Your Homes Newcastle Limited Thirteenth Annual General Meeting Tuesday 19 September 2017 at 4.00 pm To be held at YHN House, Benton Park Road, Newcastle upon Tyne NE7 7LX Contact Officer: Jill Davison
– Tel: 0191 278 8624 Email: jill.davison@yhn.org.uk
AGENDA Page No 1.
Welcome and Apologies for Absence
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Chair's Report
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Newcastle City Council Response Pat Ritchie, Chief Executive, Newcastle City Council
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Minutes
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To approve the Minutes of the Annual General Meeting held on 1 November 2016 5.
Directors' Report & Financial Statements and Auditors' Report To receive the company’s accounts for the year ended 31 March 2017 together with the Strategic and Directors’ Report and the Auditors’ report on those accounts
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Re-appointment of Auditors To re-appoint Ernst & Young LLP as auditors of the company for the period to the next Annual General Meeting
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Retirement of Tenant Members To accept the retirement of Lisa Doherty, Tony Moore and Paul Dutton as a Tenant Member, in accordance with Article 15 of the company’s Articles of Association
Your Homes Newcastle Limited. Registered in England and Wales Registration Number 5076256 Registered Office: Newcastle Civic Centre, Barras Bridge, Newcastle upon Tyne NE1 8PR. A company controlled by Newcastle City Council
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Retirement of Independent Members To accept the retirement of Phil Dibbs, Olivia Grant, Ammar Mirza, Malcolm Page, Paul Scope, Elaine Snaith and Lynn Stephenson as an Independent Member in accordance with Article 16 of the company’s Articles of Association
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Appointment of Independent Members To accept the appointment of Jo Totton (Boaden), Lisa Doherty and Malcolm Page as an Independent Member in accordance with Article 16 of the company’s Articles of Association for a three year term of office To accept the appointment of Paul Scope and Elaine Snaith as an Independent Member in accordance with Article 16 of the company’s Articles of Association for a two year term of office To accept the appointment of Richard Clark, Kevin Lowry and Helen Simpson as an Independent Member in accordance with Article 16 of the company’s Articles of Association for a one year term of office
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Any other business relevant to the Annual General Meeting
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To confirm the date of the next Annual General Meeting as Tuesday 18th September 2018
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Twelfth Annual General Meeting held on 1 November 2016 at 4.00pm at YHN House, Benton Park Road, Newcastle upon Tyne. Present: Newcastle City Council: P Ritchie (Chief Executive) Your Homes Newcastle Board Members: O Grant (Chair), V Dunn, P Dutton, P Dibbs, D Huddart, J McCarty, A Mirza, T Moore, M Page, J Reid, P Scope, L Stephenson, E Snaith, J Streather, M Talbot. In attendance: T Drury J Ritchie M Foreman J Davison A Baker A Senior S Beaumont R Roche
Managing Director Finance and Commercial Director Customer Services Director Company Secretary Governance Support Officer NCC Ernst & Young LLP Tenant
Apologies for absence D Slesenger J Purvis 1
WELCOME The Chair extended a warm welcome to all present at the meeting.
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CHAIR’S REPORT This year we’ve taken a slightly different approach to our annual review, and have tried to make it more relevant to and engaging for tenants, both in terms of content and format. Every year we agree our local offers with tenants. These are commitments to improving the services we deliver and take the form of standards and actions that we agree with customers. We have reported on these agreed offers in the review. We also consulted with more tenants earlier this year and asked them to feedback on a survey what they would like to see included in the report – their responses are reflected here too. So, we have an introductory film which includes some performance highlights, and then we have a document that goes into a little more detail on performance and tells people where they can find out more. Both will be displayed on our website but we have them here for you to preview now. Hopefully our customers will like those as much as I do! While the annual review film and document for customers focuses mainly on the things we know they want to hear about, I think it would also be useful for us to consider some of the more over-arching, strategic approaches we’ve
