are added in. The cost of lesser levels of investment (e.g. doing the theoretical bare minimum to achieve the decent homes standard and meet legal obligations) was also assessed and a breakdown of the investment requirement on an estate-by-estate basis provided.
The information from the stock condition survey fed into an independent financial analysis that identified the resources likely to be available for future investment in the stock. These were then set against various levels of potential expenditure and thus the size of the funding gap facing the Authority was identified. This amounted to some £44million up to 2010 just to meet the theoretical absolute minimum investment required to meet the decent homes standard and carry out other essential work. This gap increased to over £100m in relation to the full investment requirement identified by the survey.
The analysis concluded that in view of there being virtually no scope for using Prudential Borrowing to bridge the funding gap, the Council continuing to directly own and manage its housing stock was no longer an option. Given this it went on to identify and evaluate the benefits and risks/disadvantages of each of the three options available for securing additional funding -arms-length management, the Private Finance Initiative and stock transfer.
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At the same time, the possibility of a mixed solution involving a separate option for the retained Council stock on the Roundshaw estate was explored. The rationale for this was that, once the current regeneration programme was completed, a majority of the homes on the estate would be in RSL ownership. Roundshaw Homes (the housing association consortium set up to own the new build units) also currently manages the retained Council stock and there has been a long held view amongst residents that management of the estate should continue to be undertaken by just one provider. The financial analysis also looked at the effects of redeveloping the Authority’s 98 ‘defective’ Orlit and Unity dwellings.
A ‘test of opinion’ survey was carried out by the Council and the ITA in November/December 2004 in which residents were asked to state their preferred option. This clearly showed a very strong first preference for ‘stay as we are’, with an arms-length management organisation (ALMO) being the clear preference in the event that ‘stay as we are’ was not possible. The results of the survey are set out in Appendix D.
Although the test of opinion indicated a preference for ALMO over stock transfer across the borough, given the unique situation at Roundshaw and the unanimous support of the Roundshaw Community Board in favour of transfer to Roundshaw Homes, it was decided that some further in-depth consultation be carried out with residents of the retained units on the estate, in order to test their views further by exploring with them what the ALMO and transfer options might mean in more detail. This piece of work was carried out in March/April 2005 and resulted in an overwhelming majority of residents stating that they would like to be formally consulted on a transfer proposal.
The outcome of the option appraisal, which took into account the results of the test of opinion survey and the outcome of the further consultation with residents at Roundshaw, was a recommendation to set up an ALMO for the whole of the stock, with the exception of the retained units at Roundshaw where it was proposed that residents be formally consulted on a proposal that these properties be transferred to Roundshaw Homes. It was subsequently agreed that in the event that the proposed transfer did not proceed the retained Roundshaw homes would be managed by the ALMO. In view of this possibility the Roundshaw stock is included within our bid for ALMO funding.
It was also agreed that the defective dwellings should be incorporated in the stock subject to the ALMO proposal but that further feasibility work be undertaken with a view to their possible redevelopment in due course.
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2 Scheme Outline
A brief description of the proposal including its nature (whole stock or partial, single ALMO, group structure etc), the number of tenanted and leasehold units included, the type of housing concerned and its general condition. Where the ALMO would manage only part of the stock, a map showing the boundaries of the area should be provided.
LB Sutton proposes to transfer the management of the whole of its housing portfolio, with the possible exception of the 690 [Check/update] units that form the Council retained stock on the Roundshaw estate in Wallington, to an arms-length management organisation (ALMO. The Roundshaw units would be excluded in the event that the proposal to transfer this stock to the existing RSL consortium that owns the new build units on the estate did not proceed. A ballot on the transfer proposal is planned for the summer of 2006.
The proposed ALMO, which has already been set up in shadow form, will be a company limited by guarantee and wholly-owned by the Council as the sole shareholder. The organisation, to be known as Sutton Housing Partnership, will be a single stand-alone entity and will not form part of any group structure.
It is proposed that the ALMO ‘goes live’ on 3 April 2006, at which point it will be responsible for the management of approximately xxxx rented and xxxx leasehold dwellings, as well as some xxx homes sold freehold but for which a service charge is payable and a further xx properties sold on a shared equity basis. In the event that the management of the Roundshaw stock were included in the ALMO’s portfolio this would add some xxx rented and xx leasehold homes.
