EAST AYRSHIRE COUNCIL CABINET 19 MARCH 2014 HOUSING INVESTMENT PROGRAMME 2014/ /19
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1 EAST AYRSHIRE COUNCIL CABINET 19 MARCH 2014 HOUSING INVESTMENT PROGRAMME 2014/ /19 Report by the Acting Executive Director of Neighbourhood Services and the Executive Director of Finance and Corporate Support 1. PURPOSE OF REPORT 2. To update the previously agreed Housing Investment Programme as presented to Cabinet on the 27 March 2013 and propose a revised Housing Investment Programme Strategy for 2014/15 to 2018/19 to ensure continuing support for the Council s commitments in terms of the Standard Delivery Plan until April 2015 and ongoing maintenance of the housing stock thereafter. 3. BACKGROUND 4. In 2004, the then Minister for Communities introduced the new Scottish Housing Quality Standard (SHQS) and set a target date of April 2015 by which date all local authorities and registered social landlords are required to achieve compliance. In order to deliver on these aims the Council developed a Standard Delivery Plan which was submitted and accepted by the Scottish Executive in May Works on the Housing Investment Programme until April 2015 require to be tailored towards achievement of the SHQS in any non-compliant housing and continued thereafter to ensure that currently compliant housing is maintained at a level that will avoid future failure. 6. Allocations to fund the works required in terms of the Housing Investment Programme allow the reallocation of programme slippages between financial years. This approach has been agreed and adopted to provide some certainty for forward planning assumptions whilst maintaining the required flexibility to redress slippage or increased progress within elements of the programme. To inform Cabinet of progress, a revised and proposed 5 year rolling Housing Investment Programme will be submitted annually for approval. 7. CURRENT POSITION 8. Stock condition surveys were originally carried out for 4600 properties following the stock options appraisal in 2005 and the result of this sample was extrapolated across the overall housing stock. The sample was spread both geographically and by house type to provide balanced information. This survey information was augmented by works that had been carried out since the date of the survey to reflect the position with regards to compliance with the Standard.
2 9. Stock condition surveying has been ongoing since July 2012 to ensure that the Council have a robust survey sample to evidence its position with regard to SHQS compliance. The position at 31 st January 2014 with regard to completed surveys is that 99.7% of properties have been surveyed externally and 61% of properties fully surveyed. Work is ongoing with regard to completing the partial surveys and it is anticipated that we will have approximately 90% of our stock fully surveyed by April Properties for inclusion in the Housing Investment Programme are identified through a combination of stock information, technical knowledge and life expectancy of the main components. Previous component renewal projects provide information with regard to compliance with the relevant criteria of the Standard. For example, where kitchen upgrade projects have been carried out, the specification used meets the requirements set out within the Standard. All properties (with the exception of refusals) will have had this upgrade work carried out prior to March The Council will require to apply for exemptions and abeyances with regard to compliance with the Scottish Housing Quality Standard. Exemptions/abeyances may be required in a number of situations. 12. Where work is not technically feasible 13. An example of this would be where the installation of cavity wall insulation is not appropriate due to the form of construction. East Ayrshire Council also have flatted blocks where it is not technically feasible to install secure entry doors due to the construction of entrance to the building. 14. Where work cannot be undertaken in mixed tenure blocks due to owner refusal 15. Abeyances will be sought where work is unable to be undertaken in common properties due to the refusal of owners within the block. This may apply where the Council is unable to obtain a majority agreement to carry out the installation of a new door entry system to a mixed tenure block. 16. Tenant refusal 17. Where tenants have refused to allow certain works such as kitchen, bathroom and electrical upgrading to be undertaken due to personal reasons, health reasons etc, abeyances may be required to satisfy the requirements of the Standard. 18. Disproportionate Cost prior to Exemptions will be sought for properties that require major investment beyond 2015 or are identified to be removed from stock and the investment required is disproportionate. Where these properties are vacant, they will not be considered for social let until the proposed work is completed.
