Agenda item

Report attached.

The Head of Housing and Public Protection provided an update on the recovery of costs in relation to the provision of TV aerials in the housing stock, the recovery of costs for other services through service charges and the on-going Tribunal action in the case of Mr M (leaseholder).

The Committee were reminded of the background to these issues. Back in 2010 Mr M complained to the Council’s auditors PricewaterhouseCoopers (PWC) regarding the way in which building insurance charges were levied, and the way in which charges were levied for access to TV and satellite access points.

Whilst PWC were satisfied that the charges on buildings insurance were reasonably calculated and reflected the costs incurred by the Council, they had concerns regarding the charges relating to TV/Satellite access points, They found that the Council was lawfully entitled to levy the charge. However, in 2005/6 the basis of recharging to leaseholders changed, but there was insufficient documentary evidence retained to explain how that decision had been arrived at.  Also, PWC were concerned to note, that the full costs of the service were not being recovered and that the income from tenants and leaseholders did not cover the full charge.  PWC recommended that this charge be reviewed.

Since the Council had received the letter from PWC officers had been proactive in tackling all the issues raised. Meetings had been held with the contractor responsible for the TV/satellite aerial points as a result of which the contractor, Surtees, has deleted the charge for the Mardyke Estate and agreed to charge only one amount per address, even where the address has more than one point. Finally officers have agreed a schedule of those properties which receive the service. These changes had lead to a reduction in the costs. Officers had drawn up a plan to extend the charge to all residents on the schedule of addresses as some 664 tenants and 391 leaseholders had been wrongly omitted.  As a result of these actions the amount recovered in service charges would rise and should, in time, cover the contract costs. Increases in the amount we could charge any individual tenant were however constrained by rent restructuring rules and there might be a delay in achieving full recovery as new charges were phased in.

In response to other matters raised by PWC officers had started a comprehensive review of the recovery of other costs of services provided to tenants and leaseholders. Following discussions with residents the charges for Caretakers, Neighbourhood Wardens, fixed CCTV and bulk refuse collection had been adjusted so the charges for these services were fully recovered.

The current position in respect of other heads of charge was provided to the Committee. All reviews will seek to ensure fairness between tenants and leaseholders and will be subject to consultation with residents.

As previously advised the Council has appealed against the Leasehold Valuation Tribunal (LVT) decision in 2010. The Upper Tribunal have indicated that they will remit the case back to the LVT for a fresh hearing.  The Council will appoint a barrister to present the Council’s case which is likely to be heard in early 2012.

Efforts had been made to collect benchmarking data on the cost of the TV element of the Surtees contract but given the variety of ways in which landlords provide this service it has not been possible to obtain a definitive position.  However it did appear that the cost of our contract was higher than average. Legal advice had originally been obtained about the possibility of terminating the contract, however, the contract documents were ambiguous. Further papers had been found and fresh advice was being sought.  The Committee asked to be kept informed of the outcome of the legal advice.

PWC advised the Committee that they anticipated Mr M taking them to the High Court when he received their response to his latest objection to the accounts.

In the light of the progress made by officers in responding positively to the PWC recommendations it was AGREED that officers now be asked to report verbally to every other meeting on progress with the contract and the appeal to the LVT.