FENLAND DISTRICT COUNCIL

DISPOSALS APPLICATION

OPTIONS APPRAISAL AND PREPARATORY WORK
SECTION A
Whether the authority has undertaken an Options Appraisal exercise and transfer has been identified as the preferred route for decent homes delivery.

1.1 Provide evidence that the GO-East has formally signed off the Options Appraisal.

Fenland District Council undertook its Stock Options Appraisal between February 2004and July 2005 – the Appraisal Project was named “Options Fenland”.Key points to highlight from the process:

-The Options Fenland process was managed by a tenant led working group

-The project was completed with close support from the Community Housing Task Force (CHTF) (Contact: Solma Ahmed).

-The project followed Government guidance closely.

The Options Fenland working group concluded that Transfer to an existing RSLwas the preferred option,chiefly as it would enable our stock to exceed the Decent Homes Standard and meet the aspirational standards of our tenants.

CHTF “signed off” our project as meeting the statutory requirements in a letter to FDC received on the 2nd August 2005.

SECTION B
That the proposal can demonstrate that it provides value for money for the authority and that it forms a coherent part of the authority’s HRA Business Plan, Local Strategic Partnership and Community Partnership and that these have been drawn up after the Options Appraisal in which tenants were involved and which was informed by a housing needs assessment and a stock condition survey.

2.1Details ofthe investment appraisal and tenantinvolvement in this;

2.1.1 Investment Options Appraisal

A comprehensive Options Appraisal was undertaken. 5 Options were considered:

-Arms length management organization

-Private Finance Initiative

-Transfer

-Retention

-A mix of options

ALMO, PFI and Mix of Options

3 options (ALMO, PFI and Mix of Options) were discounted as they had no financial viability. With ALMO there is no advantage with this option as the issues that are faced with regard to the retention option would also remain as the funding shortfall after 2010 would still need to be addressed. With PFI and mix of options there was no additional financial advantage to either option to deliver more investment. The assessment for these options was rigorously examined by the stakeholder group, overview and scrutiny, Full Council and Government Office for the East of England / Community Housing Task Force.

Retention

Retention is a potential Option which was considered in detail. However, there were several serious implications arising from choosing retention:

  • Considerable operational savings would need to be identified by Fenland: efficiency savings would need to be made and these would likely impact on cuts being made to the standard of service and improvements currently delivered by Fenland.
  • Levels of investment sufficient to meet Decent Homes Standard could be identified, although the current FDC standard could not be maintained nor could higher aspirational standards set by tenants be delivered. Retention offers only £3-4 million extra investment above decent homes over 30 years.

Overall, the Working Group considered that retention would have a detrimental impact on local property standards and customer services. Inevitably, this would have wider repercussions regarding the sustainability of local communities. As the largest landlord in Fenland, a retained Council stock, with lower standards, was unacceptable to the Working Group.

The Working Group considered that Retention in Fenland would provide a bricks and mortar minimum standard solution but compromise the long-term sustainability of our homes.

Transfer

Transfer was favoured by the Working Group in view of the range of benefits and improvements it could deliver in that it could meet the requirements of the Fenland Standard (decent homes plus) whilst protecting tenants rents and equivalent tenancy conditions.

2.1.2 Tenant Involvement

The Investment Options Appraisal process was thorough and conclusive.AnInvestment Options Appraisal Working Group was set up and was led by Tenants. It had12 members:

- 6 tenants (50%)

- 4 Council Members (33%)

- 1 Local Strategic Partnership Health Service representative

- 1 Fenland Council Staff representative.

Underpinning the decision making structure was a comprehensive communications strategy which through regular telephone surveys led to an awareness level of 95 percent by the end of the Options Appraisal. The emphasis of the strategy was regular direct communications to the tenants’ doorstep, supported by a plethora of informal tenant participation networks supporting the robust formal tenant participation structure of 6 tenant associations and a tenants’ forum.