3 20. PROPOSED HOUSING INVESTMENT PROGRAMMES 2013/ / Asbestos Significant progress continues to be made to identify and remove asbestos from the Council s housing stock to protect the occupants and any workers employed in repairs and improvements. However, the proposed demolition works and ongoing major improvement works of replacing heating systems and renewing kitchens and bathrooms involves gaining access to previously untested areas of Council houses where asbestos products may still be encountered. 22. Prior to carrying out these major works, location specific Refurbishment/Demolition Asbestos Surveys are being undertaken in addition to carrying out Asbestos Management Surveys in each property as required. It is, therefore, proposed to set aside a provisional sum of 2.05m over the period of the plan to deal with identification, sampling and asbestos removal and to safely facilitate the ongoing works programmes. 23. Energy Efficiency The replacement of doors and screens with UPVC double glazed units in recent years continues to reduce the need for demand repairs and improves the energy efficiency of the Council housing stock. The new units have an anticipated lifespan of 40 years. Provision of these improvements will reduce the Council s annual maintenance costs and will significantly extend the period before replacement is again required. 24. The Council has committed to an accelerated programme of both window and door installations to enhance the thermal properties of its homes. A total estimated provision of 6.65M over the period of the plan has therefore been set aside in the Housing Investment Programme to ensure the Council meets all SHQS commitments and agreed commitments regards thermal improvements. It is planned to carry out the replacement of 600 doors and screens and 400 window replacements during 2014/ East Ayrshire Council continues to explore all potential funding streams with regard to energy efficiency with particular focus on reducing fuel poverty. 26. The Scottish Government launched the Home Energy Efficiency Programme Scotland: Area Based Schemes (HEEPS: ABS) in 2013 with a key focus on assisting home owners within mixed tenure properties to participate in certain qualifying projects. This scheme was anticipated to work in direct association with Energy Company Obligation Funding (ECO) which was to be provided by the energy utility companies. 27. Recent Government changes relating to levies applied to energy utility companies have had an immediate effect on the amount of ECO funding available and have reduced the opportunities to attract this. The current position with regard to ECO is unclear and further guidance is awaited.
4 28. Notwithstanding this, two main energy efficiency projects have been identified by Housing Asset Services to utilise current funding available for 2013/14 through HEEPS:ABS. These projects must be confirmed and owners fully signed up prior to 31 st March 2014 with work being carried out prior to October timber framed houses (68 EAC and 48 private owners) in Muirkirk, Cumnock, Logan and Dalrymple are proposed to receive external wall insulation and a render finish. Owners will receive significant grant funding for this work should they agree to participate hard to treat flatted 4 storey blocks in Kilmarnock (32 EAC tenants and 32 private owners) have been identified to benefit from external wall insulation and render finish. These properties have had ongoing structural failures in concrete sills and lintels and this proposed work will allow resolution of this along with the energy efficiency improvements. 31. The properties are 8, 10, 11, 15 Kirktonholm Place, 10, 12 Gallion Walk and 12, 15 St Andrews Walk, Kilmarnock. 32. Repair work was originally planned for these particular flatted blocks and owners were informed of the costs that would be apportioned to them. Due to the high cost of these repairs, the level of remedial work was limited to current failure only although future failure is inevitable. The visual result of this work would undoubtedly be a patchwork effect. 33. This external insulation and render proposal will allow owners within these 8 blocks to benefit from significant grant funding. They will still require to contribute to the initial identified repair costs but the shortfall will be met by the available grant funding (and discretionary grant assistance where required.) 34. Failure to gain approval or the consent of every owner within each block will prevent the progress of this project and the funding will be unable to be fully utilised. 35. While a large proportion of the cost of this work for the East Ayrshire Council properties within the above projects will be funded from the external envelope budget (the aspiration is that 100 EAC properties would benefit from external insulation and new render), an estimated provision of 0.64m has been allowed for, over the period of the plan to assist with both this work and also with ongoing energy efficiency projects. 36. Efficient Heating The Council is committed to addressing problems with obsolete and inefficient heating systems and to gradually standardise heating boiler types to reduce the variety of heating units currently installed across the housing stock. It is crucial to continue to invest in new efficient central heating systems sourced from a chosen manufacturer that can provide a high level of support and comprehensive spares provision. The proposed 5 Year Housing Investment Programme, therefore, allows for the renewal of heating systems
