Board 07 June 2017 BCT Office, 17 Raby Cross, Byker, Newcastle upon Tyne

AGENDA

1. Reminder to switch off mobile phones

2. Apologies for absence

3. Declarations of Interest

4. Urgent Items which Board Members wish to raise, not elsewhere on the agenda

ITEMS FOR DECISION

Page: Presented by:

5. To approve the Minutes of the meeting held 26 April 2017 and Matters Arising

2 – 3 Chair

6. BCT Risk Management Framework

4 – 10 P Ambrose

ITEMS FOR INFORMATION

7. CEO Monthly Progress Report

11 – 19 J Haley

8. Annual Performance Report 2016/17

20 – 27 P Pollard

9. Health and Safety Update

28 – 32 M Bell

10. AOB

CONFIDENTIAL ITEMS FOR DECISION

11. To approve the confidential Minutes of the meeting held 26 April 2017 and Matters Arising

33 – 34 Chair

12. Annual Business Plan and Investment Programme (To Follow) P Ambrose

CONFIDENTIAL ITEMS FOR INFORMATION 13. Finance and Audit Committee Minutes and Actions

35 - 37 P Ambrose

14. Performance and Services Committee Minutes and Actions

38 - 39 P Pollard

15. AOB

16. Date and time of the next meeting –19 July 2017, 6pm – 8pm at the BCT office

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Minutes of Board 26 April 2017 6:00pm Board Members Present: Jim Coulter (Chair), Gordon Bell, Christine Stobbs, Paul Callaghan, Janice Logan and Nick Kemp. BCT Officers Present: Jill Haley (Chief Executive), Michelle Bell, Philip Ambrose and Jaime Flinn (minute taking). Observers: No observers were present.

1. WELCOME

1.1 The Chair welcomed everyone to the meeting.

2. APOLOGIES FOR ABSENCE

2.1 Apologies were received from Alison Smith, Amanda Senior, Nigel Emmerson, Catherine

Walsh and Martin Greenfield.

3. DECLARATIONS OF INTEREST

3.1

There were no declarations of interest.

4. URGENT ITEMS WHICH BOARD MEMBERS WISH TO RAISE

4.1 There were no urgent items arising.

5. APPROVAL OF BOARD MINUTES AND MATTERS ARISING

5.1

The minutes of the last Board meeting held on 8 March 2017 were agreed as a correct record and signed by the Chair. Matters Arising There has only been one expression of interest for the vacant Tenant Board Member, the closing date for the position has been extended from 30 April to 30 May.

6. QUARTERLY STRATEGIC RISK REGISTER

6.1 The Board approved the changes made to the Strategic Risk Register (SRR) including the update to item FF7 and the proposal to review item BC4. It was agreed that item CA1 would be altered to refer that the only current service with effect from 1 May 2017 is YHN Concierge for clarity.

6.2 Board noted the work currently underway reviewing the BCT Risk Management Strategy.

6.3 Board noted the position with regard to emerging risks.

6.4 Isos Complete Support Board meeting on 17 May, Jill Haley to report back on legal review of Cost Sharing Vehicle and vat exemption in relation to Housing Associations.

5.

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7. CEO MONTHLY PROGRESS REPORT

7.1 The Board received this report for information, key points from the discussion were as follows;

It was advised the Chief Executive review the wording of the invoice for accounting purpose with YHN regarding the settlement for furniture, to ensure that costs are included within 2016/17 financial budget.

The Corporate Plan Action plan is due to be re written for 2017/18, it was suggested the new table display three columns titled ‘Objective’, ‘Activity’ and ‘Impact’.

The minutes from the Performance & Services Committee (P&SC) will now be reported to Board in the same way Finance & Audit Committee currently are. Levels of delegation within P&SC will need to be established.

Board requested feedback regarding the introduction of a new “Community Forum”, needing further information on what this is and the rationale behind it.

10. DATE AND TIME OF THE NEXT MEETING

10.1 Wednesday, 7 June 2017, 6pm – 8pm at the BCT offices.

…………………………. Chair of Byker Community Trust Board 7 June 2017

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Board 07 June 2017

Title: BCT Risk Management Framework Report By: Philip Ambrose, Head of Finance and Resources FOR DECISION Business Implications

Risk This report covers the proposed new Risk Management Framework.

Financial and Value for Money Robust risk management is a key part of BCT governance arrangements, it assists us in financial management and in achievement of VfM while ensuring best use of resources.

People/Consultation The Risk Management Framework covers areas of BCT business where customer engagement is required and ensures good control arrangements are in place and these are regularly reviewed.

Equality and Diversity The Risk Management Framework covers equality and diversity considerations within areas of BCT business and ensures good control arrangements are in place and these are regularly reviewed.

Environment Implications The Risk Management Framework covers the environmental aspects of the investment programme and the day to day management of the estate environment, ensuring good control arrangements are in place and these are regularly reviewed.

Contractor Implications The Risk Management Framework covers the delivery of the investment programme and the day to day housing management services by contractors, ensuring good control arrangements are in place and these are regularly reviewed.

1. Recommendations

1.1 The Board are recommended to;

i. Consider and approve the proposed Risk Management Framework (RMF) (para 4). ii. Note the next steps for implementation of the new RMF.

2. Synopsis

2.1 This report sets out a proposed new RMF for adoption by BCT.

3. Background Information

3.1 Board approved the Risk Management Strategy and Framework on 11 April 2013. This

requires the BCT Executive Team to continually update the Strategic Risk Register (SRR) as and when new risks arise and to carry out a more formal quarterly review and update of the SRR. Any recommended updates to the SRR are reported to Board for consideration and approval.

3.2 The following factors have stimulated the need for BCT to update its RMF:

The new service delivery arrangements in place from October 2016.

The increasingly challenging operating environment which BCT faces.

6.

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3.3 The proposed RMF takes account of learning from liaison with two other housing associations, to understand their approach and the arrangements which they have in place.

4. Risk Management Framework

4.1 The key aspects of the proposed RMF are:

A clear split between the management of strategic and operational risk areas.

