77.1. Short description
In 2002, Inspectors classed the Housing Management Service provided by DDC as poor, with poor prospects for improvement. The inspection team gave the service no stars. The rating may be from 0-3, where 0 is poor and 3 is excellent. Action was needed to do more to make the Council’s homes meet the Decent Homes Standard set by the government. In 2005, the four neighbouring councils of Dover, Canterbury, Shepway and Thanet each carried out an appraisal of the long-term viability of their council housing. While all four authorities could achieve and sustain the Decent Homes Standard and had viable business plans, concerns remained that the relatively small stock holding of each authority would limit any ambitions to improve services and to improve opportunities for council tenants and leaseholders.
Not-for-profit companies set up by a local authority to manage its housing stock known as “arms-length management organisations” (ALMOs) have demonstrated that they offer a better service to tenants than any other form of council housing management. The ALMO programme started in 2001 and there are around 68 ALMOs in the UK, which manage more than one million council homes across 64 local authorities. ALMOs manage over 700,000 council homes. They achieve higher inspection ratings than local authority managed housing or housing associations. There were only 26 “three star” housing authorities in the country, of which the majority were ALMO’s and none were councils19. East Kent Housing (EKH) came into being on 1 April 2011. It is an ALMO owned by the four councils of Dover, Canterbury, Shepway and Thanet.
EKH is aimed at saving money while improving services to tenants. EKH is responsible for the management and maintenance of 18,000 homes owned by the four councils. EKH does not: decide who is allocated housing, make homelessness decisions, set the housing strategy, manage the Housing Revenue Account (HRA), or decide what improvements are made to the housing stock. These functions all remain with DDC.
77.2. The innovation
The innovation behind EKH is that it aims to achieve economies of scale by operating cross local authority boundary working, and was the first instance in the country of four authorities sharing a single housing company, or “super ALMO”. EKH differs from other ALMOs in that it is the first that serves more than one local authority. As such, it is seen as being particularly innovative and has attracted national attention as a potential model for future shared services.
Although there were initial set-up costs, with Dover’s share estimated at 237,000 pounds sterling, it was hoped the second year would make modest savings of 44,000 pounds sterling for DDC and the first 5 years would save the four councils 1.5 million pounds sterling in overall housing costs between them. The ALMO should begin to deliver its most significant savings from year 5, when the longer-term maintenance and service contracts could be harmonised between the four authorities20. To date EKH has reduced running costs across the whole of East Kent by about 300,000 pounds sterling a year (about 86,000 pounds sterling in Dover), has made procurement savings by about 900,000 pounds sterling a year (340,000 pounds sterling in Dover), and has increased rental income to the councils through improved performance. That is to say, it has been re-letting empty properties faster, bringing in revenue of around 122,000 pounds sterling a year (34,000 pounds sterling in Dover).
Its claims to success are based on statistically robust annual surveys of tenants’ satisfaction. Statistics place EKH in the top quartile overall when compared to other ALMOs. Its performance in other business areas is also measured, e.g. rent arrears. Hoped-for savings have been made. So far, these have mainly been on payroll, but there are future prospects for economies of scale in maintenance and administration.
77.3. Conceptions and ways of addressing users
Improving the way EKH communicates with tenants and learns about what they really think about the service is a key element of its work. Tenants have been involved in a number of ways. For example, DDC took into consideration that of the 51 per cent of tenants who voted on the issue of the transfer of housing management functions to EKH, 72 per cent voted in favour of the transfer21. Tenant groups were sceptical at first, but that officers had won them over by listening and taking on board their suggestions, although it might take some time to deliver the improvements22. Neighbourhood managers are expected to play a significant role in working with tenants to identify and deliver environmental improvements. A Dover editorial panel was set up to review all EKH communications with tenants to ensure they were as clear and tenant-friendly as possible. The “You said, we did” section newsletter was cited as one way in which EKH communicated how it responded to tenant concerns23.