5 with gas fuelled grade A condensing combination systems where a mains gas supply is available. 37. These works, when allied to the provision of thermal insulation packages, will assist all homes where this work is undertaken, to achieve the National Energy Rating required by the Standard and will assist in the reduction of fuel poverty. It should be noted that where no mains gas is available and a replacement system is required, a wet electric heating system will be installed. 38. It is estimated that cyclic replacement of 850 units per annum is necessary to reach and maintain the necessary Standard and a total estimated provision of 12.5m has been set aside in the 5 Year Housing Investment Programme. 39. External Envelope Enhancement These works address the requirement to replace failing roof coverings, address failing roofs that require redesign to improve the longevity of the structure, and works to the external walls of properties to deal with water ingress and poor energy efficiency. It is recognised that the existing housing stock requires investment in these key areas over future years. 40. Stock condition data has been used to identify the estimated remaining life span of these major components and identify work requirements for compliance with the Standard. This information will continue to be used to inform and influence future programmes of work. 41. It is planned to renew roof coverings to 100 flatted properties and to carry out the redesign and renewal of the roof to a block of 11 flats during 2014/15. The properties identified for this work are all within mixed tenure blocks. 42. The current programme of properties receiving new external render and cavity insulation replacement is planned to continue in 2014/15. The Council acknowledged the need to invest in this particular area of work in coming years with a commitment in the HIP Cabinet Paper of 27 March 2012 to provide an additional 0.880m per year from the Repair and Renewal Fund to accelerate the programme. The aspiration of the Council is to continue to provide additional support but this will be subject to affordability and review relating to the final three years of this five year plan. Projected numbers within Appendix 1 for years 2016/17, 2017/18 and 2018/19 are therefore based on additional finance being available for these years. 43. A total of 300 properties have been identified to receive new rendering in 2014/15. Some of these properties will also receive external wall insulation as identified in paragraphs 29, 30 and The total required provision, including this proposed additional funding, is therefore estimated at 15.6m. 45. It should be highlighted that the rendering programme has had considerable issues with regard to mixed tenure ownership. Where East Ayrshire Council
6 do not factor the block in question, they require obtaining majority consent within each block to allow the work to proceed. 46. A decision was taken in 2013 to allow owners in these mixed tenure blocks to opt out of the rendering works even if East Ayrshire Council had the majority consent to progress with the full work to the common block. 47. While this has meant that private owners have not been forced to participate and to pay the associated costs of this project, it has resulted in a number of blocks having a partly rendered finish which is not aesthetically pleasing. 48. Unfortunately, there have also been situations in some mixed tenure blocks where East Ayrshire Council have not been able to gain a majority consent to either fully or partly render the property, meaning that some tenants were unable to benefit from the improvements. 49. There have also been technical concerns where a Council flat is below a private flat and consent has been obtained to render the area outside the Council property only. The potential for water ingress from the above flat causing future damage to the lower render is a risk that requires to be considered. 50. Given the above issues and concerns, the position will require to be closely monitored and may require to be reconsidered. 51. Modern Facilities and Services Modern facilities and services are a principal requirement of the Scottish Housing Quality Standard. The current co-ordinated renewal of all the major internal facilities and services through a single multi-work contract continues to provide economies of scale with regard to time and cost, whilst also ensuring that disruption to tenants is minimised and satisfaction enhanced. The current single multi-work contract includes electrical upgrading, kitchen and bathroom renewal and redesign, internal plumber work renewal, and replacement of any encountered lead piping feeds. 52. It is proposed to carry out these works to 820 properties during 2014/15 to ensure that we meet the requirements of the Standard by April A total estimated provision of 23.3m would be required during the period of the plan to continue to carry out this improvement work based on life cycles of 15 years for kitchens and 30 years for bathrooms. 54. While the current aspiration of the Council is to replace kitchens every 15 years, consideration could be given to extending this replacement cycle on a short term basis for a 5 year period (the last 4 years of this plan as well as the following year.) Based on current costs, this would reduce the proposed costs for the period of the current plan by 7.36m. 55. The net effect of this temporary reduction would be that properties improved following the 5 year period would have waited 17 years for the improvement