2.2 How transfer fits into the authority’s HRABusiness Plan;

Fenland has 2 key priorities in its current HRA Business Plan

-To manage a sustainable, high quality, affordable housing service, which is set in a safe environment and is in demand from its future customers

-To deliver a housing service at a price and quality acceptable to our customers

As part of the Options Appraisal process we considered what resources FenlandDC could deliver itself to meet the 2 key priorities, and compared this with other options, most notably with Stock Transfer. We examined these over a ‘typical’ 30 year business plan period.

The conclusion was that the HRA resources which could be delivered, under the stock retention option, were considerably less than that which could be delivered via transfer.

Assessments were made during the Options Appraisal on the potential impact of transfer on the residual council functions including the loss of HRA funds that contribute to central and support services of the Council.Changes to the organization of the Council would be necessary but it was considered that these could be managed without undermining the key objectives of the Council. The benefits that transfer could bring to tenants and to delivering sustainable communities justified the impacts of the change.

2.3 Housing needs assessment undertaken in Options Appraisal;

A Housing Needs Assessment was undertaken as part of the Options Appraisal. The Working Group received a Housing Market Analysis prepared by our main advisors which included:

-information from the Office of National Statistics (ONS),

-workplace data from the Annual Business Inquiry 2002 (ABI NOMIS)

-Fenland’s Housing needs Survey 2003.

The Analysis highlightedseveral key aspects of Fenlands Housing Market:

  • a continuing and sustained long-term demand for social housing
  • significant population growth above regional and national averages,
  • an above average population of over 65’s
  • low comparative wage levels for the area
  • low unemployment levels overall, but high employment of residents in “elementary occupations” and “process plant and machine operatives”
  • House prices rising faster in Fenland than anywhere else in Cambridgeshire and Peterborough.
  • House prices are equivalent or cheaper than some neighbouring areas which has led to growth pressures through in-migration.
  • Levels of affordable housing in the district are lower than regional and national averages.
  • A net annual affordable housing deficit: RTB sales have traditionally outstripped the number of new affordable homes built, therefore this places further pressure on the housing register
  • A need for 174 new affordable homes per annum with predominantly a need for affordable rented units.
  • Housing register numbers are rising significantly as pressure for affordable rented homes grows.
  • void levels are below the low demand indicator thresholds suggested by ODPM
  • turnover rates are slightly higher than ODPM thresholds for turnover. This is somewhat distorted by turnover in bed-sit for sheltered housing which require refurbishment.
  • high levels of housing benefit dependency within the social rented sector

2.4 How transfer provides value for money for the authority as identified in Options Appraisal;

We consider that the transfer proposal offers value for money for a variety of reasons:

  • the Decent Homes Standard can be delivered ‘on time’
  • transfer will also deliver enhanced property standards in line with those identified byTenants as aspirational during the Options Appraisal process
  • DHS and aspirational standards can be maintained over a 30 year period.
  • It will deliver a capital receipt to the Council that will assist in making a positive contribution to the 20 year vision of the Fenland Strategic Partnership and the Council’s medium term objectives.
  • The financial consequences of the transfer, e.g. cost to the general fund could be managed by reconfiguration of services and use of transitional arrangements. The issue of RTB receipts would be addressed within the partner selection process and the formal transfer sale contract.
  • An evaluation matrix of stakeholder criteria for assessment of the options clearly shows transfer offers more to the community as a whole whilst protecting tenants’ rights and rent levels.

2.5 The CHTF, GO-R and where appropriate NDC’s role in advising on the scheme.

CHTF and GO- East signed off Fenlands Options Appraisal process on 2nd August 2005.

Fenland has maintained an open and effective communication strategy with Go East. Our communications protocol includes Solma Ahmed at GO-East and Robert Buswell at the Housing Corporation. We have routinely copied key documents, minutes and public correspondence to these individuals. We are grateful for their assistance and constructive comments throughout the pre-ballot stage.

Meetings and regular e-mails and telephone calls have been held with Solma Ahmed, Nik Capon, Maxine Bilcock of Community Housing Task Force/GO-East. They receive copies of all meeting papers with an open invitation to attend. Nik attended Transfer Option development group in June.They have also regularly commented on draft communications in accordance with transfer guidance. We received advice at these contacts that has been included in our workprogrammes.