In terms of type, age and size profile the rented housing stock (including Roundshaw) is made up as follows (figs as at 1 December 2005):
Age
Pre 1945 1945-64 1965-74 Post 1974 All ages
Traditional houses and bungalows
1-2 Bedrooms 1195 97 191 17 1500
3+ Bedrooms 1258 176 105 33 1572
Non traditional houses and bungalows
All sizes 0 105 0 0 105
Flats
Low rise (1-2 storeys) 575 240 709 55 1579
Med Rise (3-5 storeys) 219 689 1274 313 2495
High rise (6+ storeys) 0 133 253 28 414
Total dwellings 3247 1440 2532 446 7665
Council housing is located in most parts of the borough. There are, however, a number of larger estates or concentrations, the principal ones being:
• around 3,000 inter-war cottages and low rise flats at St Helier in the north of the borough
• the Roundshaw estate in Wallington - built in the 60s and originally comprising some 2,000 units, the estate has been undergoing major regeneration (around 1,000 homes
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have now been replaced with new RSL housing leaving some xxx Council-owned retained units)
• 295 maisonettes at Durand Close, Carshalton –to be redeveloped over the next 4/5 years
• the Benhill estate in central Sutton comprising around 430 flats and maisonettes
• Shanklin Village in Belmont, made up of over 420 deck-access designed, 60s-built flats and maisonettes
Around 60% of the Council’s housing stock is over 40 years old, while 40% was built prior to 1945. As a result of insufficient resources for investment over many years there is now a considerable backlog of major repairs and improvements required.
As mentioned above, the 2004 stock condition survey revealed that over £600m is needed to meet the investment required to the stock over the coming 30 years. It also estimated a level of non-decency in the order of 60%. However, subsequent estimates, taking into account information on properties not included in the sample survey and the effect of works carried out since 2004, has shown that the level of non-decency now stands at xx% (see section 4).
On a more positive note, in terms of energy efficiency, the 2004 survey showed that under the Standard Assessment Procedure Sutton’s stock scored an average (SAP) rating of 62.2 compared to the national average of 51.
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3 ALMO Funding Required
The amount of additional resources bid for, taking account of the principles set out in Section 4. Bids for funds should be set out in a profile of annual expenditure and also expressed as desired additional capital investment per dwelling. The proposed works programme may be of whatever length the local authority considers appropriate, but should not extend beyond 2010. The profile of the programme should take account of the capacity of the local building industry and of contractors to meet the requirements of all housing providers in the area and surrounding region, and should as far as possible avoid the risk of inflating contract prices by excess competition for scarce capacity.
[Awaiting completion of the Building Cost Model]
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4 Decent Homes Delivery
How the proposal would ensure delivery of the decent homes target by no later than December 2010. This should include a brief description of the condition of the stock, including any particular problems or unusual property types, the number of homes which currently do not meet the decent homes standard, the date of the most recent stock condition survey and its findings, the proposed works programme, including any demolition proposals, and the date by which the housing would be brought up to the decent home standard with the additional funding; an annual profile of forecast stock numbers and the number meeting the decent homes standard should also be included.
To inform our option appraisal process a new independent stock condition survey was undertaken on the Council’s behalf by FPD Savills between April and June of 2004. This comprised a 15% sample internal survey and 100% survey of flatted block common parts and estate grounds. A summary of identified expenditure over 30 years within each of the works categories (capital and revenue) is set out in the table below.
Years
Element 1 to 5 6 to 10 11 to 15 16 to 20 21 to 25 26 to 30 1 to 30
Catch Up Repairs £3,835,006 £0 £0 £0 £0 £0 £3,835,006
Planned Works £68,855,854 £33,596,392 £22,483,548 £21,198,628 £31,417,063 £21,732,301 £199,283,785
Improvements £25,923,960 £0 £0 £72,000 £0 £0 £25,995,960
Related Assets £1,500,000 £1,500,000 £1,500,000 £1,500,000 £1,500,000 £1,500,000 £9,000,000
Contingencies £2,592,000 £2,592,000 £2,592,000 £3,034,000 £3,255,000 £3,255,000 £17,320,000
Disabled Adaptations £2,000,000 £2,000,000 £2,000,000 £2,000,000 £2,000,000 £2,000,000 £12,000,000
Exceptional Extensive Works £4,194,750 £3,744,750 £750,000 £0 £500,000 £0 £9,189,500
Environmental Improvements £601,750 £601,750 £601,750 £601,750 £601,750 £601,750 £3,610,500
Revenue Expenditure £22,397,803 £22,036,753 £21,675,703 £21,314,653 £20,953,603 £20,953,603 £129,332,118
Total £131,901,123 £66,071,645 £51,603,001 £49,721,031 £60,227,416 £50,042,654 £409,566,869
As mentioned earlier, when all on costs and the costs of management are factored in the total figure rises to over £600m. The 2004 survey had estimated the level of non-decency within the stock as a whole to be around 60%. This was later revised upwards to 73%, as at 1 April 2005, when the condition of properties not included in the survey sample was taken into account and the effect of works carried out since the survey was similarly factored in.