7 work as opposed to 15 years. A decision could then be taken as to whether to revert to a 15 year cycle for future years. 56. Timber Houses There are a number of timber properties within the Council area which have required annual external decoration and timber preservation works in previous years as part of a cyclic maintenance programme to maintain the exterior envelope in sound condition. 57. It is proposed that the funding for 2014/15 be used along with the other available funding to deliver the external wall insulation and render to timber framed houses identified in paragraph 29. This project requires the timber to be repaired and treated prior to the external insulation system being fitted. Once rendered, these properties will be removed from the cyclic preservation works programme for future years. This work would both improve energy efficiency and provide a long lasting external wall finish. 58. Decisions on years 2-5 of the plan would require taking account of the available energy efficiency funding at that time. It is proposed that if similar funding is available, further timber framed properties throughout the Authority should benefit from the improved energy efficiency and long lasting external wall finish that this work would bring. 59. A provision of 1.0m has been allowed for over the period of the plan to assist with this work. 60. Safe and Secure Neighbourhoods It is proposed to install door entry systems where no system presently exists and continue replacement of existing systems that have either failed due to obsolescence or remain inoperative for protracted periods due to ongoing vandalism or the difficulties in sourcing replacement components. The works include the provision of metal or timber security doors and screens dependent on the condition of the current units and the history of damages from forced entry. 61. It is currently estimated that an average 70 houses will be addressed per annum, with a total estimated overall cost of 0.5m during the period of the plan. 62. Stock Initiatives There are currently a number of properties within the housing stock where issues of low demand and/or significant disrepair have been identified. Some properties may give cause for concern for a variety of reasons and a considered, sensible and proportionate response is required to ensure that we maintain sustainable neighbourhoods whilst providing value for money. It is important to ensure that the properties that we own and manage are in good condition, in the right location, and of a design that is fit for purpose. 63. Where properties throughout the area are identified as difficult to let, have no registered waiting list demand and/or require significant investment,
8 consideration must be given to the long term sustainability of these buildings. This will involve the need for a whole organisation approach to ensure that well informed decisions are taken. 64. Consideration has been given to determine the most cost - effective solution in each case and this has informed the proposals for action as set out below: Proposed Demolition 9-15, 17-23, 18-24, Mason Avenue, New Cumnock 9-15 Somerville Street, Catrine 17-19, 21-27, 29-35, Greenbraes Drive, New Cumnock Holmhead, Logan 1-6 Girvan Crescent, Newmilns Barshare Road, Cumnock Knockinlaw Road, Kilmarnock Church Street, Auchinleck 65. Lock-up Garages A number of lock-up garages have been identified as low demand and in need of investment. It is recommended that consideration be given for the following units to be demolished and the sites cleared. Rigghead North, Stewarton 13 units Kirkton Road, Kilmarnock 12 units Bellsland Place, Kilmarnock 24 units Boyd Street, Kilmarnock 27 units Witch Road, Kilmarnock 9 units Keith Place, Kilmarnock 40 units Mackellar Place, Kilmarnock 22 units Henderson Drive, Muirkirk 5 units Lovedale Crescent, Muirkirk 11 units Burnbank Street, Darvel 7 units Kilnholm Street, Newmilns 8 units 66. Any further proposals for action will be submitted for elected member consideration at the appropriate time 67. A provisional sum of 1.4m has been included within the period of this plan to take these proposals forward. 68. At the meeting of the Council on 12 December 2013, it was agreed that 0.80M should be invested in housing environmental improvements. Work is ongoing at present to compile a programme of common entry painting. 69. The table below shows the aspirational lifecycle for main renewal programmes. These figures are notional and for guidance purposes only.
