Homes for Haringey November 2015 N22 7TY onfidential · Board 02 November 2015 Agenda Item 3 Page 5 of 7 options. The Board noted the content of the report 9. Minutes of the Audit

Homes for Haringey

Board of Directors Meeting

Monday 2nd

November 2015

7:00-9:00pm

1st Floor

Large meeting room

48 Station Road

Wood Green

N22 7TY

Non Confidential

Pre Board briefing 6pm

Transformation programme update - James Missenden, Programme Manager

Item Presenter Subject

1. Chair Welcomes and Apologies

2. Chair Declarations of Interest

3.

Chair Minutes from the Board meeting held on 28th

September 2015

Notification of items for AOB

4.

Compliance Manager Risk map

5.

Director of Asset

Management

Health and Safety update- removed form public display-

confidential

For Discussion

6.

Managing Director Business Infrastructure Programme

7.

Managing Director 10 Year Contract update- removed form public display-

confidential

8.

Executive Director of

property

Modular Housing: a potential source of more cost effective

Temporary Accommodation – removed form public display-

confidential

9.

Head of

Finance/Managing

Director

2016/17 Budget process

For information

10.

Chair of Audit & Risk

Committee

Minutes of the meeting held 14th

September 2015

11.

Managing Director Minutes of meeting of the Board of Move 51 Degrees North -

20th

April 2015 and 27th

July 2015 and risk map

12. Chair AOB

13. Chair Closed session of the Board , if required

Board of Directors Meeting

Monday 2nd

November 2015

7.00 – 9.00 pm

Board Room, 1st

Floor, 48 Station Rd, London N22 7TY

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Homes for Haringey Board of Management forward plan

21st

November 2015 Away day Budget & business plan

14th

December 2015 RSP impact assessment 2016/17 Draft budget and Business

plan

25th

January 2016 2016/17 Draft Budget Draft 2016/17 Business plan

29th

February 2016 2016/17 Budget 2016/17 Business Plan

5th

April 2016

10th

May 2016

28th

June 2016 Annual Accounts

30th

July- away day

27th

September 2016

24th

October 2016 Annual General Meeting

1st

November 2016 Budget and Business plan

6th

December 2016 Draft 2017/18 Budget and Business plan

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Homes for Haringey

Board 02 November 2015 Agenda Item 3

Page 1 of 7

Meeting: Board Meeting

Date: 7.00pm 28th

September 2015

Venue: Committee Room 2, Civic Centre

Present: Keith Jenkins (KJ), Adzowa Kwabla-Oklikah (AdK-O), Lorna Reith

(LR), Laurie White (LW), David Beacham (DB), Jenny Coombs

(JC),

Officers in

Attendance:

Andrew Billany (AB),Chris Liffen (CL), Astrid Kjellberg-Obst (AKO),

Denise Gandy (DG), Catherine Hardy-Smith (CHS), David

Sherrington (DS), Patricia Forrest (PF), Price Water House Coopers

(PWC), Tracie Evans (TE)

Apologies: Tom McGregor (TM), Georgina Walters (GW), Philip Goodwin

(PG), Joanna Christophides (JC)

Distribution: All Board Members, Executives

Item Minutes Action

1. Welcome and Apologies

Welcome to David Beacham.

The Chair noted the loss of George Meehan and expressed the

Boards gratitude for George’s time spent serving on the Board.

The Chair thanked LW for his words to George’s family on behalf

of the Board.

Apologies were noted as listed above

2. Declarations of Interest

No new declarations.

3. Minutes from the Board meeting held on 6 July 2015

The Board approved the minutes as a true record of the meeting.

Matters Arising

Naming estates

AKOb noted that we are using this activity as a point of

engagement with residents.

4. 2014/15 Financial Statements

The Board approved the 2014/15 company financial statements.

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PWC left the meeting at 19.12pm

5. Resolutions to the Annual General Meeting 12th

October 2015

The Chair advised the Board that the AGM will be followed by a

business planning session.

