Independence...Integrity...Value

January 2014

Jan 10th 2014, 10:00

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27th January 2014

It is interesting to see that Islington Borough Council is the latest to change its accounting policies in an effort to switch costs from the general fund to the housing revenue account. The story is included in this week’s ‘Inside Housing’ under the heading ‘Islington dips into housing budget to aid general fund’. I am quoted in the article as saying:

“Everybody is trying to alleviate pressure on the general fund… One way of doing that is to try to find ways of charging the housing revenue account and councils are going further in finding ways to do that.”

The article can be found on page five of ‘Inside Housing’ or on their website at: http://www.insidehousing.co.uk/finance/islington-dips-into-housing-budget-to-aid-general-fund/7001780.article

The Labour Party’s proposal to increase the top rate of income tax to 50% is also hitting the headlines. It is interesting to note that the top rate of income tax in 1979 when James Callaghan was Prime-Minister was 83% and that in 1983 when Margaret Thatcher was Prime-Minister it was 60%. How things have changed! I also wonder why, when we are told that a 50% rate of income tax would raise no revenue it is causing so much concern to those who it would potentially affect!

I have been giving much attention to service charges in social housing recently.

Firstly, I have completed the latest in our ‘All You Want to Know about…’ series. ‘All You Want to Know about Service Charges in Social Housing’ is now at the printers. It runs to 93 pages, sells at £30 plus £3.25 postage and packing and is a fully up to date overview of this important subject. We have not yet set up the page on the website from which it can be ordered, but if anyone would like more details or to order a copy in the meantime please e-mail enquiries@awics.co.uk .

Secondly, I have just published our latest briefing paper. It covers the calculation of service charges in social housing and includes sections on:

  • What should go into a service charge?
  • Administration
  • Staffing Costs
  • Supporting People
  • Heating, Lighting and Energy
  • Cleaning
  • Lifts, Furniture & Equipment
  • Grounds Maintenance
  • Depreciation
  • Usage Charge
  • What should not be included in service charges?
  • Designing out service charges
  • Fixed and Variable Service charges
  • Service Charge accounts

A copy can be freely downloaded from: http://awics.co.uk/calcsch.asp

Last week I chaired the January 2014 meeting of the Board of Impact Housing Association. The agenda included a review of our suite of strategic documents and matrices for our key areas of supporting people and communities, care and support, and development. At the head of our strategic documents is our mission. Our strapline in our logo ‘Improvement through Action’ is one that everyone knows, internally and externally. It has stood the test of time since 1975 and still represents what we are about. We have identified four core purposes that run through everything that we do. These are:

  • Poverty Reduction including poverty of economy, communities and opportunities
  • A transformational role for people moving through
  • Providing good, long-term secure accommodation
  • Raising Aspirations

Impact Housing Association is looking for new board members. Further information can be found on their website at: http://www.impacthousing.org.uk/news/wanted-voluntary-board-members

The first AWICS seminar and workshop of 2014 will be the ever-popular ‘All You Want to Know about Local Authority Housing Finance’ that will be held in London on 26th February 2014. For more information or to make a booking, please see http://awics.co.uk/lahfin.asp

20th January 2014

There was no 'blog' on 20th January 2014 as I was 'snowed under' marking examination scripts for the Chartered Institute of Public Finance & Accountancy's International Public Financial Management paper on Management Accounts. This exercise is now complete and I would like to congratulate all the successful candidates!

13th January 2014

I was interested to hear that the Labour Party has asked Price Waterhouse Coopers to assist them with developing housing policy. Apparently they are working on a proposal to transfer the ownership of council houses from local authorities to a new form of private company. The intention is that the private companies would be free from regulation by the Homes & Communities Agency and public sector borrowing controls and would therefore be able to borrow £25billion that could be used to fund adult social care and job creation initiatives.

This week’s Local Government Chronicle covered the issue (see page 4 or http://www.lgcplus.com/news/exclusive-housing-assets-could-hold-key-to-general-fund-pressure/5066832.article?blocktitle=Latest-Local-Government-News&contentID=2249 ). In their article I am quoted as saying:

“There is a fundamental question about what powers councils have to transfer homes to an organisation which isn’t a housing association. I suspect there would have to be some legislative change.”

However, there are other issues.

First, what about the tenants? Tenancy agreements in the private sector do not offer the same rights or protections as secure or assured tenancies. What would happen to rents? Without regulation what is to stop the new housing companies moving to offer the sort of accommodation that we see in the private rented sector.

Second, how would we ensure that the public interest is protected? How could we avoid homes being sold to companies at prices that would remind us of the sale of the Post Office? What would happen to any surpluses made by these companies?

Third, expressions like ‘liberating borrowing potential’ conceal more than they explain. If the scheme is using council housing to provide funding for general fund services then is it just another way of using the tenants’ rent money to pay for things that should be paid for through the general fund?

Fourth, would it be the intention to introduce this policy only in England or also in Scotland, Wales and Northern Ireland?

I will watch developments with interest. If either the Labour Party or Price Waterhouse Coopers would like make comments I would be pleased to publish them on my website or in my newsletter.

