Board pack 28 July 2015 by Your Homes Newcastle

Board Tuesday 28 July 2015 at 5.00pm Meeting to be held at Sir Bobby Robson Suite, St James Park, Newcastle upon Tyne. Contact: Jill Davison (telephone: 0191 278 8624 email: jill.davison@yhn.org.uk)

AGENDA Introduction items

Timing

Reminder to switch off mobile phones

5.00

Apologies for absence

Declarations of Interest

Page No.

Items for Decision 4

Disaggregation and governance update

5.00

Employability Task & Finish Group report

5.30

Quarter 1 Performance & Financial Position

5.50

Annual Accounts & Financial Statements

6.10

6.30

Items for approval 8

Minutes of 16 June 2015

Items for Information 9i

Chairs Items

6.35

9ii

Senior Director report

9iii

Management Agreement

112

9iv

Universal Credit Update

147

Equality and Diversity Update

157

9vi

Delegated Decisions

168

9vii

Petitions

173

9viii

Board Forward Plan August & September

175

9ix

Committee minutes:  Finance and Resources 2 April  Customer & Service Delivery 19 May  Audit 21 May

176 178 185

To exclude the press and public during discussion of agenda item 10-12 because of the likely disclosure of confidential information. The definitions of what is considered confidential are contained within Section 16 of the Company’s Standing Orders.

Protect not for publication – Items for Decision 10

Health & Safety

6.50

Confidential minutes 16 June 2015

6.55

190

Protect not for publication – Items for Information 12

Finance and Resources Committee minutes 2 April 2015

194

4 Board 28 July 2015 Disaggregation and Governance Update Report by Director of Corporate Services and Assistant Chief Executive

For Decision 1.

Background information

1.1

Previous reports to Board have provided information on many different work streams relating to both the governance of YHN and the disaggregation of the HRA and YHN finances. This work was initiated from the NCC/YHN review which commenced in December 2013. During the period January 2014 to June 2015 we have provided board with reports which covered the progress at each stage which included tax and legal advice from our external consultants. Decisions have been made by the Board regarding; the strategic management of HRA returning to NCC, YHN and NCC decision making, the disaggregation of YHN finances, and our approach to the revised regulatory standards relating to governance and financial viability. Due to the key areas of governance improvement and financial disaggregation overlapping, this report pulls together both areas of work and provides an update on developments since the last meeting.

Proposals and decisions made at previous board meetings

2.1

Since early 2014, Board have been receiving a series of proposals regarding the result of the self-assessment against the governance and financial viability standard and disaggregation. Where the proposals are sufficiently complete they have been formally approved. In the case of disaggregation, Board has been updated on how the proposals are developing and there will be a final, all-encompassing, approval to proposals at the Board meeting in September.

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2.2

Decisions as a result of the self assessment against the governance and financial viability standard

2.2.1

Board 4 November 2014: Board agreed to complete;  A self-assessment and gap analysis against the HCA’s governance and financial viability standard and against the recommendations for boards from the report on the lessons learned from Cosmopolitan Housing Group.  Financial stress testing against a range of simultaneous scenarios which could occur at the same time to the point where we understand what would break the business.

2.2.2

Board Away day 28 April 2015 Board were presented with the findings of the governance self-assessment and gap analysis and reviewed the proposed actions, commenting on the actions, importance and timeline for completion.

2.2.3

Board 16 June 2015: Board were presented with the output from the away day, and;    

Approved the Governance improvement plan Approved the Board skills matrix Approved the role description for board members Agreed to complete a self-assessment against the skills matrix

2.3

Decisions as a result of disaggregation

2.3.1

27 May 2014: Update on NCC Review of YHN Board agreed the transfer of strategic management of the Housing Revenue Account (HRA) to NCC.

2.3.2

4 November 2014: Proposals for YHN Financial Restructure Board approved the principles of disaggregation, that is the transfer of noncore landlord services into YHN: 

That operational budgets are moved fully into YHN so that a simplified HRA would only hold key strategic items (for example, rent and service charges, repairs and maintenance, management fee, capital, treasury). Specific operational budgets will be moved from the HRA to YHN to clarify responsibilities between YHN and the HRA. NCC staff will assume full responsibility for managing all HRA budgets.



Non-core landlord services will move to YHN: furniture service, Care Services, Sheltered, and Advice & Support along with supporting people contracts.



NCC would then commission YHN to provide specific services through the management fee, which would be agreed annually and explicitly linked to the delivery of specific service-related outcomes.

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2.3.3

10 February 2015: YHN Budget and Disaggregation At this meeting, Board:

2.3.4



approved the 2015-16 YHN budget on a pre and post – disaggregation basis. It was recognised that as the plans for disaggregation changed this may require changes to the budget which board would be kept abreast of.



agreed external legal and financial advice would be provided at subsequent meetings to support the proposals.

24 March 2015: Disaggregation and decision making in the future; YHN Disaggregation 

Board were provided with information on roles and mechanisms related to decision-making for the HRA from a Cabinet report to address some of the key issues which had been potential areas for confusion.



In a project update, Board were informed of tax advice that suggested a YHN group structure with two subsidiaries (one charitable and one trading) would be required to avoid corporation tax as a result of disaggregation as previously planned and agreed a revised timetable for implementation: o March, April 2015 – Receive legal and financial advice on proposed YHN group structure o April 2015 – Implement interim position (disaggregation of nontrading activities) o April – Sep 2015 – Report and operate under interim position o October 2015 – Transfer of assets and trading cash flows to YHN

2.3.5

16 June 2015: Disaggregation Update Board had confirmation of legal advice confirming the legality of the proposals for the YHN group and their recommendations: 

A trading subsidiary constituted as a company limited by shares



A charitable subsidiary constituted as a Community Benefit Society.

Board agreed: 

the Chair makes a decision on the name of each of the subsidiaries in order to progress the project;



the size of the subsidiary boards and YHN’s representation on them;



the retention of the Audit Committee



the business of Commercial Committee will pass to the trading subsidiary board

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Progress since the last meeting

3.1

The following section describes the work completed by officers since the last meeting, presents the results for Board to consider and proposes recommendations for approval on the main areas which are important to ensuring the project stays on course to meet the 1 October implementation date.

3.1.1

Following feedback received at the Board on the 16 June, the Board Member Job Description and Skills Matrix were amended; these were then used in the recruitment process for a new Independent Board member. The vacancy was advertised through North East Jobs and our own YHN website. Shortlisting was undertaken on the 8 July and interviews scheduled for the 21 July. The current Board members were also asked to complete the skills matrix to provide an overview of competencies across the Board and to gather information we can use to look at any skills gaps and feed this into future learning and development planning. Board are asked to agree to receive a report at the September meeting which presents the results of this work, and receive a draft Learning and Development Plan for Board members approval.

3.1.2

A review of all reports to board and its committees has been undertaken to ascertain where reports would best fit in the new disaggregated structure. 

Officers have reviewed all the business that passed through Board and its committees in 2014-15 and make the following recommendation:



YHN has o Board: six weekly to look at finance & performance, Chief Executive/ Senior Director’s/Chair’s reports, annual reports from committees and subsidiaries, governance and regulation, approval of key strategies, board member duties and liabilities, key contracts, decisions emanating from Audit Committee o Group Audit Committee: quarterly to manage risk and internal control, business continuity and recommend the annual financial statements and risk register to boards o Service and Strategy Delivery Committee: six weekly to approve the scope of strategy and service reviews, monitor the delivery and progress of reviews, as well as look at detailed performance issues



Trading Company Board, quarterly to consider all matters as listed for the YHN Board and its Service and Strategy Delivery Committee above with respect to the traded elements of NFS and Palatine



Charitable Company Board, quarterly to consider all matters as listed for the YHN Board and its Service and Strategy Delivery Committee above with respect to CCAS, Sheltered Housing, Advice and Support and Young People Service

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There are some areas of business that officers recommend are no longer subject to dedicated reports mainly as they are now HRA matters or covered in other reports above. More detail is included in appendix 1 With regard to the frequency of meetings, the new structure will require 28 meetings throughout the year, in comparison to 26 in the current structure. CURRENT STRUCTURE

NEW STRUCTURE

YHN BOARD

AUDIT

CHARITABLE SUBSIDIARY

CUSTOMER & SERVICE DELIVERY

TRADING SUBSIDIARY

FINANCE & RESOURCES

GROUP AUDIT

COMMERCIAL

SERVICE & STRATEGY

Although there is a slight increase in two meetings, the time commitment from Board members will be reduced as we are proposing that members attend the main YHN Board (8 meetings per annum) and one other committee or subsidiary (either 4 or 8 meetings), so a total commitment of 12 or 16 meetings. This is instead of current practice where members attend YHN Board plus two committees which totalled between 16 to18 meetings per annum. Board are requested to note there may be more meetings of the subsidiary boards in the initial set up period to allow for decisions to be made on the governance arrangements, as with any new company set up. 3.1.3

As part of the self-assessment, the need for Board to have greater cognisance of financial matters was identified. As a result of the review of 2014-15 business to board and its committees, officers recommend the following finance and performance reports go to Board:     

Budgets and outturns Financial Modelling Key decisions, including capital, large scale procurements and procurements outside the annual plan YHN treasury management, including cash flow Quarterly performance and finance reports

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3.1.4

The new subsidiaries, “Trading Co” and “Charitable Co” will be fully constituted legal entities and will therefore bring with them full company director responsibilities. It is recommended that subsidiary boards meet quarterly to consider all matters covered by YHN Board and it’s Service and Strategy Delivery Committee where they are relevant:  

3.1.5

“Trading Co” for traded elements of NFS and Palatine “Charitable Co” for Employability, CCAS, Sheltered Housing, Advice and Support and Young Peoples Service

Since the last update to Board, the first shadow s151 meeting have commenced as though disaggregation had taken place: 

17 June to consider the logistics of the new forum, the 2014-15 finance performance of HRA areas YHN has management responsibility for, the 2014-15 Top Twenty Target results, YHN level of reserves, key issues including disaggregation;



27 July to consider Q1 2015-16 finance performance of HRA areas YHN has management responsibility for, the Q1 2015-16 HRA Target results, agreement of any variations to management fee, key issues update.

3.1.6

Further legal advice has established that the proposed split of YHN business across YHN and its subsidiaries cause no legal concerns. Trowers have advised that an inter group agreement is required as well as an agreement for the transfer of trade into YHN and its subsidiaries from NCC.

3.1.7

Trowers & Hamlin have provided draft constitutions for the two subsidiary boards, which have been scrutinised by the Company Secretary. The Charity subsidiary will be registered as a Community Benefits Society (CBS) under the Co-operative and Community Benefit Societies Act 2014, will have a set of rules, these are based upon the National Housing Federation's 2015 model (which is widely accepted including by the FCA) with amendments to fit with our specific requirements. The rules have been drafted so as to strike a balance between YHN having sufficient control over the charitable subsidiary and to ensure the independence of the charity cannot be called into questioned. The CBS will not be registered with the Charity Commission, it will nevertheless need to comply with charity law and will be seeking to be recognised as charitable by HMRC. It has been confirmed that tenants can apply to become an independent trustee of the Community Benefits Society. The Trading subsidiary will be registered at Companies House under the Companies Act 2006 as a Private Company Limited by Shares and will have Articles of Association. Unlike a charitable community benefit society there is no regulatory requirement for the trading subsidiary to be structured so that it is independent from YHN and YHN can legitimately exert control over the company as the sole shareholder. The articles are based on the statutory

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model articles for a privately owned company limited by shares but we have included a number of provisions which provide YHN with some additional powers which enable it to have more control over the day to day management of the company. Board are asked to agree that the Company Secretary use these draft constitutions in the registration of the subsidiary companies, and present them to the inaugural board meeting of each respective subsidiary for approval and adoption. There are provisions in both constitutions allowing for amendments to the articles and rules by process of a special resolution and approval by YHN, should this be required in the future. 3.1.8

Since the last board meeting, financial modelling of the new YHN structure has been completed to ensure the structure meets the following required outcomes: 

No detriment to HRA



Trading profits not in excess of charity deficit before gift aid income



Charity deficit before gift aid income not in excess of distributable profits from YHN (ALMO) and “Trading Co”



Recharges reasonable from an HMRC perspective i.e. transfer pricing reasonable



Meet Teckal requirements i.e. not subcontracting to a company which has more than 20% external trading

The modelling suggests that activities should be delivered from the entities as set out in appendix 2. The contractual relationships are more complex to meet NCC requirements of only one NCC YHN management agreement. As a result, YHN will subcontract activity to “Charitable Co’, as set out in appendix 3. The modelling suggests that trading profits will not be in excess of the charity deficit and the charity deficit before gift aid will not be in excess of distributable profits from YHN and “Trading Co”. Teckal requirements are met other than an issue with Palatine internal trading which needs to be addressed as YHN cannot normally subcontract to the trading company without a full procurement exercise. The modelling assumes intergroup trading charges which need to be reviewed by EY. Board will be updated on this advice as it becomes available. 3.1.9

The two subsidiary companies require names to be registered as a legal entity. Board agreed in June to delegate the decision of choosing the two names to the Chair. At this point the names for the charitable and trading companies are required for registration purposes only and will not be given any visibility in YHN literature, or on our website. We are recommending two words that fit well together, are quite obscure, sound strangely familiar, but their meanings are not generally understood, which has the effect of making them quite memorable and distinctive.

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For the trading company (NFS, Palatine beds): Abri Trading Limited (pronounced a-bree). This is a ‘lost word’ that has dropped out of modern day use. It means 'Shelter used by mountaineers, typically an overhanging rock'. We are recommending this as it symbolises the role that our trading services are playing in generating funds to help protect key services to customers – and, more indirectly, the purpose of our key services. For the company with charitable aims – Community Benefit Society (Advice and Support, CCAS and Sheltered Housing, Young people’s service): Asfaleia Limited - means ‘pledge of good faith, trust, confidence, certainty or promise’ and is often used in Greece as shorthand for ‘just in case’. Again, the meaning fits the purpose of those services well. Adopting something less descriptive than, for instance, ‘Your Homes Newcastle Trading Ltd’ should be less likely to lead to confusion amongst our stakeholders and leaves more room for us to develop our existing service brands. We can still trade using a different name to our registered name, this is known as a ‘business name’, eg. Palatine. However, they are both attractive and meaningful words in their own right, so the potential is there to develop either of the words into a brand of their own should we need it. Legal checks with Companies House, Charities Commission, FCA and the Intellectual Property Office have been completed and we are assured the names are free to be registered. 3.1.10

The remuneration of Board members with regard to the subsidiary companies has been considered, and in light of the revised structure the following proposals are recommended for board approval; 

Chair of Trading subsidiary to be paid £1,000 in line with Committee Chairs



The role of the Independent Chair of the CBS to be advertised with remuneration of £1,000, in line with the Independent Chair of Audit Committee.



Independent Trustees to the CBS not to be remunerated, in line with current practice of CBS and position at Leazes Homes.



Future decisions on remuneration to be the business of the CBS subsidiary board.

The Business Implications

4.1

Mission and Strategic Objectives: the move to the new structure of business for YHN will allow it to continue to operate innovatively and meet its strategic objectives.

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4.2

Value for money/efficiencies; the move to the new structure of business for YHN will allow it to continue to seek efficiencies and achieve value for money within the group structure.

4.3

Financial Implications: It is a key objective that the new arrangements leave the HRA no worse off than it would have been pre disaggregation but gives YHN the opportunity to increase its trading surpluses.

4.4

Other Resources (property, technological or human): Trowers & Hamlins have given a fee quotation of ÂŁ35,000 for advice and creation of the new companies and their constitutions. Tax consultancy fees have amounted to ÂŁ3,500 to date.

4.5

Impact on services/performance: There should be no detrimental impact on services and performance and the new structure will create opportunities for improved performance.

4.6

Outcomes for tenants/leaseholders: There should be no detrimental impact on services and performance and the new structure will create opportunities for improved performance.

4.7

Risk (reputation, relationship): There is minimal risk to reputation as YHN has been managing the transferred services on behalf of the HRA for 11 years. The relationship between HRA tenants and NCC remains unchanged. Other risks have been detailed in the report to the March meeting.

4.8

Environmental: None

4.9

Legal: see the main body of the report.

4.10

Equality and Diversity and Community Cohesion: Recruitment to the subsidiary Boards should ensure that it is broadly representative of the community it serves. Targeted recruitment will provide opportunities for those groups who are under-represented on Board to put themselves forward for Board Membership as well as addressing any skills deficits.

4.11

Stakeholder Involvement/consultation: The work to date has been undertaken collaboratively with NCC and their formal approval is required before the transfers take place.

Conclusion and recommendations

5.1

Board is asked to note the project progress to date and agree: 1. to receive a training plan and appraisal documentation for board members to the September meeting 2. the recommendations for committees as set out in section 3.1.2 3. the recommendations of financial and performance reporting to Board as set out in section 3.1.3

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4. the recommendations for the business to subsidiaries as set out in 3.1.4 5. the draft constitutions are used in the registration of the subsidiary companies 6. the new subsidiary names as recommended in 3.1.9 7. the remuneration for subsidiary board members as recommended in 3.1.10 6.

Implementation

6.1

Over the next two meetings, Board will have significant decisions to take. It is proposed to hold an additional meeting in August to ensure all disaggregation proposals have been approved in line with the planned implementation date of 1 October.

6.2

August board meeting: 25 August 5-7pm Board will be asked to approve the revised YHN governance handbook including: a. Scheme of delegations b. Financial regulations c. Memorandum and Articles It is hoped that members will also be able to hear from John Lee, the way in which his thinking is developing and thus enable us to take account of and contribute to the work he is doing.

6.3

September board meeting: ď&#x201A;ˇ

ď&#x201A;ˇ

Board will be asked to approve the final disaggregation proposals including (but not limited to): o Loan agreements o Asset transfer o Trade transfer o Intergroup Agreement o Palatine Lease Board will be asked to approve a new training plan and appraisal documentation for board members

Background Papers See section 2 above Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Lisa Forrest by telephone on 0191 278 8616 or email lisa.forrest@yhn.org.uk or Jill Davison by telephone 0191 278 8624 or email jill.davison@yhn.org.uk

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Appendix 1

1. Board Reports will include YHN decisions, recommendations to NCC for decision and items for information. Finance     

Budgets and outturns Modelling Key decisions, including capital, large scale procurements and procurements outside the annual plan YHN treasury management, including cash flow Quarterly performance and finance reports

Senior Director’s/Chair’s reports  

National and local developments affecting the operating environment Updates on previous decisions where appropriate

Annual reports from Committees and Subsidiaries Governance and regulation Approval of key strategies 

Including Business, Finance, Procurement, IT, Equalities and Diversity and Health & Safety Strategies, Delivery Plan, Strategic Risk Register and Investment Programme.

Board member duties and liabilities 

Including Health and Safety, Safeguarding, stewardship.

Key contracts 

Including BCT and Leazes Homes

Decisions emanating from Audit Committee recommendations 

Including financial statements, Annual Reports, audit results and the appointment of External Auditors

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2. Audit Committee For the group        

Recommendation on Annual Risk Register to Boards Quarterly risk updates Internal audit plans, progress and findings Business continuity Annual assurance statements Recommendation on financial statements, annual reports, audit results to Boards Evaluation of internal and external auditors Recommendation on appointment of External Auditors to Boards

3. Service and Strategy Delivery Committee (working title) For ALMO services both internal and external    

Strategy delivery updates Scope of service reviews and their progress Detailed performance updates and issues Spotlight on specific performance issues

4. Trading Subsidiary Board  All matters covered by Board and Service and Strategy Delivery Committee for traded elements of NFS and Palatine

5. Charitable Subsidiary Board  All matters covered by Board and Service and Strategy Delivery Committee for CCAS, Sheltered Housing, Advice and Support and Young People Service

No longer subject to dedicated reports     

Right to buy and leasehold updates (HRA matter) Sickness updates (emphasis on one target only – can be picked up under specific performance items and Service and Strategy Delivery Committee) Debt write off (NCC decision) SLA monitors (to be included in finance and performance updates) NCC decisions on HRA

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Appendix 2: Substantive activities in group companies

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Appendix 3: Contractual relationships

Trading subsidiary: External NFS Palatine (Internal? and External)

Subcontract

tract

Charitable subsidiary: CCAS, Sheltered, Employability, YPS, A&S

External contracts

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External contracts

Board 28 July 2015 Task and finish’ findings; employability update Report by Director of Corporate Services and Assistant Chief Executive

For decision 1

Background

1.1

The drive to tackle unemployment on estates that YHN manage continues to be a priority for the organisation. The areas of Newcastle that have the highest levels of unemployment are areas that are predominantly managed by YHN. We also know that the employment levels of social housing tenants are significantly lower than the national average. This, coupled with the ongoing impact of welfare reform, reinforces the argument for YHN to play a role in providing employability support for our tenants and communities.

1.2

Since March 2010 YHN has employed an Employability Manager to manage and coordinate the delivery of a range of initiatives to improve the employability of tenants and their families.

1.3

At the core of our offer is a varied apprenticeship programme for young people, and a related programme, ‘Your Homes Your Jobs’, (YHYJ) for people over 25. We are also aware that we can deliver more in partnership than we can working alone so we have developed relationships with other organisations that allow us to meet more of the needs of people who are further from the labour market. These include:  A Learning Hive in Walker (with Northern Learning Trust) offering local residents help with many basic skills such as ICT, Maths, English, budgeting, healthy eating and job searching. This project has recently secured funding until 2018 date.  United for Employment (with Newcastle United Foundation). Held at St James Park, these ten week courses are designed to raise confidence, fitness and well-being, as well as key employability skills. The involvement of the football club often appeals to people who are more reticent in engaging with more mainstream programmes.  Tenant training with links to employment (with a range of training providers including In-Training, Newcastle City Learning and Group Horizon). 

Partnership with Newcastle futures that provides tenants with one to one support in areas such as CV writing, job searching and interview skills. Page 15 of 189

1.4

In November 2013 Board agreed additional temporary funding to expand the employability offer primarily in the light of the impacts of welfare reform. This additional funding was designed to allow us to address some barriers to success, many of which emanated from having a single person working on this project.

1.5

Since the Board decision of November 2013, the following has been put in place:

1.6



The Employability Team has temporarily expanded from one to two and a half posts.



The number of apprentices has risen from 10 to 30 and the number of YHYJ trainees has risen from 20 to 30 annually.



More support is provided for managers to effectively manage apprentices and YHYJ trainees.



Bespoke pastoral packages have been put in place to support the progression and development of apprentices and YHYJ trainees.



We have changed the key outcome measure from placement completion to progression into employment, education or training.



We have forged relationships with training providers who provide tenants with employment opportunities in the catering, hospitality and care sectors.



We have set up a small initiative with the Blakelaw Community Partnership to place two YHYJ trainees every six months primarily in catering but also in other areas of activity.



We have set up a partnership with Sustainable Enterprise Strategies (SES) which supports tenants to set up their own business.



We have established a small ‘Business Start Up’ fund which tenants who are working with SES can access to support their transition into self-employment.



We have set up a ‘Moving to Work’ fund where we can support people into employment by paying for a bus pass or business wear or other small items of expenditure to help remove barriers to starting work.



We have established a pool of YHN managers who support people who are nearing the end of their placement by providing help with application forms and interview preparation.



We have developed a work experience programme, both for apprentices who are currently placed with YHN and for young people or tenants who are looking to broaden their employment experience.

Some key outcomes for 2014/15 are detailed below: 

64 people were employed by YHN through the YHYJ and apprenticeship programmes and 83% of those people progressed into more permanent employment against a target of 70%; Page 16 of 189

ď&#x201A;ˇ

The Make Your Own Money project with SES supported tenants who were interested in self-employment to create business plans, source funding and develop a sustainable business. Following this support, 42 tenants have successfully created their own business and are still trading

ď&#x201A;ˇ

The Walker Learning Hive engaged with over 200 local residents, many of whom used the resource on a regular basis. The Hive has had a strong focus on developing residentsâ&#x20AC;&#x2122; ICT skills to enable them to manage online processes such as universal credit applications or complete job application forms through universal job match.

The Task and Finish Group on Employability

2.1

The Chair created a Task and Finish Group and the group has met on three occasions. The initial meeting presented an overview of work to date. Based on this information the group asked officers to provide the following:

2.2

Information

Reason the group requested the information

Consultation exercise

To gain further insight from tenants who have engaged with the YHN employability programme to assess their progression and the support and intervention they received, and to understand whether YHN tenants who have not engaged with the programme value employability as a priority

Cost benefit analysis

To compare the financial, employability and social value of each of the YHN programmes

The 12 month journey of an apprentice

To assess the intervention that apprentices receive at different stages of their apprenticeship and identify any gaps or duplication

Unemployment rates and demographic breakdown of each Ward.

To decide whether any targeted work should be delivered to address underrepresentation

Details of large local employers, other training providers and current YHN suppliers and contractors

To identify ways of working more closely with large businesses and local training providers

At the second meeting, Officers presented the findings to all of the above pieces of work and the group discussed the following areas: Page 17 of 189

2.3



YHYJ and apprenticeships have been successful in delivering employment outcomes so there was support to preserve these initiatives. The group asked that the programmes can demonstrate that they are accessible to all, well promoted and engage with tenants from all of our areas.



The demographic analysis has indicated some clear areas that YHN should focus resource on, however YHN should not seek to deliver this in isolation as there are organisations who are already delivering excellent work with diverse groups.



The cost benefit analysis clearly highlighted the benefit and social value of volunteering, and YHN should look to work more closely with charities and other organisations that support volunteering opportunities as this area of work has not hitherto been prominent in our approach.



A steering group has been established to focus on the ‘Learning Challenge for Newcastle’. The group has been exploring the work that schools and organisations are doing and could do to improve the attainment levels, and therefore employment prospects, of pupils and young people in Newcastle. YHN has a role in this work as pupils are our future tenants so an early intervention approach would have long term benefits.



Vacancies exist, particularly in some sectors in Newcastle and large local employers are recruiting, so YHN has an opportunity to establish links and relationships with employers for the benefit of our tenants. Some Board members felt that they could help to facilitate these links.



YHN already works with lots of contractors and suppliers who receive significant amounts of money from the HRA to deliver different services and supplies. Training and employment opportunities for tenants could be integrated into these contracts or working relationships.



It is important that YHN communicates and promotes its employability work. This needs to include the range of opportunities that are on offer but also adopt a ‘case study’ approach. Older tenants of working age who are long term unemployed may readily relate to a case study and benefit from hearing the story of a tenant who may have been in a similar position to them.

The above areas of discussion led to the following more specific recommendations from the committee to officers: 

to target recruitment for YHYJ and apprenticeships in Walker, Benwell, Elswick and Scotswood;



to provide some bespoke offers, in partnership with other agencies, for disabled tenants in Walker and BME communities in Elswick, Wingrove and Westgate, as well as a concentrated approach across all areas to target tenants over the age of 50;

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

to develop more opportunities for volunteering;



to develop further links with schools, both in terms of work experience and general employability work;



to establish employability partnerships with some large local employers;



to develop a proposal for suppliers and contractors who benefit from contracting with YHN (or NCC via YHN), and



to develop a structured communications plan to promote the programme by highlighting its succeses and the skills that people have developed.

Newcastle Futures

3.1

Newcastle Futures is an organisation that supports unemployed residents in Newcastle into work. They deliver from over 30 outreach areas across the City including Housing Offices. They predominantly support unemployed residents, whether in receipt of benefit or not, with information and guidance to access employment opportunities as well as being a conduit to other support such as housing, budgeting, debt and mental health. There is no set time with Newcastle Futures. Clients are able to access the service as long as the need it, including up to six months after they enter employment. This post-employment support is important as evidence has shown that offering support, especially in those early weeks after starting work, ensures that people can remain in work longer term.

3.2

Newcastle Futures offer a flexible fund which they use on a needs basis to overcome barriers to achieving employment and financial problems in sustaining employment. It can take the form of helping to purchase groceries and childcare until first salary is received or allowing for essential bills, such as rent and utilities, to be paid. Without the support of the flexible fund, residents could find themselves in a position of turning down jobs which could result in a sanction of their benefits, extreme hardship being suffered until their first monthly pay or high interest loans being taken out to pay for things. The risk of reducing this support has been heightened by the funding reductions at Job Centre Plus and Newcastle Futures predicts that the demand for the support from the flexible fund will grow.

3.3

Due to the difficult financial constraints at NCC, there is a proposal that the funding for Newcastle Futures is reduced by 20%. Newcastle Futures are also changing their strategic focus to concentrate more resource on people under the age of 25. They worked with 1264 people in 2014/5 and 650 of those are either certainly, or likely, to have been council tenants over the age of 25 (tenure is not always collected at registration as clients can be living with family or friends).

3.4

The 20% reduction in Newcastle Futures funding effectively means that £46,260 less will be spent on council tenants over the age of 25. This will Page 19 of 189

not only significantly limit their ability to service as many residents; it will also greatly impact on the support that they can provide via the flexible fund. Board may wish to recommend to NCC to use the HRA to offset the impact of the budget reduction for tenants over 25. 3.5

This funding would allow Newcastle Futures to: 

Provide employability support, advice and guidance to an additional 98 tenants;



Support an additional 42 tenants into employment, and



Spend approximately £5,056 of Flexible Fund to both support these 42 tenants into employment and help them remain there.

European Funding

4.1

The new 2014-2020 European Structural and Investment Growth Programme is now live and this provides a great opportunity to further improve and co-ordinate employability provision in the region. The North East Local Enterprise Partnership (LEP) was awarded €547.4million, one of the largest allocations in the country, and has developed a single strategy for Northumberland, County Durham and Tyne and Wear.

4.2

The funding will be directed by a number of key principles which include developing the local skills base and improving access to our labour markets to achieve more inclusive growth. Our employability experience along with our position in the community and our relationship with unemployed local people makes us well placed to support and contribute to the delivery of these principles.

4.3

The ethos of the funding is co-ordination and partnership work and a significant amount of the funding will be directed through lead organisations who will commission delivery partners to deliver bespoke pieces of work. We are currently meeting with the different lead organisations to talk through our experience and what we could offer as a delivery partner. We will be attending further workshops with the lead organisations to further develop potential relationships but so far the lead organisations have been extremely impressed with both the reach and access that YHN has and the employability outcomes that have been achieved.

4.4

Additional to the larger funding streams detailed above, there was also a call for organisations to submit applications for a specific, smaller funding stream that focused on supporting the most disadvantaged groups into employment or training. Using the analysis and information that was directed through the Task and Finish Group we have developed an application that detailed how YHN could support this agenda. The proposal is that we could: 

Develop and deliver bespoke employability focused workshops, events and pre-employment training courses in collaboration with organisations working directly with disadvantaged individuals and groups including people with disabilities or health barriers, lone parents with dependent children and unemployed people from BME Page 20 of 189

communities; 

Establish working relationships with local health professionals and mental health charities so that we are able to cross refer customers who are prevented from accessing our employability programmes due to health difficulties;



Carry out employability workshops and early intervention work in schools to promote the positive benefits of employment. We will use these initiatives to increase awareness of the apprenticeship and work placement opportunities that are available through YHN and other partners, and



Bespoke employment opportunities through Your Homes Your Jobs for people who engage with YHN through this targeted outreach approach.

4.5

The application for £70,700 was submitted in May 2015. A timescale has not been given for a response. If the bid is successful it would be our intention to develop a larger number of projects to meet the recommendations of the Task and Finish Group, or to develop some of them on a larger scale than we would with the options listed below. In other words this funding application is seen as supplemental to the options and the recommendations.

5 5.1.

The Options Option 1

5.1.1 It is open to Board to cease the additional funding agreed at November st 2013’s meeting, which is due to expire at March 31 2016. This would mean reverting to a single person resource and concentrating efforts on a small apprenticeship and YHYJ programme as previously. A limited number of other projects could also be supported similar to those listed at section 1.3. 5.2

Option 2

5.2.1 Board could recommend to NCC another temporary extension, or permanent resource, for employability provision. This would mean maintaining the current Employability Team structure and continuing with the provision listed in sections 1.3 and 1.5. 5.3

Option 3

5.3.1 Board could recommend to NCC budget growth in the management fee to accommodate the additional initiatives proposed by the Task and Finish Group listed in section 2.3. This would be an annual growth of £32,743 to accommodate an additional Employability Support Assistant. This would allow us to make steady progress across a range of new initiatives. This is the preferred option of the Task and Finish Group. 5.4

Newcastle Futures option

5.4.1 In addition, Board could recommend to NCC that £46,260 of HRA funding be Page 21 of 189

used to support Newcastle Futures. This option could sit alongside any of those above. Specific targets and monitoring processes would be established in conjunction with Newcastle Futures to ensure that the resource is resulting in positive outcomes for YHN tenants. 6

Resourcing the activity

6.1

Option 1 of reverting back to one person and focusing primarily on a smaller number of apprentices and YHYJ trainees would equate to an annual cost of £287,371. This is already provided for in existing budgets. Most of this sum is for the apprentices’ and trainees’ salaries.