taken throughout the year so I’ll run through those now. Five approaches we took in 2015-16 1. A new look for a new year At the beginning of the last financial year, the wheels were in motion for some of the biggest changes to YHN’s operational structure in years. The disaggregation of YHN’s finances from the Housing Revenue Account provided Newcastle City Council with greater reassurance about the monitoring of our financial performance, and us with more power to be innovative and trade commercially. At the same time, the creation of the wider group structure, which was to include Asfaleia Limited, our charitable subsidiary, and Abri Trading Limited, meant numerous changes for members and officers. An overhaul of this nature was obviously not without its challenges, but the changes made throughout 2015-16 have put YHN in a fantastic position, both in terms of responding to the council’s needs and creating our own opportunities. This of course meant a great deal of work for employees, not least those in financial and governance teams, and I know I speak for everyone when I say that we’d like to pass on our thanks for that. 2. Not putting our heads in the sand As disaggregation not only transferred additional opportunity, but also additional risk, YHN Board has been “stress testing”; forcing us to think through potential impacts and forecasts in more depth. Stress testing considered key economic assumptions for the coming years, including reduction in the management fee and potential limitations on growth in trading, helping us anticipate future financial pressures. We know we will have to cope with less, but we’re not waiting until we actually have less before we act on this. We’ve been thinking more strategically. We’ve looked at efficiencies and come up with a comprehensive list. We’ve also considered multiple different scenarios and implemented numerous controls to monitor risk as we go. All of this puts us in a better position to cope with anything that comes our way, none of which should be unexpected at this point. 3. Becoming more business minded Several factors beyond our control have caused us to reconsider generally our approach and to become more business-like in our endeavours. The Government’s 1% rent cut may have seemed a positive thing for our tenants, but the loss of this income will of course be keenly felt by the organisation, and this will likely still impact on our customers. It affects things like the capital programme, so we have worked hard to get best value out of the programme to meet tenants’ priorities and keep investing in the council’s stock. In addition, various other changes to the welfare reform system are of course meaning reduced income for our tenants, which will in turn affect our income.
Newcastle City Council continues to face pressure following significant reductions in funding from central Government and, although we have been largely protected from this for a long time, it was inevitable that some of this would be passed on to us eventually. As a result, the new Business Strategy has far more emphasis on trading services. This is an area where we can maximise our income in spite of our other limitations, helping to preserve the HRA and supporting the council’s priorities. We’ve also been looking at other cross cutting objectives, with more emphasis on ICT, more partnerships, and more investment in staff. Our new structures, which will help to facilitate this, have now been confirmed with a massive vote of confidence from the council in the ten year agreement. 4. Realising that ‘life goes on’ After a very stable period where the organisation was led by the same people for many years, we’ve had some changes at the top, with virtually all of our long-standing Management Team moving on. We’ve also recently said goodbye to the Byker Community Trust after gradually decreasing our work there and following the organisation signalling that it wants to make its own way in world. None of this has meant any let up in our service provision, though there are still lots to be proud of. We’ve continued to support our partners at Leazes Homes as they progress through their development programme with funding from the Homes and Communities Agency, and their extra care supported accommodation in particular is making a real difference to Newcastle City Council; something we’re of course pleased to assist with. We’ve delivered more life cycle improvements than agreed with customers and we’ve resolved a higher number of ASB cases than the target we agreed through our local offers process. Customer satisfaction, although it has dropped a little, remains high at 85%. We also kept the void rent loss under what we agreed and have met our target around collection rates. 5. ‘It’s time to look forward’ As we’ve said before though, this is not an organisation that rests on its laurels. Customer satisfaction can be improved, and our services can still be delivered more efficiently and expertly. We also know that there will be more challenges to come, as Government policy continues to change and new restrictions and obligations are imposed on us. We will of course continue to work collaboratively with Newcastle City Council in response to these pressures. Since we turned ten, we’ve spent quite a bit of time internally reflecting on the journey so far. This has been a useful process; it’s cathartic and it’s necessary, but it’s time to take the next step now. With a new managing director in place, and a new executive team to come, the time is right to move beyond this.