EKH is run by its own Board. The main function of the Board is to oversee the strategic development of the organisation, ensure effective financial management and ensure that the organisation delivers its obligations to the four councils and their tenants. The Board has 12 members, four councillors (one nominated from each council), four tenants (selected by the tenant representative bodies in each local authority area) and four independent members, selected through an open recruitment process, involving councillor and tenant board members. The Board initially meets bi-monthly. Board meetings are open to the public and agendas, papers, minutes and the forward plan are published on the EKH website.
Area Boards are a critical part of the EKH governance structure and are designed to ensure that there remains local accountability to tenants, leaseholders and councillors. There are four local area boards, one for each authority, and these provide scrutiny of EKH based on the tenants’ priorities. Within Dover, these comprise the Dover/Deal and Sandwich/Rural tenants’ groups. Each group elects six tenant representatives and one leaseholder representative who form the Area Board, together with two councillor nominees and a nominee from the main EKH Board. Area Board meetings are open to all tenants and councillors to attend. Details of meetings, venues, agendas and minutes are on the EKH website. As well as an Area Board structure, EKH has developed other ways in which tenants can hold the organisation accountable and has introduced Tenant Inspectors and a Tenant Scrutiny panel in line with the current regulatory requirements for social landlords.
77.4. Internal organisation and modes of working
DDC remains the owner and legal landlord of the council housing stock in the district and continues to set rents. Tenants’ and leaseholders’ rights and responsibilities are unchanged as they remain tenants and leaseholders of DDC. Councils have kept responsibility for all strategic housing functions such as housing strategy, homelessness, housing advice, the management of the housing register including Choice Based Lettings, private sector housing, and the management of the Housing Revenue Account. DDC retains responsibility for the policy that determines how council homes are allocated and for determining the terms and conditions of its tenancy agreement which EKH undertakes to enforce.
EKH, on the other hand, manages and maintains council homes across the four councils involved in areas including: repairing and improving tenants’ homes, managing grass cutting, gardening contracts, cleaning and maintenance of communal areas, collecting rent, and helping tenants who are having difficulty in paying, and ensuring tenants stick to their tenancy agreements. EKH supports DDC with regard to the delivery of its strategic housing objectives.
The configuration of staffing was critical in delivering both an effective and improved service and reducing costs in line with expectations of the councils. Two hundred and thirty posts transferred from the four councils to EKH in April 2011. The Board appointed a Chief Executive and other senior management posts within the organisation. Two members of the management team, the Head of Corporate Services and the Head of Asset Management were both former employees of DDC.
Certain principles underpin the innovative restructuring, the most important being that core frontline services like housing management and repairs will remain locally based. Other functions have potential for being centralised, e.g. debt recovery, leasehold management etc.
77.5. Impact on the governance of local welfare system
EKH aims to achieve economies of scale by operating cross district boundary working, and was the first instance in the country of four authorities sharing a single housing company, or “super ALMO”. It follows a wider trend in smaller councils to explore sharing other management staff roles within the council and services such as the collection of council tax, the administration of housing benefit, ICT technical support and customer services, with other district councils.
EKH works closely with DDC. A comprehensive performance-reporting framework has been developed by EKH. Formal quarterly monitoring meetings take place involving the portfolio holders for Housing and Community and Finance and senior officers in the council including the Housing and Community Manager. Within DDC, performance is monitored through the Housing Improvement Board (HIB) which includes the Deputy Leader and Portfolio Holder for Housing, Community and Youth and the Portfolio Holder for Corporate Resources and Performance. HIB scrutinises performance reports produced by EKH and meets with the Chief Executive of EKH and senior managers on a quarterly basis. In addition, there are regular meetings between senior managers of the two organisations including meetings between the Head of Finance at EKH and finance staff at DDC. The Chief executive of EKH also attends quarterly meetings with the Council’s Corporate Management Team. The Management team of EKH and the client officers from the four councils meet quarterly. Key areas of the monitoring include, Performance Plan (e.g. rent arrears, re-lets, repairs targets); Delivery Plan; and Managed Budgets (repairs budgets).