6.2

Option 2 of continuing with our current employability offer would equate to an annual cost of £495,400. Although this is provided for in current budgets this has only been approved temporarily. This would therefore represent growth to the mainstream budgets of £208,029.

6.3

Option 3 of continuing with our current employability offer but also adding some additional resource to accommodate the initiatives suggested by the Task and Finish Group would equate to an annual cost of £528,143. This would represent growth to the mainstream budgets of £240,772.

6.4

Support to Newcastle Futures. Board could recommend to NCC that £46,260 of HRA funding be used to support Newcastle Futures. This option could sit alongside any of those above.

The Business Implications

7.1

Purpose and Strategic Objectives:This work contributes to our purpose of enabling positive living for people in our homes and neighbourhoods. It also helps us towards our strategic objective of working together to realise a brighter future.

7.2

Value for Money/Efficiencies: Effectively this proposal is about investing in individuals to enable them to go forward independently. It is complementary to resources already directed at other aspects of welfare reform. Tenants in employment are in general better equipped to meet their rent payments.

7.3

Financial Implications:See sections four and five of this report.

7.4

Resources (financial, property, technological or human):See sections four and five of this report.

7.5

Impact on Services/Performance:The recommended approach should, over time, increase the income going into some of our tenants’ households and thereby may have a positive impact on rent collection rates.

7.6

Outcomes for Tenants/Leaseholders:Tenants and their families who access Page 22 of 189

the service have an opportunity to access work in a supported environment. 7.7

Risk (reputation, relationship):It is possible that this area of work may become less important if the broader economic picture continues to improve and if unemployment in the North East decreases. Similarly, if some of the more punitive aspects of Welfare Reform are repealed, Board may consider that employability is no longer central to our purpose. The Chair of YHN is also the Chair of Newcastle Futures and declared her interest in option 5.4. The Board are updated that the Chair will not take part in the discussion or decisions of this report.

7.8

Environmental: None

7.9

Legal: None

7.10

Equality and Diversity and Community Cohesion:The proposals in the report are concerned with improving the quality of life for people who are currently likely to be socially and financially excluded. The Task and Finish Group have recommended that we develop bespoke initiatives for some disabled people and some BMR residents as we have data to show that they experience multiple barriers to employment.

7.11

Stakeholder Involvement/Consultation:The proposals have been consulted on internally.

Conclusion and Recommendations

8.1

Board is recommended to: The Task and Finish Group have expressed a view that Option three is their preferred option. Board is therefore recommended to agree that option. The Task and Finish Group have also expressed a view that they would like to support Newcastle Futures therefore Board is also recommended to agree the Newcastle Futures option detailed in section 5.4

Implementation

9.1

If agreed NCC will be recommended to agree the additional HRA expenditure.

Background Papers Reports to Task and Finish Group on 25 February 2015 and 2 April 2015 Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Sheila Breslin on 0191 2788707 or sheila.breslin@yhn.org.uk or Stuart Clarke, Employability Manager on 0191 278 7733 or email stuart.clarke@yhn.org.uk

Page 23 of 189

Board 28 July 2015 Quarter 1 YHN Performance and Financial Position Report by Director of Corporate Services and Assistant Chief Executive For Decision 1.

Background information

1.1 Board has recognised the need to have a clear understanding of both YHN’s financial performance and non-financial performance. In May, Board considered a presentation of the full year results for 2014-15. 2.

Q1 Results

2.1 The YHN results for quarter 1 2015-16 will be in presentation format again which will be circulated to Board members as a supplemental report to allow consideration in advance of the meeting. 3.

Issues and concerns

3.1 YHN officers have developed a monthly timetable to produce timely and accurate results for management and Board. Currently this does not allow a full report to be prepared and circulated in advance of Board meetings which have already been calendared up to the AGM. 3.2 Following the AGM Board meeting dates will be aligned to the timetable for production of results which means that written reports will be received in advance of the meetings. 4.

Conclusion and recommendations

4.1 Board are asked to 

note the progress in the development of timely and accurate performance information



agree to receive the finance and performance information in presentation format until meetings are re-scheduled.



Agree to receive revised schedule of meeting dates at September board meeting

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Lisa Forrest by telephone on 0191 278 8616 or email lisa.forrest@yhn.org.uk Page 24 of 189

Board 28 July 2015 YHN 2014-15 Financial Statements and YHN Outturn Report by Head of Finance For Approval 1.

Background information

1.1

This report introduces the Your Homes Newcastle (YHN) Financial Statements for the financial year 2014-15. These statements have been prepared in conjunction with EY, YHN’s external auditors. The Income and Expenditure account tells us how ‘profitable’ YHN has been in the year. The Balance Sheet sets out a statement of its assets and financial obligations. The Cashflow Statement shows the movement in cash transactions for the year. The Strategic Report, Directors’ Report and Financial Statements are attached in Appendix 1.

1.2

1.3

The Report of the members of the Board and Financial Statements are a requirement for all companies and will be presented along with the Annual Report at the Annual General Meeting on 22nd September 2015. EY have conducted a full audit of the report and financial statements and reported to Audit Committee. They have given the statements a ‘clean’ audit report, that is, the statements give a “true and fair view of the company’s affairs” and no material errors have been found. YHN’s letter of representation to the auditors has also been included. This letter gives an undertaking to the auditors that all relevant information has been disclosed to them by Board. There is also the requirement for a letter to the auditors evidencing to them YHN’s status as a going concern, which will be reviewed at the AGM.

1.4

Audit Committee has had the opportunity to review the financial statements and audit results report from EY and has recommended that Board approve : •

The Strategic Report and Directors’ report;

•

The financial statements and notes to the statements; and

•

The letter of representation.

Subject to the detailed recommendations set out in section 2 Page 25 of 189

1.5

There is still the possibility of changes to the statutory accounts up to the time of their acceptance at the AGM should a significant post balance sheet event occur.

1.6

This report also provides a summary of YHN’s performance for the year, which is structured as follows: 

A description of the YHN Income and Expenditure for 2014-15



A comparison of this performance against the results for the previous financial year 2013-14



A description of the YHN balance sheet position as at March 2015.

YHN Financial Statements and Audit Results

2.1

There are several issues contained within the Strategic Report, Director’s Report Board and Financial Statements (“the Statements”) which need to be brought to the Board’s attention:

2.2



Changes from previous statements



FRS17 Note re Pension Fund Deficit



Tax position



Audit Committee recommendations



Letter of Representation



Going Concern Disclosure

Significant changes from previous statements There are no significant accounting policy changes to the YHN Financial Statements. YHN’s profits are much greater than in previous years. YHN has achieved efficiencies and kept within its management fee agreed earlier in the year. NCC has waived their right for this profit to be repatriated to them in the form of a reduced management fee.

2.3

FRS17 Note re Pension Fund Deficit It is well documented that many pension funds across the country are underresourced in that there may be insufficient money in the future to pay pension liabilities for retiring employees. In order to safeguard their interests YHN has again sought and received an undertaking from NCC that they would underwrite any future deficits on the pension scheme. YHN is required to disclose the pension liability according to FRS17 (Financial Reporting Standard 17) as a note to the accounts. NCC have given an undertaking to assume any current and future funding deficit so there is no impact on YHN financial statements from any funding gap. The actuaries’ report shows a funding deficit of £19.5m at 31st March 2015 – deterioration from the £12.5m deficit as at 31st March 2014 (but very similar to the March 2013 position). The fund valuation is carried out every 3 years Page 26 of 189

and it is this that will determine the employer’s pension contribution rate. The apparent deficit relates to future costs which may not transpire, for example if investment performance improves. 2.4

Tax Position In 2014-15 YHN was able to reclaim tax of £1,500 relating to activity undertaken in the 2012-13. There is no tax liability arising from 2014-15 activities.

2.5

Audit Committee Recommendations Audit Committee have considered the annual financial statements and received EY’s audit results report for the year ended 31 March 2014. EY has reported that there are no material errors in the Financial Statements and no material weaknesses in internal controls have been identified during the audit. Audit Committee has recommended that Board: 

accept the financial statements as a true and fair view of the financial status of YHN



approve the Report of the members of the Board subject to the following amendments:

The committee wished for more clarity on the number of leasehold tenancies managed by YHN and the breakdown of this number between Byker Community Trust and the NCC. This has been amended on page six. 2.6

Letter of Representation The letter of representation which should be approved by Board in relation to the Report of the members of the Board and Financial Statements is attached as Appendix 2. This letter gives an undertaking to the auditors that all relevant information has been disclosed to them by the Board. It is recommended that approval of this disclosure is delegated to the Chair and current Company Secretary.

2.7

Going Concern Disclosure An assessment of going concern and liquidity risk by the Board is required as confirmation that the basis of the preparation of the Statements is appropriate. EY will require evidence that cash flows for at least 12 months following the date of signing the accounts demonstrate going concern. The evidence will show that YHN is a financially viable company. It will include evidence of Newcastle City Council’s letter of support in relation to Pension Fund deficits. This disclosure will be reviewed at the AGM to provide the most up to date evidence for the auditor. It is recommended that the further approval of this disclosure is delegated to the Chair of the Board. Page 27 of 189

2.8

Possible Outcomes The Report of the members of the Board and Financial Statements present YHN’s operations for the year to 31 March 2015. The Board has the following options available. 1. The Board can accept that the Financial Statements give a true and fair view of the state of affairs of the company. 2. If the Board has an issue of principal with the Report of the members of the Board and Financial Statements they can amend them. Any revisions would be subject to further audit scrutiny. Any amendment to the Report of the members of the Board and Financial Statements may prevent them being taken to the AGM. If the Board were not to sign the letter of representation the auditors would be unable to sign off the accounts. Board would effectively be implying that the accounts are not representative of the financial situation of the company and that the auditors had been misled.

Summary YHN Revenue Outturn Position for 2014-15

3.1

YHN’s Outturn is set out on page 30 of the Financial Statements.

3.2

YHN’s results for the year show a profit of £2.04m arising from its activities. This is a significant increase in from the previous year (£0.01m). There is no liability to pay any Tax on these profits for the year as much of its interactions with its parent Newcastle City Council fall outside the scope of Corporation Tax. Section 3.3 and 3.4 give descriptions of the categories used in the Financial Statements and provide examples of the items that make up the totals under each category.

3.3

Income HRA management fee The income that YHN receives for managing NCC housing stock. Other management fee The income that YHN receives for its management of other housing stock and services. This heading shows the income earned from Byker Community Trust, Leazes Homes and Palatine Beds. Other Income YHN recovers costs for services it provides outside of its management agreements and receives revenue grants for special projects.

3.4

Costs Employee Costs The majority of YHN’s expenditure is the wages, pensions and NI contributions of its staff. This heading also contains the provision for any Page 28 of 189

agreed redundancy payments. Premises Costs Building related costs. Cleaning, security, repairs and maintenance of offices. Transport Costs Fuel costs and the hire of YHN’s vehicles are recorded under this heading. Supplies and Services This heading shows all the services contracted from outside organisations (including NCC) and other costs. It includes IT and legal support, and office costs. 4.

Comparison of performance against the previous year

4.1

A breakdown of YHN’s operating income and expenditure compared to the previous year is shown in the table below:Analysis of Income 2015 £'000

2014 £'000

Change £'000

HRA Management Fee

(28,099)

(26,684)

(1,415)

Other Management Fee

(3,119)

(3,057)

(62)

(686)

(1,353)

667

(31,904)

(31,094)

(810)

2015 £'000

2014 £'000

Change £'000

Employee costs

25,746

26,757

(1,011)

Premises Costs

186

224

(38)

Transport Costs

608

617

(9)

3,323

3,469

(146)

29,863

31,067

(1,204)

(2,041)

(27)

(2,014)

Other Income

Analysis of Operating Costs

Supplies & Services

Operating (Profit)/Loss

If the variances reported in the table above are shown as negative or credit amount it relates to a reduction in costs or increase in income. As such they are a comparative improvement in financial performance. 4.2

HRA Management Fee The HRA Management Fee has shown an increase as a result of NCC waiving its right to repatriate YHN surpluses. This increase in management fee will allow YHN to build up reserves. These reserves will be used to Page 29 of 189

support the new YHN post disaggregation. Other Management Fee The fees charged to other organisations have increased slightly, as YHN has carried out more work for its partners. The favourable variances relates to amounts recovered from Leazes Homes for managing additional housing stock. Other income YHN’s other income fluctuates as it carries out activities outside its management fee responsibilities. YHN’s other income has reduced from the previous year as we no longer charge Byker Community Trust for staff that were hosted on YHN’s payroll. (Employee costs have reduced by a corresponding amount). The other income category has reduced also because YHN has made a technical adjustment to re-categorise some of its income flows from the NCC as management fee. Employee Costs Employee cost is YHN’s greatest item of expenditure. The majority of reduced spend is due to high one-off redundancies recorded in 2013-14 during the Housing Management and Property Service reviews. Whilst these costs were significant, YHN has seen an overall fall in staffing costs since employees no longer work for the organisation and will result in a structural saving in the long term. The removal of Byker Community Trust staff which formed part of the set-up costs has now transferred across to the Trust from YHN’s Payroll Supplies and Services The use of agency staff has reduced following extensive service reviews and the procurement of a new printing contract for YHN has also contributed to a favourable variance. 5.

Balance Sheet Review.

5.1

The Balance Sheet appears at page 31 of the financial statements.

5.2

The YHN Balance Sheet is a relatively simple statement. YHN no longer holds any fixed assets or any long-term debts since it transferred its housing assets in April 2012. However its reserves are now far greater than before (an increase to £2.76m from £0.03m) this is reflected in a larger cash balance held at NCC (an increase to £2.76m from £0.40m).

The Business Implications

6.1

YHN Mission and Strategic Objectives: A healthy financial position supports the achievement of all YHN’s strategic objectives and future plans.

6.2

Value for money/efficiencies; Detailed, timely and accurate financial information allows YHN to identify areas of concern with regards to Value for Page 30 of 189

Money, the need to generate efficiency savings and the ability to monitor progress in achieving those savings. We can use annual information to compare our performance to other housing organisations. 6.3

Financial Implications: The YHN Management Fee for 2014-15 was £.28,098,820

6.4

Other Resources (property, technological or human): None

6.5

Impact on services/performance: A healthy financial position enables YHN to invest in services as appropriate to support the achievement of strategic goals and improve performance.

6.6

Outcomes for tenants/leaseholders: A healthy financial position enables YHN to invest in services as appropriate to support the achievement of strategic goals and the impact of services on tenants and leaseholders.

6.7

Risk (reputation, relationship): The Financial Statements are a legislative requirement. Failure to approve the financial statements would damage YHN’s reputation. The audit process gives assurance that internal procedures and systems are robust.

6.8

Environmental: Financial resources are required to implement actions to reduce YHN’s environmental impact. Understanding the Budget and Medium Term Plan helps understand some of the environmental impacts of YHN/HRA.

6.9

Equality and Diversity and Community Cohesion: The Strategic report outlines our commitment to Equality and Diversity in employment matters. A strong financial position supports, and is supported by, our equality and diversity policies.

6.10 Legal: The statutory financial statements relating to the YHN outturn will be published after approval and files with Companies House. 6.11 Stakeholder Involvement/Consultation: None 7.

Conclusion and recommendations

7.1

Board are asked to approve: •

The Directors Report and Strategic Report;

•

The Financial Statements and notes to the Statements;

•

The Letter of Representation; That the Directors’ Report, Strategic Report and Financial Statements and Letter of Representation are duly signed by the Chair and Company Secretary;

•

Delegate approval and signature of the assessment of going concern and liquidity risk to the Chair and Company Secretary and this is duly signed;

•

Receive for information the variations on the 2014-15 actual Page 31 of 189

expenditure compared to the results for 2013-14. 8.

Implementation

8.1

Once approved by Board the Report of the members of the Board and Financial Statements will be presented to the Member at the AGM and filed with Companies House and the HCA.

8.2

The revised reported level of YHN Management fee is agreed with Newcastle City Council on a regular basis.

Background Papers YHN Management Agreement YHN Delegations â&#x20AC;&#x201C; Report to Board 1st April 2004 YHN Audit Committee 9 July 2015 Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact: Lisa Forrest (Head of Finance) by telephone on 0191 2788616 or email lisa.forrest@yhn.org.uk James Clifford (Financial Controller) by telephone on 0191 2788679 or email james.clifford@yhn.org.uk.

Page 32 of 189

7 Annual Report and Financial Statements Year 2014-15

Registered Company No: 5076256

Page 33 of 189

Your Homes Newcastle Limited

Contents

Page

Corporate Information: Board Members, Company Secretary and Advisors

Strategic Report

Directorsâ&#x20AC;&#x2122; Report

Independent Auditorsâ&#x20AC;&#x2122; Report

Financial Statements

Notes to the Financial Statements

Page 34 of 189

Your Homes Newcastle Limited

Corporate Information Board Members, Company Secretary and Advisors

Chair

Marjorie Olivia Grant OBE, DCL, DL

Tenant Directors

Lisa Doherty Paul Dutton Tony Moore Julie Purvis John Reid

Independent Directors

Jane Yugire

Resigned 30th September 2014

Loraine Wilson

Appointed 10 February 2015

Judith Common

Resigned 31st March 2015

Phil Dibbs Ammar Mirza CBE Nitin Shukla

(Vice Chair)

Elaine Snaith

Lynn Stephenson Paul Scope

Appointed 5 May 2015

Page 35 of 189

Your Homes Newcastle Limited

Board Members, Company Secretary and Advisors (continued) Council Nominated Directors

David Down Veronica Dunn Robert Higgins

Resigned 18 July 2014

Doreen Huddart Joyce McCarty

Appointed 18 July 2014

Sue Pearson

Resigned 18 July 2014

John Stokel-Walker

Resigned 27 May 2015

Marion Talbot

Appointed 18 July 2014

Jane Streather

Appointed 27 May 2015

Chair of the Audit Committee

George Clark

Vice Chair of Audit Committee

Paul Scope

Company Secretary

Jill Davison

Appointed 19 August 2014

Lisa Forrest

Appointed 27 May 2014 Resigned 19 August 2014

Joanne Noble-Nesbitt

Registered Office Address

Resigned 27 May 2014

Civic Centre, Barras Bridge, Newcastle upon Tyne, NE1 8PR

Company registration

The Company is registered with the Homes and Communities Agency (4627), and incorporated as a private company limited by guarantee under the Companies Act (company number 5076256)

Page 36 of 189

Your Homes Newcastle Limited

Board Members, Company Secretary and Advisors (continued) Internal Auditors

Newcastle City Council Civic Centre, Barras Bridge, Newcastle upon Tyne, NE1 8BR

External Auditors

Ernst and Young LLP Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JD

Solicitor

Mr John Softly, Chief Legal Officer Chief Executive’s Office, Civic Centre, Barras Bridge, Newcastle upon Tyne, NE1 8BR

Page 37 of 189

Your Homes Newcastle Limited

Strategic Report The members of the Board of Your Homes Newcastle Limited (trading as ‘YHN’) present their strategic report for the year ended 31 March 2015. Principal business The principal activity of YHN is the provision of housing management and improvement services to Newcastle City Council’s housing revenue account (‘HRA’) and other external organisations. In additional YHN is also responsible for the delivery of housing related support services that improve the sustainability of tenancies and neighbourhoods and promote independent living across the City of Newcastle. YHN currently manages:   

26,100 council homes on behalf of Newcastle City Council; 1,820 homes on behalf of the Byker Community Trust; and 460 homes on behalf of Leazes Homes.

We also manage 1,538 leasehold properties on behalf of Newcastle City Council and 27 for the Byker Community Trust. Organisational structure YHN is a local authority controlled company under the control of Newcastle City Council established with no share capital and limited by guarantee. Newcastle City Council has delegated to YHN responsibility for overseeing the management and maintenance of its residential stock and of HRA services provided to the City’s housing tenants. £28.1m was earned from the Council in management fees in relation to these activities throughout the year (2014: £26.7m). YHN has a Board of Directors who are responsible for the strategic direction of the company involving defining the statement of purpose, objectives and values, ensuring they reflect the company’s obligations to stakeholders. The Board is made up of six tenants, six independent people and six Newcastle City Council nominees, plus an independent Chair. Additional information about the make-up and work of the Board can be found in the Directors’ Report. The day to day business of YHN is delegated to an Executive Management Team which consists of four people (Chief Executive, Assistant Chief Executive and Director of Corporate Services, Director of Property Services, and Director of Tenancy Services). The Executive Management Team manages the business in accordance with the company’s Scheme of Delegation and Financial Regulations.

Page 38 of 189

Your Homes Newcastle Limited

Strategic Report (continued) Statement of Purpose and Strategic Objectives In March 2013 a new three year Business Strategy was approved by the Board which defined that our statement of purpose is to ‘enable positive living for people in our homes and neighbourhoods’. This purpose is underpinned by three strategic objectives:   

To make the money deliver; To create homes and neighbourhoods we can all be proud of; and Work together to realise a better future.

How we do business YHN was established in 2004 to manage council properties and improve housing, and to provide various other services for Newcastle City Council. The services that we provide and the ways in which we provide them are covered by a Management Agreement with Newcastle City Council. The current Management Agreement expires on 31 March 2016 and Newcastle City Council have expressed their intention to enter into a new long term agreement with YHN. This is a really positive step for both organisations and for customers. We have been working constructively with the Council in reviewing current arrangements and are now reaching a point where we are clear about their requirements for future service provision and how we can go about delivering these. Through the Management Agreement we are required to develop an annual Delivery Plan which translates the Business Strategy into actions for the year ahead. The Delivery Plan consists of three main parts:   

Top 20 business targets and actions; Service improvement programme; and Operational service plans.

The Delivery Plan, with the exception of the Top 20 targets, is predominately an operational document. Every team within the organisation has a service plan which helps to ensure that all outputs contribute towards service objectives and in turn the broader business strategy priorities and strategic objectives. The Top 20 targets are developed on an annual basis and are designed to give assurance to Newcastle City Council, the Board, tenants and wider stakeholders that business critical areas are on track. The targets are developed in conjunction with YHN’s Management Team, the Board, Newcastle City Council, and tenants.

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Your Homes Newcastle Limited

Strategic Report (continued) The targets include a combination of sector-wide performance measures, performance measures which are unique to YHN and priority actions and service reviews. Each year a number of the Top 20 targets are based on customer priorities (known as â&#x20AC;&#x2DC;local offersâ&#x20AC;&#x2122;). These priorities are developed using tenant feedback collected throughout the year and agreed at a meeting with tenants where local offers are prioritised and finalised. In 2014-15 the Top 20 targets included eight local offers on a variety of topics such as apprentice training, providing tenant broadband, and improving the HRA housing stock. Local offers are also assessed by a tenant group and progress is publicised in our tenant newsletter, Homes and People, and on our website. Progress against targets and actions is monitored every three months. Progress is monitored by senior officers through our Wider Management Team and by Board through the Audit Committee. Performance is also reported to Newcastle City Council, as our sole member. YHN also provides a full range of landlord services to Byker Community Trust through a management agreement. This has been in place since July 2012. We work with the Trust to develop performance indicators which their Board approve on an annual basis. Every quarter we report our performance against these targets to the Board. Leazes Homes also contracts us to provide housing management services to their properties since 2012. Every year we agree targets and provide quarterly performance reports to their Board. We created a single top 20 target which we use to monitor all the individual targets agreed with Leazes Homes and Byker Community Trust. Commerciality and market engagement YHN has continued to explore ways to generate income in addition to the fee we receive from Newcastle City Council for managing the HRA. Alternative sources of income for YHN help to reduce the pressures on HRA budgets. Our Commercial Committee has the remit to oversee all commercial activities and is chaired by an independent Board member and seven other Board members are also members of the Committee. To support the Committeeâ&#x20AC;&#x2122;s work, we have established a Business Grants and Sponsorship Panel of officers to consider all new tender opportunities and to report information on commercial opportunities and activities to the Commercial Committee. During the year YHN made a commitment to focus on income generation and explore ways to diversify the business.

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Strategic Report (continued) Key Performance Indicators The following table highlights our performance in managing stock for NCC and other clients.

2014-15 performance Council properties We collected 99.46% of rent owed. 87.5% of customers are satisfied with the overall service provided by YHN. We carried out 4725 lifecycle improvements to housing stock. 85% of all YHN estates scored over 70% in their Going for Gold inspections. 83% of our apprentices moved onto further education, training or employment Byker Community Trust properties We collected 98.7% of rent owned We collected £31K from former tenant arrears accounts 99.9% of emergency repairs were completed on time Leazes Homes Properties Rent arrears on current tenancies was £48,091 Average arrears per property were £118

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Strategic Report (continued) Review of the Year It may seem surprising that the year in which tenant satisfaction in the city has reached new heights (87.5%) it has also seen arguably the most reorganisation and review within YHN since we opened for business in 2004, with significant changes being made within our Property Services and Tenancy Services Directorates. Reviews have become second nature for a number of reasons, not least that our operating environment is increasingly challenging and we must guard against complacency. They have not been about reducing services to customers, but about maintaining good quality housing and related services whilst achieving increased efficiency and value for money. Lots of the recent changes within YHN were identified as part of our Welfare Reform Service Review, and many of the improvements have now become visible and accessible to tenants at five hubs located across the city. Creating specialist functions relating to housing options, income management, and tenancy and estate management means we’re providing customers with expert contacts and a more dedicated and knowledgeable service. This is also benefitting staff working in the services by developing their knowledge, skills and experience in a specific area. Where it has been possible we’ve taken the opportunity to share service provision with the City Council, which makes our respective budgets go further. Recent changes to the benefits system have placed tenants’ finances under great pressure, so it is more important than ever that we collect as much rent as possible. This year we collected £111.27m 99.46%. This is testament to the hard work of staff working out on estates and behind the scenes day in, day out. It is also vital that we maximise any additional income we can draw in, and our trading services continue to support us to deliver high quality services by bringing in additional income. Our Furniture Service has increased its customer numbers and has improved its productivity by adopting new stock management and workforce scheduling technologies. However, it’s not just about income; we’re generating social returns as well. Our work to transform Palatine Beds was recognised at the National Federation of ALMOs 2014 awards in July, Palatine won “Most innovative social enterprise partnership” for their work to improve the training and enterprise provision for learning disabled clients in recognition of their work with Changing Lives, The Percy Hedley Foundation and JET (Jobs, Education and Training). We want all of the homes and neighbourhoods we manage to meet 21st century standards, something which tenants have told us is important to them. During this year we worked with the City Council to agree a new Asset Management Strategy for

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Strategic Report (continued) the stock we manage on their behalf. We have already started to deliver some of the commitments in the strategy. This includes improvements to the Council’s sheltered housing stock with an eye-catching improvement scheme at Moor House in Fenham, and have re-clad several high rise blocks across the city to make them better insulated, which will in turn reduce tenants’ fuel bills. And we have also helped the City Council and our partner Leazes Homes secure a total of £3.2 million for new build developments across the city. As the year drew to a close, we took a little time out to recognise the sterling efforts of some of our most community-conscious customers at our 5th Community Spirit Awards. This uplifting event reaffirmed that working in partnership with customers and community groups makes a difference, even in straitened times for the city.

Newcastle City Council review of YHN Both Newcastle City Council and YHN recognise that since the original Management Agreement was put in place a lot has changed. Both parties have committed to working together to create a new Management Agreement which will meet the future needs of our tenants. A YHN Review Oversight Group with representation from the YHN Board and Newcastle City Council political leadership has met regularly throughout the year to discuss a number of proposals and these have resulted in the following changes to the way we work together:   

Newcastle City Council have assumed strategic management of the HRA Non-core landlord services will be transferred from the HRA to YHN (for example;Newcastle Furniture Services and Care Services) YHN and Newcastle City Council have increased their shared services particularly with respect to human resources and communications.

Annual Assurance Statement The Annual Assurance Statement is a statement on the system of internal controls which provides assurance, to both the YHN Board and Newcastle City Council, that there are robust systems of internal control and effective governance arrangements. The Statement is an expression that the organisation had put in place good business practices, robust risk assessments, high standards of conduct and sound governance arrangements. We complete an annual assessment of our systems and during 2014/15 concluded that we demonstrated full assurance, and no areas of weakness were identified.

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Strategic Report (continued) Principal Risks and Uncertainties YHN has a well-established assurance framework which along with audit, performance management, accreditation and service reviews includes risk management. A strategic risk register is maintained which outlines the most significant risks to the achievement of the business's objectives. The strategic risk register highlights the perceived threat level of a risk, the controls in place to mitigate the risks and the actions required to improve the controls. The current approach to the management of strategic risks was approved by the Board in May 2013. The framework consists of: • •

Annual review of the register approved by the Board; and Quarterly monitoring of the strategic risk register by the Audit Committee.

In order to assess risk the likelihood of a risk it is assessed against its potential impact. The assessment generates a score which in turn is assigned a traffic light (red, amber or green) based on controls that YHN has in place. The strategic risk register monitors the following seven risks and uncertainties facing the business as at 31 March 2015 are: 1. Procedure for agreeing 2016-17 management fee does not meet YHN expectations 2. Substantial reduction in budget position of externally traded services 3. YHN services unable to meet contractual requirements without substantial funding above agreed budgets 4. Staff skills and experience do not meet current and future service delivery requirements. 5. Significant disruption to continuity of service provision 6. Failure to comply with statutory health and safety (H&S) requirements. 7. Substantial damage to YHN’s reputation/public image The strategic risk register ensures that the proposed controls and improvement actions reflect our priorities during the financial year. As the strategic risk register reflects our key strategic risks the improvement actions are primarily aligned to our:   

Strategic targets; Service Improvement Programme, and Service plans.

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Strategic Report (continued) Value for Money This year YHN has adopted a new Value for Money strategy which seeks to ensure resources are used to deliver value for our customers. We will:1. Understand our services and our customers to maximise efficiency and effectiveness 2. Help our partners understand their assets and invest sustainably to maximise future development potential. 3. Deliver real savings to our running costs and seek new income streams to optimise the fees we charge our clients. 4. Collect evidence of our performance and publish it openly and transparently for tenants and stakeholders. Financial Risk Management Policy YHN currently holds no complex financial instruments. Cash balances are held at Newcastle City Council. Other financial assets and liabilities, such as trade creditors and related party balances, arise directly from the organisation's operating activities. The main risks associated with YHN's financial assets and liabilities are set out below. Interest Rate Risk YHN received interest rates from Newcastle City Council relating to cash held on its behalf. Financial assets, liabilities, interest income and cash flows can be affected by movements in interest rates. The Board Members do not consider there to be any significant exposure. Credit Risk During the financial year YHN received almost its entire turnover from Newcastle City Council, and payment terms are 30 days from the date of invoice. Individual exposures and overdue debts are monitored with customers subject to credit limits to ensure that YHN's exposure to bad debts is not significant. Liquidity Risk YHN is not exposed to liquidity risks as its cash balances are held and managed on our behalf as part of the larger Newcastle City Council bank balances. Foreign Currency Risk YHN does not engage in any foreign currency transactions. All of its activities take place within the United Kingdom and consequently, YHN is not exposed to any foreign currency risk.

