First Supplementary Memorandum by CityWest
Homes
SUMMARY OF
KEY ISSUES
AND RECOMMENDATIONS
— The ALMO model has worked very effectively
in Westminster and this submission highlights the opportunities
for further development of the model. A high performing ALMO like
CityWest Homes is able to focus on service delivery and bring
about innovations and improvements which frees the Council's Housing
Department to focus on strategic issues.
— CityWest Homes (CWH) has a key role
in supporting community cohesion and neighbourhood renewal, particularly
through its inclusive processes of resident involvement in decision-making
and Its growing influence on the use of commercial properties
within the HRA. Building on this track record of community engagement
and its close links with the local authority CWH is capable of
making a greater contribution towards increasing the supply of
rented housing and improving the management of rented housing.
— Longer-term stability and greater
financial freedoms are needed if successful "round one"
ALMOs are to thrive and continue to contribute towards the achievement
of Government priorities. For CWH there is now an urgent need
to plan and deliver beyond "Decent Homes". There is
a risk that the momentum behind innovative, customer focused service
delivery could be lost and some opportunities for future development
stifled.
— CityWest Homes completed the Decent
Homes programme in December 2008 and is well placed and ready
to embark on an ambitious longer-term asset management programme
but is constrained by annual changes to the HRA and the 5-year
agreements. Ideally an asset strategy should have a 10-30 year
time frame in order to secure and allocate funding and to
manage residents' expectations. If given the remit
CWH could also embark on building new homes in Westminster, keeping
resident involvement at the heart of the process.
— Three-star ALMOs can help to rationalise
the management of rented accommodation within the private and
public sector but are impeded by the requirement to charge VAT
on housing management services.
— A revised ALMO model should therefore
include the ability to:
— Provide a housing management
services for other landlords without having to charge VAT;
— Use full rental income to provide
services;
— Bid directly for Housing Corporation
funding and borrow outside HRA constraints in order to attract
private finance; and
— Build new social and intermediate
housing.
1. INTRODUCTION
1.1 CityWest Homes (CWH) is a "round
one" Arms Length Management Organisation (ALMO) and has managed
Westminster City Council's housing stock since April 2002. It
was one of the first ALMOs in the country to gain excellent status
from the Audit Commission and was, again awarded 3 stars with
excellent prospects for improvement in September 2006. In December
2006 CWH was one of the first housing management organisations
to sign up to the Respect Standard for Housing Management. The
board structure combines challenge, support and accountability
and includes residents, independent housing experts and council
nominations.
1.2 We are pleased to have been invited
to provide a second written submission to the inquiry, the first
being a joint submission with Westminster City Council which covered
a broad range of issues in the terms of reference and included
the Report of the Westminster Housing Commission. This submission
complements the first by illustrating the experience of an inner
city Arms Length Management Organisation (ALMO) with a focus on
social housing management as set out in the terms of reference:
" ...
— The future role for local authorities
as builders and managers of social housing
— The effectiveness of different social
housing models including traditional local authority housing,
ALMOs, housing co-operatives and housing association..."
2. THE FUTURE
ROLE FOR
LOCAL AUTHORITIES
AS BUILDERS
AND MANAGERS
OF SOCIAL
HOUSING
2.1 As a manager of social housing CityWest
Homes is proud of its achievements, especially meeting the Decent
Homes standard in December 2006 and retaining 3-stars status.
Through this process CWH attracted and developed the following:
expertise in complex building programmes; excellent systems for
resident involvement and housing management services; in-depth
local knowledge; detailed understanding of the assets it manages;
and a vision for sustaining excellent services beyond Decent Homes.
CWH would like to continue to develop a long-term programme of
service improvement that includes entering management agreements
with other landlords but needs more certainty about the future
of ALMOs (see 3.1 0-3.12)
2.2 Although demand for affordable housing
in Westminster will always outweigh supply,there is scope to reverse
the decline in the supply of new social housing in Westminster.
CityWest Homes, working alongside the City Council, has the potential
to embark on a building programme that could make significant
progress with tackling the housing shortage, and make more progress
with reducing overcrowding and creating sustainable inner city
communities. There are substantial development opportunities on
HRA land within Westminster where density is low and where there
are pockets of un"2
used and under-used buildings (eg garages, storage
sheds and some commercial properties).
