Agenda item

The Committee considered a report which provided an update on progress to implement the recommendations of the audit of the Council House Delivery Programme, undertaken by Mazars between October and November 2019 and which received an overall audit score of limited assurance. The report was introduced by Robbie Erbmann, Assistant Director of Housing and Anna Blandford, Senior Housing Project Delivery Manager as set out in the agenda pack at pages 15-36. Cllr Ibrahim was also present, as the Cabinet Member for Housing and Estate Renewal. The following was noted in discussion of this report:

a.    The Cabinet Member assured the Committee that all of the issues identified in the audit report were being addressed.

b.    The Chair enquired as to the availability of the minutes from the Housing Delivery Board and whether all Members had access to them. In response, officers advised that the Board was not Committee or Sub-Committee of the Council and that Members would therefore have to demonstrate a ‘need to know’ to access them.

c.    The Committee noted concerns about the scheme being over budget, particularly as it was a £400m scheme. The Committee sought some further assurance around this considering the tight financial margins involved in successfully delivering Council homes and concerns that any significant increase in costs could blow a hole in the HRA budget.  In response, the AD for Housing advised that the biggest single change that had been made was investing in the database, which allowed officers to track every single item of spend in real time and provide an accurate reporting picture. The AD for Housing advised that in comparison to his previous role at TfL, Haringey had introduced this type of software at a much earlier stage in the programme and he set out that he was impressed with the rapid progress that the team had made in implementing the financial governance arrangements.  

d.    The AD for Housing advised that the team was now looking at having 72 sites in the programme. It was suggested that the Council was, in effect, a start-up as it hadn’t delivered any new housing for over 40 years. The AD for Housing suggested that, what was effectively a start-up, delivering a very ambitious target of 1000 homes in a short period of time, required the programme to run parallel work streams. Such as at the same time as getting planning applications submitted and feasibility assessments underway, officers were also having to set-up all of the governance systems. It was suggested that the pace of progress should not be underestimated. Officers also set out that the development procedures were set up a few months ago and that these were now being reviewed, following an initial bedding-in period, and that the governance arrangements for how projects would be dealt with at each gateway stage formed part of that evaluation process, including the monitoring of any overspends in pre-contract budgets. This was in addition to the wider budget-monitoring framework for the programme.

e.    The Committee enquired how much the investment cost was into the sequel database was and why this was not in place earlier. Officers advised that they did not have that information to hand but commented that it was usually used in conjunction with financial viability software, called ProVal which would usually be used in determining the initial viability assessments. Officers advised that it was usual for organisations not to have a software programme like Sequel in place until projects began onsite, where it would be used to manage the cash flow of projects etcetera.  It was suggested that the Council had begun using the software at an earlier stage than many other organisations.

f.     The Chair sought assurance around how soon it would be before officers were in a position to be able to report an accurate picture of any delays or costs to the scheme. In response, officers advised that the systems were in place as of now and that the first round of reporting would be going to the Housing Delivery Board in September (as there was no meeting of the board in August).

g.    A Member of the Committee emphasised that, in addition to having not built any new homes for 40 years, Haringey was setting up a pioneering and ambitious programme of 1000 new homes at social rents and welcomed the progress made to date in spite of the impact of coronavirus.

h.    The Committee sought assurances around whether it was foreseen that any further delays would occur to the Housing Delivery Programme  due to COVID-19. In response officers advised that COVID-19 had created ongoing delays to the programme, with reduced capacity within the contractor market due to the government furlough scheme and, where schemes were on-site, capacity was typically running at two-thirds of pre-COVID levels. It was also anticipated that there was a risk to housing acquisitions occurring from an overall market slow-down. The AD for Housing advised the Committee that he was confident that 1000 plus homes would be started on-site by March 2022, but that it could be a year or two later before those schemes were completed, due to market constraints.  

i.      The Committee sought assurances around why the original manifesto pledge to establish a wholly owned company to deliver 1000 homes was not implemented. In response the Cabinet Member advised that part of the reason for a wholly owned company was the borrowing cap on the HRA, which was subsequently lifted by the government in 2018 and allowed the Council to borrow significantly higher amounts of capital in order to build the homes itself. The Cabinet Member emphasised that by delivering homes through the HRA the Council were able to deliver the 1000 plus homes at social rents. This was much harder to do through a wholly-owned company, not least due to limitations around state-aid.

j.      The Committee suggested that one of the advantages of the wholly-owned company, as set out in the Cabinet report of July 2018, was that they would not be subject to Right-to-Buy provisions whereas any new homes built by the Council would be. In response, the Cabinet Member suggested that this was a bit of a red herring, as the discounts available under Right-to-Buy were relatively small and that it was very unlikely that the people who would be placed in the new Council houses would be able to exercise their Right-to-Buy; particularly as they would have been living in Temporary Accommodation for, on average, a period of eleven years. It was also set out that there were protections in place for local authorities and that Councils could not sell the properties for less than their cost.

k.    The Committee sought assurances around the governance structure for the strategic risk register for the Council Homes Delivery programme and questioned whether Corporate Committee could have sight of this document. In response, officers advised that the strategic risk register was updated quarterly due to the market-based nature of many of the risk involved. However, monthly highlight reports by exception would be produced for the Council Housing Delivery Board and there was also monthly project review meetings within the Housing Delivery service. The AD for Housing suggested that it would be an issue for Legal and Democratic Service to determine whether it was appropriate for the Committee to review the strategic risk register.

l.      In response to a further request for assurance, officers advised that all of the actions identified in the audit would be in place for the Housing Delivery Board in September.

m.  In relation to assurance around the estimated delivery of 200 Council-owned homes by 2022, the AD for Housing suggested that this was probably a conservative estimate, but that provided there were no further periods of lockdown, he was confident that the Council would be in a position to achieve 200 completions by 2022.

n.    The Committee requested that a further update on the audit of the Housing Delivery Programme be brought back to the Committee at its next meeting if that was feasible, or failing that to the December meeting. (Action: Robbie Erbmann/Clerk).

RESOLVED

That Corporate Committee:

     I.        Noted that whilst the original deadline for actions set out in the audit was April 2020, and actions were initially going to be delivered slightly later than this, COVID-19 had significantly delayed the timescales for completing the work for the reasons set out in paragraph 6.10 of the report; and

    II.        noted the progress made to date on actions following the audit and the further work required to comply with the recommendations in the audit, as set out in paragraphs 7.14, 7.16, 8.8, and 9.5 of the report.