Application Multi-Reg Parking 2017

The Royal Borough of Kensington and Chelsea
Tenant Management Organisation Limited

(the Company)
Agenda
A meeting of the Board of Directors (Board) of the Company
is to be held on the 5th of January 2015 at 6.30pm
at 346 Kensington High Street, London, W14 8NS
Agenda Report Name Presenter Enclosure

Item
PART A - OPEN
1. Notice, Apologies and Quorum Company Secretary -
2. Minutes of the meeting held on the Chair

20th of November 2014
3. Matters Arising Chair
4. Chief Executives Report Chief Executive
5. Rent Report Executive Director, Financial

Services & ICT and Head of
Finance, RBKC Department of
Housing
6. KCTMO Budget 2015-16 Executive Director, Financial

Services & ICT
Notes:
(1) Board Members unable to attend physically can attend by teleconference (dial-in details to be provided)
(2) Board Members can send in their apologies to the Company Secretary by email or by calling on 020 7605
6532
(3) * Every member of the Board has a duty under Section 182 of the Companies Act 2006 to declare any interest
in any transactions or arrangements with the Company under consideration, or section 177 of the Companies
Act 2006 to declare any interest in any proposed transactions or arrangements with the Company under
consideration in accordance with the Companys Articles of Association. Any interests should be declared to
the Company Secretary on, or before the meeting.
(4) * A person who has declared an interest will neither attend the discussion leading to a decision on the
conflicted matter nor vote on it.
1
Agenda Item: 2
THE ROYAL BOROUGH OF KENSINGTON & CHELSEA

TENANT MANAGEMENT ORGANISATION LIMITED
(the Company)
Minutes of a meeting of the Board of Directors (Board) of the Company

held at 346 Kensington High Street, London W14 8NS
on the 20th November 2014 at 6.30 pm
PRESENT:
Resident Board
Members
Fay Edwards - Chair
Tony Annis
Mary Benjamin
Anne Duru
Kush Kanodia
Deborah Price
Brendan Tracey
Council-Appointed Councillor Judith Blakeman
Board Members
Jeff Zitron
Independent Board Peter Chapman
Members
Anthony Preiskel
APOLOGIES: Councillor Maighread Condon-

Simmonds
Peter Molyneux
Simon Brissenden
IN ATTENDANCE: Robert Black Chief Executive
Rupa Bhola Assistant Director, Financial
Services
Yvonne Birch Executive Director of People &
Performance
Teresa Brown Director of Housing
Sacha Jevans Executive Director of Operations
Fola Kafidiya Head of Governance & Company
Secretary
Peter Maddison Director of Assets &
Regeneration
Anthony Parkes Executive Director of Financial
Services & ICT
Daniel Wood Assistant Director, Home
Ownership
Jane Clifton Executive Office Manager
1
1. NOTICE, APOLOGIES AND QUORUM
1.1 The Chair noted that the members of the Board entitled to receive notice and attend
meetings had been duly served with notices of the meeting.
1.2 The Chair also noted that apologies were received from Councillor Maighread
Condon-Simmonds, Simon Brissenden, and Peter Molyneux.
1.3 The meeting was quorate in accordance with the provisions of the Articles of
Association of the Company.
2. MINUTES OF THE MEETING HELD ON 11TH SEPTEMBER 2014
2.1 The Board RESOLVED TO approve the minutes of the meeting held on the 11 th
September 2014 as a correct and accurate record of the meeting.
3. MATTERS ARISING
3.1 Committee Terms of Reference

This would be presented to the Board in 2015.
3.2 Mutual Exchanges

This was yet to be actioned.
3.3 Grenfell Tower

Since the last meeting, consultation on the priorities for investment had been carried
out with the residents of the finger blocks, and this had included comments on the
removal of the ramp. The feedback would be reported to the Board, and Peter
Maddison would be meeting with Cllr. Blakeman on the details in the following week.
Cllr. Blakeman queried whether there had been consultation with the residents
association, and it was confirmed that even though this did not take place at 50% of
the residents had been contacted by door-knocking and the feed-back was being
analysed.
3.4 Business Plan Strategies

This action has been completed.
3.5 Board Meeting Dates

This action has been completed.
4. CHIEF EXECUTIVES REPORT
4.1 The Board took the report as read and agreed to NOTE the Chief Executives update
report.
2
5. RBKC MID YEAR REVIEW
5.1 The Board took the report as read and agreed to NOTE the contents of the report.
6. FINANCIAL REPORT
6.1 Rupa Bhola presented the budget monitoring report for the period to September
2014. The forecast surplus for the Company was 32k against the budget of 35k,
but there were variances in the budgets so savings had been found.
6.2 A revised budget for the subsidiary company had been presented to the Repairs
Direct Board, and the Finance, Audit and Risk Committee, which included a five-year
projection. The revised budget for the Group would be presented to the Board in
January, and would include a 120k surplus.
6.3 On the HRA budgets, there was a higher than projected number of Right to Buy
properties. The collection of leaseholder charges had been delayed whilst the
Company waited for the outcome of a court case, but these charges would be
collected in the next year.
6.4 Anthony Parkes briefed the Board on the tax position for the Company and its
subsidiary, and recommendations on the tax position were to be presented to the
Board in 2015.
6.5 The Board NOTED the report.
7. PERFORMANCE REPORT
7.1 Yvonne Birch presented the performance for Quarter 2 of the current financial year.
There was some concern about performance on voids and rent collection, but it was
anticipated that performance would be on target by the year end, however in the
meantime the position would be monitored.
7.2 Peter Chapman raised the issue of the post inspection pass rate for Repairs Direct,
which was at 63% and the target was 97.4%. An explanation was given that the
Company had not been doing enough inspections, but Peter Maddison was doing
some work on common trends, and how performance could be improved with the
subsidiary.
7.3 The Chair noted that gas compliance had achieved 100%, which was a key risk for
the Board, and a lot of work had been done in this area.
8. CORPORATE RISK MAP 2014/15
8.1 Janet Seward presented the Corporate Risk Map for 2014/15 for approval by the
Board as recommended by the Finance, Audit and Risk Committee. It was
proposed that the risk map would be reviewed regularly by the Finance, Audit and
3
Risk Committee.
8.2 The Chief Executive undertook to circulate the questions raised by Simon
Brissenden, and the responses.
8.3 The Board RESOLVED TO adopt the Corporate Risk Map for 2014/15 as
recommended by the Finance, Audit and Risk Committee.
9. COMPLAINT COMPENSATION POLICY
9.1 Janet Seward presented the revised Compensation Policy and Procedure which
simplified the existing policy. The policy had been presented to the Operations
Committee and the Councils Policy Board, as compensation was paid out of the
HRA. Legal advice had also been obtained in drawing up the policy. The policy
covered compensation for residents who had suffered a loss of service within their
property.
9.2 Anthony Preiskel queried the notional life cycles referred to in the policy, which were
different from those stated within the Asset Standard and Strategy. It was
acknowledged that the life cycles were different.
9.3 The Board RESOLVED TO agree and adopt the revised Compensation Policy and
Procedure.
10. HRA COMMERCIAL PORTFOLIO Q1 & Q2 2014/15
10.1 Nick Rendle and David Bickerstaff presented a report on the first two quarters of the
2014/15 financial year. The report presented the work done during the previous 12
months to maximise the HRA commercial portfolio for RBKC. 3m income per
annum had been achieved for the first time and this reflected the work being done to
improve records, rents and lease renewals. The work of the team had laid good
foundations for the efficient management of the portfolio.
10.2 Following the review of void properties, there would be an additional 160k income
in the next year. The Cabinet had also decided that all rents should be at market rate
since tenants were previously been subsidising the rents of voluntary organisation,
through the HRA. These voluntary organisations would now be supported by
General Fund grants where there was a direct benefit from their activities to
residents.
10.3 Rents had also been increased for artist studios. These studios remained hard to let,
so work was being done on providing more commercial artist studios, and the
traditional artist studios in Chelsea would be changed to residential use.
10.4 On health and safety compliance, the responsibility had been passed to the lessee
in the property, and there was now an officer checking that compliance was met i.e.
gas safety compliance.
4
In summary, performance on the HRA commercial portfolio was good.
10.5 Anthony Preiskel asked about outstanding lease renewals, and David Vickerstaff
confirmed that all lease renewals were being reviewed, but some leases were yet to
be renewed because of an existing valid reason e.g. possible re-development of the
site. However, confirmation was given that all tenants were paying rent.
10.6 Cllr. Blakeman raised the issue of the Grenfell crche, and it was confirmed that the
matter should be addressed to Claire Williams, the project manager for the
regeneration programme, because she was more familiar with the subject matter.
10.7 Peter Chapman asked when the Service Level Agreement for the Commercial
Property Management would be signed by RBKC Legal Services. It was confirmed
that the delay for signing was caused by a final round of comments being made on
the Modular Management Agreement of which it was an appended schedule. It was
requested that this issue be recorded as an action so that the Board could monitor
the situation.
11. ASB UPDATE
11.1 Teresa Brown gave a presentation on the key issues from the update on Anti-Social
Behaviour, following changes introduced by the Anti-Social Behaviour Crime and
Policing Act 2014. The civil injunctions due to come into effect in January 2015 were
an important new power for the Company. The new absolute ground for possession
provisions would speed up the most serious cases in specific circumstances. On
noise abatement, which was the most common cause for complaints about anti-
social behaviour, the Company would work with partners such as the Environmental
Services department.
11.2 Councillor Blakeman queried why the victims were moved rather than the
perpetrators since other residents would continue to suffer the same anti-social
behaviour patterns. Teresa Brown confirmed that it was not Company policy except
in certain cases where the victim specifically requested to be moved.
11.3 Anne Duru queried why the Police were deferring the hearings of the cases from the
Company by the Joint Action Group. Confirmation was given that the Company tried
to get the cases heard, but the Police were not receptive to cases that were not
already on their radar. Anne Duru queried the timescale of 3 5 days for serious
cases, and clarification was given that this was the timescale for the initial action
plan when more time may be needed to implement it.
11.4 Anne Duru queried whether the Company had sufficient resources. Teresa Brown
confirmed that there were sufficient resources, but improvements could always be
made. The procedure for anti-social behaviour cases was being reviewed, and the
timescales would be looked at. A new Housing Policy Officer was due to join the
5
Company in January, and they would be working on this.
11.5 Kush Kanodia raised further concerns about the Joint Action Group (JAG) as there
had been a recent report that they did not always record cases. Teresa Brown
confirmed that she was a member of a task force to improve JAG.
11.6 Peter Chapman asked whether the KPIs in this area were also due to be reviewed
as currently they appeared to be rather light-weight, and it was confirmed that they
were due to be reviewed.
11.7 The Board NOTED the contents of this report.
6
Agenda item: 3
MATTERS ARISING
NO. MEETING MINUTE ACTION BY BY WHEN UPDATE

DATE NUMBER WHOM
1 11/09/14 4.2 Mutual exchanges: a report to go to SJ tbc
Operations Committee.
2 20/11/14 5.7 Service Level Agreement for FK tbc
Commercial Property Management:
confirmation to be given to the Board
when this had been signed by RBKC
3 20/11/14 10.2 Corporate Risk Map 2014/15: FK As soon as
responses to queries raised by possible
Simon Brissenden to be circulated
Agenda Item 4
THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA

Open
For information
TMO Board
th
5 January 2015
Report title: Chief Executives update report
Authority for decision: The Board has ultimate responsibility for

monitoring the performance of the
organisation.
Recommendations: For information
Regulatory/legal requirements: None
Business Plan link: Keeping abreast of performance initiatives

within the organisation, and external
developments affecting social housing.
Equality Impact Assessment/comment: Equality and diversity issues are taken into
consideration.
Resident consultation: Ongoing
Resource implications/VFM statement: Keeping up to date on the latest

developments in social housing is
important for shaping the business.
Improved performance within the
organisation will help the TMO to achieve
its VFM objectives.
Risk: Failure to engage with the external

housing sector could have an adverse
effect on the TMO in keeping abreast of
1
developments within the sector. There is
also reputational risk if performance fails
to improve across the TMO.
Appendices: 0
Total number of pages including 5

appendices:
Name, position and contact details of Robert Black, Chief Executive

author: 020 7605 6311
CHIEF EXECUTIVES REPORT
1. COUNTERS CREEK FLOOD ALLEVIATION SCHEME
A report went to RBKCs Public Realm Scrutiny Committee in November

concerning consultation by Thames Water on their preferred sites to build the
Counters Creek Flood Alleviation Scheme. The consultation will be running
until 25th January 2015. There will be a second round of consultation in May
2015, a planning application will be submitted in November 2015 with an aim
of starting construction in 2017. The work will be completed by 2020.
Three of the five sites are located with the Royal Borough with the others in
Hammersmith & Fulham. However, the work will not affect any of RBKC
properties.
2. TENANTS LEADING CHANGE (TLC) PROGRAMME
The Chief Executive has joined a Ministerial Challenge Group on tenant

involvement which has met twice this autumn. This is an initiative which the
National Tenant Organisations are working on with the Unversity of
Birmingham with funding and support from the Department of Communities
and Local Government. Further information is available on the National
Tenant Organisations website at www.nationaltenants.org.
The initiative was endorsed by a letter from the Communities Minister,

Stephen Williams, MP, encouraging organisations to put forward a business
case for tenant involvement and its benefits. KCTMO has responded to this
Call for Evidence, and the Chair and Kush Kanodia attended a tenant
workshop in Croydon on 24th November. Yvonne Birch attended an officer
session the same day.
There will be another meeting of the Ministerial Challenge Group in early

February. The Chief Executive and the Chair have been put forward to attend
a Ministerial reception at the House of Commons in early March, and
attendance will be confirmed in the New Year. We have also been invited to
have a stand at the reception.
There will be a Tenant Leading Change campaign in the spring of 2015, and
the Board will be kept updated on developments.
3. KCTMO COMMUNITIES OUTREACH SURGERY
The Resident Engagement Team held a Communities Outreach surgery on