Specific operational risk registers for the 3 areas of BCT Business: - Neighbourhood Operations. - Property Services. - Business, Finance & Resources.

Wherever possible, quantification of financial impacts of the identified risks.

Stress testing to understand the impact of multi variate risk scenarios facing BCT.

Quantifying the financial impact of identified risk mitigation measures.

Horizon scanning to ensure early identification of emerging risks.

Board dedicating time specifically to consideration of key risk exposures, including risk identification, stress testing and adverse scenario planning.

Taking account of the annual HCA Sector Risk Profile.

4.2 Management of Strategic Risks

4.2.1 It is proposed that the following arrangements be put in place:

A renewed Strategic Risk Register (SRR) be created taking account of the content of the current SRR and agreed by the Chief Executive (CE) and Executive Team (ET).

CE and ET are responsible for managing the strategic risks.

The Company Secretary is responsible for maintaining the SRR.

Each identified risk should be scored in terms of likelihood and impact, leading to an overall risk score. The scoring matrix within the current BCT RMF would be used for this. Scoring should be recorded in the SRR.

CE and ET review the SRR on a monthly basis and agree any mitigation or other actions required to manage the risks.

Agreed mitigation actions are recorded in the SRR together with timescales and responsibilities for implementing these actions.

Progress on implementing mitigation actions is recorded in the SRR and reviewed by the CE and ET.

The SRR is reported to Board for review and approval on a quarterly basis.

4.3 Management of Operational Risks

4.3.1 It is proposed that the following arrangements be put in place:

Operational Risk Registers (ORRs) be established for each of the 3 areas of BCT Business.

Heads of Service are responsible for managing the operational risks and maintaining the ORR for their area.

Each identified risk should be scored in terms of likelihood and impact, leading to an overall risk score. The scoring matrix within the current BCT risk management framework would be used for this. Scoring should be recorded in the ORR.

The CE and ET review all ORRs on a monthly basis and agree any mitigation or other actions required to manage the risks.

Agreed mitigation actions are recorded in the ORR together with timescales and responsibilities for implementing these actions.

Progress on implementing mitigation actions is recorded in the ORR and reviewed by

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the CE and ET.

4.4 Risk Impact Stress Testing

4.4.1 It is proposed that the following arrangements be put in place covering all identified risks with an overall risk scoring of HIGH:

As far as is practicable, the financial impact of identified risks occurring should be measured and recorded in the ORRs/SRR. This should be done based on the BCT Business Plan.

The financial impact of identified mitigating actions should be calculated and modelled through the BCT Business Plan to determine the overall effect on future financial viability.

These results should inform any mitigation action implementation plans.

4.5 Horizon Scanning

4.5.1 BCT is operating within an increasingly challenging and uncertain economic and political environment.

4.5.2 A key requirement of successful risk management is to have an understanding of the ever changing operating environment so that emerging issues can be identified and the risk flowing from them be specified and quantified.

4.5.3 Horizon scanning is a standing agenda item for fortnightly ET meetings. Any new risk areas identified can then be added to SRR/ORRs, scored and, if required, form part of risk impact stress testing.

4.5.4 The specific arrangements in respect of horizon scanning will be:

Horizon scanning activity will aim for early identification of potential risk exposures to BCT across the following broad topics and agendas: - Political and economic. - Financial. - Reputational. - Health & safety. - Business continuity. - Income management. - Investment programme management and affordability.

Staff and Board Members all have an important role to consider the above risk agendas and highlight any risks they identify.

A range of channels for gathering information and intelligence will be used to aid understanding of emerging risks, their potential impact and potential mitigation actions. Appendix C provides an illustrative list of channels available for intelligence and information gathering.

4.6 Role of Board

4.6.1 Board must understand the key risk exposures facing BCT and their potential impact on

BCT financial viability.

4.6.2 It is proposed that the following arrangements be in place for Board involvement in BCT Risk Management:

Reviewing and discussing a quarterly Risk Management update including the following: - Review of the SRR.

6.

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- Any ORR issues to be reported by exception only. - Key points and any recommendations from risk impact stress testing and from

horizon scanning.

Dedicated Board sessions covering risk identification, stress testing and adverse scenario planning.

5. Risk Management Documentation

5.1

Documentation relating to the proposed RMF is attached to this report: Appendix A – Risk Scoring Matrix. Appendix B – Risk Register Format (including illustrative examples of operational and strategic risks).

6. Next Steps

6.1 To implement the new Risk Management Framework the following actions will be completed:

Development of ORRs for the 3 areas of BCT Business by CE and ET.

Refresh of the SRR by CE and ET.

Implementation of the risk management arrangements specified in section 4 of this report.

Production of the first quarterly Risk management update report to the Board meeting on 19/07/17.

7. Background Papers

7.1 Current BCT Risk Management Strategy and Strategic Risk Register. HCA Sector Risk Profile (September 2016). Documentation shared by 2 local registered providers covering their Risk Management Framework arrangements.

8. 8.1

Contact Officer If you have any questions about this report that you would like clarifying before the meeting, you can contact Philip Ambrose by telephone on 0800 5335 442 or email philip.ambrose@bykerct.co.uk

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Appendix A

Risk Scoring Matrix

All risks are scored in terms of likelihood and impact as follows:

1. Likelihood is scored as:

Very likely to happen (71-100% probability) = HIGH (score 4).

More likely to occur than not (50-70% probability) = MED (score 3).

Less likely than not to occur (21-49% probability) = LOW (score 2).

Unlikely to occur but not impossible (0-20% probability) = VERY LOW (score 1).

2. Impact is scored as:

Financial loss in excess of £500k, loss of service for more than 3 months, long term reputational damage = HIGH (score 4).

Financial loss in excess of £250k, loss of service for more than 3 weeks, damage to national reputation = MED (score 3).

Financial loss in excess of £50k, loss of service for more than 1 week, damage to local reputation = LOW (score 2).

Financial loss under £50k, service disruption for less than 1 week = VERY LOW (score 1).

The total score is then fed into the scoring matrix to identify the relative importance

of each risk using a traffic light system:

RED = high importance. AMBER = MEDIUM importance. GREEN = low importance.