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Strategic Report (continued) Future Developments The year ahead This promises to be another challenging year. The introduction of Universal Credit is sure to alter our relationship with many customers, a major proportion of whom have never had any sort of payment relationship with us. We have put additional provision in place for Universal Credit as it should help us mitigate the negative impact of the change, and we have a duty to support customers to cope with the change during what could be a difficult and disruptive time. Linked to this, is the emphasis on digital access to services. Whilst offering many benefits, it threatens to leave some customers behind, with damaging consequences for them, and for our clients and our own finances. It is of utmost importance that we work to improve digital take up of services so that customers are able to navigate this unfamiliar terrain, and can access our services in ways they are comfortable with, whilst achieving value for money for our clients. For those tenants that are long-term unemployed or are young and without work, the governmentâ&#x20AC;&#x2122;s successive changes to the benefits system is making a difficult time harder. Their reduced income not only affects their sense of worth and increases the likelihood of them getting into debt, but it could also have a significant impact on their ability to pay their rent, and on their local community and the local economy. To help counter this we will continue to offer a range of work experience and apprenticeship opportunities and are looking to work with other organisations to generate further opportunities. Change promises to be a theme for the year, following the general election in May. It is clear that the government will continue to demand that housing providers take advantage of the unique position of influence they have and make a difference both through improving neighbourhoods for employment, health and education outcomes. We will strive to meet and exceed those demands for our clients, supporting their tenants to raise and achieve their personal aspirations where we can. We also expect that our relationship with our biggest client, the City Council, will continue to develop as they begin to realise the outcomes of their review of their management arrangements for their stock. We welcome the opportunity that the changes will give us in time to develop our contracting and commercial acumen. This year we are actively pursuing new contracts for our Furniture Service, and we expect that repositioning our sheltered housing and Telecare services will bring more money into both businesses and enable more residents of the city the opportunity to live independently. The new financial arrangements that are being adopted will help the Council protect the city, and the investment and vital services that make it tick, as the effects of the economic downturn of this decade continue to cast a long shadow.

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Strategic Report (continued) They will be complemented by the work we are doing, as part of our Asset Management Strategy, for the Council to maintain and enhance the value of their housing stock whilst reducing the environmental impact and carbon footprint of the homes. Our work to develop our commercial services has to be done carefully and cannot be allowed to jeopardise the delivery of our clientsâ&#x20AC;&#x2122; core management obligations. We have already started work to evaluate the resilience of our operations in changing markets and will step up our efforts to manage risk within our business. This will be complemented with reviews of our Business Strategy and Finance Strategy, as these set the context for so many of the day-to-day decisions we make. YHN is a very different place to work today than it was 10 years back. Our Board is more representative, lesbian, gay or bisexual staff are more likely to be Out at Work, and we are more skilled at working through issues related to equality and diversity, with much of this work being done by staff, not management. But competition amongst employers is growing and we cannot afford to stand still. Working through the actions of our new People Strategy will help us attract and retain quality staff, and our new Equality and Diversity strategy will help us build on our achievements and go beyond legislation and advance equality of opportunity for all.

The strategic report was approved by the Board on 28 July 2015 and signed on its behalf on 28 July 2015 by:

Olivia Grant Chair

Jill Davison Company Secretary

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Directors’ Report The members of the Board of Your Homes Newcastle Limited (trading as ‘YHN’) present their directors report for the year ended 31 March 2015. The Board The Board has a total membership of nineteen people as set out on pages 3 and 4. All Board members served throughout the year unless otherwise indicated. The Board members are drawn from a wide background bringing together professional, commercial and local experience. In accordance with guidance for the establishment of an arm’s length management organisation the Board has an equal representation of tenant and independent members and council nominees. Six people from each group makes up the representation of the Board plus an independent Chair. Following a recruitment process that complies with the Nolan principles, Olivia Grant was appointed as Chair of YHN on 1 January 2014, for a three year term of office. Council nominees are appointed and removed directly by Newcastle City Council. Tenant and independent members are appointed through a Nolan compliant recruitment process which is both open and transparent. As part of the recruitment process prospective Board members are invited to submit an application form and if successfully shortlisted attend an interview. Board members can serve a maximum of three terms (up to a total of nine years) with tenant and independent members being subject to retirement by rotation arrangements as contained in the company’s Articles of Association. Interests of Board Members YHN is a private company limited by guarantee which is wholly controlled by the local authority, Newcastle City Council. Six Board members are Newcastle City Councillors. The role of the Board The Board’s key responsibilities are to promote the long term success of the Company, to oversee the activities of YHN and to maintain good corporate governance. The Board seeks to achieve this through setting out its strategy, monitoring strategic objectives and providing oversight of its implementation by the Executive Management Team.

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Directors’ Report (continued) In establishing and monitoring the strategy, the Board considers the impact of its decisions on wider stakeholders including Newcastle City Council, tenants, employees, suppliers and the environment. The role of the Board (continued) A number of key decisions and matters are reserved for the Board’s approval and are not delegated to the Executive Management Team. These include approving the adoption of strategies, policies and budgets for YHN, the appointment of tenant Board members and agreeing the Investment Programme delegated to YHN from Newcastle City Council. There are also a number of decisions which are reserved for approval by Newcastle City Council, the sole member. These include approval of the appointment of the Chair and Independent Board members, changes to the memorandum and articles of association and agreeing recommendations from the YHN Board concerning annual rent increases and service charges. Decisions reserved for the Board and Newcastle City Council are set out in a Scheme of Delegation. A copy of the Scheme of Delegation is available from YHN’s website. In addition, the Board also delegates certain responsibilities to its committees, to assist it in carrying out its functions of ensuring independent oversight The Board meets regularly throughout the year. There were nine Board meetings during the financial year. The table below shows Board member attendance at YHN Board meetings during the period 2014-2015: Board members as at 31 March 2015 O Grant (chair) J Common P Dibbs L Doherty D Down P Dutton V Dunn D Huddart J McCarty A Mirza T Moore J Purvis J Reid N Shukla E Snaith L Stephenson J Stokel-Walker M Talbot L Wilson

Attendance 9 out of 9 9 out of 9 8 out of 9 8 out of 9 7 out of 9 7 out of 9 5 out of 9 6 out of 9 5 out of 7 8 out of 9 7 out of 9 6 out of 9 9 out of 9 9 out of 9 8 out of 9 8 out of 9 8 out of 9 6 out of 7 2 out of 2

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% attendance 100% 100% 89% 89% 78% 78% 56% 67% 71% 89% 78% 66% 100% 100% 89% 89% 89% 86% 100%

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Directors’ Report (continued) Corporate Governance The organisation signs up to the principles of the Good Governance Standard for Public Services. YHN has in place a robust code of conduct for its Board Members as well as a Risk Management Strategy and Action Plan which underlies all key decisions. In 2012 a review of YHN’s Strategic Risk Register was undertaken and a revised approach adopted which focuses more on key strategic risks. The Audit Committee undertakes an annual formal review of the risk register and the register is aligned with YHN’s Delivery Plan to ensure that key targets contribute to the control of key strategic risks which the organisation is likely to face. All the organisation’s corporate governance documents are set out in a Governance Handbook, which is issued to all Board Members. Governance arrangements are also published on the organisation’s website. The Board meets every six weeks, with additional meetings being convened as necessary. Board meetings are also attended by members of the Executive Management Team and YHN staff. Representatives from Newcastle City Council, Newcastle Tenants and Residents Federation and YHN tenants are also invited to attend Board meetings as observers. The Board has five Committees. Terms of Reference for each Committee are regularly reviewed to ensure they are fit for purpose. Major changes to the Terms of Reference were last approved by the Board in December 2012. The Committees are:  Audit;  Customer and Service Delivery;  Finance and Resources;  Commercial; and  Remuneration. The three groups of Board Members are each represented on all the Committees. The Audit Committee has an independent chair who was appointed to provide an independent and objective approach to overseeing the work of the committee and to ensure that the organisation’s practices and processes are efficient and effective. Following a successful appraisal, the Chair of the Audit Committee was re-appointed for a fourth term of office on 30 September 2014.

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Directors’ Report (continued) Corporate Governance (continued) The organisation regularly reviews its governance arrangements to ensure that the needs of the organisation are being effectively met and to take account of best practice guidelines. A self-assessment of the governance arrangements was undertaken in the early part of 2015, which considered the revised regulatory standard for Governance and Financial Viability issued by the HCA, lessons learnt from the independent report into Cosmopolitan Housing Group, and governance best practice. The Board will be considering the recommendations from this assessment and implementing a governance improvement plan in the forthcoming year 2015-2016. On 19 August 2014 Lisa Forrest resigned as Company Secretary. Jill Davison was appointed Company Secretary of YHN on the 19 August 2014. Executive Management Team During the year the Executive Management Team consisted of the following people:  The Chief Executive;  The Assistant Chief Executive and Director of Corporate Services;  The Director of Property Services; and  The Director of Tenancy Services. The Head of Finance continues to attend Wider Management Team meetings and presents reports to the Board. The operational day to day running of the organisation is delegated to the Chief Executive and his Executive Management Team in accordance with the organisation’s Scheme of Delegation and Financial Regulations. The Chief Executive and the Executive Management Team are not members of the Board. Board Diversity We continue to be proud of the diversity of our Board. We recognise that a diverse Board helps us to be more representative of the communities within which our tenants live and we work. In order to ensure that we continue to have a diverse Board we will be undertaking a review of our Board succession plan in 2015-2016 to help identify the mix of skills and experience we need from our future Board members. New Board appointments from amongst our tenant and independent members will seek to complement these as well as ensuing that we maintain a good gender balance.

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Directors’ Report (continued) Board remuneration The Chair of the Board receives remuneration of £10k per annum. The six tenant and six independent Board members each receive remuneration of £2k per annum. In addition the chairs of the four main committees each receive an additional £1k per annum as does the Vice Chair. The six Newcastle City Council Board members do not receive any remuneration. All Board members are entitled to receive reasonable expenses in accordance with the Board Members’ Allowances Scheme which was approved in December 2012. Directors’ conflicts of interest YHN has procedures for managing conflicts of interest. Should a Board member become aware that they, or a connected party has an interest in an existing or proposed transaction then they should notify the Company Secretary in writing or at the next Board meeting. Internal controls are in place to ensure that any related party transactions involving directors, or connected parties, are conducted on an arm’s length basis. Board members have a continued duty to update any changes to these conflicts. The Company Secretary contacts all Board members on an annual basis to check that their declarations are up to date. Our Employees Employee Communication and Involvement YHN is committed to the involvement of its entire staff in the development and improvement of all areas of work and understands the importance of effective communication to achieve change. The organisation employs a number of different approaches to encourage staff involvement and communication including:   



Staff having access to email and intranet facilities; Established, regular communication channels including staff focus groups, regular team brief sessions, staff newsletters, team meetings and staff surveys; A formal annual appraisal mechanism that includes regular 1-2-1s for all staff to receive feedback on their performance, identify training needs and gain an understanding of how their targets feed into the achievement of the organisation’s goals; and Formal and informal communication and consultation mechanisms with trade unions.

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Directors’ Report (continued) Our Employees (continued) YHN has come a long way since we were established as Newcastle City Council’s ALMO in 2004. We’ve expanded in both scale of delivery and scope of the services that we provide to our customers. At the heart of this success is our people. We could not have achieved all that we have without the on-going hard work and commitment, skill and passion demonstrated on a daily basis by our workforce. To ensure this success continues we need to continue to develop and invest in our people in order to deliver our business objectives and respond flexibly to the changing needs and structure of our organisation, hence the production of the new People Strategy ‘Fit for the future’ (2014- 2016). This strategy will contribute towards us achieving our statement of purpose and objectives as set out in our Business Strategy 2013-2016 ‘Enable positive living for people in our homes and neighbourhoods’ As in our previous People Strategy, the feedback we received through an organisational wide staff survey has influenced the priorities we have identified in the current strategy. The strategy has also been influenced by our review of internal and external factors. The three inter-related priorities which the People Strategy focusses on are; - Great leadership - Optimum Performance - Health and Engaging and Inclusive Our People Strategy is supported by an annual People project plan that details all the associated milestones and key responsibilities. Throughout the year employees have supported a number of charities. Our named charities receiving support throughout this financial year were The People’s Kitchen, an organisation which provides a variety of support and services to homeless and disadvantaged people, and Crisis, the national charity for single homeless people. Employees were invited to suggest charities to receive support during 2014-15 and Crisis was chosen to receive support for the remainder of the financial year and into 2015-16 - the charity was recognised for having a direct link to YHN’s work and as one able to receive support in kind rather than just donations. A Christmas drive to collect food and warm clothing was organised and a van was required to take all of these donations in December. Some members of staff also raised funds via bake sales and selling Christmas gifts. Our employees have also supported other organisations including fundraising for the CEO sleep out in support of Changing Lives, the Samaritans Purse Operation Christmas Child Appeal, Children in Need and Comic Relief.

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Directors’ Report (continued) Equality and Diversity During the year YHN maintained a place on Stonewalls Top 100 Workplace Equality Index for 2015. This was an excellent achievement and demonstrates our ongoing commitment to LGBT equality. A new equality and diversity strategy and associated action plan were agreed by the Board in March 2015. The strategy and action plan focus on five key equality objectives. 1. A modern and diverse workforce and an organisation culture that values and cultivates diversity; 2. Know who are customers are and provide responsive, flexible services; 3. Remain in touch with our staff and customers by listening to and learning from them; 4. Embed equality and diversity across YHN, promote understanding and the added value this brings to the organisation, and 5. Better use of our influence and profile to make a positive difference. YHN use an equality and diversity cycle that underpins the equality and diversity strategy and the way we deliver services and operate as an employer.       

Understanding; Involving; Learning; Improving policy; Investing in services; Demonstrating commitment; and Checking how we are doing.

We continue to prioritise our work around employees and some of the work that has followed is:  We have encouraged the establishment of staff network groups. We now have four groups established. These are Multi-Cultural Staff Network Group, the Lesbian, Gay, Bisexual and Transgender Staff Network Group, the Allies Staff Network Group and the Disabled Staff Network Group.  Deliver a comprehensive and informative equality and diversity calendar, compromising of 12 events/activities per year including video screenings, intranet promotion and social media participation relating to national and international days and events.

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Directors’ Report (continued) Equality and Diversity (continued)  Deliver an equality and diversity training and development programme, which meet the needs of different levels of staff and with a target of 90% attendance or completion. Includes a learning and development plans for YHN Board members, incorporating equality and diversity training. The strategy aims to build on our achievements and look at what we need to do next. It sets out our priorities to mainstream equality and diversity within every activity undertaken by individuals and teams within YHN. We are also committed to an active equal opportunities policy for recruitment and selection, through training and development, performance reviews and promotion to retirement. It is our policy to promote and operate in an environment that is  free from discrimination, harassment and victimisation;  where everyone will receive equal treatment regardless of sex, gender reassignment, race, disability, age, pregnancy or maternity, marital status, sexual orientation or religion; and  where all decisions relating to employment practices are objective, free from bias and based solely upon work criteria and individual merit. Employees with disabilities YHN is committed to ensuring that people with disabilities should have full and fair consideration for vacancies. During the year we continued to demonstrate our commitment to interviewing people with disabilities who fulfil the minimum criteria and endeavour to retain employees in the workforce if they become disabled during employment. If appropriate we would actively retrain and make adjustments to the working environment to allow our employees to remain in the business. Statement of the Board’s Responsibilities The Board is responsible for preparing the Strategic Report, the Directors’ Report and financial statements in accordance with UK Accounting Standards and applicable UK law (UK Generally Accepted Accounting Practice). Company law requires members of the Board to prepare financial statements for each financial year. Under company law the Members of the Board must not approve the financial statements unless they are satisfied that taken as a whole the financial statements are fair, balanced and understandable and provide the information necessary for the sole member to assess the company’s performance, business model and strategy for the period ending 31 March 2015.

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Directors’ Report (continued) Statement of the Board’s Responsibilities (continued) In preparing these financial statements, the Board is required to:  select suitable accounting policies and then apply then consistently;  make judgements and estimates which are reasonable and prudent;  state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and  prepare the financial statements on a going concern basis unless it is inappropriate to presume YHN will continue in business. Members of the Board are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of YHN and to enable them to ensure that the financial statements comply with the requirements of the Co-operative and Community Benefit Societies Act 2014, the Accounting Direction for Private Registered Providers of Social Housing 2012 and the Housing and Regeneration Act 2008. The Board are also responsible for safeguarding the assets of YHN and for taking all reasonable steps for the prevention and detection of fraud and other irregularities. The Board takes its responsibilities in relation to bribery seriously and continues to support initiatives to emphasise the organisation’s anti-corruption culture. A revised Anti-Bribery and Corruption Policy was adopted by the Board on 3 December 2013. An online training module titled ‘Doing Business without Bribery’ was also developed and mandatory for all staff and the Board to complete. During the year, a review of the implementation of the Anti-Bribery and Corruption Policy was undertaken and reported as satisfactory to the Audit Committee. The Audit Committee will continue to monitor the policy under the strategic risk register controls. Statement of the Board on internal financial controls The Board acknowledges its ultimate responsibility for establishing and maintaining a robust system of controls across all areas of the organisation and for reviewing the overall effectiveness of such controls. The controls, which are regularly reviewed and updated, are designed to give reasonable assurance with respect to:  The reliability of financial information used by the organisation or for publication;  The maintenance of proper accounting records; and  The safeguarding of assets against unauthorised use or disposition.

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Directors’ Report (continued) Statement of the Board on internal financial controls (continued) It is the Board’s responsibility to establish and maintain robust systems of internal financial control which are designed to manage, rather than eliminate, the risk of failure to achieve business objectives. The Board recognises that such systems can only provide reasonable and not absolute assurances against material financial misstatements or losses. Key elements of the system include ensuring that:  forecasts and budgets are prepared which allow the Board and the Executive Management Team to monitor the key business risks and financial objectives and progress towards financial plans set for the financial year and the medium term;  regular management accounts are prepared and fully considered by the Executive Management Team which provide relevant, reliable and up to date financial information and other information as well as details of significant variances from budget;  all significant new initiatives, major commitments and investment projects are subject to formal authorisation procedures;  the Board regularly reviews reports from the Executive Management Team, from internal and external auditors and from its own Audit Committee to provide reasonable assurance that robust control procedures are in place;  the Board regularly considers major risks facing YHN and internal auditors make regular reports to the Audit Committee;  formal recruitment, retention, training and development for all staff;  Board regularly reviews and approves whistle-blowing and anti-theft, bribery and fraud and corruption policies; and  formal procedures have been established to ensure, that in respect of any weaknesses identified from the above reports, corrective actions are promptly taken and lessons learnt to ensure that such weaknesses do not recur. Post balance sheet events The Board considers that there have been no events since the year end that have had a significant effect on YHN’s financial position. Going Concern Having made enquiries, the Board consider that the Company’s current and future prospects and its availability of financing are adequate to enable it to continue business for the foreseeable future and that they are also satisfied that the Company can continue to pay its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements.

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Directors’ Report (continued) Going Concern (continued) The Board consider that a robust going concern assessment process was undertaken and the results discussed and challenged formally at the Audit Committee on 9 July 2015. At that meeting the Audit Committee recommended the Board’s approval of these annual accounts. The process for determining whether or not the Company is a going concern involved a number of considerations including an assessment of the financial budgets and forecasts for YHN to March 2017, the continued and possible future effects of Welfare Reform and the ongoing review of YHN by Newcastle City Council including a revised management agreement. This period is considered to be the ‘foreseeable future’ as required for this ongoing assessment only and is in accordance with company law and accounting rules. The assessment also considered the solvency and liquidity risks involved in delivering the financial forecasts for the foreseeable future. There were no major changes to YHN’s significant liquidity and solvency risks in the year. For this reason, the Board continue to adopt the going concern basis of preparation for these financial statements. Disclosure of information to auditors All the Board members, appointed at the date upon which these report and accounts were approved, were not aware of any relevant audit information which was required by the auditors in connection with the preparation of the report and accounts, of which the auditor is unaware. Having made enquiries of fellow Board members and YHN’s auditors, each Board member has taken all the steps that he/she is obliged to take as a member of the Board in order to make himself/herself aware of any relevant audit information and to establish that the auditor is aware of that information. Auditors Ernst & Young LLP are the external auditors of Your Homes Newcastle Limited for the period 2014-15. Ernst & Young LLP have indicated that they are willing to continue in this role and a resolution to re-appoint them to this role will be put to the AGM on 22 September 2015. The annual report and accounts, when taken as a whole, were deemed to be fair, balanced, understandable and provided the information necessary to enable the sole

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Your Homes Newcastle Limited

member of the company, Newcastle City Council, to assess the companyâ&#x20AC;&#x2122;s performance, business model and strategy. The report of the members of the Board was considered and approved by the Board on 28 July 2015 and signed on its behalf on 28 July 2015 by:

Olivia Grant Chair

Jill Davison Company Secretary

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Your Homes Newcastle Limited

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF YOUR HOMES NEWCASTLE LIMITED We have audited the Company financial statements for the year ended 31 March 2015 which comprise the Statement of Income and Expenditure, Balance Sheet, Statement of Cash Flows and the related notes 1 to 17. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company’s members, as a body, in accordance with the Co-operative and Community Benefit Societies Act 2014, the Housing and Regeneration Act 2008 and the Accounting Direction for Social Housing in England from April 2012. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Board and the auditor As explained more fully in the Statement of Board's Responsibilities set out on pages 23 and 24, the Board is responsible for the preparation of financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the board; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report and Financial Statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

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Your Homes Newcastle Limited

Opinion on financial statements In our opinion the financial statements: 

give a true and fair view of the state of the company’s affairs as at 31 March 2015 and of its income and expenditure for the year then ended; and



have been properly prepared in accordance with the Co-operative and Community Benefit Societies Act 2014, the Housing and Regeneration Act 2008 and the Accounting Direction for Social Housing in England from April 2012.

Opinion on other matters In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Co-operative and Community Benefit Societies Act 2014 requires us to report to you if, in our opinion: 

a satisfactory system of control over transactions has not been maintained; or



the company has not kept proper accounting records; or



the financial statements are not in agreement with the books of account; or



we have not received all the information and explanations we need for our audit.

Caroline Mulley (Senior statutory auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor Newcastle upon Tyne 28 July 2015

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Your Homes Newcastle Limited

Financial Statements Statement of Income and Expenditure for the 12 months ended 31 March 2015 Notes 2015 ÂŁ'000

2014 ÂŁ'000

Income

31,904

31,094

Operating Costs

(29,863)

(31,067)

2,041

4a 4b

1 -

(15)

Surplus on ordinary activities before taxation

2,042

Taxation

(1)

2,043

Operating Surplus Interest receivable and other income Interest payable and other charges

Surplus on ordinary activities after taxation

All amounts relate to continuing activities. There have been no recognised gains and losses other than those shown in the income and expenditure account in both the current and prior years, therefore no Statement of Total Recognised Gains and Losses has been prepared.

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Your Homes Newcastle Limited

31 Registered Company No: 5076258

Balance Sheet As at 31 March 2015 Notes

2015 ÂŁ'000

2014 ÂŁ'000

2 5,286 5,288

2 3,650 3,652

(3,212)

(3,619)

Total assets less current liabilities

2,076

Net Assets

2,076

Current assets Cash Debtors Current liabilities: amounts falling due in less than one year

Reserves

These financial statements were approved by the Board and authorised for issue on 28 July 2015. . Signed on behalf of the Board

Olivia Grant Chair

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Your Homes Newcastle Limited

Statement of Cash Flows for the 12 months ended 31 March 2015 Notes

2015 ÂŁ'000

2014 ÂŁ'000

(1)

Financing Loans repaid Net cash inflow from financing

Increase in cash

Cash brought forward

Increase in year

Cash carried forward

Net Cash flow from operating activities Return on investments and servicing of finance Interest received Net cash outflow from returns on investments and servicing of finance Taxation paid

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 1

Accounting Policies Legal Status Your Homes Newcastle is registered under the Companies Act 2006 (Registered Number 5076256) and is a registered housing provider. Basis of preparation The financial statements have been prepared on a going concern basis and in accordance with UK Accounting Standards. The accounts are prepared under the historical cost convention modified to include the revaluation of certain land and buildings and in accordance with applicable accounting standards in the UK, and the 'Statement of Recommended Practice: accounting by registered social landlords (SORP Update)', issued in 2010. Turnover Turnover represents income received for goods and services provided. All figures exclude VAT. All turnover arises in the United Kingdom. Pension costs The company participates in the Local Government Pension Scheme, through membership of the Tyne and Wear Pension Fund. The scheme is a final salary pension scheme and retirement benefits to employees of the company are funded by contributions from all participating employers and employees in the scheme. Payments are made in accordance with periodic calculations by consulting actuaries and are based on pension costs applicable to the various participating organisations. Costs are charged to the income and expenditure account over the period benefiting from the employees' service and disclosures are given as required by FRS17.

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015

Analysis of Turnover 2015 £'000

2014 £'000

28,099

26,684

3,119

3,057

686

1,353

31,904

31,094

2015 £'000

2014 £'000

Employee costs

25,746

26,757

Premises Costs

186

224

Transport Costs

608

617

3,323

3,469

29,863

31,067

HRA Management Fee Other Management Fees Other Income

Analysis of Operating Costs

Supplies & Services

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 4a

Interest receivable and other income Interest receivable of £1,000 was received during the year for the company (2014: £nil). This largely relates to in-year notional cash balances held with NCC.

Interest payable and other charges Interest payable of £nil was incurred during the year for the company (2014: £15,000). This largely relates to in-year notional cash balances held with NCC.

Surplus on ordinary activities before taxation The surplus on ordinary activities before taxation is stated after charging: 2015 £'000 Auditors’ Fees For audit services For non-audit services

10 5

2014 £'000

10 3

Employee information The average number of persons employed during the year, expressed as equivalent of whole time employees was: 2015 2014 Housing Management

677

665

Administration and Clerical

194

210

871

875

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 7

Costs for the above employees were 2015 £'000

2014 £'000

21,692

22,009

Employers NI

1,480

1,557

Employers pension

2,574

3,191

25,746

26,757

Wages and salaries

The full time equivalent number of staff who received emoluments in the following pages are: 2015 2014 No. No. £60,001 to £70,000 2 10

£70,001 to £80,000

£80,001 to £90,000

£90,001 to £100,000

£100,001 to £110,000

£120,001 to £130,000

£150,001 to £160,000

Directors Emoluments

Aggregate emoluments payable to directors (including pension contribution and benefits in kind)

2015 £'000

2014 £'000

Emoluments paid to the Chief Executive including pension contributions amount to £151,400 (2014: £151,500). The Chief Executive is a member of the Tyne and Wear Pension Scheme, a defined benefit final salary pension scheme. He is an ordinary member of the pension scheme and no enhanced or special terms apply. YHN does not make any further contributions to an individual pension arrangement for the Chief Executive. The Chief Executive is not a Director and not a member of the Board.

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 9

Tax (a) Tax on surplus on ordinary activities The tax charge is made up as follows: 2015

2014

£'000

Adjustment in respect of previous years

(1)

Total current tax (note 9(b))

(1)

Current tax: UK Corporation Tax

Deferred tax Tax on surplus on ordinary activities

There is no deferred tax asset or liability. (b) Factors affecting current tax charge The tax assessed on the surplus on ordinary activities for the year is different from the standard rate of corporation tax in the UK of 21% (2014: 23%). The differences are reconciled below:

Surplus on ordinary activities before tax Surplus on ordinary activities multiplied by standard rate of corporation tax of 21% (2014: 23%) Expenses not deductible for tax purposes Tax losses carried forward Adjustments to tax charge in respect of previous periods Non-taxable income Total current tax (9(a))

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2015

2014

£'000

2,042

428

(1)

(524)

(52)

(1)

Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 10

Debtors 2015 £'000

2014 £'000

Amounts Due from NCC

2,972

2,355

Other debtors and prepayments

2,314

1,295

5,286

3,650

Creditors: amounts falling due in less than one year 2015 £'000

2014 £'000

Corporation Tax

2,180

1,991

Accruals

621

773

Redundancy and other pay provisions

301

756

3,212

3,619

VAT Amount due to NCC Income received in advance

Interest payable

Constitution Your Homes Newcastle Limited is a company limited by guarantee and does not have any share capital. There is only one “member” of the organisation. That “member” is NCC and the company’s articles of association state that no other person other than the Council Member shall be admitted to membership of the organisation.

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 13

Reconciliation of reserves 2015 £'000

2014 £'000

Result for period

2,043

At end of period

2,076

At beginning of period

Notes to the cash flow statement i) Reconciliation of operating surplus to net cash flow from operating activities

Operating Surplus (Increase) in debtors (Decrease)/increase in creditors Net cash inflow from operating activities

2015 £'000

2014 £'000

2,041

(1,634)

(571)

(407)

545

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 14

Notes to the cash flow statement (continued) ii) Reconciliation of net cash flow to movement in net funds 2015 £'000

2014 £'000

Loans repaid in the year

Change in net debt resulting from cash flows

Net funds at start of the year

Net funds at end of the year

iii) Analysis of changes in net debt

At 31 March 2014 £’000

Cash flows £’000

At 31 March 2015 £’000

Cash

Net funds

Related party disclosures Your Homes Newcastle Limited is a local authority controlled company of NCC established with no share capital and limited by guarantee. The Council has delegated responsibility for overseeing the management and maintenance of its residential stock, and of Housing Revenue Account services provided to the City's housing tenants. £28.1m was earned from the Council in management fees in relation to these activities throughout the year (2014: £26.7m). At 31 March 2015 management fees owed to YHN from NCC amount to £208k (2014: £2,355k). In addition, transactions totalling £2.3m took place with NCC (2014: £2.9m). This related to interest charges, support services such as temporary staffing, general office supplies, legal services, human resources management, IT, exchequer services and other centrally administered services. At 31 March 2015 £17k was payable to NCC (2014: £83k).

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 15

Related party disclosures (continued) With the exception of petty cash transactions, all cash book payments and receipts are made via NCC's banking intermediaries with the net balance owing to or from the City Council being disclosed as a current asset or liability as appropriate. Byker Community Trust Limited (‘BCT’) is an Industrial and Provident Society and registered with both the Homes and Communities Agency and the Financial Conduct Authority. Elaine Snaith, YHN Board member became a Board member of the Byker Community Trust Limited. In accordance with the Byker Community Trust’s Rules all Board members must become shareholders of the Byker Community Trust Limited. In 2014-15 transactions totalling £2,174k took place between YHN and BCT. Of these transactions, YHN received £2,031k of income in relation to management fees from the BCT in the year (2014: £2,066k). At 31 March 2015 amounts owed to YHN from BCT amounted to £1,595k (2014: £282k) in relation to income due. On 1 April 2013 Leazes Homes Limited ceased to be a wholly owned subsidiary of Your Homes Newcastle. On the same date Your Homes Newcastle acquired a 1/7th membership of Leazes Homes Limited. Judith Common, YHN Board member, was a director and trustee of Leazes Homes Limited until 12 January 2015, the position is currently vacant. Leazes Homes Limited is an independent charity. Many of its senior management team are employed by YHN. In 2014-15 transactions totalling £586k took place between Your Homes Newcastle and Leazes Homes Limited. (2013-14: £445k). At 31 March 2015 amounts owed to YHN from LH amounted to £263k (2013: £157k). No amounts were owed to LH (2014: No amounts were owed to LH). Blakelaw Community Partnership Limited (‘BCP’) is a company controlled by Newcastle City Council. YHN employs one member of staff who works exclusively for BCP. YHN received income of £32,000 from BCP in 201415.

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 Contingen 15 Related party disclosures (continued) Six YHN Board Members are NCC housing tenants. All Board member tenancies are granted on normal commercial terms for a housing provider. Tenant Board Members do not use their position to gain any commercial advantage. Six YHN Board Members are Newcastle City Councillors. The Councillors do not use their position as YHN Board Members to gain any commercial advantage. Where conflicts do arise they are fully disclosed either in advance of a Board/Committee meeting or at such a meeting. If appropriate the Councillor would leave the meeting to enable the matter to be discussed in their absence thereby avoiding a conflict of interest.

Pensions The company participates in the Tyne and Wear Pension Fund, which is a funded defined benefit scheme where contributions payable are held in a trust separately from the company. The main results and assumptions of the most recent valuation of the Tyne and Wear Pension Fund are as follows: Contributions to the scheme have been charged to the income and expenditure account on a cash basis. A qualified actuary has determined contribution rates on the basis of triennial valuations using the projected unit method. The actuaries determined that in order to meet the funding target, the contribution rate would be set at 14.2% for 2014-15 (2013-14: 14.0%)

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Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 16

Pensions (continued) Financial Reporting Standard No 17 Under the requirements of FRS 17, the company is required to account for and disclose further information on its share of assets and liabilities of the Tyne and Wear Pension Fund at the end of the accounting period. The valuation at 31 March 2013 has been updated by an independent qualified actuary on an FRS 17 basis as at 31 March 2015. As required by FRS 17 the defined benefit liabilities have been measured using the projected unit credit method. This information is set out below: Main financial assumptions

Discount Rate RPI Inflation CPI Inflation Rate of increase to pensions in payment Rate of increase to deferred pensions Rate of general increase in salaries Post retirement mortality Males

2015 %

2014 %

2013 %

3.3 3.0 1.9 1.9 1.9 3.4

4.3 3.4 2.4 2.4 2.4 3.9

4.6 3.7 2.8 2.8 2.8 4.7

2015 Standard SAPS Normal Health Light Amounts (S1NMA_L)

Year of Birth base table

Scaling to above base table rates

120%

Improvements to base table rates

CMI_2012 with a long term rate of improvement of 1.5% p.a.