Since then a great deal of further work has been undertaken to update our stock condition position, this data now being held within a specialist IT system –Codeman. As at December 2005 the level of non-decency within our stock is estimated at xx% xxxx properties). This can be broken down as follows:
[To include a table showing the make up of non-decency in terms of the four key elements]
[Remainder of this section awaiting completion of the Building Cost Model]
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5 Sustainability
That there is long-term demand for the housing to be improved and, if not, how low demand problems will be addressed. If demolition is proposed, details of tenants' views on the proposals should be provided. Also what other activities, including regeneration, market renewal, community initiatives and environmental works, are being planned or undertaken to ensure the sustainability of the improvements to be carried out by the ALMO and how these are being funded. In line with Section 4, applications should also provide full details of any bids for funding to support sustainability works up to the value of 5% of their total bids.
In common with other local housing authorities in London and the Southeast, Sutton faces a demand for social housing that greatly outstrips supply. This is evidenced by our latest (update) housing needs survey which estimates the need for an additional 1,162 affordable housing units per annum over the next five years. A separate supply and demand analysis, undertaken in house, indicates that over the next five years the number of households on the Housing Register (including tenanted households wishing to transfer) is set to increase from around 3,700 as at the beginning of this financial year to over 6,400 by 2009/10.
Sutton has no problems of low demand but, again like other councils, does have certain stock that is difficult to let, due either to its condition or design –sheltered units with shared facilities being a prime example of this. However, following a best value review a programme of reimprovement has begun to address the sheltered stock.
Some estates have already undergone or are undergoing regeneration, notably the Roundshaw estate in Wallington and Durand Close in Carshalton, through which the Council has been able to address problems of sustainability. It also owns a number of ‘defective’ Orlit and Unity system built dwellings in the Clockhouse and Carshalton areas for which a long-term solution will need to be found. These were flagged up in the option appraisal as stock that would be included in the ALMO but for which further work would be needed in the future to determine the best outcome for these units.
The option appraisal included a survey of residents’ aspirations in terms of investment and service delivery, carried out in April 2004. This revealed a very strong desire on the part of residents of certain estates for their homes to be redeveloped. As with the system built properties it was acknowledged that there were clearly issues to be addressed in relation to these estates but that they would be included as part of the ALMO programme application, in terms of the need to tackle non-decency, with the intention that further work would be carried out in later years to examine their long term future.
The survey also highlighted the desire on the part of tenants and leaseholders to see not just essential decent homes related works undertaken but also improvements to estate environments and the common parts of flatted blocks etc. In particular, works such as improved parking, estate lighting and other security measures feature very highly in residents’ priorities. Such environmental works are of course major contributors to estates remaining popular and sustainable into the future and accordingly our bid for ALMO funds incorporates an element for this.
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6 Division of Functions
The proposed division of functions between the ALMO and the local authority, with an explanation where this varies from the division suggested in Section 3 of this Guidance.
The principal housing management functions that it is proposed that the ALMO will undertake directly on the Council’s behalf are:
• Lettings
• Mutual exchanges
• Rent accounting and arrears control
• Tenancy management
• Making ASBO requests (see below)
• Sheltered housing officer service
• Estate management
• Void management
• Leasehold management
• Responsive repairs
• Cyclical maintenance
• Major repairs and improvements
• Energy efficiency improvements
• Stock condition surveys
• Resident participation
• Communications/consultation
• Complaints/Member enquiries
• Day-to-day management of the Housing Revenue Account
The Council intends to retain direct responsibility for:
• Housing needs assessment
• Housing strategy
• Housing enabling
• HRA business plan
• HRA budget (including rent) setting
• Applying for ASBOs [Subject to possible change in Government policy re the powers of ALMOs]
• Changes to housing management policy
• Annual resident satisfaction surveys
• Homelessness
• Housing advice
• Housing benefits
• Housing allocations/nominations
• Housing register (including registration of tenant transfer applications)
• Right-to-Buy (RTB) administration
• Home ownership initiatives
• Sale of HRA land (outside of RTB)
• Private sector housing (grants, enforcement etc)
• Regeneration –policy and project management
• Supporting People
• Community support
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• Community alarm service
• Management of shops and other commercial premises within estates
It is proposed that certain housing or housing related functions will be shared or carried out in partnership between the two organisations. These include:
• Temporary accommodation management
• RTB valuations
• Financial management/returns
• Insurance claims
• Procurement policy
• Initiatives for making best use of the housing stock
• Disabled adaptations
• Meeting the requirements of the Home Energy Conservation Acts
• Addressing anti-social behaviour within the wider community
• Development of the Tenant Participation Compact
• Meeting the wider objectives of sustainable communities, neighbourhood renewal, community safety, diversity etc
This functional split accords broadly with the Government’s ALMO guidance. Where interfaces exist between functions to be carried out by the two parties (e.g. allocations and lettings) operational protocols are being developed as a basis for the effective and efficient management of these areas of activity. These will form an appendix to the ALMO’s Initial Delivery Plan, which in turn forms an annex to the Management Agreement between the ALMO and the Council.
