In 2001 the Welsh Assembly Government produced the ‘National Housing Strategy - Better Homes for People in Wales’. The Assembly asked all local authorities to improve the standard of their housing to the Welsh Housing Quality Standard by 2012.
In May 2004 we appointed Pennington FMCS Limited, a housing and facilities management consultant, to act as our advisor on the housing options assessment. With our guidance, Pennington has assessed whether the available council housing still provides value for money.
At the same time, we appointed DOME consultants as independent tenants advisers (ITAs). We followed the recommended best practice by appointing an ITA in the early stages of the assessment, making sure that tenants are at the heart of the process. The ITA has worked directly with tenants, independent from us, to advise them on the assessment process. DOME has consulted tenants by using roadshows, producing and sending out leaflets and documents, and setting up the ‘Your Home, Your Choice, Insight Group’, a forum for tenants to discuss the assessment. DOME will present a report setting out tenants’ views on the best way forward. We will consider this report as part of the decision-making process.
A strategic options review carried out in July 2004 narrowed down the options to the following.
- Keeping our council housing
- Transferring the housing to a new or existing housing association
- A combination of both of the previous options
1. Keeping our Council Housing
In September 2004 we finished our financial assessment based on a 30-year plan to improve the houses and continue to manage the service. This assessment found that, with our existing resources, we could not meet the Carmarthenshire Homes Standard by 2012. The assessment estimated that we needed to find another £60.5 million to meet the standard.
We carried out further assessments to see if we could keep the housing and find the £60.5 million by borrowing money. We found that we could do this, but it would take 40 years to pay back the loan and we would need to make extra savings.
If we took this option, we also identified that, if we wanted to use the investment in the housing as an opportunity to boost the economy and develop skills in the county, realistically we could only meet the standard by 2014.
2. Transferring the housing to a new or existing housing association
Another option could be to transfer the housing to a new or existing housing association. This would involve us selling the housing to an existing housing association or a new association set up specifically to manage the housing.
The advantages of this option are as follows.
- We would meet the Carmarthenshire Homes Standard.
- The housing association could get extra resources from the Welsh Assembly.
- The Welsh Assembly would pay off any debt we still owe for building and improving houses in the past.
- The housing association can borrow freely from the private sector.
- The amount we borrowed could be paid back earlier.
If we chose this option:
- we would no longer own the housing; and
- we would never be able to take the houses back in the future.
3. A combination of both of the previous options
We have looked into this option, but found that there is no real benefit in it. As a result, we have not considered it.
On 13 April 2005, based on the best information available at that time, we took option 1 (keeping the housing and borrowing money to pay for the extra investment needed). This included doing the following.
- Having detailed discussions with the Welsh Assembly Government on how we borrow the money (under a system known as the ‘prudential borrowing model’), to clearly set out, as far as possible, the Assembly’s current and proposed government policies for social-housing funding, and limit the risks involved in borrowing money.
- Using the financial model produced for the options assessment to regularly update financial forecasts and influence how we manage funding and improvement programmes, and setting aside enough resources to make sure that work was carried out fully and on time.
- Approving the draft Housing Stock Business Plan as the basis for our discussions with the Assembly and for our preferred option.
- In line with the recommendations made by IPF Consultants (CIPFA), carrying out a full risk assessment before we apply to borrow money.
- During 2005/2006, carrying out a detailed assessment – using process management techniques and best-value processes – to identify the most effective ways to manage and deliver our services over the medium- and long-term.
- Putting together a full strategy to include all aspects of how we will improve the council housing and the possibilities for contributing to wider redevelopment, such as developing the skills of the county’s workforce, improving health, improving the environment and so on.
- Updating the survey of the condition of the housing as a matter of priority, and setting aside enough resources for managing information about the condition of the housing by using a housing database. This made sure that the information we held was current and accurate and in a format that would help us to manage our resources efficiently and improve how we plan and deliver our services.
- Reviewing the new arrangements for consulting and involving you (including the Tenant Participation Compact, Housing Services Advisory Panel and so on) to continuously improve our management and encourage you to get directly involved in housing services.
- Developing and putting into practice programmes for redeveloping the community over the long-term, and taking advantage of the opportunity social housing provides.