The Board approved the proposed resolutions it intends to put to

the Council Member on the 16th

October 2015 as follows;

1. To approve the minutes of the Annual General Meeting of the

Company held 15th

September 2014.

2. To approve the annual accounts for 2014/15

3. To approve the procurement of external Auditors to the

Company to the conclusion of the 2016 Annual General

Meeting of the Company at which the accounts are laid

before the Council Member and to authorise the Directors to

determine the remuneration.

4. To accept retirement of Director Jenny Coombs (Independent

Board Member)

5. To appoint Jenny Coombs as a Director ( Independent Board

Member)

6. New Management Agreement

The Chair thanked staff, the Executive and the Board for their hard

work to achieve the new contract.

Key discussion points

LR notes that the proposal is clearly focused on the service

to tenants and leaseholders but does not outline all the

services we provide.

The Chair explained that concept of the proposal means

that essentially we have same contract we provide for any

service provided.

The business plan will set out the deliverables each year.

LR noted the importance of high risk new areas of business

being more explicitly set out in the Business Plan.

AKOk noted the clear approach of the proposal, but is

concerned about keeping standards high whist the Business

Infrastructure Programme (BIP) is underway.

TE advised that the Council services are moving to a shared

service back office arrangement. The back office should be

delivering a high quality service though one place. If this is not

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happening LBH expect to be challenged – as with a contract or

service level agreement.

The Chair advised the draft contract and business plan will be

available in November.

Action: The Chair to write to the HLA regarding the judicial review.

Action: The Chair to write to all staff with personal letter thanks

regarding the new contract.

Action: LR requests the same message to tenants and leaseholders.

The Board discussed the contract proposals and provided advice

to the Executive team on deliverables.

KJ

KJ

CHS

7.

Health and Safety update

DS tabled his report on Health and Safety

CL attended Audit and Risk committee on 14 September 2015

and has provided an action plan addressing current high risk

health and safety issues, as requested.

The finding report of the Temporary Accommodation compliance

review is due next week. The action plan will then be updated with

recommendations.

CL notes there are some actions not completed at 48 Station Road

to address H&S issues.

The Chair states he can see that work is being done, but the Board

have not been given full assurance through an auditable trail of

reporting.

CL notes concerns over H&S and compliance in Temporary

Accommodation, until the review is complete we are unsure of the

potential challenges and Electrical Maintenance works, this is an

emerging risk as we do not currently have a budget of

programme.

Action: AKOk would like stronger emphasis on Health and Safety

in the Managing Directors job description and noted the

importance of health and safety being an essential part of the

organisations culture.

The Chair agreed that organisational culture needs to be re-

visited; this needs to swift and effective.

CHS

AB

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Action: The Board and Executive discussed the various safety

checks carried out to tenanted homes. The Board ask the Executive

to consider if these services could be offered to leasehold homes.

TE advised the Board that she is Chair of the Council’s officer

Health and Safety Board and has good contribution and

involvement from HfH staff.

The Board noted the report.

CL

8. New sources of more cost effective temporary accommodation

CL advised the Board that we have identified three land sites that

may be suitable for the development of modular units to be used

for Temporary Accommodation. Viability reports are being

prepared for Wolves lane, Trulock court and White Hart Lane

Dairy Fields.

We are also looking at Broad Water lodge and Moselle school as

potential options for Temporary Accommodation. We are at

viability and feasibility stage with both properties, once compete

we will propose options to the Board.

CL advised that we are involved in the Council’s commercial

property review to help find potential new homes and requests to

be notified of any potential properties that Board members are

aware of.

Action: LR notes that there is a vacant flat above Stroud Green

Library. DS to look at details.

Key discussion points

All sites are in Tottenham, we need to aim for mixed

demographics.

CL explained that we have limitations on the land we can use. We

can not use land already identified for infill or Tottenham

regeneration. We will insure consultation with stakeholders in the

proposed areas.

Civic Centre car park - Action: CL to discuss with TE.