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7 Service Delivery
How the ALMO would deliver a higher quality housing service for tenants.
Sutton Housing Partnership has clearly stated within its draft initial Delivery Plan its intention to become a 3-star ALMO by the time of its first inspection, due in October 2006. The Plan sets out how the ALMO will achieve this and in so doing provide an improved housing management service. This will be achieved by:
• Building on the Council’s record of service improvement in recent years and its move from a one to a two star service, achieved in 2003
• Working closely with the Council and other agencies to support delivery of the housing strategy and the wider strategic objectives of the Authority and the local community, as set out in the Community Plan
• Setting a range of clear priority and other service objectives that focus on the critical issues where the need for improvement has been identified and can be achieved, within each housing management functional area
• Developing the current housing management service improvement plan, focused on achieving as a minimum the excellent standards of service as described in the Audit Commissions Key Line of Enquiry documentation, by the time of the ALMO inspection
• Setting a wide range of local and best value performance indicator targets, which take the ALMO into the top quartile of performance when compared with like organisations
• Building on and improving upon the Council’s current standards of service, in consultation with its customers
• Carrying out a programme of early best value reviews in key areas of the service where strengthening and improvement is believed to be necessary and achievable. (These include: customer access and opening hours; neighbourhood management; rent arrears legal support services; former tenant debt recovery)
• Reviewing and improving upon the Council’s existing corporate complaints procedure
• Building up a detailed picture of the ALMO’s customer base to better tailor services to meet tenant and leaseholder needs and in particular the needs of hard to reach groups
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8 Best Value Reviews
Details of the timing and results of previous Best Value reviews and inspections of the housing service. The bid should include any existing evidence such as Inspection reports, Best Value reviews, action plans following inspections / reviews etc. The timetable for planned reviews and inspections, including the first inspection of the ALMO, should be set out. This should demonstrate how it is proposed to work towards at least a two star rating in time to make significant use of an initial allocation of ALMO funding, which for applicants in Round 5 will generally be for 2006/07 and 2007/08.
The Council’s housing management service was last reviewed in 2003 when it achieved a 2-star rating, albeit with uncertain prospects for improvement. This inspection covered the sheltered housing service and the Council’s community alarm (Safecall) service. As stated above, with go live planned for April 2006, we anticipate that the first inspection of the ALMO will take place in October 2006.
The previous section has set out the means by which the ALMO will aim to achieve its target of a 3-star rating. Part of this will be the best value review of certain aspects of the service, to be carried out in the early months of the contract and including:
• Customer access and opening hours
• Neighbourhood management
• Rent arrears legal support services
• Former tenant debt recovery
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9 Tenant Involvement
Details of tenant engagement during the Options Appraisal process and during preparation of the bid, and evidence of tenants' support for the proposals. Details of any discussions with existing or proposed TMOs. The bid should also set out the arrangements for tenant involvement after the establishment of the ALMO. It should explain in particular how hard to reach groups are being and will continue to be involved and how their needs will be met.
Tenants and leaseholders were fully involved during our option appraisal process and have continued to be involved during the ALMO set up/bidding process.
As part of the former a detailed resident communication and consultation strategy was developed in conjunction with resident representatives who formed part of the formal option appraisal working group. The latter body met regularly throughout the option appraisal process and was responsible for recommending to the Strategy Committee the options to be taken forward.