27th November at the Al Noor Youth Association Supplementary School. This
was a joint initiative with MIDAYE, and 60 parents and children from Somali
and Arabic speaking communities attended to ask for housing and welfare
advice.
4. HOUSING REGENERATION PROGRAMME FUNDING CHANGE
Each year KCTMO works with residents to bid for funding from the Housing
Regeneration Programme (HRP) pot of 250,000. This funding comes out of
the HRA, and was linked to a similar pot of funding from the General Fund for
the local RPs/HAs (Registered Providers/Housing Associations). Bids are
reviewed and prioritised by the Operations Committee, and previously went to
RBKC to be reviewed by their team, and a decision was then made by
Councillor Feilding-Mellen, the lead member for housing.
Following a review, RBKC has closed the RP/HA pot due to lack of demand,
and after discussions with the TMO, have agreed to continue funding this
process, but have changed the governance. From 2015/16, the process will be
managed completely by the TMO with the 250k becoming the Companys
responsibility, and will be monitored by RBKC in its overall process with our
capital programme and other HRA funded programmes.
This is a really positive move which allows the TMO to have governance control
and responsibility for this community investment. Teresa Brown, Director of
Housing, has reviewed the process and developed a new process which will be
taken to Operations Committee in January 2015.
Operations Committee members will score each of the schemes put forward
based on the HRP scoring criteria which considers the following points:
Designing out crime and anti-social behaviour

Improving the overall look of the estate
Improving environmental and/or green issues
Encouraging community inclusion
Reducing costs such as grounds maintenance costs (value for money)
Priority based on residents and estates that have not had previous
funding.
5. CAPITAL PROGRAMME
The size of the Housing Capital Programme has increased significantly over
the last year. The programme has doubled in size since the 2013-14
programme, and will remain at a similar level over the coming years. There is
also the likelihood of further increases as the Hidden Homes programme
develops, and further capital resources are added to the programme.
In order to deliver this increased scale of programme, it is necessary to review

the scale of the Assets and Regeneration team. The capital salaries budget
allocation is currently 550k, which is equivalent to 3.6% of the 2014-15
capital programme. It is proposed that a fee of between 5% and 6% would
provide the capacity required to plan and deliver a programme of the scale
anticipated from 2014-15 onwards.
Some consultancy services have previously been charged to the projects that
the individuals have worked on. In this years budget we have pulled the
following posts into the salaries budget to give greater transparency of these
costs (these posts include the Framework Manager, Contract Administrator,
and Resident Liaison Officer posts).
The Leasehold Alterations Surveyor will be self-funding, paid for through the
income stream generated by charging residents for the service.
The post of Surveyor (Voids and Aids and Adaptations) is a new position and
the post is needed to meet the increasing demand in this area of the service.
A Project Officer post will give capacity to move forward with key service
development initiatives, such as the Energy Strategy.
6. PARKING UPDATE
The KCTMO parking project team are continuing to work towards

implementing a new estate parking system in 2015. This borough was the
first one in the UK to begin addressing the problems of estate parking
enforcement that arose from the Protection of Freedoms Act 2012. It will also
be one of the first, if not the first, to implement a new system based on the
recommendations and wishes of the Department of Transport and the
Department for Communities and Local Government.
Following on from the informal consultation in October, the Council has written
a Key Decision Report to enable the project to go ahead, which the cabinet
members have accepted. It was also debated at the Public Realm Scrutiny
Committee and is now cleared for the Council to begin the traffic order making
process.
The legal wording of the off street and on street traffic orders must be finalised
and agreed by KCTMO and the Counil prior to the order making process
commencing. The off street order is close to being finalised and work is now
beginning on the on street order. These orders are ground-breaking; they
have not been done before and as such there is no existing precedent to base
them on. They also need to be legally sound, considering and covering all
possibilities.
The new parking system will also require new internal processes to be set up
and new permits to be issued. Good progress is being made on these in
order to have them agreed and finalised in time for the new system to go live.
Once the traffic order has been made, and before we can go live, physical
changes need to be made to the car parking areas - predominantly lining and
signing work. Discussions on the contract and scope for these works are well
underway.
In summary, KCTMO remains on target to go live with the new parking system
on 1st April 2015. Finalising the wording of the on street and off street traffic
orders in time to advertise them and make the order is being given the upmost
priority by all parties involved in it, and it is still hoped to achieve the go live
date.
Open
For Decision
Board Report
5th January 2015
Report title: Budgets 2015-16
Authority for decision: The Board has the responsibility of approving the
annual budgets for the Company
Recommendations: It is recommended that the Board pass a

resolution in the following form:
The Board RESOLVED TO:

(i) adopt the Managed TCC Revised Budgets, as
presented, for the 2014-15 financial year; and
(ii) adopt the Managed TCC Budgets, as
presented, for the 2015-16 financial year.
Regulatory/legal requirements: The Board have legal responsibility of ensuring

the organisations resources are used in
accordance with the budget and business plan.
Business Plan link: Delivering value for money and achieving

business growth.
Equality Impact None required

Assessment/comment:
Resident consultation: None required.
Resource implications/VFM This is the subject of the report.

statement:
Risk: Not operating in accordance with the agreed

budget and business could put the Company at
the risk of not being competitive and not
achieving the budgeted surplus.
Appendices: 1
Total number of pages including 25

appendices:
Name, position and contact Rupa Bhola

details of author: Assistant Director of Finance
1
KCTMO BOARD 5 JANUARY 2015
TENANTS CONSULTATIVE COMMITTEE - 6 JANUARY 2015
HOUSING AND PROPERTY SCRUTINY COMMITTEE 7 JANUARY 2015
REPORT BY THE DIRECTOR FOR HOUSING AND THE TMO CHIEF

EXECUTIVE
HOUSING REVENUE ACCOUNT - RENT REPORT 2015/16
This report sets out the proposed budget for the Housing Revenue Account
(HRA) in 2015/16. It also recommends the level of increase to be applied to
rents and other charges made to tenants and leaseholders who live in
Council properties managed by the TMO.
The proposals in this report result in an average increase in rents of 4.66%.
FOR COMMENT
1. BACKGROUND
1.1 A new regime for funding social housing within the Housing Revenue
Account was introduced in April 2012. This is known as Self-Financing
and aims to put local authorities in a position where they can support
their own stock from their own income. This report has been prepared
within the new funding regime and concentrates on the budget being
set for 2015/16.
1.2 The results of some financial modelling over the medium term are set
out in section 5.
2. BUDGETS 2014/15 AND 2015/16

2.1 Following the ending of the agreement with the Lancaster West Estate
Management Board on 31 May 2014, the budgets for expenditure on
Lancaster West will no longer be shown separately but will be
incorporated into the overall budgets managed by the TMO. Some of
the variations from the 2014/15 original budget are due to this change
in presentation.
2.2 Management arrangements for budgets within the Housing Revenue

Account (HRA) are set out in the management agreement with the TMO.
This provides for a number of budgets within the HRA to be managed by
the TMO. Budgets within the HRA fall into the following three
categories:
1
The management costs of the TMO - these are met from an agreed
management fee which is charged to the HRA;
Budgets managed by the TMO on behalf of the Council known within
the agreement as Tenants Consultative Committee (TCC) budgets.
These include the major budgets covering repairs, maintenance and
energy and income from rents, service charges and commercial
lettings and
Council managed HRA budgets including capital financing charges
and the provision for depreciation.
2.3 An overall statement of HRA budgets for the current year and 2015/16 is
set out in Appendix 1. Total gross expenditure in 2015/16 is budgeted at
47.944 million with income budgeted to be 58.519 million. This results
in a budgeted surplus of 10.575 million which is added to the Working
Balance. In 2015/16, it is planned to transfer 18.661 million from the
Working Balance to the Major Repairs Reserve as a contribution towards
the Capital Programme, this is partly funded from contributions from
leaseholders. The net effect in 2015/16 is to reduce the Working Balance
by 7.272 million.
2.4 The following table summarises the changes to the Working balance in
both 2014/15 and 2015/16:
Heading 2014/15 2014/15 2015/16

Original Revised Proposed
Budget Budget Budget
000 000 000
TMO management fee 10,505 10,505 10,631
Gross expenditure budgets managed 21,833 21,315 21,148
by TMO
Gross expenditure budgets managed 17,201 17,032 16,165
by the Council
Total Budgeted Gross Expenditure 49,539 48,852 47,944

Income budgets managed by the TMO -56,432 -55,954 -58,265
Income budgets managed by the -274 -279 -254
Council
Total Income Budgets -56,706 -56,233 -58,519
Net Budgeted Surplus

-7,168 -7,380 -10,575
Contribution towards the Major Repairs
Reserve to fund 6,468 7,945 18,661
Capital Expenditure
Contribution from leaseholders towards -2,000 -1,157 -814
Major Works
Overall Change in Working -2,700 -592 7,272
Balance
2
2.5 Further details on the current years budget and the proposed budget for
2015/16 are set out in the following appendices:
The TMO Management Fee (Appendix 2);
Managed TCC Budgets (Appendix 3) and
Council Managed Budgets (Appendix 4).
2.6 Details of the Working Balance and Reserves are set out in Appendix 5.
2.7 A potential risk to the budget arises from the possible reduction in the
Discretionary Housing Payments Fund. The Fund was increased to
mitigate some of the impacts of the welfare reforms which have been
introduced by Central Government and the planned introduction of the
Universal Credit.
3. POLICY FOR SETTING RENT LEVELS FOR HRA DWELLINGS
Rent Policy from April 2014
3.1 In 2002/2003, the Government introduced its rent restructuring

regime where rents are set in line with a national formula which is used
to calculate a target/formula rent for each property.
3.2 The assumption was that actual rents move to target rent in equal steps.
However, the Government introduced a number of guidelines (known
as caps and limits) to protect tenants from excessive increases in
rents. These constraints have resulted in many rents in the Royal
Borough being set at levels which are considerably below their
target/formula rent.
3.3 In order to generate additional resources to fund capital expenditure, a

revised rent policy was introduced in April 2014. The key aspects of
this new policy are as follows:
a) rents for individual properties will converge with their

target/formula rent over the five year period 2014/15 to 2018/19;
b) the maximum increase for any individual property will be limited to

10% in each of the 5 years, this will protect households from high
rent increases;
c) Re-lets are let at target rent unless the target rent would exceed
250 per week. In this case the decision regarding the level of rent
to be set is delegated to the Director of Housing who will make a
decision taking into account the households income and employment
status and
3
d) Target rents would be increased annually by the retail price index
plus 0.5%.
Recent Guidance from Central Government
3.4 During the period of the rent review in 2013/14, the Scrutiny Committee
noted the Government announcement regarding potential changes to
the rent restructuring regime. In May 2014, the Government published
its proposals following consultation. The key changes effective from April
2015 are:
a) To continue to set target/formula rents on the same basis;
b) To increase rents annually by no more than CPI + 1%. This changes

the annual inflation increase from RPI + 0.5% to CPI + 1% and also
removes the concept of convergence where rents increase to a
target/formula rent over time;
c) To retain the current national caps and
d) To encourage landlords to re-let vacant properties at target/formula

rent.
Rent Policy from April 2015
3.5 The Governments rent policy set out above applies to both Registered
Providers and Local Authorities, but for local authorities the policies
remain non-statutory.
3.6 It is proposed to continue with the policy adopted in April 2014, with one
exception. The formula used to inflate rents will be amended to CPI +
1%. We could keep RPI + 0.5% but in later years our average rents
could exceed the Limit Rent meaning there would be a shortfall in
Housing Subsidy which would need to be met by the HRA.
3.7 This approach would mean that the calculation of target/formula rents
continues to remain in line with the Governments approach, but a more
local approach is used to determine actual rents chargeable to
households.
3.8 On this basis, the average rent in 2015/16 would be 123.81 per week
which equates to an increase of 4.66%.
3.9 An Equalities Impact Assessment has been undertaken and is attached

at Appendix 8.
4
4. OTHER CHARGES
4.1 A Members Working Group has been established by the Housing and
Property Scrutiny Committee to review and make recommendations
regarding income generated from parking facilities within the HRA, this
includes charges for garages and parking bays.
4.2 Any recommendations from this review could not be considered prior
to the setting of charges for 2015/16. The increase in charges for
garages and parking bays will therefore, as in previous years, be
linked to the average dwelling rent increase which for 2015/16 is
4.66%. The proposed charges from April 2015 are set out in Appendix
7.
5. FINANCIAL OUTLOOK MEDIUM TERM