Action: The Executive are working on a report for the Council on

the sites and return on investment. This report to be brought to the

next Board meeting. To include; rental costs, potential savings on

temporary accommodation and the cost of not providing new

DS

CL

CL

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options.

The Board noted the content of the report

9. Minutes of the Audit & Risk meeting held 19th

May 2015

For information

The Board noted the minutes.

10. AOB

None.

11. Closed session of the Board

Recruitment of Board Members

The Board approved:

i. The formation of a Remuneration and Appointments

Committee to manage the process of recruiting a Board

Member with commercial experience. The following

Board Members were appointed to the committee:

Keith, Adzowa, Laurie and Joanna;

ii. The timetable to run behind the MD recruitment slightly to

allow for use of narratives and adverts if applicable.

Recruitment of the Managing Director

The Board approved:

i. The process for recruiting to the Managing Director role as

per the outline in the proposal;

ii. The salary for the post at £135,000pa;

iii. Appointment of Members to the Remuneration and

Appointments Committee of Keith, Phil, Jenny and Lorna,

with the LBH COO co opted and on this occasion the Board

approved voting rights for the co opted at this Committee.

The Job Description will be finalised during the recruitment process.

12. Risk map- review after meeting

The Board discussed the risk profile in each of the 6 areas and

noted the actions resulting from the meeting. The risk amp is to

move up to the top of the agenda so that risks can be reviewed

throughout the meetings discussion.

CHS

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Summary of Approvals/Delegations

Action log

Date of

meeting

Agenda

item

Action Action

owner

Action due to

be

completed

Action completed and

comment

18/06/2014 5 Resident Engagement Strategy AKO July 2015

September

15

July 6th

Board- revised strategy

to come back to September

Board meeting.

Update provided in October

Board Bulletin

28/09/2015 6 The Chair to write to the HLA regarding the judicial review.

KJ Completed

28/09/2015 6 The Chair to write to all staff with personal letter thanks and a

message is sent to tenants and leaseholders regarding new

contract

CHS October

2015

Completed

Agenda Item No. Approved/Delegated

Minutes from the Board meeting held on

1st

June 15

3 Approved, with revisions.

2014/15 Statutory Accounts 4 Approved

Resolutions to the 2015 AGM 5 Approved

Recruitment of Board members 11 Approved recruitment of Commercial Board Member

Recruitment of Managing Director 11 Approved process, salary and appointments to Committee including voting rights for co

optee

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28/09/2015 7 Stronger emphasis on Health and Safety in the Managing

Directors job description

CHS

October

2015

Completed and subject to

further tweaking by R&A

Committee

28/09/2015 7 Health and Safety action plan to be a standing item on the

Board agenda.

CHS November

2015

On going

28/09/2015 8 Vacant flat above Stroud Green Library. DG to look at details.

DG October

2015

28/09/2015 8 CL to discuss with TE if Civic Centre car park is a potential

option for modular build

CL October

2015

Confirmed that viability should

be worked up

28/09/2015 8 Modular Build viability report to next meeting CL November

Board

On agenda

Page 10 of 38

Objectives Risk Ref

Risk Residual Risk RAG Status - After Controls

Causes Effects Specific Control Measures Date the Control Measure will be completed

Control number

Additional Information

Lack of influence at a strategic level with LBH

Loss of confidence in Board's ability to deliver

2015/18 Business plan approved &

(allowing for flexibility in reacting to significant changes in the operating environment and potential new opportunities)

01/12/2015 B1.1

Lack of appropriate skills and capacity on the Board leads to ineffective decision-making

LBH intervention and potential withdrawal of the contract

Specific Board member portfolios In place B1.2

HfH Chair relationship with LBH not effective

Further development of robust Board self assessment process including success factor measures

01/12/2015 B1.3

Interdependencies not understood within multiple change programmes

Board & Staff Appraisal Process In place B1.4

Management Agreement not defined, too narrowly focused or not fit for purpose risk map

01/11/2015 B1.5

Reporting & monitoring processes are not effective or reflect the customer experience