Impact

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Page 8 of 32

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Appendix C

BCT Risk Management Framework – Horizon Scanning

Illustrative Channels for Intelligence & Information Gathering

Regulator and regulatory standards.

Legislation.

Conferences & training events/seminars.

Performance Benchmarking (Housemark).

Networking groups and networking contacts.

Information sharing with other housing associations.

Partners and agencies.

Local politicians.

Professional advisory services.

Housing press:

- Journals.

- Periodicals.

- Bulletins.

- News updates.

Media:

- Television.

- Radio.

- Newspapers.

- Websites.

- Social media.

Economic forecasts:

- Office of budget responsibility.

- Bank of England.

Customer feedback:

- Customer satisfaction surveys.

- Customer complaints.

- Community events.

- Social media.

Trade and Professional Bodies:

- National Housing Federation.

- Chartered Institute of Housing.

- Housing Quality Network.

6. A

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C

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Board 7 June 2017 Title: Chief Executives Monthly Progress Report Report By: Jill Haley, Chief Executive (CE) FOR INFORMATION 1. Recommendations

1.1 The Board are recommended to note the contents of this report.

2. Synopsis

2.1 This report provides an information update of progress made since the last Board

meeting.

3. Actions from last Board meeting

3.1

Item CA1 of the Quarterly Strategic Risk Register was altered to reflect that from 1 May 2017 the only current remaining service with YHN is Concierge and Cleaning. The Strategic Risk Register has been updated accordingly.

3.2

The Corporate Plan Action Plan for 2017/18 to be reported to July’s Board, has been amended to include columns titled ‘Objective’, ‘Activity’ and ‘Impact’.

3.3 The Performance and Services Committee on 17 May received information and discussed the introduction of a “Community Forum” as part of BCT’s new Tenant Engagement Framework.

4. Delegated Decisions

4.1 There are no delegated decisions to report since 26 April 2017.

5. Isos Complete Support (ICS)

5.1 5.1.1

ICS name change Following on from the recent Isos rebrand to Karbon Homes, it is also intended to rebrand ICS to Karbon Solutions in the near future.

5.2 Performance Review Oct 2016 – April 2017 Following a very successful service transition, in respect of those services which transferred in house to BCT and those which transferred to ICS as part of our Cost Sharing Vehicle (CSV) partnership, performance has improved month on month. A separate report to this meeting provides greater detail to this end.

7.

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5.2.1 Board will recall that one of the benefits of the ICS partnership is that the CSV only charges its members for the actual cost of services, additionally no VAT is charged. Very strict tests apply to the CSV arrangement and ICS are required to keep a clear audit trail of any charges which can be checked by HMRC at any given time.

5.2.2 Performance of the Service Level Agreements (SLAs) across the business areas which are included in the CSV has been closely monitored during the first six months since service transition. Despite the very poor performance situation and management challenges which BCT inherited on 3 October 2016, a £160,000 saving (13.54%) has been achieved below the expected CSV budget.

5.3 5.3.1

Legal Review of cost sharing VAT exemption The ‘Cost Sharing Exemption’ (CSE) enables housing associations like BCT to share resources without incurring a VAT cost, however four recent cases which have been heard in the European Court of Justice (ECJ) have cast some doubt over whether this will continue to apply.

5.3.2 The National Housing Federation (NHF) and their tax advisers Deloitte are monitoring the situation closely on behalf of the BCT, Karbon Homes, Two Castles and other housing organisations, who like us have taken the initiative to make valuable savings in this way.

5.3.3 In each of the four ECJ cases, the Advocate General has recently released ‘Opinions’ on the matter (ECJ v Germany, ECJ v Luxembourg, DNB Banka and Aviva) and the judgments from the ECJ in all of these cases are expected in the next few months. In particular, they should inform whether Housing Associations can continue to use the CSE to mitigate irrecoverable VAT on certain arrangements for sharing costs in relation to housing rental activity (for example, costs such as repair and maintenance, finance, IT, etc).

5.3.4 The most critical question for the sector in these cases is whether the CSE can apply to housing rental at all. The Opinion in the most recent of these cases - ECJ v Germany – appears to say it can. It concerns whether Germany can restrict the CSE to the healthcare sector and the Opinion has concluded that the CSE should be available to all VAT exempt organisations regardless of the sector they are in.

5.3.5 Against this Opinion sits the interpretation in the DNB Banka and Aviva cases, where the Opinion is that the CSE should only apply to organisations engaged in activities within specific ‘public interest’ exemption categories (healthcare, medical treatment, education, welfare). On a strict interpretation this would exclude housing rental which is covered by a separate exemption.

5.3.6 Ultimately the judgments in these cases are the ECJ’s own to make, and it is difficult to predict how it might now rule. It will be interesting to see how the conflicting Opinions referred to above are reconciled in the final ECJ judgements.

5.3.7 Whatever the decisions of the ECJ, there is also uncertainty about how HMRC may implement the rulings, particularly as the UK leaves the EU.

5.3.8 The NHF, together with Deloitte, will monitor the position and liaise with HMRC on behalf of its members as appropriate and in the event of an unfavourable ruling. Board will be kept informed of all progress.

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5.4 Driving further efficiency and cost reduction

5.4.1 The ICS Board have agreed that prior to considering any further expansion of the CSV, that the model needs to be developed and evaluated to demonstrate the true efficiencies emerging from sharing services. During this financial year the following actions will be taken:

An external audit of charges, which will protect ICS against challenge from HMRC and also provide members’ assurance.

An independent assessment of current service provision and how this benchmarks with others in the market also to understand the differences the model adds re customer satisfaction / compliance etc.

5.4.2 It was agreed that the business overhead service charging would be reviewed as a result of the Isos – Derwentside merger (to Karbon Homes) and efficiencies made from this.

6. Review of Accounting Policies

6.1 The accounting policies are reviewed as part of the work in preparing the annual statutory accounts and the external audit of these. The review has been completed and has concluded that the current policies continue to be fit for purpose for BCT and in compliance with accounting rules and requirements, therefore no updates are required to the accounting policies which were approved by Board on 08 June 2016.

