The Assistant Director of Housing (ADH), John Knight, introduced the report to the Committee updating the Members on the service charges to Council tenants introduced in December 2016. This had been included as part of the 30 year Business Plan for the Housing Revenue Account (HRA). Although the service charges had gone through consultation with all affected tenants in March 2017 and were set to be implemented from 2 October 2017, an influx of enquiries and concerns regarding the service charges had been received from tenants and Members.

The decision was made by the Leader of the Council with the Chair of the Housing Overview & Scrutiny Committee on 27 September 2017 to suspend the Grounds Maintenance Charge (GMC) pending a review. A motion was carried at Full Council on the same date which called upon the Cabinet to re-evaluate the need for the GMC for general needs tenants. A comprehensive review would be carried out with a wider consultation following the points in paragraph 4.3 of the report. Members would be welcome to come to the consultation meetings. A full report of the grounds service maintenance charge review would be submitted for consideration at the next Housing Overview and Scrutiny Committee meeting on 19 December 2017.

The Corporate Director of Adults, Housing and Health (CDAHH), Roger Harris, stated that the report of the GMC review would also go to Cabinet in January 2018, once the Housing Overview and Scrutiny Committee had discussed and made recommendations on it.

The Chair felt that the proposal of the GMC would need to be more explicit and informative than had been brought forward to the Committee and Cabinet previously. If the proposal had been more explicit before, it could have saved time. Some information could have also been improved on before going to Committee. With these points in mind, the Chair asked that the report of the GMC review be explicit and ensure all information was accurately captured before it came back to Committee. He went on to ask whether there had been any legal challenges to applications of grounds maintenance charges in other boroughs. The ADH agreed that the wording in the previous proposal of the GMC could have been clearer, especially regarding street properties. He agreed the report could also have been updated when it had come back to Cabinet. A benchmarking exercise on other Local Authorities had been carried out and the service was not aware of any legal challenges, there may be some case law which the ADH could look into. The list of Local Authorities in the benchmarking included Birmingham, Suffolk, Lambeth and Camden amongst others so GMC was not an unusual practice for social landlords.

Councillor Redsell echoed the Chair’s comments in that the information provided previously was not enough. She had received complaints from two tenants within her ward that had a grass verge outside their homes which everybody used. The letters regarding the GMCs had also been sent out to residents who did not have entry door lighting but had an entry door. The Chair questioned if Councillor Redsell felt the letters were too generic. She agreed and felt that they had been sent out across the board without considering what services homes received and further discussed the types of properties within her ward. She had also seen nine operatives cutting grass outside a block of flats which she thought was too many considering some of the residents who owned the flats were able to cut the grass themselves. The ADH said there were some areas of complexity and that the GMC was new. In sheltered housing, there had been an existing charge of £8 per week to residents since 2013. Referring to a ‘method statement’ document which set out how tenants receiving the service was identified and was based on local Members’ knowledge and base data, he said the Northgate database had been used for the letters and like all large data systems, was subject to some error. It did need regular cleansing and was not going to be 100% fully up to date. The letters that had been sent out had stated that tenants were receiving one of the above services and the letters had not been sent to all residents. The decision taken was to consult those affected and the FAQ was attached to the letters. There had been very few enquiries from general needs tenants during the consultation phase and a low number of residents participating which was not unusual during Council consultations. It was not so low that it would lead the service department to believe that nobody understood the GMC. In recent weeks, the service had dealt with nearly 300 residents regarding the GMC and many had been unaware of other areas that were being maintained. Whilst more could have been done to help make the charges clearer, most related to the principle of introducing the charge and not any ambiguities

The ADH went on to discuss a question that had been presented by a resident regarding the GMC at the previous Full Council meeting and reiterated that gardens were not included in the charge. Residents could be assisted with maintaining their gardens if they met the required criteria in the non-chargeable Assisted Gardening Scheme which looked at more than just the age of the tenant. He stated that ‘grounds’ referred to the wider areas of land, grass edges etc., that was maintained for Housing with a Service Level Agreement (SLA) in place and charged to the HRA. This was a £1.7 million charge overall in 2017/18 and when split equally between tenants benefitting from the services, would come to over £5 per week. The same principles used for sheltered housing and other charges (which were lower but were still based on contract costs) were applied in the GMC costings. Nothing was set in stone; the decision could be made to not collect the charge separate from the basic rent.

The ADH also wished to clarify that the impact of collecting the charge is that the raised cost of collecting the £1.7 million would be paid from the basic rent. If there was no charge, every tenant would still be contributing a small amount from their basic rent whether they received the services or not, which could be argued not to be equitable or reasonable. In collecting the money for the charge, it would give wider scope to the budget to carry out other activities set out in the report of the GMC. This would mean the money would not have to be found elsewhere from other budgets. For half the year, there would be an available £845,000 to spend on other services. As a result of the suspension of the GMC, this was the amount the HRA did not have available to put into repairs and maintenances.

Echoing the Chair’s earlier comments, Councillor Pothecary agreed the review could have been clearer the first time round. She felt the review should not be restricted to the GMC and that the values of the Council needed to be reconsidered. She went on to mention that tenants in tower blocks had to pay for lift maintenance as if it were a luxury for them. These tenants had not chosen to live in a tower block or chosen to have a lift and she asked that the review be expanded to include all the service charges to be looked at again. She felt that the service department needed to consider what they were trying to achieve through the charges and that the principles of the GMC should be applied to the lift maintenance charge. The ADH said the motion was for the Cabinet to reconsider the need for a GMC and not of other service charges. Service charges were normal in rental property arrangements and no provisional service provided was a luxury or privilege. Some additional services were provided beyond the basic functions which was chargeable outside the basic rent. He assured Members that all the charges could be included in rents for the purpose of Housing Benefits and Universal Credit. Last year, the Council had evicted 30 tenants but they had also assisted 300 tenants with rent payments. The service was not in the business of finding grounds for eviction and was very much for the assistance of people. The initial report of the GMC was explicit in the continuance of the rent reduction and its impact on the HRA. Revenue raising measures had been sought and the GMC had been identified. As a social landlord, the service was not charging for a range of services provided in addition to the basic rent.