Throughout the period residents were supported by an independent tenant advisor (PEP Ltd) and were involved and communicated with in a number of different ways including:
• Postal surveys
• Conferences
• Meetings
• Focus groups
• Road shows
• Booklets, leaflets, posters, newsletters etc
• Press articles
• A telephone hotline
• Interactive web site
• Radio interviews
The culmination of the process was a 100% ‘test of opinion’ survey of all tenants, leaseholders and ‘s16’ freeholders (those who pay a service charge to the Council) in which residents were asked their opinion on which option/options they would like to see taken forward. The results of the survey very much informed the Council’s decision to pursue arms-length management. Some further and more in depth face-to-face consultation was subsequently carried out with tenants and leaseholders of the retained stock on the Roundshaw estate. This resulted in the decision to pursue stock transfer for that estate.
In the borough-wide survey, when the three options of stock transfer, arms-length management and PFI were put to residents some 80% chose setting up an ALMO as their preferred route. However, the subsequent consultation at Roundshaw resulted in nearly 93% of residents who were spoken to expressing a wish to be formally consulted on stock transfer. Fuller details of these consultation exercises have been provided in our option appraisal submission, main and Roundshaw supplementary reports, provided to the Government Office for London in March 2005 and May 2005 respectively.
Following the decision, taken in March 2005, to pursue arms-length management the Council, through an advisory group to the Strategy Committee, continued to work closely with resident representatives. At an early stage all tenants and leaseholders were advised of the setting up of the ALMO shadow board and were invited to apply to be one of the four resident representatives on the board (three places for secure tenants and one for a leaseholder).
As part of the work in developing the Initial Delivery Plan for the ALMO discussions were held with the Sutton Federation of Tenant and Resident Associations (SFTRA) regarding proposed structures for resident participation and involvement under the new ALMO set up.
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The proposed formal structure is set out in an appendix to the Delivery Plan and is re-produced in this document at Appendix E.
Annex 4 of the Management Agreement sets out the current version of our Tenant Participation Compact. This is in the process of being revised, in liaison with resident groups and SFTRA, and will be re-published by the ALMO once it comes formally into being. It explains the ways in which we seek to engage with all customers, including groups that have traditionally been hard-to-reach. In that regard the Council has had some recent successes: notably engaging with young people on estates through organised activities and the recent setting up of a borough-wide association for residents who are not served by a local estate-based association. In accordance with its Initial Delivery Plan these initiatives, and others, will be built upon and taken forward by the ALMO.
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10 ALMO Structure and Board
Details of the proposed Board composition and structure of the ALMO (group structure, area boards etc), including how membership reflects the community it serves. The bid should include details of the range of skills and experience the Board will be expected to possess and should set out the proposed recruitment, selection, training and development process.
The board of management of Sutton Housing Partnership consists of 12 directors: made up of four Council nominees, four independent members drawn from the local community and four residents (three secure tenants and one leaseholder). The ALMO is a company limited by guarantee and wholly owned by Sutton Council. It is a stand-alone entity and does not form part of any group structure. At this stage there are no proposals to create area boards.
Prior to recruiting members of the shadow board, in the summer of 2005, the Council agreed roles and responsibilities of the board. Based on existing good practice elsewhere this set out in detail the responsibilities and accountabilities of the board, as a whole, under a number of key headings such as leadership and direction, strategic development and risk management. A copy of this document is set out in Appendix F.
A separate board member role profile was also agreed. This explained the purpose of the board member role and the values and ethics expected of board members. It went on to describe a range of core competencies (again based on guidance and good practice from elsewhere) that board members were expected to either have or to be able to develop with training and support. It further set out the range of knowledge and experience that was being looked for in board members across the board as a whole. A copy of the board member role profile is included at Appendix G.
These documents formed part of a comprehensive recruitment pack used to invite applications and select members of the shadow board. The process was applied equally to each of the three elements of the board (residents, council nominees and independents) and was led by a sub-group of members of the Housing Strategy Committee Advisory Group (who formed the recruitment panel), supported by senior officers and a specialist recruitment consultant.
The members of the shadow board were accordingly selected by competitive interview and were subsequently ratified by the Strategy Committee in December 2005. Initially only 10 of the 12 places were recruited to but the remaining places were subsequently filled by…..[TBA]. A programme of training and development was put in train, shortly after the first meeting of the shadow board, held in September 2005. This has taken place at a series of shadow board meetings/away days/estate visits etc held since, and has covered issues such as governance and code of conduct, [other topics TBA].
The governance arrangements for the ALMO are incorporated in its draft Memorandum and Articles of Association. These are based on the ODPM model and form an appendix to the Initial Delivery Plan.