7. Welfare Reform

7.1 Universal Credit

7.1.1 Universal Credit has been live in the East End of Newcastle since 8 February 2017 and BCT currently have 142 active claims.

7.1.2 Making claims and claim maintenance are still proving to be time consuming, as tenants are finding it difficult to report changes and check their online accounts themselves for a multitude of reasons. BCTs Welfare and Employability Support Worker is continuing to support these tenants to make sure that claims do not fail.

7.1.3 There are ongoing issues with regards to BCT receiving the Housing Cost element of Universal Credit where we have applied to have this paid directly. Payments are made to BCT in bulk on a 4 weekly basis, which means that rent accounts do not always reflect the correct balance. We have some tenants who are yet to be paid the Housing Cost element, despite having an award of Universal Credit for several months. We are continuing to provide dedicated support to these residents to rectify the problem.

7.1.4 Karbon Homes have been requested to produce a monthly report showing rent arrears levels of all tenants in receipt of Universal Credit, so that we can analyse how the introduction of Universal Credit has and will impact on BCT tenants’ ability to pay their rent.

7.2 Benefit Cap

7.2.1 The new lower Benefit Cap is continuing to affect BCT tenants, but not to the extent that it was when it was first introduced. There are currently 15 capped households that we are aware of. BCT’s gifting of furniture packs and the removal of furniture charges has undoubtedly been of great assistance in bringing households closer to the benefit cap figure.

7.

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7.2.2 BCT continue to receive updates from Newcastle City Council informing us when someone new has been affected by the Benefit Cap, and by how much. BCT’s Welfare and Employability Support Worker is then attempting to engage with these tenants to look at possible exemptions and to offer referrals for additional support where required.

7.2.3 Newcastle City Council are no longer automatically accepting Discretionary Housing Payment (DHP) applications for those tenants who are affected by the new lower cap. A more stringent evidence gathering process has been implemented whereby tenants must be able to prove that they cannot afford to pay their rent, and if the City Council are satisfied that the tenant has sufficient disposable income, or the requested evidence is not provided, then the application is refused. This has meant that there has been a decrease in the number of our tenants receiving DHPs.

7.2.4 Under Occupation

7.2.5 Since the Governments removal of the ‘Spare Room Subsidy’ in 2013 (commonly known as the Bedroom Tax), the number of BCT tenants in receipt of housing benefit who are under occupying has reduced from 342 to 143. Of the 143 tenancies, 55% are in rent arrears.

7.2.6 BCT have a wide range of different property types and alternative suitable accommodation to offer people in these circumstances but some tenants are flatly refusing to move. BCTs Welfare and Employability Support Worker is working with the Income Officers to target additional support for all tenants who are under occupying and who have rent arrears. Unfortunately if tenants continue to refuse to engage with us, or refuse to move into smaller accommodation, then legal possession proceedings are the last remaining option.

7.3 Furniture

7.3.1

Following Boards decision to end the YHN furniture contract and to gift all furniture to tenants, the reaction has been extremely positive. Many tenants have expressed their personal gratitude to BCT staff for helping them to improve their financial situation and their future chances of gaining affordable employment.

7.3.2 An alternative furniture scheme has been set up for all new BCT tenants, in partnership with Moneywise Credit Union and OrangeBox Furniture. The pilot scheme is called Sustain and it allows tenants to take out a small loan of up to £200.00 to purchase furniture from OrangeBox. Part of the amount which they repay will be held in a savings account for them to access as soon as the loan has been fully repaid.

7.3.3 Tenants are not credit checked as part of this process, and the loan repayment must be affordable for them to access the scheme, however by taking the loan with Moneywise Credit Union, tenants will also start to build up a credit history.

7.3.4 Moneywise are providing BCT with monthly updates on how the scheme is progressing.

8.1 Biomass 2 Project

8.1.1 BCTs development of the Biomass 2 Project has sought to:

Procure the proposals to install a 4 megawatt biomass boiler to supply the Byker District Heating System.

Procure a delivery partner with access to ECO funding.

Minimise the financial risks to BCT by means of a fixed price contract.

Maximise the future RHI income to reduce future operating costs of the system.

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8.1.2 Negotiations around the procurement of a delivery partner were progressed with British Gas, who had originally proposed to provide a fully managed scheme for the design and delivery of the whole Biomass 2 project, at an agreed maximum fixed price to provide BCT with cost certainty. To facilitate this considerable progress was made by BCT to de-risk the project including:

Full planning approval - completed.

A site investigation survey report - completed.

A topographical survey and report - completed.

A mining survey and recommendations on the treatment of an uncapped mine shaft adjacent to the site – survey completed and treatment will be completed by NCC.

The combination of the above actions being completed now makes the Biomass 2 Project much more deliverable and makes it easier to determine the true cost of the works on site.

8.1.3 As a result of a recent national policy change by British Gas, the company have decided to withdraw from the delivery of all fully managed projects and are therefore now unable to proceed with BCTs project requirements.

8.1.4 The progress carried out to date to develop BCTs Biomass 2 project and to mitigate some of the key delivery risks does however make it an attractive project to other energy companies. The project can offer them the opportunity to make significant carbon savings which they are required to deliver through their Energy Company Obligations (ECO).

8.1.5 Two other energy companies have already expressed an interest in the project and are keen to become our alternative partner.

8.1.6 While the interest is very encouraging there are some major issues that would need to be addressed before we could proceed with the project. These are the:

Procurement route.

ECO availability.

Delivery timescale.

8.2 Procurement Route

8.2.1 The BCT district heating system is still formally in the ownership of Newcastle City Council (NCC) and it is they who will be required to contract the works via an energy company with access to ECO funding. This could be procured by one of the following two options:

Competitive OJEU compliant tender process.

Via an established procurement framework for works of this nature to which both NCC and the energy company are partners.

8.2.2 At present no suitable works framework has been identified so the competitive tender

route is the only viable route to procuring the energy company partner.

