Agenda and minutes

RECOMMENDATION:

To appoint a Vice-chairman for the duration of the meeting.

RESOLVED:

That Councillor G Mohindra be appointed Vice Chairman for the duration of the meeting.

(Assistant to the Chief Executive)  To report the appointment of any substitute members for the meeting.

It was noted that Councillor J Knapman had substituted for Councillor Breare-Hall and Councillor A Watts for Councillor Mrs A Grigg.

(Assistant to the Chief Executive). To declare interests in any items on the agenda.

In considering whether to declare a personal or a prejudicial interest under the Code of Conduct, Overview & Scrutiny members are asked pay particular attention to paragraph 11 of the Code in addition to the more familiar requirements.

This requires the declaration of a personal and prejudicial interest in any matter before an OS Committee which relates to a decision of or action by another Committee or Sub Committee of the Council, a Joint Committee or Joint Sub Committee in which the Council is involved and of which the Councillor is also a member.

Paragraph 11 does not refer to Cabinet decisions or attendance at an OS meeting purely for the purpose of answering questions or providing information on such a matter.

There were no declarations of interest pursuant to the Council’s Code of Member Conduct.

At their meeting on Monday, 13 September 2010, the Cabinet asked that the report on Non-Housing Assets within the Housing Revenue Account be considered by a joint meeting of the Housing and the Finance Scrutiny Standing Panels as the subject matter covers both housing and finance.

The report (C-020-2010-11, attached, along with a covering report and other relevant background papers), recommended the transfer of the non-housing assets to the general fund. Cabinet wanted this joint scrutiny to look at this and make any recommendations to the full Council meeting on 2 November 2010. The Cabinet would also submit their recommendations to this meeting.

Brian Moldon, Principal Accountant, Peter Maddock, Assistant Director, Finance and Alan Hall, Director of Housing took the Panel through the background reports to the Cabinet’s proposal to transfer the non-housing assets from the Housing Revenue Account (HRA) to the General Fund.

The Panel noted that the Cabinet had met to consider this on 13 September 2010 and had agreed to recommend to full Council that all non-housing assets should be transferred from the HRA to the General Fund from 2011/12, following an updated valuation of the assets. However, they also wished that further scrutiny of this proposal should be undertaken and they asked the Overview and Scrutiny Committee if they could set up a joint meeting of the Finance and Performance Management Standing Scrutiny Panel and the Housing Scrutiny Standing Panel to provide views and recommendations direct to Council on 2 November 2010. This meeting had resulted from that request.

The Joint Panel had the following papers for consideration:

• An annex from the Communities and Local Government document “Council housing: a real future prospectus”;
• A report from the Director of Housing that went to the Tenants and Leaseholders Federation (TLF) on the implication of the proposed transfer for the Housing Service and the Housing Capital Programme;
• Letter from the Director of Housing to all Members of Council accompanying a copy of the report that went to the TLF, providing some additional information;
• The report that went to the Cabinet on 13 September;
• A Financial Issues Paper; and
• A letter from the TLF setting out their point of view.

The Joint Panel questioned officers about the financial implications for the HRA if the transfer took place and the implications for the General Fund if the transfer did not take place. They noted that:

• There would be a loss in income between £750,000 - £1 million per annum to the HRA due to the proposed transfer;
• It would in time have a detrimental effect on the HRA, the Housing Services and the Housing Capital Programme;
• The TLF strongly opposed the transfer. They would like the Council to defer the decision pending further information or only transfer those non-housing  assets that are unrelated to flats or other HRA properties or, as a last resort, transfer no more than 50% by value of the assets;
• The implications for the HRA outlined by the Director of Housing was not the worse case scenario; it was based on the most likely outcome based on the current forecasts;
• There was currently no difficulty continuing to meet the Decent Home Standard and any impact would not be for at least for another 14 years;
• The External Auditor had been consulted by the Director of Finance twice about the transfer and had raised no concerns;
• Once transferred over to the General Fund, it would be very difficult for the assets to be transferred back again to the HRA;
• The Medium Term Financial Forecast is currently based on £2million of savings being required assuming the transfer taking place; if the  ...  view the full minutes text for item 4.