9 Gas Central Heating Installations Kitchens Bathrooms Render Windows and Doors Concrete Tiled Roofs Slated Roofs Flat roofs 15 years 15 years 30 years years years 40 years 80 years years 70. SCHEME OF ASSISTANCE 71. The Council have previously been able to assist adjacent owners within mixed tenure blocks with advice and in some cases financial grant assistance where the block was included in the investment programme through the Council s Scheme of Assistance. Any financial assistance is discretionary, subject to available resources and is subject to means testing. Grant assistance is only considered where the parts that is subject to improvement works are owned in common with East Ayrshire Council s own housing stock. 72. This assistance is intended to help the Council to obtain consent from adjacent owners and encourage owners to be involved in the programmed works. East Ayrshire Council are not currently in a position to offer a formal loan in respect of the payment for common works. 73. The increase in planned external fabric works to mixed tenure blocks has placed a greater strain on the funding available for this purpose and it is important that any financial assistance that is available is provided to the most appropriate cases. 74. It is proposed that the current arrangements and eligibility criteria be reviewed with a view to optimising opportunities for progressing with the Housing Improvement Programme where multi-tenure issues present potential impediments. 75. STRATEGIC LOCAL PROGRAMME 76. Further to the award of additional resources to Councils Resource Planning Assumptions by the Scottish Government, a report was submitted to Cabinet in April 2013 to increase the proposed number of units of affordable housing to be developed in response to the additional allocation. A total of 200 houses across 12 sites are currently being developed for Council housing. Site start has been achieved on 7 sites to date, following receipt of competitive tenders, with the balance all due to commence works by April A separate report to this Cabinet provides an update on the progress of the Strategic Local Programme as well as the Strategic Housing Investment Plan 2013/ /2018.
10 77. Progress on taking matters forward continues to be managed by a Project Board comprising senior officers from relevant services across the Council led by the Acting Executive Director of Neighbourhood Services. Progress on delivering the programme will be reported to elected members through East Ayrshire Performs. 78. FINANCIAL IMPLICATIONS 79. The Housing Investment Programme for 2013/14 is currently projected to outturn 1.427m less than budget. This is due to render and roofing projects being delayed due to weather and procurement issues. These works will be carried out in 2014/ Phased allocations have also been provided for all further financial years to 2018/19, however, it should be noted that the contract figures given in the tables appended to this report are based on known historic costs and should be regarded as provisional only at this time pending completion of the usual procurement and tendering exercises. Therefore where the work programme is under or over committed in any future years, there may be a compensatory increase or decrease, but the programme will be maintained to achieve the Scottish Housing Quality Standard by 2015, and an ongoing sustainable housing stock within the approved maximum allocation. 81. The estimated increase in the debt financing costs in the financial years up to 2018/19 arising from the proposed increase in the level of capital investment is 1.885M based on Appendix 1. It is expected that this will be met through increased budget provision within the Housing Revenue Account. This approach will be subject to annual review to ensure that the longer-term affordability and sustainability of the investment programme is maintained 82. Details of the source of finance for the plan are shown on Appendix LEGAL IMPLICATIONS 84. Any private properties that within the scope of the Council s stock initiative proposals as identified in Paragraph 64 of this report will require to be repurchased to allow the demolition to proceed. 85. The remaining Scottish Secure tenants, the private owners and any private tenants within the blocks may be entitled to receive home loss and disturbance payment under the terms of the Land Compensation (Scotland) Act In addition, any private owner or private tenant entitled to a disturbance payment is entitled in terms of the 1973 Act, in an identical manner to the remaining Scottish Secure tenants, to be re-housed by the Council