I have just published the January edition of the ‘AWICS’ Housing News. It features articles on:

  • The Autumn Statement and Housing
  • Councils and Collective Punishment
  • Local Authority Housing Finance
  • Thamesmead and Service Charges
  • Impact Housing launches its 2014/18 Business Plan
  • Northampton Borough Council launches Arm’s Length Management Organisation
  • Rents for Social Housing from 2015
  • Housing Transfer Manual
  • Advertisement – An Opportunity to join the Board of Impact Housing

Your copy can be freely downloaded from: http://awics.co.uk/HousingNews.asp

6th January 2014

Happy New Year to all readers of my blog, customers and users of my website.

The local government financial settlement for 2014/15 was announced as expected on 18th December 2013. Revenue Support Grant is being reduced by 9.4% on average in 2014/15 with further reductions in 2015/16 taking the total reduction to 13.2%. The government calculates that this will lead to an average reduction in spending power of 2.9% in 2014/15 and 1.8% in 2015/16. The largest reductions in spending power at 6.9% in 2014/15 are for Chesterfield Borough Council and East Lindsey District Council; with reductions generally being greatest in London, Metropolitan and urban areas. My briefing paper on the settlement is now freely available to download from http://awics.co.uk/lgfin1415.asp

Impact Housing Association, of which I am Chair, has recently approved and published its business plan for 2014/18. The plan focuses on addressing four challenges: Funding; the Role of the third sector; Self-regulation; and Staffing. These challenges will require four major commitments from the association:

  • We need to stick closely to the commitments set out in our Blueprint which is a reaffirmation of our basic principles
  • We need to continue to have a clear focus on best use of our energy and resources
  • We need to continue our commitment to develop truly customer facing services
  • We need to have a continuing emphasis on value for money, the costs of front line services and back office costs within a budget that shows very constrained surpluses

Further information can be found on the Impact website at http://www.impacthousing.org.uk/news/impact-launches-its-201418-business-plan.

The first ‘AWICS’ seminar and workshop of 2014 is ‘All You Want to Know about Local Authority Housing Finance’ and will be held in London on 26th February 2014. I am currently busy preparing for this session. As usual the session is proving popular but we still have a few places available. Details can be found on our website at http://awics.co.uk/lahfin.asp

All local authorities with housing responsibilities are obliged to identify sufficient sites for the travelling community. However, Selby District Council in North Yorkshire has not succeeded in doing this for some years with the result that in October 2008 it was forced to grant temporary planning permission for a site in the village of Towton. This was controversial at the time because in 1461 the village was the site of the largest battle of the Wars of the Roses and many people locally, nationally and internationally protested that no development should be allowed on the battlefield. Five years later and the Council has still not identified sufficient sites for travellers and is now considering an application to make the Towton site permanent. Perhaps the moral of the story is that councils should fulfil their obligations to the travelling community otherwise sites of historical or other interest may be in jeopardy. Further information is on the Council’s website at http://public.selby.gov.uk/online-applications/centralDistribution.do?caseType=Application&keyVal=MCAEBPNX03P00

If you are interested in keeping up to date with me and AWICS you may want to follow my twitter feed at @AdrianWaite

I hope that all readers of this blog had a Merry Christmas and will have a Happy and successful New Year.

An increasing number of organisations are now using ‘Skype’ as a way of communicating that is more effective than a telephone call but more economic than a face-to-face meeting. I am now available on Skype – both at ‘AWICS’ on Adrian.waite@awics.co.uk and at Impact Housing Association on adrianw_iha. Please feel free to call if you wish!

My briefing paper on Communities & Local Government circular 8/95 is now online at http://awics.co.uk/circ895.asp . It contains the full text of the guidance plus my commentary. Given that this circular is still the government’s principal advice on the housing revenue account ring-fence it is surprising that a copy is not available on the Communities & Local Government website.

I hope that the readers of this blog have not been too badly affected by the bad weather that we have had during the festive period.

When listening to the television news on Christmas Eve about the power cuts, I was surprised to hear that the energy companies did not plan to work on Christmas Day or Boxing Day to restore power but would expect customers to wait until after the bank holiday! I would have thought that cuts in electricity supplies (especially in winter) would be treated as an emergency and that work to restore supplies would continue even on bank holidays. There would obviously be a cost attached but the energy companies would appear to be able to afford it. I also understand that there are no reductions made to standing charges when energy companies fail to make a supply.

The local government financial settlement for 2014/15 was announced as expected on 18th December 2013. Revenue Support Grant is being reduced by 9.4% on average in 2014/15 with further reductions in 2015/16 taking the total reduction to 13.2%. The government calculates that this will lead to an average reduction in spending power of 2.9% in 2014/15 and 1.8% in 2015/16. The largest reductions in spending power at 6.9% in 2014/15 are for Chesterfield Borough Council and East Lindsey District Council; with reductions generally being greatest in London, Metropolitan and urban areas.

I notice that the Secretary of State has suggested that local authorities can manage with these reduced resources by ‘cutting waste and making sensible savings’. However, everyone I know who is involved in local government is agreed that the local government financial settlement will force councils to make significant reductions in front-line services and that some may even find their financial viability threatened. I am working on a briefing paper on the local government financial settlement that will be published on my website soon.

The Chartered Institute of Public Finance & Accountancy held its International Public Financial Management examinations on 10th December 2013. I am the examiner in management accounting so I have been spending some of the festive season marking exam scripts. Hopefully the successful candidates will go on to make a difference in financial management in various countries around the world including developing countries.

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