EXECUTIVE SUMMARY

EXECUTIVE BOARD - 3^rd May 2005

HOUSING STOCK OPTIONS APPRAISAL

The report presents the evaluation and findings of the housing stock options appraisal project. County Council is asked to select its preferred way forward for improving the condition of the Council's present housing stock to the Carmarthenshire Homes Standard, incorporating the Welsh Housing Quality Standard. The main points of the report are summarised in the attached table:
DETAILED REPORT ATTACHED ?	YES

IMPLICATIONS

I confirm that other than those implications which have been agreed with the appropriate Directors / Heads of Service and are referred to in detail below, there are no other implications associated with this report : Signed: B. McLernon Director of Social Care and Housing R. A. Sully Director (Strategic Projects)

Policy and Crime & Disorder	Legal	Finance	ICT	Risk Management Issues	Organisational Development	Physical Assets
YES	YES	YES	NONE	YES	YES	YES

1. Policy and Crime & Disorder The Welsh Assembly Government's (WAG) national housing strategy for Wales, Better Homes for People in Wales, requires all social housing landlords, including local authorities, to bring all social housing in Wales up to the Welsh Housing Quality Standard (WHQS) by 2012. Councils in Wales are required to present to WAG each year a detailed business plan which sets out, inter alia, how they intend to achieve the WHQS. The Carmarthenshire Community Strategy, Thinking Together, Planning Together, Doing Together, includes a commitment for "improving the quality of council house accommodation throughout the county", within a key aim to "improve the quality and availability of housing in both the public and private sectors, within safe communities offering a good environment and facilities". The County Council's Corporate Strategy, Improving the Way We Live and Work, commits the Council to "publish a plan to show how the Council intends improving its own housing". The quality of housing and the local environment in which it is set is recognised as a central factor in determining many aspects of well-being, for example, health, social cohesion, etc. The housing stock options appraisal will allow the County Council to identify its preferred way for moving forward to improve the standard of its dwellings to meet the WHQS.

2. Legal There will be no new legal implications for the County Council arising out of the options appraisal should it decide in favour of a retention strategy. The statutory and operational obligations associated with the landlord function will remain as at present. The Council could potentially be faced with legal implications, e.g. under employment law, in meeting the targeted efficiency gains built into the prudential borrowing model. Should the Council decide in favour of a large scale voluntary transfer there will be legal implications associated with the transfer of the landlord function and the existing housing stock to a Registered Social Landlord (RSL). This will include: · Preparing a legal agreement to implement the transfer of ownership. · If the transfer is to a new special purpose RSL, legally constituting the new organisation in whichever becomes the preferred form. · Arranging for the transfer of physical assets to the new organisation. · Arranging for the transfer of staff to the RSL under the TUPE Regulations. · Possibly agreeing short term contractual arrangements with the RSL for the provision of support and operational services by the Council. If a stock transfer takes place ownership of the physical assets will pass to the RSL through the transfer agreement. Under current legal provision once a transfer is processed it cannot be reversed.

3. Finance There are significant financial implications for the County Council arising out of the report, whichever option is selected. Under current government funding arrangements a retention strategy can only be taken forward through the use of a large prudential borrowing programme requiring borrowing of some £74.3 million with an estimated repayment period of up to 29 years. There is currently no government provision for additional resources over and above existing mainstream funds to support housing stock retention by a local authority. Significant efficiency savings in management and operational costs will be necessary for the prudential borrowing model to be viable. These are detailed in the report. If the Council determines that a large scale voluntary transfer is its preferred option there are likely to be implications for the Council post transfer once assets and staff have transferred to the new landlord. It is likely that a reconfiguration of residual functions and teams will be required and there will be implications for the Council through, for example, loss of economies of scale. Any implications in this regards will have an impact on the General Fund. The full scale of any such impact will need to be quantified as part of the development of the transfer proposal. Under a retention strategy the County Council would continue to operate the Housing Revenue Account (HRA). If the Council were to proceed to a stock transfer the HRA would be closed, with the RSL establishing an independent financial mechanism. The financial implications arising out of the options appraisal are detailed in the report and are a central issue of the appraisal and the selection by the County Council of the preferred option.

4. Risk Management Under a retention strategy all existing new risks associated with the housing landlord function will remain with the Council and significant new risks associated with a large prudential borrowing programme will arise. Under a stock transfer all risks associated with the landlord function would potentially pass to the new landlord, subject to a possible negotiation around sharing some risks, and prudential borrowing risks associated with housing improvements would not arise. There is a risk to the Council of residual costs increasing post transfer but this requires further analysis. The options appraisal has considered risk and identifies the major areas of concern. A number of different potential scenarios have been modelled to inform an assessment of risk. The report recommends that should the retention option be preferred a fully costed risk assessment and risk management regime be completed prior to a prudential borrowing programme being enacted.