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11 ALMO Independence
How the independence of the ALMO and separation from the local authority will be assured. The bid should include details of any controls that the authority plans to retain over the ALMO in addition to those catered for by the model Management Agreement.
In Sutton there has been a separation of the housing management and strategic housing functions in place for a number of years. This goes back to the early 90s with preparations for CCT of housing management, which resulted in the outsourcing of the service to a private sector provider. Following the end of the contract, and the repeal of the CCT legislation, when the service was brought back in house it was decided that it should be managed from within a dedicated division within Community Services -Housing & Regeneration- with the strategic and other statutory functions being managed by Community Living, a separate division within the directorate.
Building on this tradition, Sutton’s approach to ensuring appropriate separation of its ALMO from the local authority has, firstly, been achieved by our adhering as closely as possible to the model Management Agreement and Memorandum and Articles of Association (MAA) produced by the ODPM. The only areas where we have sought to substantively amend the former have been:
• Annex 2 (format of the delivery plan) has not been included; rather clause 1 states that the plan will be reviewed but remain in substantially the same format
• Clauses 6.3 and 6.4 where we have built in a degree of flexibility in the annual performance reporting regime
• Clauses 6.9 and 67 where we have introduced the process of mediation as a first resort for resolving disputes
• Clause 23 where the ALMO is required to obtain the Council’s prior written consent before undertaking work for a third party over a specified value; we have also introduced a process of periodically reviewing the financial limits placed on the ALMO in respect of its undertaking works or providing services on behalf of a third party
In addition to the above, the following options within the model agreement have been chosen:
• Clauses 20 and 57 where the options of giving the Council the power to require the removal of any personnel of the ALMO and the Council being able to offer employment to anyone employed by the ALMO upon expiry of the contract have not been included. Also the option where the Council ‘believes’ that the information on transferring staff given to the ALMO has been chosen, with the inclusion of an indemnity which protects the ALMO against any negative impact of pension underfunding
• Clause 53 where the Council’s use of surpluses is limited to areas of spending which are specifically the subject of Council resolutions or are incorporated in Council budgets
• Clause 60 where the option of the ALMO being able to object to instructions from the Council’s Representative that vary the fundamental nature/delivery of the service has been included
• Clause 62 where the agreement has been set for a term of 10 years with a break clause allowing termination after five years
• Clause 64 where a ‘substantial change’ in the number of dwellings, for the purposes of allowing changes to the responsibilities/cost basis within the delivery plan, has been set at 2.5%
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• Clause 65 where the option of unilateral termination of the agreement by the Council has been deleted
Also, as well as adhering to the model MAA the ALMO will follow closely the ODPM guidance on governance as set out in…[Title TBA]
Although there are a range of services that will be supplied to the ALMO by the Council, as set out within schedule 9 to the Management Agreement, these are all subject to robust service contracts that ensure that the independence of the parties is not compromised and that best value is achieved by the ALMO in each service area. Further, set out in the Initial Delivery Plan, are a number of operational protocols which set out the roles and functions of each party (and third parties where they are involved) for all service areas or processes where there is an interface to be managed (e.g. in the allocation and letting of empty homes). Again, these reinforce the separation of roles of the two organisations in terms of the ALMO as the deliverer of the housing management service and the authority as the strategic enabler.
The independence of the ALMO is also supported by the separate accounting arrangements being put in place and the separate external auditing of accounts
Finally, the separation is further ensured by the fact that the ALMO will be operating from its own offices, conveniently location in central Sutton and close to the Civic Offices. This will have the benefit of allowing the ALMO to develop its own distinct organisational culture and identity while at the same time maintaining a close working relationship with the Council and the related services it provides (e.g. housing benefits).
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12 ALMO staffing arrangements
Staffing arrangements for the ALMO, including how staff and unions have been consulted about the proposals so far. Also, how the staff reflect the community served.
It is envisaged that nearly all staff that currently work within the Council’s Housing & Regeneration division, and who are responsible for providing our housing management service, will transfer, under the TUPE regulations, to the ALMO when it goes live in April 2006. The only exceptions to this are a small number of staff responsible for the regeneration function, which the Council has opted to retain within its strategic housing service.
The transfer will see the current executive head of service for Housing & Regeneration become the ALMO’s chief executive and the senior managers within the division taking up certain of the director posts within the ALMO’s top structure. Remaining vacant posts, including that of director of finance, will be recruited to during the early months of 2006. The top level management structure has been set out in the initial delivery plan and is reproduced in this document at Appendix H.