Decent Homes requirements not met

Key staff are ineffective, or leave the organisation

Failure to demonstrate Value for Money has been achieved / ineffective VFM Framework

Risk appetite not defined / opportunities taken without due diligence

LBH intervention leading to loss of contract

TA Reduction Strategy & Action Plan Ongoing B2.1

Efficiencies not achieved because of lack of management

Lack of autonomy to deliver wider growth/added value objectives

Review of outsourcing options 01/12/2015 B2.2

Financial plans and monitoring inadequate Audit reports In place B2.3

Financial resources inadequate Monthly Board Financial update New reporting drafted

B2.4

Political environment affects or delays decisions

Horizon scanning reporting to inform risk maps and controls

In place B2.5

Key staff are ineffective or leave the organisation

Stakeholder influence with GLA and other bodies

?? B2.6

Failure to demonstrate Value for Money has been achieved / ineffective VFM Framework

VFM Annual Self Assessment 01/12/2015 B2.7

Financial regulations and the controls around the use of assets are not embedded, understood or effectively monitored

LBH Intervention leading to loss of contract

Review and monitoring of adherence to the financial regulations

Ongoing B3.1

Procurement & Contract Management processes not effective

Reputation is adversely affected

Testing of controls around asset and financial management

01/11/2015 B3.2

Breach of FCA regulations(once registered)

New GRC framework in place and rolled out to all staff

01/11/2015 B3.3

Robust process of registering conflicts of interest in place

01/11/2015 B3.4

Tenancy audit due to be undertaken during 2015-6

31/03/2015 B3.5

Legislative requirements are not understood

Regulatory intervention A&R Quarterly reporting includes compliance & procurement reviews

In place B4.1

Lack of clarity where accountability and powers of decision-making sit

LBH Intervention leading to loss of contract


01/11/2015 B4.2

Financial loss from substantial and/or unlimited fines

Compliance with NHF Code of Governance & FCA regulations

In place B4.3

Tracking of looming political and legislative changes and modelling of likely impacts, as well as consideration of how our own policies and procedures may need to change

Housing Bill due October 2015

B4.4

Informed, adequate legal advice Ongoing B4.5

External Assurance In place B4.6

Failure to identify and manage risk effectively

Criminal action against Board members and liable officers

Discussion & agreement at A&R Committee In place B5.1

Lack of robust understanding and management of HfHs safeguarding responsibilities

Reputational damage Existence of a Safeguarding Board in liaison with LBH

In place B5.2

H&S obligations not met Fines Detailed, specific gap analysis and action plan to address failures in Temporary accommodation

01/10/2015 B5.3

Risk Management process is ineffective and not embedded into the business at all levels

Staff at all levels fail to identify business threats

Roll out training and awareness-raising programme around Risk

31/12/2015 B5.4

Failure to carry out regular reviews of support plans in sheltered housing

A vulnerable customer suffers harm or inadequate care

Full review underway as part of Work stream 5 to address deficiencies in the Supported Housing service

01/12/2015 B5.5

Inadequate research

Risk Management process is ineffective and not embedded into the business at all levels

·HfH Strategic Direction is appropriate and developed, owned and monitored by the board through a well planned business planning approach·HfH Strategic Direction is achievable & prioritised ·Board have the skills & capacity to deliver new strategic and sometime inspirational opportunities ·HfH Executive Team have skills & capacity to deliver strategic objectives·Culture to deliver the objectives·Good reputation in the sector with peers

B1 Lack of alignment between HfHs Business Plan and LBHs strategic objectives; and failure to deliver on these objectives

12 21.10.15: Having been awarded the ongoing contract the relationship with LBH is currently clearly very good and our mutual objectives are clear. As it is a new contract we now have the opportunity to be very clear about how assurances are provided and are therefore in a strong position to deliver on this.

A red risk has been flagged under Property Services due to the uncertainty over a 30 year stock investment plan, so we would recommend that Board seek assurances on this from LBH if/whenever possible.