8.3 ECO Availability

8.3.1 The current round of ECO funding ends in September 2018. ECO funding is only released once the new boiler is commissioned and this constitutes one of the biggest risks for the energy companies. To mitigate this risk and manage any potential on site delays the energy companies generally aim for a completion date that is at least three months ahead of the close of the ECO funding programme (i.e. June 2018).

8.3.2 Unfortunately this means that BCTs project would be very hard to deliver within the current timeframe of the existing ECO programme. This is due to the fact that a competitive procurement exercise will take approximately six months, then the boiler

7.

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manufacture and construction programme would to take a further twelve months from the point of contracting.

8.4

Summary and next steps

8.4.1 The next round of ECO funding is due to commence in October 2018 and is currently planned to run until March 2022. With this longer ECO period (three and a half years) the project completion date deadlines are less problematic for energy companies.

8.4.2 The development of the project has generated additional interest from a number of energy companies and an open procurement process should generate even more competition from prospective energy partners.

8.4.3 The timescales to deliver this project do not fit with the current ECO programme therefore it is proposed to delay the project until the next round of ECO funding. When the government guidance for the next round of ECO funding is released it is proposed to commence the competitive OJEU compliant tender process.

8.4.4 In the interim NCC are to carry out the remedial works to deal with the redundant mineshaft which will further de-risk the project before the tender process commences.

8.5 ERDF Funding Application

8.5.1 The ERDF application to support this project was predicated on progressing with British Gas proposals and project delivery timescales during 2017/18.

8.5.2 With the withdrawal of British Gas from the delivery of the project we have been unable to progress with the ERDF final application.

8.5.3 This does not however impact on the viability of the project at all, as the business case approved by Board in September 2016 did not include any ERDF funding assumptions.

9. National Standard Self-Assessment

9.1 Registered Providers of Social Housing (RPs) are subject to the Regulatory Framework, set out by the Homes and Community Agency (HCA) and must meet all the applicable Regulatory Standards. The National Standards are classified as either Economic or Consumer Standards.

9.2 Economic Standards

Value for Money

Governance and Financial Viability

Rent

Consumer Standards

Home

Tenancy

Neighbourhood and Community

Tenant Involvement and Empowerment

9.3 The HCA have advised that they will not be issuing an updated Rent Standard and that this has been replaced by the guidance in the Welfare Reform and Work Bill 2015 - BCT is compliant with this guidance. The Economic Standards are monitored by the HCA and RPs are expected to monitor their own performance against the Consumer Standards. Board have responsibility for seeking appropriate assurance that all of these standards are being met.

9.4 Self-Assessment 2017

9.4.1 Executive Team have completed a self-assessment against all of the National Standards

Page 16 of 32

to identify any gaps and/or weaknesses which BCT may have. Where gaps and/or weaknesses have been identified, an appropriate action has been proposed which when completed will ensure future compliance with the appropriate National Standard.

9.4.2 Following this analysis, a summary of BCT’s compliance for both the Economic and

Consumer Standard was compiled, along with a list of all the proposed actions required to ensure future compliance with the appropriate National Standard set out in Appendix A.

9.4.3 The proposed actions will be monitored within the Corporate Plan Action Plan 2016/17. A self-assessment against the National Standards will be carried out and reported to Board annually, in order to provide reassurance that BCT is compliant.

10. Contact Officer

10.1 If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Haley by telephone on 0191 290 3910 or email jill.haley@bykerct.co.uk

7.

Page 17 of 32

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Page 18 of 32

Appendix A Actions List Economic Standards

Value for Money Standard: Fully Compliant

Governance and Financial Viability Standard: Fully Compliant

Rent Standard: Fully Compliant Consumer Standards

Home Standard

Required Outcome Action to be taken/ Local Offer

Ensure that tenants’ homes meet the standard set out in section five of the Government Decent Homes Guidance and continue to maintain their homes to at least this standard.

A second Modern Homes Omit contract will start on site July 2017. The contract will bring a further 12 properties up to the decent home standard internally. All voids are checked for decency compliance and modernised when they become vacant.

Specific Expectation Action to be taken/ Local Offer

Registered providers may agree with the regulator a period of non-compliance with the Decent Homes Standard, where this is reasonable. Providers shall ensure their tenants are aware of the reasons for any period of non-compliance, their plan to achieve compliance and then report on progress delivering this plan.

All BCT properties meet the decent homes standard externally. Prior to the Byker stock transfer from Newcastle City Council to the BCT in 2012, the Modern Homes programme had been delivered across the Byker estate both internally and externally. Upon stock transfer, BCT developed a planned approach to encourage the 188 internal properties who omitted from the internal modernisation work to opt back in. An omit contract was delivered in 2013 to 19 properties. Any properties where tenants omitted from the Modern Homes programme are automatically picked up when the property becomes void. To date 90 properties have been completed and brought up to the decent homes standard internally. 79 omitted properties in Byker currently do not meet the decent home standard internally. A second omit contract starts on site July 2017 which aims to bring a further 12 properties up to the decent home standard internally. The completion of this contract will reduce the number of properties in Byker which do not meet the decent home standard internally to 67.

Neighbourhood and Community Standard: Fully Compliant

Tenancy Standard: Fully Compliant

Tenant Involvement and Empowerment Standard: Fully Compliant

Page 19 of 32

BCT Board – 7 June 2017

Title: Annual Performance Report 2016/17. Report By: Philip Pollard, Director of Operations

FOR INFORMATION AND DISCUSSION

Business Implications

Risk The report outlines key performance information and where satisfactory performance is not being achieved, mitigations will be outlined to ensure performance improvements and eliminate risks for the business.

Financial and Value for

Money

The report outlines key performance information and the monitoring of Service Level Agreements relating to operational delivery. Where satisfactory performance is not achieving target, mitigations will be outlined to ensure that performance improves and that BCT continue to achieve VFM for contracts that are in place.

People/Consultation

By working closely with residents and communities through Customer Care Visits and the Tenant Engagement Strategy we will establish customer priorities whilst also providing the opportunity for customers to input into service delivery.

Equality and Diversity

Byker has a very diverse community and by engaging with all residents through Customer Care Visits and the Tenant Engagement Strategy we are able to better understand and engage with those whose characteristics are detailed in the Equality Act.