Tina has been talking to staff and the appetite is there – our staff are up for the challenge and looking forward to what the changes will bring for them, for the organisation and for customers. We as a Board have also been undergoing a review to ensure we are fit for the future and in a strong position to lead the organisation as it faces additional challenges. In summary, we’re really looking forward positively to what 2017 will bring. On behalf of all of the Board, whom I’m sure will echo my thoughts, I’d like to pass on our thanks to all YHN’s hard working staff for their dedication and commitment to our objectives of delivering great services, enabling people to thrive in great communities and supporting a great city. 3
NEWCASTLE CITY COUNCIL As the shareholder this is the annual time when I come and receive the accounts and assurance of the governance on behalf of the council. I’ll talk a little bit about the year and some challenges ahead. First of all can I thank you all for inviting me, and for the opportunity to talk about the progress we’ve made over the last year and some things that we need to consider for the future. Can I welcome Tina to your first AGM as Managing Director of YHN, one of the big changes but one of the very positive changes that have taken place over the last few years. Can I thank the Chair and the Board for your continued commitment to YHN as you’ve gone through a period of significant change. As we’ve talked about before in these discussions, I think the closeness and the relationship between YHN and the council as we both go through a period of change, responding to the needs of tenants and communities. As a council we’ve gone through significant change over the last five plus years, and YHN is starting to go through that change now in partnership and conjunction with the council, one of the big things for us all is to ensure that during that period we continue to maintain good services to our tenants and positive outcomes for residents and communities. Can I also put on record as part of the AGM the councils thanks and my thanks to the senior management of YHN who started this year off and to particularly thank John Lee and his team for that they did over the last ten years in making this a successful organisation. Every year I come to these things and I talk about the last year being a period of great change, my notes here say it’s been an eventful year, I think that is an understatement. Who would have thought that we were only here last year when we would have left Europe, a new Prime Minister, and facing some of the biggest challenges and changes in housing that anybody has seen for a long time. Who knows what will happen over the next couple of weeks with the American elections, spending review and all other sorts of other things. There has been a huge amount of change over the last year, the position for the public sector remains challenging for the next three to five years. From a
City Council point of view we’ve already made significant change and reductions in our budget, we will need to continue with that, so what we expect over the next few years is we expect to have to take another £30m out this year, another £20m then another £20m and that is on top of around £280m we’ve taken out already from the council budget. None of that gets any easier. Slightly better news this year is we’ve got more of any opportunity to plan over a longer period of time so as part of the government’s settlement with local authorities is to be given a four year guarantee around funding, so we are able to predict how things look over the next three to four years. Assuming there isn’t big cataclysmic change that impacts on that we have got a four year settlement. What that means is we can take a bit of a longer term view on the annual statement which will be used in local government will help us in developing our transformational plans but working closely with YHN to deliver those plans. It’s really important to say that throughout this period of austerity we’ve worked in partnership with residents, with the voluntary sector, the public and private sector organisations to try to continue to achieve the best outcomes we can for the residents of the city. Our relationship with YHN is central to this, and through that collaborative approach that we have developed over the last few years we can tackle the issues that face residents and communities together to try and maintain those outcomes and ensure that we deliver as effectively as we can to the people of the city. As we continue to deal with those ongoing budget challenges alongside the impacts of welfare reform changes which are now really impacting, we are also at the forefront of change that is being headed by the Housing and Planning Act but also the previous changes that Olivia talked about in her presentation. I think that the council and YHN’s ability to be able to invest in new and existing housing will be constrained in future and we will work around that and be as innovative as we can but there is an inevitable constraining of our ambition and our ability to achieve some of the things that we want to see, and as we see further cuts to housing and benefits, implementation of pay to stay, fixed term tenancies, further pressure on tenants of YHN, we will have to continue to be innovative, find our way through that challenging policy context that affects us, and I think we have already done a lot to tackle some of those issues, we are delivering a number of services jointly, I feel that if you look at the work we’ve done in the libraries, work in customer services, and a range of areas we have found different solutions and ways forward to try and protect services. We will need to do more of that in future. As you know, one of the next big pieces of work on collaboration around change will be in the review we have undertaken on how we deliver our repairs and maintenance service to tenants within the city, this will be quite a substantial review that will look at tenants as the heart of the review, how we get the best service in the most efficient way, meeting tenants expectations and driving change in how we deliver. As far as I am concerned, as Chief Executive of the council, I have no fixed idea about how that would pan out in the future. What I would want to see is
