Independence...Integrity...Value

November 2014

Nov 9th 2014, 11:28

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24th November 2014

The ‘AWICS’ seminar and workshop ‘All You Want to Know about Local Authority Housing Finance’ was held in London last week. It was attended by representatives of various local authorities from London, the South, the Midlands and the North. It was very well received with delegates describing it as: Useful, Clear, Interesting, Thorough and Enjoyable. Most said that the information provided was very relevant, the quality of the presentation was good and the training met their needs fully. Many thanks to all those who attended!

This was the last of our seminars and workshops for 2014. We are now in the process of putting together our programme of seminars and workshops for 2015. The subjects, dates and venues will be announced soon and will be posted on our website at http://awics.co.uk/seminars2015.asp

The conference room at the Waterloo Novotel Hotel where 'All You Want to Know about Local Authority Housing Finance' was held.

On Wednesday evening I will be chairing the November meeting of the Board of Impact Housing Association. It will be held at Centre 47 in Carlisle. Centre 47 is not only the Carlisle office of Impact Housing Association but is also a ‘hub’ that provides access to the full range of Impact’s services (including Impact Furniture Stores) and access to many partner organisations.

The main items on the agenda are:

  • Key Priorities for the 2015 Business Plan including PEST, SWOT and Risk Analysis.
  • Staffing structures for the future.
  • Asset Register.

Our key priorities will continue to focus on the increasingly difficult tasks of providing housing and alleviating poverty in a society that is becoming increasingly divided economically.

On 2nd December students around the world will be sitting the Professional Certificate examination in Management Accounting for the Chartered Institute of Public Finance & Accountancy. As examiner, I have set the paper and will mark the scripts (with assistance from CIPFA moderators and other staff). I obviously wish all students the best!

Next week I will be speaking at the Housemark conference for stock retaining authorities in Coventry. The conference will be held on 4th & 5th December 2014 and will look at policy, business performance and investing in new and existing property. There will be workshop sessions on the private rented sector, social enterprise and legal updates. Welfare reform and the economy are still at the top of the sector’s agenda and this conference aims to provide delegates with expertise in these areas from within the sector, as well as providing the opportunity to network with other stock retaining senior staff.

My session is: ‘Getting a grip on Asset Management’. In the light of the ‘borrowing cap’ and tough conditions for acquiring social housing grant, this session will look at:

  • What does the government expect on asset management from local authorities?
  • Asset Management Plans and the impact on them of the borrowing limit and depreciation accounting.
  • Achieving the Decent Homes Standard with reduced or insufficient capital resources.
  • Achieving new build and the potential of delivery vehicles and joint ventures.
  • Developing sustainable investment programmes.
  • Asset Performance – sustaining demand, investment and disposals.
  • Performance Management – Understanding and measuring return on investment.

More information can be found on the Housemark website at https://www.housemarkbusinessintelligence.co.uk/Pages/Events/Stock%20retaining.aspx

17th November 2014

Last week I attended three meetings: The first was with the Chartered Institute of Public Finance & Accountancy (CIPFA) in London; the second was with Wrexham Borough Council and the third was with Mike Muir, the Chief Executive of Impact Housing Association.

The meeting with CIPFA was to discuss the introduction of e-assessment for future CIPFA examinations as part of the introduction of the new syllabus. I am currently the examiner in management accounting that forms part of the professional certificate. My paper will be one of the first to be sat and assessed electronically in December 2015 along with the financial accounting paper. Other papers will be e-assessed from June 2016. The same level of competence will still be required to achieve CPFA and practice and mock exams will be made available so students can prepare for the real thing. The main changes to the syllabus will be to:

· Increase the focus on the wide range of commercial skills needed by United Kingdom public finance practitioners.

· Deliver greater portability between the public and private sectors.

· Provide more entry routes for holders of other qualifications and experienced professionals.

· Allow for improved and more relevant testing, using cutting edge online assessment technology.

· Enhance the Practical Experience Portfolio by placing greater emphasis on the role of the employer.

· Enable greater flexibility around blended and online learning options.