Environment

Implications

Business Plan expectations and revenue assumptions to complete capital works and appropriately manage the environment.

Contractor Implications Performance of contractors is closely monitored to ensure that expectations are achieved.

1. Recommendations

1.1 The BCT Board are recommended to note and discuss the content of this report.

2. Synopsis

2.1 This report provides information relating to the year-end performance for 2016 / 2017.

This report includes performance by Your Homes Newcastle until service transfer on 3 October 2016.

2.2 It also provides a headline update regarding operational service delivery and planned future developments.

3. Performance Update

3.1 As part of the work undertaken by the Performance and Services Committee a BCT balanced scorecard was developed which will be used as the basis for reporting performance at the Performance and Services Committee and is included as Appendix A. The scorecard outlines operational performance in key areas as follows:

8.

Page 20 of 32

Customer Services

Stock Investment

Tenancy Management (Voids and Lettings)

Income Management (Tenancy)

Corporate Health

3.2 Customer Services: Three Key Performance Indicators (KPIs) have been developed covering Customer Services. The KPIs are as follows:

Number of complaints received

Number of compliments received

Number of customer satisfaction surveys completed

3.2.1 There were 13 complaints received during the year. All complaints were resolved at the first stage of investigation. The complaints procedure has been reviewed during the year to coincide with the delivery of operational services and staff have received appropriate training on applying the BCT Complaints Policy.

3.2.2 There were 2 compliments received during the year and they both related to the repairs and maintenance services delivered by Isos Complete Support (ICS)

3.2.3 The KPI covering customer satisfaction surveys will be measured from May 17 when the surveys were introduced. A draft survey has been developed and is currently being piloted.

3.3 3.3.1

Stock Investment: Four KPI’s have been developed to cover the responsive repairs. All four of the indicators performed on target for the year.

3.3.2 The indicator for the percentage appointments made and kept was at 95.6% for the year against a target of 95%. There had been some underperformance observed previously in this area because of the volume of the unexpected levels of void properties since service transition, as a result of the number of evictions undertaken for rent arrears. This resulted in resource having to be moved between the repair service and void service. Performance has recovered and stood at 97.7% for the month of March.

3.3.3 The KPI for the Average Responsive Repair cost has a target of £120 including support staff costs. At present the data available shows a £227,753 average direct cost for delivering the repair with support costs of £38,673. There were a total of 3427 repairs completed during the year giving an average repair cost of £78.

3.3.4 The percentage of responsive works orders completed on time stands at 98.1% against a target of 98% at the year end. The average time to complete responsive works stood at 5.1 days against a target of 10.5 days for the year.

3.3.5 It should be noted that as at the end of the year, 100% of dwellings had a valid gas safety certificate.

3.4 3.4.1

Tenancy Management (Voids and Lettings) KPIs have been developed covering how efficiently and effectively the stock is being managed and properties are being let.

Page 21 of 32

3.4.2 In terms of void management, some performance indicators are outside of target for the year. There have been issues concerning the number of void properties as a result of the number of evictions and also some maintenance resource issues which were addressed with ICS.

3.4.3 The KPI for the average cost of all void works per property has a target £2450. The direct costs of providing the void repair service for the year was £268,482 with support costs of £38,673. During the year there was 114 voids completed which gives an average cost of £2,694 per void property. There were 24 void jobs raised in March so there will be some costs associated with the partially completed voids included in the total direct costs.

3.4.4 The stock turnover as a percentage of all stock performed at 14.7%, which is outside of the target of 10% for the year. This is due to the high number of evictions as previously outlined.

3.4.5 The percentage of dwellings that were vacant and available to let performed outside of target standing at 1.7% for the year against a target of 1.0%. This performance needs to be taken into context with the high number of terminations previously outlined.

3.4.6 The average re-let time for the year, using the Housemark definition, was 39.1 days for the year. An additional breakdown of this area of service will be provided at the meeting.

3.4.7 The reason for the increase in the number of days taken to re-let properties was due to a high number of voids which were in very poor condition as a result of evictions during quarter 3 and quarter 4, as well as resource issues that have since been addressed with ICS.

3.5 3.5.1

Income Management KPIs have been developed to assess whether rental income is being maximised in an efficient and cost effective way.

3.5.2 The percentage of income collected against the debit stood at 98% as of the end of the year, which is in the lower quartile in terms of benchmarking performance. This is a significant improvement on the YHN performance of 93.9% at the point of service handover. The current arrears position is £615,304 compared to £676,444 at the point of service transfer.

3.5.3 Current rent arrears net housing benefit as a percentage of the rent debit stood at 6.6% at the end of the year. This is performing outside of target however performance has shown improvement since the point of services being transferred to be managed by ICS. The indicator stood at 9.75% at the point of service transition.

3.5.4 Former tenants arrears as a percentage of the rent debit is performing 4.2% at the end of the year. This has improved with a reduction of 0.5% since the end of quarter 3 and 0.06% lower than at the point of service transition. The additional number of evictions and increased former tenant debt as a result should be taken into account. This is outside of target and performing in the lower quartile in terms of benchmarked performance.

3.5.5 The current and former tenant arrears write off is performing at 0.8% for the year. It should be noted however that write off has taken place during February and March as a result of the work undertaken in this area.

8.

Page 22 of 32

3.5.6 Regular meetings are being held with the Income Management Team who have now had time to review all rent accounts and move them to the appropriate stage of action in line with income management procedures.

3.5.7 Additional resource has been allocated to address former tenant arrears and this is demonstrating a positive impact so far. All former tenant accounts have been reviewed and an exercise is currently underway to establish payment plans, referral to a debt collection agency or present longer term arrears case for write off.

3.5.8 Former tenant arrears stood at £475,116 at the year end. Positive collection rates continue to be observed with regards to the overall debt. An average of £946.81 former tenant debt was collected weekly during the last two months of the year.

3.5.9 The total tenancy debt at the end of 2016/17 stood at £757,589 which is a considerable improvement from the service transition total of ££979,429. This represents a reduction of

£221,840.