tenants driving that change, and ensuring that they are involved in designing the best service around R&M that we can get in the future, avoiding duplication and ensuring we get the right approach. We will also work together in a number of areas- housing policy, tenant engagement, and the review of Tyne and Wear Homes. What will be important is that the changes we want to make at the board to ensure as the organisation goes forward the board also changes and provides the most effective governance that they can. The other area to highlight is ensuring our capital investments that we made in providing support particularly to vulnerable tenants that we provide the right management support that is needed to support tenants in their homes. We have done a lot jointly around capital investment to provide support to people who have been in receipt of services in a different way and continue to do that in the next three years, we need to make sure we get that right with our partnership with Leazes Homes. Inevitably with this presentation it’s often around some of the challenges that we face, but as a city, I think there’s a lot of things that are very positive within the city itself. We’ve seen some real signs of growth within Newcastle. We’ve got the highest employment rates in the city since 2004, we’ve had significant growth in both housing and in private sector investment in the city, Stephenson Quarter, Science Central, a number of others. I think we need to build on that confidence in the city, the future, to ensure those opportunities really benefit tenants across the city. When I talked at the beginning around changes since the last AGM I’ve talked about combined authority devolution and at the last AGM I had done a deal, we were signing up with George Osbourne, thought we had a really good deal for the North East region, as many of you will know that has changed substantially over the last few months with a number of councils deciding that they didn’t want to go ahead with that devolution deal. I just really wanted to assure those around the table that from a Newcastle City council point of view we continue to be committed to devolution and we will work in any way we can to bring about devolution to the city and for the broader region because we think that decisions that could be made locally, being in charge of our own destiny is important in driving the growth that I talked about earlier within Newcastle and the wider area. So, we will work with government and with partners to look to bring forward a devolution deal if at all possible within the region, and you will have seen the press, we are talking to other councils in the north of the Tyne who also would look to do a devolution deal in Northumberland and North Tyneside, and we are in discussions with government around whether or not a deal will be on the table, within that we will make the argument of a greater devolution deal particularly around housing and investment as part of that deal. It’s quite early days, a lot to go before we know whether it will be possible to do a deal with the north of Tyne, as I said before the council remains committed to ensuring that we get as much decision making at a local level to drive growth as we can and we remain committed to devolution, so we will
continue to keep you updated on that. So, I’m pleased with the progress we have made including all of the change we have seen over the last year, I think we have seen greater collaboration and closer working in a whole range of ways to drive innovation and change between YHN and the council and will continue to see that in the future. I don’t think I will be coming here next year and saying everything will remain static, I think there will be no doubt further change as we’ve talked about, who can anticipate. I’m very pleased to be here as the representative of the shareholder to receive the accounts and assurance from board on governance, and look forward to working with the new team, the changes that are happening in the board and the overall change within YHN to achieve for next year for the tenants and communities in the city. 4
MINUTES The minutes of the eleventh Annual General Meeting held on 22 September 2015 were received and approved.
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DIRECTORS’ REPORT AND FINANCIAL STATEMENTS AND AUDITORS REPORT L Forrest, Head of Finance, gave a short presentation about the financial statements for the period ending 31 March 2016. L Forrest reminded the board of the journey these important statements have gone through. Group Audit Committee looked at them in more detail on the 26 September and recommended them to the Board, the Board then approved these accounts on the 11 October. They have been through an external audit, Ernst & Young identified no material errors or weaknesses, and we have tested going concern assumption, looked at a base model, which shows that going concern was assessed as valid. Some very quick highlights; The accounts are far more complex this year as they have been prepared on a group basis. There are also 6 months of disaggregated business from the HRA, and YHN Group is now asset holding. FRS102 has added complexity as leased assets and liabilities are now accounted for on the balance sheet and there has been a change in the pension accounting. RESOLVED – that the sole member of YHN, NCC, received the Directors’ Report & Financial Statements and Auditors’ Report for the period to 31 March 2016.
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RE-APPOINTMENT OF AUDITORS RESOLVED – that Ernst & Young LLP be re-appointed as Auditors for the period to the next Annual General Meeting.
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RETIREMENT AND APPOINTMENT OF TENANT MEMBERS The Chair asked members to approve the retirement and appointments of tenant members as set out in the agenda (previously circulated and copy attached to the official minutes). RESOLVED:
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To accept the retirement of Julie Purvis as a Tenant Member, in accordance with Article 15 of the company’s Articles of Association.
To accept the retirement of John Reid as a Tenant Member, in accordance with Article 15 of the company’s Articles of Association.
RETIREMENT AND APPOINTMENT OF INDEPENDENT MEMBERS The Chair asked members to approve the retirement and appointments of independent members as set out in the agenda (previously circulated and copy attached to the official minutes) RESOLVED:
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To accept the retirement and re-appoint Paul Scope as an Independent Member in accordance with Article 16 of the company’s Articles of Association for three year term of office.
To accept the retirement and re-appoint Elaine Snaith as an Independent Member in accordance with Article 16 of the company’s Articles of Association for three year term of office.
Appointment of the Chair The Company Secretary confirmed that written confirmation had been received from Newcastle City Council, following the Chairs recent review meeting with the Chief Executive and deputy Leader. The Directors, in accordance with Article 32 were asked to re-appoint Olivia Grant as Chair of YHN Board for a term of three years, subject to annual reviews. RESOLVED:
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To re-appoint the Chair, Olivia Grant in accordance with Article 32 of the company’s Articles of Association.
DATE OF NEXT MEETING The next Annual General Meeting would take place on Tuesday 19 September 2017 The meeting closed at 4.55 pm.