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TEES VALLEY SUB REGIONAL CHOICE BASED LETTINGS PROJECT

EXECUTIVE MEMBER FOR REGENERATION: COUNCILLOR DAVID BUDD

DIRECTOR OF REGENERATION: TIM WHITE

Date: 13th September 2007

PURPOSE OF THE REPORT

  1. To inform the Executive Member for Regeneration of the progress of the Tees Valley Choice Based Lettings (CBL) project and seek approval for the implementation of a sub regional scheme.

BACKGROUND

Choice Based Lettings at a local level

  1. The principle of CBL was first introduced by the Government in the 2002 Housing Act and is outlined in the former Office of the Deputy Prime Minister (ODPM) five year plan, Sustainable Communities: Homes for All. A CBL scheme allows people to make bids for social housing vacancies, which are advertised through various media rather than waiting for an organisation to identify their need and preference through a waiting list. CBL is the Government’s preferred option to all other types of lettings systems and the Government has published the following targets for the introduction of this type of allocation system:

a)25% of all local authorities are required to have CBL systems by the end of 2005; and,

b)100% of local authorities are required to have CBL systems by 2010.

  1. The nature of CBL involves working in partnership with a number of landlords in order to maximise choice, types of tenure and stock available to customers. Registered Social Landlords (RSLs) contribute to CBL systems through making available a percentage of their void properties to the scheme, a process known as nominations. The active involvement of private sector landlords within CBL schemes is also a key objective to increase the amount and choice of properties available to customers.
  1. In line with Government policy a CBL allocation scheme was introduced at a local level in Middlesbrough in November 2005 when it was introduced as part of the transfer agreement with Erimus Housing.

Sub regional CBL

  1. In order to achieve even greater choice and flexibility in meeting housing need the Government’s policy direction is for CBL schemes to develop on a regional or sub regional basis, involving partnerships of local authorities and RSLs and where possible private sector landlords. Advantages of larger cross-local authority schemes are as follows:

a)the provision of a larger pool of available housing, giving people more choice and helping to ease localised problems of high demand;

b)breaking down artificial geographical boundaries and recognising existing housing and labour markets;

c)offering greater mobility for tenants across geographical areas;

d)reducing the complexities and costs associated with RSLs being involved in a number of different allocation schemes across different local authority areas; and,

e)economies of scale as partners are able to share the set up costs associated in developing CBL schemes.

  1. The Tees Valley sub regional CBL partnership was established in January 2006 following confirmation from the Department for Communities and Local Government (DCLG) of a successful bid for £105,000 to explore the possibility of developing a sub regional CBL scheme. Middlesbrough Council is the lead local authority and accountable body for the resources and also Chairs partnership meetings. The partnership is made up of all the Tees Valley authorities and stock transfer or arms length housing providers. Erimus Housing has provided a key project management role in taking the project forward, as the only partner who has direct experience of operating a CBL allocation policy.
  1. In addition to the formal members of the partnership steering group, representation has been established from other RSLs operating within the sub region. This representation is being undertaken by Accent North East and Tees Valley Housing Group, who have the agreement of the other RSLs operating in the Tees Valley to undertake this role and feed back information.
  1. On July 7th 2006 a report was presented to the Executive Member outlining the successful bid to the DCLG to undertake a two year project with the objective of introducing a sub regional allocations scheme across Tees Valley. The report outlined the individual partner contributions of £5,000 each to support the development phase of the project and identified that additional contributions would be needed if the project progressed to implementation. A commitment was made within the report to provide the Executive with an update of the project and to seek approval prior to any implementation of a sub regional scheme.
  1. The sub regional CBL project is at a critical stage with all partners going through the process of recommending to their appropriate Boards and Executives approval to progress the scheme to implementation.

Progress to date

  1. The first priority of the partnership steering group was to appoint a Project Co-ordinator. The post was offered as a secondment opportunity within the partnership organisations and an appointment was made in April 2006. The post is managed by Erimus Housing and is located within its Homechoice office. To date the main objectives for the Co-ordinator have been as follows:

a)to conduct a sub regional CBL feasibility study;

b)to co-ordinate a working group (sub group to partnership meetings) to develop a common allocation policy framework; and,

c)to co-ordinate the work required in establishing the ICT requirements of the partnership and reporting on any subsequent procurement issues.