3.6

Corporate Health

3.6.1 1.09 days were lost to employee sickness during the year. This is against an annual target of 7.5 days. In terms of benchmarking, this places the organisation in the upper quartile compared to the peer group against a target of 5.93 days.

3.6.2 Staff turnover was 6.3% during the year against a target of 10%. This accounted for two employees leaving the organisation. In terms of benchmarking, this places the organisation in the upper quartile compared to the peer group against a target of 7.0%.

4. Operational Update

4.1 The process of undertaking Annual Customer Care visits has commenced during May. The aim is to improve BCT’s knowledge of the customer base, increase customer involvement in service delivery, complete a property inspection and gain an insight into the needs of customers when shaping future services and commissioning.

4.2 A revised Tenant Engagement Framework was presented to the Performance and Services Committee on the 17 May. The framework outlines the proposed BCT approach to customer engagement. This will include the introduction of an overarching Community Forum that is underpinned by a number of current engagement groups and increased customer scrutiny of BCT services.

4.3 We are currently developing partnership project proposals that will continue to underpin work that is ongoing in the community. In addition, housing officers have been allocated small budgets to support small scale schemes and initiatives in the areas in which they are responsible for. In conjunction, a Thriving Byker Strategy is being developed and along with partnership project proposals will be presented to a future meeting of the Performance and Services Committee.

4.4 Pre-tenancy support workshops have been introduced from the beginning of June. This forms part of the allocations and lettings process and supports new tenants with issues such as income management, managing a tenancy, universal credit and setting up a home.

4.5 BCT have been working in conjunction with Moneywise Credit Union and OrangeBox to develop a pilot scheme for new customers that will allow access to low cost loans and re-useable furniture. Loans will be capped and linked to furniture needs with an element

Page 23 of 32

of the repayment going into a savings account that can be accessed at the end of the repayment plan.

5. Conclusion

5.1 In terms of repairs and maintenance the majority of indicators are performing close to target with work continuing to report overall costs. There has been some impact on the cost of void repairs due to the condition of the properties.

5.2 Performance with regards to lettings is currently outside of target however it should be taken into account that a high number of long term voids have been let which is affecting the year to date performance. It should also be considered that due to the number of evictions taking place as a result of rent arrears that this has impacted upon the time taken to repair properties.

5.3 Income management performance is well outside of target in terms of the Housemark benchmark, however it should be noted that positive progress has been made since service transition.

6. Contact Officer

6.1 If you have any questions about this report that you would like clarifying before the meeting, you can contact Philip Pollard by telephone on 0800 533 5442 or email philip.pollard@bykerct.co.uk

8.

Page 24 of 32

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Page 25 of 32

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Page 26 of 32

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8. A

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A

Page 27 of 32

Board 7 June 2017

Title: Health and Safety Policy and Update Q3 and Q4 2016/17 Report By: Michelle Bell, Head of Property FOR INFORMATION

Business Implications

Risk BCT’s Health and Safety (H&S) Policy and management arrangements proactively manage compliance with legislation to reduce the risk of any potential breaches in H&S.

Financial and Value for Money

BCT will, with its contracting partners, manage H&S risks to effectively reduce the risk of potential financial loss via litigation, accidents and incidents, staff absence or construction related delays.

People/Consultation

BCT ensures its H&S management and monitoring measures are regularly reviewed in order to protect the health, safety and welfare of its staff, partners, contractors, tenants and members of the public as far as reasonably practicable.

Equality and Diversity

This report ensures a non-discriminatory approach is adopted in our H&S Policy and its management and monitoring processes.

Environment Implications

BCT Board and employees will receive training as and when necessary to ensure all safe working practices are adhered to, and H&S is monitored in the wider environment to guarantee the safety of our tenants and members of the public.

Contractor Implications A number of our legal and statutory health and safety responsibilities are delivered through our partnership agreement with ISOS Complete Support (ICS). Close partnership working continues to ensure all appropriate measures are managed and monitored.

1.

Recommendations

1.1 The Board are recommended to; i. Note the contents of this report.

2. Synopsis

2.1 BCT have a moral and legal responsibility to ensure the health, safety and welfare of

its staff, partners, contractors, tenants and members of the public as far as reasonably practicable. This report provides an update of H&S activity between 3 October 2016 and 1 April 2017, to satisfy Board that BCT are complying with all relevant legislation.

3. Background Information

3.1 Employers must comply with the requirements of the H&S at Work Act 1974. This is a key piece of legislation covering H&S law, but we are also bound by other regulations such as the Management of H&S at Work Regulations (1999), The Workplace (Health, Safety and Welfare) Regulations (1992) and the Regulatory Reform (Fire 9.

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Safety) Order 2005. Our main responsibilities are identified in BCT’s H&S Policy, and BCT continue to comply.

3.2 BCT have 5 members of staff trained to emergency at work first aid standards.

3.3 BCT have 2 trained designated Fire Wardens.

3.4 To ensure BCT are compliant with all H&S legislation as a landlord, we monitor

monthly, BCTs statutory H&S obligations delivered through our contractual agreement with Your Homes Newcastle (YHN) and our partnership agreement with ISOS Complete Support (ICS) for: 1. The provision of support services delivered by YHN which includes concierge and

cleaning services. 2. The Member’s agreement in relation to a cost sharing arrangement with ICS with

agreement for the provision of:- a. Property Services which includes responsive repairs, voids maintenance and

delivery of compliance related maintenance services; b. Grounds maintenance and environmental response services including

playground inspections.

4. BCT Investment Programme

4.1 The Construction Design and Management Regulations 2015 (CDM) place duties upon clients and contractors for construction related work involving work over 30 working days or 500 man hours. BCT continue to ensure all their duties under the CDM Regulations are being met and discharged where appropriate on capital contracts.

4.2 Any reportable accidents or incidents on capital contracts categorised as RIDDOR (Reporting of Injuries, Disease and Dangerous Occurrences Regulations 2013), which require reporting to the H&S Executive should also be reported to BCT Board. Between 3 October 2016 and 1 April 2017 there have been no accidents or incidents categorised as RIDDOR on BCT capital projects.