5.1 Predicting levels of income and expenditure over the medium to longer
term is extremely difficult and inevitably predictions for the early years
will be more accurate. However, the self-financing regime has
removed the uncertainty around the annual announcements regarding
housing subsidy but has introduced local decision making regarding
capital financing and depreciation.
5.2 The introduction of self-financing was broadly welcomed by local

authorities and has improved the financial outlook for our HRA.
Financial modelling suggests that at the end of the next 5 years the
cumulative surplus could be in the region of 35 million. These
surpluses enable us to plan further investment in our housing stock
and will be considered as part of the HRA Business Planning process.
5.3 This surplus arises largely because, under self-financing, increases in

rent income can be retained by the HRA rather than being returned to
Central Government through the Housing Subsidy process. The
position reflects the value for money savings which have been
achieved in recent years and cost pressures which are anticipated in
2015/16. Identifying further efficiency savings continues to remain a
key target for both the TMO and the Council.
5.4 Appendix 6 provides further details of the surpluses anticipated over

the next 5 years.
5
6. COMMENTS BY DIRECTOR OF LEGAL SERVICES
6.1 The proposed increases applied to rent and other charges to tenants
will require the Council to comply with the terms of the tenancy
agreement when imposing the intended alterations and increases in
charges. Often tenancy agreements make provision for the landlord to
alter the rent and any other charges by giving the tenant four weeks
notice in writing. Furthermore, Section 24 of the Housing Act 1985
provides that a local housing authority may make such reasonable
charges as they determine for the tenancy or occupation of their
houses.
6.2 In respect of Leaseholders, the Council will need to comply with the
statutory consultation provisions of any relevant legislation and the
terms of the leases.
6.3 The Council is required by the provisions of the Local Government and
Housing Act 1989 to maintain a housing revenue account (HRA) in
accordance with proper practices. The sums which are to be debited
and credited to the HRA are prescribed by law and are not a matter for
discretion. This means that the HRA is effectively ring fenced. The
amounts which may be credited include rents and other charges such
as heating and hot water. The Council is also under a duty to budget to
prevent a debit balance arising on the HRA.
6.4 When making a decision in relation to any of its functions such as to

changes in service provision and/ or making any decisions such as the
one contained in this report due regard must be had to the general
equality duty imposed by the Equalities Act 2010. The public sector
equality duty consists of a general equality duty which is set out in
section 149 of the Equality Act 2010 and there are specific duties
which are imposed by secondary legislation. This duty came into force
in April 2011. The duty covers the following eight protected
characteristics: age, disability, gender reassignment, pregnancy and
maternity, race, religion or belief, marriage or civil partnership, sex
and sexual orientation.
6.5 Those subject to the equality duty must, in the exercise of their
functions, have due regard to the need to:
Eliminate unlawful discrimination, harassment and victimisation

and other conduct prohibited by the Act.
Advance equality of opportunity between people who share a
protected characteristic and those who do not.
Foster good relations between people who share a protected
characteristic and those who do not.
6
6.6 An Equalities Impact Assessment (EIA) attached at Appendix 8 of this
report identifies the ways in which the adverse impact of the proposal
can be reduced.
7. RECOMMENDATIONS
7.1 Following discussion at the TMO Board, the Tenants Consultative
Committee and the Housing and Property Scrutiny Committee, a Key
Decision will be taken by the Cabinet Member for Housing, Property
and Regeneration to determine the budget for 2015/16 and the level
of rents and charges to be set in 2015/16. The Scrutiny Committee is
asked to comment on the budget set out in this report and, in
particular, on the following recommendations:
(i) Rents are increased in accordance with the proposals set out in
section 3 which result in an average rent increase of 4.66% in
2015/16;
(ii) Charges to tenants for garages/car parking facilities are increased
by 4.66%;
(iii) Tenant (including Hostels) and Leaseholder Service Charges for
2015/16 are increased in line with revised estimates of costs
recoverable and
(iv) The HRA Working Balance and other reserves are retained at the
level set out in Appendix 5.
Laura Johnson
Director of Housing
Nicholas Holgate
Town Clerk and Executive Director of Finance
Robert Black
TMO Chief Executive
Background papers used in the preparation of this report:

DCLG publications and guidance to Self-Financing
Budget Working papers
TMO Board reports
Contact officer: Mr S Mellor on 020 7361 2370
7
APPENDIX 1
HOUSING REVENUE ACCOUNT (HRA)
Original Budget Revised Estimate %

Budget Variation
Original &
Estimate
2014-15 2014-15 2015-16 2015-16
'000 '000 '000 '000
TMO Management Fee 10,138 10,444 10,631 5%

Lancaster West Management Fee 367 61 0 -100%
Total TMO Management Fee 10,505 10,505 10,631 1%
TCC Managed Budgets

Planned Maintenance 7,096 6,708 6,279 -12%
Responsive Maintenance 5,192 5,632 5,905 14%
Lancaster West EMB Expenditure 627 105 0 -100%
Aids and Adaptations 150 120 150 0%
Area Revenue Works 199 199 199 0%
Electricity, Heating, and Hot Water 3,610 3,620 3,663 1%
Contract Cleaning 2,228 2,266 2,303 3%
Refuse Collection 154 154 157 2%
Pest Control 199 240 244 23%
Provision for Bad Debts 723 473 500 -31%
Rents, Rates, Taxes & Other Charges 165 165 192 17%
Car Park Management 35 35 35 0%
Other Expenditure - Special Services 304 363 304 0%
Security Costs 240 289 299 25%
Supporting People Expenditure 220 257 220 0%
Legal Costs 210 210 218 4%
Digital TV 480 480 480 0%
TCC Managed Budgets Expenditure 21,833 21,315 21,148 -3%
Dwelling Rents - Rent and Hostels -42,344 -42,045 -43,936 4%

Commercial Properties Rent Income -3,039 -3,020 -3,258 7%
Garages Rent Income -727 -727 -758 4%
Tenants Service Charges -4,423 -4,247 -4,335 -2%
Leaseholder Service Charges -2,353 -2,524 -2,584 10%
Heating and Hot Water Charges -2,445 -2,209 -2,312 -5%
Insurance Charges - Leaseholders -1,010 -999 -1,023 1%
Supporting People Contract Income -26 -26 -26 0%
Other Contributions Towards Expenditure -30 -30 -30 0%
Other Charges for Services & Facilities -35 -35 -4 -89%
Transfer from Lancaster West reserves to working balance 0 -92 0 0%
TCC Managed Budgets Income -56,432 -55,954 -58,265 3%
Total TCC Managed Budgets -34,600 -34,639 -37,117 7%
Council Managed Budgets

Capital Charges 11,394 11,437 10,838 -5%
Depreciation - Dwellings and Non Dwellings 2,946 2,946 2,673 0%
Insurance Costs 1,358 1,338 1,378 1%
Recharges from Corporate Services 330 330 318 -4%
Recharges from Housing Services 622 622 789 27%
Audit Fees 52 20 20 -62%
Miscellaneous expenses 59 0 0 -100%
Burgess Field (Supporting People) 103 103 103 0%
Consultancy budget 13 13 13 0%
Rent, rates, other and subscriptions 24 24 34 41%
Stock Options/Regeneration 300 200 0 -100%
Council Managed Budgets Expenditure 17,201 17,032 16,165 -6%
Supporting People Grant -205 -205 -205 0%
Interest income -69 -74 -49 -29%
Council Managed Budgets Income -274 -279 -254 -7%
Total Council Managed Budgets 16,927 16,753 15,911 -6%
Contribution to (-) or from (+) HRA working balance (excluding

Captial) -7,168 -7,380 -10,575 48%
Transfer to Major repairs reserves 6,468 7,946 18,661

Contibution from Leaseholders towards Major Works -2,000 -1,157 -814
Contribution to (-) or from (+) HRA working balance -2,700 -592 7,272
HRA Balance b/fwd -18,942 -18,942 -19,534 3%

Contribution to (-) or from (+) HRA working balance -2,700 -592 7,272 -369%
TOTAL HRA Working Balance -21,642 -19,534 -12,262 -43%
8
APPENDIX 2
TMO MANAGEMENT EXPENSES
1.1 The management costs incurred by the TMO in fulfilling its

responsibilities under the Management Agreement are funded from the
HRA by way of a fixed management fee approved by the Council
annually. The total management fee for 2014/15 is 10.505 million.
1.2 The Management Fee for 2015/16 has been set at 10.631 million.
1.3 An overall inflationary provision of 1.2% has been allowed for 2015/16.
This provision will be used to fund pay awards and other inflationary
increases on non-pay budgets e.g. utilities. This level of management
fee will enable the TMO to maintain and improve its level of services
within the financial framework.
1.4 In order to support the welfare changes, two welfare reform officers
were created for a two year period. It is planned to extend this period
for a further year to March 2016. These officers are providing support
and advice mainly for tenants affected by the Under Occupancy Charge
and Benefits Cap. This includes assistance to claim for Discretionary
Housing Payments which mitigate the risk of income loss to the
Council. The position will be reviewed during 2015/16 when the
timescales for introducing Universal Credit will be clearer.
1.5 An additional project officer will continue to be funded, focusing on the

planned Parking Review and supporting the Members Working Group
on parking facilitates. The first of the car park projects is now in place
with a further three due to come to fruition over the next year. The
projects are forecast to bring in an income of approximately 10m
over the life of the leases. The project officer will also be responsible
for the implementation of the Traffic Management Order on some
estates which is due to come into force in April 2015. This is designed
to protect income from parking charges whilst meeting the new
legislative requirements.
9
APPENDIX 3
MANAGED TCC BUDGETS
Summary Position
1.1 These budgets, managed by the TMO on behalf of the Council, comprise
the major running costs relating to the management of the stock
(repairs and maintenance, utilities, cleaning and refuse, etc.) and the
income collected in the form of rents, service charges and other charges.
1.2 The original net budget for 2014/15 splits down between budgeted
income of 56.432 million and budgeted expenditure of 21.832 million
to produce a net income budget of 34.6 million. Although managed
during the year by the TMO, the expenditure and income on these
budgets is included in the Councils HRA. Any variance at the year-end
therefore impacts on the HRA working balance.
1.3 The following table summarises the overall position for 2014/15 and
2015/16:
2014/15 2014/15 2015/16

000 000 000
Expenditure 21,832 21,315 21,148
Income -56,432 -55,954 -58,265
Net Managed TCC Budgets -34,600 -34,639 -37,117
Revised Budget 2014/15
2.1 For the current year, the revised net TCC managed budget is 39,000
higher than the original budget. The main factors resulting in the
variance are:
Planned Maintenance This is forecast to be under spent by
388,000. This comprises:
o Individual Heating Works expenditure is expected to be

150,000 less than the budget as the planned domestic boiler
renewals are of a capital nature and will therefore form part of
the main capital programme.
o External Decorations expenditure is forecast to be 140,000

less than the original allocation. The progress on the external
decorations has been good however the cost of the works
expected to be completed by the end of 2014/15 is lower than
originally budgeted.
10
o Estate Lighting forecast expenditure is 50,000 below the
original budget. This reflects savings arising from the re-
procurement of the contract.
o Individual Heating forecast expenditure has reduced by

40,000. This reflects the revised planned maintenance contract
and some portion of the work falling into the capital programme.
Responsive Maintenance This is forecast to be 440,000 above

budget. This is as a result of budget virements during the year.
As the Lancaster West EMB has disbanded the expenditure
budgets have been merged with the borough wide budget lines.
Lancaster West EMB Expenditure The forecast underspend of

522,000 arises from the virements needed to merge the
Lancaster West expenditure budgets with borough wide budgets.
These virements relate to Responsive Maintenance (mentioned
above), Contract Cleaning, Pest Control, Special Services and
Security Costs. The budgets have been pro-rated for 2014/15 as
the EMB disbanded at the end of May 2014.
Provision for Bad Debts the 2014/15 budget included an

additional provision to reflect the potential implications of the
welfare reform changes. The welfare reform officers have
successfully engaged with most of the households affected by the
changes and have, where appropriate, encouraged households to
claim a Discretionary Housing Payment. However, whilst it is
unlikely this provision will be fully used in year, predicting the
outturn position is difficult, given, the need for tenants to continue
to engage in the process. The in year provision has been reduced
by 250,000 and the budget will continue to be closely monitored
and amended if necessary.
Other Expenditure Special Services The main reason for the

overspend of 59,000 is the increase in resources to support the
creation of a Traffic Management Order which can be funded from
a virement from Council Managed budgets.
Dwellings Rents income is projected to be 299,000 less than

assumed when the budget was set. This income loss is mainly due
to the number of properties being sold under the Right to Buy
legislation (185,000) and a higher level of voids than had been
assumed. The void level as at September 2014 was 1.175%
compared to 0.75% in September 2013, this is still below the 2%
level assumed by the Government in the Self Financing
determination.
11
Tenant Service Charges a decrease of 176,000 reflects the
actual cost of services provided to tenants. A small proportion of
this is attributable to the right to buys that have taken place since
the last quarter of 2013/14. The balance reflects lower levels of
expenditure on services chargeable to tenants than were assumed
when budgets were set.
Leasehold Service Charges forecast income is 171,000 more

than assumed when budgets were set. This reflects the final
accounts for leaseholders service charges and is mainly due to
the cost of maintenance works rechargeable to leaseholders
being more than was assumed when the charges for 2013/14
were set.
Heating and Hot Water Charges income is forecast to be

236,000 lower than assumed when the budget was set. This is
partly due to lower gas prices being achieved but also reflects
variations in consumption levels. There will always be a variation
between costs and income as expenditure relates to the costs of
procuring energy in year whilst charges to tenants and
leaseholders are based on consumption levels averaged over the
previous 3 years.
Budget 2015/16
3.1 The proposed TCC managed budget for 2015/16 is for net income of
37.117 million. This surplus is 2.517 million more than assumed in the
original budget. The main factors resulting in the proposed changes are:
Planned Maintenance an overall budget decrease of 817,000.

The main reason for this is the provision for the External
Decorations Programme is being set at 2,000,000, whereas the
budget for 2014/15 (2,600,000) included an extra provision of
600,000 which had been carried forward from the previous year.
Other savings within Planned Maintenance include a reduction of

150,000 in individual programmed heating works due to a larger
scale programme being planned as part of the 2015/16 capital
programme and savings of 50,000 on estate lighting arising from
the re-procurement of the contract.
Responsive Maintenance an overall budget increase of 713,000

of which 506,000 is due to budget virements needed to merge
the Lancaster West budgets with borough wide budgets. The
remainder of the increase is due to an inflation provision for
responsive repairs and voids.
12
Lancaster West EMB Expenditure a reduction of 627,000
reflecting the disbandment of the EMB with budgets being merged
with borough wide budgets (see above).
Electricity, Heating and Hot Water a budget increase of 53,000.

