Agenda, decisions and minutes

RESOLVED: That the minutes of the meeting held on 11 November 2014 be signed as an accurate record of the meeting.

1.1      RESOLVED: That the minutes of the meeting held on 11 November 2014 be signed as an accurate record of the meeting.

2.1      There were no declarations of interest.

RESOLVED: That:

a)    The proposals made in Section 2 of the officer report be noted.

b)    An update report to be presented in 2015-16.

c)    Generation Rent be asked for more information on their work with other local authorities in helping tenants claim rent back under RROs.

d)    d) The Committee welcomed the approach of the Council in respect of discretionary licensing on flats over shops. The Committee would support a trial of discretionary licensing on flats over shops and would like an update on this specific proposal in 2015-16.

3.1      Dayna Edwin, representing Generation Rent addressed the meeting. The key points to note were:

• She had worked with Generation Rent on a House of Commons Bill on Private Sector Regulations.
• Generation Rent would like to see borough-wide licensing of all landlords or at the very least blanket landlord licensing in every ward where there is a significant private rented sector.
• If the Council budgeted exactly the same sum for enforcement as it currently does, presuming the cost of licensing is covered by the licence fee, then there are still benefits to the Council, for example:
  • Off-setting some of the overhead costs of the housing enforcement team to the license fee account
  • Providing the enforcement team at its current scale with far better intelligence in terms of landlords of concern. When you prosecute a licensed landlord you will have a list of all their other properties in the borough which should be prioritised for proactive inspection
  • The licence fees and conditions can be scaled to impact harder on non-compliant landlords.
• There is more likely to be uplift in Council Tax receipts if there is licensing of all landlords.
• Generation Rent would like to be signposted to residents in the borough where landlords have failed to protect their deposits to help them recover money through Rent Repayment Orders (RROs).
• Generation Rent rejects the idea that landlords would put up rents. Rents are high because there is little supply and lots of demand and that is how the market price emerges. For example, if market rents were based on costs then you would see £400-a-month family homes available where landlords had no mortgage to pay.
• It should cost less than the £1m a year in set-up costs estimated in the agenda report, but even if that were the case; if it provides a measure of protection to one quarter of this borough’s population would be worth it.
• Generation Rent requests that the Select Committee calls for a business case to be prepared so that borough-wide licensing can remain an option for the Mayor and Cabinet.

3.2       In response to questions from the Committee, Generation Rent made the following further points:

• It was a disappointment that the Private Member’s Bill that would have outlawed revenge evictions was unable to make it through the Parliamentary legislative process, and therefore now unlikely to become law by the end of this Parliament.
• Having a borough-wide licensing scheme would deter rogue landlords by ensuring they have to be registered and monitored with an enhanced enforcement team.
• Licensing can be a tool to help protect vulnerable tenants, including people who have English as a second language, and who are often in the worst private sector rented accommodation.

3.3       Debi Waite, Environmental Health Team Manager, Residential Services, LB Greenwich, addressed the meeting. The key points to note were:

• She has worked in the area of housing for over 20 years, and has experience of successful selective licensing in Gresham, Middlesbrough. She has also worked with a number of local  ...  view the full minutes text for item 3.

RESOLVED: That the comments and evidence be noted for the  Review.

4.1      Bertie Dixon (Engineer from Max Fordham) made a presentation to the Committee. The key points to note were:

• Max Fordham LLP is a consultancy specialising in engineering and construction, who have been in business for over 50 years. They have worked with numerous local authority housing developments, including projects in Lewisham such as Milton Court. They have installed and refurbished all types of heating system in that period, and followed up the results where possible. 
• The common description for ‘district’ or communal heating system that operates many houses or buildings, like a housing estates or shopping centres from one central boiler plant. The conventional system is the boiler system where you have one boiler per flat/house
• The general convention since the 1980s has been to fit individual boilers rather than communal heating when constructing housing developments. However, in the last 10 years there has been a move to fit communal heating systems.
• This is due to the very strong policy position that has developed that combined heat and power is the most efficient way to generate heat.  The Greater London Authority (GLA) & in turn local councils now all but require communal heating systems in major housing developments in London, and strongly encourage combined heat and power.  Max Fordham LLP believes that there is an ‘gap in understanding’ in the information that has led to this policy position held by the GLA and others, on the operational use of communal heating systems and the inappropriate use of small scale combined heat and power units.
• Government published calculation methods used for building control and planning state that there is a 5% loss in energy with communal heating systems; but Max Fordham LLP own calculations state that for new flat developments it is more like 50%-70%. Losses as low as 30% are possible but with unusually high standards of design and installation.  This causes higher carbon emissions, significantly higher bills than one would predict using the government calculator. Furthermore the uncontrolled heat loss in the distribution system causes overheating with attendant health risks to the tenants.
• Housing developers are now expected by planners to install communal heating systems to meet sustainability requirements for new developments, when better energy-efficient building would have been a more effective solution.
• One of the issues is that policymakers seem not know how inefficient communal heating systems are, particularly in current UK practice, and seem to be unaware of the problems that social housing tenants have with these systems.