5. BCT Leaseholders

5.1

BCT currently own the freehold to 27 leasehold properties across the Byker Estate. BCT do not have a legislative responsibility to carry out safety inspections on gas appliances within leasehold properties, however it is good practice to ensure our leaseholders service their gas appliances on an annual basis.

5.2 In total 9 of these leaseholders have gas appliances. 2 of these purchased after 2009 so under the terms of their lease with BCT have provided a valid CP12 certificate. In addition, one leaseholder is sub-letting so must therefore also provide a valid CP12. This has been received by BCT.

5.3 BCT have written to the remaining 6 leaseholders advising of the importance of gas safety, and provided details of the gas servicing available by ICS. 2 leaseholders have taken up this option.

6. ICS Services (as detailed in 3.4)

6.1 Between 3 October 2016 and 1 April 2017 in relation to services provided by ICS they have;

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1. Continually reviewed legislation that impact on H&S compliance for these service areas;

2. Not amended any method statements / risk assessments in these service areas; 3. Not updated any Corporate H&S Policy Statements; 4. Completed routine play area inspections (weekly) and operational visits (monthly) of all

BCT play areas; 5. There has been no accidents in Byker categorised as RIDDOR that require

reporting to the Health & Safety Executive. In addition Zurich (BCTs insurer) carried out BCTs annual inspection of play areas in January 2017.

7. YHN Contracted Services (as detailed in 3.4)

7.1 Between 3 October 2016 and 1 April 2017 in relation to services provided by YHN, they have; 1. Continually reviewed legislation that impact on H&S compliance for these service

areas; 2. Not amended any method statements / risk assessments in these service areas; 3. Not updated any Corporate H&S Policy Statements; 4. There has been no accidents in Byker categorised as RIDDOR that require

reporting to the Health & Safety Executive.

8. 8.1

Compliance Contracts The table below details the position of all compliance related contracts as at 1 April 2017.

H&S Legislative

Requirement

No of location

inspections across the

estate

Frequency Status Comments

Fire risk assessments

(FRA) 19 3 years All valid.

Lift examination and testing

18 Monthly All lift inspections valid.

Water hygiene

7 Monthly All water hygiene inspections valid.

Communal Area

Asbestos Monitoring

29 Annual All valid.

Portable Appliance

Testing (PAT) 5 Annual All PAT testing of electrical appliances valid.

Emergency Lighting

43 6 Monthly

42 inspections of emergency lighting in place – Graham House has been identified as not having emergency lighting, so the number of locations has been reduced to reflect this. Quotation being obtained from ICS for this upgrade to be carried out.

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Fire Fighting Equipment

20 Annual

All inspections of firefighting equipment valid – Figures now include lift motor rooms and BCT office.

Gas Servicing

135 homes and

1 Communal Boiler at Chirton House

Annual

All valid. Gas pipework and meters are being removed in all voids where applicable.

8.2 Newcastle City Council (NCC) operate 5 district heating substations and district heating office that BCT own, and the H&S compliance of these buildings is their responsibility. It is good practice, but not legislation for BCT to have copies of all compliance and inspection record, therefore BCTs Technical Services Manager continues to work closely with NCC to obtain copies of all compliance records relating to these buildings.

8.3 All electrical installations deteriorate with age and use. Domestic properties should be checked at least every 10 years or upon change of occupancy, 5 years if they are a modern homes internal omit or a communal area to ensure they are in a satisfactory condition in accordance with current wiring regulation. BCT have carried out a full audit of the inspection certificates provided by YHN and 163 of our properties have no certificate. BCT have instructed ICS to commence the 2017/18 electrical test programme which includes 252 properties, and to prioritise those with no certificate. In addition smoke and heat detectors will be renewed that are at the end of their 10 year life expectancy. This essential work was highlighted under H&S works to meet landlord obligations.

9. Gas

9.1 The information YHN provided BCT with on 3 October 2016 stated 79 properties were identified as having gas meters where tenants had no gas appliances. A further 9 gas meters have since been identified by BCT as part of routine works. We are working closely with utility providers and to date 11 gas meters have been removed.

9.2 9.3 9.4 9.5

The information YHN provided BCT with on 3 October 2016 stated 31 properties had not been surveyed and YHN spoke to tenants of 122 properties who confirmed they had no gas supply or meter. ‘Xoserve’, the national database that records all connections to properties also identifies these properties are registered with ‘no gas’. BCT are continuing to double check this information to update our gas database. The repairs system has been updated to include a flag against all properties not yet surveyed, so that when a repair is raised, the ICS Operative is instructed to check for any gas supply or meter and advise BCT’s Technical Services Manager who in turn will check and update BCT’s database. BCT’s housing management team will check gas supply details against our records as part of the annual customer care visit, ensuring BCT retains detailed records relating to gas supplies for cookers. The BCT tenancy agreement has been updated and does not allow new tenants to arrange gas supplies or for any gas appliances to be fitted.

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10. 10.1 10.2 10.3

Fire Risk Assessments Following the audit of fire doors carried out at Mount Pleasant and Tom Collins House, BCT have carried out inspections to the fire doors in all communal blocks. Although all blocks have valid fire risk assessments, in light of the situation identified in our sheltered blocks, BCT have double checked the current position regarding fire doors in all our communal blocks. This has identified 9 communal staircase doors that have no intumescent fire and smoke seals, which in the opinion of Storm Tempest who provide fire risk advice to ICS, should include them. BCT are seeking quotations and arranging for this work to be completed as soon as practicable. BCT also asked Storm Tempest for their opinion on fire doors to bin stores within communal blocks. Storm Tempest have suggested, as good practice but not legislation, that bin stores have intumescent fire and smoke seals fitted in the future. We can therefore expect this recommendation to be identified when future fire risk assessments are carried out to these blocks. Unfortunately these recommendations cannot be retrofitted onto these doors, and we will need to plan for the replacement of bin store doors as part of future planned investment.

11. 11.1

Contact Officer If you have any questions about this report that you would like clarifying before the meeting, you can contact Michelle Bell by telephone on 0800 533 5442 or email michelle.bell@bykerct.co.uk

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