This budget provision is based on current consumption levels and
assumes current rates continue. The TMO procures energy costs
through the Office of Government and Commerce Buying
Solutions. The large volumes purchased for communal heating
systems enable the TMO to access energy at discounted rates
through use of the market, resulting in rates being significantly
lower than could be achieved by domestic users with their own
individual heating systems. No inflationary increase has been
assumed in this budget.
Contract Cleaning an overall budget increase of 75,000. This

mainly relates to inflation which is needed to meet the provision
included in the main borough wide cleaning contract.
Provision for Bad Debt an overall provision of 500,000 has

been set for 2015/16 which is 223,000 less than was assumed in
the 2014/15 budget. The two Welfare Reform Officers will
continue to provide support and advice to households impacted by
the welfare reform changes, thereby helping to contain the level of
bad debts arising in these cases.
Security Costs a budget increase of 59,000 reflecting the

virement from the Lancaster West budget.
Income from Dwelling Rents the estimated income from rents in

2015/16 is 1.592 million more than was assumed in the 2014/15
original budget. This reflects the rent policy to converge individual
rents with their target rent over a 5 year period.
Commercial Properties rent income an increase of 7%

reflecting work being undertaken by officers within Corporate
Property and the TMO. A TMO-led project has identified
alternate uses for derelict estate car parks; in 2013/14 and
2014/15 Cabinet approved proposals to commercially lease
basement areas at Acklam Road for conversion into an office
workspace and at Walnut Tree House and Holmefield House for
conversion into self-storage businesses. These long-term leases
are structured to allow the lessees to recoup their initial capital
investment, via initial rent-free periods or stepped rent increases
in the first three years. As such, they will generate an estimated
187,000 of new income in 2015/16 (exact sum dependent on
the legal completion dates) increasing to 481,000 from
2018/19 onwards.
13
Tenant Service Charges a decrease of 88,000 reflects the
actual costs of services chargeable to tenants.
Leasehold Service Charges an increase of 230,000 reflecting

the cost of works rechargeable to leaseholders. Part of this
increase relates to inflation payable to contractors and part of this
is due to an increase in maintenance work.
Heating and Hot Water Charges income is forecast to be

133,000 lower than was assumed when the budget was set.
This is partly due to lower gas prices being achieved but also
variations in consumption levels. There will always be a variation
between costs and income as expenditure relates to the cost of
procuring energy in year whist charges to tenants and
leaseholders are based on consumption levels averaged over the
previous 3 years.
14
APPENDIX 4
COUNCIL MANAGED BUDGETS
1.1 The budgets within the HRA which continue to be directly managed by
the Council comprise the following elements:
Costs relating to the financing of HRA debt;
Costs relating to the funding of the capital programme including a
provision for depreciation;
Costs resulting from development and regeneration work;
Costs relating to property insurance and
Costs incurred in supporting the Councils statutory responsibilities
in relation to the HRA including audit, performance review,
accounting/legal advice, the cost of Council officer time spent on
HRA matters and support to the Cabinet Members with
responsibility for Housing.
Financing HRA Debt
2.1 Prior to the introduction of Self-Financing, the methodology for

determining capital financing charges to be met from the HRA was
prescribed. Under Self-Financing, these charges must be determined
locally.
2.2 It is anticipated, that over the medium term, significant surpluses will
arise on the HRA revenue account. These surpluses could be used to
fund additional capital expenditure or to refinance capital debt as PWLB
loans fall out or General Fund cash reserves become unavailable. Taking
out fixed term loans, e.g. for 10 years, therefore seems inappropriate
when access to short term funding from the Councils General Fund is
available.
2.3 In determining the charge to be made to the HRA for the use of
General Fund resources, the underlying principle must be to ensure
the effect on both the HRA and the General Fund is fair and equitable.
2.4 It was agreed as part of the Councils Treasury Strategy that the
charge for using internal resources would be equal to the higher of the
PWLB three month variable rate or the Royal Boroughs average
interest rate. This reflects the short to medium-term nature of General
Fund support for HRA borrowing whilst using an interest rate that
reflects market short term rates with a small premium. This approach
penalises neither the HRA nor the General Fund and so achieves the
principle of being both fair and equitable.
2.5 The exception to this is the funding of the Self Financing settlement
payment (24.960 million). The Council has matched the special rates
15
made available to local authorities for 5 years to fund the settlement
payment, on this loan a rate of 1.24% is being charged.
2.6 In 2015/16, the overall debt to be financed is 210.164 million. Of this,

145.836 million will be funded from loans from the Public Works Loans
Board, with the balance being funded through use of the Councils cash
reserves within the General Fund.
2.7 Based on the methodology outlined above, the average interest rate
chargeable to the HRA on actual external debt is estimated to be 6.7%
and on internally funded debt (except that financing the Self
Financing settlement) a rate of 1.9% is currently forecast.
2.8 In 2004/05, Government changes to Capital Financing accounting

included the abolition of the HRAs statutory annual duty to repay 2% of
debt. There are no plans to repay debt over the medium term.
However, this will be reviewed each year as part of HRA business
planning.
Funding the HRA Capital Programme
3.1 As part of Housing subsidy, an allocation to fund capital expenditure on

HRA properties was received each year. This was known as the Major
Repairs Allowance (MRA). Local authorities were allowed to use the level
of MRA as a proxy for depreciation.
3.2 Under Self-Financing, local authorities must determine the annual

funding to be allocated to the capital programme. They also need to
determine the level of depreciation chargeable to the HRA which must
be in accordance with appropriate accounting practices.
3.3 In conjunction with Corporate Finance a depreciation charge of 2.673

million on dwellings and non-dwellings has been calculated. This
provision provides a source of funding to meet capital expenditure
requirements within the HRA stock.
3.4 The 2015/16 budget includes a further contribution towards the HRA
Capital Programme in 2015/16. An overall revenue contribution of
21.334 million has been assumed in the 2015/16 budget, this includes
the depreciation provision set out above. This is a higher contribution
than in recent years, the planned uses of this additional capital budget
are set out in the HRA Business Plan.
16
Summary Position
4.1 The following table summarises the revised budget for the current year
and the proposed budget for 2015/16:
2014/15 2014/15 2015/16

000 000 000
Expenditure 17,201 17,032 16,165
Income -274 -279 -254
Net Council 16,927 16,753 15,911

Managed Budget
Revised Budget 2014/15
5.1 In terms of the current year, the revised budget indicates a decrease of
174,000 which is primarily due to:
Capital Charges a increase of 43,000 in the cost of debt

charges (interest costs on borrowing to fund the outstanding
debt), is due to a increase in the interest rate used to calculate
the debt charges from that used in the original budget.
Audit fees are projected to be 32,000 less than assumed in the

original budget as actual costs have decreased with the removal
of the HRA subsidy audits.
No provision for a Miscellaneous budget has been included in the

revised budget.
An underspend of 100,000 is projected against the Stock

Options/Regeneration budget as expenditure previously assumed
to be funded from this budget is now being charged against
capital schemes.
Budget 2015/16
6.1 The proposed Council managed budgets for 2015/16 indicates a

decrease of 1.016 million. The main factors are:
Capital Charges a decrease of 557,000 in the cost of debt

charges (interest costs on borrowing to fund the outstanding
debt) is due to a decrease in the interest rate used to calculate
the debt charges from that used in the original budget. This
17
reflects the refinancing of capital debt as PWLB loans fall out and
use is made of General Fund cash reserves at a rate of 1.9%.
Depreciation the 273,000 reduction in dwellings depreciation is

mostly due to the reduction of the Councils dwelling stock from
Right to Buys in previous years
Charges made by the Corporate Services business group a

decrease of 12,000. This is mainly due to reductions in the public
liability insurance premium.
Charges made by Housing Services - an increase of 167,000.

This is mainly due to the creation of a new Residents Liaison and
Decanting Officer and also a Housing Regeneration Project
Manager being charged here rather than the Stock
Options/Regeneration budget (see below).
Audit fees projected to be 32,000 less than assumed in the

original budget as actual costs have decreased with the removal
of the HRA subsidy audits.
No provision for a Miscellaneous budget has been included in the

2015/16 budget.
No provision for a Stock Options/Regeneration budget has been

included in the revenue budget as most expenditure previously
assumed to be funded from this budget is being charged against
capital schemes.
Income from interest on balances a decrease of 20,000. This is

mainly due to a decrease in the working balance.
18
APPENDIX 5
HRA WORKING BALANCE AND RESERVES
Working Balance
1.1 As at 1 April 2014, the working balance was 18.942 million. As a
result of the projected net contribution to the working balance of
592,000 (see table in paragraph 2.4), the forecast for the working
balance as at 31 March 2015 is 19.534 million. The proposed budgets
for 2015/16 (see table in paragraph 2.4) would result in a drawdown
from the working balance of 7.272 million resulting in a projected
working balance at the end of 2015/16 of 12.262 million.
1.2 The projected movements in the working balance up to March 2016

can therefore be summarised as follows:
HRA Working Balance

000
Opening balance (1 April 2014) 18,942
add Projected outturn variance 2014/2015 592
equals Projected Working Balance (31 March 19,534
2015)
Less Budgeted drawdown from Working -7,272

Balance 2015/2016
equals Projected Working Balance (31 March 12,262
2016)
1.3 Any proposed uses of the working balance will be considered within the
HRA Business Plan.
19
Reserves
2.1 The draft budgets also incorporate changes in the budgeted level of HRA
reserves during 2015/16. The planned reductions are as follows:
Heading 1 April 31 March 31 March

2014 2015 2016
(Actual) (Forecast) (Forecast)
000 000 000
TMO Managed Reserves
Controlled Repairs/Area 263 263 263
Revenue Works Reserve
Lancaster West 92 0 0
Total 355 263 263
Major Repairs Reserve
2.2 The TMO is currently undertaking the procurement of a framework

agreement which would cover the major works redecoration
programmes for a 4 year period. This process is subject to an
application at the Upper Tribunal and a decision is not anticipated until
July/August 2015. The TMO will not plan to undertake works
rechargeable to lessees until the Tribunal makes its decision. We can
expect to see a significant increase in income from lessees from 2016
onwards.
2.3 A recent court case has also impacted on the timing of invoicing
leaseholders for major works. This in turn has delayed income being
received in 2014/15.
2.4 The following table summarises the projected position on the Major
Repairs Reserve:
Original Revised Estimate

Budget Budget
Major repairs reserves (MRR)
2014-15 2014-15 2015-16
'000 '000 '000

Brought Forward -586 -363 0
HRA Depreciation transfer to MRR -2,946 -2,946 -2,673
HRA transfer to MRR -6,468 -7,945 -18,661
Capital expenditure funded by MRR 10,000 11,254 21,334
Carried Forward 0 0 0
20
APPENDIX 6
HOUSING REVENUE ACCOUNT BUSINESS PLAN - 2014/15 to

2019/20
Financial modelling has been undertaken to estimate the level of surpluses

that might arise on the HRA over the next 5 years. The following table
summarises the results of the modelling exercise:
In Year Cumulative
(Surplus)/Deficit (Surplus)/Deficit
000s 000s 000s
Balance at 1st April 2014 -18,942
Income received in 2014/15 -56,233
Expenditure in 2014/15 55,641
Surplus arising in 2014/15 -592
Balance at 31st March 2015 -19,534
Deficit arising in 2015/16 7,272
Surplus arising in 2016/17 -3,593
21
A number of assumptions have been made within the financial model. The
key assumptions are as follows:
The charge to the HRA where debt is financed internally is in accordance

with the methodology set out in Appendix 4 paragraph 2.4 i.e. the
interest rate is equal to the higher of the PWLB three month variable rate
or the Royal Boroughs average interest rate;
Dwelling rents are set in accordance with the policy set out in section 3
of the covering report, assuming CPI to be 1.2% each year from
2016/17;
Inflation assumptions over the period are as follows: an annual increase

of 2% on the TMO Management Fee from 2016/17 and an annual
increase of 2.3% on other expenditure budgets and
Over the 5 years 2015/16 to 2019/20, revenue contributions of 64

million are assumed to be made to the Main Capital Programme. This can
be broken down over the 5 years as follows (figures rounded to nearest
million):
2015/16 14m
2016/17 14m
2017/18 16m
2018/19 10m *
2019/20 10m *
*The adequacy of this provision will need to be reviewed, taking into

account available resources.
Additional revenue contributions totalling 8 million have been made

towards other schemes within the Capital Programme.
Some sensitivity analysis has been undertaken to estimate the potential

changes if key assumptions were to change. The results of some scenarios
considered are:
A 1% increase in the cost of financing debt internally would reduce the

surplus at the end of the period by 3.051 million to 32.088 million.
A 1% increase in the inflation level assumed each year in the

calculation of dwelling rents would increase the surplus by 4.629
million to 39.768 million.
A 1% increase in the cost of expenditure (excluding debt financing

charges) met by the HRA would reduce the surplus by 1.375 million
to 33.764 million.
The combined effect of the above 3 scenarios would increase the

surplus by 203,000 to 35.342 million.
22
Appendix 7
CHARGES FOR PARKING PERMITS
Charges for Tenants and Leaseholders (TLSC) from 1 April 2015
Facility Current Proposed

Standard Standard
Charge per Charge per
week week
Tenants and Tenants and
Leaseholders Leaseholders
(TLSC) (TLSC) from
1 April 2015
Self-Contained Garage North 12.17 12.74
(excluding Lancaster West)
Self-Contained Garage South 23.92 25.03
Self-Contained Garage - Lancaster 20.76 21.73
West
Self-Contained Garage Norwood 6.38 6.68
Green, Southall
External Hardstand North (inc. 4.86 5.09
Lancaster West)
External Hardstand South 6.26 6.55
Indoor Car Park Bay Elm Park 24.26 25.39
Gardens
Indoor Car Park Bay Walnut Tree 13.07 13.68
House
Indoor Car Park Bay Warwick Road 11.10 11.62
Indoor Car Park Bay Worlds End 15.97 16.71
Indoor Car Park Bay Swinbrook 8.50 8.90
Estate (new charge to be introduced
when bays created)
Charges to tenants and leaseholders Nil Nil
with a disabled persons purple badge
23
Charges for Other Users (OUSC) from 1 April 2015
Facility Current Proposed