Joint working with LBH on key projects Ongoing B1.6

Board to oversee structured exit and handover periods for interim staff to avoid loss of critical skills at a senior level and potential loss of faith by LBH

01/03/2016 B1.7

·Board proactively enhance their ambassadorial role ·Board understand and seek to influence HfH's external environment

B2 Failure to exert financial control and appropriate forward planning within approved budgets and new commissioning

21.10.15: TA overspend is currently projected at £4m by year-end so this overall risk is red on both Corproate Affairs and Demand risk map. (Corporate affairs due to the finance department failing to spot the overspend previously). We are likely to fail to remain within budget and achieve budgeted savings. This is partly due to the increase in demand on our statutory requirements. Initiatives to increase TA stock are underway but unlikely to have an impact within this financial year. Ongoing measures to prevent homelessness and reduce acceptances have successfully reduced net inflow into TA. However, net outflow from TA has reduced even more quickly as the availability of affordable PRS accommodation & GN lettings have gone down substantially.

Failure to produce / understand financial performance information

HfH's Governance Risk Compliance Framework is appropriate & operating effectively

B3 Incident of major fraud

63

12 21.10.15: All Directorate's mark this risk as Green other than the lettings agency, where more work needs to be done on controls around potential fraud by staff members as we start to sign up clients .

A culture of noticing and reporting suspicions around fraud has not yet been embedded but this will be rolled out as part of the GRC. RTB frauds are being picked up through our work with LBH so this is being controlled very well. A new repairs stock control system is being piloted and will be rolled out in October. An audit has taken place in TA procurement and the findings will be reported to A&R in due course. LBH have commissioned a full tenancy audit this year. A new financial reporting framework is being rolled out.

Board fail to declare conflicts of interest

Financial loss

21.10.15: Corporate Affairs, Property and Demand mark this as a red risk. A detailed action plan is in place to manage compliance with HSE requirements however it is not yet able to deliver assurance to Board that we are fully compliant in terms of H&S requirements within the temporary accommodation stock.

The lettings agency is not yet registered with FCA, and there are concerns around what impact the Right to let policy may have. As it is a new area of business, controls need to be robust and well tested and financial performance will be scrutinised.

Communication not understood by audience

Judicial challenge

HfH's Governance Risk Compliance Framework is appropriate & operating effectively

B4 Failure to comply with statutory obligations (e.g. data protection, code of governance, regulatory requirements etc)

45

36 21.10.15: The likelihood of an incident is actually relatively low, but we have no auditable evidence that checks have taken place which makes this a red risk under Property, Corporate Affairs and Demand. Progress against the action plan will be reviewed weekly by ELT.

Compliance against support plans is now at 100%. It is still flagged as an amber risk for Operations because though all customers have a plan in place they need to be quality checked and stored electronically. We are developing a better system for regular review to give assurance that the recommendations in each plan are being delivered.

Health and safety obligations are met and monitored

B5 Health and Safety incident leads to serious injury or death of a customer or staff member

Health and safety obligations are met and monitored

B6 Failure to anticipate and prepare for an act of god disaster/ major incident

21.10.15: A BCP is in place but requires updating to clearly address what is expected of all staff in which circumstances. In a major incident there are limitations as to what, as a landlord, we can contribute as the lead will be taken by emergency services or the Council.

0.00009 Directorate plans adversely affected by a disruption in delivery of goods/services

Robust disaster recovery / business continuity plan in place

01/12/2015 B6.1

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Homes for Haringey Board Agenda Item

1 of 6

Report for Board

Title LBH Business Infrastructure Programme (BIP)

Report for Discussion

Business plan link Business planning

Risk map link Well Governed

Authority for decision The Board sets the strategic direction of the Company and has

ultimate responsibility for risk management.

Officer to contact for more

information

Catherine Hardy-Smith

Head of Corporate Affairs

Executive Director Andrew Billany, Managing Director

Portfolio Holder Keith Jenkins

KEY ACTION: The Board is asked to discuss the BIP decisions and consider the risks this may pose

to the business.

