On the 20 January the Chief Executive of Northampton Partnership Homes and others gave a presentation on the impact of the missing £20m!
Rent decrease based on Government Policy -1% for 4 years
Councillor Stephen Hibbert, Cabinet Member for Housing, Councillor Mike Hallam, Cabinet Member for Finance, Glenn Hammons, Chief Finance Officer, Phil Harris, Head of Housing and Wellbeing and Mike Kay, Chief Executive, Northampton Partnership Homes gave the Committee a presentation that set the scene:
- Impact on Capital Programme
- Impact on Repairs & Maintenance Budget MTFP had assumed that rent would increase by CPI + 1%
- Rent decrease will reduce total income by approximately £20.6m over 4 years
- Will have an even bigger impact over the longer term 30 year HRA Business Plan
- Will affect investment options around the stock
- Impact of the 1% rent decrease over the next 4 years:
- Savings on Retained HRA – £0.6m
The remaining £20m is proposed to be found by splitting over the following areas:
- NPH Management Fee (25% / £4.98m)
- Repairs and Maintenance (30% / £5.98m)
- Capital Investment Programme (45% / £8.97m)
The Committee asked questions, made comment and heard:
- To give some context over the 4 years the forecast NPH management fee is approximately £50 million, Repairs and Maintenance managed budget is approximately £64 million and Capital Investment approximately £82 million before the proposed reductions.
In response to a query it was confirmed that tenants will pay 1% less in rents year on year for the next 4 years and this will cost approximately £20 million in reduced income. There will be a continued need to drive efficiencies, driving value for money and look at costs and overheads etc.
- The Committee heard one example about the new Scheduling System that will drive efficiencies SAMS
- The Northampton Standard identifies certain aspects of work that are a priority. Some works will be deferred if they have not been identified as a priority.
- In response to a query, it was confirmed that repairs to Sheltered Housing accommodation will go forward. A Sheltered Housing Review is nearing completion and report will be presented to the Overview and Scrutiny Committee at its June 2016 meeting.
- The Capital Programme is currently predominantly for improvements to existing housing stock
- The Committee heard that the extension to Housing Associations of Right to Buy will result in a formulae approach to calculating how much the HRA will have to pay over to Treasury to pay for this extension. Details of the formulae are awaited to enable the assessment of impact although it will be another negative financial impact on the HRA starting from 2017/18.
- The Committee welcomed and commended the work undertaken by NPH over the past year.