Given Fenland’s tenant profile and the relatively high levels of tenant satisfaction we are all conscious of the need to develop a strong offer that will maximize the appeal of transfer for all our tenants. With the assistance of our ITA we have engaged stakeholders widely in developing the offer. Go East provided useful advice on the approach to the test of opinion as we communicate key messages over the remaining months to the ballot. We are also reviewing the brief to the Ballot Administrator.

SECTION C
That there would be long term demand for the housing it is proposed to transfer, how it is proposed it would be sustained and, if not, details of the strategy in place which will address demand problems.

3.1 Details of the extent of long-term demand for social housing in the region, borough and wider area, and for the types of housing being proposed for transfer and whether this is likely to be sustained;

The housing market analysis undertaken for Options Fenland clearly demonstrated long-term demand for social housing in Fenland. There is an annual additional need for 174 new affordable homes.

In addition, there are further demographic and socio-economic changes, both sub regionally and regionally, which will impact on continuing high demand for social housing:

  • Regional Housing Strategy: Fenland is part of the London-Stansted-Cambridge-Peterborough growth ‘corridor’ – an important part of the Sustainable Communities Plan. We have a crucial role to play to meet the growth agenda of the regional economic strategy and the significant contribution that Fenland has in structure plan outputs (511 homes per annum allocated to be built in Fenland)
  • Regional Spatial Strategy: The structure plan recognises Fenlands importance by highlighting 3 market towns as “key market towns” for future growth (Wisbech, March and Chatteris). Fenland, unlike many districts in the growth area, has space to grow economically, and, therefore, the ability to provide new homes for the large influx of in-migration into the area. Fenland has an economic development strategy which details the structure to deliver economic growth with an emphasis on diversification of new industry. This proposal will assist in providing a more balanced housing market for the new industry.
  • Regeneration Pathfinders: The importance Fenland has in future growth is highlighted by 2 major funding social regeneration pathfinder projects.
  • A neighbourhood management pathfinder project for part of Wisbech and 9 rural settlements
  • A DEFRA sponsored Fens pathfinder spanning the whole of Fenland as well as parts of West Norfolk, South Lincs. Peterborough, East Cambs. and Huntingdonshire.
  • In-migration: Recent statistics from the Office of National Statistics highlight that Fenland is second only to Tendring in having the largest increase of in-migration in the whole of the East of England into the district. Fenland in 2003-04 had an increase of 1800 people compared to Peterborough (reduction of 500 people), Cambridge (reduction of 600 people), and EastCambs. (increase of 1100 people), Huntingdon (increase in 300 people).
  • Structure Plan Allocations: We have been meeting housing outputs in structure plan allocations for the past 4 years and this again highlights our ability to deliver affordable housing units to complement growth pressures
  • House Prices: The impact of such a large in-migration into the area has culminated in having the largest increase in Cambridgeshire in House Prices over the last 3 years. National Housing Federation statistics show that at the end of 2004 Fenlands average income was 7.2 times lower than the average house price. This compares unfavourably withlocal areas such as Peterborough (6.4), Huntingdonshire (6.8) and East Cambs. (7.0).
  • Housing register and In-Migration: Recognising the in-migration Fenland has for some time operated a housing register for affordable housing which is open to anyone whether they live in Fenland or not. The open register has seen a huge increase in numbers on our register from 1439 in April 2004 to 2226 in April 2005, a massive increase. Allocations made in the last year from our register reflect the impact of in-migration with 15% of all allocations being made to people who lived outside the district of Fenland. We now have a shared ownership register in its infancy which with initial marketing of what shared ownership is has quickly grown to 144 applicants and this we expect to grow significantly with greater marketing and awareness of what shared ownership is.
  • Travel to work patterns again emphasise the impact of growth in 2004, 37 percent of Fenland working residents worked outside of Fenland with 17.2 % working in Cambridge, Peterborough and London

Overall, the pressures generated by success, growth, and unmet local housing needs, means affordable housing demand is likely to continue to grow in coming years. Of the 174 affordable units needed to be built per annum. 150 should be affordable units for rent and 24 should be new build home buy. Fenlands existing council stock has a high proportion of bungalows therefore the need is predominantly for family homes although there is a significant need for 1 bed roomed accommodation

3.2 Details of any demand and/or unpopular housing issues and proposed measures to address them;

Given the pressures referred to in 3.1, we can confirm that Fenland has no unpopular housing issues. The key to the transfer proposal in Fenland is to maintain the popularity of our housing through investment in neighbourhoods and services alongside physical improvements to the home.

