PAPER C
SCRUTINY COMMITTEE FINAL REPORT
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RESPONSIBLE BODY Scrutiny Committee |
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ENQUIRY NAME LOSS OF
HOUSING INVESTMENT GRANT 2006-07 |
REFERENCE NUMBER SC16/06 |
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1
OUTLINE OF ENQUIRY AND PROPOSED OUTCOME 1.1
To ascertain to what extent the council
participated in the consultation exercise, and whether there is evidence that
the manner in which it did so contributed to the decision not to
award grant monies. 1.2
To investigate why there was no contingency plan
in place. 1.3
To ensure that budget
and service planning lessons are learnt by the Council on behalf of
Islanders. |
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2
RECOMMENDATIONS 2.1
New approaches to budget and service planning currently being
developed must ensure that, where targets are being set, and delivery plans
being prepared: ·
Where delivery is contingent on funding yet to be confirmed, this is
clearly identified, and ·
The risk of funding not being confirmed is mitigated by the
development of alternative funding arrangements, the adoption of lower
targets, and/or adoption of alternative delivery plans 2.2
That approaches to Government Office of the South East which have
already been made, are followed up in order to ascertain that data basis of
names and addresses are accurate and communication arrangements make better
use of e-mail. |
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3
BACKGROUND TO THE ISSUE 3.1
The Cabinet, at its meeting on 23 March 2006, was
advised by the Cabinet Member for Care, Health and Housing that the Council
had been informed that monies that it had hoped to receive from the
Government Office of the South East (GOSE) would not be available. This
funding amounted to £1,769,000. The loss of this money had substantial
implications for the provision of new affordable housing schemes on the
Island. 3.2
The Cabinet was advised at that meeting that the
formula funding had changed and was to be based on the amount of unfit
properties that were within each area of local authority distribution. This
Council was not alone in being affected as only 22 of the 76 Councils in the
GOSE’s area would receive funding for housing capital investment. 3.3
In making representations to GOSE on the withdrawal
of the funding it transpired that the Council had been consulted on funding
allocations and relevant information had been made available. 3.4
The Scrutiny Committee, at its meeting on 27 July
2006, was advised that the Cabinet Member for Island Health, Housing and
Community Wellbeing (previously titled the Cabinet Member for Care, Health
and Housing), had commissioned an investigation into the matter. The
Committee indicated that as the matter was of significant public interest it
needed to be examined on behalf of Islanders who are in housing need and
therefore agreed to have its own enquiry. 3.5
The enquiry undertaken
by the Cabinet Member was to establish the facts behind the consultation
arrangements and processes to identify any weaknesses so that these could be
rectified. This was used as the basis for the Committee’s own deliberations. |
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4
OUTCOMES 4.1
The Council, like many other housing authorities, had typically
received “supported capital allowance” (SCA) in respect of some of its
housing needs. 4.2
Allocations of SCA were typically made by the South East Regional
Housing Board (SERHB). In 2004, after
issuing a Green Paper on the subject, the SERHB undertook consultation on
their proposals to change the way it targeted resources as set out in its
strategy for 2006-08. This
consultation took place between January and June 2005 and was in the form of
both a questionnaire and a series of workshops for appropriate stakeholders
across the south east region. There was
a considerable amount of information available about how the consultation was
undertaken and its results were shown on the GOSE and SERHB’s websites. This included a full report (published in
June 2005) on the outcome of the consultation including a list of authorities
which responded to it (mostly by way of the questionnaire). 4.3
It was clear, therefore, that even from an early stage (February and
March 2005) there was complete awareness by relevant officers of the impact
of the RHB’s strategy and that advice and warnings were being given about
that impact. 4.4
The results of the consultation were published by the SERHB in June
2005 and the Board launched its new strategy on 21 July 2005. 4.5
There was readily accessible information on the SERHB’s website about
the Board’s allocation of the “Regional Housing Pot”. According to Steve Kethero, Housing Policy
Officer of the SERHB, that information, described as “Indicative
allocations”, had been available on the SERHB website since early November
2005. (Furthermore, when the
allocations were finally announced on 4 April 2006 after Ministers had
approved them, they did not change from the “indicative” ones announced
earlier.) It was clear from the
information provided that the Isle of Wight was not to receive any of the
“Regional Housing Pot”. It was also
apparent that the Isle of Wight was amongst the majority of Councils who were
to “miss out” – only 22 authorities out of 67 or so received an allocation. 4.6
There was throughout the period from December 2005 to May 2006 a
developing awareness within the finance function of the Council that it had
not heard about the award of capital allocation for affordable housing. It had been apparent that the previous
system of receiving borrowing approval had ended because the financing
element no longer appeared in the RSG settlement. This, somewhat perversely, represented better news for the Isle
of Wight Council since it only ever received around 16% of any marginal grant
changes (the remainder being re-directed via ‘dampening’ to so-called poorer
authorities). If, under the new
system the Council was to receive a direct capital grant, then that
represented a significant improvement from this Council’s perspective. 4.7
Unfortunately, it was not immediately realised that the Council would
in fact not receive any of the “new” grant.
The Council’s Chief Financial Officer raised this issue at a meeting
of the Hampshire and Isle of Wight Chief Financial Officers’ Association on
12 May 2006, asking if other housing authorities were aware that they too had
missed out. Interestingly, only one
authority had realised and at least four others who were present had not. 4.8
According to the SERHB, two letters were sent to the Council on 4
April announcing the award of the “Regional Housing Pot”. There was no evidence to show that these
letters were received, the most likely explanation being that they were
incorrectly addressed. The
announcement of the changes in grant arrangements was late because Ministers
approval was not forthcoming until 28 March 2006. 4.9
There was sufficient information available from the SERHB’s website
from early November 2005 to advise local authorities of the indicative grant
situation. It is unfortunate that the information held on the SERHB’s
database included incorrect contact information for the Council. 4.10 The loss of grant
represented 27 units of affordable housing. The Council’s Local Area
Agreement (LAA) with GOSE for affordable housing was for 604 completed units
between 2006-2009. This was to be split 220, 124, and 260 in successive
financial years. Although there is no
reward funding dependent upon achieving the target there is a reputation
factor involved and a reduction in the Council’s ability to meet local need. 4.11 The Cabinet Member advised
that the situation had not been helped by the interim staffing arrangements
within the Housing Section whilst vacancies were unfilled during the period
involved. An investigation conducted by Internal Audit did not highlight
any particular officer was responsible for failing to respond to the effect on
the Council of grant changes. |
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5.1
Report to the Cabinet on 23 May 2006 by
the Cabinet Member for Care, Health and Housing 5.2
Record of Decision of the Cabinet held on
23 May 2006 5.3
Question by Cllr Deborah Gardiner to Cllr
Cousins, Cabinet Member for Care, Health and Housing at full Council on 21
June 2006. 5.4
Minutes of the Scrutiny Committee held on
27 July 2006 and 14 September 2006 Scoping document for the enquiry. |
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Prepared by: Date: |
Cllr Geoff Lumley, Cllr Deborah Gardiner and Mr
Tony Marvin. April West & Paul Thistlewood, Overview &
Scrutiny Team September 2006 |
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