Future Lifetime from age 65 (currently aged 65) Future Lifetime from age 65 (currently aged 45)

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2014 Standard SAPS Normal Health Light Amounts (S1NMA_L) 120% CMI_2012 with a long term rate of improvement of 1.5% p.a.

23.1

23.0

25.1

25.0

Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 16

Pensions (continued) 2015

2014

Post retirement mortality Females Standard SAPS Normal Health Light Amounts (S1NMA_L)

Year of Birth base table

Scaling to above base table rates

115%

Improvements to base table rates

CMI_2012 with a long term rate of improvement of 1.5% p.a.

Future Lifetime from age 65 (currently aged 65) Future Lifetime from age 65 (currently aged 45)

Standard SAPS Normal Health All Amounts (S1NFA) 110% CMI_2009 with a long term rate of improvement of 1.25% p.a.

24.7

23.9

27.0

25.8

Value of Assets

Equities Property Government Bonds Corporate Bonds Cash Other Total

2015 Long-term rate of expected return (% p.a.)

2015 Asset split at 31 March 2015

7.6 6.9 3.4 4.0 0.9 7.6 6.8

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Asset split at 31 March 2014

(%)

2014 Long-term rate of expected return (% p.a.)

2014

66.4 9.5 3.7 11.7 2.4 6.3 100

7.6 6.9 3.4 4.0 0.9 7.6 6.8

66.8 8.5 3.5 11.5 2.9 6.8 100

(%)

Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 16

Pensions (continued)

Reconciliation of funded status to balance sheet

Notional value of assets Present value of liabilities Net pension liability

2015 £m

2014 £m

111.29 (130.78) (19.49)

98.12 (110.86) (12.74)

NCC has confirmed that it will assume any current and future funding surpluses or deficits relating to the Group. Accordingly, the scheme deficit has been restricted to nil and the pension cost is based on contributions payable. Analysis of Income and Expenditure Account Charge

Current Service Cost Past service cost Interest cost Expected return on assets Expense recognised

2015 £m

2014 £m

3.49 0.22 4.81 (6.64) 1.88

4.16 0.22 5.04 (6.05) 3.37

Changes to the present value of liabilities during the accounting period

Opening present value of liabilities Current service cost Interest cost Contributions by participants Actuarial losses/(gains) on liabilities Net benefits paid out Past service cost Closing present value of liabilities

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2015 £m

2014 £m

110.86 3.49 4.81 1.15 12.94 (2.69) 0.22 130.78

108.00 4.16 5.04 1.13 (5.52) (2.17) 0.22 110.86

Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 16

Pensions (continued) Changes to the fair value of assets during the accounting period

Opening fair value of assets Expected return on assets Actuarial gains on assets Contributions by the employer Contributions by the participants Net benefits paid out Closing fair value of assets

2015 £m

2014 £m

98.12 6.64 5.38 2.69 1.15 (2.69) 111.29

88.32 6.05 2.14 2.65 1.13 (2.17) 98.12

2015 £m

2014 £m

6.64 5.38 12.02

6.05 2.14 8.19

Actual return on assets

Expected return on assets Actuarial gain on assets Net return

Analysis of amount that would be recognised in statement of total recognised gains and losses (STRGL)

Total actuarial losses Total loss in STRGL

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2015 £m

2014 £m

(7.56) (7.56)

7.66 7.66

Your Homes Newcastle Limited

Notes to the financial statements at 31 March 2015 16

Pensions (continued) History of asset values, present value of liabilities and deficit / surplus

Fair value of assets Present value of liabilities Deficit

2015 £m

2014 £m

111.29 (130.78) (19.49)

98.12 (110.86) (12.74)

2015 £m

2014 £m

5.38 0.44

2.14 (3.03)

History of experience gains and losses

Experience gains on assets Experience gains/(losses) on liabilities 17 Parent Undertaking

The company is a local authority controlled company within the meaning of Part V of the Local Government and Housing Act 1989, being a company under the control of NCC. Copies of the financial statements for Your Homes Newcastle Limited can be obtained from the Company Secretary, YHN House, Benton Park Road, Newcastle NE7 7LX The Directors consider that NCC is the ultimate controlling party.

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Your Homes Newcastle Limited

Your Homes Newcastle Limited Registered Company No: 5076256 Address: Civic Centre, Barras Bridge, Newcastle upon Tyne, NE1 8PR

Your Homes Newcastle Ltd Registered Company no: 5076256 Your Homes Newcastle Limited, YHN House, Benton Park Road, Newcastle upon Tyne NE7 7LX.

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Board 16 May 2015 (5.00pm to 7.00pm) Present: O Grant (Chair), P Dibbs, P Dutton, L Doherty, V Dunn, D Huddart, J McCarty, A Mirza, T Moore, J Purvis, J J Reid, N Shukla, E Snaith, P Scope, M Talbot, L Wilson In attendance: John Lee

Chief Executive

S Breslin

Assistant Chief Executive & Director of Corporate Services

N Scott

Director of Tenancy Services

D Langhorne

Director of Property Services

J Davison

Company Secretary

L Forrest

Head of Finance

D Creighton

Executive Assistant to the Chief Executive

A Allison

Head of Income and Tenancy Management

L Henderson-Gray

Project Manager - Customer Service

L Horsefield

Head of Business Strategy

I Gallagher

Head of Property Maintenance

J Wylie

Head of Business Services

J Urwin

Head of Housing Options

G Ellingham

Head of IT

C Nicholson

Procurement Manager

J Vinton

Head of Assets and Regeneration

L Waters

Assets and Regeneration

A Pearce

Assets and Regeneration

E Fair

Newcastle Tenants and Residents Federation

T Durcan

Newcastle City Council

A Senior

Newcastle City Council

376

WELCOME The Chair welcomed everyone to the meeting and reminded members to turn off their mobile phones.

377

APOLOGIES Apologies were received from D Down, L Stephenson and J Streather.

378

DECLARATIONS OF INTERESTS The following members declared an interest in items on the agenda; Page 85 of 189

V Dunn – Item 8, as NCC Cabinet member for resources. M Talbot – Item 9, as member of NCC Planning committee. 379

CHAIRS ITEMS The Chair commented that this was the first meeting since the Board away day and that we had all had time to digest and consider the issues raised around governance and effectiveness, and was looking forward to the opportunities that improvement will bring. The Chair noted that the effectiveness of board meetings should begin with leadership from her, and at the meeting the context of the reports will be summarised, before passing over to Directors to answer any queries or questions. She was pleased that Board members had taken advantage of contacting officers prior to the meeting to enhance understanding of matters, and hoped to ensure each item had sufficient attention. The Chair also thanked Jen Vinton and her team for the recent bus tour which had been organised. This was very informative and looked at many different investment projects across the city. Finally the Chair updated Board members on a letter received from Newcastle City Council regarding their commissioning of independent tenant scrutiny and other tenant engagement services. The procurement will be led by the City Council and any queries should be directed to Amanda Senior, Head of the Fairer Housing Unit.

380

BOARD MEMBERSHIP Submitted: Report by Chair (previously circulated, copy attached to Official Minutes). The Chair presented the report which formally asked the Board for approval of the re-appointment of Lisa Doherty, Tony Moore and Phil Dibbs for a further 3 year term effective from the AGM in September. The Chair noted that herself, and two other Board members had a really good session where they considered the board members written statements along with attendance details and considered that all three were of the appropriate standard and continued to be committed to YHN. The report also notified Board that Newcastle City Council at their AGM on the 27 May changed their YHN nominated representatives. Cllr Jane Streather now becomes the portfolio holder for Health and Housing and joins the Board; unfortunately she could not attend due to prior commitments but will attend the next meeting in July. Cllr John Stokel-Walker has stood down from the Board and the Chair has personally written to John to thank him for his contribution over the last two years. RESOLVED that the Board; 

approved the re-appointment of Phil Dibbs as an independent member of Your Homes Newcastle Board for a three year term.



approved the re-appointment of Lisa Doherty and Tony Moore, as tenant members of Your Homes Newcastle Board for a three year term. Page 86 of 189

ď&#x201A;ˇ

381

noted the Councilâ&#x20AC;&#x2122;s nominated representatives on Your Homes Newcastle Board: Councillors Joyce McCarty, Marion Talbot, Veronica Dunn, Doreen Huddart, David Down and Jane Streather.

GOVERNANCE SELF-ASSESSMENT ACTION PLAN Submitted: Report by the Company Secretary (previously circulated, copy attached to Official Minutes). Jill Davison presented the report which outlined the work completed since the Board away day in April. All the discussions and feedback provided on the day had been taken and translated into a governance improvement plan. Jill Davison outlined to the Board that the improvement plan set out the proposed activity and target dates for completion. It was evident at the away day that a lot of the work was required to be completed before the AGM in September and had linkages to the disaggregation project. Some of the work had already begun in order to assist in the Independent Board member recruitment, and the report presented a proposed job description and skills matrix. Questions A Board member queried the benchmarking exercise referred to in the action plan and how the Board members will get to see this information. Jill Davison responded by explaining the research which had been undertaken to assist with the proposed job description and skills matrix. A Board member queried the list of additional actions set out in section 2.1 of the report, as the same wording does not appear in the action plan. Jill Davison explained the requirements listed in 2.1 will be considered alongside the action plan. A Board member questioned whether the action plan was achievable in such a short time span and whether it was realistic. Jill Davison responded that the action plan had been designed taking into account the disaggregation project timeline, with a target date of 1 October for the new company structure, a lot of the work in the governance action plan; namely committee structures, scheme of delegations and the financial regulations will need to be completed by this date and fit in with the target date to present these to the board in September. Additional support has also been assigned to the governance function to assist in this work. A Board member questioned the skills as listed on the skills matrix and queried how these would be measured and why they did not match the key skills required on the job description. A Board member also commented that the first skill listed was experience of social housing or related services as a tenant, and this was restricted to just tenants. Sheila Breslin responded that the experience as a tenant was considered a key skill as this is an important part of the make-up of our board and the wealth of knowledge that tenants bring to the role is very important. The reason the key skills within the job description are different is due to these being required by individual board members, but the skills matrix will measure the collective skills of the board as a whole, no one needs to have all the skills listed. The matrix will be turned into a self-assessment for Board members to complete so we will have a complete assessment of current skills. Page 87 of 189

A comment was made with regard to the reporting of performance and dashboard of indicators to ensure that these were compatible and linked to the NCC dashboard and that the layout was compatible with our reporting to Leazes Homes and Byker Trust. A Board member questioned the legal responsibilities of board members, and whether the job description was specific enough. Jill Davison responded that the first bullet points in the key requirements section were the statutory duties as set out in the Companies Act 2006, but an amendment can be made to make this clearer. A Board member commented that training sessions are available which cover “Directors Duties” and this may be of interest to Board members. A Board member suggested that social enterprise was included in the list of skills required. A Board member commented that the improvement plan was good, but we need to make sure that this extends to the committees as well, to make sure committees are effective as they can be and they require input into the learning and development plans. The Board members comments were noted and the recommendations considered, subject to the changes indicated. RESOLVED that the Board;

382



Approved the Governance improvement plan (appendix 1)



Approved the Board skills matrix (appendix 2)



Approved the role description for board members (appendix 3)



Noted the project linkages with the disaggregation/structures project.



Agreed to complete a self-assessment against the skills matrix



Agreed to continue to receive further updates on the Governance Improvement Plan activity

DISAGGREGATION UPDATE Submitted: Report by the Assistant Chief Executive and Director of Corporate Services (previously circulated, copy attached to Official Minutes). Sheila Breslin presented the report which outlined the work to date on the disaggregation project, outlining the legal advice received, financial modelling and governance implications. A Board member enquired about the demands on Board members in the new structure which will have one more committee. Jill Davison responded that the charitable board will comprise four members who are independent of YHN and therefore cannot be current board members. The rest of the entities in the structure may not meet as regularly as current committees and further detail will be presented at the next board, but it is not envisaged that current Board members time commitment would be increased. A Board member questioned whether tenants would be able to apply to be a member of the charitable board. Jill Davison is to check the legal requirements and report back to Board. A Board member questioned the diagram on page 20 naming committee 1 and Page 88 of 189

committee 2 and what these committees would be responsible for. Sheila Breslin responded that this work was still being undertaken, a review of what business needed to be reported to Board and what business is then required to be delegated to a committee will determine what remit the committee structure has. Further detail will be reported to Board next month. A Board member commented that if the Commercial Committee membership was to be transferred to that of the “trading” company, the skills required should be assessed and ensure there was a correct skills match. A Board member questioned the business of the “charity” company and what other business this company should complete. Lisa Forrest explained that the current business of YHN was being split into the two companies to ensure an even balance of finance. The profits from the “trading” services would be transferred to the “charity” company in order to run services, these will be services such as Community Care Alarm Service and the Young Peoples service, and not new services. A Board member commented that the report to the next meeting should include some detail on the scrutiny and accountability within the new structure. RESOLVED that the Board;

383



noted the project progress to date;



agreed the preferred process of deciding subsidiary names;



agreed the size of the subsidiary boards and YHN’s representation on them;



agreed to the retention of the Audit Committee



agreed that the business of Commercial Committee will pass to the trading subsidiary board



agreed to receive a report to the next meeting on the future committee structure and remuneration.

HOUSING INVESTMENT PROGRAMME 2015/16 – 2018/19 Submitted: Report by the Director of Property Services (previously circulated, copy attached to Official Minutes). David Langhorne presented the report which provided Board with an update on the delivery in 2014-15 and a look at the future four year programme. David Langhorne reported that 2014-15 had been a successful year in terms of delivery considering the challenges. The overall outturn was £47.2m with the original budget being £50.181m. David Langhorne reported that the future investment programme had been formulated in line with the approved Asset Management Strategy (AMS) priorities; this had been in consultation with the City Council finance, Investment & Development Group and Fairer Housing Unit. David Langhorne highlighted to the Board that a positive outcome of the consultation with NCC finance, is that they were able to increase the size of the programme within the borrowing cap, allowing delivery against the AMS sooner than projected. Board were also asked to note that in order to continue to successfully deliver against outcomes whilst reacting to the challenges of construction related programmes of this magnitude required a level of flexibility. Page 89 of 189

Questions A discussion was held concerning the government’s Right to Buy scheme and the new developments. More details are emerging all the time and the Board will be kept up to date. A paper on the implications, when known, will be presented to the Customer & Service Delivery Committee and circulated to all Board members. RESOLVED that the Board;

384



Noted the outturn for the 2014/15 investment programme.



As approved in 2014/15 agreed that the virement of resources can be made between budget heads to provide flexibility in the programme to enable us to continue to align with our AMS priorities whilst maximising delivery opportunities.



Agreed that further work will be carried out with NCC officers over the summer on the areas in section 5.1



Approved the four year investment programme as detailed in appendix two and recommend this to NCC’s Cabinet.

SHELTERED PROGRAMME Submitted: Report by the Director of Property Services (previously circulated, copy attached to Official Minutes). David Langhorne presented the report which discussed the programme of full sheltered scheme remodelling in order to eradicate bedsits. David Langhorne reported that the programme is well underway and proving very successful. The quality of the product is very good as Board members who attended the Moor House and Hadrian House openings will have seen for themselves. The report highlights how the team have needed to look at the schemes in the round to make the investment measures stack up as collective, meaning some schemes with higher rent support the investment in other schemes. By agreeing to the collective investment package this gives YHN the ability to package together the procurements requirement leading to greater cost savings and residents more certainty. Questions A Board member questioned whether the blocks to be used for re-housing the elderly people were in the same area, as may be unsettling for the tenants to move to a new area. David Langhorne responded that the tenants will have an option if they want to stay in the same area. A Board member commented that they attended the opening of Hadrian House and that the accommodation was brilliant. They questioned whether the HCA funding was essential to complete the works and whether there was a contingency if we don’t receive the grant, and whether we could possibly complete the programme quicker. David Langhorne replied that the HCA funding has been assumed to be able to complete the financial modelling and if unsuccessful then the overall programme would need to be reviewed. With regard to the timing, this programme has already been brought forward but unfortunately we cannot speed up the programme further as would require more tenants to be re-housed and there is not the capacity to move tenants out of more than one block at a time. Page 90 of 189

A Board member commented that the report was very positive regarding sheltered accommodation, and would request that the officers consider the demographics of the city changing and there are communities which are not in YHN properties and we need to look to the needs of these communities in the future. Sheila Breslin commented that this was a target in the equality and diversity strategy to increase the BME profile in sheltered accommodation. A Board member commented that there are changes due in July to Housing Benefit in relation to residents of pensionable age which need to be considered. RESOLVED that the Board;

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Agreed to recommend to Cabinet that the Housing Investment Programme has a capital budget of £11M allocated from the HRA up to 2019/20 to deliver the remodelling programme and a budget of £2.7M allocated from the HRA up to 2019/20 to deliver communal improvements.



Agreed that further detailed work is done on the proposal for new build on the Coniston Court site. This will be subject to a further detailed report to Board and Cabinet In Autumn 2015



Agreed that there is a bid made to the HCA for a further two blocks to be remodelled (in addition to the previously agreed Shield Court) at Bamburgh House and Milecastle House.



Agreed to the proposed way forward for each of the blocks as outlined in section 3 recognising that there will need to be a review concluded for Margaret Collins House and Eastbourne Court by summer 2016.



Agreed to the priority order for the remodelling of blocks as outlined in section 4.1.



Agreed to the priority order for the communal upgrade of blocks as outlined in section 6

BUSINESS STRATEGY DEVELOPMENT Submitted: Report by the Director of Corporate Services and Assistant Chief Executive (previously circulated, copy attached to Official Minutes). The Chair introduced the report outlining the approach proposed to review the business strategy between now and December. The proposal is to convene a time limited committee to lead the review and the Chair had previously had a discussion and asked Phil Dibbs to chair the group. Phil Dibbs added that the review of the Business Strategy was required in light of the disaggregation project to ensure it is fit for purpose. Board members were asked to let Jill Davison know if there were available to join the review group. RESOLVED that the Board; 

Approved the proposed approach to lead the Business Strategy review via a Time Limited Committee.



are asked to express interest in joining the Time Limited Committee by 24 June 2015. Page 91 of 189

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RISK REGISTER Submitted: Report by the Director of Corporate Services and Assistant Chief Executive (previously circulated, copy attached to Official Minutes). The Chair reminded Board members that the Board are required to approve the Strategic Risk Register each year, before delegating the responsibility of quarterly monitoring and assessment to the Audit Committee. The draft Strategic Risk Register presented in this report had been considered by Audit Committee on 21 May and the Committee approved the register for recommendation to Board. Questions A Board member questioned whether entering into a new company structure should be detailed on the risk register. Sheila Breslin responded that all risks associated with the HRA have been removed from the register to represent the new company structure, and that within the new governance arrangements the new structures would be monitored. RESOLVED that the Board;  Approved the 2015-16 Strategic Risk Register (subject to any amendments Board requests).

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MINUTES OF 5 MAY 2015 RESOLVED that the Board;  Considered the minutes of the meeting held on 5 May 2015 and approved them as a correct record, these were duly signed by the Chair.

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ITEMS FOR INFORMATION RESOLVED – That the following items be received for information:

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Procurement Plan

ii)

Social Value Act update

iii)

Delegated Decisions

iv)

Board Forward Plan 28 July

Committee Minutes

EXCLUSION OF PRESS AND PUBLIC RESOLVED – That in accordance with the organisation’s Access to Information provisions, the press and public were excluded from the meeting during the consideration of all further agenda items. ……………………………………….. Mrs O Grant Chairman 28 July 2015 Page 92 of 189

Board 28 July 2015 Senior Director’s Report

For Information

Introduction

1.1

This report aims to bring Board Members up to date with the Summer Budget proposals announced 8 July 2015. This is a brief overview of the key proposals potentially affecting the housing sector and impacting on YHN. Board will receive further information as proposals are further developed and more detail becomes known about implementation and impact.

Summary

2.1

The Government announced its summer budget proposals on Wednesday 8 July. Much of what George Osborne was announced had been anticipated but there were some surprises for the Housing Sector. In summary the Chancellor has described the aims of the budget as:

2.2



Ensuring economic security for working people by putting the public finances in order and setting out a bold plan for a more productive, balanced economy.



Supporting national security by investment in defence.



Setting out bold reforms on tax and welfare, introducing a National Living Wage moving Britain from a low wage, high tax, and high welfare economy to a higher wage, lower tax, and lower welfare economy.



Delivering on the promises on which the government was elected.

The Budget sets out the action the government will take to: 

eliminate the deficit and run an overall surplus to start paying down debt, while increasing spending on defence and the NHS



reward work and back aspiration, by introducing a new National Living Wage, cutting taxes so people can keep more of what they earn, and Page 93 of 189

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reforming the welfare system to make it more affordable and fair to the taxpayers who pay for it

2.3



back business and make the economy more productive, by cutting corporation tax and increasing the permanent level of the Annual Investment Allowance, and by undertaking major reform of funding for skills and infrastructure to ensure higher standards of living for everyone in the UK



secure a truly national recovery, by devolving powers and budgets to build a Northern Powerhouse, and create the right conditions for strong growth throughout the UK

Impacts for the Social Housing Sector fall into three general categories:   

General changes to income tax, pay and pensions Housing specific announcements Welfare Reform

Income tax, pay and pensions

3.1

Raise the personal allowance to £12,500 by 2020 - based on a single person paying £100 per week in rent and earning exactly the threshold income of £12,500, they will be £2 per week better off when the income tax threshold is removed. The threshold will be increased in phases starting with £11,000 in 2016.

3.2

Raise the 40p tax threshold - currently levied on incomes over £42,385 to £43,000 by 2020. This is unlikely to affect many of our customers.

3.3

Limit Public sector pay increases to 1% for the next four years. This may impact on recruitment and retention of staff as well as morale.

3.4

Introduction of a new living wage to people over the year 25 - £7.20 by April 2016 rising to over £9 an hour by 2020. YHN Apprentices and YHYJ placements are currently paid minimum wage. It is not yet known how this will affect the apprentices who have a lower minimum wage which is due to rise to £3.30 an hour from October.

3.5

Pension Reform – future changes may impact on staff and the wider organisation

Housing specific announcements

4.1

Rents in social housing cut by 1% each year for the next four years this was a surprise element of the budget and is clearly aimed at reducing the annual housing benefit bill for social housing. An initial assessment on the rent loss to the HRA over the next four years suggests changes to pre-budget projections for rent income for 2016-2020 in the region of £32m. After the four years, it is assumed that rent policy will revert to CPI+1%. Page 94 of 189

4.2

Pay to Stay - higher earners will be required to pay a market rent which will effectively remove subsidies for households earning more than £30,000. Local authorities will be required to pass on the extra income to the Treasury but housing associations will be able to keep theirs. The reduction is estimated to affect around 9% of all social housing tenants in England. The Treasury has not confirmed whether it will be up to social landlords to monitor tenants’ income or whether it will be recorded through the tax system. The Treasury has said it will reveal details in a consultation paper at a later stage.

4.3

A review of Lifetime Tenancies - aimed at limiting their use and ensuring that households are offered tenancies that match their needs and making best use of the housing stock. This could have a big impact if it leads to changes to Secure Tenancies.

4.4

Extend Right to Buy discount to housing association tenants – this will have no direct impact on YHN but will impact on Leazes Homes. Once the current affordable homes programme comes to a close in 2018 it may be more difficult for Leazes to secure new loans to develop new homes, as they are secured against stock. Additionally, any reduction in social housing stock will impact on meeting housing need generally.

4.5

Planning reform - A new law will allow ministers to impose a housing plan on a local authority if it fails to come up with one, as well as imposing penalties on those that fail to process planning applications quickly. A zone system will be set up to give automatic planning permission on designated brownfield sites, which Osborne hopes will lead to the development of empty land in towns and cities.

Welfare Reform

5.1

Abolition of automatic entitlement to housing support for 18-21 year olds from April 2017- this is accompanied by an ‘earn to learn’ obligation with young people participating in an intensive regime of support from day one of their benefit claim. There will be some exemptions, including for vulnerable young people, those who may not be able to return home to live with their parents and those who were working for 6 months prior to their claim.

5.2

Reduction in Employment Support Allowance from April 2017- new claimants of Employment and Support Allowance who are placed in the Work-Related Activity Group (WRAG) will receive the same rate of benefit as those claiming Jobseeker’s Allowance, alongside additional support to help them take steps back to work.

5.3

Working age benefit increases frozen – most working-age benefits will be frozen for 4 years from April 2016. This will apply to Jobseekers’ Allowance; Employment and Support Allowance; Income Support; Child Benefit; applicable amounts for Housing Benefit; and Local Housing Page 95 of 189

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Allowance rates. 5.4

Changes to tax credits income thresholds and Universal Credit work allowances from April 2016 - the income threshold in tax credits will be reduced from £6,420 to £3,850 per year. Work allowances in Universal Credit will be abolished for non-disabled childless claimants, and reduced to £192 per month for those with housing costs and £397 per month for those without housing costs. Claimants earning below these amounts will retain their maximum award. As this is an in-work benefit, the reduction in tax credits is intended to be counterbalanced by increases in personal allowances (the amount that people can earn before paying tax), to £12,500 by 2020. However, the financial impact on individual households is still being worked through.

5.5

Limit Child Element in tax credits and Universal Credit for- no longer to be awarded for third and subsequent children born after 6 April 2017. This will also apply to families claiming Universal Credit for the first time after April 2017. Households who have been in receipt of tax credits or Universal Credit, with an interruption of less than 6 months, will be protected. Furthermore, children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in tax credits and the equivalent in Universal Credit. Multiple births will be protected in both systems.

5.6

Lowering the household benefit cap – so that the total amount of benefits out-of-work working-age families can receive is limited to £20,000. The current exemptions to the cap will continue to apply.

5.7

Limiting backdating in Housing Benefit from April 2016 - Housing Benefit claims will now be backdated for a maximum of 4 weeks rather than the current 6 months.

5.8

Introduction of Universal Credit parent conditionality once youngest child turns three - currently lone parents are entitled to higher benefit entitlement (currently Income Support) until youngest child turns five.

To see the budget in full please see here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/44323 2/50325_Summer_Budget_15_Web_Accessible.pdf See Appendix one for HQN briefing on budget proposals and legislative process Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Diane Creighton, Executive Assistant to the Chief Executive on 0191 278 8701 or diane.creighton@yhn.org.uk.

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Housing law update 6: the UK legislative programme JULY 2015 Tim Horsley

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Introduction Housing law is an integral part of housing management and constantly evolving through legislation, common law and day-to-day interpretation of what it all means. This is no better exemplified than by legislation proposed in the Queen's Speech, the legislation enacted at the end of the last Parliament, new public sector duties, and the volume of recent case law, in particular from the Supreme Court. This latest briefing will give providers the detail they need on the legislation coming before Parliament concerning England, Wales, Scotland and the UK as a whole; a glimpse at what to look out for as the new Bills emerge and highlights from the Chancellor’s July Budget... Our next housing law briefings, to follow shortly, will review the legislation passed towards the end of the last Parliament, recent government guidance, use of the new anti-social behaviour (ASB) tools and powers and recent case law including a number of significant Supreme Court rulings. Please note this briefing is intended as housing management rather than legal advice.

Key points from the July Budget1 £37bn of further savings in the current Parliament; £12bn from welfare; £5bn from tackling tax evasion and avoidance and the remainder from government departments to be announced in the Autumn Statement Rents paid in the social housing sector will be reduced by 1% a year for the next four years Housing association and local authority tenants earning more than £40,000 in London and £30,000 elsewhere will have to pay market rents Abolishing automatic entitlement to housing benefit for 18-21 year olds; “…there will be exceptions made for vulnerable people and other hard cases.”2 A compulsory national living wage for over 25’s of £7.20 per hour from April 2016 and £9.00 by 2020 The government will legislate to freeze working age benefits for four years; including Tax Credits and Local Housing Allowance but excluding Maternity Pay and the disability benefits (PIP, DLA and ESA Support Group) The benefit cap will be lowered to £23,000 in London only (and the southeast?) and to £20,000 elsewhere The income threshold in tax credits and Universal Credit work allowances will be reduced; the latter will no longer be awarded to non-disabled claimants without children; the rate at which a household’s Tax Credit award is reduced as they earn more will be increased by raising the taper rate; and the income rise disregard will be reduced Universal Credit; Tax credit and housing benefit to be limited to the first two children for families who have a third child after April 2017 2 – Housing Law Update 6: The UK legislative programme

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Homes worth up to £1m exempted from inheritance tax with downsizing families protected in future years Public sector pay awards of 1% a year over the next four years Three million new apprenticeships Further powers agreed for devolution to Greater Manchester; fire services, a land commission; children’s services and employment services Devolution discussions are also under way with Cornwall, Sheffield; Liverpool; and Leeds/West Yorkshire A Help to Buy ISA will be available from the autumn Buy to Let tax relief is to be limited to basic rate of tax with higher rate to be withdrawn gradually Room rental tax relief will be raised to £7,500 All new Employment Support Allowance claimants in the work related group to receive the same level of benefit as Job Seeker Allowance claimants. Look out for: The impact of reduced rents on the business plans of the social housing sector and the freeze on LHA on housing for the less well off in the private sector The impact of both incentives and disincentives on providers’ employment support initiatives How the income thresholds for higher earners in social housing will be assessed and enforced The benefit to providers of the new apprenticeships Whether housing investment and strategy will be included in any way in devolved powers The impact of Buy to Let changes on private sector rents; affordability and homelessness.

The Queen's Speech 2015 "My government will legislate in the interests of everyone in our country. It will adopt a one nation approach, helping working people get on, supporting aspiration, giving new opportunities to the most disadvantaged and bringing different parts of our country together."3 Amidst the headline grabbers there are some other provisions in the Queen's Speech4 of interest to housing providers and housing advisers. Only a handful of the Bills have been published5 at the time of writing. However, the government briefing 6 which accompanied the Speech gives further detail and this briefing invites providers to dig even deeper. It should be read alongside the recent HQN briefing Housing under a Conservative government. 3 – Housing Law Update 6: The UK legislative programme

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Proposals for a British Bill of Rights The Queen told Parliament: "My government will bring forward proposals for a British Bill of Rightsâ&#x20AC;?, and the government says: "This would reform and modernise our human rights legal framework and restore common sense to the application of human rights laws. It would also protect existing rights, which are an essential part of a modern, democratic society, and better protect against abuse of the system and misuse of human rights laws." What is not clear is whether this will mean proactive change to the legislation and the relationship with the European Court, or reactive resistance to its decisions, so look out for: Whether the proposals will recommend repeal or changes to the Human Rights Act (eg, the extent to which UK courts are bound by European Court decisions) What a Bill of Rights might achieve and whether it will address any housing-specific issues arising in case law since the Human Rights Act The geographic scope of the Bill of Rights Whether the ambition of bringing the final say on human rights back to the UK Supreme Court will affect not only the Human Rights Act but the European Convention on Human Rights.

