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Agenda item

LBTH/THH Strategic Review of Housing Management Options

The report “Strategic Review of Housing Management Options” was considered by the Mayor in Cabinet on 31st July, 2019. The following decisions were agreed and published on Friday 2nd August, 2019

1. To note the findings of Altair’s independent review of current housing management arrangements and appraisal of future options (Appendix 1 to the report).

2. To note the outcome of the recent consultation exercise (Appendix 2 to the report) and agree to proceed with the extension of the Council’s management agreement with Tower Hamlets Homes for four years (to 2024), with a possible extension for a further four years (to 2028).

3. To delegate to the Corporate Director (Place) after consultation with the Corporate Director (Governance), authority to complete the said extension by July 2020 and do all that is necessary for this purpose including negotiating and approving a revised Management Agreement.

Decisions above have been ‘Called-In’ by Cllr Puru Miah; Cllr Ehtasham Haque; Cllr Shah Ameen; Cllr Shad Chowdhury and Cllr Gabriela Salva Macallan. This is in accordance with the provisions of the Overview and Scrutiny Procedure Rules of the Council’s Constitution.

RECOMMENDATION

That the Overview and Scrutiny Committee (OSC) considers:

1. The contents of the attached report, review the Mayor in Cabinet’s decision (provisional, subject to Call In) arising; and

2. Decide whether to accept the decision or to refer the matter back to the Mayor with proposals and reasons.

CONSIDERATION OF THE “CALL IN”

Having met the “Call In” request criteria, the matter is referred to the OSC in order to determine the “Call In” and decide whether or not to refer the matter back to Cabinet for further consideration.

The following procedure is to be followed by the Committee for consideration of the “Call In”:

· Chair to invite a call-in member to present call-in.

· Chair to invite members of the Committee to ask question.

· Chair to Invite Cabinet Member to respond to the call-in.

· Chair to invite members of the Committee to ask questions.

· Followed by a general debate.

N.B. In accordance with the OSC Protocols and Guidance adopted by the Committee at its meeting on 4th June, 2013, any Member(s) who present(s) the “Call In” is (are) not eligible to participate in the general debate.

It is open to the OSC to either resolve to take no action (which would have the effect of endorsing the original Mayoral decision/s), or to refer the matter back to the Mayor for further consideration setting out the nature of its concerns and possibly recommending an alternative course of action.

Minutes:

The Committee noted that the decision made by the Mayor in Cabinet on Wednesday, 31 July 2019 in respect of agenda item 6.3 ‘Strategic Review of Tower Hamlets Homes’ had been ‘called in’ under the Overview and Scrutiny Committee Procedure Rules of the Council’s Constitution by Councillors Gabriela Salva-Macallan, Ehtasham Haque, Puru Miah, Shah Ameen and Shad Chowdury (‘Call-in Members’).

The Committee considered the:

· Cabinet report

· Mayor in Cabinet Decision published on 2 August 2019

· “Call in” requisition from the Call-in Members (undated)

· Representations by the Cabinet Member for Housing, Councillor Sirajul Islam.

· Representations by the Call-in Members

The Committee then noted that the Mayor in Cabinet’s decision, published on 2 August 2019 had:

Noted the findings of Altair’s independent review of current housing management arrangements and appraisal of future options;
Considered the outcome of the recent consultation exercise and agreed to proceed with the extension of the Council’s management agreement with Tower Hamlets Homes for four years, possible extension for a further four years (to 2028);
Delegated to the Corporate Director (Place), in consultation with the Corporate Director (Governance), authority to complete the above extension by July 2020.

The Committee was advised that alternative course of action proposed in the call-in was:

That the THH contract is extended for a maximum of two years to undertake a full consultation and resident-led appraisal of option 1: in-house management;
That the Council arranges a peer review for delivery of housing options, assisted by an independent advisor experienced in finance, risk and partnerships to undertake economic and governance modelling of housing options; and informed by a full risk register and comprehensive risk assessments; and
Undertake economic modelling of financial implications of housing options that reflects the lifting of the HRA debt cap.

Call-in members presented to the Committee the reasons for call-in and their proposed alternative course of action, and added that:

· Across London, other Local Authorities Arm’s Length Management Organisations (ALMO) are different to that as presented in the consultant’s/Altair’s report;

· Engagement with residents was insufficient and contrary to LBTH engagement policy and good practice regarding engagement and consultation; and

· The Altair report wasn’t part of the consultation and didn’t consider HRA debt, value of in-house management, or savings potential for in-house management/options.

Committee then posed a number of questions concerning:

· The implications of the two year delay, or four year extension

· Opportunities to make savings, and performance improvements in house

· Whether consultation was sufficient

· Whether the benefits of in house consultation were described in enough detail

· What the issue with HRA debt cap was

· Whether Full Council considers this decision

· Whether there may be THH workforce implications

The Lead Member then advised the Committee that the consultation had been undertaken according to legislation, and that lifting the HRA debt cap has no impact for the management.

The Committee then raised concerns over:

· The adequacy and extent of consultation

· The period of extension

· What residents feel about the proposal

· Savings and performance potentials

· Risk of bringing in-house, or maintaining externally

After hearing from the Call-in Members and the Lead Member, the Committee considered the following issues and concerns:

· In-house has merits, as others have done this

· It is unclear to residents as to LBTH or THH ownership and responsibility

· Not the right time to bring house, given other big services are being brought in

· Good performance now with THH, gains may be at risk

· 8 years too long

· Better approach to consultation needed, more consultation with residents needed to understand views

· Need decision in 6 months after better consultation

· Is HRA debt cap a risk – this isn’t certain

As a result of discussions on the report the Chair moved and it was RESOLVED that the decision should be referred to the Mayor for reconsideration, including consideration of the alternative course of action as set out in the call-in requisition with the following additional and amended wording:

· Amend paragraph 1 to: ‘For the reasons outlined above, we would ask that the O&S committee explore these issues in depth and then request a delay to the final reconsideration by the Mayor until January 2020 in order that a full consultation can be undertaken

· Remove paragraph 2: [Note – this would enable Members to submit a motion to Council to allow all Councillors to express their views on the following points.]

· Remove paragraph 4: ‘That the Tower Hamlets Homes’ contract is extended for a maximum of two years so as to undergo a full consultation exercise and allow for a full resident led appraisal of Option 1: In-house Management.’

Supporting documents:

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Agenda item

LBTH/THH Strategic Review of Housing Management Options