Blog 15th August 2017

Blog 15th August 2017

In this week’s blog, I write about Housing Business Planning in an Uncertain Environment, the funding of Children’s Services, the Scottish Planning Bill, the Grenfell Tower refurbishment budget and Local Authority Housing Finance.

Last week we published my briefing paper on ‘Housing Business Planning in an Uncertain Environment’. This briefing paper addresses the following questions:

• What are the key elements of a good quality housing revenue account business plan?
• What is the political, economic, social and technological environment in which local authority housing services operate? What are the key uncertainties?
• How can councils develop effective self-financed business plans that will address the new uncertain environment in a robust way? What assumptions should be made in the financial model? How can uncertainties be managed?
• What business planning techniques are now required including for strategy, financial forecasting, sensitivity analysis, risk management and contingency planning?

And concludes that Business Planning is not just about ‘crunching the numbers’. It is also about: Strategy, responding to external challenges including changing government policy, Asset Management and Risk Management.

Now is not only a good time to revise and update business plans. It is essential that this be done so that local authorities can be responsive to changing government policy and other significant uncertainties in the environment in which housing services are provided.

This requires a new way of business planning including a robust approach to the development of strategy, financial forecasting, sensitivity analysis, risk management and contingency planning.

Your copy of the briefing paper can be freely downloaded from HERE

Yesterday, ‘Action for Children’ published a report called ‘Revolving Door: Are Vulnerable Children overlooked?’ that concludes that Councils are ‘not providing enough support for thousands of children’. They found that, in 2015/16 184,500 children’s need assessments were closed as ‘no further action’. This was because councils did not consider the needs severe enough to meet the threshold for statutory services. Of the 184,500, a quarter received early help services through children’s centres or domestic violence programme, leaving 140,000 vulnerable children without support. The Local Government Association has calculated that local authority children’s services face a funding gap of £2billion by 2020. My own experience in analysing local authority accounts for the Local Government Association confirms that in most authorities the funding of children’s services is under pressure. ‘Action for Children’ is calling on the government to strengthen the legal framework for early help services and provide adequate funding to local authorities so they can provide help as soon as children need it.

This week, the Scottish Federation of Housing Associations has responded to the Scottish Government’s consultation on their Planning Bill to argue for an increased focus on delivering affordable homes. They argue that not enough is being done to ensure that housing needs are met. The Scottish Federation of Housing Association’s proposals to increase the delivery of affordable housing in Scotland include the setting of national and regional targets and to allow local authorities to transfer land at existing value to address the lack of affordable land that is available for housing development. They also recommend that national or regional bodies should be set up to deliver infrastructure up front to unlock key sites.

Last week it was claimed that the ‘Grenfell refurbishment budget was limited by borrowing cap’. Kensington & Chelsea Borough Council’s borrowing cap of £221million left the Council with only £11.4millon of headroom in 2014 and the Council took the decision not to use this borrowing capacity to fund maintenance. At that time, the Council calculated a need to spend £100million on maintenance while its resources totalled £70million leaving a shortfall of £30million. The budget for the refurbishment of Grenfell Tower was set at £9.7million and ‘Inside Housing’ reports that two contractors declined to carry out the work because the budget was insufficient. The argument is that if the borrowing cap did not exist or if it was higher, the Council would have been able to set a higher budget for the refurbishment and the fire safety measures may have been more effective. My view is that while the borrowing cap is an unnecessary constraint I do not think that this absolves the Council from its responsibility to ensure that proper precautions are taken to protect tenants from fire.

Our next seminar is on ‘All You Want to Know about Local Authority Housing Finance’ and will be held in London on 27th September 2017. It is proving popular, but there are still a few places available. For more information or to make a booking, please click HERE