Housing Bill "Legislation will be introduced to support home ownership and give housing association tenants the chance to own their own home."7 The Bill is intended to: Enable approximately 500,000 more tenants of housing associations to buy their home at the same Right to Buy discount levels as local authority tenants Require local authorities to dispose of high-value vacant council properties to help fund the Right to Buy extension discounts and the building of more affordable homes Increase the supply of new starter homes for young (under 40) first-time buyers only at a 20% discount below open market value Take forward the Right to Build, requiring local planning authorities to support custom and self-builders registered in their area in identifying suitable plots of land to build or commission their own home Introduce a statutory register for brownfield land, to help achieve the target of getting Local Development Orders8 in place on 90% of suitable brownfield sites by 2020 Simplify and speed up the neighbourhood planning system, to support communities that seek to meet local housing and other development needs through neighbourhood planning Give effect to other changes to housing and planning legislation that would support housing growth. 4 â&#x20AC;&#x201C; Housing Law Update 6: The UK legislative programme

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The legislation will cover England only initially and Wales depending on a decision by the Welsh Government. The Welsh Government consultation9 on the future of the Right to Buy in Wales ended in April and the responses have been published.10 The provisions relating to planning will apply only to England. Look out for: How one-for-one replacement will be guaranteed in legislation and, if ‘guaranteed’ is a wrong or inappropriate term, what terminology is used in the legislation and whether it is fit for purpose Will guarantees include a maximum period between sale and replacement? Will the legislation determine whether one-for-one replacement is at like-for-like rent or will there be an underlying assumption of affordable rent? Will there be exemptions or protection for local authorities where land is scarce or access delayed? Will there be a specific rural exemption where viability for replacement is more difficult to achieve, fewer sites, and planning rules are more complex? Will there be specific exemptions for London where land is more expensive, where sale of local authority stock may be disproportionately high, and where there will be pressure to ring-fence receipts from local authority sales? How the legislation will deal with charitable status and other specific aims of housing associations Will the government simply extend and enhance the Right to Acquire (this now seems unlikely)? Whether a cost floor, below which a property cannot be sold, will be included in legislation Whether there will be regulatory sanctions for those who do not comply and what non-compliance will look like How sites for starter homes will be identified and the role of need and demand in that process The specific statutory requirements on planning authorities relating to the Right to Build and how this will be applied in areas of low demand or scarce land resources.

Cities and Local Government Devolution Bill “To bring different parts of our country together, my government will work to bring about a balanced economic recovery. Legislation will be introduced to provide for the devolution of powers to cities with elected metro mayors, helping to build a Northern Powerhouse.”11 The Bill's12 main provisions apply only to England and are intended to: Fulfil the government’s commitments on devolving powers and budgets to boost local growth in England

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Provide the legislative framework for the Greater Manchester deal and other deals in large cities which choose to have elected mayors and in other places with combined authorities Empower towns and counties through Growth Deals13 implemented in the last Parliament Applied by order to specified combined authorities and their areas to enable an elected mayor for the combined authority who would exercise specified functions, chair the authority, and undertake the functions of Police and Crime Commissioner (PCC) for the area Remove the current statutory limitation on functions; currently these are limited to those on economic development, regeneration, and transport. Look out for: What the legislation will mean for areas outside the major conurbations, areas of two-tier local government and rural areas What an elected mayor's ‘greater control’ over housing will really mean, bearing in mind it is not a named function in the draft Bill What a combined authority's role in housing might mean.

Public Service Ombudsman Bill The government intends to ‘...reform and modernise the Public Service Ombudsman sector providing a more effective and accessible final tier of complaints redress within the public sector.’14 The proposal would absorb the functions of the Parliamentary Ombudsman, the Health Ombudsman, the Local Government Ombudsman and potentially The Housing Ombudsman for England. The government published a consultation15 on the proposal to create a single Public Service Ombudsman (alongside the Gordon Report16) in March and the consultation closed in June. The legislation is intended to: Provide a simplified, improved and more accessible final tier of redress for customers of public services who have complained and who do not feel satisfied by how their complaint has been handled Be an opportunity to improve public services by identifying where problems are occurring and informing the creation and development of effective responses Ensure a robust process for accountability and reporting: the new Ombudsman will be independent of government and directly accountable to Parliament. Look out for:

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Whether the Housing Ombudsman Service is ultimately included How current Housing Ombudsman Services will transfer to the new service How the new service will relate to scrutiny and regulation arrangements.

Welfare Reform and Work Bill (formerly the Full Employment and Welfare Benefits Bill) "To give new opportunities to the most disadvantaged, my government will expand the Troubled Families programme and continue to reform welfare, with legislation encouraging employment by capping benefits and requiring young people to earn or learn." 17 The Bill, to be published 9 July, is intended to: Freeze the main rates of the majority of working age benefits, tax credits and Child Benefit for two years from to 2017 Protect pensioners; benefits relating to the additional costs of disability and statutory payments, such as Statutory Maternity, Paternity, and Adoption Pay Lower the benefit cap to £23,000 in London, equivalent to gross family earnings of up to £29,000, and £20,000 elsewhere Introduce statutory duties to report on progress towards achieving the highest employment area in the G7; report annually on progress against meeting a target of three million new apprenticeships and report annually on progress of the Troubled Families programme including a requirement on public bodies to provide information to the Secretary of State A new Youth Allowance for 18-to-21-year-olds with stronger and immediate workrelated condition and requirement to go on an apprenticeship, training or community work placement after the first six months Remove automatic entitlement to Housing Benefit for 18-to-21-year-olds Provide Jobcentre Plus adviser support in schools across England to supplement careers advice and provide routes into work experience and apprenticeships. Look out for: The impact of the benefit freeze and lower cap on providers and their tenants How homelessness resulting from the changes for 18-21 year olds will be managed and the cost reconciled against any savings Will there be exemptions for 18-to-21-year-olds claiming benefits where they were in work and are between jobs and in circumstances where it would be inappropriate to force them to return home or sofa surf How homelessness resulting from the changes for 18-21 year olds will be managed and the cost reconciled against any savings The impact on supported housing provision for young people, in particular by specialist providers18

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Opportunities for housing providers to deliver apprenticeships, training and community work placements Opportunities relating to the Troubled Families programme. And see our HQN briefing Housing under a Conservative government for more detail on expected benefit cuts.

Charities (Protection and Social Investment) Bill The Bill19 extends to England and Wales (charity law and regulation is a devolved matter in Scotland and Northern Ireland) and is intended to protect charities from abuse by people who present a known risk; make it easier for the Charity Commission to take action against individuals and charities in cases of abuse; extend the criteria for automatic disqualification from charity trusteeship, and extend disqualification to senior management positions to better protect charities from the risk of abuse. The Charity Commission's powers will be strengthened enabling it to direct that a charity be closed down after an inquiry; issue official warnings to charities; disqualify a person who is unfit to serve as a charity trustee in certain circumstances, and address some gaps and weaknesses in the Charity Commissionâ&#x20AC;&#x2122;s existing powers. The legislation will make it easier for charities to invest their funds to generate a financial return and a positive social outcome by giving charities a new specific and simple power to make social investments (pursuing both a financial and social return), along with clear duties when they do. The social investment provisions are based on recommended by the Law Commission.20 Look out for: The impact on housing providers that are charities or have charities as part of their group structure Including the legislation in risk management planning Opportunities to work with charities seeking to undertake social investment in the provision of housing or activities that promote the better management of social housing and tenancy support.

Childcare Bill "Measures will be brought forward to help working people by greatly increasing the provision of free childcare."21 The Bill22 is intended to provide for an increased entitlement to 30 hours a week of free childcare (for 38 weeks of the year), to be made available to eligible working parents of three- and four-year-olds. It will also require local authorities to publish information about the provision of childcare in the local authority area, and other services or facilities which might be of benefit to parents or prospective parents, or children or young persons in their area. 8 â&#x20AC;&#x201C; Housing Law Update 6: The UK legislative programme

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Providers will need to be aware of opportunities to support families generally and with additional opportunities into employment specifically. However, they will also need to be aware of the concerns expressed by childcare providers that the current provision is already under-funded. Concern has also been expressed regarding the reporting requirements on both parents and providers regarding employment status.

Immigration Bill "There are other ways we can identify those who shouldn’t be here, for example through housing. For the first time we’ve had landlords checking whether their tenants are here legally. The Liberal Democrats only wanted us to run a pilot on that one. But now we’ve got a majority, we will roll it out nationwide, and we’ll change the rules so landlords can evict illegal immigrants more quickly. "We’ll also crack down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime. And, a bit like ending jobs when visas expire, we’ll consult on cancelling tenancies automatically at the same point."23 The Bill is intended to: Introduce an offence of illegal working and enabling the wages paid to illegal migrants to be seized as proceeds of crime Create a new enforcement agency responding to the worst cases of exploitation Make it illegal for employment agencies to recruit solely from abroad without advertising those jobs in Britain and in English Consult on funding apprenticeship schemes for British and EU workers by implementing a new visa levy on businesses that use foreign labour A clearer bar on access to services by illegal migrants: "We will build on the national roll-out of the landlord scheme established in the Immigration Act 2014, and make it easier to evict illegal migrants"24 Ensure banks take action against existing current accounts held by illegal immigrants Extend the ‘deport first, appeal later’ principle to all cases, except where it will cause serious harm, and require all foreign offenders released on bail to be tagged to prevent absconding and increase the number of criminals deported. Look out for: How the lessons learned from the West Midlands pilot on tenancy checks is applied to the draft legislation Whether the government will introduce prohibitions on landlords and agents charging extra fees relating to the checks The impact on pre-tenancy checks by social and private landlords

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What “…crack(ing) down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime"25 means in practice. The impact on managing tenancies in cases involving deportation. The statutory basis for making it easier to evict illegal immigrants; whether this will be based on fast track possession proceedings or the tenancy being voided in some way and who will be responsible for carrying out the eviction and the compatibility of this with human rights and prevention from eviction legislation The potential for Equality Act challenges. And see our HQN briefing Immigration and housing for more detail on this controversial issue.

Counter-Extremism Bill The Bill26 is intended to: Promote social cohesion and protect people by tackling extremism Introduce new powers: – – – – –

Banning Orders: a new power for the Home Secretary to ban extremist groups Extremism Disruption Orders: a new power for law enforcement to stop individuals engaging in extremist behaviour Closure Orders: a new power for law enforcement and local authorities to close down premises used to support extremism Strengthening Ofcom’s roles so that tough measures can be taken against channels that broadcast extremist content Enable employers to check whether an individual is an extremist and bar them from working with children.

Look out for: The role of local authorities in identifying and now dealing with extremism through closure orders Any role for housing providers either specifically or as ‘public bodies including any additional pre-tenancy checks The role of housing providers as employers.

Policing and Criminal Justice Bill The Bill is expected to apply to England and Wales only and is intended to: Provide enhanced protections for children by, subject to consultation, introducing sanctions for professionals who fail to take action27 on child abuse where it is a professional responsibility to do so, either through amending current duties, introducing a criminal offence of ‘wilful neglect’, or introducing a mandatory reporting scheme. It will also 10 – Housing Law Update 6: The UK legislative programme

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close a legal loophole so that live-streaming of child sexual abuse online can be punished in the same way as recorded images – meaning offenders will face up to 14 years in prison. Reform legislation to detain people under sections 135 and 136 of the Mental Health Act 1983 to ensure better outcomes for those experiencing a mental health crisis by cutting the use of police cells detentions, reducing the current 72-hour maximum period of detention for the purposes of medical assessment, and enabling more places, other than police cells, to be designated as places of safety. Create a presumption that suspects will be released without bail unless it is necessary by limiting pre-charge bail to 28 days, with an extension of up to three months, authorised by a senior police officer and the police will have to apply to the courts for an extension beyond three months, to be approved by a magistrate. Ensure 17-year-olds who are detained in police custody are treated as children for all purposes under the Police and Criminal Evidence Act (PACE) by ensuring an appropriate adult is present for drug sample taking; ensuring appropriate consent is granted by both the 17-year-old and parent or legal guardian for a range of interventions, including intimate searches, and the ability to impose conditional bail to ensure the welfare and interests of the 17-year-old. Change HMIC’s statutory remit and functions to strengthen its independence, extend its scope and allow it to comment on the efficiency and effectiveness of policing as a whole including contractors and Police and Crime Commissioner staff who are supporting the police and delivering policing functions and acquiring information from third parties. Changes to the police complaints system will include a stronger role for Police and Crime Commissioners, measures to strengthen protections for police whistleblowers, and changes to the powers of the Independent Police Complaints Commission (IPCC). Look out for: The professions to be included in the child protection sanctions The impact of changes in mental health legislation on supporting vulnerable residents The impact of changes to bail conditions on supporting victims of and managing ASB.

Victims of crime The legislation is intended to put the key entitlements of the Victims’ Code of Practice28 in primary legislation; give victims a voice in the criminal justice system and the opportunity to explain how a crime has affected them, and guarantee greater protections for victims and witnesses in the criminal justice system, including that victims of crime have the right to make a Victim Personal Statement and read it out in court at sentencing and at the Parole Board.

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Look out for: What Police and Crime Commissioners are doing with their responsibility to support victims of ASB in the areas where housing providers work How tenants and residents can be supported when they are victims of crime and approach their provider for help.

Psychoactive Substances Bill The Psychoactive Substances Bill29 will ban the production, distribution, sale and supply of new psychoactive substances (NPS) in the UK. Under the Bill it will be an offence to produce, supply, offer to supply, possess with intent to supply, import or export psychoactive substances. The maximum sentence will be seven years’ imprisonment. The Bill will cover psychoactive substances intended for human consumption that are capable of producing a psychoactive effect. However, it will exclude tobacco, caffeine, food and medical products. Controlled drugs will continue to be regulated by the Misuse of Drugs Act 1971. Enforcement powers would be extended to all NPS supply from UK websites, so they can be shut down. There will be powers to seize and destroy NPS and powers to search persons, premises and vehicles, as well as to enter and search premises by warrant if necessary. There will also be provision for civil sanctions – prohibition notices and prohibition orders – to enable the police and local authorities to adopt a proportionate response to the supply of NPS in appropriate cases. Look out for: Opportunities to manage ASB associated with legal highs Opportunities to work with partners to reduce the impact of legal highs and crime associated with legal highs How the legislation will be interpreted and enforced in practice.

Other Bills There will also be: An Enterprise Bill, introducing a cap on exit payments made to public sector workers to end six-figure payoffs for the best paid public sector workers An Energy Bill giving local communities the final say on wind farm applications by removing the need for the Secretary of State’s consent for any large onshore wind farms (over 50MW) A Trade Union Bill on requirements around the level of participation in ballots for strike action An Education and Adoption Bill30 around creating regional adoption agencies to speed up the adoption process across local authority boundaries 12 – Housing Law Update 6: The UK legislative programme

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An Energy Security Bill around investing in new energy infrastructure such as new nuclear and new renewables, as well as exploring for gas A High Speed Rail (London-West Midlands) Bill giving the government powers to compulsorily acquire or temporarily take possession of land required for the scheme, and construct and operate the railway.

Scotland In the Scottish Parliament: A Community Justice Bill31 establishes a new model for community justice services focusing on local delivery, partnerships and collaboration with national arrangements to provide the profile, leadership and strategic direction. In the UK Parliament the Scotland Bill32 will: Provide the Scottish Parliament with around ÂŁ2.5bn-worth of new welfare powers Allow the Scottish Government to vary the frequency of Universal Credit payments in Scotland Give the Scottish Parliament the power to set the rules over a range of benefits which affect carers, disabled people, the elderly and to control programmes which help people find work.

Wales In the Welsh Assembly the Renting Homes (Wales) Bill33 continues its progress (see our April briefing34). The Assembly's Communities, Equality and Local Government Committee has suggested changes to the Bill: The fitness for human habitation test will not raise the standard of accommodation in the rental sector in a meaningful way so the criteria to be used should be reconsidered There is and over emphasis on the courts to resolve disputes, and that going to court should not be the only option for tenants or landlords to enforce rights with a need for alternative dispute resolution provisions which are accessible and expedient, and less costly than court proceedings The proposal for 16 and 17 year olds to be able to hold tenancies would be difficult in practice as they would find difficulty entering into associated contracts for services such as gas and electric and that these tenancies should be limited to community landlords able to provide support to the young people. In the UK Parliament, a Wales Bill will: Make Welsh devolution clearer by introducing a reserved powers model to clarify the division of powers between the National Assembly and Parliament

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Make Welsh devolution stronger by devolving important powers to the National Assembly over energy, transport and local government elections in Wales Give the National Assembly control over its own affairs including what it should be called, its size, electoral system, elections and voting age Reflect the permanence of the Assembly and the Welsh Government in statute Provisions to place the permanence of the National Assembly and the Welsh Government on a statutory footing and enshrine the legislative consent process in law The Bill would devolve to the National Assembly control over its own affairs including what it should be called, its size and the electoral system used to elect its Members.

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About the author Tim Horsley spent over 20 years in local government housing management in central London and the West Midlands. He is an associate consultant who is experienced in writing strategies, policies and procedures; mock inspections; service reviews and health checks. Specialist areas include anti-social behaviour management; ASB in a community safety setting; homelessness services; hostel management; temporary accommodation and leasing schemes; and allocations and lettings. Tim has also written several briefings and toolkits on managing ASB, homelessness, neighbourhood management and the practical aspects of housing law as well as developing and delivering training on ASB policies and procedures.

Chancellor George Osborne's Summer Budget 2015 speech Chancellor George Osborne's Summer Budget 2015 speech Queen’s Speech 2015 4 Queen’s Speech 2015 5 Public Bills before Parliament 2015-16 — UK Parliament 6 Queen’s Speech 2015: what it means for you 7 Queen’s Speech 2015 8 What types of area-wide local planning permission are there? | Planning Practice Guidance 9 Welsh Government | Consultation on the future of Right to Buy and Right to Acquire – a White Paper for social housing. 10 Welsh Government | Consultation on the future of Right to Buy and Right to Acquire – a White Paper for social housing. 2 3

Queen’s Speech 2015: what it means for you Cities and Local Government Devolution Bill Local Growth Deals 14 Queen’s Speech 2015: what it means for you 15 Public service ombudsman - Consultations 16 Public service ombudsman - Consultations 17 Queen’s Speech 2015 18 Housing benefit axe could drive up youth homelessness, warns YMCA | Children & Young People Now 19 Charities (Protection and Social Investment) Bill 20 Social Investment by Charities - Law Commission 21 Queen’s Speech 2015 22 Childcare Bill [HL] 2015-16 — UK Parliament 23 Queen’s Speech 2015: what it means for you 24 Queen’s Speech 2015: what it means for you 25 Prime Minister speech on immigration 26 Counter-Extremism Bill - National Security Council meeting 27 Karen Bradley's How Safe Are Our Children conference speech 28 The code of practice for victims of crime and supporting public information materials 29 Psychoactive Substances Bill 30 Education and Adoption Bill 2015-16 — UK Parliament 31 Community Justice (Scotland) Bill 32 Scotland Bill 2015 - legislation and explanatory notes 33 Welsh Government | Renting Homes 34 HQN - Fast Practical Guidance on Everything to do with Housing 12 13

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Board 28 July 2015 Management Agreement between Newcastle City Council (NCC) and YHN Report by Director of Corporate Services and Assistant Chief Executive For information 1.

Background information

1.1

Board members are aware that our current Management Agreement (MA) with NCC expires on March 31st 2016 and that officers from both organisations having been working jointly to draft a new agreement to apply from April 1st next year.

1.2

At the May meeting Board received a short presentation on the process adopted, the main clauses and the fee principles. This report is to give further detail on the MA and to provide Board members with an opportunity to comment on any of its detail prior to being asked to agree it later in the year.

Principles of the approach

2.1

The main body of the MA represents the fixed contractual relationship and has been written so as to remain applicable through a range of possible changes to our operating environment. Where we need to refer to current situations or processes, but where we know that these will change year on year (for example fee levels or performance indicators), these are appended in schedules. The schedules can be changed without recourse to legal advice, whereas the main body of the MA is a legal document and any changes would be more onerous. As far as possible we would wish not to change the main part of the MA during its life. Schedules can be changed by joint agreement.

2.2

The draft MA is much shorter and simpler than the previous version and is based on a template widely used in the sector. Obviously, in many clauses the wording has been adapted to reflect our circumstances, but there are a substantial number of clauses towards the end of the document, where we are proposing no alterations to the template.

2.3

Much of the terminology in the previous document had become dated as there were references to government departments, inspectorates and NCC directorates that no longer exist. Some of the terms proposed are now more generic to avoid them becoming obsolete.

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2.4

The work has been undertaken jointly and collaboratively by officers in both organisations and there are no areas of dispute.

Salient content

3.1

The proposed term of the MA is ten years.

3.2

The way in which the fee is to be calculated involves  a process of quarterly and annual review  an expectation of efficiency  an allowance for inflation  consideration of variation to services; in the case of new services, these could be short term (non-recurring expenditure) or mainstreamed (recurring).

3.3

The notice period for material change to service provision from either party to the other, is 12 months, unless a shorter period is jointly agreed.

3.4

NCC is interested in the outcomes we achieve using the fee that we receive. This sounds like an obvious statement but represents a shift which sits well with the disaggregation of the HRA and YHN financial structure. NCC, when agreeing our Key Performance Indicators (KPIs) and our Delivery Plan will effectively be telling us what they want us to achieve for the fee we receive. They will not be prescribing how we do so. Decisions and risks relating to our structure, processes, trading and so on, will all belong to the Board.

3.5

The MA does not propose a formulaic approach to defining performance failure by YHN, so as to avoid unnecessary work, and also to avoid a kind of two tier target being set inadvertently. Instead it is envisaged that through the quarterly monitoring, both parties would be clear about remedial action to improve on performance. A situation where NCC lost trust in YHN to deliver a service would be well signalled through these quarterly sessions. In this unlikely instance the MA provides for the termination of all or part of the agreement.

The document

4.1

The most recent version of the document and its schedules are appended. The only outstanding issue of principles to be agreed are around  the treatment of service charge areas within the fee  whether to include a separate schedule on the processes for determining the Business Strategy, the Delivery Plan and the KPIs, or whether to include this in the main agreement. Schedule Four will contain the actual fee to be paid to YHN for 2016-17 and therefore will not be completed until March when budget processes are concluded. The document being worked on is a ‘marked up’ version, containing many notes and annotations. These have all been removed for ease of reading, for this report. Cross referencing of numbers and terms is still to be done and there will be a final proofing exercise, so Board members need not comment on this level of detail.

4.2 4.3

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The Business Implications

5.1

Mission and Strategic Objectives: The MA is designed to help us achieve our mission and strategic objectives, while supporting those of our shareholder, NCC. It is sufficiently flexible to allow changes to the Mission and Strategic Objectives as they occur through Business Strategy review processes.

5.2

Value for money/efficiencies: The MA contains a requirement for efficiencies.

5.3

Financial Implications: The MA sets out the way in which YHN’s fee will be determined.

5.4

Resources (financial, property, technological or human): The MA broadly allows YHN to deploy resources as we see fit to deliver the outcomes required by NCC. Oversight of our finances by YHN Board will be essential to ensure that this is managed appropriately.

5.5

Impact on services/performance: The MA includes a commitment to continuous improvement.

5.6

Outcomes for tenants/leaseholders: There should be no detrimental impact on services and performance and the new MA will create opportunities for improved performance.

5.7

Risk (reputation, relationship): The MA, couple with disaggregation, means that the HRA’s risks are more directly controlled by NCC, whilst YHN’s risks are controlled by YHN’s Board.

5.8

Environmental: None

5.9

Legal: NCC lawyers are the authors of the agreement.

5.10

Equality and Diversity and Community Cohesion: None

5.11

Stakeholder Involvement/consultation: this has been a collaborative piece of work. In addition a presentation was made to the Board meeting of May 2015, and there was a session with involved tenants on this and the review of YHN on July 2nd.

Conclusion and recommendations Board is recommended to;  Provide comments on the draft document to Sheila Breslin by August 28th.

Implementation The MA and its appendices will be completed and a final draft brought back to Board to coincide with the timing of NCC decision-making processes. The exact date for this is to be confirmed.

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Background Papers Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Sheila Breslin by telephone on 0191 278 8707 or email sheila.breslin@yhn.org.uk

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9iii Dated [

] 20[ 15]

THE COUNCIL OF THE CITY OF NEWCASTLE UPON TYNE and YOUR HOMES NEWCASTLE LIMITED

Agreement for the delivery of housing management and other services

Trowers & Hamlins LLP 3 Bunhill Row London EC1Y 8YZ t +44 (0)20 7423 8000 f +44 (0)20 7423 8001 www.trowers.com Model draft 2014 Copyright Trowers & Hamlins LLP

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Agreement dated Parties (1)

THE COUNCIL OF THE CITY OF NEWCASTLE UPON TYNE of Civic Centre, Barras Bridge, Newcastle upon Tyne NE1 8PB (the Council)

(2)

YOUR HOMES NEWCASTLE LIMITED whose registered office is Civic Centre, Barras Bridge, Newcastle upon Tyne NE1 8PB (YHN)

Introduction (A)

The Council is the local housing authority for its area pursuant to Sections 1 and 2 of the Housing Act 1985 (1985 Act) and pursuant to the powers contained in the 1985 Act provides housing accommodation and exercises general management, regulation and control of its housing accommodation.

(B)

Pursuant to Section 27 of the 1985 Act and with the approval of the Regulator and pursuant also to Section 1 of the Localism Act 2011 and all other enabling powers the Council agrees that YHN shall exercise such of the Council's management functions as are specified herein.

(C)

The Council and YHN have agreed that YHN shall provide and the Council shall cooperate with it in providing the Services in the manner and upon the terms hereinafter set out.

Definitions and interpretations

1.1

The definitions used are as follows: ALMO means arms length management organisation; Appropriate Index means the CPI or such other index as the Council and YHN may agree from time to time; Capital Sum means the sum paid to YHN in accordance with Clause 10 for the capitalfunded element of the Stock Maintenance and Improvement Programme as set out in Schedule 3; Constitution means articles of association; Council's Representative means the Council's [Director] [Head] of [Housing] or such other person with a similar role who may be nominated from time to time by the Council; CPI means the United Kingdom Index of Consumer Prices; Expert shall be a recognised expert in council housing management agreed to be appointed by the parties and in default of agreement nominated at the request of either party by the President of the Chartered Institute of Arbitrators;

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IGD.48023.3

Financial Year means the period from 1 April to 31 March; HCA means the Homes and Communities Agency; HRA means the Housing Revenue Account; HRA Business Plan means the Self-financing business plan at the date hereof as revised from time to time (in consultation with YHN); Improvement Services means those Services described in section [ ] of the Specification and Improvement shall be construed accordingly; KPIs means key performance indicators; Maintenance Services means those Services described in section [ ] of the Specification and Maintenance shall be construed accordingly; Management Services means those Services described in the Specification except for those Services in sections [ ] and [ ] thereof and Management shall be construed accordingly; Management Services Fee means the fee payable to YHN under Clause 10 for the provision of the Management Services and Maintenance Services Fee and Improvement Services Fee shall be construed likewise; Objects means the objects set out in YHN's Constitution; Other Legislation means that legislation relating to (inter alia) data protection, health and safety, freedom of information, the promotion of equality and diversity and other matters ancillary to housing management to which YHN is subject and which applies to the Services; Quarter Days means 25 March, 24 June, 29 September and 25 December and Quarter shall be construed accordingly; Regulator means the HCA (acting through the Regulation Committee established by it) or any successor authority; Representatives Representative;

means

collectively

the

Council's

Representative

and

YHN's

Retained Housing Service means the Council's statutory and other housing functions and services (whether financed out of the HRA or General Fund) not outsourced to YHN; Review of Services means the review described in Clause 3; Right to Manage is the right exercisable pursuant to the Housing (Right to Manage) Regulations 2008;

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Fee means the Management Services Fee for recurring, non-recurring and service charge activities payable by the Council pursuant to and calculated in accordance with Clause 10 and the fee principles set out in Schedule 5;

Self-financing means the financing arrangements for the HRA which were implemented in April 2012; Services means the services described in the Specification and any other services which from time to time are provided by YHN pursuant to Clause 2 subject to any variations pursuant to Clause 4; Specification means the document which forms Schedule 1 including any variations pursuant to Clause 4; Stock Maintenance and Asset Management Programme means the Maintenance and Asset Management programme described in Schedule 3 subject to any revisions made in accordance with Clause 5; The term stock maintenance is used to describe revenue funded improvements to the stock â&#x20AC;&#x201C; including day to day repairs. The term improvement programme is used to describe capital funded improvements including cyclical (lifecycle) replacements; regeneration of existing stock; environmental works to estates; internal upgrades to communal facilities within blocks; energy efficiency measures; health and safety requirements. In addition other intermittent areas of expenditure will be considered as capital expenditure such funding set aside for tenant directed upgrades (participatory budgeting) and upgrades to non residential assets. Newbuild capital programme â&#x20AC;&#x201C; this refers to any newbuild activity undertaken within the HRA ringfence of housing or other stock including (but not restricted to) â&#x20AC;&#x201C; new build HRA properties constructed on Council owned land, newbuild HRA properties constructed on land purchased through HRA or for the purposes of construction of HRA dwellings.. Stock acquisition means the purchase of land or property using the HRA ring fenced capital fund for the purpose of acquiring land/property assets to provide additional rental units within the HRA. Tenant means a secure or introductory tenant of the Council occupying a Council dwelling as his or her principal home, or a licensee occupying a Council dwelling as aforesaid; Works means the subject-matter of the Works Contracts; Works Contracts means contracts let and/or administered by YHN pursuant to Clauses 6-7; Works Fees means the fees payable to YHN under Clause 9 in connection with the delivery of the Stock Maintenance and Improvement Programme; YHN's Representative means YHN's Chief Executive or such other person with a similar role who may be nominated from time to time by YHN. 1.2

In this Agreement references to amounts expressed to be indexed are references to such amounts at the date of this Agreement multiplied by: V1/ V2 Where:-

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V1 is the value of the Appropriate Index published in the September most recently preceding the relevant calculation date.

(b)

V2 is the value of the Appropriate Index at the date of this Agreement.

1.3

A reference to any Act of Parliament, or to any order, regulation, statutory instrument, or the like, shall be deemed to include a reference to any amendment, re-enactment, consolidation, variation, replacement or extension of the same respectively from time to time and for the time being in force.

1.4

A reference to any statutory authority, agency or regulatory body shall include a reference to any other such authority, agency or regulatory body which from time to time carries on substantially the same functions.

1.5

Wordings denoting the singular shall include the plural and vice versa and words denoting the masculine gender shall include the feminine gender and vice versa and words denoting persons shall include firms and corporations.

1.6

References to clauses, schedules and annexes shall be deemed to be references to the clauses in and the schedules and annexes to this Agreement as so numbered.

1.7

In this Agreement headings are included for ease of reference only and shall not affect this Agreement or the interpretation thereof.

YHN Services

2.1

YHN will provide the Services as set out in the Specification so as to deliver the outputs and (subject to Clause 2.2) any KPIs set out therein.

2.2

The KPIs referred to in the Specification will be reviewed as part of the review process described in Clause 3.

Review of Services

3.1

Save in relation to KPIs the Services provided by YHN shall only be varied in accordance with Clause 4.

3.2

The KPIs in the Specification shall be reviewed by the Council and YHN in each year of this Agreement pursuant to the timetable set out in the fee principles document which forms Schedule 5 to this Agreement. The Council acting reasonably will set realistic KPIs for the following year. Changes to the then current KPIs will only be deemed realistic if they reflect: 3.2.1

service standards achieved by other housing managers working in comparable circumstances;

3.2.2

the resources made available to YHN by the Council for the relevant Services

Variation to Services

4.1

Subject to Clause 4.2, or in cases where the Council and YHN agree to a shorter period, the Council will only vary the nature and extent of the Services by giving YHN at least 12 monthsâ&#x20AC;&#x2122; notice thereof.

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(a)

4.2

In the following circumstances the Council shall be entitled to vary the Services as such circumstances require and shall give YHN as much notice thereof as is practicable: 4.2.1

the exercise of the Right to Manage;

4.2.2

formal steps taken by the Regulator.

4.3

The parties shall discuss the variation of the Services on a yearly basis and shall commence such discussions each year pursuant to the timetable set out within the fee principles document attached at Schedule 5 to this Agreement.

4.4

Where the Council varies the Services in accordance with this Clause 4, the Council may make a commensurate variation to the Fee in accordance with Clause 9.4 and the principles in Schedule 5.

Stock Maintenance and Improvement

5.1

YHN agrees to assist the Council to produce a Stock Maintenance and Improvement Programme on a rolling four year basis which will be agreed annually.

5.2

YHN agrees to assist the Council to deliver the Stock Maintenance and Improvement Programme by: 5.2.1

letting and/or administering the (revenue funded) Maintenance Works Contracts in accordance with Clause 7; and

5.2.2

letting and/or administering the (capital funded) Improvement Works Contracts in accordance with Clause 8.

5.3

The parties shall review the Stock Maintenance and Improvement Programme on a yearly basis and shall commence each review no later than 1 July each year.

5.4

The review may take account of (inter alia):

5.5

5.4.1

the Councilâ&#x20AC;&#x2122;s strategic housing plans;

5.4.2

changing standards (such as energy efficiency);

5.4.3

future stock condition surveys;

5.4.4

legal and regulatory requirements (relating to fire safety and other matters);

5.4.5

housing needs and the changing household demographic of Newcastle upon Tyne;

5.4.6

the 30 year HRA business plan;

5.4.7

external funding opportunities;

5.4.8

sustainability of the Councilâ&#x20AC;&#x2122;s housing stock

Any revisions arising from Clauses 5.2 and/or 5.3 shall give rise to a commensurate revision of the Works Fees pursuant to Clause 9.

