Agenda item

Mark Rogers, Group Chief Executive, and Chris Eddison, Regional Director, were present on behalf of Circle Housing and made a presentation to the Committee, copy interleaved, during which the following main points were made –

·         Mr Rogers offered an unreserved apology for the unacceptable housing maintenance and repairs service provided to Circle’s tenants in the Borough by Kier Services. Mr Rogers emphasised Circle’s commitment to Islington and working in partnership with the Council.

·         It was noted that Circle provided 3,488 homes in Islington and employed 250 people in the Borough.

·         Information was provided about Circle’s customers in the Borough and the services provided to them. It was commented that 52% of Circle tenants in Islington were aged between 40 and 60 and in single households, which was a different profile to Circle customers in other areas.

·         The advantages of supporting the financial resilience of customers were explained; helping tenants with debt and income advice helps to reduce arrears. Only 2.6% of the organisation’s tenants in the Borough were currently in arrears.

·         It was stated that Circle had a positive voids position, with fewer than 1% of its properties in the Borough void at any one time. The current voids position was given as 0.67%.

·         The background of Circle’s repairs and maintenance contract with Kier was explained. The contract was intended to improve performance and deliver value for money. Tenants throughout the group were consulted throughout the tender process and helped to select the contractor.

·         Circle had sought to mitigate the contractual problems with Kier by allocating additional resources to its customer service, complaints and surveyors sections. However, Circle considered that insufficient progress had been made by the contractor and as a result Kier was to cease providing the organisation’s responsive repairs service by the end of April 2015, and emergency repairs service by the end of March 2015.

·         Mr Rogers stressed the importance of partnership work and in particular drew attention to Circle’s work with the Council on tenancy fraud, and the work with MAGPI teams on anti-social behaviour.

·         The resident engagement and “social dividend” work of Circle was noted. Circle sought to promote home mobility, with 400 Islington residents registered for its house exchange programme, and 10,000 customers registered across London.

·         Following a question from a member, it was stated that the new repairs and maintenance contractor could not be named at the time for reasons of commercial sensitivity.

·         It was queried at what stage Circle acknowledged the problems with its repairs and maintenance contractor. It was explained that the contract started in November 2013, and initial performance issues were considered to be teething problems, or related to the relatively high workload following the winter storms of that year. Following further poor performance, the problem was acknowledged in Spring 2014, at which stage Circle sought to address the issues with the contractor.

·         It was commented that there were performance issues with the repairs and maintenance service before November 2013, and this was why a new contract was initially sought.

·         Members shared their experiences of Circle customer services. It was suggested that the service was poor and cultural change may be required in the organisation. In response, Mr Rogers offered to investigate these matters further and advised that, although Circle had an accredited customer complaints procedure, further work may be required to ensure that both the process and resolution of complaints are of the highest standard.

·         It was queried how Circle prioritises repairs, given that environmental health notices were served on Circle properties in the Borough and not acted upon. It was agreed that the organisation required a better system of prioritisation, and it was suggested that too many repairs may be logged as an “emergency” which makes it difficult to prioritise those which need urgent action. A greater understanding of customer circumstances could also improve performance. It was advised that these factors would be taken into consideration when implementing a new customer management system.

·         Members commented on the organisation’s financial position, in particular Circle’s £45.1m surplus and £6.8m underspend on repairs in 2013/14. In response, it was advised that the repairs underspend was due to the timing of the new contract, however assurance could not be given that the same budget would not be underspent in 2014/15. It was advised that a surplus is required to further invest in housing stock; however members questioned the level of investment made in Islington. The Committee expressed concern that the rental income from Islington tenants was significantly higher than the organisation’s expenditure on repairs and investment in housing in the Borough, as it appeared that this income was used to develop housing outside of the Borough.

·         Circle commented that its surplus was not as significant as other social housing providers.

·         In response to a query on Circle’s affordable rent policy, it was confirmed that a calculation is made to set rental values and, in Islington, the average rental value of a one bedroom flat was 46% of market rate, and the average rental value of a three bedroom house was 44% of market rate. As a rule Circle did not charge more than 60% of market rate in London, and this was generally lower in Islington as this level was not considered affordable.

·         The Committee was dissatisfied that Circle did not appear to be compliant with the Council’s affordable rent policy; however Circle commented that the majority of its tenants in Islington paid social rent.

·         Circle had not been accredited as a Living Wage employer, however it was stated that the majority of the organisation’s staff and contractors were paid the Living Wage. It was advised that the organisation’s future contracts would seek to pay the Living Wage.

·         Circle had not recently sold any properties in Islington and had no immediate plans to do so; however this position was kept under constant review.

·         Circle charged market rent for approximately 700-800 properties across the Group and was anticipating adding another 250 to this number over the next five years. Mr Rogers suggested that the disposal of some properties, shared ownership, and affordable rent was the future of the social housing sector, however members did not agree that this position was wholly positive.

·         It was confirmed that the Kier contract was expected to save £100m over ten years and these savings would now not be realised.

·         The Committee suggested that Circle could make greater use of the local workforce to alleviate the relatively high level of unemployment in the Borough.

·         Many Circle properties in Islington required investment in central heating systems and windows to improve energy efficiency. It was commented that this is particularly difficult given the age of the properties; many are Victorian and some are listed buildings, which exacerbates these problems. 

·         A debate was had on fixed term tenancies. Circle had cautiously introduced five year fixed term tenancies for vulnerable tenants as a way of encouraging engagement with the organisation. The Committee was concerned that such tenancies can increase stress on vulnerable people and disrupt communities.

·         A discussion was had on the implementation of universal credit. It was recognised that there was a risk that rent arrears could increase when the scheme was implemented.

·         In response to a question concerning maintenance at Hanley Gardens Sheltered Accommodation, it was stated that Circle did have a cyclical maintenance programme but this would be reviewed in view of the problems experienced with such programme.

The Chair thanked Circle for their attendance and hoped that the organisation would make further investment in the Borough.