Feasibility study

  1. The feasibility study was completed in November 2006. A key part of the study focused on outcomes from Erimus Housing CBL scheme, as this is the only CBL scheme operational within the sub region and also drew on good practice identified by the DCLG regarding other sub regional CBL schemes. The findings from the study indicated that there was a wide range of inter-related potential benefits to introducing sub regional CBL for the partnership, these were:

a)cost savings associated with joint procurement;

b)strengthening joint working with a group of local authorities and housing providers;

c)providing opportunities for people to move from one local authority boundary to another; and,

d)a more efficient management of the allocations and lettings process.

A copy of the feasibility study is provided as Appendix 1.

A joint allocation policy framework and housing register

  1. The Government advocates the development of a common housing register and common allocation policies as they are regarded as providing simpler and fairer access to housing than other systems. The original bid to the DCLG outlined the intention of the partnership to develop these key components. The framework for a common allocation policy needs to comply with Part 6 of the Housing Act 1996 and the Statutory Code of Guidance: allocation of accommodation, issued to local authorities in November 2002. The framework also needs to illustrate the method for determining which categories of applicants will be prioritised within the scheme, in accordance with the reasonable preference groups as set out in section 167(2) of the 1996 Act.
  1. To ensure that priority at a local level is given to households within regeneration schemes and those to which a statutory duty is owed, an applicant’s local connection to an area will be recognised within the policy.
  1. The original timetable for completing the work necessary for producing a draft common allocation policy framework, to take forward for consultation was May 2007. However due to the level of detailed work involved in considering all partner organisations’ existing policies and good practice and legislation there has been some slippage within this timescale. The draft policy framework has been presented for approval to the formal steering group, the document will be subject to a 12 week consultation period, during which time a wide range of stakeholders at a local and sub regional level will be given the opportunity to comment. It is proposed that a half day event will take place with RSLs operating across the sub region during this 12 week period. It is estimated that the final draft policy framework will be presented to the partners’ Boards or Executives for formal approval before the end of February 2008.
  1. The development of a common housing register is significantly cheaper than developing individual registers, this is due to the requirement for only one ICT software solution and cost savings due to a single brand and application form.
  1. In order to promote CBL to private sector landlords an event is planned for later this year which will provide an opportunity for partners to meet with landlords. The event will raise awareness of accredited private landlord schemes, promote the benefits of partnership working with social landlords and encourage private landlords to advertise their properties through CBL. Middlesbrough Council’s Respect Housing Team has supported the work of the partnership in facilitating the mailing of flyers to all private landlords in Middlesbrough who are known to the service. A number of presentations and workshops are planned for the event this will provide an opportunity for Middlesbrough Council to promote initiatives such as Selective Licensing.

Procurement of ICT software

  1. Procuring ICT software which meets the needs of each organisation will prove to be the most significant expenditure in implementing a sub regional CBL scheme. The Tees Valley CBL partnership has considered the options in terms of procurement processes and pending formal commitment to the scheme, use has been made of the Northern Housing Consortium (NHC) to access a software solution on behalf of the partnership.
  1. Whilst the Council is a member of the NHC, an exemption from Standing Orders is required in order to use it to procure on the Council’s behalf. In line with the procurement policy a dispensation from normal competition requirements under Standing Order 5 has been approved by the Director of Resources and Director of Legal and Democratic Services, the approval is attached as Appendix B.

OPTION APPRAISAL/RISK ASSESSMENT

  1. CBL is in operation in Middlesbrough and is the chosen allocation policy of the Council. There are clear advantages of being part of a sub regional scheme for Middlesbrough as outlined within paragraph five.
  1. A study into the longer term impact of CBL was published by the DCLG in November 2006[1]. The key findings of the study which are outlined below include a number of reasons why a CBL allocation scheme should be further developed; and found:

a)in general, applicants preferred CBL to the traditional approach to housing allocations;

b)the majority of lettings went to those with a high level of housing needs;

c)overall demand for housing stock rose, including the demand for less popular areas;

d)lettings to BME applicants increased;

e)statutory homeless applicants had improved housing prospects;

f)an improvement in performance and cost effectiveness;

g)an improvement in tenancy sustainment;

h)an improvement in relet times (although already efficient landlords are less likely to see improvements);

i)a decline in refusal rates;

j)CBL schemes were more expensive to administer, though this was found mainly in relation to set up costs which can be offset by savings accrued from improved housing management performance; and,

k)more work is needed with voluntary sector groups to ensure potentially disadvantaged groups are safeguarded.