Below the top tier structure it is envisaged that existing staff will, by and large, slot into the same or nearly equivalent posts to the ones they currently hold. The process for this has been the subject of extensive consultation with staff over many months, commencing from the time that the decision to pursue the ALMO route was taken. In addition to numerous meetings with staff on the subject of the ALMO, both as a whole, in small groups and individually, meetings have also been held with the relevant trades unions, and throughout this period of change the Council’s procedures for establishment changes has been carefully followed.
According to the 2001 Census the borough’s population includes 10.8% of people from non-white BME backgrounds. Our latest satisfaction survey showed that within the tenanted population this proportion is slightly lower at xx%. In terms of the ethnic make up of the staff due to transfer to the ALMO this…[TBA]
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13 Strategic Context
Details of how the proposal fits in with the authority's overall strategy. The bid should include copies of the authority's latest Housing Strategy and HRA Business Plan. It should show how the local authority is utilising its existing resources to work towards the decent homes target and how the shortfall to be met by ALMO funding has been calculated.
Sutton’s housing strategy, approved as ‘fit for purpose’ by the Government Office for London, was published in April 2004. The strategy sets out five key priorities:
1 Maximising the supply of affordable housing
2 Making best use of the borough’s existing housing stock
3 Improving the condition, energy efficiency and sustainability of the borough’s homes
4 Tackling homelessness and providing housing related support to vulnerable groups
5 Improving housing services and quality of life for residents through increasing choice and access and addressing diversity
At the same time, we published our Housing Revenue Account business plan. This had an overall aim or mission:
‘To deliver excellent landlord and regeneration services which improve the quality of life of Sutton’s tenants and leaseholders and provide a decent home for all’
The latter was produced during the period that our option appraisal was being carried out. In light of the updated stock condition information obtained as part of that process, the Council published a revised version of its HRA business plan in January 2005, which reflected the post option appraisal position. Copies of the housing strategy and the latest version of the HRA business plan have been provided with this application.
From the business planning and option appraisal processes it was very clear that in order to meet the decent homes target and to deliver on our mission and provide for the level of investment needed to modernise and maintain the Council’s housing stock, and indeed meet the wider aspirations of residents in terms of improving estate environments etc, Sutton would need to take up one or more of the options being available by the Government for securing additional funding.
Through the option appraisal we established that in order to meet the full amount of investment required in the stock up to 2010 a funding gap of over £100m needed to be addressed. Over the full 30 year period of the business plan this rose to over £200m (this was on the assumption that the Roundshaw stock was transferred and the ‘defective’ dwellings were taken out of the equation). Since then further work has been done to provide a more precise and up to date quantification of the ALMO funding we require, and this is contained within the Building Cost Model (see section 17).
The model shows…[To complete this section following completion of the BCM]
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14 The Local Authority’s Strategic Function
How the local authority proposes to discharge its strategic housing function. This should specify the financial and staffing resources to be devoted to this important area and explain where these would fit in the authority's corporate structure. Evidence of the corporate impact on the local authority of the ALMO should also be provided.
The strategic housing functions that the Council will retain, and those which will be the joint responsibility of the Council and the ALMO, are set out in section 6.
With the exception of private sector housing and energy conservation activity, these being functions carried out within the Environmental Services directorate, all the strategic housing functions listed will be the responsibility of a new re-configured strategic housing services division, to be headed up by the current Executive Head of Service, Community Living under a new Director of Adult Social Services and Housing. These revised posts will come into being in April 2006 when the ALMO goes live.
Under the Executive Head of Service the strategic housing functions fall mainly into two broad areas: the Housing Centre, responsible essentially for the operations of homelessness, the housing register, housing advice, home ownership and community support; and Housing Partnerships, responsible for strategies and plans, Supporting People, housing enabling, performance management across the housing function as a whole, managing the ALMO contract and the wider partnership agenda with health and other statutory and voluntary agencies as well as the SW London housing sub-region.
A separate reporting arrangement will be put in place for the regeneration function, also the responsibility of the strategic housing service, but the officers concerned will be co-located with staff in the ALMO offices in order to facilitate the close working that will be required on a day to day basis with housing management.
Set out at Appendix I is the proposed staffing structure for the Housing Partnerships side of the strategic housing service. This is broadly the same as the current structure of our Housing Strategy & Resources unit, although the opportunity has been take to switch some resources from the housing strategy to the housing enabling function in order to provide a better balance between these areas. The switch to the ALMO will not affect the staffing arrangements within the Housing Centre. In terms of staff numbers the Centre’s establishment is currently made up as follows:
Centre manager 1 staff
Homeless Persons Unit xx staff
Housing Advice xx staff
Housing Registrations xx staff
Home Ownership xx staff
Community Support xx staff
Total xx staff
Outside of the strategic housing services division financial and accountancy support will be provided to the function through the corporate group accountant establishment within the resources directorate. This will support both the General Fund activity of the division and also its HRA related role, particularly given that the Council will retain ownership and ultimate responsibility for the HRA.