Standard Standard
Charge per Charge per
week Other week
Users (OUSC) Other Users
(OUSC)
from 1 April
2015
Self-Contained Garage North 30.43 31.85
(excluding Lancaster West)
Self-Contained Garage South 59.80 62.59
Self-Contained Garage - Lancaster 51.90 54.32
West
Self-Contained Garage Norwood 15.95 16.69
Green, Southall
External Hardstand North (inc. 12.15 12.72
Lancaster West)
External Hardstand South 15.65 16.38
Indoor Car Park Bay Elm Park 60.65 63.48
Gardens
Indoor Car Park Bay Walnut Tree 32.67 34.19
House
Indoor Car Park Bay Warwick Road 27.75 29.04
Indoor Car Park Bay Worlds End 39.92 41.78
Indoor Car Park Bay Swinbrook 21.25 22.24
Estate (new charge to be introduced
when bays created)
Charges to tenants and leaseholders Nil Nil
with a disabled persons purple badge
24
Appendix 8
Tri-Borough Equality Impact Analysis Tool
Conducting an Equality Impact Analysis
An EIA is an improvement process which helps to determine whether our policies, practices, or new proposals will impact
on, or affect different groups or communities. It enables officers to assess whether the impacts are positive, negative or
unlikely to have a significant impact on each of the protected characteristic groups.
The tool has been updated to reflect the new public sector equality duty (PSED). The Duty highlights three areas in which
public bodies must show compliance. It states that a public authority must, in the exercise of its functions, have due regard
to the need to:
1. Eliminate discrimination, harassment, victimisation and any other conduct that is prohibited under this Act;
2. Advance equality of opportunity between persons who share a relevant protected characteristic and
persons who do not share it;
3. Foster good relations between persons who share a relevant protected characteristic and persons who do
not share it.
Whilst working on your Equality Impact Assessment, you must analyse your proposal against the three tenets of the
Equality Duty.
Tri borough EqIA Tool 1
General points
1. In the case of matters such as service closures or reductions, considerable thought will need to be given to any
potential equality impacts. Case law has established that due regard cannot be demonstrated after the decision has
been taken. Your EIA should be considered at the outset and throughout the development of your proposal, it should
demonstrably inform the decision, and be made available when the decision is recommended.
2. Wherever appropriate, the outcome of the EIA should be summarised in the Cabinet/Cabinet Member report and
equalities issues dealt with and cross referenced as appropriate within the report.
3. Equalities duties are fertile ground for litigation and a failure to deal with them properly can result in considerable
delay, expense and reputational damage.
4. Where dealing with obvious equalities issues e.g. changing services to disabled people/children, take care not to lose
sight of other less obvious issues for other protected groups.
5. If you already know that your decision is likely to be of high relevance to equality and/or be of high public interest, you
should contact the Equality Officer for support.
6. Further advice and guidance can be accessed from the separate guidance document (link), as well as from your
service or borough leads:
LBHF RBKC WCC

Opportunities Manager: Corporate Equalities Officer: Senior Policy Officer:
PEIA@lbhf.gov.uk or ext 3430 angela.chaudhry@rbkc.gov.uk doleary@westminster.gov.uk
020 7361 2654 020 7641 8024

Equality Impact Analysis Tool
Overall Information Details of Full Equality Impact Analysis

Financial Year and 2015-2016
Quarter
Name and details of Title of EIA: The Impact of Increasing Dwelling Rents in TMO Managed Properties
policy, strategy, function, Short summary:
project, activity, or
programme The Royal Borough is landlord to 9488 properties, of which approximately 6,900 are socially rented and 2,500 are leasehold,
those remaining fall into either shared ownership or supported housing categories. The housing management responsibility for
this stock has been delegated to the Kensington and Chelsea Tenant Management Organisation who maintain responsibility
for Housing Management and Repairs and Maintenance through the Modular Management Agreement (MMA).
In 2002/2003, the Government introduced its rent restructuring regime where rents are set in line with a national formula
which is used to calculate a target/formula rent for each property. The assumption was that actual rents move to target rent in
equal steps. However, the Government introduced a number of guidelines (known as caps and limits) to protect tenants from
excessive increases in rents. These constraints resulted in many rents in the Royal Borough being set at levels which were
considerably below their target/formula rent. In order to generate additional resources to fund capital expenditure, a revised
rent policy was introduced in April 2014. Under this policy, rents for individual properties will converge with their target/formula
rent over the 5 year period 2014/15 to 2018/19. To protect households from high rent increases, the maximum increase for any
individual property will be limited to 10% in each of the 5 years.
The rents for 2015/16 have been set in accordance with this revised policy. This means that by 2018/19, 97% of households
will have reached their target rent. For 2015/16 the average increase will be 4.66% meaning the average rent across all
properties will be 123.81, up from the average of 118.29 in 2014/15
It is important that measures are implemented to minimise and mitigate the financial hardship that tenants will face as a result
of these increases, along with other welfare reform related changes. For example, in addition to the forthcoming rent increases,
the bedroom penalty was introduced from April 2013 and from July 2013 the benefit cap was introduced across Kensington and
Chelsea, meaning that some recipients of welfare payments were restricted across a range of benefits to 500 per week for
families and 350 per week for single people. Information provided by the Housing Benefit Department confirms that of the
6,900 TMO properties that are socially rented, 4,822 of these receive housing benefit. Should these households not be subject
to the overall benefit cap, then the increase in rents is unlikely to have any effect. The bedroom penalty on the other hand,
reduces the amount of housing benefit that people receive if they are considered to have an unoccupied bedroom. The rate of
housing benefit reduced is 14% for one spare bedroom and 25% for two or more spare bedrooms. Information provided by the
TMO indicates that 325 households have been subject to the bedroom penalty.
This Equality Impact Assessment seeks to identify those groups noted in the protected characteristics (section 2) that may be
affected positively or negatively by the introduction of increasing rents, and (sections 6 & 7) sets out measures to mitigate the
impact on those groups. The impact assessment also serves to assist the Council in ensuring it meets its equality duty, that is,

to prevent discrimination and ensure equality for its residents. When making a decision in relation to any of its functions such
as increases in rent levels, due regard must be had to the general equality duty imposed by the Equalities Act 2010. The public
sector equality duty consists of a general equality duty which is set out in section 149 of the Equality Act 2010 and there are
specific duties which are imposed by secondary legislation. This duty came into force in April 2011. The duty covers the
following eight protected characteristics: age, disability, gender reassignment, pregnancy and maternity, race, religion or belief,
marriage or civil partnership, sex and sexual orientation.
As noted, the proposed average rent increase for 2015/2016 will be 4.66% with average rents equalling 123.81 per week, no
rent will exceed a 10% increase across any of the 5 years during which the rent model is implemented. The increase applies to
all properties, regardless of the age of the occupant.
Note: If your proposed strategy will require you to assess impact on staff, please consult your HR Relationship Manager
Lead Officers RBKC
Name: Celia Caliskan
Position: General Needs Housing Commissioning Manager
Email: Celia.Caliskan@rbkc.gov.uk
Telephone No: 0207 361 2238
Lead Borough RBKC Specific
Date of completion of final 5 December 2014

Full EIA
Section 02 Scoping of Full EIA

Plan for completion Timing: November 2014
Resources: Previous EIA Assessments and TMO Resident Survey Data.
Analyse the impact of the Analyse the impact of the policy on the protected characteristics (including where people / groups may appear in more than
policy, strategy, function, one protected characteristic). You should use this to determine whether the policy will have a positive, neutral or negative
project, activity, or impact on equality, giving due regard to relevance and proportionality.
programme
Impact:
Protected Borough Analysis Positive,
characteristic Negative,
Neutral
Age The introduction of rents across TMO stock will apply to all residents, regardless of the Negative
residents age. However, other specific welfare reform measures may have an impact
as a result of the age of the tenant, these are as follows.

Social Sector Size Criteria Under Occupation Penalty
As of the end of November 2014 there were 325 households subject to the social sector
size criteria (otherwise known as the under occupation penalty). This welfare reform is
only applied to working age households. We do not hold information on households who
are under occupying but not claiming Housing Benefit.
Benefit Cap
As of the end of November there were 14 households where the benefit cap was being
applied. This welfare reform is only applied to working age households.
Disability Negative
There are 584 known disabled residents within the TMO stock. Disabled adults are
twice as likely to be living in low-income households as non-disabled adults.
Additionally, disabled people are more likely to not be working, and where they are
working, are more likely to be earning less1. It is evident therefore the increase in rents
is likely to specifically impact this protected characteristic.
Gender Resident survey information does not capture specific information as to whether any Neutral
reassignment TMO residents have undergone gender reassignment but the TMO are not aware of
any residents who have undergone gender reassignment; however, it is not anticipated
that the increase of rents across TMO housing stock will adversely impact individuals
who may have undergone gender reassignment.
Marriage and It is not anticipated that the increase of rents across TMO housing stock will adversely Neutral
Civil affect individuals if they are married or in civil partnerships, more so than non-married
Partnership residents or those not in civil partnerships.
Pregnancy and It is not envisaged that those residents who happen to be pregnant or on maternity Neutral
maternity leave will be adversely affected by the rent increases as a result of their pregnancy or
maternity.
1
Laxton and Parckar for Leonard Cheshire Disability Fuel Poverty and Disability January 2009
The TMOs resident data shows 48.08% of tenants are from black, Asian or minority Negative
ethnic groups2, with a further 27.09% unknown. A report by the Department for Work
Race and Pensions3 also tells us that working-age adults living in households headed by
someone from an ethnic minority were more likely to live in low-income households.
This was particularly the case for households headed by someone of Pakistani or
Bangladeshi ethnic origin.
Religion/belief It is not anticipated that the increase of rents across TMO housing stock will adversely Neutral
(including non- affect individuals as a result of any specific religion or belief that they may have.
belief)
Sex It is not anticipated that the increase of rents across TMO housing stock, or the Neutral
bedroom tax will adversely affect individuals based on their sex. Male and Female
residents will be equally affected, of which 58.40% are female and 41.60% male, but for
the purposes of this characteristic we dont have evidence that the impact on women
will be greater because of their gender; therefore the overall impact is neutral, as theres
no different mitigation needed for women or men.
Sexual It is not anticipated that the increase of rents across TMO housing stock will adversely Neutral
Orientation affect individuals based on their sexual orientation.
Human Rights or Childrens Rights

If your decision has the potential to affect Human Rights or Childrens Rights, please contact your Borough Lead for advice.
Forthcoming TMO rent increases are not expected to affect Human Rights or Childrens Rights.
Section 03 Analysis of relevant data

Examples of data can range from census data to customer satisfaction surveys. Data should involve specialist data and
information and where possible, be disaggregated by different equality strands.
Documents and data RBKC: In addition to the data sources identified in Section 2, recent research obtained in connection with this equalities impact
reviewed assessment shows that
2
This is all known ethnicities that are not White British.
3
Department of Work and Pensions: Households Below Average Income An analysis of the income distribution 1994/95 2010/11 June 2012 (United Kingdom)
New research Not applicable.
Section 04 Consultation
Complete this section if you have decided to supplement existing data by carrying out additional consultation.
Consultation in each There is a standardised consultation process used for the HRA budget and associated rent increase:
borough
5 January 2015: TMO Board meeting the report will be presented by the Councils Housing Finance Manager to
answer questions,
6 January 2015: Tenants Consultative Committee this is the main agenda item and comments and questions are
welcomed.
7 January 2015: Councils Housing and Property Scrutiny Committee Meeting
The Tenants Consultative Committee will be used as a forum to consult with residents and representatives from individual
resident associations. Following the Housing and Property Scrutiny Committee on 7 January the Cabinet Member for Housing
and Property will be asked to take a key decision for the 2015-2016 rent increase. Once the key decision has been agreed the
TMO will distribute rent increase letters to all Council Tenants notifying them of the increase. Information outlined within the
letters will clearly state that tenants should seek advice from their Rental Income Officer, Welfare Officer or Neighbourhood
Officer if they have any concerns in managing the increase. In addition, it is proposed that the TMO will publicise the increase
on the TMO website and in Tenant Link Magazine, at resident association meetings and other resident consultation groups.
Analysis of consultation
outcomes for each
borough
Section 05 Analysis of impact and outcomes

Analysis It is inevitable that all council tenants will be affected by these proposed rent increases and a small percentage will be impacted
by the under occupation penalty and/or benefit cap, however, it is likely that some groups will be affected to a greater extent
because of their lower income. It is essential that those tenants who have been identified as likely to suffer from financial
hardship as a result of the rent increases, the under occupation penalty or the benefit cap are provided with as much advice as
is possible to minimise the impact. To this end, the TMO has two Welfare Officers whose remit is to provide tailored advice and
assistance to those affected, such that they are aware and have access to all available forms of benefit. This includes the
option of applying for Discretionary Housing Benefit Payments (DHP) to cover shortfalls temporarily.
Section 06 Reducing any adverse impacts and recommendations
Outcome of Analysis As explained in Section 4, the TMO will be required to communicate with all residents in writing, outlining the proposed
increases for 2015/16. The TMO will also provide detailed information to residents on where and when they can seek further
advice and guidance on income maximisation and how to reduce the impact of rent increases as well as the alternative housing
options for those who will be affected by under occupation.
As outlined in Section 2 there will be residents from certain protected characteristics who may be more likely to experience
difficulties paying the increased charges, and who will be affected by the bedroom penalty and benefit cap. This primarily
relates to households of a working age as those above the working age are excluded. The TMO will therefore need to ensure
that those tenants who will be affected are given appropriate advice and support to help them avoid rent arrears and financial
hardship. Informing tenants well in advance of the rent increase and of the impact a reduction in housing benefit will cause for
under-occupiers, will help residents to budget effectively and make informed and independent choices.
In order to support welfare changes generally, two welfare reform officers were created for a two year period. It is planned to
extend this period for a further year to March 2016. These officers are providing support and advice mainly for tenants affected
by the under occupation penalty and benefit cap. This includes assistance to claim for DHP which mitigate the risk of income
loss to the Council. At present, 98 households are in receipt of DHP to supplement their rent.
Whilst neither the Royal Borough as landlord or the TMO as managing agent are able to directly offer permanent financial
support to residents affected by these increases, both organisations are in a position to assist tenants with identifying additional
income sources to help mitigate this impact. This could be in the form of a referral to the DWP for an income maximisation
consultation, an application to RBKC Housing Benefit for discretionary housing benefit and or an application to the RBKC social
fund for local support payments. Tenants should also be made aware that they can have access to independent financial and
housing advice. As noted, the Royal Borough will also have funds available from a discretionary housing benefit fund that will
aim to support vulnerable residents in exceptional circumstances; clear guidance on how to apply and who might be eligible for
this will need to be disseminated amongst council tenants. Further, the Councils Housing Options and Allocations Team
operates an Under Occupation Scheme through which social housing tenants with spare bedrooms are awarded a high priority
for re-housing on the housing register, and may receive financial incentives and other assistance when downsizing to a suitably
sized property. The incentives and assistance have been extended to under occupiers who downsize with overcrowded RBKC
residents, where best fit of the properties in question results. Council tenants subject to the under occupation penalty may take
advantage of these forms of assistance. Alternatively, they can seek alternative forms of advice and assistance either from the
Council or the TMO either to downsize or to remain in their current property while affording the rent.
Section 07 Action Plan

