Open Letter To Philip Corthorne
11th January 2010
Dear Cllr Corthorne,
I am writing to you in your capacity as Cabinet Member for Social Services, Health and Housing. David Munroe, a council tenant, has drawn my attention to the Council’s plans to dissolve Hillingdon Homes.
At the Cabinet meeting of 24th Sept 2009 it was decided “to instruct officers to carry out a tenant and leaseholder test of opinion on dissolving Hillingdon Homes and bringing the council housing services back in-house”.
“Cabinet considered it to be in the council’s and customers’ best interests (subject to the required consultation process with tenants and leaseholders) to take the service back into the council. Cabinet felt it would enable savings to be made by eliminating the cost of governance of the ALMO and further improvements to services by closer alignment to the delivery of services and improvement programmes within the council.”
I have studied the report submitted to the meeting on which these decisions were based and want to raise a number of concerns with you.
Apparent Absence of A Business Plan
There does not appear to be any business plan which accounts for the claimed annual savings of £300,000 pa. Is there such a plan and, if so, why was it not included in the documents available to the Cabinet?
Failure to consider all of the options
Apart from maintaining the status quo no other options were considered by the report in spite of the fact that the Dept. of Communities and Local Government in their Review of ALMOs advises Councils to consider:
ALMOs carrying on as they are through extending the current agreement;
ALMOs taking on a greater range of responsibilities on behalf of the council;
ALMOs using trading powers to offer a range of services to other organisations;
Mergers or consortia arrangements between ALMOs;
Changing the management arrangements of ALMOs;
Integrating the ALMO with other local authority work, changing ownership arrangements
Why was consideration not given to all of these options at the Cabinet meeting?
Poor Hillingdon Homes stood no chance
The report’s stated purpose was “To consider the future of Hillingdon’s arms length management organisation (ALMO), Hillingdon homes and to agree a recommendation that, subject to tenants test of opinion, the council housing service will be brought back in house “
It would appear therefore that the recommendation had been decided upon before the facts were considered by the report’s author.
Failure to scrutinize the proposals
The report was not subject to any scrutiny by the Social Services, Health and Housing Policy Overview Committee. Why was the report (and any business plan) not made available to them in a timely manner?
If it had been the following questions might have been raised. I would like to put them to you now:
Why are we taking the management of the Council’s housing stock away from an organisation that is performing well and transferring it to one that is not? See LBH Performance Assessements.
The report (13) says “maintaining the ALMO .. involves a strong duplication of effort in a number of areas most significantly governance, strategic direction, performance management and communications functions” and (25) “the potential savings from the costs of governance of the ALMO are likely to be in excess of £300,000 pa”.
Does this mean that since the inception of Hillingdon Homes in April 2003 the cost to council tax payers (or tenants?) of the duplication of the governance function alone has been of the order of 6.5 years x £3000,000 = £1.95 million?
Why are Council Officers duplicating the work of Hillingdon Homes?
Could not the £300,000 annual savings be achieved just as easily by eliminating the duplicated functions at the Council and leaving Hillingdon Homes in place?
This would obviate the need for consultants (£50,000) and the £100,000 (31) for a project manager and legal officer to manage the merger.
The report (14) says the Council “will be able to introduce an improvement programme”
What improvements are planned and why would Hillingdon Homes not be able to introduce the same improvements?
I look forward to hearing from you and will post your reply here.
Reply From Philip Corthorme
21st January 2010
Re: Open letter from Hillingdon Watch
Thank you for your open letter. There are two key points which I wish to make at the outset:
Firstly, Hillingdon was one of the first Councils to establish an ALMO and we have been pleased with the results achieved, particularly completion of the decent homes programme two years ahead of the government target. Indeed, like many other Councils that was a prime motivation as the ALMO route brought with it funding from government.