There are modest low demand issues regarding some sheltered bed-sit schemes, although it is likely these will be refurbished as part of the transfer proposal and as part of the wider best value review of sheltered housing.

3.3 Details of how much detail will be available to tenants at the proposed time for ballot of any demolition proposals.

Tenants will receive clear, thorough and comprehensive information provided to them on the transfer proposal. We intend to show how the Transfer Offer compares to other options, particularly the Retention option.

We can confirm that there are no demolition proposals within the transfer proposal.

SECTION D
The extent to which the transfer would contribute to the authority’s strategy for building sustainable communities and achieving the Government’s wider regeneration, social and economic objectives.

4.1 Provide an explanation of how transfer would contribute to achieving the Government’s sustainable communities strategy and its regeneration, social and economic objectives;

The proposed transfer would make a positive contribution to the Council’s own strategies and to the wider aims of the Governments Sustainable Communities Plan. In particular, it would contribute to:

  • Developing sustainable communities
  • The new stockholding RSL would be able to make significant contribution to sustainability locally. With a detailed knowledge of the needs of the local community, they would have the ability to ensure that existing and new communities are inclusive and sustainable
  • The business plan for the new RSL includes £1M to fund community regeneration initiatives identified in conjunction with residents. Examples include provision of recreational activities for the community or a learning capacity building initiative. This will enable the new organization to become a catalyst for resident driven improvements including improvements both to homes and to the wider neighbourhood.
  • The new RSL will help to achieve a better balance in the local housing market and to improve the standard of housing in the District
  • Improving the Countryside and the Local Environment
  • Our rural hinterland remains under pressure and increasing the supply of affordable homes critical
  • Rural housing remains a key priority for us and we would expect the new RSL to make a significant contribution to this through delivery of new affordable housing via exception sites and use of the community fund to improve rural access to services.
  • Decent Homes Standard
  • Transfer will enable the drawing down of new investment to meet and exceed the Decent Homes Standard in line with the aspirations of our tenants. With the capital receipt the council will consider in accordance with its overall priorities as detailed in section 17.1 investment into private sector stock that will assist in delivering the decent homes standard for vulnerable people living in the private sector.
  • Support for New Growth Areas
  • As stated above, Fenland is part of the London-Stansted-Cambridge-Peterborough growth ‘corridor’ – an important part of the Sustainable Communities Plan. We have a crucial role to play to meet the growth agenda of the regional economic strategy and the significant contribution that Fenland has in structure plan outputs (511 homes per annum allocated to be built in Fenland) Growth has been a particular focus for the Communities Plan. Transfer should enable new sources of funding to be brought forward to contribute to new affordable housing locally and meet the challenges of growth.
  • In partnership with its group parent, Circle Anglia, the new Fenland RSL will ensure the development of at least 100 affordable homes locally per annum for the first five years after transfer
  • Achieving a step change in housing supply
  • the transfer will enable two additional funding streams to be accessed to provide new affordable housingwhich would enable Fenland to contribute to the step change required
  • use of capital receipt (the Council will consider using part of the receipt to fund new affordable housing)
  • in house and other funding resources brought forward by the existing RSL and complement any SHG allocated locally by the Regional Housing Board

4.2 if the transfer is part of a larger regeneration scheme, give details of the roles of stakeholders delivering the project and whether bids have been made to finance the project and the stage reached in the approval process; how the transfer will fit in with not only the NDC's strategy but also the authority's wider Options Appraisal.