Action Plan Note: You will only need to use this section if you have identified actions as a result of your analysis

Issue identified: Action (s) to be When Lead officer and Expected outcome Date added to
taken borough business/service
plan
Ensure all Provide written Prior to Sacha Jevans Affected residents
residents are notification and introduction of Executive Director to be clear on rent
aware of use forums noted Rent Increase in of Operations. increases and
forthcoming rent in Section 4 as April 2015. options for
increases. opportunities to additional income
make residents and advice.
aware.
Ensure all Provide detail Prior to Sacha Jevans To ensure that

residents are able information and introduction of Executive Director residents affected
to make best use advice to affected Rent Increase in of Operations. by rent increases
of advice and residents. April 2015. and or welfare
assistance, and reform measures
where entitled, are currently
receive maximum receiving all
benefits and or available benefits.
grants.
Ensure residents To ensure Ongoing since the Rob Shaw To ensure

affected by the residents under implementation of RBKC Head of residents are kept
under occupation occupying the spare room Housing Needs informed of their
penalty are offered accommodation penalty. options.
advice on their re- are given re-
housing options. housing advice.
Section 08 Agreement, publication and monitoring

Chief Officers sign-off Laura Johnson Director of Housing
Key Decision Report Cllr Rock Fielding Mellen RBKC Lead Member for Housing & Property
(if relevant)
Lead Equality Manager Angela Chaudhry Corporate Equalities Officer
(where involved)

Open
For Decision
Board Report
5th January 2015
Report title: Budgets 2015-16
Authority for decision: The Board has the responsibility of approving the annual
budgets for the Company
Recommendations: It is recommended that the Board pass a resolution in the

following form:
The Board RESOLVED TO approve the budget as

presented for the 2015-16 financial year.
Regulatory/legal The Board have legal responsibility of ensuring the

requirements: organisations resources are used in accordance with the
budget and business plan.
Business Plan link: Delivering value for money and achieving business growth.
Equality Impact None required

Assessment/comment:
Resident consultation: None required.
Resource This is the subject of the report.

implications/VFM
statement:
Risk: Not operating in accordance with the agreed budget and

business could put the Company at the risk of not being
competitive and not achieving the budgeted surplus.
Appendices: 1
Total number of pages 16

including appendices:
Name, position and Rupa Bhola

contact details of Assistant Director of Finance
author:
REPORT BY THE ASSISTANT DIRECTOR OF FINANCIAL SERVICES
BUDGETS 2015/16
1. Purpose of the Report
1.1 The purpose of this report is to present The Board the TMO Company Budgets
and the HRA Managed Budgets for 2015/16.
FOR DECISION
2. TMO Company Budgets - Introduction

The overall position for the TMO Company in 2015-16 is a surplus budget of
36k. This is a 1k or 3% positive variance in budgeted surplus from 2014-
15.
2.1. Assumptions
The budgets are prepared on the following assumptions:
1.2% inflation increase on salaries 2015-16 including performance related pay

(2014-15: 1% increases). This is in line with RBKC guidelines and is reflected
by increases across all Payroll costs budgets.
Salaries have been increased to reflect the spinal point as per the
employment contracts.
Vacant positions are budgeted at mid-point in pay scales with pension
contributions.
Inflation on management fee has been taken at 1.2% in line with RBKC
guidelines where applicable.
All utility and other costs have been budgeted at contracted or forecasted
amounts.
2.2. TMO Summary There overall position for the TMO Company (including
Lancaster West) in 2015-16 is a surplus budget of 36k. This is a 1k or 3%
increase in budgeted surplus from 2014-15.
In 2015-16 we have budgeted for eight additional posts. The costs of these
additional post as reflected by the table below is (574k). Six of these
additional posts will cost 340k which are funded by additional income from
RBKC to offset the cost. The remaining two posts are in the customer contact
centre and have been identified as a need to reduce call waiting times for
customers.
2.3.
Budget Budget Variance Variance
(Cost)/Income
2014-15 2015-16 Amount Percentage
000s
Management Fee 10,577 10,703 126 1%
Legal Cost Recovery 255 210 (45) 18%

Other Income 2,072 2,518 446 22%
Legal Costs (640) (625) 15 2%

Consultants Costs (250) (145) 105 42%
Other Non-Employee
(3,029) (3,101) (72) 2%
Costs
Payroll Costs (8,950) (9,524) (574) 6%
Surplus 35 36 1 3%
2.4. Chief Executive Directorate Net 1% increase in income.
The Management fee for 2015-16 has been increased by 126k, being
inflation of 1.2% and the recharge income from Repairs Direct is 41k.
The 3% increase in Payroll costs represents the inflationary increase and the
additional post agreed within the current financial year to improve the TMOs
membership.
Other costs within the division remain largely in line with the previous year.
2.5. Operations Directorate There is an overall reduction in expenditure of 1%

or 55k.
Asset & Regeneration (Including Partnering) There is a 16% decrease in

costs overall in the 2015-16 budgets. This equates to an decrease of 196k.
This is made up of 64% or 397k increase in income. This is largely based on

the income expected from surveys for leasehold alterations and larger capital
programme team to deliver a larger programme from 2015-16.
The extra income is partly offset by a 18% or (275k) increase in payroll costs
to provide for the additional six posts in the department.
Other costs are lower by 74k to reflect the reduction in the use of consultants
for procurement and the depreciation charge for keystone.
Customer Contact and Access An overall upward change in the budget of

22% or (139k) due to the two additional posts agreed within 2014-15 and
another two posts from 2015-16. This increase in staffing is to enhance the
customer experience and reduce call waiting times.
Neighbourhood Housing An overall decrease in costs of 12k in the 2015-

16 budget.
Budgeted income has increased by 32k or 14%. This is as a result of

increased legal costs recovery that has been achieved for the past two years
consecutively. This has now been built into the budget for 2015-16.
Supported Housing & Community Alarm Service (CAS) A (14k) or 13%

decrease in overall budgeted surplus.
This decrease is the impact of pay rise for staff has been included in the
budgets, however the contract prices are not increasing in line with inflation in
2015-16.
2.6. People and Performance Directorate Net 5% or (79k) increase in

expenditure.
Human Resources There is a 2% or 9k reduction in costs in the overall

budget for 2015-16.
A saving in Other Costs of 23k as a result of the payroll software being fully
depreciated in 2014-15 and thus no further costs from 2015-16.
Planning and Performance There is an overall 1% 10k decrease in costs

budgeted for 2015-16.
Resident Engagement An overall 36% or (98k) increase in costs.
Payroll costs have increased by (83k) or 34% reflecting both the

assumptions above and the inclusion of a two new Resident Engagement
Officers to extend the services delivered by the team.
2.7. Financial Services Directorate Net 4% or (106k) increase in expenditure
Finance There is an overall increase in costs of 1k.
Home Ownership Department There is an overall increase 5% or (20k) in

costs for the 2015-16 budgets.
The recovery of legal costs has been reduced by (44k) impacting the overall
budgeted income for the department. The reduction reflects the legal cost
recovery being made and the reduction in debt remaining to be collected.
This is further reflected by the 30% (55k), reduction in budgeted legal costs.
The Payroll costs have increased by 8% or (31k) which reflects the
assumptions of inflation mentioned, and the inclusion of a revised structure in
the department.
ICT There is an overall increase in expenditure of 6% for the 2015-16

budget which amounts to (62k).
Payroll costs are forecast to decrease 3% or 14k reflecting the assumptions

above and the current salary levels.
A (78k) or 11% increase in other costs reflects the budgeted increase for
depreciation and the actual cost of our various contracts such as Telecoms
service and software support.
Office Accommodation (KHS, HUB, Blantyre) There is small overall

increase of (22k) reflecting the increase to the budget for utility costs.
3. HRA Managed Revised Budgets 2014-15 (Revenue) Summary
3.1. The HRA Managed Revised Budget for 2014-15 is an overall income on
35.795m. This is a decrease of approximately 2% of (805k). The Original
Budget for 2014-15 is a net income of 36.600m.
3.2 HRA Managed Revised Budgets 2014-15 Income.
3.2.1 Dwelling Rents income is projected to (299k) less than assumed when
the budget was set. This income loss is mainly due to the number of
properties being sold under the Right to Buy legislation (185k) and a higher
level of voids than had been assumed. The void level as at September 2014
was 1.175% (Budgeted at 0.75% in September 2013) which is still below the
2% level assumed by the Government in the Self Financing determination.
3.2.2 Tenant Service Charges a decrease of (176k) reflects the actual costs of
services provided to tenants. A small proportion of this is attributable to the
right to buys that have taken place since the last quarter of 2013-14 financial
year. The balance reflects lower levels of expenditure on services chargeable
to tenants than were assumed when budgets were set.
3.2.4 Leasehold Service Charges forecast income is 171k more than assumed
when budgets were set. This reflects the final accounts for leaseholders
service charges and is mainly due to the cost of maintenance works
rechargeable to leaseholders being more than was assumed when the
charges for 2013-14 were set.
3.2.5 Major Works Income (Leaseholders) a decrease in budgeted income of

(843k)recent court case has impacted on the timing of invoicing leaseholders
for major works. This in turn has delayed income being received in 2014-15
3.2.6 Heating and Hot Water Charges income is forecast to be (236k) lower
than assumed when the budget was set. This is partly due to lower gas prices
being achieved but also reflects variations in consumption levels. There will
always be a variation between costs and income as expenditure relates to the
costs of procuring energy in year whilst charges to tenants and leaseholders
are based on consumption levels averaged over the previous 3 years.
3.3. HRA Managed Revised Budgets 2014-15 Expenditure
3.3.1 Planned Maintenance Planned Maintenance This is forecast to be under

spent by 388,000. This comprises:
Individual Heating Works expenditure is expected to be 150k less than the

budget as the planned domestic boiler renewals are of a capital nature and
will therefore form part of the main capital programme.
External Decorations expenditure is forecast to be 140k less than the

original allocation. The progress on the external decorations has been good
however the cost of the works expected to be completed by the end of 2014-
15 is lower than originally budgeted.
Estate Lighting forecast expenditure is 50k below the original budget. This
reflects savings arising from the re-procurement of the contract.
Individual Heating forecast expenditure has reduced by 40k. This reflects

the revised planned maintenance contract and some portion of the work
falling into the capital programme.
3.3.2 Responsive Maintenance This is forecast to be (440k) above budget.

This is as a result of budget virements during the year. As the Lancaster West
EMB has disbanded the expenditure budgets have been merged with the
borough wide budget lines.
3.3.3 Lancaster West EMB Expenditure The forecast underspend of 522k

arises from the virements needed to merge the Lancaster West expenditure
budgets with borough wide budgets. These virements relate to Responsive
Maintenance (mentioned above), Contract Cleaning, Pest Control, Special
Services and Security Costs. The budgets have been pro-rated for 2014-15
as the EMB disbanded at the end of May 2014.
3.3.4 Provision for Bad Debts the 2014-15 budget included an additional
provision to reflect the potential implications of the welfare reform changes.
The welfare reform officers have successfully engaged with most of the
households affected by the changes and have, where appropriate,
encouraged households to claim a Discretionary Housing Payment. However,
whilst it is unlikely this provision will be fully used in year, predicting the
outturn position is difficult, given, the need for tenants to continue to engage in
the process. The in year provision has been reduced by 250k and the budget
will continue to be closely monitored and amended if necessary.
3.3.5 Other Expenditure Special Services The main reason for the overspend
of 59k is the increase in resources to support the creation of a Traffic
Management Order which can be funded from a virement from Council
Managed budgets.
4. HRA Managed Budgets 2015-16 (Revenue) Summary
The HRA Managed Budget shows an overall Budgeted Net Income of

37.932m. This is an increase of 4% in 2015-16 over the budgeted surplus of
36.600m in 2014-15. Expenditure has increased either in line with inflation or
based on specific provisions as per service contracts.
4.1. Assumptions
The assumptions made in arriving at this budgeted position are as follows:
An estimated 1.2% inflationary increase in gas and electricity prices for 2015-
16.
A 4.66% increase in Dwelling Rents has been projected in accordance with
the current rent setting policy.
Responsive building repairs have been applied an inflationary increase of 3%.
All other expenditure has a zero inflation rate or an increase as per the
service contracts.
These inflationary increases are in line with those proposed by RBKC and
contract variations.
4.2 HRA Managed Budgets 2015-16 Income.
4.2.1 Dwelling Rents the estimated income from rents in 2015-16 is 1.592
million more than was assumed in the 2014-15 original budget.
4.2.2 Commercial Properties following project to identify alternate uses for

derelict estate car parks, in 2013-14 and 2014-15, Cabinet approved
proposals to commercially lease basement areas at Acklam Road for
conversion into an office workspace and at Walnut Tree House and
Holmefield House for conversion into self-storage businesses. These long-
term leases are structured to allow the lessees to recoup their initial capital
investment, via initial rent-free periods or stepped rent increases in the first
three years. As such, they will generate an estimate of 187k of new income
in 2015-16 (exact sum dependent on the legal completion dates) but this will
increase over the following year, to 462k pa from 2017-18 onwards.
4.2.3 Tenant Service Charges a decrease of (88k) reflects the actual costs of
services chargeable to tenants.
4.2.4 Leasehold Service Charges an increase of 230k reflecting the cost of
works rechargeable to leaseholders. Part of this increase relates to inflation
payable to contractors and part of this is due to an increase on the estimates
for maintenance charges.
4.2.5 Major Works Income (Leaseholders) The TMO is currently undertaking

the procurement of a framework agreement which would cover the major
works redecoration programmes for a 4 year period. This process is subject to
an application at the Upper Tribunal and a decision is not anticipated until
July/August 2015. We can expect to see a significant increase in income from
lessees from 2016 onwards.
4.2.6 Heating and Hot Water Charges income is forecast to be (133k) lower
than was assumed when the budget was set for 2014-15. This is partly due to
lower gas prices being achieved but also variations in consumption levels.
There will always be a variation between costs and income as expenditure
relates to the cost of procuring energy in year whist charges to tenants and
leaseholders are based on consumption levels averaged over the previous 3
years.
4.3 HRA Managed Budgets 2015-16 Expenditure
4.3.1 Planned Maintenance Planned Maintenance an overall budget decrease

of 817k. The main reason for this is the provision for the External
Decorations Programme is being set at 2 million whereas the budget for
2014-15 (2.6 million) included an extra provision of 600k which had been
carried forward from the previous year.
Other savings within Planned Maintenance include a reduction of 150k in

individual programmed heating works due to a larger scale programme being
planned as part of the 2015-16 capital programme and savings of 50k on
estate lighting arising from the re-procurement of the contract.
4.3.2 Responsive Maintenance an overall budget increase of (713k) of which