Secondly, when considering the way ahead, tenants’ needs and wishes have been paramount. Also, there is a legal requirement for us to consult with tenants before making any major change to the way housing management services are delivered. In addition, although there is not a strict legal requirement to do so, the Council has also decided to consult with its leaseholders in the spirit of openness and transparency. That is why we have commissioned a Test of Opinion by an independent company and want to see those views before we take a final decision. This is exactly the process used when Hillingdon Homes was established in 2003.
With regard to your specific points:
Business Plan and Costs of Duplication
The Officer report refers to potential savings from the cost of governance of the ALMO, which are likely to be in excess of £300k. Indeed the report makes specific reference to duplication of effort in a number of areas—governance, strategic direction, performance management and communications functions.
It is clear that on return to the Council, the separate governance structure and processes would not be applicable as the ALMO company would not exist and the support services would be integrated with existing Council support services which serve the whole Council. The Deputy Director has calculated that a number of posts would be reduced by that rationalisation and hence the £300k figure. Councillors found no difficulty in accepting that logic and estimated saving, which, in my view, is probably an understatement. It did not require a ‘Business Plan’ to provide this figure, but I know the Officer has quantified the likely saving from looking closely at existing organisational details.
Because we are talking about posts occupied by existing staff it would be inappropriate to go into further detail in the public domain.
The additional cost of governance and support costs incurred with the running of an ALMO have applied throughout the life of the ALMO and were unavoidable if the ALMO was going to function as an independent company. You are right that these were ‘duplicated costs’ but necessary to secure £60M from government for decent homes.
The Council support services (and costs) are necessary for all its existing services so cannot be ‘eliminated’ as you suggest. However, because of their scale of operation, integration of (less onerous) ALMO needs will facilitate savings.
All the Options
The guidance about ALMO’s to which you refer, was published in 2006 and circumstances have changed since then. You state that you have read the report to cabinet in September 2009. You will therefore have noted that since 2006, Councils can now obtain funding from the Homes and Communities Agency to build new homes and use income from new homes to invest in new housing. Previously, these were advantages limited to the ALMO and not the Council.
The report makes clear reference to the change in circumstances but also to some of the specific options in that circular — see paragraph 9 of the report, where we have tried the ALMO on private sector housing but found it cannot compete with other Government funded agencies. Let me also remind you that Hillingdon has previously extended the agreement with the ALMO from its expiry in 2008.
There is no longer any additional strategic advantage in terms of powers/services, which an ALMO can offer that the Council cannot deliver itself, or by other means.
Since the setting up of Hillingdon Homes, service standards have improved for tenants, which I am delighted with, and the ALMO has been assessed as 2 stars. However, as you have drawn comparison with the Council performance, you were somewhat selective in ignoring the fact that the council’s overall Housing rating was a 4 star standard and our Benefits Service was also awarded 4 stars. More recently, the Council has received advice about its performance under the new CAA rating and I am pleased that we continue to improve in a number of areas such as Adult Social Care and support for vulnerable children where we are a national model of good practice.
We are committed to consulting with tenant representatives as to where improvements should be made. The reason the Council will be able to do this and not the ALMO goes to the crux of the whole proposal. By returning services, costs will be reduced and these savings can then be reinvested in improving services.
The Cabinet Report relating to the future of Hillingdon Homes was placed on the Council’s Forward Plan. Policy Overview Committee can ask to see reports from the Forward Plan. They asked for an Officer update at one of their meetings before Cabinet and referenced this in a comment that was placed within the report. That comment was “Policy Overview Committee has noted the report on the Forward Plan and may wish to comment on any future Cabinet reports on this matter”.
I would reiterate that the decision has not yet been taken to bring the council housing services back in-house. Cabinet will be considering a further report on the 18th February and Policy Overview Committee are at liberty within the processes within the Council to make comments on any report, as they did on the original report.
In addition, Executive Scrutiny Committee can call in any decision made by Cabinet if they wish to examine any decisions made. It may be worth noting at this point that Executive Scrutiny Committee did not exercise that power after the September cabinet report.