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Maintenance Works Contracts

6.1

YHN will let and administer such Works Contracts as the Council and YHN (acting reasonably) deem fit/necessary to deliver the Maintenance element of the Stock Maintenance and Improvement Programme. Should the Council choose to act on its own behalf it will give YHN 12 months’ notice of any proposed changes to the existing arrangements. Such works contracts would comprise repairs and maintenance, void repairs, painting programme, gas servicing, equipment and building servicing and health and safety measures.

6.2

YHN’s responsibilities in regard to the letting and administration of revenue funded works contracts will comprise the following potential arrangements: 

Procurement and Provision of maintenance services through OJEU external tender process



Procurement and provision of maintenance services through partnering or commissioning arrangements comprising a number of agencies acting together



Procurement and provision of maintenance services through service level agreement between YHN and NCC



Procurement and provision of maintenance services by direct delivery by YHN

6.3

In the procurement of any Maintenance Works Contracts YHN will comply with all applicable European Union and other regulations and take all reasonable steps to adhere to best procurement practice and achieve value for money.

6.4

YHN will stipulate provisions in the Maintenance Works Contracts (when they are let) so as to take reasonable account of possible future revisions of the Stock Maintenance and Improvement Programme in accordance with Clauses 5.2-3 (but without prejudice to Clause 5.4).

6.5

[The Council agrees that the costs of complying with Clause 6.2 is an additional cost for YHN which will be reflected in the Fee.] NOTE NEED TO REFER TO THIS AS WORK FEES CLAUSE 10

Improvement Works Contracts

7.1

YHN will let and administer the Works Contracts [let by the Council][as [YHN] (acting reasonably) deems [fit/necessary]] to deliver the Improvement element of the Stock Maintenance and Improvement Programme [following the expiry or earlier termination of the current contract[s]]. Should the Council choose to act on its own behalf…..

7.2

The provisions of Clauses 7.2 – [ Maintenance Works Contracts. REPLICATE 7 IN TERMS OF PROCUREMENT AND PROVISION

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Provision of information

8.1

In accordance with the timetable which is included in the fee principles document attached at Schedule 5 to this Agreement, and in any event no later than 30 working days following the end of each Quarter, YHN will provide the Council with such information as may reasonably be required to demonstrate YHN's delivery of the Services.

8.2

The information referred to in Clause 8.1 will include details of community triggers in relation to anti-social behaviour, formal complaints made to YHN by tenants and other residents directly affected by the Services, formal corporate complaint reviews handled on YHNâ&#x20AC;&#x2122;s behalf by the Council and investigations by the Local Government Ombudsman concerning YHN.

8.3

The parties (acting reasonably) shall from time to time agree the format for the reports required under Clause 8.1.

Fee etc.

9.1

For the first Financial Year of this Agreement (here meaning the period to 31 March 2017) the Council will pay YHN ÂŁ[XXX] for the provision of the Services in accordance with Clauses 2-3.

9.2

The Fee referred to in Clause 9.1 has been calculated and/or is deemed to be attributable to the Services as shown in Schedule 4.

9.3

It is agreed that the allocation of the Fee in Schedule 4 serves only to assist in the variation of the Fee under Clause 9.4 and YHN is entitled to use the Fee as it sees fit to deliver any or all of the respective Services.

9.4

The Fee shall only be varied in accordance with this Clause 9.4:

9.5

9.4.1

the parties will commence discussions on the Fee for the next Financial Year no later than 1 October each year in accordance with the guidance on fee principles attached at Schedule 5;

9.4.2

the discussions referred to in Clause 9.4.1 will be based on the Fee Principles in Schedule 5;

9.4.3

any variation of the Fee may be commensurate with the variation of the Services in accordance with Clause 4 based so far as practicable and relevant on the initial calculation of the Fee as described in Clause 9.2 and provided that the Maintenance [and Improvement] element[s] of the Fee shall always be sufficient to enable YHN to discharge its obligations under the [Maintenance] Works Contracts;

9.4.4

if the parties cannot agree the variation of the Fee and invoke Clause 31 an Expert to whom the dispute is referred shall take into account any value for money requirement in the Specification subject always to the proviso to Clause 9.4.3.

The Fee due and payable under this Clause 9 shall be paid monthly in advance on presentation of an invoice by YHN.

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The Fee shall be indexed with effect from 1 April in each year of this Agreement provided that no indexation shall result in a reduction in the Fee.

Surpluses and reserves

10.1

Subject to Clauses 10.2-4 YHN shall be entitled to use any of its own available surpluses or reserves as it sees fit on and/or in the furtherance of any of its Objects.

10.2

Surpluses and/or reserves shall only be deemed to be available for the purposes of Clause 11.1 if this is consistent with generally accepted accounting practice or specific confirmation from YHN's auditors.

10.3

YHN shall use any available surpluses or reserves to meet any in-year shortfall in the Services Fee.

10.4

YHN shall keep the Council informed about the use of its surpluses and reserves.

10.5

YHN shall apply to the Council for the use of reserves previously approved by the YHN board for the benefit of the HRA. These amounts will be included in the non-recurring activity element of the Fee.

Additional income-generation YHN shall be entitled to pursue and exploit opportunities for income generation with third parties provided that:

11.1

they are consistent with YHN's Objects or they can be legally pursued and exploited through a wholly owned subsidiary;

11.2

YHN's ability to discharge its obligations hereunder is not adversely affected;

11.3

any proposed commitment by YHN is expressly approved by YHN's board and is recorded at the next appropriate meeting between YHN and the Council;

11.4

any proposed commitment by YHN which may add to its liability to the extent that YHNâ&#x20AC;&#x2122;s total liabilities may reasonably be taken to be in excess of YHNâ&#x20AC;&#x2122;s reserves shall be first approved in writing by the Council.

Continuous Improvement

12.1

The parties acknowledge the importance of the principle of continuous improvement in the provision of the Services and the delivery of the Stock Maintenance and Improvement Programme and accordingly: 12.1.1

YHN will regularly review how better to perform its obligations hereunder; and

12.1.2

the Council will support YHN to improve its performance.

12.2

Continuous improvement will result in either or both improved standards or greater costeffectiveness.

12.3

The processes for agreeing a programme and priorities for service improvement is included within the document at Schedule 5.

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9.6

Improvement of Service Delivery and year-on-year cost efficiencies

13.1

Improvement in the delivery of Services will be effected through the KPIs agreed in accordance with Clauses 2-4 and Schedule 5.

13.2

Year-on-year efficiencies will be achieved by delivering the Services for less than the Fee.

Annual Delivery Plans Each year the parties will agree through their Representatives priorities for improvements in the delivery of the Services [and the Stock Maintenance and Improvement Programme] and so far as practicable the agreed priorities in the form of annual delivery plans will be taken into account in the review processes described in Clauses 3 and 5 (subject always to the terms thereof). The required consultation on the Delivery Plan with tenants and other interested parties will be led by YHN. The Council’s involvement will be co-ordinated by the Council’s Representative in conjunction with relevant lead officers and members. This process will be as set out in the Council’s report to its Cabinet from January 2015 titled “YHN Performance Update”.

New build AND ACQUISITION OF Property /land

15.1

Subject to Clause 15.2 the Council will work with and support YHN to maximise opportunities for carrying out new development [within the HRA] by (inter alia): 15.1.1

procuring or supporting YHN's application for HCA or other grant funding;

15.1.2

applying for and using all reasonable endeavours to obtain necessary consents and approvals;

15.1.3

facilitating the establishment of a charitable subsidiary or otherwise making or approving such changes to YHN's Constitution as may assist;

15.2

Nothing in Clause 15.1 shall prevent the Council working as it sees fit with other organisations to deliver new housing (affordable or otherwise).

15.3

YHN will devote such resources as it can reasonably make available to carrying out the development of new social or mixed use housing in accordance with the Council's statutory housing strategy (including any specific stipulations concerning housing need and rent levels). That where possible, any new housing or properties will concur with standards and best practice reflected in Council policies or sector . Where funding or technical constraints limit the ability of YHN to achieve these standards the final specification will be agreed with the Council.

15.4

YHN will assist the Council to explore new markets and ways to meet housing need of the City including housing to be let at a social or affordable rent; intermediate housing, housing for market sale.

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YHN's Constitution The Council shall only use its rights as sole member (or guarantor) of YHN to amend YHN's Constitution and appoint or remove board members (save for the Council's own nominees) or to issue directions to YHN or its board if and then only for so long as YHN fails to comply with the terms hereof and the Council would therefore be entitled to terminate this Agreement under Clause 28.

The governance of YHN

17.1

Subject to Clauses 17.2 and 17.3 the Council may send nominated representatives to attend meetings of YHN's board and/or relevant meetings of YHN committees, and by prior arrangement those representatives will be invited to make a factual statement in respect of the agenda item(s) of relevance to them.

17.2

It shall be a condition of attendance at board and committee meetings pursuant to Clause 17.1 that the representatives agree to be bound by the same duties of confidentiality and other matters as board and committee members.

17.3

Representatives attending board or committee meetings pursuant to Clause 17.1 may be required to leave for any part of the meeting (or any matter discussed thereat) which the board or committee reasonably deems confidential.

17.4

The right of the Council to send nominated representatives to board and/or committee meetings outlined at Clause 17.1 above shall extend to board and/or committee meetings of any subsidiary company of YHN, and any nominated representatives attending such meetings shall be subject to the conditions of attendance outlined at Clauses 17.2-3 above.

Changes in YHN's role and activities

18.1

The parties acknowledge that YHN's role and activities on behalf of the Council will be subject to change including changes resulting from: 18.1.1

regulatory or statutory requirements;

18.1.2

tenant and/or leaseholder expectations;

18.1.3

Council policy objectives

and accordingly this Agreement will need to be varied or otherwise incorporate such changes. 18.2

In order to give effect to the changes referred to in Clause 18.1 but without prejudice to Clauses 3 - 5 and subject to Clauses 18.3 and 21 the parties (acting reasonably) will agree a protocol for identifying and documenting such changes.

18.3

Any change pursuant to this Clause (and any consequential variation to this Agreement) may be accompanied by an adequate adjustment of the Fee or other resources needed to implement such change.

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Services provided by the Council

19.1

The Council will provide the services described in Schedule 2 for the fee(s) set out therein.

19.2

If the Council and YHN agree that the Council will provide an additional service to YHN a description of that such service (in the same form as set out in Schedule 2) will be prepared together with the agreed fee (or fee formula) therefor. The description and fee will be deemed to be incorporated in Schedule 2.

19.3

Unless the parties agree to a shorter period of time, YHN agrees to consult with and give at least twelve (12) months prior notice to the Council if it decides not to renew or extend any service level agreement or service contract with the Council.

Council's financial support for YHN

20.1

The Council shall provide and evidence such support for YHN as shall be required to enable YHN's auditors to confirm from time to time to YHN's board of directors that YHN is and will continue to be able to meet its debts as they fall due and is otherwise a 'going concern'.

20.2

Without prejudice to Clause 20.1 and subject to Clause 20.3 the Council agrees that whether through the Fee or otherwise it shall ensure that YHN is able to discharge its liabilities for the pensions costs attributable to YHN's past, present and future employees.

20.3

YHN will not knowingly take any steps (including the recruitment of new employees) which are likely to add materially to the Council's potential total liability under Clause 20.2 without first obtaining the Council's consent (which shall not be unreasonably withheld or delayed).

The HRA ring-fence The parties acknowledge that HRA income and expenditure is and remains (following the implementation of Self-financing) subject to the requirements of the statutory ring-fence and they will use all reasonable endeavours to maximise the benefits of the HRA for the Council's tenants.

Council responsibilities and entitlements It is understood and agreed that the Council:

22.1

is and remains statutorily responsible for the HRA;

22.2

will set rents and other charges for its tenants each year;

22.3

may vary the Fee in accordance with Clause 10;

22.4

can review any KPIs in accordance with Clause 4.

Council duties to YHN The Council acknowledges that its own performance in providing the services described in Schedule 2 to YHN could have an impact on YHNâ&#x20AC;&#x2122;s ability to provide the Services set out in the Specification or to meet any of the KPIs set out therein. The Council also

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Where any provision of this Agreement refers to YHN’s performance of the Services in any way, the Council will always take into account the effect of its own performance or the pressure of external factors in determining YHN’s performance of the Services. 24

Section 151 duty It is acknowledged that the Council's Director of Resources has statutory duties under Section 151 of the Local Government Act 1972 and nothing in this Agreement shall be construed as preventing that officer from doing such acts or things as are properly required for the discharge of such duties.

Management of the HRA Until further notice YHN will undertake the day-to-day management of the HRA and provide the Council with advice on how best to make use of the resources within the HRA under Self-financing.

Consultation on HRA matters In addition to the requirements of Section 105 of the 1985 Act the Council agrees to consult with its tenants and leaseholders on major issues affecting the HRA including rentsetting and the overall budget.

Term

27.1

This Agreement shall expire on 31 March 2026 unless it is terminated on any fifth anniversary of the Agreement by the Council giving YHN at least twelve (12) months prior written notice of any review which could lead to termination and at least six (6) months prior written notice of termination.

27.2

For the avoidance of doubt the Council is entitled to terminate this Agreement under Clause 27.1 free of any contractual constraints.

27.3

Clause 27.1 is without prejudice to the Council's rights under Clause 28.

Termination

28.1

Subject to Clauses 28.2-3 the Council shall be entitled to terminate this Agreement if YHN fails to comply with the terms hereof or if in the Council's reasonable opinion there is a serious and substantiated risk that YHN will shortly fail so to comply.

28.2

Unless YHN's actual or anticipated failure which would entitle the Council to terminate this Agreement under Clause 28.1 cannot (in the Council's reasonable opinion) be remedied YHN shall be afforded a reasonable opportunity (including where appropriate a remedial plan) to comply or demonstrate that it will shortly comply with the terms hereof.

28.3

For the purposes of Clauses 28.1 and 28.2 a failure to comply with any KPIs shall be deemed capable of being remedied unless the failure represents so significant a performance failure in the opinion of the Council (acting reasonably) that it is unacceptable

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acknowledges that other external factors outside of YHN’s control may adversely impact YHN’s ability to provide the Services or meet the KPIs.

in the context of the relationship between the Council and YHN and has caused a breakdown in trust and confidence that cannot be retrieved. 28.4

If the Council becomes entitled to terminate this Agreement it may decide to terminate the whole or any part hereof and either provide the Services itself or procure that any third party do so and YHN will take such steps as may reasonably be required to give effect to the Council's decision.

28.5

The Council shall have a right to terminate this Agreement where it is required to enter into an agreement with a Tenant Management Organisation (TMO). If the Agreement is terminated under this Clause 28.5 the Council and YHN shall within three months of such termination make all necessary arrangements for the transfer of the relevant functions from YHN to the TMO.

28.6

This Agreement shall be terminated if such requirement is imposed pursuant to Section 247(2) or 249(2) of the Housing and Regeneration Act 2008. If the Agreement is terminated pursuant to this Clause 28.6 the Council and YHN shall make all necessary arrangements for the transfer of the relevant functions from YHN.

Access to information YHN will afford the Council and persons properly authorised by it access to any information reasonably required provided that the Council gives YHN appropriate notice thereof.

Insurances etc

30.1

YHN shall at all times maintain in force policies of insurance with reputable insurers or underwriters as shall insure and indemnify YHN (on the usual terms available in the market) against YHN's liability to: 30.1.1

the Council and any employee of the Council;

30.1.2

the employees of YHN;

30.1.3

any other person

in the sum of at least ÂŁ[XXX] in respect of any one occurrence or series of occurrences arising out of one event. 30.2

The Council shall itself insure against all the usual risks associated with its housing stock and acknowledges that YHN has no liability therefor.

30.3

YHN will establish and maintain policies and procedures designed to (a) maintain so far as practicable continuity of business during periods of disruption caused by abnormal circumstances and (b) manage so far as practicable the risks facing it.

Dispute resolution

31.1

Save as otherwise provided in this Agreement, in the event of any dispute between the parties arising out of or in connection with this Agreement the parties shall in the first instance use their reasonable endeavours to resolve it amicably between them in accordance with the procedure set out below:

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Stage 1: Representatives of the parties (being the officers having day to day responsibility for or knowledge of the area which is the subject of the dispute) shall meet within ten working days. If they are unable to agree a resolution at such meeting or if there shall be no appropriate officers of each of the parties available to attend such meeting then move to Stage 2.

31.1.2

Stage 2: The relevant Representatives or their nominated deputies shall meet within ten working days. If they are unable to agree a resolution at such meeting or if there shall be no appropriate officers of each of the parties available to attend such meeting then move to Stage 3.

31.1.3

Stage 3: The Director of Investment and Development of the Council and the Chief Executive of YHN or their nominated deputies shall meet within ten working days.

31.1.4

In seeking to resolve any dispute considered under Stage 1, Stage 2 or Stage 3 the parties shall apply the following principles: (a)

a spirit of mutual trust and co-operation

(b)

both parties shall bear their own costs

(c)

the parties shall extend the periods of negotiation if they both agree to do so

(d)

any unanimous decision shall be implemented.

31.2

Disputes remaining unresolved after following the procedure set out in Clause 31.1 shall be referred to an Expert.

31.3

Subject to Clauses 31.4-7 the result of any dispute resolution procedure under this Clause 31 shall be final and binding on the parties (save in the event of fraud or a mistake in law or material fact) and shall where and to the extent necessary and appropriate be reflected in a variation to the provisions of this Agreement.

31.4

No resolution of any dispute pursuant to this Clause 31 shall be final and binding on the parties unless the Council's Representative confirms the Council's agreement pursuant to Clause 31.5.

31.5

Subject to Clause 31.6 the Council's Representative shall confirm the Council's agreement to an Expert's decision within 20 working days thereof (the Confirmation Period) and if he fails to do so then subject to Clause 31.6 the decision shall be final and binding on the parties.

31.6

If within the Confirmation Period the Council's Representative notifies YHN's Representative of the Council's disagreement with the Expert's decision the Council shall have 10 working days thereafter to make another decision and that decision (which shall be notified to YHN's board with the Council's reasons therefor) shall be final and binding on the parties.

31.7

If the Council fails to make another decision in accordance with Clause 31.6 the Expert's decision shall be final and binding on the parties.

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31.1.1

31.8

Until such time as a dispute between the parties is resolved or concluded in accordance with this Clause 31 the parties shall continue to comply with their respective obligations under this Agreement.

Regulator This Agreement is subject to the Regulator's right to direct the variation or termination thereof and the parties will take all steps necessary to give effect to any such variation or termination.

Other legislation Without prejudice to YHN's obligations to comply with housing and related legislation as set out in the Specification YHN will comply with all Other Legislation.

Value added tax All payments by any party to another party pursuant to the terms of this Agreement shall be exclusive of any Value Added Tax chargeable in respect of the supply of goods or services for which the payment is consideration and in so far as such payments fall to be made under this Agreement such Value Added Tax shall be added to the amount thereof and paid in addition thereto upon production of a proper Value Added Tax invoice.

Interest on overdue payments Save where payment is reasonably disputed by one party and the other party has been notified of such dispute, if and whenever any payment due in accordance with this Agreement shall at any time remain unpaid for a space of twenty-one days next after becoming payable a further and additional sum by way of interest on the same calculated on a day-to-day basis at an annual rate higher by two per cent than the Base Rate of the Bank of England in force from time to time from the date upon which such sum first became payable shall (if demanded) be accounted for (as if paid) by the defaulting party to the other party.

No partnership Nothing in this Agreement shall be construed as creating or implying any partnership between the parties hereto and save as expressly provided nothing in this Agreement shall be deemed to make YHN the agent of the Council or authorise YHN to:

36.1

Incur any expenses on behalf of the Council;

36.2

Enter into any engagement or make any representation or warranty on behalf of the Council; or

36.3

Commit or bind the Council in any way whatsoever without in each case obtaining the Council's Representative's prior written consent.

Survival of this Agreement

37.1

Insofar as any of the rights and powers of the Council provided for in this Agreement shall or may be exercised or exercisable after the termination or expiry of this Agreement the

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37.2

Insofar as any of the obligations of YHN provided for in this Agreement remain to be discharged after the termination or expiry of this Agreement the provisions of this Agreement imposing such obligations shall survive and remain in full force and effect notwithstanding such termination or expiry.

Severance If any provision of this Agreement comes or is declared invalid or unenforceable this shall not affect any other provisions which shall all remain in full force and effect.

No assignment No party shall be entitled to assign this Agreement or any of the rights hereunder to any other party.

Notices etc

40.1

Any notice or other communication to be given the Council under this Agreement shall be sufficiently served if served personally on the Council or sent by prepaid first class post to the address given at the head of this Agreement or by electronic mail to the central email addresses given on the Councilâ&#x20AC;&#x2122;s website.

40.2

Any notice or other communication to be given to YHN under this Agreement shall be sufficiently served if served personally on YHN or sent by prepaid first class post to YHN House, Benton Park Road, Newcastle upon Tyne NE7 7LX or by electronic mail to the central email addresses given on YHNâ&#x20AC;&#x2122;s website.

40.3

Subject to proof to the contrary, the notice or other communication shall be deemed to have been received on the second working day after the day of posting or on successful transmission, as the case may be.

Third party rights No rights are conferred under this Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.

Concurrent remedies No right or remedy for any party under this Agreement is exclusive of any other right or remedy and each such right or remedy shall be cumulative and enforceable concurrently and shall be without prejudice to pre-existing obligations.

Variation Except as otherwise expressly provided, no variation of this Agreement shall be valid unless it is in writing and executed and delivered as a deed by or on behalf of each of the parties.

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provisions of this Agreement conferring such rights and powers shall survive and remain in full force and effect notwithstanding such termination or expiry.

Confidentiality

44.1

The parties agree to keep the subject matter of this Agreement confidential subject only to statutory duties and/or usual contractual obligations.

44.2

It is acknowledged by the Council that notwithstanding YHN's status as the Council's subsidiary YHN may have commercial and other interests which are confidential to YHN.

Law This Agreement shall be governed and construed according to English law.

This Agreement has been entered into as a deed and is delivered on the date stated at the beginning The COMMON SEAL of the COUNCIL OF THE CITY OF NEWCASTLE UPON TYNE was affixed ) in the presence of: )

The SEAL of YHN was affixed in the presence of:

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)

) ) )

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Schedule 1 â&#x20AC;&#x201C; YHN's Services (Clause 2) [Insert Delivery Plan annually (abridged to remove non HRA activity)]

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Schedule 2 – Services provided by the Council (Clause 20) Part 1 – [Description of Service] 1

Service outputs [including targets/KPIs?] [

]

Fee(s) [repeat for each service area in succeeding Parts – distinguishing between SLAs (fixed term/mandatory) and Service Contracts (call-off/discretionary)]

                     

Grounds Maintenance Information Technology Street Wardens Building Cleaning Legal Services Street Cleansing Transport Highways Income Pest Control Energy Property 1 (RTB) Property 2 (acquisitions/disposals) Security - Void Alarms Employee Admin Services Occupational Health Services Internal Audit Corporate Business Management/Procurement Learning Management System Complaints Democratic Services Operational HR Contract

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9iii Schedule 3 â&#x20AC;&#x201C; Stock Maintenance and Asset Management Programme (Clause 6) [Describe the programme, including the expenditure profile, as included/assumed in the Selffinancing business plan â&#x20AC;&#x201C; distinguishing between (a) Maintenance (for which YHN is paid from revenue?) and (b) Improvement (for which YHN is paid from capital?)]The obligations set out in Clause 6 will be reviewed on an annual basis and any changes set out in the yearly Investment Programme/Delivery Plan.Stock Maintenance Repairs, maintenance and property reinstatement: Day to day repairs and maintenance Out of hours emergency repairs provision Provision of customer contact centre for repairs Reinstatement of empty properties Disabled adaptation maintenance and repair Domestic stair lift repairs Passenger lift repairs Cyclical Maintenance Gas servicing and safety inspections Smoke alarm testing and inspection Fire alarm and emergency lighting testing and inspection Intruder alarm testing and inspection CCTV testing and inspection Lightning conductor testing and inspection Portable appliance testing and inspection ICLS testing and inspection 10 year domestic electrical testing and inspection Five yearly communal area testing and inspection District, community and communal heating system testing and inspection

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Domestic stair lift testing and inspection Passenger lift testing and inspection Emergency fire-fighting equipment testing and inspection Water hygiene testing and inspection Air conditioning testing and inspection Communal laundry equipment testing and inspection Communal soil stack testing and inspection High rise property window maintenance

Improvement Programme Lifecycle Programme - The asset management system is updated as surveys are completed and reality checks are carried out. This provides detailed information on what work is required on which estate in any year. The programme will continue to include a provision for voids, one off reactive boiler replacements and a mop up programme for Modern Homes omits. It will also continue to replace internal elements including bathrooms, heating, rewiring and kitchens and external elements such as roofing and doors and windows. The life cycle programme also ensures we meet out landlord obligations in relation to communal lifecycles for example lift refurbishment, district and group heating and also in relation to Health and Safety such as asbestos removal, fire prevention and fire risk assessment remedial work. Standard Housing Investment â&#x20AC;&#x201C; This programme includes: Spend to save which enables us to respond to Property Maintenance priorities. This enables work previously carried out in a reactive way to be planned to ensure value for money is achieved. Tenants Investment Priorities - A small budget is allocated each year to pick up any sound insulation problems. Health and Safety - A budget has been allocated to respond to any Health and Safety concerns and also to be able to deliver any new initiatives through our liaison with the Fire Service. Energy Efficiency/Fuel Poverty - There are ongoing priorities which have been identified to tackle Fuel Poverty. This includes a fuel switch programme which helps reduce tenants fuel bills. Environmental and Communal Programme â&#x20AC;&#x201C; This programme includes: Environmental The funding available will see a continuation of the Citywide environmental programme. The priorities for this are identified through feedback from site visits with local housing staff and close working with the environmental services team. Communal Budget is allocated to continue with the communal programme. Priorities are identified linked with net present value, sustainability analysis and also linkage with other internal communal programmes.

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Regeneration â&#x20AC;&#x201C; This programme includes: General Needs re-provision- This budget enables us to respond to any properties which are not ideal for modern living and which are unsustainable in the long term. Priorities are identified based on NPV and sustainability analysis. Sheltered Housing remodelling- A number of blocks within our portfolio represent a problem in terms of sustainability and desirability which alongside the changing demographic profile requires investment. Non housing assets - This programme will continue to deliver garage demolition and refurbishment. It will also deliver any office accommodation improvements as well as improvements to community buildings to help support the asset transfer process. New build and new housing This programme enables us to respond to changing demographics, housing needs, demands and the offer in the local area. It also enables us to respond quickly to opportunities of match funding through for example the Homes and Communities Agency. There is also a small budget for right to buy buybacks.

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Participatory Budget The work delivered through this budget is based on what our tenants tell us is important to them. They are able to put forward suggestions and to vote on the preferred projects to be delivered.

Schedule 4 – Fee (Clause 10) [Set out pro forma breakdown of the Fee – to facilitate discussions/negotiation in subsequent years – query by reference to relevant headings of the Specification or by cost elements instead?].

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Schedule 5 – Fee Principles (Clause 10.4 )

NCC YHN Management Fee 2016/17 1. Principles The initial service areas will be set out in a schedule in the management agreement appendix 1. It will specify the service areas YHN are delivering to NCC under the management agreement, the associated recurring and non-recurring fees and the required outcomes. It should be noted that there are separate fees for HRA service charge areas including CCAS, concierge and furniture service.

2. Monitoring and officer liaison 

There will be a regular “Client” meeting to consider YHN financial and non-financial performance (this will cover s151 issues). Attendees will be: o

NCC: Director of Resources, Director of Investment and Development, Assistant Director of Financial Services and Head of Fairer Housing

YHN: Management Team and Head of Finance

Previous by discussions at Partnering Group and IDG should be considered at Client meetings. These meetings will be minuted and will be reported to YHN Board within the Chief Executives Report, and to NCC Cabinet as a background paper to the quarterly performance report. 

These quarterly meetings will cover: o

YHN delivery of NCC objectives (i.e. against specified outcomes)

NCC spend managed by YHN e.g. grounds maintenance, building cleaning and district heating including impact on broader YHN performance YHN delivery of HRA capital programme Variations to the management agreement e.g. new commissioning, revised commissioning Variations to arrangements for managing NCC costs Annual review of surpluses and reserves requirement and business case for nonrecurring usage; Medium term outlook particularly in terms of efficiency requirements Agreement of revised management fee for following year (see section 4 below) Any potential issues / risks that may impact on YHN’s ability to achieve the agreed outcomes

o o o o o o o



The schedule for these quarterly meetings is set out in the diagram overleaf:

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• Review Q1 performance (revenue and capital) • Agree variations to management agreement*

• Review Q4 performance (revenue and capital) • Agree reserves for following year, non-recurring use of surpluses*

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• Review Q2 performance (revenue and capital) • Agree variations to management agreement* • Initial discussions about management fee for following year

• Review Q3 performance (revenue and capital) • Agree variations to management agreement* • Review medium term outlook • Agree management fee for following year*



HRA revenue budget changes – any proposals that impact on the HRA revenue budget (including changes to YHN’s management fee) should be shared initially with the Head of the Fairer Housing Unit and the Assistant Director Financial Services to review. A YHN Board report or YHN management team report that sets out the benefits / outcomes to be achieved for the additional investment will be sufficient for this purpose. Following this, the report will be presented to NCC Directors’ Team by the Director of Investment & Development for approval. Following this, the Director of Investment & Development / Head of Fairer Housing Unit will brief relevant Cabinet members to gain informal approval. The proposal can then be implemented in advance of formal approval by way of the next NCC quarterly performance report or by a Member DD or specific Cabinet report if necessary.



HRA capital programme changes – any proposals that impact on the HRA capital programme (including movements between investment priority blocks) should be shared initially with the Head of the Fairer Housing Unit and the Assistant Director Financial Services to review. A YHN Board report or YHN management team report that sets out the reasons for the change or the benefits / outcomes to be achieved for the additional investment will be sufficient for this purpose. Following this, the report will be presented to NCC Investment & Development Group by the Director of Investment & Development to gain informal approval. Following this, the Director of Investment & Development / Head of Fairer Housing Unit will brief relevant Cabinet members for informal approval. The proposal can then be implemented in advance of formal approval by way of the next NCC quarterly performance report or by a member DD or specific Cabinet report if necessary.

4. Annual Management Fee agreement It is proposed that the annual management fee is considered as recurring and non-recurring activity. Recurring fees will be calculated for the following year based on: 

The previous fee ( after any in year variations)



Plus: an inflationary uplift (basis to be agreed but could be based on salary inflationary increases)



Less: an efficiency target ( as agreed at medium term outlook discussions)



Plus: any agreed recurring service variations

Non recurring fees are, by their nature, agreed on a one off basis (although they may extend beyond one year) and should be agreed in the context of the annual review of surpluses and reserves requirement. An illustrative example is set out in appendix 2 This management fee will be invoiced by YHN a month in advance and paid within 7 days.

HSNG.3350500.1

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IGD.48023.3

9iii

3. Please note the indicated agenda items are not intended to be an exhaustive list. Governance Items marked with an asterisk in section 2 are to be agreed as follows: (in line with NCC financial regulations)

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HSNG.3350500.1

Income and Estate Management

C: Housing Management plus

Lettings Service

C: Housing Management plus

£x.xm

IGD.48023.3

A: Oversight of HRA repairs and maintenance

£x.xm

Service

B: Oversight of HRA capital programme

Recurring and non-recurring fee £xxm

Maximum Arrears : 2.36% of annual rent

Rent collection : 99.59% of rent owed

Resolve 93% of anti social behaviour cases investigate

Void rent loss no more than 1.28%

Average re let time not to exceed 25 days

Increase SAP by 0.57 points on ...self contained GN units.