To Councillor Pothecary, the Chair expressed his sympathy and suggested raising a motion for the route of the other service charges. Due to the scale of the money involved, the full implications would need to be considered to provide a viable way forward. He stated he was not for the GMC but he did not want to see the HRA struggle either. He would listen to any motion and be open to persuasion if it were to occur but without a motion at that moment, there was no basis for other service charges within the Committee.

The CDAHH stated that the rent reduction would be more over the period of  five years than the introduction of the grounds maintenance charges. During that time, the HRA would lose £500,000 to £750,000 a year over the five year period, even with the GMC in place. The ADH reminded Members that the impact of no service charge would be £845,000. He had considered the budget with and without the ground maintenance service charge so there had never been a presumption that this money would be coming in. Assuming the charge would not be implemented until April 2018, the gain from other service charges was considerably less as fewer people were charged. The general needs charges provided £132,000 and sheltered housing charges came to £180,000 which was not enough to bolster the basic repairs budget that was already underfunded. This meant the service would not be able to be too ambitious in future developments or improvements. The Chair sought reassurance that Officers would be available to help Councillor Pothecary if she decided to carry a motion on other service charges to which they agreed.

The Vice-Chair asked for the figures of the GMC to be clarified in the report, as the Leader of the Council had quoted £1.6 million and 6300 tenants at Full Council.  He also questioned whether the charge would be applied to private landlords or tenants in the same road as a council tenant; and if the charge could be applied in totality towards the General Fund as it was outside the curtilage of those properties. He proposed the charge should come from the General Fund and not the HRA to which a case could be made.

The ADH replied that the land and assets were held in the HRA and not the General Fund. The areas of HRA land were maintained through SLAs which the HRA was currently funding and staff for grounds maintenance were not tasked with maintaining areas that was not within the SLA. He agreed the Vice-Chair’s proposition could be considered but the HRA was currently funding £1.7 million for activities carried out in grounds maintenance. There was a bigger consideration relating to the local plan and development opportunities. A bigger piece of work would need to be done on what sat in the HRA and General Fund and some people had been surprised grass verges were maintained by the housing department. To move those areas of land from the HRA to the General Fund or vice-versa would be a wider strategic process but the service department would need a budget to do this. The service department had no power to levy HRA charges on freeholders or private tenants despite having a council tenant in the same road. As a borough with a lot of development ambition, there needed to be careful consideration on moving land out of the HRA which would risk the financial responsibilities that came with it. The figure of £1.6 million quoted by the Leader of the Council had been for the full year impact and the figure the ADH had given earlier was for the remaining six months of the budget and had no discrepancies.

The Vice-Chair suggested Officers to look into the process of moving land from HRA to the General Fund. He felt that in the fairness of equity, the curtilage remained part of the General Fund and not the HRA as it was part of the road. Council tenants were responsible up to the garden gate, back and side fences. Outside of the gate was the responsibility of the General Fund. If another budget had to pay for this, at least it would be in the right account. The ADH said the land outside the tenant’s gate had always been housing land as understood by all parties hence the SLA and GMC.

The Housing Tenant Representative (HTR), Lyn Mansfield, sought clarification on whether the grounds maintenance service charge was the same service charge as sheltered housing and that no extra services were added. The ADH stated the GMC used the same services as sheltered housing and the charge was not to enhance anything. The service would continue to look into the operational side of SLAs to see if there was scope to make it more efficient or to potentially reduce costs. Services would be kept under review to ensure the service was as good as possible to justify the charges. In some areas where services were not as good, measures had been put in place to improve this.

Linking to the HTR’s question, Councillor Pothecary asked if GMC would change anything. She also asked the Officers to visit Broxburn Drive where there was no ground maintenance work carried out and no door entryways working. The CDAHH confirmed he would follow this up. The Chair added that this would be in the Key Performance Indicators.

Councillor Redsell said the borough had changed and people were now capable of cutting the grass themselves so the Council did not always have to do this. She agreed with the Vice-Chair’s comments on fairness of equity and the service should look at where letters were being sent.

Councillor Piccolo sought clarification on whether a privately owned flat within a council block also paid service charges which he could understand why. He did not understand why the council tenants had to pay the GMC and not the private tenant in the same road. The Chair said this backed up the Vice-Chair’s proposal on moving the charge to the General Fund. This would limit how much council tax could be raised to and whether there was enough scope to do so. The ADH said Councillor Piccolo’s point was touched upon in the third bullet point of paragraph 4.2 but there were very few leaseholders so the income there was low. He stated that the GMC was a part of the HRA raising revenue and would remain so.

The Members and Officers went on to discuss how council tenants had believed they were the only ones to be charged for the grounds maintenance charge and private tenants were evading the charge. They further discussed using the Members’ knowledge of their wards for future communications and the Vice-Chair’s proposal of moving the GMC to the General Fund. Officers could look into this but swapping land was a bigger issue than the service charges and would need to be separated from the HRA review.

RESOLVED:

1)    That the Committee comments on the report.

2)    That the Committee agrees the approach proposed in the report to reconsidering the grounds maintenance charge, following the decision in September 2017 to suspend the introduction of the charge for tenants pending a review.