In addition, the report that has been to Cabinet and the process we have been progressing have been subject to full scrutiny by the Council’s Monitoring Officer, the Borough Solicitor. I am therefore satisfied that the decision making process has so far been robust and will continue to meet the high standards of integrity and probity that I expect
Cllr Philip Corthorne
West Ruislip Ward Councillor
Cabinet Member for Social Services, Health and Housing
Follow up from Hillingdon Watch
From: Hillingdon-Watch [mailto:firstname.lastname@example.org]
Sent: 25 January 2010 12:52
To: Cllr Philip Corthorne
Subject: Hillingdon Homes Open Letter
Philip, thank you for your response to my open letter of 11th January. I will post it on the Hillingdon Watch web site.
I very much appreciate the fact that you have responded to each of my points.
In spite of your comments I remain concerned about what this says about the way the Council carries out its business. In my opinion a major decision is being made without:
* A proper business plan /formal assessment showing a breakdown of costs and savings
* Any meaningful scrutiny by our elected representatives
* Full consideration of other options
I think it best if we just agree to differ on this and move on.
Thank you for telling me about the Test Of Opinion survey. Could you please let me have a copy of the survey questionnaire. Similarly could you let me have a copy of the previous information / questionnaire sent to tenants asking for the views on the proposals.
E-mail From David Munroe To LB Hillingdon
From: email@example.com [mailto:firstname.lastname@example.org]
Sent: 28 January 2010 21:20
To: neil stubbings
Cc: Dan Coombs; Philip Corthorne; Mike Cox; Hugh Dunnachie; Freedom of Information LBH; Nick Hurd MP; BBC London News Team; David Yarrow; Mo Kursheed; Raymond Puddifoot
Subject: Your Letter received today 28/01/10
Thank you for the letter regarding the destruction of the hard-working organisation, Hillingdon Homes, and the re-integration of the tenants/leaseholders into the tender cares of the London Borough of Hillingdon (herein after referred to as LBH).
Kind to show the results of the "consultation" process, carried out at a time that Open Community advised against, but anyway that is when you carried it out.
I, personally, think still that regardless of any "consultation" the decision was already made before the expense of any such "consultation" was added to the burden of Hillingdon tenants. The type of consultation falls well short of the rulings laid out by Mr Justice Sedley, (Regina v Brent Council ex parte Gunning). You failed to provide any clear indication of any information that would lead to an intelligent, informed decision. In fact you admitted in a Freedom of Information response that no figures existed to support the claimed savings. You failed to allow any opportunity for the opposing viewpoint to be presented. You, in contradiction to the promise contained in the leaflet "Your future, your homes", dated Nov 2009, failed to turn up at the Queens Walk, South Ruislip, on the 26/11/09. The, no doubt expensive, consultant had no knowledge to pass over, no facts, no figures, and the 2 Hillingdon Homes people were not allowed to say anything.
For the benefit of any readers of this mailing I give, below the ruling by Mr Justice Sedley, which is now enshrined in case law for England and Wales.
" whether or not consultation is a legal requirement, if it is embarked upon it must be carried out properly; to be proper, consultation must be undertaken at a time when proposals are still at a formative stage; it must include sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response; adequate time must be given for this purpose; and the product of consultation must be conscientiously taken into account when the ultimate decision is taken."
Holding a consultation over the period of Christmas and New Year, with a closing date of the 28th December 2009, particularly since the deadline for notifying Hillingdon Homes of a decision was the 31st October 2010, has, in my opinion, not complied with the "adequate time", nor has the information from LBH, at any time, complied with "sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response;"
I request that you forward this mailing to the Legal Department/Borough Solicitor and inform them that I consider LBH to be in breach of this ruling on consultation, information provided, length of consultation period and the timing of the consultation, which the cynical might consider fits in nicely with a May Local Election. I will require a response as soon as possible.
On a final note, the figures quoted in your letter, who verified them, who watched the verificiation process and are they available for perusal by such a lowly tenant as myself.