4.2      In response to questions from the Committee, Bertie Dixon made the following further points:

• With communal heating systems, the capital costs are substantially higher due to the increased level of infrastructure, and the running costs are higher due to the increased fuel used, maintenance and management. Bills are generally much lower for the tenant with a single boiler system in their dwelling.
• Housing developers do have an option not to install communal heating systems if they so wish, especially if they build more energy-efficient properties. However the policy  ...  view the full minutes text for item 4.

RESOLVED: That the report be noted.

5.1      Jeff Endean (Housing Programmes and Strategy Team Manager), introduced the report. The key points to note were:

• The latest developments in the project will go to Mayor and Cabinet in January 2015.
• Phrase 1 is soon to be completed; Phrase 2 will start in Spring 2015, and Phrase 3 will go to Mayor and Cabinet so the planning process can begin.
• There will also be two re-builds for Extra Care Schemes as part of the plans as proposed previously.

5.2       In response to questions from the Committee, the following was noted:

• There needs to be more communication with local residents and parents as many are unaware of the expansion of Fairlawn Primary School, which is situated next to the Greystead Road proposal.
• The roads and links that are part of the Elliot Bank proposal should improve the area around the site.

5.3      RESOLVED: That the report be noted.

RESOLVED: That the Select Committee support Option B in the officer report.

6.1      Mark Humphreys, Group Finance Manager, Customer Services, introduced the report. The key points to note were:

• The Government has recently amended the Guidance for rental for social housing stock to Local Authorities.
• Following the introduction of the self-financing system for the housing revenue account (HRA) in 2012, the Council is responsible for ensuring that the costs of managing, maintaining, improving and developing its social housing stock can be met from rents collected and other income.
• The self-financing system allows the Council to develop plans over a longer term, unlike the previous annual housing subsidy system. This has enabled the Council to consider longer term options of how its stock is managed and developed.
• To assist in assessing the various management and development options, a financial model has been developed. Within this, there are assumptions about future costs, for example for lifecycle repairs, capital investment, new build and so on. Most significantly of all it is based on an assumption that rents would rise in line with the Government’s ‘Convergence Formula’ until all units have converged to its ‘target’ or formula rent using an annual uplift of RPI + 0.5% + £2pw, and increase by RPI + 0.5% p.a. thereafter.
• The intention of the Convergence Formula was to ensure that tenants in accommodation of a similar size in a similar location would pay similar rents. To date, the Council has set rents in accordance with this formula.
• Officers have provided four illustrations in the papers that provide potential rent rises for 2015/16. Three of the rent increase illustrations show a potential shortfall against the rent income assumption in the current HRA financial model. If the Council follows the Government Guidance for increases 0f CPI+1%, and the discontinuance of rent convergence, over the remaining life of the HRA financial model shows a deficit of £24.6m against the rental income assumptions. This will need to be made up by additional saving or efficiencies which would affect services to residents. It would also mean that approximately 30% of tenants would not reach convergence, i.e. there would be a high proportion of tenants paying differing rents for similar properties.
• The Formula suggested by the Government is only ‘Guidance’, however if the Council’s rent is increased by less than the Formula amount then the Council suffers the full cost of the lost rent which would have a significant impact on the Council’s investment plans; and if the rent is increased by more than the Formula amount, and the resulting average rent is higher than the amount Government has indicated it is willing to cover via Housing Benefit, the Council will receive only part of the financial benefit of the extra rent raised because of the way the housing benefit system operates in such circumstances.
• The recommendation from officers is that whilst no recommended increase is being made, tenants are asked for their opinion on the increase to be applied, for consideration by the Mayor & Cabinet.
• No proposals have been received to increase the current levy  ...  view the full minutes text for item 6.

7.1      Timothy Andrew, Scrutiny Manager introduced the report. The key points to note were:

• The items scheduled for the January meeting were as follows:
  • Housing Strategy 2015-20
  • Communal Heating System Review
  • Key Housing Issues

7.2      In response to questions the Committee were advised:

• The Housing Strategy’s consultation may have to be tabled at the meeting as there will be little time to prepare a paper for agenda despatch once the consultation has concluded on 21 January 2015.
• The Registered Housing Providers – Invitation item has been moved to the March meeting to provide more time to discuss the relevant issues at the meeting. Officers will write to the five major Registered Housing Providers in the New Year to invite them to the March meeting.
• Officers will write to Registered Housing Providers (L&Q have already provided evidence to the Communal Heating Review) so they can provide additional evidence to the Review from their perspective.
• Officers will request to Barratt Homes that they send a representative to the January meeting to give evidence as part of the Communal Heating Review.
• The item on ‘Private rented sector update/licensing scheme’ be removed from the March meeting, and an update would be provided to the Committee as part of its 2015-16 work programme.

8.1      There were none.

The meeting ended at 10.10pm

Chair:

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Date:

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