506k is due to budget virements needed to merge the Lancaster West
budgets with borough wide budgets. The remainder of the increase is due to
an inflation provision for responsive repairs and voids.
4.3.3 Lancaster West EMB Expenditure a reduction of 627k reflecting the

disbandment of the EMB with budgets being merged with borough wide
budgets.
4.3.4 Electricity, Heating & Hot Water a budget increase of (53k). This budget
provision is based on current consumption levels and assumes current rates
continue. TMO procures energy costs through the Office of Government and
Commerce Buying Solutions. The large volumes purchased for communal
heating systems enable the TMO to access energy at discounted rates
through use of the market, resulting in rates being significantly lower than
could be achieved by domestic users with their own individual heating
systems. No inflationary increase has been assumed in this budget.
3.3.6 Cleaning Contract a (75k) increase relating to the inflation on the

contract.
4.3.6 Provision for Bad Debt an overall provision of 500k has been set for
2015-16 which is 223k less than was assumed in the 2014-15 budget. The
two Welfare Reform Officers will continue to provide support and advice to
households impacted by the welfare reform changes, thereby helping to
contain the level of bad debts arising in these cases.
4.3.7 Security Costs a budget increase of (59k) reflecting the virement from the
Lancaster West budget.
5. Conclusion
5.1 The TMO Finance, Audit & Risk Committee is asked to note the contents of
the above report and make recommendations to the Board for approval.
Rupa Bhola
Assistant Director of Financial Services
TENANT MANAGEMENT ORGANISATION DIVISIONAL REPORTING
TMO BUDGETS 2015-16
TMO SUMMARY
%
Sub Division Budget 2014-15 Budget 2015-16 Change
INCOME OTHER (13,413,946) (13,971,240)
Income Other Total (13,413,946) (13,971,240) 4%
PAYROLL COSTS 8,949,996 9,524,032
Payroll Costs Total 8,949,996 9,524,032 6%
OTHER COSTS 4,428,950 4,411,208
Other Costs Total 4,428,950 4,411,208 0%
(35,000) (36,000) 3%
Values
%
Directorate Sub Division Budget 2014-15 Budget 2015-16 Change
CEO INCOME OTHER (10,541,676) (10,672,779)
PAYROLL COSTS 840,647 865,716
OTHER COSTS 282,500 257,200
CEO Total (9,418,529) (9,549,863) 1%
Operations INCOME OTHER (1,632,466) (2,064,257)
PAYROLL COSTS 5,280,461 5,708,056
OTHER COSTS 1,239,120 1,188,570
Operations Total 4,887,115 4,832,369 1%
People & Performance INCOME OTHER (103,869) (120,846)
PAYROLL COSTS 1,305,395 1,402,258
OTHER COSTS 412,110 411,450
People & Performance Total 1,613,636 1,692,862 5%
Financial Services INCOME OTHER (1,135,935) (1,113,358)
PAYROLL COSTS 1,523,493 1,548,002
OTHER COSTS 2,495,220 2,553,988
Financial Services Total 2,882,778 2,988,632 4%
Grand Total (35,000) (36,000) 3%
TMO BUDGETS 2015-16
CEO Division
Values
%
Directorate Sub Division Description Budget 2014-15 Budget 2015-16 Change
CEO INCOME OTHER CHIEF EXEC - MANAGEMENT FEE (10,505,273) (10,505,272)
CHIEF EXEC - MFEE INCREASE (126,063)
CHIEF EXEC - RECHARGE INCOME (36,403) (41,443)
INCOME OTHER Total (10,541,676) (10,672,779) 1%
PAYROLL COSTS CEO - MATERNITY PAY 15,000 10,000
CHIEF EXEC - BONUS 65,172 67,638
CHIEF EXEC - EMPLOYERS NI 69,035 63,681
CHIEF EXEC - EMPLOYERS PENSION 131,500 127,700
CHIEF EXEC - MONTHLY SALARY ALLOWANCE 35,689 35,731
CHIEF EXEC - PENSION POT 5,000 5,000
CHIEF EXEC - STAFF SALARY 519,252 555,965
PAYROLL COSTS Total 840,647 865,716 3%
OTHER COSTS CHIEF EXEC - BOARD MEMBER ALLOWANCES 12,500 13,200
CHIEF EXEC - BOARD TRAINING 16,000 16,000
CHIEF EXEC - TMO - ELECTIONS 13,000 13,000
CHIEF EXEC - AGM COSTS 17,000 17,000
CHIEF EXEC - BOARD EXPENSES 3,000 3,000
CHIEF EXEC - CONFERENCE & AWAY DAY 15,000 25,000
CHIEF EXEC - CONSULTANTS 140,000 100,000
CHIEF EXEC - GENERAL HOSPITALITY 2,000 6,000
CHIEF EXEC - INSURANCE 45,000 50,000
CHIEF EXEC - LEGAL EXPENSES 15,000 10,000
CHIEF EXEC - MISC EXPENSES 500 500
CHIEF EXEC - TRAVEL & SUBS 3,500 3,500
OTHER COSTS Total 282,500 257,200 9%
CEO Total (9,418,529) (9,549,863) 1%
Grand Total (9,418,529) (9,549,863) 1%
TMO BUDGETS 2015-16
Operations Division
Directorate Operations
Values
Department Name Sub Division Description Budget 2014-15 Budget 2015-16 % Change
Assets & Regeneration INCOME OTHER TS - AM&I - AIDS AND ADAPTATIONS INCOME (27,500) (27,500)
TS - AM&I - LEASEHOLD ALTERATION INCOME (10,962) (83,000)
TS - AM&I (RECH) - EXPENSES RECHARGED (525,000) (841,000)
TS - REPAIRS - RECHARGE INCOME (51,599) (60,192)
INCOME OTHER Total (615,061) (1,011,692) 64%
PAYROLL COSTS TS - AM&I - BONUS 41,107 49,321
TS - AM&I - EMPLOYERS NI 109,560 98,991
TS - AM&I - EMPLOYERS PENSION 222,000 200,300
TS - AM&I - MONTHLY ALLOWANCE 21,390 17,820
TS - AM&I - SALARIES 1,093,381 1,395,624
PAYROLL COSTS Total 1,487,438 1,762,055 18%
OTHER COSTS TS - AM&I - CONSULTANTS 100,000 35,000
TS - AM&I - DEPN ON KEYSTONE 9,250 0
TS - AM&I - ENERGY SOFTWARE SUBSCRIPTIONS 2,000 2,000
TS - AM&I - VALUERS COSTS 180,000 180,000
TS - AM&I (RECH) - COSTS TRANSFERRED IN 70,000 70,000
TS - REPAIRS - TRAVEL & SUBS 750 750
Assets & Regeneration Total 1,234,377 1,038,113 16%
Customer Contact and Access PAYROLL COSTS TS - CSC - BONUS 20,450 22,749
TS - CSC - EMPLOYERS NI 41,519 40,177
TS - CSC - EMPLOYERS PENSION 65,300 81,800
TS - CSC - MONTHLY SALARY ALLOWANCE 10,312 9,320
TS - CSC - OVERTIME 900 1,100
TS - CSC - SALARIES 408,992 531,606
OTHER COSTS CSC - POSTAGE & COURIERS 30,000 30,000
TS - CSC - OUT OF HOURS SERVICE 45,000 45,000
Customer Contact and Access Total 622,472 761,752 22%
Neighbourhood Housing INCOME OTHER HM - HOSTELS - LAUNDRY TOKENS (400) (400)
HM - HOSTELS - SALARIES CONTRIBUTION (11,165) (11,165)
HM - INC MGT - DMH Legal costs Recovered (30,000) (30,000)
HM - INC MGT - RECHARGED INCOME LEGAL COSTS (90,000) (90,000)
HM - NORTH - MISCELLANEOUS INCOME (1,000) (3,000)
HM - SWAY - MANAGEMENT FEE (Stable Way) (72,000) (72,000)
HM - RECHARGE INCOME - Legal costs (30,000) (60,000)
INCOME OTHER Total (234,565) (266,565) 14%
PAYROLL COSTS HM - STAFF SALARIES 1,726,950 1,740,414
HM - OVERTIME 26,000 25,800
HM - BONUS 51,119 72,258
HM - MONTHLY SALARY ALLOWANCE 39,530 36,353
HM - EMPLOYERS NI 203,331 181,954
HM - EMPLOYERS PENSION 379,500 362,500
HM - AGENCY STAFF 1,572 0
HM - SALARIES 242,737 250,416
PAYROLL COSTS Total 2,670,739 2,669,694 0%
OTHER COSTS HM - INC MGT - FTA COSTS 2,000 2,000
HM - INC MGT - LEGAL COSTS (SLA) 60,000 40,000
HM - INC MGT - LEGAL COSTS DMH 85,000 120,000
HM - INC MGT - PUBLICATIONS 120 120
HM - LS&ENV - GARDEN COMP 1,000 0
LANC WEST - ARB EXPENSES 1,000 0
LANC WEST - AUDIT FEES 1,000 0
LANC WEST - CLOTHING & UNIFORM 1,400 150
LANC WEST - COMPUTER SUPPLIES 1,000 0
LANC WEST - CONSULTANTS COSTS 1,000 0
LANC WEST - DRINKING WATER 1,500 500
LANC WEST - EQUIPMENT MAINTENANCE 1,500 1,500
LANC WEST - FURNITURE 500 0
LANC WEST - GENERAL HOSPITALITY 1,000 0
LANC WEST - LEASEHOLDER SERVICES CHARGES 13,000 13,000
LANC WEST - LEGAL EXPENSES 1,000 0
LANC WEST - NNDR 23,000 19,000
LANC WEST - OFFICE CLEANING 7,500 7,000
LANC WEST - POSTAGE & FRANKING 1,500 1,500
LANC WEST - PUBLICITY 1,000 0
LANC WEST - STATIONERY 3,000 1,000
LANC WEST - SUBSCRIPTIONS 500 0
LANC WEST - TELEPHONE 10,000 6,000
LANC WEST - TENANT TRAINING 1,000 0
LANC WEST - TRAINING 500 0
Values
LANC WEST - VEHICLE RUNNING COSTS 3,500 1,500
LANC WEST - WATER RATES 1,400 0
HM - TOOLS FOR HANDYMAN 500 500
HM - SERVICE TENANCIES 76,500 70,500
HM - CLEANING & DOMESTIC SUP 5,100 5,100
HM - TRAVEL & SUBS 3,600 600
HM - UNIFORM 4,000 3,500
HM - MISC EXPENSES 3,500 3,250
HM - MISC EXPENDITURE 1,000 600
HM - TENANT RENT PRINTING 30,000 40,000
HM - CONSULTANTS COSTS MEDIATION 10,000 10,000
HM - LEGAL COSTS 60,000 160,000
HM - TRUSTEE/PROBATE 300 300
HM - SLA LEGAL COSTS 240,000 170,000
HM - INTERNAL AUDIT 20,000 23,000
HM - FRAUD INVESTIGATOR 23,000 23,000
Neighbourhood Housing Total 3,138,593 3,126,749 0%
CAS & SHELTERED INCOME OTHER HM - CAS - CAS INCOME(CORPORATE CLIENT) (25,000) (25,000)
HM - CAS - CAS INCOME(PRIVATE CLIENT) (155,000) (155,000)
HM - CAS - RECOVERY OF EQUIPMENT&LABOUR COSTS (5,000) (5,000)
HM - CAS - SUPPORTING PEOPLE (524,840) (527,000)
HM - CAS - TELECARE MAINTENANCE INCOME (1,000) (1,000)
HM - CAS - TELECARE RECHARGED (71,000) (71,000)
HM - SHELTERED - MISCELLANEOUS INCOME (1,000) (2,000)
PAYROLL COSTS HM - CAS - BONUS 2,378 9,899
HM - CAS - EMPLOYERS NI 44,426 40,303
HM - CAS - EMPLOYERS PENSION 71,200 73,500
HM - CAS - MONTHLY SALARY ALLOWANCE 6,595 6,807
HM - CAS - OVERTIME 30,000 30,000
HM - CAS - STAFF SALARIES 420,214 429,046
OTHER COSTS HM - CAS - BAD DEBT WRITTEN OFF 1,000 1,000
HM - CAS - EQUIPMENT MAINTENANCE 50,000 50,000
HM - CAS - MISC EXPENSES 0 2,000
HM - CAS - PUBLICITY 500 1,000
HM - CAS - TECHNICAL EQUIPMENT 32,000 32,000
HM - CAS - TELEPHONES 5,000 5,000
HM - CAS - TRAVEL & SUBS 200 200
HM - CAS - TV LICENCES 900 900
HM - CAS - VEHICLE RUNNING COSTS 8,100 8,100
HM - SHELTERED - CLEANING & DOMESTIC SUP 1,000 1,000
HM - SHELTERED - GENERAL EQUIPMENT 500 500
HM - SHELTERED - SUBSCRIPTION 500 500
CAS & SHELTERED Total (108,327) (94,245) 13%
Grand Total 4,887,115 4,832,369 1%
TMO BUDGETS 2015-16
People & Performance Division
Directorate People & Performance
Values
HR INCOME OTHER HR - SALARIES RECHARGED (89,990) (78,445)
PAYROLL COSTS HR - BONUS 11,686 12,094
HR - EMPLOYERS NI 24,576 22,257
HR - EMPLOYERS PENSION 45,300 32,300
HR - MONTHLY SALARY ALLOWANCE 1,289 1,331
HR - STAFF SALARIES 233,716 241,879
OTHER COSTS HR - BOOKS & PUBLICATIONS 1,000 0
HR - CHILDCARE VOUCHERS 500 500
HR - DEPRECIATION ON SOFTWARE 23,160 0
HR - HEALTH INSU, CHECKS etc 25,000 25,000
HR - Learning & Ongoing Development 90,000 80,000
HR - LEGAL EXPENSES 20,000 20,000
HR - RECRUITMENT COSTS 60,000 80,000
HR - SALARIES EXPENSE NON PAYROLL (NIC for P11D's) 1,800 1,800
HR - SLA PERSONNEL 1,200 1,700
HR - TRAVEL & SUBS 1,000 1,000
HR Total 450,238 441,416 2%
Planning & Performance INCOME OTHER OD - BI - COMMUNITY CENTRE INCOME 0 (30,000)
INCOME OTHER Total 0 (30,000) 100%
PAYROLL COSTS OD - BI - BONUS 23,887 26,359
OD - BI - EMPLOYERS NI 57,920 52,867
OD - BI - EMPLOYERS PENSION 112,600 108,100
OD - BI - MONTHLY SALARY ALLOWANCE 3,867 3,994
OD - BI - OVERTIME 200 200
OD - BI - SALARIES 544,791 571,905
OTHER COSTS OD - BI - Business Continuity 4,000 2,500
OD - BI - CHARTER MARK 1,400 1,400
OD - BI - COMMUNICATION 83,000 70,000
OD - BI - EQUALITY ST LG 500 500
OD - BI - MISC EXPENSES 500 500
OD - BI - ORGANISATION MEMBERSHIPS 36,000 50,000
OD - BI - RESIDENT CONSUMER PANEL 12,500 12,500
OD - BI - TRANSLATION 7,500 7,500
OD - BI - TRAVEL & SUBS 250 250
Planning & Performance Total 888,916 878,576 1%
RI INCOME OTHER HM - RI - MISC INCOME (4,000) 0
HM - RI - RECHARGE INCOME (9,879) (12,401)
PAYROLL COSTS HM - RI - BONUS 8,887 12,428
HM - RI - EMPLOYERS NI 19,263 23,286
HM - RI - EMPLOYERS PENSION 35,800 40,700
HM - RI - MONTHLY SALARY ALLOWANCE 3,867 3,994
HM - RI - STAFF SALARIES 177,745 248,563
OTHER COSTS HM - RI - ANNUAL CONFERENCE 10,000 10,000
HM - RI - PUBLICITY/SURVEY 1,000 1,000
HM - RI - RA GRANT 2,800 2,800
HM - RI - RI EXPENSES 2,000 2,000
HM - RI - ROADSHOW/EVENTS 13,000 13,000
HM - RI - TENANT TRAINING 12,000 12,000
HM - RI - TP TRACKER SUPPORT 2,000 15,500
RI Total 274,483 372,870 36%
Grand Total 1,613,636 1,692,862 5%
TMO BUDGETS 2015-16
Financial Services Division
Directorate Financial Services
Values
Finance INCOME OTHER F&ICT - FIN - DIGITAL TV (480,000) (480,000)
F&ICT - FIN - THAMES WATER COMMISSION (172,000) (185,000)
F&ICT -FIN- SALARIES RECHARGED (85,801) (92,648)
PAYROLL COSTS F&ICT - FIN - BONUS 17,308 19,701
F&ICT - FIN - EMPLOYERS NI 45,803 41,515
F&ICT - FIN - EMPLOYERS PENSION 100,400 95,200
F&ICT - FIN - MONTHLY SALARY ALLOWANCE 7,734 5,325
F&ICT - FIN - OVERTIME 3,900 3,900
F&ICT - FIN - STAFF SALARIES 424,477 441,071
OTHER COSTS F&ICT - FIN - BANK CHARGES 2,500 2,500
F&ICT - FIN - DIGITAL TV 480,000 480,000
F&ICT - FIN - MISC EXPENSES 500 738
F&ICT - FIN - PROVISION FOR BAD DEBTS 5,000 5,000
F&ICT - FIN - RENT COLLECTION 5,000 5,000
F&ICT - FIN - SLA CASHIERS/RECEIVABLES CHARGES 75,000 85,000
F&ICT - FIN - SOFTWARE MAINTENANCE 13,000 16,000
F&ICT - FIN - STATUTORY AUDIT 26,000 26,000
Finance Total 468,821 469,303 0%
Home Ownership INCOME OTHER F&ICT - LHS - HOME OWNERSHIP RECHARGE (25,000) (25,000)
F&ICT - LHS - INCOME(ENQUIRY FEE) (25,000) (26,000)
F&ICT - LHS - LANC WEST (13,000) (13,000)
F&ICT - LHS - RTB SERVICES (15,000) (15,000)
F&ICT - LHS- RECHARGE INCOME - DMH Legal costs Recovered (85,000) (55,000)
F&ICT - LHS- RECHARGE INCOME - Legal costs (50,000) (35,000)
PAYROLL COSTS F&ICT - LHS - BONUS 11,297 17,203
F&ICT - LHS - EMPLOYERS NI 37,018 34,646
F&ICT - LHS - EMPLOYERS PENSION 14,100 24,300
F&ICT - LHS - MONTHLY SALARY ALLOWANCE 10,312 8,988
F&ICT - LHS - STAFF SALARIES 341,041 359,842
OTHER COSTS F&ICT - LHS - L/HOLD AND RENT PRINTING 20,000 20,000
F&ICT - LHS - LEGAL COSTS 100,000 45,000
F&ICT - LHS - MISC EXPENSES 750 750
F&ICT - LHS - SLA LEGAL COSTS 60,000 60,000
Home Ownership Total 381,517 401,729 5%
HUB Costs INCOME OTHER F&ICT - HUB - ACCOMMODATION CONTRIBUTION (45,000) (45,000)
OTHER COSTS F&ICT - HUB - AMORTISATION OF RELOCATION COSTS 66,325 75,000
F&ICT - HUB - NNDR 100,000 110,000
F&ICT - HUB - RENT 262,000 260,000
F&ICT - HUB - RUNNING COSTS 32,000 32,000
F&ICT - HUB - SERVICE CHARGE 105,000 105,000
HUB Costs Total 520,325 537,000 3%
ICT INCOME OTHER F&ICT - ICT- RECHARGE INCOME (140,134) (141,710)
PAYROLL COSTS F&ICT - ICT - BONUS 18,208 18,809
F&ICT - ICT - EMPLOYERS NI 39,919 35,656
F&ICT - ICT - EMPLOYERS PENSION 77,500 59,000
F&ICT - ICT - MONTHLY SALARY ALLOWANCE 10,312 6,657
F&ICT - ICT - SALARIES 364,166 376,187
OTHER COSTS F&ICT - ICT - SOFTWARE PURCHASES 12,500 15,000
F&ICT - ICT - ACADEMY Development / Imp 7,500 10,000
F&ICT - ICT - DEPN ON COMPUTER EQUIP 227,045 240,000
F&ICT - ICT - DISASTER RECOVERY 6,000 6,000
F&ICT - ICT - GENERAL CONSUMABLES 5,500 5,500
F&ICT - ICT - HARDWARE MAINTENANCE 27,000 27,000
F&ICT - ICT - HARDWARE SMALL 6,500 10,000
F&ICT - ICT - MISC EXPENSES 500 1,000
F&ICT - ICT - MOBILE PHONES 40,000 50,000
F&ICT - ICT - PHOTOCOPYING 30,000 30,000
F&ICT - ICT - PRINTING CONSUMABLES 9,000 7,500
F&ICT - ICT - TELECOMS BILLING 150,000 170,000
F&ICT - ICT - TRAVEL & SUBS 3,500 5,000
F&ICT - ICT- SOFTWARE MAINTENANCE 204,100 230,000
ICT Total 1,099,115 1,161,600 6%
KHS OTHER COSTS F&ICT - KHS - STAFF - HOSPITALITY & WELFARE 9,500 7,500
F&ICT - KHS - & BLA RD AMORTISATION OF RELOCATION 69,000 75,000
F&ICT - KHS - CLEANING/SUNDRY COSTS 37,500 40,000
F&ICT - KHS - EDMS & OFFICE RUNNING COSTS 22,000 22,000
Values
KHS OTHER COSTS F&ICT - KHS - H&S ALLOWANCE 2,000 2,000
F&ICT - KHS - LIGHT&HEAT OTHER TMO OFFICES 25,000 25,000
F&ICT - KHS - NNDR 70,000 72,000
F&ICT - KHS - OFFICE FURNITURE 5,000 2,000
F&ICT - KHS - PRINT GENERAL 5,000 6,000
F&ICT - KHS - RENT 88,000 88,000
F&ICT - KHS - ROOM HIRE & PARKING 1,000 0
F&ICT - KHS - SERVICE CHARGE 44,000 44,000
F&ICT - KHS - STATIONERY 20,000 23,000
F&ICT - KHS - WATER RATE OTHER TMO OFFICES 15,000 12,500
KHS Total 413,000 419,000 1%
Grand Total 2,882,778 2,988,632 4%
HRA BUDGETS 2015-16
HOUSING REVENUE ACCOUNT (HRA)
Original Revised Budget Original