In establishing the ALMO and the strategic housing service the opportunity has also been taken to address the financing of the latter in terms of the costs that fall to the General Fund and those that fall to the HRA. The revised proposed structure and its associated budgets provide for a more appropriate balance of funding. For 2006/07 the total cost of the strategic housing function is estimated at £XXXXXXX. In terms of the main functional areas this breaks down as follows:
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Housing Centre £XXXXXXX
Housing Partnerships £XXXXXX (of which £XXXXXX is funded through the Supporting People administration grant)
Regeneration £XXXXXX
In terms of the overall corporate impact of the ALMO…[To be provided]
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15 Monitoring
How the local authority will monitor the performance of the ALMO.
The Council’s strategic housing service will be responsible for monitoring the performance of Sutton Housing Partnership and ensuring that the Authority meets the decent homes target and our other targets in relation to the housing management function. In so doing the Council will focus in particular on the following:
• Performance against the targets set against each best value and local indicator
• The delivery of the actions set out in the service improvement plan
• Progress towards meeting the decent homes standard and investing in the wider needs of the housing stock and estate environments
• Overall levels of customer satisfaction (from surveys to be carried out periodically by the Council)
• Customer satisfaction (from the various customer feedback mechanisms operated by Sutton Housing Partnership -see below)
• The involvement of customers in the delivery and development of the service
• The levels and handling of complaints
• The handling of Member and related enquiries
• The standards of governance being upheld
• The contribution of Sutton Housing Partnership to the wider regeneration and sustainable communities agendas
• Audit and associated reports
The relationship between the Council and the ALMO in terms of performance management, policy development and review is set out in Appendix J. Key to this is the ‘ALMO Monitoring Group’ comprising the Council’s Representative, the chief executive of Sutton Housing Partnership, a Sutton Federation of Tenant and Resident Association (SFTRA) representative and ALMO board representation either through the chair or another member.
This group will meet on a quarterly basis to oversee all aspects of our performance, receive reports from ALMO officers, refer reports on to the Council’s appropriate scrutiny committee(s) (also on a quarterly basis) as well as to residents and other stakeholders, and recommend policy changes to the Council via its Housing Strategy Committee Advisory Group. More frequent meetings between senior ALMO and Council officers are also likely to take place to discuss performance and related issues in greater depth as required.
Sutton Housing Partnership will agree with the Council the range and format of performance reports for submission to the ALMO Monitoring Group and other bodies as required.
Within the ALMO itself the senior management team will have overall responsibility for the performance of Sutton Housing Partnership and will be accountable to the chief executive and the board. Performance against the Delivery Plan will also be reported to the board and to residents via the Liaison Group and through its routine publications such as the tenant newsletter and annual report.
Sutton Housing Partnership will set up its own internal performance management and quality systems to ensure that targets are delivered.
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16 Timetable
The timetable setting out key stages in the process including establishing the ALMO, applying for section 27 approval and planned inspections. The application for section 27 approval may be submitted with the bid if the proposals are far enough advanced. A project management plan or process map may be included.
A detailed project plan for the process of establishing the ALMO, together with the wide range of associated activity including the communication/consultation process with residents, was set out in a detailed project plan at an early stage. This has since been regularly updated and amended as the process has unfolded. A copy of the latest version of the ALMO project plan is set out at Appendix K.
The key dates within the project plan are:
• Option appraisal sign off June 2005
• Agreeing the ALMO/Council functional split October 2005
• Agreeing ALMO and Council staff structures October 2005
• Ballot of secure tenants and leaseholders November/December 2005
• Formal establishment of the ALMO shadow board December 2005
• Management agreement approved January 2006
• S27 application submitted [January 2006]
• Financial/audit arrangements agreed February 2006
• Submission of Round 6 ALMO bid [March 2006]
• ALMO go live April 2006
• ALMO inspection October 2006
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17 Building Cost Model
A completed BCM. The information within the BCM should both support and be supported by information given elsewhere in the application. It would be helpful if key information contained within the BCM (e.g. proposed ALMO funding profile, progression toward Decent Homes) is also included within the formal bid document.
[Awaiting completion of the BCM]
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