2.3 Higher density housing bulit to excellent
design standards is a valid option in parts of Westminster and
would enhance the architectural and environmental quality of targeted
neighbourhoods. This in turn creates opportunities to reduce overcrowding
by developing family accommodation at other sites. For example,
one of the best estates in Westminster has very high density and
excellent design.
2.4 The extremely high land values could be utilised
to attract investment in a greater range of housing products including
social rents, intermediate (targeting families) and private housing.
2.5 Building new homes in existing communities
requires sustained resident engagement at all stages of the process.
CWH is best placed for this role because of its strong track record
of resident involvement and the skills it has attracted back into
the organisation to deliver the complex building programmes associated
with Decent Homes. The organisation already manages the majority
of homes on HRA land and is primed for action having just completed
the Decent Homes programme.
2.6 This is therefore, an ideal time for
CWH to go beyond the Decent Homes Standard to meet other stock
maintenance requirements and if allowed, to build new homes. Sustaining
this investment and undertaking a programme of continuous improvement
beyond five years, will require a longer time frame for planning,
additional funding, freedoms and flexibility (see below).
3. THE EFFECTIVENESS
OF DIFFERENT
SOCIAL HOUSING
MODELS INCLUDING
TRADITIONAL LOCAL
AUTHORITY HOUSING,
ALMO., HOUSING CO-OPERATIVES
AND HOUSING
ASSOCIATIONS
3.1 The ALMO model as applied in Westminster
shows how adaptive and successful the model can be. Few housing
management organisations can match the complexities of the CityWest
Homes portfolio which bring opportunities as well as challenges.
CWH manages 21,500 properties with a mixture of tenures.
— 12,300 are for council tenants (including
sheltered and supported);
— 9,200(42%) are leasehold properties
— RSLs hold the learn for
411 properties
— a quarter of all leasehold
properties (2,362) are sublet, of which 629 are to RSLs
— over 1000 of all sublets
are for temporary accommodation for the homeless
— over half of leaseholders
are not ex-Council tenants;
— Nearly 90% of the stock is flats,
a third or the homes are in conservation areas and 13% are in
listed buildings and 15% are street properties;
— CWH supports 14 Tenant Management
Organisations which manage 2,827 properties (13% of stock).
3.2 Added to the variety of tenure and stock
is the rich diversity of residents in CWH villages and their surrounding
communities. Nearly half the resident population is from Black
and Minority Ethnic (BME) communities and 182 languages are spoken
in the city. Two wards are among the 10% most deprived in the
country and pockets of need exist throughout the city, closely
correlated to the location of council estates. Nearly 12% of households
in Council housing are overcrowded, due mainly to a shortage of
larger accommodation. Westminster's unemployment rate is above
the English average.
3.3 CityWest Homes carefully manages the
inherent tensions arising from such a mix of clients and by providing
a variety of opportunities for residents to communicate with us
and participate in decision-making. CityWest also takes a broader
view of the local community. Unlike RSLs the local authority boundaries
set for CWH has allowed it develop in-depth knowledge of local
communities, an overview of the city and effective partnerships
with other service providers. For example during the immediate
aftermath of the bombings on 7 July 05, CityWest Homes worked
closely with partners in a community reassurance programme and
as a result there were no significant increase in reports of harassment.
3.4 CWH prides itself on its commitment
to involving residents in service improvement and exemplifies
the assertion that ALMOS are the most effective in the social
housing sector at resident involvement. Our recent survey conducted
by MORI shows that across the board 70% of tenants are satisfied
with the overall service. CWH has very high service standards
and has Local Service Improvement Compacts which are tailor made
for estates. These unique compacts involve residents in setting
service priorities and monitoring performance.
3.5 Much of the Neighbourhood Renewal Strategy
and other overarching strategies are targeted where CWH manages
homes and CWH is actively involved in local partnerships across
the city through its resident involvement, community safety and
community development teams. Through c!ose work with the police,
health, education and training providers and because of its local
knowledge CWH helps to connect local residents and service providers.
CityWest Homes was a founding partner in a local charity, "Vital
Regeneration" which specialises in IT learning and development
projects for people who are not in paid employment. There is scope
for future partnership with the private sector through the vehicle
of corporate social responsibility.