INTRODUCTION

1. This paper outlines the principles of the BIP and invites the Board to discuss the decision, its

impact on HFH and the new risks that may emerge in the future as a result. It comes to the

Board following a detailed set of constructive discussions, including the Managing Director,

Head of Corporate Affairs, the Head of Commissioning at the Council and the Chief Operating

Officer.

TIMING

2. The current programme indicates that staff considered in scope will ‘lift and shift’ from their

current physical location and line management to LBH on 1st

January 2016.

BACKGROUND

3. The principles set out by the LBH for the BIP in the March 2014 Cabinet report were:

Where there are functional duplications between HfH and the Council, these

services will be delivered by only one of the organisation and from wherever it is

most cost effective and will deliver the best service. This means that it is likely that

support services and customer services will revert back to council.

The BIP will look to deliver support services from one centralised place which will

mean that a number of support service functions will transfer from HfH to the

Council

The Council will retain responsibilities for setting housing policy and strategy, for

commissioning the appropriate services and monitoring the performance of those

functions charged with delivering housing services (whether internal or partnered

including HfH).

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The Scope of the BIP includes all support and business services across the

Council and in HfH. These services include HR, IT, Procurement, Information

Technology, Admin and FM (this is not an exhaustive list).

Support services will return to LBH. Services will not be duplicated across the two

organisations

The Council will retain responsibility for performance and commissioning

CONSIDERATIONS

4. The Board will recall that the Business Infrastructure Programme (BIP) was paused while the

decision on HFH was made. The starting point for LBH is that all support service posts - all those

in the Corporate Affairs directorate, being: Governance, Communications, Finance, Housing

Information, Business Improvement and Procurement, are in scope to move to a shared service

centre.

5. The decision on which post are in scope has now been made by LBH and are attached at

appendix 1. In summary, this retains a strategic core centre of Compliance (to drive strategy

governance and policy, communications); Quality (to drive transformation and assist the business

meet the requirements of the MTFS); and Commercial; (Finance and HRS contract management

service, and procurement).

Risks

6. The preparation of the SLAs that set out what services are delivered to Homes for Haringey from

the Council may pose more risk to the business.

7. The retention of Homes for Haringey as the Council’s Housing Management Company is

based upon its agility; to combine the business focus of a company structure with public sector

accountability. Agility depends upon our ability to control business critical processes. Control

can come from a range of approaches of which direct provision and outsourcing (the BIP

approach) are the two most obvious. Fundamental to the BIP approach of shared services will

be rigorous service delivery conditions and penalties to underlie the quality and timeliness of

the service. We must assume that we can put those agreements in place. However, if the

service cannot be delivered in lien with these agreements there will be an effect on the service,

and subsequent ability to delver top quartile performance and achieve the savings required

and continue to improve its engagement with residents.

Finance (budget or cost effectiveness considerations)

8. There are no implications as a result of the report itself. There are a number of critical finance

process changes that will need to be profiled quickly and this will form part of the SLA

negotiations.

Customer/Resident impact (including equality and diversity implications)

9. None as a result of this paper, but the focus on providing the best way to support service

outcomes is paramount.

Communications (internal and external)

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10. There are of course a large number of changes proposed or being considered as a result of the

BIP changes. Now that we have certainty over the initial roles in scope as well as consulting

directly with those effected or possibly affected we will keep the rest of the business informed

through Team Brief.

Human Resources (HR)

11. The Human resources team will manage the process with the Head of Corporate Affairs, to meet

TUPE requirements and ensure there is clear messaging and consultation through out with staff

and the Unions. Staff have been involved in proposing the retained services and will need to be

involved in process mapping the resulting service delivery from LBH.

Health and Safety

12. None as a result of this report.

RECOMMENDATION

1. The Board is asked to discuss the BIP decisions and consider the risks this may pose

to the business.

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Appendix 1- retained posts

We will have 23.6 FTE at the core business support function, 7 FTE transfer into the business

(and subject to further review once further identification of duplication has been reviewed) with

20.4 FTE post transferring back to LBH service centre and other departments yet to be

confirmed.