14/15 vs
2014/15 2014/15 2015-16 2015/16
Description '000 '000 '000 % Change
Dwelling Rents - Rent and Hostels (42,344) (42,045) (43,936) 4%
Commercial Properties Rent Income (3,039) (3,020) (3,258) 7%
Garages Rent Income (727) (727) (760) 4%
Tenants Service Charges (4,423) (4,247) (4,335) 2%
Leaseholder Service Charges (2,353) (2,524) (2,584) 10%
Major Works Service Charges - Leaseholders (2,000) (1,157) (814) 59%
Heating and Hot Water Charges (2,445) (2,209) (2,312) 5%
Insurance Charges - Leaseholders (1,010) (999) (1,022) 1%
Supporting People Contract Income (26) (26) (26) 0%
Other Contributions Towards Expenditure (30) (30) (30) 0%
Other Charges for Services & Facilities (35) (35) (4) 89%
Transfers from Reserves 0 (92) 0 100%
HRA Managed Budgets Income (58,433) (57,111) (59,080) 1%
HRA Managed Budgets

Planned Maintenance 7,096 6,708 6,279 12%
Responsive Maintenance 5,192 5,632 5,904 14%
Lancaster West EMB Expenditure 627 105 0 100%
Aids and Adaptations 150 120 150 0%
Area Revenue Works 199 199 199 0%
Electricity, Heating, and Hot Water 3,610 3,620 3,663 1%
Contract Cleaning 2,228 2,266 2,303 3%
Refuse Collection 154 154 157 2%
Pest Control 199 240 244 23%
Provision for Bad Debts 723 473 500 31%
Rents, Rates, Taxes & Other Charges 165 165 192 16%
Car Park Management 35 35 35 0%
Other Expenditure - Special Services 304 363 304 0%
Security Costs 240 289 299 25%
Supporting People Expenditure 220 257 220 0%
Legal Costs 210 210 218 4%
Digital TV 480 480 480 0%
HRA Managed Budgets Expenditure 21,833 21,316 21,148 3%
Total HRA Managed Budgets (36,600) (35,795) (37,932) 4%

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The Royal Borough of Kensington and Chelsea

Tenant Management Organisation Limited

Agenda Report Name Presenter Enclosure

1. Notice, Apologies and Quorum Company Secretary -

2. Minutes of the meeting held on the Chair

3. Matters Arising Chair

4. Chief Executives Report Chief Executive

5. Rent Report Executive Director, Financial

6. KCTMO Budget 2015-16 Executive Director, Financial

THE ROYAL BOROUGH OF KENSINGTON & CHELSEA

Minutes of a meeting of the Board of Directors (Board) of the Company

APOLOGIES: Councillor Maighread Condon-

2. MINUTES OF THE MEETING HELD ON 11TH SEPTEMBER 2014

3.1 Committee Terms of Reference

3.2 Mutual Exchanges

3.3 Grenfell Tower

3.4 Business Plan Strategies

3.5 Board Meeting Dates

4. CHIEF EXECUTIVES REPORT

6.5 The Board NOTED the report.

7.4 The Board NOTED the report.

8. CORPORATE RISK MAP 2014/15

9. COMPLAINT COMPENSATION POLICY

10. HRA COMMERCIAL PORTFOLIO Q1 & Q2 2014/15

10.8 The Board NOTED the report.

11. ASB UPDATE

11.7 The Board NOTED the contents of this report.

NO. MEETING MINUTE ACTION BY BY WHEN UPDATE

THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA

Report title: Chief Executives update report

Authority for decision: The Board has ultimate responsibility for

Recommendations: For information

Regulatory/legal requirements: None

Business Plan link: Keeping abreast of performance initiatives

Resident consultation: Ongoing

Resource implications/VFM statement: Keeping up to date on the latest

Risk: Failure to engage with the external

Total number of pages including 5

Name, position and contact details of Robert Black, Chief Executive

1. COUNTERS CREEK FLOOD ALLEVIATION SCHEME

A report went to RBKCs Public Realm Scrutiny Committee in November

2. TENANTS LEADING CHANGE (TLC) PROGRAMME

The Chief Executive has joined a Ministerial Challenge Group on tenant

The initiative was endorsed by a letter from the Communities Minister,

There will be another meeting of the Ministerial Challenge Group in early

3. KCTMO COMMUNITIES OUTREACH SURGERY

The Resident Engagement Team held a Communities Outreach surgery on

Designing out crime and anti-social behaviour

In order to deliver this increased scale of programme, it is necessary to review

The KCTMO parking project team are continuing to work towards

Report title: Budgets 2015-16

Recommendations: It is recommended that the Board pass a

The Board RESOLVED TO:

Regulatory/legal requirements: The Board have legal responsibility of ensuring

Business Plan link: Delivering value for money and achieving

Equality Impact None required

Resident consultation: None required.

Resource implications/VFM This is the subject of the report.

Risk: Not operating in accordance with the agreed

Total number of pages including 25

Name, position and contact Rupa Bhola

KCTMO BOARD 5 JANUARY 2015

TENANTS CONSULTATIVE COMMITTEE - 6 JANUARY 2015