  1. Whilst formal commitment is still being progressed by some partner organisations the following partners have already obtained the necessary formal approval for implementing the sub regional scheme:

a)Erimus Housing;

b)Stockton Borough Council;

c)Tristar Homes;

d)Darlington Borough Council;

e)Redcar and Cleveland Borough Council; and,

f)Coast and Country Housing.

  1. Middlesbrough Council is the lead local authority for the project and therefore there is an expectation that the Council will show the necessary commitment to take the project forward.
  2. Should any partner organisation fail to approve continuation to implement a sub regional scheme and subsequently withdraw from the project, the remaining partners will be required to provide the additional financial support to close the gap.

24.The CBL advisor has indicated to the partnership that Government Office North East (GONE) would not look positively on partners who later withdraw from the scheme, given central Government’s commitment to sub regional and regional CBL. The significance of CBL allocations schemes has also been recognised by the Housing Corporation, through their monitoring of RSLs in terms of how many lets are made via CBL systems.

FINANCIAL, LEGAL AND WARD IMPLICATIONS

25.In year one each of the nine partners committed £5,000 (£45,000 in total) towards the DCLG grant funding to explore the benefits of developing a sub regional scheme. To date this funding has contributed to the Project Co-ordinator’s salary and expenses, administration, consultation and training and development. It is estimated that a further contribution of £23,152 is required in year two of the project in order to meet the full costs of implementation. Tables 1 and 2 below outline the income and estimated expenditure details for the two year project.

Table 1 Income

Budget Year / 2006/07 / 2007/08 / Total
£ / £ / £
DCLG grant / 52,500 / 52,500 / 105,000
Partner contributions / 45,000 / 208,361 / 253,361
Total income / 97,500 / 260,861 / 358,361
Table 2 Expenditure
Period / Actual
April 2006 to March 2007 / Forecast
April 2007 to March 2008 / Total
£ / £ / £
Project management /administrative costs / 48,144 / 52,675 / 100,819
Private sector landlord event / 542 / 2,000 / 2,542
Potential procurement costs / 0 / 1,000 / 1,000
ICT costs[2] / 0 / 120,000 / 120,000
Running costs / 0 / 54,000 / 54,000
Set up costs(scheme guide, application forms and welcome folders) / 0 / 80,000 / 80,000
Total / 48,686 / 309,675 / 358,361

26.Taking into account the projected total spend of £358,361 and the current available income of £150,000 there is a shortfall of £208,361. The contribution for each of the nine partners is therefore £23,152. There will be an ongoing cost in relation to an annual licence fee; this is estimated at £6,000 for each partner. However the amount will not be confirmed until the tender process has been completed.

  1. The expenditure required will be earmarked from a combination of existing regeneration core budget and grant resources.

28.The joint allocation policy framework produced by the project steering group will reflect all relevant legislative requirements. The policy will be presented to the Executive for approval.

29.A sub regional CBL system will operate across the whole of Middlesbrough and will have the same impact upon all wards.

RECOMMENDATIONS

30.The Executive Member for Regeneration notes the progress made on the Tees Valley sub regional CBL project and approves the following:

a)the continuation of the work on the sub regional project with partner organisations in order to implement a Tees Valley CBL scheme;

b)that a further report be presented on completion of the common allocation policy framework for Executive approval; and,

c)that any future changes to the implementation of the scheme are delegated to the Director of Regeneration following consultation with the Executive Member.

REASONS

31.Implementing a sub regional Choice Based Lettings system for the Tees Valley is recommended for the following reasons:

a)the Council has made a commitment to developing a sub regional scheme;

b)a sub regional scheme is regarded as good practice by the DCLG;

c)it will provide greater choice for people in housing need within the Tees Valley area;

d)successfully implementing the project will reflect positively on the Council and partners in providing Government bodies with additional evidence of how effective partnership working can be; and,

e)a decision regarding formal approval to continue to the implementation stage is required by all partners prior to a contract being entered into for the ICT software package.

BACKGROUND PAPERS

32.The following background papers were used in the preparation of this report:

a)DCLG Study – Monitoring the Long Term Impact of CBL; and,

b)Executive report 7th July 2006 – Choice Based Lettings

AUTHOR: Gill Corbett

TEL NO: 01642 729369

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[1] Department for Communities and Local Government (DCLG) Study – Monitoring the Long Term Impact of CBL – Housing Research Summary Number 231, 2006.

[2] Estimated within the Feasibility study