11 86. COMMUNITY PLANNING IMPLICATIONS 87. The annual Housing Investment Programme improves the condition of the council housing stock towards achievement of the Scottish Housing Quality Standard by 2015 and supports the East Ayrshire Community Plan themes of Delivering Community Regeneration and Improving Health and Wellbeing. 88. ASSET MANAGEMENT IMPLICATIONS 89. The ongoing investment programme improves and maintains individual properties and supports the long term sustainability of the council housing stock in East Ayrshire. 90. RISK MANAGEMENT IMPLICATIONS 91. Due to the currently experienced and future predicted falls in receipts from house and land disposals, greater reliance on borrowing and support from the Housing Revenue Account is anticipated. Any further reduction in funding is likely to prejudice the achievement of the Standard by 2015 and affect future sustainability of the housing stock thereafter. 92. The Housing Investment Programme and Standard Delivery Plan is based on the present Scottish Housing Quality Standard in terms of affordability. Any future additions to the Standard would require the overall Standard Delivery Plan to be reappraised and a new Delivery Plan would require to be produced to address the requirements after the present 2015 deadline. 93. Any reduction in cyclic replacement based on the life expectancy of components, such as heating systems, would result in future increased costs for the Council through increased failures and obsolescence of parts. Tenant satisfaction levels would likely reduce as a result of increased waiting times for replacement, lower heating efficiency and increased fuel costs, in turn leading to increased fuel poverty. 94. Any significant slippage would result in a general extension of timescales over which improvements are delivered. Any significant extension of timescales would require the revision of the currently published 5 year plan and would mean that the 2015 target may not be achieved or, in later years, sustainability would be compromised. 95. The removal or reduction of Private Sector Housing Grant may have a significant impact on the ability of East Ayrshire Council to encourage private owners within mixed tenure blocks to participate in planned works.
12 96. RECOMMENDATIONS 97. It is recommended that the Cabinet: i) Approve the reduced number of modern facilities and services improvements as specified at paragraphs 54 and 55 and Appendix 1; ii) Approve the clearance and demolition of properties identified in paragraphs 64 and 65. iii) Note the issues with regard to mixed tenure properties within the render programme identified in paragraphs iv) Approve all other proposals for the 5 Year Housing Investment Programme for the period 2014/15 to 2018/19; v) Note that regular reports on progress in delivering the programme will be submitted to members through the budget scrutiny arrangements throughout the year; vi) Otherwise note the contents of the report. Chris McAleavey Acting Executive Director of Neighbourhood Services Alex McPhee Executive Director of Finance and Corporate Support LIST OF BACKGROUND PAPERS Any person wishing further information should contact Gary Craig, Housing Improvement Manager, Housing Asset Services Implementation Officer: gerry.darroch@east-ayrshire.gov.uk
13 APPENDIX 1 Housing Improvement Programme 2014/15 TO 2018/ / / / / /19 Cost Cost Cost Cost Cost Contract Type No. K No. K No. K No. K No. K K Door and Screen replacement ,650 Efficient Central Heating 850 2, , , , ,500 12,500 Re-roofing (inc. chimneys/gutters etc) , , ,100 4,900 Specialist re-roofing Modern Facilities and Services 820 4, , , , ,860 15,940 External envelope enhancement 300 2, , , , ,100 10,500 Energy Efficiency n/a 170 n/a 170 n/a 100 n/a 100 n/a Door Entry Systems Window Renewals (initially of single glazed) 400 1, , , , ,000 5,000 Asbestos Testing/Removal n/a 410 n/a 410 n/a 410 n/a 410 n/a 410 2,050 Stock Initiatives / Demolition ,400 Timber House Investment ,000 Total 12,710 10,720 10,950 10,950 10,950 56,280 Council House Build Programme House Building SLP 26,134 House Building SHIP 3, , ,844 13,932 10,950 19,438 10,950 94,114 Financed by Capital Funded from Current Revenue (CFCR) 9,811 9,811 9,811 9,811 9,811 Capital Receipts Drawdown from Repairs and Renewals Scottish Government Grant (SLP) 9, Scottish Government SHIP ,116 0 Borrowing 17,823 1, ,511 1,139 28,179 Total 38,844 13,932 10,950 19,438 10,950 94,114
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