Agenda item

(Director of Communities) To consider the attached report (FPM-021-2015/16).

The Director of Communities presented a report on a proposed Charging Plan for Housing Related Support Services covering the Council’s Careline Service, Scheme Management Service and Intensive Housing Management Support.

The Director of Communities advised that although the Careline Service currently broke even when the income was compared to the expenditure, there was currently a deficit on the income and expenditure for the Council’s Scheme Management Service.  The Council was dependent on funding for Housing Related Support (HRS) services from Essex County Council (ECC), which was reducing in 2016/17 and was likely to reduce further in future years. Therefore the Cabinet had previously agreed that the Housing Portfolio Holder should come forward with a Charging Plan on how HRS charges could be increased each year from April 2016, until the cost of the Scheme Management Service became self-funded, taking account of any annual reductions in HRS funding from Essex County Council. Both the Tenants and Leaseholders Federation and the Resources Select Committee had been consulted and supported the proposals suggested.

The Cabinet Committee considered the current deficit for providing the Scheme Management Service which was approximately £50,250 per annum and the plan put forward to recover the debt over 10 years. The Cabinet Committee had concerns over the time period for the recovery of costs and that the service would need to be self financing sooner and felt that a target of 5 years would be more appropriate, without any cap on the maximum percentage increase on charges made to tenants but to look at the figure increase instead.

The Housing Portfolio Holder commented that further reductions in ECC funding were not known and that if/when further reductions were made this, would also increase the cost of the service to residents.

The Leader asked what the future was for the service. The Director of Communities advised that a report would be brought forward to the Housing Select Committee in 2016 on options for the future of the service including the possibility of providing the service to non Council residents.

Recommended:

(1)        That the separate charges for the Council’s Careline Service, Scheme Management Service and Intensive Housing Management Support be increased annually in accordance with the following principles:

(a)   The expected amount of reduction in ECC funding for the forthcoming year should be added to the current service deficit (or subtracted from the current service surplus) - this is the total deficit/surplus to be recovered/repaid;

(b)   The deficit for the Scheme Management Service should be recovered over a 5 year period and should therefore be divided by the number of years remaining between April 2016 and April 2021 - this is the service deficit to be recovered in the forthcoming year;

(c)   Any deficit/surplus for the Careline Service should be recovered/repaid in the following year - this is the service deficit/surplus to be recovered/repaid in the forthcoming year;

(d)   The prevailing level of annual pay increases, as calculated by the Office of National Statistics (ONS), should then be applied to the total current income received from current charges and added/deducted to/from the service deficit/surplus to be recovered/repaid, in the forthcoming year - this results in the total amount to be recovered/repaid in the forthcoming year;

(e)   The total amount to be recovered/repaid should then be spread across service users, in the same proportions as currently, as follows:

Ø  Scheme management and intensive housing management charges - Sheltered tenants and area tenants; and

Ø  Careline charges – Council tenants and private users;

(f)    The resultant monetary increase (but not the percentage increase) for those both in receipt and not in receipt of housing benefit should be the same; and

(g)   The methodology used to calculate the increases in accordance with the above principles should be as set out at Appendices 2 and 3 attached;

(2)        That only 50% of the expected ECC HRS funding reduction in 2016/17 be taken into account when calculating HRS charges for 2016/17; and

(3)        Accordingly, using the above principle and the methodology at Appendices 2 and 3 attached, the HRS charges for 2016/17 be set as follows:

            Careline

                        Council tenants:

                                    Self-funders                            -  £3.60 per week

                                    In receipt of housing benefit    -  £0.55 per week

                        Private users                                       -  £112 per annum

            Scheme Management

                        Sheltered tenants:

                                    Self-funders                            -  £8.61 per week

                                    In receipt of housing benefit    -  £1.57 per week

                        Area tenants:

                                    Self-funders                            -  £2.16 per week

                                    In receipt of housing benefit    -  £0.39 per week

Intensive Housing Management (not paid by those in receipt of housing benefit)

                        Sheltered tenants                                -  £1.52 per week

                        Area tenants                                        -  £0.38 per week

Reasons for Decision:

To approve a Charging Plan that would be used to calculate charges for Housing Related Support Services in 2016/17 and future years.

Other Options Considered and Rejected:

(1)     Not to seek to eradicate the current deficit for the Scheme Management Service over time.

(2)     To reduce the current service deficit over a different period than the 5 years.

(3)     To take into account the expected ECC funding reduction in full when calculating next year’s charges.

(4)     Not to take into account any expected funding reduction when calculating next year’s charges

(5)     Not to include an annual increase for average pay increases within the charges for the following year.

(6)     To use RPI, CPI or another index for inflationary increases instead of average pay increases.

(7)     To spread the total amount to be recovered across service users in a different way than proposed.

(8)     To increases charges for tenants both in receipt and not in receipt of housing benefit by the same percentages, rather than the same monetary amounts.

(9)     To apply a cap, above which charges should not be increased.