3.6 With its influence over the commercial
HRA properties and close links with local communities and partners
CWH can further promote community cohesion and sustainability.
Land use can be geared to meet local social and economic needs
eg supporting community enterprises, attracting services for the
community, and where appropriate homes could be created on redundant
"commercial" sites.
3.7 As stated above CWH has become proficient
at implementing complex maintenance programmes and completed the
Decent Homes Programme in December 2006, four years before the
2010 deadline. During this time over 6,000 homes were improved
to the DH standard. Considerable efficiencies were gained through
partnering arrangements with constructors (one of the first for
pubic sector housing) and with careful management of the supply
chain which includes residents in scoping projects. CWH also became
a leading member of a consortium of 11 London ALMOS which combine
procurement processes—this ha potential benefits worth in
excess of £30 million for the network. This was all possible
because the ALMO has a clear focus on service delivery and can
concentrate on getting the details right and take forward innovations.
These capabilities can be transferred into a new role of building
homes. In turn, an excellent ALMO allows the Council to focus
on the strategic agenda. In this regard the model works very.
3.8 With its presence spread across the
city CWH is ready and able to take a leading role in stock rationalisation
and/or management agreements where there are multiple landlords.
The mix of landlords in CWH villages can result in different service
standards being applied in the same community. There are over
fifty RSLs that own or manage properties In Westminster, none
of which have a 3-star rating from the Audit Commission and only
one has signed up to the Respect Standard. Within the HRA residential
property portfolio, over 1,000 properties are either leased or
sub-let by RSLs. In addition over 1000 properties including some
privately based ones, are used by the temporary accommodation
scheme for homeless families. Some of the most vulnerable people
in our local communities are getting a one or two star service
when they could be better served, as their neighbours are, by
a truly local and excellent housing management organisation.
3.9 The administration costs and complexity
associated with many layers of management could be reduced if
CWH could provide housing management services on behaif of other
landlords. This would not result in a monopoly of ownership and
management—the social housing s6ctor would remain diverse
with a more consistent service within local communities. A significant
barrier to progress is the requirement to charge VAT which should
be removed or set at a lower rate.
3.10 For successful "first round"
ALMOs there is an urgent need to plan beyond "Decent Homes"
and sustain high quality services in the longer term. There is
a real danger that the momentum behind innovative, customer focused
service delivery could be lost and opportunities for future development
stifled. Managing resident expectations and optimising asset management
cannot be achieved in the current subsidy regime which changes
annually. For areas like Westminster the trend is for less subsidy
despite the high labour costs and the additional costs of operating
in conservation areas. New forms of investment should be permitted.
3.11 A ten- to thirty-year planning cycle
is needed for major repairs and maintenance and thirty years is
required for planning and programming new developments. For example
CWH is particularly concerned about the effects on leaseholders
of service charges for major works. Greater financial stability
would allow CWH to plan major maintenance and improvements with
greater care and certainty and to set up mechanisms like a "sinking
fund" to help leaseholders plan well ahead for what can be
very high one-off service charges (eg £50,000). (Opportunities
for building new social and intermediate homes are mentioned above
in section 2.)
3.12 High performing ALMOs should have the
ability to move out of the HRA subsidy system and have the ability
to use the full rental income to provide services; with this move
should come the ability to borrow or bring in investment set against
future income streams.
4. CONCLUSION
4.1 In a short period of time CWH has developed
a proven capacity for excellent asset management, resident involvement
and community development in a complex environment of mixed tenure
and diversity. Against this proven ability to perform to excellent
standards and to be accountable to local communities the ALMO
model should be considered for freedoms and flexibilities that
will improve the supply and management of social housing in inner
city areas.
4.2 Working alongside the local authority,
a successful ALMO like CityWest Homes should be able to use its
skills base to build new homes, to plan ahead for ten to thirty
years and make more of a contribution to stock rationalisation
and management agreements with other landlords. Timing is important:
CWH needs to manage residents' expectations of future services
and there is a risk of losing some of the momentum and capacity
built up during the Decent Homes programme. The main barriers
seem to be financial: freedom to borrow outside the HRA system;
use full rental income to provide services; the right to bid directly
to the Housing Corporation; and to offer management services without
having to charge VAT.
19 January 2007
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