5. Organisational Development Under a retention strategy there will be corporate organisational impact in that the viability of the prudential borrowing programme relies fundamentally upon a significant saving in existing management and operational costs. Organisational procedures and processes will need to be reviewed and changed in order to realise the level of savings required. This process will require robust analysis and effective change management. The Council will need to consider developing partnerships with other authorities and external bodies to support its efficiency objectives. If a stock transfer were to go ahead there would be a transfer of a significant number of staff from the Council to the new landlord and/or service provider(s). The number and nature of the staff to be transferred would need to be identified and agreed as part of the development of the transfer proposal. The impact of staff transfer on the residual functions would need to be reviewed in order to ensure the effectiveness of future provision within the Council. The role of elected members would not change under a retention strategy but would change significantly under a transfer.

6. Physical Assets The selection of the preferred option will lead to a major investment in improving the condition of the Council's present housing stock to nationally defined and locally agreed standards, irrespective of which option is selected. If the retention option is selected the County Council will continue to own the physical asset and it will be for the County Council to fund and deliver the improvements. If a stock transfer is preferred it will be the responsibility of the new landlord to fund and deliver the improvements. Under present national housing policy once a stock transfer has taken place it cannot be reversed.

CONSULTATIONS

I confirm that the appropriate consultations have taken in place and the outcomes are as detailed below Signed: B. McLernon Director of Social Care and Housing R. A. Sully Director (Strategic Projects)

1. Local Member(s) All members of the County Council have had the opportunity of consultation on the contents of the report. Full details of member engagement in the housing stock options appraisal are given in Appendix 1 of the main report. 2. Community / Town Council Bulletins have periodically been issued to all Town and Community Councils in Carmarthenshire to advise them of the options appraisal. Llanelli Town Council received a presentation on the options appraisal on the evening of the 6th April 2005. Llandybie Community Council has written expressing the view of its members that the County Council should continue to manage its social housing stock. 3. Relevant Partners Tenants have occupied a central position throughout the housing stock options appraisal. Details of tenant engagement are given within the main report and the Tenants' Consultation Report at Appendix 3. 4. Staff Side Representatives and other Organisations Representatives of the trades unions and housing staff have been part of the Project Team throughout and have, therefore, been at the heart of the options appraisal process.

Section 100D Local Government Act, 1972 - Access to Information List of Background Papers used in the preparation of this report:
Title of Document	File Ref No.	Locations that the papers are available for public inspection
Better Homes for People in Wales: A National Housing Strategy for Wales (July 2001) (WAG)	HSOA	Town Hall, Llanelli.
Local Housing Strategies: Guidance to Local Authorities in Wales (June 2002) (WAG)	HSOA	Town Hall, Llanelli.
Local Authority Housing Stock Business Planning: Guidance to Local Authorities in Wales (November 2002) (WAG)	HSOA	Town Hall, Llanelli.
Welsh Housing Quality Standard (June 2001) (WAG)	HSOA	Town Hall, Llanelli.
Housing Transfer Guidelines (WAG)	HSOA	Town Hall, Llanelli.
Delivering Decent Homes - Option Appraisal: Guidance for Local Authorities (ODPM)	HSOA	Town Hall, Llanelli.
Housing Transfer Manual (ODPM)	HSOA	Town Hall, Llanelli.
Putting Our House in Order - WLGA Manifesto for Housing in Wales (WLGA)	HSOA	Town Hall, Llanelli.
Guide to the Prudential Framework for Capital Finance for Local Authorities in Wales - WAG (June 2004)	HSOA	Town Hall, Llanelli
Prudential Code for Capital Finance in Local Authorities - CIPFA (2004)	HSOA	Town Hall, llanelli
Thinking Together, Planning Together, Doing Together: Carmarthenshire Community Strategy (CCC)	HSOA	Town Hall, Llanelli.
Improving the Way We Live and Work: Carmarthenshire County Council Corporate Strategy	HSOA	Town Hall, Llanelli.
Carmarthenshire Unitary Development Plan (Deposit Draft) (CCC)	HSOA	40, Spilman Street, Carmarthen.
People Homes and Communities - Delivering the Future Together: Carmarthenshire Local Housing Strategy (CCC)	HSOA	Town Hall, Llanelli.
Carmarthenshire Housing Stock Condition Survey (E. C. Harries 2002, updated CCC 2004)	HSOA	5, Spilman Street, Carmarthen.
Local Housing Market Assessment (CCC)	HSOA	5, Spilman Street, Carmarthen.
Residents' Perception Survey (KWEST for CCC - July 2003)	HSOA	5, Spilman Street, Llanelli.
Tenant Consultation on WHQS (R&M for CCC - April 2004)	HSOA	5, Spilman Street, Carmarthen.
Carmarthenshire Homes Standard (Draft) (CCC - August 2004)	HSOA	5, Spilman Street, Carmarthen.