Further information is available on the CIPFA website at: http://www.cipfa.org/qualifications/professional-qualification-2015

In Wrexham I presented a session of ‘All You Want to Know about Service Charges’ for officers of the Borough Council. I wrote about the relevance of service charges in Wales in my blog last week (see below). The session was well received with participants describing it as: Thorough, Comprehensive, Interesting, Thought-provoking and Useful.

For further information on ‘All You Want to Know about Service Charges’ as an in-house session please contact me at Adrian.waite@awics.co.uk or 017683-52165.

My meeting with Mike Muir was the regular monthly meeting between him as Chief Executive and me as Chair in advance of finalising our board agenda.

This week’s ‘Inside Housing’ magazine includes an interesting article on ‘Taking the Medicine’ that discusses the ‘growing need for the health and housing sectors to take joint action’. This chimes with our thinking at Impact Housing where, at our recent board conference we identified joint working with partners in health and social care as a key strategic long-term objective. One of the quotations in the article that caught my eye was from Mark Henderson of the Home Group who said:

“A… wall exists between exciting thinking… and conservative procurement processes that act to maintain the status quo”.

This observation applies specifically to the National Health Service but I can’t help thinking that many organisations have moved during recent years to centralise procurement arrangements. I feel this has often led to the entrenchment of traditional, bureaucratic and ‘conservative’ approaches. Perhaps there should be a review of approaches to procurement across the board!

The next ‘AWICS’ seminar and workshop ‘All You Want to Know about Local Authority Housing Finance’ will be held in London this week on 18th November. I wrote about this at length in my blog a fortnight ago (see below). We still have a few places available. Details are available on our website at: http://awics.co.uk/lahfin.asp but if you would like to attend (as time is now short) please contact me at Adrian.waite@awics.co.uk or 017683-52165.

10th November 2014

This week I will be travelling to London and to Wales.

My trip to London is to attend a meeting of examiners at the Chartered Institute of Public Finance & Accountancy. I am the examiner in Management Accounting for the International Professional Certificate. The next examination in this paper will be on 2nd December (which means that I will be busy over the ‘festive season’ marking examination papers) and the draft paper for the following examination in June 2015 needs to be in its first draft in December also.

My trip to Wales is to present a session of ‘All You Want to Know about Service Charges’ for Wrexham Borough Council. A few years ago I went to Wrexham to present ‘All You Want to Know about Welsh Local Authority Housing Finance’ so I am looking forward to the return visit. There is a lot of change in local authority housing finance in Wales at present, with the Welsh Government introducing self-financing in April 2015 along with a new policy on rents and service charges that obliges Welsh local authorities to unpool service charges where they have not already done so. All the stock-holding local authorities in Wales are therefore preparing self-financed business plans, unpooling service charges and considering how they can use the new freedoms and flexibilities to build new social homes. I have recently been working with Denbighshire Council on these issues.

The next ‘AWICS’ seminar and workshop ‘All You Want to Know about Local Authority Housing Finance’ will be held in London next week on 18th November. I wrote about this at length in my blog last week (see below). We still have a few places available. Details are available on our website at: http://awics.co.uk/lahfin.asp

The Trussell Trust has published some worrying statistics today. They are the largest provider of food banks in the United Kingdom and they report that the number of people receiving emergency food aid and support from them during 2013/14 was 913,138. This compares with 346,992 in 2012/13, 128,697 in 2011/12 and 61,468 in 2010/11. The Trust reports that static incomes, rising living costs, low pay, underemployment and problems with welfare, especially sanctioning, are significant drivers of the increased demand. In particular, benefits sanctions, that have become increasingly harsh, have caused more people to be referred to them for emergency food. Half of referrals to food banks in 2013/14 were a result of benefit delays or changes. More information is available on their website at http://www.trusselltrust.org/foodbank-figures-top-900000

Our latest ‘AWICS Housing News’ is also available to download from our website. It includes articles on:

  • Affordable Homes Programme - £800million available
  • Local Authorities, New Build and the Borrowing Cap
  • Rent Increases in 2015
  • Government considers Centralisation of Housing
  • Scottish Housing Budgets announced
  • Eden Council promotes Affordable Housing

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

We have been joined by a new associate consultant: Sue Powell. Sue is an experienced housing professional and has worked in the sector for thirty years in a wide number of different roles. She joins our housing management team. Further information about Sue can be found on our website at: http://awics.co.uk/our_housing_associates.asp

3rd November 2014

When I first went to work in a local government finance department in the 1980s, housing finance was seen as a bit of a specialism – best left to the housing accountants! It still is a bit of a specialism but I think that the days when housing managers, elected members, tenant representatives and even Finance Directors could safely ignore housing finance are long gone. With self-financing, austerity and an ambition to build new homes to tackle the housing crisis a working knowledge of housing finance is now essential for anyone with any responsibility or interest in local authority housing.