4061 life cycle improvements by 2016/17

11 new build homes

Ave cost per responsive repair not to exceed £xx

Outcomes

Appendix 1

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HSNG.3350500.1

Employability

C: Housing Management plus

Tenant Engagement

C: Housing Management plus

Advice and Support

C: Housing Management plus

YPS

C: Housing Management plus

Leasehold Services

C: Housing Management plus

Service

£x.xm

IGD.48023.3

Recurring and non-recurring fee £xxm

80% apprentices YHYJ to move onto education, employment or training

70% of customers believe that YHN listens and acts on their views

Generate £1 million in Housing Benefit , Discretionary Housing Payment and back dated Housing Benefit by 31/03/2016

Successfully sustain 98% of tenancies where ASW support was received during 2015/16.

To prevent Homelessness in 95% of cases in Homelessness prevention service.

98% of people receiving support from the Young People Service sustain their tenancies during 2015/16.

Maintain percentage of leaseholder service charge collected at XX% during 2015-16

Outcomes

9iii

Page 145 of 189

YPS

HSNG.3350500.1

Employability

Tenant Engagement

Leasehold Services

Advice and Support

£0

See half as many of cases again as 15/16

IGD.48023.3

Additional Recurring Service Additional Variation Recurring Fee Service Variation description 16/17

Efficiency targets are set at a total management fee level and YHN will be free to allocate across services to best meet NCC objectives.

Recurring Fee 15/16 including in year service variations Inflationary uplift Efficiency target 2% 3% £ £ £

Estate and Income Management

Lettings Service

Housing Management plus:

Oversight of HRA capital programme delivery

Oversight of HRA repairs and maintenance delivery

Management Service

Appendix 2

£0

Second year of two year apprentice and

Welfare reform response: rent sense etc

Non recurring activity description £

Non recurring activity

£0

9iii HSNG.3350500.1

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IGD.48023.3

Board 28 July 2015 Universal Credit Report by Senior Director For Information 1.

Background

1.1

This report is to provide Board with an update on Universal Credit (UC) and a summary of key activity that has been on-going since the board report in May 2015. This details the progress the implementation project has made and learning from the initial roll out for single people on UC.

1.2

The government has introduced UC to try and simplify the benefit system and make work pay. It is designed to support people on a low income or out of work. It replaces six existing benefits and is being introduced in stages. Whether a person can claim depends on where they live and their own personal circumstances. There are strict eligibility criteria and in Newcastle, new UC claims are only available to single people, see appendix 1. It has been introduced to replace a benefit system that is complex and confusing. Three different agencies administer a range of benefits each having their own rules which can be difficult for customers when trying to understand the current system.

1.3

UC is paid differently to current benefits: ď&#x201A;ˇ ď&#x201A;ˇ ď&#x201A;ˇ

It is paid monthly in arrears into a bank account Any help with rent is included in the UC payment and the claimant must pay their landlord themselves. The first payment is received one month and seven days after the date of the claim.

Implementation

2.1

Following its introduction in April 2013, UC has been progressively rolled out and is available in one in three jobcentres nationwide. The numbers of new UC claimants are increasing on a weekly basis. 148,567 people had made a claim for universal credit up to 2 July 2015 87,665 (11 June 2015), attended an initial interview, accepted their claimant commitment, and moved on to UC; Page 147 of 189

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75,427 people were in receipt of UC as of 11th June 2015. Of these, 23,912 (or 32%) were in employment and 51,513 (68%) were not in employment. 2.2

From 27th April, Newcastle Job Centres started to receive new claims for UC for people who otherwise would have claimed Job Seekers Allowance. We are aware that 252 residents of Newcastle have claimed UC as shown in the table below. Age Range 16-24 25-49 50+ 16-24 25-49 16-24 25-49

Newcastle City Newcastle West Newcastle East 2.3

Male

Female

Acceleration of Universal Credit The government’s driver to acceleration and other groups being moved onto UC is the digital service. It is expected that the digital service will be scaled up around May 2016 when the full service will be available. The digital service is currently being tested and has been implemented within postcodes of Sutton and soon to be in a small part of Croydon and Southwark. It is likely the timing of acceleration will depend on the digital service working both for the DWP and the customer. Users will be able to make a claim, check details of payments, notify changes of circumstance and search for a job through a single account, making digital the primary channel for most working-age people to interact with the DWP.

Welfare Reform Changes

3.1

Following confirmation of a majority Conservative government in the new Parliament there is more certainty about how the Government’s Welfare Reform programme will continue. Chancellor George Osborne announced £12bn of cuts to welfare during the summer budget, of this £5.5bn will fall to tax credits and Universal Credit recipients. £3.8bn of these savings will directly affect the work incentives of low earning households.

3.2

Welfare Reform and Work Bill The purpose of the Bill is to deliver the government’s commitment to freeze the main rates of the majority of working-age benefits, tax credits and Child Benefit, and to reduce the level of the benefit cap. The government hopes that the main benefits of the Bill would be to: 

Ensure that it pays to work rather than to rely on benefits, and deliver Page 148 of 189

 3.2.1

fairness to the taxpayer while continuing to provide support for those in greatest need. Help create two million new jobs and help move young people into paid employment by giving them the support, skills and experience.

Reducing the Benefit Cap from £26,000 to £20,000 New legislation would lower the benefit cap so that the total amount of benefits a non-working family can receive in a year would be £20,000, (£23,000 in London). Households are exempt where someone is entitled to Working Tax Credit or is in receipt of benefits relating to additional costs of disability, or War Widows’ and Widowers’ Pension. By reducing the cap to £20,000 (£385 per week for couples and lone parents and £257.00 per week for singles) the government expect to save an additional £2bn. There has been no mention as to whether the discretionary housing payment funding given to local authorities to assist those impacted households in hardship, will be increased to reflect this change.

3.2.2

‘Youth Allowance’ and removing entitlement to Housing Support from out of work under 21’s It is proposed that from April 2017 the automatic entitlement to housing support will be removed for new claims in Universal Credit for 18-21 year olds who are out of work. There will be exemptions, including for vulnerable young people, those who may not be able to return home to live with their parents, and those who have been in work for 6 months prior to making a claim. In addition to this, young people will participate in an intensive regime of support from day 1 of their benefit claim. After 6 months they will be expected to apply for an apprenticeship or traineeship, gain work-based skills, or go on a mandatory work placement to give them the skills they need to move into sustainable employment.

3.2.3

Freezing working age benefits It is proposed that working age benefits are fixed at current rates for the next four years with no annual uprating. Pensioners would be protected, as would benefits relating to the additional costs of disability. Statutory payments, such as Statutory Maternity, Paternity and Adoption Pay would also be exempted.

3.2.4

Further Announcements Further key points within the Summer 2015 budget; 

Reduce rents in the social housing sector by 1% a year for the next four years



Support for children through tax credits and universal credit to be Page 149 of 189

9iv

limited to two children, affecting those born after April 2017 

Reduce earnings level for tax credits withdrawal from £6,420 to £3,850.



Social housing tenants earning more than £40,000 in London and £30,000 elsewhere to pay rent at market rates



Disability benefits will not be taxed or means-tested



Employment and Support Allowance payments for claimants deemed able to work to be "aligned" with Jobseeker's Allowance for new claimants



Introduction of National Living Wage for working people aged 25 and over to be introduced in 2016 rising to £9 by 2020.



Free 30 hours of childcare for three and four year-olds

YHN Implementation Response

4.1

Universal Credit Implementation Project Board will recall that to support the initial roll out of UC, two ‘UC Specialists’ were appointed to work alongside the UC Implementation Manager. The staff are in post and working solely on supporting tenants with UC. This approach is helping to understand the difficulties YHN tenants are facing and what impact on service delivery this is having. It is intended that there will be a gradual roll out across services to support the specialists. This approach will enable YHN to test and learn processes to deal with UC and to ensure that service delivery processes are fit for purpose.

4.2

Impact on the Introduction of UC to YHN YHN are aware of 47 tenants currently claiming UC. YHN should receive ‘landlord notification’ letters from the secretary of state advising when a tenant has made a claim and it includes an element for housing costs. The letter is to assist landlords in assessing which UC claimants may need advice and support in managing their financial affairs. We have started to see trends in what support people require and have categorised these as Red, Amber and Green. Generally, the workload for managing a UC account requires intensive support following the first notification to ensure that all relevant evidence has been provided to the DWP. The support to tenants has varied with letters to creditors, referrals to food banks, employment, DHP applications and budgeting support being required. The balance of the 47 accounts at the time of making a UC claim amounts to £17,714.37. The current rent balance for the UC caseload is £25,895.65. Board should be aware that the difference of £8,181.28 cannot be presumed to be solely down to UC. Page 150 of 189

4.3

Alternative Payment Arrangements Alternative Payment Arrangements (APA’s) are available in circumstances for claimants who are unable to manage their monthly payment. The following APA’s are available to help claimants who are identified as needing additional support:   

Paying the housing element of UC as a Managed Payment to landlord More frequent monthly payments A split payment of an award between partners

To date, the DWP have identified that one tenant required an APA at the time they made a claim for UC. YHN have made an additional 9 applications and one APA is now in payment. The length of time taken to deal with an APA is significant, with the first APA taking six weeks to be processed by the DWP and increased administrative effort by the specialists to get the application live and into payment. 5

Partnership Working

5.1

Delivery Partnership Agreement (DPA) The DPA is the DWP’s mechanism for developing partnership working between agencies involved in providing services to the vulnerable; it is an agreement between the council and the DWP. There are three elements to the DPA; 1) Support for the DWP to assess housing costs and the manual processing of the local council tax reduction scheme. 2) Support to make claims online (support being provided by the council’s digital by choice programme) 3) Personal Budgeting Support (PBS) The DPA is currently in the process of being signed; NCC and YHN are in regular contact with the DWP to improve working relationships and the introduction of UC in Newcastle. Knowledge within the local Job Centres of housing costs and personal budgeting support is limited; this is an area which they have never had to consider previously in their own working practices resulting in some YHN tenants receiving payments for incorrect housing costs or failure to refer for Personal Budget Support. This has resulted in significant administration time from the UC Specialists to rectify this.

5.2

Policy in Practice (PiP) Policy in Practice was founded to ensure that policy is informed by the experience of people on the front-line of public services. The organisation supports central and local government, housing associations, employment Page 151 of 189

9iv

and advice agencies with the effective implementation of policy and costeffective, user-centred delivery. PiP have specific expertise in welfare policy and anti-poverty strategies. They apply this to support clients to tackle diverse problems and allow them to implement policy cost – effectively and according to the original policy intent. PiP have been commissioned to assess the cumulative impact of welfare reform on Newcastle residents and to provide a ‘better off’ benefit’ and budgeting software. 5.2.1

Cumulative Impact of Welfare Reform Many tenants are experiencing financial difficulties following the enactment of the Welfare Reform Act. Some tenants will be affected by more than one reform and it is not clear in many cases who those tenants are and how to better target service delivery to provide support to them. The overall objective of this work is to use NCC, Single Housing Benefit Extract (SHBE) data and YHN tenancy data in a way to identify those residents most likely to be impacted by recent and upcoming changes to the welfare system. Specific objectives are to:

5.2.2



Assess the impact that Universal Credit will have across the city



Understand the impact of recent reforms to the welfare system, both independently and on a cumulative basis



Use this information to better identify what support that residents will require, to meet the changed challenges of welfare reform and then to target support accordingly and use NCC / YHN resources in a cost-effective way

Universal Credit and Budgeting Software There is an understanding that over time, some tenants may need to move to become more able to support themselves requiring organisations to be enablers. This is a broad social objective, but one that is being driven by welfare reform and pressures on both household and the organisations budgets. Currently each team within YHN has their own approach to supporting residents. This means that while independently each team is happy with the process, information could be duplicated multiple times across the organisation and opportunities to offer broader support to residents are missed.

5.3

Partnership working with other organisations We have made contact with neighbouring housing organisations and have set up a working group to share best practice on UC and the Wider Welfare Reforms.

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Income Management Strategy Progress is being made with the Income Management Strategy action plan. In May, Team brief was delivered across the organisation explaining the four areas of priority for the Income Management Strategy. This explored ways in which staff in all areas could contribute to the theme of ‘rent is everyone’s business. Team brief was very well received by staff at all levels and generated a lot of positive ideas, including:     

Updating household information on IT systems at every customer interaction Being more aware of financial exclusion when visiting tenants in properties and making referrals to support services where necessary Being aware of work of frontline UC specialists and having Universal Credit as a regular agenda item for local team meetings Talk about rent and ways to pay at every opportunity Promote credit unions and bank accounts with tenants

We continue to increase the number of tenants who pay their rent by direct debit and promote this as our preferred method of payment. We are working closely with Newcastle City Council to minimise the impact of the withdrawal of the cashiering service and will undertake bespoke campaigns with customer groups prior to November to encourage direct debit sign up including telephone, email and text campaigns. We have established links with local banks and are now able to book appointments on behalf of tenants who do not have bank accounts to enable them to open an account quickly and easily in their local area. 7

Business Implications

7.1

Purpose and objectives By taking an approach that maximises income collection whilst supporting tenants we will contribute to our strategic objectives of;  

7.2

Make the money deliver Work together to create a brighter future.

Value for money and efficiencies: The implementation project includes actions that are intended to ensure we deliver efficient services that are value for money. Examples include the potential to offer tenancies starting and ending on any day of the week in addition to reviewing IT systems so that there is an efficient cash flow process in place for UC housing costs from the DWP. Co-location with the DWP will help build their knowledge of housing costs reducing administrative error and build strong working relationships.

7.3

Financial Implications YHN Board previously agreed to establish a reserve specifically for welfare Page 153 of 189

9iv

reform related activity. This reserve is now managed by the council and we have received approval for an initial draw down of funds in order to assist us in the preparation of Universal Credit, and wider welfare reform activity. 7.4

Impact on services / performance The rent accounts of tenants who have been transferred to Universal Credit are being monitored separately and as expected arrears for this group are above average with a collection rate of 46.77%. The overall collection rate including UC claimants is currently on track at 98.34% which is ahead of the seasonally profiled target of 97.62%.

7.5

Outcome for tenants/leaseholders A large percentage of council tenants and leaseholders will be affected by Universal Credit. Currently over 61% of working age tenants are currently in receipt of Housing Benefit and will be responsible for managing a monthly payment and paying their rent directly to YHN.

7.6

Risk (reputation and relationship) YHN and the City Council have developed a reputation for low evictions and reduced homelessness. The introduction of Universal Credit presents a risk of increased rent arrears which could ultimately lead to eviction. This may affect our relationship with statutory and voluntary sector partners. UC does present a unique opportunity to build positive relationships with the DWP and we hope by working jointly with the council we can prevent evictions and sustain YHN tenancies. When fully rolled out there remains a significant risk to HRA rental income

7.7

Environmental There are no direct environmental impacts following the introduction of Universal Credit.

7.8

Legal UC is a significant element of the Welfare Reform Act 2012 and its implementation is determined by further regulation and guidance. In terms of our implementation project there may be changes to tenancy agreements and further updates will be brought back to Board.

7.9

Equality and Diversity and Community Cohesion The introduction of Universal Credit may increase tenancy turnover and homelessness which could impact on community cohesion and sustainability of estates. National research has identified that women and some other groups are disproportionately affected.

7.10

Stakeholder Involvement/consultation: Page 154 of 189

We have been working with the council and other partners as part of the welfare reform strategy board. We have developed a communication plan as part of our UC implementation project that encompasses internal and external stakeholders. 8

Conclusion and recommendations

8.1

The introduction of Universal Credit presents a significant challenge to our tenants and YHN. Whilst the principles of making the benefit system simpler and fairer with an emphasis on making sure that work pays, are to be supported, some of our tenants are struggling to budget and manage a monthly payment. YHN will continue to develop appropriate responses and support tenants but in doing so also raise the importance of paying rent and avoiding arrears.

8.2

Board is recommended to ď&#x201A;ˇ

Note progress made on delivery of the Universal Credit Implementation Project.

Implementation

9.1

The YHN UC Implementation Project meets monthly and lead officers have been identified for the themes within the project. Reports will be brought back to Board on a quarterly basis during 2015/16.

Background Papers Universal Credit report to YHN Board February 2015 Universal Credit report to YHN Board May 2015 Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Neil Scott, Senior Director by telephone on 0191 278 8711 or email neil.scott@yhn.org.uk

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9iv

Appendix 1 - Universal Credit Eligibility Criteria To be eligible to claim Universal Credit (as opposed to existing benefits), you must: • live at your usual address, in an area where Universal Credit is available • not be homeless, in supported or temporary accommodation, nor a homeowner • be a British citizen with a National Insurance number • be aged between 18 years and 60 years and six months • be fit for work • not have applied for a fitness for work note • consider yourself/yourselves fit for work • not be pregnant nor have given birth within the last 15 weeks • not be entitled to Jobseeker’s Allowance(JSA), Employment and Support Allowance (ESA), Income Support (IS), Incapacity Benefit (IB), Severe Disablement Allowance (SDA), Disability Living Allowance (DLA) or Personal Independence Payment (PIP) • not be awaiting a decision on a claim for Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support (IS), Housing Benefit (HB), Child Tax Credit (CTC) or Working Tax Credit (WTC) • not be appealing against a decision of non-entitlement to Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA) or Income Support (IS) • not be awaiting the outcome of an application to revise a decision of nonentitlement to Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support (IS) or Housing Benefit (HB) • not have any caring responsibilities (such as for a disabled person) • not be self employed, a company director or part of a limited liability partnership • not be in education or on a training course of any kind • not have a person acting on your behalf over your claim • have at least one suitable account that DWP can pay your money into • not live in the same household as a member of the regular or reserve forces who is away on duty • have lived in the UK for the last two years, and not have been abroad for more than four weeks continuously during that time • not be required to pay child maintenance via the Child Support Agency • not have savings in excess of £6,000 • not be an approved foster parent (even if you currently have no foster children)not be expecting to adopt a child in the next two months or (where family claims may be made) have adopted a child within the last 12 months • not expect to receive individual take home pay of more than £338 in the next month • not be responsible for a young person under 20 who is in non-advanced education or training not expect to receive any earnings from self employment in the next month If you and your partner are claiming as a couple you must also: • live at the same address • be married to each other, civil partners of each other, or living together as if you were married • not expect to receive joint take home pay of more than £525 in the next month from 6 April 2015 this amount will increase to £541 • not have savings in excess of £6,000 between the two of you Page 156 of 189

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Board 28 July 2015 Equality and Diversity Update Report by Director of Corporate Services and Assistant Chief Executive For Information 1.

Background information

1.1 This report provides Board with an update on equality and diversity (E and D); specifically:



Progress against our equality objectives and the equality and diversity strategy and action plan; and



Key activities coming up in the second half of the year, including preparation for reassessment of the Social Housing Equalities Framework and submission to the Stonewall Workplace Equality Index.

Background information

2.1 Our equality objectives were approved by Board in November 2014 and subsequently incorporated into our Equality and Diversity Strategy 2015 – 2016. For each objective the strategy sets out what we want to do, how we plan to do it and how we will measure our success. The equality objectives are: 1. Know who our customers are and provide responsive, flexible services; 2. Embed equality and diversity across YHN, promote understanding and the added value this brings to the organisation; 3. A modern and diverse workforce and an organisational culture that values and cultivates diversity; 4. Remain in touch with our staff and customers by listening to and learning from them; and 5. Better use of our influence and profile to make a positive difference. The strategy enables YHN to continue to meet the statutory duty for public bodies as set out in the Equality Act 2010 and in line with the Act we are committed to having due regard to: 

Eliminate unlawful discrimination, harassment or victimisation;



Advance equality of opportunity between different groups; and



Foster good relationships between different groups. Page 157 of 189

2.2 In addition to reporting progress to Board we also committed within the strategy to undertaking a different approach to monitoring progress against the strategy and action plan. This approach is for Management Team to carry out regular health checks with services, the first of these will take place during July and August. 3.

Progress against the strategy and equality objectives

3.1 Detailed progress against the strategy and equality objectives is contained at appendix one. Some of the evidence of progress has previously been presented to Board members through the Finance and Resources Committee and the Customer and Service Delivery Committee. 4.

Key activities in the next quarter; Social Housing Equalities Framework reassessment and submission to the Stonewall Workplace Equality Index (WEI)

4.1 Officers are currently working to prepare for YHN’s reassessment against the Social Housing Equality Framework (SHEF). This takes place in September and the approach is more ‘light touch’ than previously, relying more on desk top analysis and a shorter two day visit from assessors (taking place on 16 and 17 September 2015). 4.2 The SHEF aims to help organisations integrate their commitments to promote equality and diversity into their day-to-day work. YHN is currently assessed as an excellent organisation against the five performance areas of: 

Knowing your customers;



Leadership, partnership and organisational commitment;



Involving your customers;



Responsive services, access and customer care; and



A skilled and committed workforce.

4.3 Officers are also beginning to prepare for YHN’s submission to the Stonewall WEI. Taking part in the WEI enables us to effectively measure our efforts to tackle discrimination and create an inclusive workplace for lesbian, gay, bisexual and transgender employees. The biggest change to this year’s Index is that it now reflects the recent extension of Stonewall’s remit to become trans inclusive. 5.

The Business Implications

5.1

Mission and Strategic Objectives: This report’s contents contribute to the delivery of our purpose ‘to enable positive living for people in our homes and neighbourhoods.’

5.2

Value for money/efficiencies: We are able to effectively target our resources through increased knowledge of the needs of our customer and colleagues. Page 158 of 189

5.3

Financial Implications: The activities within this report are delivered within existing resources.

5.4

Resources (financial, property, technological or human): The activities within this report are delivered within existing resources.

5.5

Impact on services/performance: Increased knowledge about our customers and colleagues contributes to improved service performance

5.6

Outcomes for tenants/leaseholders: Our equality objectives enable us to ensure that we deliver services which respond to our customersâ&#x20AC;&#x2122; differing needs.

5.7

Risk (reputation, relationship): The contents of this report ensure that our focus on equality and diversity is maintained which upholds YHNâ&#x20AC;&#x2122;s reputation.

5.8

Environmental: There are no environmental implications arising from the contents of this report.

5.9

Legal: The contents of this report support YHN to comply with the legal requirements set out in the Equality Act 2010.

5.10 Equality and Diversity and Community Cohesion: This is the subject of this report. 5.11 Stakeholder Involvement/consultation: The contents of this report take account of consultation from customers and community groups. 6.

Conclusion and recommendations

6.1 Board members are asked to: Receive this update, comment on progress and agree to receive a further update at the end of the year. Background Papers - Equality Act 2010 - Previous reports to Board in December 2014 and March 2015 - Previous reports to Finance and Resources Committee and Customer Service and Delivery Committee in June 2015 Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Louise Horsefield by telephone on 0191 278 8720 or email louise.horsefield@yhn.org

Page 159 of 189

Equality and Diversity Board Report

Appendix one

Progress against the equality and diversity strategy and equality objectives Reporting Period April – July 2015 This appendix sets out the progress we have made in our equality objectives, reported against the measures set out in the equality and diversity strategy. In some areas activities have not yet taken place and these will be reported on later in the year. Equality objective one: Know who our customers are and provide responsive, flexible services Success measures 1. Regularly scrutinising the accuracy of customer profile information held by individual services (focusing on priority areas) We have created profiles for our customers who use the Community Care Alarm Service, Newcastle Furniture Service (NFS) and those who are in rent arrears. This information is updated on a regular basis so that service managers have access to the most up to date information.

2. Demonstrable evidence of information being used to tailor service delivery through clear and consistent examples in reports to boards, committees and staff Reporting on this objective is largely done through Customer Service and Delivery Committee who received a report earlier this month on customer insight. This included evidence of customer feedback and insight being used to improve and tailor our services:  



Customers’ priorities have shaped the YHN Audit Committee audit programme for the year. This was achieved through a focus group with twelve customers; YHN’s Local Offers were developed in conjunction with customers using all customer insight from the previous twelve months and prioritised through a customer focus group. The Local Offers are part of our strategic targets which are monitored by the Performance Plus group of customers; The delivery and content of a four week basic IT skills training course for customers was influenced by a series of targeted digital focus groups held with customers from diverse backgrounds. This ensured that the training programme met the needs of those identified as being most at risk of digital exclusion; and Sheltered Housing customers are underrepresented in those using NFS. To gain understanding and inform the actions we might need to take to address this we undertook 30 telephone surveys with older customers living in Sheltered Housing. This revealed cultural and perception barriers that prevent older customers from using the service. This insight has been fed 1 Page 160 of 189

back to NFS who are picking up on this work as part of their current service review. Further consultation work is planned for customers and community groups attending the equality and diversity event in August to enable older customers to identify products that would be attractive to them. 3. Analysing customer satisfaction across different groups This will be reported in the next period following the interim STAR survey which is planned to take place in October. 4. Improving service performance measures (these will vary by service) The service performance measures from the equality and diversity strategy have been built into individual Service Plans. These will be additionally supported through account management and monitored through the Management Team health checks and reported in the next period. Equality objective two: Embed equality and diversity across YHN, promote understanding and the added value this brings to the organisation Success measures 1. Demonstrating the use of equality information in our business planning process and ensuring that resources are effectively targeted We begin our annual business planning process (called Business and Financial Planning) in November 2015. We will provide Board with an update on how we will meet this success measure in the next Board report. 2. Evidencing that equality impact considerations are part of all key decision making at YHN and undertake an annual audit of equality analysis as part of our strategy and policy planning process An audit of equality analysis of strategies and policies was undertaken by the Business Strategy team for the year 2014/2015. The gaps identified have subsequently been addressed and the process for undertaking equality analysis has been strengthened for the current year. In addition, equality and diversity considerations continue to form part of the â&#x20AC;&#x2DC;business implicationsâ&#x20AC;&#x2122; in all board and committee reports. 3. Improved service performance (measures will vary by service and are incorporated into Service Plans) Progress on this measure will be reported in subsequent updates following the first Management Team health checks with services. Equality objective three: A modern and diverse workforce and an organisational culture that values and cultivates diversity Success measures

2 Page 161 of 189

1. Make up of the workforce Information on the makeup of the workforce was reported to Finance and Resources Committee in June 2015. This covered the period 2014/15 and will be used as a baseline for reporting outcomes within the equality and diversity strategy. This baseline information has highlighted that the majority of YHN’s workforce remains ‘White British’ with 94.74% of staff falling into this category. We recognise that one of the challenges that we face in increasing the diversity of the workforce is the current approach to advertising vacancies. This requires managers to look to recruit internally in the first instance, only recruiting externally where the required skills do not already exist. The 2014/15 baseline information for recruitment was presented to Finance and Resources Committee in January 2015. This has informed us that of the vacancies advertised over the past 18 months we have received a greater number of applications for employment, including from all sections of the community. However, this increase in the diversity of applicants has not yet led to increased job offers being made to people from underrepresented groups and suggests that managers are unconsciously influenced to recruit people who are most like them. In response to this we have commissioned Unconscious Bias training to be delivered to managers from across YHN; the outcomes from this training will be reported in the next update to Board.

To further support our ambition for a more diverse workforce, the multicultural staff network group has already started to plan for their attendance at the Newcastle Mela, where they will focus on promoting YHN as an employer of choice. This has also been the theme for the advertisement taken out in the Pride brochure. 2. Evidence of training outcomes for different groups We have delivered training to staff to enable them to understand and respond to the differing needs of their teams and customers and to address known gaps in the skills and knowledge of our staff. This included: 

  



People management workshops for all staff with line management responsibilities. A dedicated Equality and Diversity Dignity and Respect workshop was included in the programme designed to improve managers’ confidence and competence in equality and diversity in the workplace and to enable them to role model appropriate behaviours in their teams; A revised equality and diversity online learning package has also been tested and will be amended following feedback and then rolled out to staff; Induction for new staff members has been revamped and now includes enhanced information on equality and diversity and the staff network groups; Building on this training the approach to one to ones and appraisals has been changed to ensure that equality and diversity conversations take place between managers and their direct reports and are documented. This reinforces the message that equality and diversity is everyone’s business here at YHN; and Through the work on disaggregation and the Board evaluation process we are in the process of preparing learning and development plans for board members, incorporating equality and diversity. Progress has been made through undertaking best practice research to feed into the plans. 3 Page 162 of 189

3. Employee Relations outcomes for different groups Information on employee relations was reported to Finance and Resources Committee in June 2015 which again provides a baseline on which we will be able to report progress in future updates. This shows that the majority of alleged perpetrators in disciplinary cases are non-disabled, heterosexual, white British males aged 45 - 64. Three of the cases related to dignity at work perpetrations. The profile of those involved in disciplinary cases is mirrored in grievance cases; and here two of the cases were in relation to dignity at work. 4. Internal promotions and make up of staff at different levels of the organisation Information on the make up of staff was reported to the same Finance and Resources Committee referenced above. From this baseline information we know that: 

  

The gender profile data evidences that the gender mix is balanced across YHN as a whole. At higher grades the proportions change; in first to middle management positions the ratio of females to males is almost 60:40 and at senior management levels this trend is reversed with a ratio of males to females of 64:36; The ethnicity data evidences that black minority ethnic staff make up 3.61% of the workforce and that the most senior grade for this group of employees is Y5a; The sexual orientation data evidences that 1.91% of the workforce is lesbian, gay or bisexual and that the highest grade for this group of employees is senior manager; and 5.8% of the workforce has a disability and the highest grade for this group of employees is Y7.

The data on sexual orientation has been compared to the return rate for the Stonewall Workplace Equality Index questionnaire. The differences in the numbers for both of these strongly suggest that we have members of staff who are lesbian, gay or bisexual and have chosen not to declare. This has formed the basis for discussions with the LGBT staff network group on how we continue to both create a culture where everyone is confident to be themselves at work and identify different ways for people to declare, particularly the ability to declare after joining YHN. We are developing an online form that staff can use to anonomously update their demographic information. We are seeking best practice from Stonewall to review the pros and cons of completely anonymised data collection from staff. We will provide an update to Board in the next Board paper once we have reviewed the information from Stonewall. 5. Average pay for different groups From the evidence in the report to Finance and Resources Committee we know that the gender pay gap is the reverse of the national picture with our female staff earning 6.9% more on average than their male counterparts. As with many organisations, this position reverses at the most senior levels. For other staff from the protected characteristics the most senior grades are; black minority ethnic staff Y5a, LGB staff - senior manager and for disabled staff this is Y7. 4 Page 163 of 189

6. Staff engagement across different groups; and 7. Staff confidence in reporting bullying and harassment. The staff survey would be the mechanism for collecting data and measuring progress against both of these measures of success. We have postponed the staff survey planned for this year so that we can deliver more of the actions (and measure the impact) from our People Strategy prior to undertaking the staff survey. This indicator will be measured in the next survey. For bullying and harassment we have provided additional training for service managers addressing themes from the previous staff survey, established Contact Support Colleagues and have further promoted the Dignity at Work Policy. We will be able to report on the difference these measures have made following the next staff survey. Other activities that have supported us to make progress against achieving this equality objective include: 

Continuing to support and recognise the integral role that staff network groups play in YHN’s efforts to fulfil its commitments to equality, diversity and inclusion by: o Formally recognising individuals’ commitment and involvement in the groups in one to ones and appraisals. o Exploring the opportunity for the Lesbian, Gay, Bisexual and Transgender (LGBT) staff network group and the Allies Group to work more closely together with a view to merging. This move is in line with feedback received from attendance at Stonewall events; and o Identifying ways for all of the groups to work more closely together.  Fostering a culture of inclusion and delivering a comprehensive and informative equality and diversity calendar supports us to promote good practice and embed a culture whereby everyone can participate, thrive and contribute. Since April we have promoted: o International Day against Homophobia, Transphobia and Biphobia (IDAHOT, 17th May) by inviting staff to attend screenings of the film ‘Pride’ and to take part in a quiz about LGBT history, and used screensavers and posters to inform staff about IDAHOT; o The holy month of Ramadan through information for staff on the intranet, taking part in the #UKHousingFast (9th July) to show support for Muslim staff and customers, and collected donations for a foodbank; and o Northern Pride (17th – 19th July) in which members of the Allies Group have taken part in the LGBT 5k race and collected sponsorship which has been donated back to Northern Pride to keep this important event free of charge. Members of the LGBT staff network group also took part in the Pride March. As part of the partnership working between the three staff network groups, and outlined above, the Chairs of the Multicultural and Disabled People’s Staff Network Groups carried the YHN Pride banner alongside the Chair of the LGBT group. 8. In addition to this we have used social media to highlight Refugee Week, a Stonewall Young Leaders’ event and information about Ireland’s vote to legalise same sex marriage

5 Page 164 of 189

Equality objective four: Remain in touch with our staff and customers by listening to and learning from them Success measures 1. Staff engagement and percentage of staff that feel they can influence decisions across different groups The staff survey would be the mechanism for collecting data and measuring progress against both of these measures of success. However, as mentioned above a decision has been taken to postpone the staff survey planned for this year. The staff survey from 2013 showed 58 per cent of employees were engaged which is a 6 percentage point increase from the 2011 survey. 2. Inclusive range of involvement opportunities offered to meet diverse needs Our menu of involvement provides customers with a range of options to engage with us and influence our services. However, we recognise that for underrepresented groups we have to do more and we have made additional efforts in this period to target particular customers and community groups to build and improve relationships. To facilitate this we have provided these customers and groups with the opportunity to influence the design, delivery and evaluation of our biennial equality and diversity event taking place in August 2015. This work and the event help us to increase our understanding of the people and neighbourhoods we work with, helping us to foster good relations and balance diverse and sometimes conflicting interests between communities. We have worked with: Gasbags (gay/bisexual men’s group); MESMAC (LGBT organisation providing services, advice, information and support to the community); Youth Voice (group for young people with homelessness or housing issues); Greater Walker Community Trust (for older vulnerable adults with physical disabilities, learning disabilities and mental health problems); Elders Council; ACANE (community group for African people); Angelou Centre (BME women’s group); BECON (BME community organisation); Millin Centre (BME community organisation and resource); Riverside Community Health Project (health and wellbeing organisation); South Mountain Chinese Older People’s Association; and JET (BME community support with employment and training).

           

3. Make up of customers that have been involved in influencing our services and key decisions Other activities that have supported us to make progress against achieving this equality objective include:   

Taking part in Northern Pride; Planning attendance at this year’s Newcastle Mela; Encouraging diverse communities into employment through hosting a 6 Page 165 of 189

Jobs Fair attended by 200 customers with 23 organisations taking part to promote their job and training opportunities; and 4. Providing training opportunities: 34 customers took part in the Your Homes Your Jobs pre-employment training courses and eight customers completed a three day training course with InTraining. Evidence of the impact that customer insight and feedback has had on key decisions and service delivery Evidence for this measure is outlined above under Equality objective one: Know who our customers are and provide responsive, flexible services. This is because reporting on the impact of customer insight and feedback is through the Customer and Service Delivery Committee. 5. Satisfaction with engagement opportunities across different groups are incorporated into Service Plans. An update on our progress with this action will be provided in the next Board report. We plan to complete a short tenant survey later in the year which we can use as evidence of our progress towards this objective. We also monitor (and have reported in this report) the characteristics of those tenants who take part in training and involvement activities. Equality objective five: Better use of our influence and profile to make a positive difference

Success measures: 1. Diversity in our work with partners and contractors delivering services on our behalf; We have continued to work with partners during quarter one to make a positive difference. For example, we have made arrangements for work to be carried out at Palatine to enable JET (Jobs, Enterprise and Training) to open a cafĂŠ. We also facilitated the opening of the Happy Wheels Car Wash at Palatine in June. Both these ventures will create employment opportunities for people who are disabled 2. Satisfaction with neighbourhood across different groups; 3. Sense of belonging to neighbourhood across different groups; Our work with different groups has continued during quarter one largely through the work outlined above under equality objective four. We will report on the difference this has made to neighbourhood sense of belonging in the next report to Board. 4. Showing that our contractors and suppliers have met our expectations and are compliant with the Equality Act 2010. We have completed a number of procurements during quarter one. Our procurement process requires tenderers to evidence their compliance with the Equality Act 2010, and this is assessed as part of the tender evaluation process. We are therefore continuing to ensure that new contractors are compliant with the act. We have also had discussions during quarter one about making diversity performance an agenda item for supply contract management meetings.

7 Page 166 of 189

In addition some of our construction partners have committed to offering training and employment opportunities through procurement. Keepmoat, via subcontractors, have created two long term apprenticeship opportunities in the electrical and plumbing trades. These are being offered to our current apprentices as a progression opportunity. We have also started work on creating a construction pathway for tenants who are interested in working in construction. This will take the form of a pre-employment course and will result in work experience placements and hopefully job opportunities for the tenants that complete the course. We will promote this course to BME communities, through established community groups, as we know that people from a BME background are under-represented in construction roles.

8 Page 167 of 189

Page 168 of 189

PVC rainwater goods

Queens Court Fencing

IRDL New build bungalows

New Mills area improvements

Queens Court Windows and Doors

2 David Langhorne

3 David Langhorne

4 David Langhorne

5 David Langhorne

Scheme

1 David Langhorne

No. Delegated Officer

Directorate/

31 BCE

120 BCE

£1,335,600 from the Investment Programme Lifecycle

6 KeepMoat

£361,990 from Environmentals and Communals budget

£808,374.95 from New Build and New Housing provision

16 Aaran Builders

£13,939.42 from the Participatory Budget

Contractor

14 BCE

Units

£66,009.38 from the Investment Programme - Spend to Save

Cost/ Budget provision

Westgate

Byker

Westgate

Gosforth/Fawdon

Wards

Delegated Decisions – Schedule of non-confidential Delegated Decisions taken between 30h May 2015 and 6th July 2015

Board 28 July 2015

9vi

Page 169 of 189

£24,380 from Mental Health Matters

Fairfield House bathroom adaptation

The Spinney communal upgrade

Shield Court Remodelling

1-17 Hareside Close Roof

Daisy Hill Bungalows New Build

Tedham Road – parking bays

Graham Park Road - metal fencing

7 David Langhorne

8 David Langhorne

9 David Langhorne

10 David Langhorne

11 David Langhorne

12 David Langhorne

13 David Langhorne

1 HLS

£12,000 from the Participatory Budget

13 ESH Property Services

£971,166.68 from New Build and New Housing and an additional £260,000 HCA Grant

£14,000 from the Participatory Budget

9 John Flowers Roofing

30 Keepmoat

84 Mears Construction

1 BCE

3 BCE

£45,242.92 from the Investment Programme - Spend to Save

£472,760 from the Investment programme – communals budget £1,878,015.00 from Regeneration - Sheltered housing and additional funding of £600,000 via grant from HCA

£409,160 from New Build and New Housing provision

Beech Grove Road New Build

6 David Langhorne

West Gosforth

Lemington

Walkergate

Newburn

Ouseburn

North Heaton

Elswick

Page 170 of 189

Buyback 28 Third Avenue

Liddle Road refurbishment

Fuel Switch Phase 2

Graham Park Road Window replacement

Windsor Court PB

Demolition of Rathbone Centre

Moor & Hadrian House additional DD

Naworth Drive Lighting Upgrade

14 David Langhorne

15 David Langhorne

16 David Langhorne

17 David Langhorne

18 David Langhorne

19 David Langhorne

20 David Langhorne

21 David Langhorne

9vi

9 Straightline

6 HLS

1 G.O’Briens

38 Keepmoat

124 BCE

£231,010 from the Investment Programme - Life cycle

£36,300.27 from the Participatory Budget

£194,075.40 from Regeneration - Non-housing Assets

£150,000 from the Investment Programme - Sheltered

£19,705.40 from Tenant Investment Priorities

84 BCE

6 BCE

£178,568.72 from the Standard housing investment programme - spend to save £307,930 from Energy and Efficiency – Standard Housing Investment

1 N/A

£69,933.50 from New Build & New Housing - Buyback

Westerhope

Newburn, Westgate

Walker

East Gosforth

West Gosforth

Citywide

Westgate

South Heaton

Page 171 of 189

28000 Pattinsons

28000 SGS

£150,000 from the Asbestos Sampling budget

£10,085 from the Participatory Budget

£22,000 from Investment Programme Lifecycle

£10,500 from the Participatory Budget

£5,643.84 from I.T Hardware purchases budget

Stair lift and Hoist Servicing and Repairs 15/16

Asbestos Surveying Pattinsons

Asbestos Surveying SGS

Iris Place Footpaths

Ecology surveys for RF0014/RF0015 Pitched & flat roofing programme

Participatory Budget Scheme no.27, Brunswick Grove Parking

Concierge Wireless network links licencing

23 David Langhorne

24 David Langhorne

25 David Langhorne

26 David Langhorne

27 David Langhorne

30 David Langhorne

31 David Langhorne

4779 Ofcom

16 HLS

501 Argus Ecology

48 BCE

28000 Service Direct

£132,000 from the Stair lift repairs budgets

Drying Cabinet Inspections

22 David Langhorne

882 Pennington Choices

£20,000 from Planned Maintenance & Servicing Budget

Citywide

Castle

Citywide

Fenham

Citywide

Page 172 of 189

Etal Lane Footpaths Project 6

33 David Langhorne

1 n/a

108 HLS

£65,000 from New Build and Acquisitions

£23,123.73 from Participatory Budget

Woolsington

Walker

All projects were approved as part of the Investment Delivery Programme contained within a report entitled ’30 Year HRA Financial Model and Other Financial Issues’ which was considered by the Board on 11 December 2012.

Buyback of 3 Ryton Terrace, Walker

32 David Langhorne

9vi

Board 28 July 2015 Petitions Monitoring Report by Senior Director For Information 1.

Background information

This report informs Board on Petitions received during July 2015. The Petitions Protocol states that the Chief Executive will refer petitions relating to operational issues to the appropriate Head of Service who will be responsible for contacting the petitioners (or petitioners’ representatives).The Head of Service will make any further enquires which are required and draft a response on behalf of the Chief Executive. The Chief Executive will ensure that Your Homes Newcastle responds to the petitioners’ request. Context Following the completion of the remodelling work at Hadrian House, residents raised a number of snagging issues. YHN team met with the residents on site to discuss the issues which were all resolved to the residents’ satisfaction. This petition was handed to YHN staff following the meeting but it was acknowledged the particular issue in which it related to had already been resolved at the meeting. It is YHN protocol to submit all received petitions to Board albeit the issue contained within this petition had been resolved prior to its submission. YHN will look to identify improvements in future scheme’s tenant consultation so that issues and concerns are captured earlier in the process and a consultative dialogue is maintained. Petitions received

Date received

Petitioner(s)

Issue

Action

2 July 2015

Residents of Hadrian House, Throckley

Withdrawal of access to east side of building

Meeting held with residents on 2 July 2015 at 11:30am. Lynn Waters confirmed to residents that as part of the remodelling at Hadrian House the access would be reinstated.

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9vii

The residents were happy with the arrangement and handed over the petition for our information. Detailed paperwork relating to the petition has not been included in the Board papers. If you would like to see the specific details please contact Jill Davison.

Recommendations

3.1

Board is recommended to note this information.

Background Papers Petitions Protocol Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk

Page 174 of 189

Board 28 July 2015 Board Forward Plan 1

Board Forward Plan

1.1

Board members are requested to note Tuesday 25 August 2015 5-7pm, as an additional board meeting date. We may have the following items which will be presented to Board.  Disaggregation Update - there may be some further Board approvals required prior to the September meeting.  Approach to commercial development NCC - an opportunity to hear from John Lee on his work at NCC  Severance Scheme – report regarding the proposed changes to Terms and Conditions and redundancy calculator. Board members will be notified as soon as possible to confirm if this meeting is going ahead.

1.2

This Board Forward Plan lists the reports known at the present time that will be presented at the Board meeting on 22 September 2015 (or amended date subject to confirmation):

Audit Committee Annual update

Non-confidential

Vice Chairs and Audit Committee Chair Appointments

Non-confidential

Disaggregation update

Non-confidential

New Build – Coniston Court

Protect

Byker Community Trust contract

Protect

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison, Company Secretary by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk. Page 175 of 189

9viii

Board Reports

9ix

Finance and Resources Committee 2 April 2015 (5.00 pm - 5.45 pm) Present: E Snaith P Dibbs P Dutton J Purvis L Middlemiss

(In the Chair)

IN ATTENDANCE L Forrest B Elder M Grainger J Miller 29

Head of Finance Strategic HR Manager Income Manger Democratic Services

APOLOGIES FOR ABSENCE Apologies for absence were received from V Dunn and L Stephenson.

DECLARATIONS OF INTEREST None.

MINUTES OF THE MEETING HELD ON 15 JANUARY 2015 The minutes of the meeting held on 15 January 2015 were approved as a correct record and signed by the Chair.

ACTION LIST REVIEW Bike to Work â&#x20AC;&#x201C; Officers were reviewing the terms of the Bike to Work schemes and other schemes of a similar nature, to ensure that this situation did not occur in the future. Housing benefit fraud- it was noted that there was nothing in the tenancy agreement in relation to housing benefit fraud as this area was covered in the fraud policy. Page 176 of 189

Arrears Monitor- it was noted that the rent advice letters had been changed following the discussion with NCC about the use of eye tracker research in sending information, as suggested at the previous meeting. Equality and Diversity Draft Action Plan – the issues raised in debate had been submitted to Board. RESOLVED – that the action list be received and update accordingly. 33

ARREARS MONITOR Submitted: Report by Income Manager (previously circulated and copy attached to Official Minutes) M Grainger introduced the report which set out a breakdown of arrears at 28 February 2015, drawing members’ attention to the improvement that was being seen as a result of the new way of working. It was noted that the following year’s targets would be based on House Mark targets. RESOLVED – that the report be received.

DISAGGREGATION AND DECISION MAKING IN THE FUTURE L Forrest updated that following discussion at early meetings about the need for clarity around decision making and the future role of this committee following disaggregation of YHN finance from the Housing Revenue account. A report from NCC Cabinet on Disaggregation of YHN’s Finances from HRA had been submitted to Board in March, which had set out the revised governance arrangement being developed with YHN to reflect the new working arrangements going forward. The report provided clarity and a framework in which to operate. In future NCC would set the high level priority investment areas that YHN officers would work within in terms of asset management, everything within that would be monitored by YHN Board. There would be a role for this committee in considering the detail of the capital programme, with high level information being reported to Board.

EXCLUSION OF PRESS AND PUBLIC RESOLVED – that the press and public be excluded from the meeting during consideration of the Sickness Absence report and Dignity at Work presentation because of the likely disclosure of confidential information.

Page 177 of 189

9ix Customer and Service Delivery Committee 19 May 2015 (4.30 pm - 5.45 pm) Present: N Shukla L Middlemiss T Moore J Reid M Talbot

(Chair)

In attendance: N Scott A Pearce D Langhorne M Burn J Urwin J Vinton I Gallagher B Joyce 24

Director of Tenancy Services Assets and Programming Manager Director of Property Services Head of Support and Care Head of Housing Options Head of Assets and Regeneration Head of Property Maintenance NCC Democratic Services

APOLOGIES FOR ABSENCE Apologies were received from Paul Dutton.

DECLARATIONS OF INTEREST None

MINUTES OF THE MEETING HELD ON 17 MARCH 2015 RESOLVED â&#x20AC;&#x201C; That the minutes of the meeting held on 17 March 2015 be agreed as a correct record. It was confirmed that at the two Customer Service Centres not staffed by YHN reception staff, the quality of service should not be significantly different. Committee members asked to be kept updated on standards.

ACTION LIST AND WORK PLAN Submitted: Report by Neil Scott (Director of Tenancy Services) to provide information on the Customer and Service Delivery Committee workplan and the action list (previously circulated and copy attached to the official minutes). Page 178 of 189

Work Plan (May 2015 – January 2016)

(a)

The workplan was updated by the Customer and Service Delivery Committee and also via regular meeting with the chair and vice chair. Members were asked to contact N Scott if there were any particular areas they would like to be added to the workplan. (b)

Action List N Scott confirmed that a report detailing informal contact with customers would be added to the agenda for the July meeting of committee.

REPAIRS AND MAINTENANCE ANNUAL UPDATE Submitted: Report of I Gallagher (Head of Property Maintenance) (previously circulated and copy attached to the Official Minutes). Ian Gallagher presented the annual report which provided information on the performance of the YHN Repairs and Maintenance service for 2014/15. The report provided detailed information on:

Contract Performance o Appointments made as a % of appointable repairs o KPI changes for 2015/16 o Appointments made as a % of appointable repairs



Contract Development o Schedule of Rates (SOR) o Planned maintenance o Building services o Repair reporting



Customer satisfaction

Appendix one provided information on Key performance indicators for 2014/15; appendix two detailed revised KPI’s for 2015/16; and, appendix three contained details of repairs numbers reported through the Repair App. I Gallagher informed committee that he was happy to have a wider discussion on repair reporting, including bespoke work, at a future meeting. A visual would be developed to illustrate the many different approaches to customer satisfaction. Members’ comments and points raised 

A member asked if there were any links, for example from texts to other reporting on the same repair. I Gallagher advised that the majority of responses were about the repair.

Page 179 of 189

      

The term ‘void’ was clarified as meaning the time from when a tenancy was terminated to when a new tenant had taken over. If a customer responded ‘no’ to a yes/no text satisfaction question this initiated a phone call from a manager. Information on the percentage of people who did not respond would be included in the next report to committee. It was pointed out that this was exacerbated by many people regularly changing phones. In total, 9000 -10,000 repairs were reported per month on a variety of issues. At present the App represented a very small proportion although residents were being encouraged to use it. The App was also very easy to use. A meeting had also taken place with NCC to look at the wider online offering. Any ‘not satisfied’ responses were deemed complaints. The new KPI for external repairs was checked with Housemark and replicated criteria on Appendix 2. It was noted that the challenging target of 98% would continue to be impacted upon by adverse weather.

LIFTS IN LOW RISE BLOCKS Submitted: Report of J Vinton (Head of Assets and Regeneration) (previously circulated and copy attached to the Official Minutes). This report provided Customer and Service Delivery Committee with an update on work which had been carried out to look at the implications of installing lifts in low rise accommodation. A question was asked at the December Board meeting, regarding the possibility of lifts being installed in new build proposal for North Kenton flats. As some elderly tenants were experiencing difficulties officers agreed to investigate installing lifts retrospectively in existing stock and installing lifts as part of new build projects. There are a total of 518 blocks categorised as low to mid-rise without lift access across the City. For the purpose of this work a selection of the most common blocks were chosen for inspection. The results highlighted that it would not be possible to reconfigure the internals of the blocks to accommodate a lift due to limited space. Work was then undertaken to look at whether there was an option to retrofit a lift to the external of the blocks. This was also ruled out as it would necessitate losing space or a flat. Going forward, information would be gathered on a block by block basis when stock was surveyed for communal improvements; more detailed information on each block would illustrate if retrofitting a lift would be feasible. It was confirmed that the North Kenton new build project had space within the designs to incorporate a lift to serve the three floors but not the three units in the roof space. The ideal time to provide lift access was during the build process. The estimated cost of providing a lift at the North Kenton site was £45,000 per block (a total additional cost of £90,000, excluding fees). Page 180 of 189

9ix

It was proposed that the installation of a lift in each of these blocks be added into the project but this would be dependent on the receipt of a grant from the HCA. Members’ comments and points raised 



Members were very pleased to see that a comment at Board level had resulted in such a positive outcome. The Chair stated that it was really refreshing that officers took on board member comments to improve services for YHN tenants. Members considered the use of stairs in buildings with lifts and made the following comments:o Notwithstanding mobility issues, many people did not use stairs simply because they could not find them. J Vinton advised that signage could be looked at to make sure everything was very clear. o What could be done to encourage tenants to use the stairs and could this be linked to a report on wellbeing and health? o This linked more broadly to how YHN engaged with tenants and should be given some thought. o Often the conditions of stairs was an issue and stairwells should be made as attractive as possible.

INVESTMENT PROGRAMME QUARTER 4 PERFORMANCE Submitted: Report of Jen Vinton (Head of Head of Assets and Regeneration) (previously circulated and copy attached to the Official Minutes). Jen Vinton introduced the regular Performance and Progress Update report to provide Committee with information on the investment programme including the:  Key achievements delivered through the 2014/15 programme  Performance during Quarter four of 2014/15  Highlights of planned work in 2015/16 Appendix one detailed the current forecast expenditure for the 2014/15 investment programme; appendix two contained a graph showing spend profile for the financial year – at the end of 2014/15 actual spend was £47.2M; appendix three provided customer satisfaction information on completion of projects, and; appendix four provided detailed KPI information. J Vinton highlighted key schemes from each of the budget headings in the programme. Lifecycle Programme – current budget forecast of £21.1M  920 roof replacements had been delivered against the target of 819 properties.  410 window were delivered against a target of 272 properties. Page 181 of 189

Standard Housing Investment – current budget allocation of £12.6M  294 boilers had been installed from the remaining floor mounted and back boiler replacement programme.  Works at Cruddas Park House to install new windows, a new roof and external wall insulation was under way.  Work was progressing well on phase one and two of the British Iron and Steel Federation (BISF) properties windows and render upgrade. Environmentals and Communals – current budget allocation of £1.8M  Re-modelling works on New Mills estate was progressing well.  Two rounds of the ‘You’re got the Power’ voying process had been completed and would result in 52 projects being delivered over the next two years.  The communal upgrade at Iris Steadman House had been completed. Regeneration – current budget allocation of £3.5M  The biggest highlight was the completed remodelling works at Moor House.  Central Walker phase one and two was now on site. New Build – current budget allocation of £1.8M  New build works at Bristol Terrace were now complete.  The apprentice led new build scheme at Middle Street was also complete. The expected outturn figure for the year at the end of quarter four was £47.2M. J Vinton informed members that she was very pleased with the outturn figure, the customer satisfaction details and the KPIs. Member comments /points raised in discussion 

A member asked about the boundaries of Slatyford estate. J Vinton advised that this was linked to Ian Gallagher’s work and that she would provide further details.



With regard to Appendix three it was confirmed that the figure of 88% was 24% of those who had responded.

ASSET MANAGEMENT STRATEGY - PERFORMANCE AGAINST ACTION PLAN Submitted: Report of J Vinton (Head of Assets and Regeneration) (previously circulated and copy attached to the Official Minutes). The report provided Customer and Service Delivery Committee with information on the Asset Management Strategy action plan and covered:  

Work which had progressed since the approval of the Strategy. Key priorities for quarter two of 2015/16.

In November 2014, YHN Board approved the Asset Management Strategy (AMS). The Newcastle City Council (NCC) Cabinet gave approval in January 2015 with an Page 182 of 189

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agreed implementation date from April 2015. A working group would continue to meet regularly to take forward the key priorities identified within the AMS. Future quarterly progress updates would be presented to this Committee as part of the monitoring process. Appendix one detailed the AMS priorities transferred into an action plan; this would enable close monitoring of both the actions and the timescales. The report provided information on progress to date and work planned on each of the following priorities:      

Priority one - Ensure our investments are sustainable Priority two - Maintain decency and landlord obligations Priority three - Meet future demand and demographics Priority four - Work in partnership and encourage employment Priority five - Invest to improve our environmental sustainability performance Priority six - Build friendly and safe neighbourhoods Priority seven - Invest to reduce repair costs and make good decisions on voids

J Vinton advised members that as this was the first report on the progress of the AMS she was happy to take any feedback. Also, as key pieces of work came to a conclusion detailed reports would be brought back to this committee. Member comments /points raised in discussion 

A member raised the issue of potential future pressure to sell off high value properties and linkages to priority three. J Vinton advised that it was considered that NPV as a key measure needed to be explored. Further detail would be brought back to committee.



With regard to priority three a member asked how this translated into the design of new homes and how this shaped thinking around types of homes and demographics. J Vinton stated that Central Walker was a good example of an evidence based scheme; a range of different age categories and how many people were bidding were considered before developing the scheme. YHN also used information from the Annual Lettings Review and worked closely with the Fairer Housing Unit.



Members had talked about stress testing/new risk assessment at a recent Board away day. This raised the issue of whether further consideration should be given to how this linked to priority one and NVP. N Scott advised that YHN did not have any assets and that stress testing was not aligned. However, stress testing would be taken into account if issues linked to the HRA.

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

The Vice Chair stated that the demographics of the city were changing year on year eg. numbers in the Chinese community. Conversations about meeting needs would be required.



Linked to priority four, the Vice Chair asked what more could be done to ensure as many opportunities as possible were provided. Also, how could YHN ensure all of its partners were doing as much as they could (priority six)?

J Vinton informed members that the equality and Diversity Strategy included templates which listed everything that needed to be considered before the development of a scheme; additional details could be added to the template. With regard to employment, monitoring was key – officers would bring back more detail to illustrate how delivery was taking place. YHN did liaise with its wider partners eg. New Mills Estate – tenants had wanted very high fencing; working together with the Crime Prevention Officer a solution was agreed upon for trellis topped fencing which provided both height and a sightline. J Urwin advised that census information was also utilised to identify emerging communities and gaps etc.

DATE AND TIME OF NEXT MEETING 14 July 2014 4.30pm

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9ix Audit Committee 21 May 2015 (5.00 pm - 6.25 pm) Present: G Clark L Doherty J Reid P Scope N Shukla L Stephenson

(In the Chair)

IN ATTENDANCE S Breslin N Scott D Langhorne L Horsefield J Davison L Riley I Pattison C McMullen J Miller 29

Director of Corporate Services and Assistant Chief Executive Director of Tenancy Services Director of Property Services Head of Business Strategy Company Secretary and Board Administrator Service Quality Officer Internal Audit Fairer Housing Unit Democratic Services

APOLOGIES FOR ABSENCE Apologies for absence were received from D Down and A Mirza.

DECLARATIONS OF INTEREST IN ANY MATTER TO BE DISCUSSED AT THE MEETING None.

MINUTES OF MEETING HELD ON 26 FEBRUARY 2015 The minutes of the meeting held on 26 February 2015 were approved as a correct record, subject to the inclusion of L Stephenson’s apologies.

ACTION LIST REVIEW RESOLVED – that the action list be noted and updated accordingly. Page 185 of 189

PERFORMANCE MONITORING REPORT APRIL 2014 - 2015 Submitted: Report by Head of Business Strategy (previously circulated and copy attached to Official Minutes) L Horsefield introduced the report which provided performance monitoring for the 2014-15 financial year. The following issues/queries were raised during debate:

   

N Scott responded to a query as to how it was intended to achieve the target for void rent loss. He explained that a report on the outcome of the sustainability review on some of the multi storey blocks would be going to Board with recommendations. The void levels in some of these blocks was skewing the achievement of the target as in three of the five areas the levels of void rent loss was less than 1%. As a result of the void improvement plan there had been a range of service improvements which would support service delivery. It was noted that the adoption of the Newcastle City Council (NCC) policy and procedure for managing sickness absence in July 2014 had seen an increase in the number of warnings issued following sickness hearings and dismissals. Members were assured that each sickness absence case was looked at on its merits but were advised that the key issue was whether there was a path back to work for an employee. A member commented that a level of depression, mental health and fatigue related sickness absence of 26%, was not unusually high.

RESOLVED – that the report be received. 34

DRAFT STRATEGIC RISK REGISTER 2015 - 16 Submitted: Report by Head of Business Strategy (previously circulated and copy attached to Official Minutes) L Horsefield introduced the report which set out the draft Strategic Risk Register which outlined the most significant risks to the achievement of the organisation’s objectives. It also highlighted the perceived threat level for each key risk, the controls in place to regulate the risk and the actions required to improve controls. She drew members’ attention to the most significant changes to the register as detailed in the report. She explained that this year the register reflected the changes in relationship with the NCC which meant that some of the risks such as those relating to the Housing Revenue Account (HRA) that had previously been a risk for YHN were now a risk for NCC. The following issues were raised during debate: 

In response to a members’ query, officers advised that at this stage there were no penalty clauses relating to performance in the Management Agreement. NCC would specify what services they wanted YHN to deliver and the outcomes they expected YHN to achieve. Page 186 of 189

  



There would be a quarterly review of the performance and finances with changes being made mid- year if necessary, along with a more comprehensive annual review. The Management Agreement would operate in shadow form for the first year, the process would then be finalised based upon lessons learned from the first year of operation. In response to a member’s query officers confirmed that SR4 partly related to the possibility that some staff would either not have the skills or would not want to develop new skills to meet changes in service delivery requirements as a result of disaggregation. There was now an increase in staff movement following a period of very little staff movement. A report would be taken to Board in June on governance. This would include a future action to look at succession planning.

RESOLVED – that:i. ii. iii.

The draft 2015-16 Strategic Risk Register be noted. The draft Strategic Risk Register be recommended to Board for approval. The proposed approach for quarterly updates on the Strategic Risk Register be agreed.

INTERNAL AUDIT PROGRESS REPORT Submitted: Report by Head of Internal Audit (previously circulated and copy attached to Official Minutes) I Pattison introduced the report which showed Internal Audit activity since the last Audit Committee meeting in March 2015. He advised that no reports had been finalised in the last reporting period. Six pieces of work were with managers for review and finalising, two others were ongoing. In terms of delivering the audit plan for 2014/15 he reported that two audits had been carried forward to 2015/16. I Pattison explained that some audits had taken longer than anticipated to complete, some outcomes had required further investigation. He commented from the work to date on these audits there was nothing that was of concern. He advised that the internal audit year ran from 1 June 2014 – 31 May 2015 and internal audit were on track to have everything finalised by that date. RESOLVED – that:i. ii.

Progress against the Internal Audit plans for 2014/15 be noted. Progress on the implementation of audit recommendations be noted.

STRATEGIC INTERNAL AUDIT PLAN 2015/16- 2017/18 INCLUDING ANNUAL INTERNAL AUDIT PLAN 2015/16 Submitted: Report by Head of Internal Audit (previously circulated and copy attached to Official Minutes) I Pattison introduced the report which set out the draft Annual Internal Audit Plan for 2015/16 and Strategic Internal Audit Plan 2015/16 to 2017/18, drawing member’s Page 187 of 189

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attention to the to the summary of audits and number of audit days proposed in the Plan for 2015/16. The following issues/queries were raised during debate:



 



In response to a query as to whether there was a reserve list in case any of the audits where unable to go ahead, I Pattison advised that the indicative 2016/17 audit plan would be used as a reserve list, if there was a need to bring audits forward. It was noted that the Community Care Alarm Service (CCAS) audit may need to be put back by two months. I Pattison undertook to have further discussions with N Scott with a view to reassessing the situation as the procurement of the new system progressed. N Scott commented that the Garden Care audit could be brought forward to September/October and undertook to discuss this with I Pattison. It was noted that the Safeguarding and Domestic Violence audit would check that managers were complying with the recommendations from the 2014/15 audit; that the system was robust; that monitoring arrangements were in place and that the training had taken place. Members commented that they would prefer to have realistic dates which could be achieved rather than an aspirational date for the completion of audits.

RESOLVED – that the Annual Internal Audit Plan for 2015/16 and the Strategic Internal Audit Plan 2015/16 to 2017/18 be agreed subject to officers discussing the timing of the CCAS and garden care audits. 37

ANNUAL ASSURANCE STATEMENT Submitted: Report by Company Secretary (previously circulated and copy attached to Official Minutes) J Davison introduced the report which presented YHN’s Annual Assurance Statement for 2014/15. RESOLVED – that the Annual Assurance Statement be approved.

STRATEGIC RISK REGISTER - QUARTER FOUR 2014-15 'RISK AT A GLANCE' UPDATE Submitted: Report by Head of Business Strategy (previously circulated and copy attached to Official Minutes) L Horsefield introduced the report which provided the year end ‘risk at a glance’ update against the 2014-15 Strategic Risk Register. RESOLVED – that the report be received.

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2015-16 DELIVERY PLAN Submitted: Report by Head of Business Strategy (previously circulated and copy attached to Official Minutes) L Horsefield introduced the report which provided the annual delivery plan which had been approved by Board in March 2015. The report included the strategic targets, performance against these targets would be reported to committee during 2015/16. The following issues/queries were raised during debate: 

  

Rent arrears was a new top 20 target because of concerns that collection rates may deteriorate upon the introduction of Universal Credit, based on experience elsewhere. Arrears had previously been monitored at a service level. In response to a member’s query L Horsefield outlined the collaborative process that had been undertaken between YHN and NCC to ensure the YHN Delivery Plan was aligned with NCC priorities. The top 20 priorities reflected NCC, YHN and tenants’ priorities. The finance team were working on developing a live dashboard of real time financial information

RESOLVED – that the report be received. 40

EXCLUSION OF PRESS AND PUBLIC RESOLVED – that the press and public be excluded from the meeting during consideration of the 2015-16 Delivery Plan – restricted targets.

2015-16 DELIVERY PLAN - RESTRICTED TARGETS Submitted: Confidential report by Head of Business Strategy (previously circulated and copy attached to Official Minutes) RESOLVED – that the report be received.

DATE AND TIME OF NEXT MEETING Thursday 9 July 2015 at 5pm – 7pm

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