Self-financing in England has provided local authorities with new opportunities to use flexibilities and freedoms to produce long-term business plans that will enable them to manage council housing economically, efficiently and effectively. At the same time self-financing represents a significant transfer of risk from central government to local government that requires careful management. For example, there is an increased level of debt to manage and increased exposure to the risk of fluctuations in interest rates.

However, government policy still influences local authority housing revenue accounts significantly. Government still controls council house rents and the recent change in rent policy that will be implemented from April 2015 reduces the potential income of local authorities – especially those whose rents are currently below the government’s targets. The government has also imposed a ‘borrowing cap’ on local authorities that inhibits them in achieving the Decent Homes Standard and in building new homes and recent relaxations of the ‘cap’ have had strings attached that have made them unattractive to many local authorities.

The reinvigorated ‘right to buy’ was promoted by the government as a way of encouraging home ownership while at the same time ensuring that any council houses sold would be replaced. The financial arrangements for securing this are complex and many consider that the promised ‘one for one replacement’ will not materialise.

Yet many local authorities are pressing ahead with new build programmes, often using innovative approaches involving subsidiary companies and joint ventures.

All of this applies to the housing revenue account that local authorities use to budget and account for expenditure and income on council housing. The housing revenue account is mainly funded by rents. Councils also have a general fund in which they budget and account for expenditure and income on other services such as economic development, social care, environmental services and leisure services. The general fund is mainly funded by Council Tax, business rates and revenue support grant paid by government.

Local authority general fund budgets are under increasing pressure with government placing limits on increases in council tax and reducing the revenue support grant by 43% (on average) between 2010 and 2015 and with further reductions expected after 2015. There has also been an end to ‘ring-fencing’ of many government grants such as grants for Supporting People. This has led local authorities to make significant reductions in Supporting People and other general fund housing budgets and to look at ‘creative’ ways to shift costs from the general fund to the housing revenue account.

Then there is welfare reform – the under-occupation penalty and total benefits cap have already adversely affected many local authority tenants and we are now seeing the roll out of Universal Credit. Despite the fact that most local authorities have increased their financial advice services to tenants and increased the resources devoted to rent collection, many have seen reductions in collection rates and increases in arrears.

I have been providing training on local authority housing finance since 1999 and our seminar and workshop ‘All You Want to Know about Local Authority Housing Finance’ continues to be our most popular. It is a useful introduction and overview of local authority housing finance that is suitable for elected members, housing managers, tenant and resident representatives, almo board members, members of the finance team and anyone with an interest in local authority housing finance.

And, as Rob Whiteman, the Chief Executive of the Chartered Institute of Public Finance & Accountancy says in this week’s Local Government Chronicle:

“If we take a rounded view of austerity over the ten years it now seems likely to last, we must not ask ourselves the easy question: ‘What budget can we get agreed?’ but the difficult question: ‘What is best for our budget?’

“An example of this is training. It’s practical and useful to save on training in the short-term as discretionary budgets are reduced as part of financial control.

“However, this is not plausible over a decade. Any organisation that didn’t invest in training for ten years would create huge problems for itself, losing good people to other organisations and fostering a reliance on interims.”

The next ‘AWICS’ seminar and workshop ‘All You Want to Know about Local Authority Housing Finance’ will be held in London on 18th November. This could be YOUR opportunity to gain a working knowledge of local authority housing finance. We still have a few places available. Details are available on our website at: http://awics.co.uk/lahfin.asp

‘All You Want to Know about Local Authority Housing Finance’ is also available as an in-house session. For further information please contact me at Adrian.waite@awics.co.uk

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