Retained core business support function- Homes for Haringey

Compliance Team Commercial Team Quality Team

Compliance Manager Company Accountant Quality Assurance Manager

Business Strategy

Manager

Management Accountant Programme Managers x 2 FTE

Comms x 2.6FTE Contract Support Team x 3

FTE

Business Analysis

Policy Officer Procurement Service x 2 FTE

Housing Information Team x

9FTE

Note that the Housing Information Team are out of scope for the moment, however the

Council is considering a tri borough ICT service and that team will be in scope for that review.

Transferred into Operations and retained in HFH

Haringey Repairs Service Operations

Systems officer Rent accounting service x

6FTE

Transferred to LBH

HR x - after April 2016

2 x performance posts

Rationales

Compliance Team

Business Strategy Manager x 1 FTE

The management agreement requires HfH to produce an annual corporate business plan to

present to the Council. This post is responsible for business planning and strategy. It also has

an overview of new business initiatives that HfH undertake.

Compliance Manager x 1 FTE

This post is responsible for audit and risk. Internal Audit services are provided by the Council,

but this post is responsible for identifying and managing corporate risk across the company.

This post will become the Company Secretary in due course once the Exec level at Homes for

Haringey is reviewed. This post leads on supporting the Resident Scrutiny Panel and the

Complaints Panel both of which are required under legislation.

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Governance Assistant x 1 FTE

To support the Company Act requirements and compliance, support the monthly Board

meetings, Board away days, Board member training, induction and Board member

recruitment. This post also supports the Resident Scrutiny Panel and Complaints Panel, both

of which are requirements undercurrent regulation.

Communications Officers x 2.6 FTE

We are separate company with a business plan and separate brand which we want to grow.

We have to have the ability to manage our own messaging in a timely way that suits our

needs. We have a very small communications team of 2.6 FTE which manage messaging,

design, corporate publications, and social media including intranet and internet management

and resident events. In the absence of any service offer or costing we are convinced that our

team deliver a better service than a centralised service for which housing will be low on the list

of priorities.

Policy Officer x 1 FTE

Lead son maintaining the policy framework and converting strategy into housing specific work

instructions for the business.

Commercial Team

Company Accountant x 1 FTE

Differing from the services to be provided from the Council, the overall responsibility for

proper financial administration of the financial affairs of the Company will be delivered by a

Company and Management Accountant.

Provide lead role and advice on the corporate financial position and key financial

controls.

Provide strategic financial advice to the ELT and the Board.

Provide the lead client role for financial services procured by Homes for Haringey.

Establish constructive working relationships with the Council and other partners to

jointly provide services where required eg HRA Business Planning.

Be responsible for overseeing any commercial activity undertaken eg Lettings Agency.

Lead on monitoring VFM and efficiency measures for both Company and managed

Budgets including MTFP savings.

Lead on preparation of Company accounts for annual audit.

Responsible for ensuring that a detailed budget is prepared each year for the

Company, HRA/General Fund Managed Budgets and the Capital Programme.

Ensure that appropriate insurance cover for the Company is in place.

Responsible for managing VAT and other corporate tax affairs for the Company.

Responsible for registering and on-going compliance with FCA regulations.

Manage other external finance related relationships that the Company enters into.

Management Accountant x 1 FTE

Client responsible for overall monthly monitoring of all budgets including ensuring

accurate forecasts are made and presenting to ELT, the Council and the Board.

Responsible for managing the relationship with the Finance Shared Service Support

Centre to ensure that financial information and support is delivered according to

agreed SLAs.

Provides challenge and expertise to the financial affairs of HRS.

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Report on Salary and Bonus Payment trends to HRS senior management.

Responsible for statutory and other statistical returns required for the Company

Responsible for procurement statistics and information provision to support the

procurement function, Statistical Returns eg Procurement, CIPFA, ONS and other

business function such as House mark

Analysis of SLA charges to enable recharges to leaseholders and RTB applicants.

Contract Support Team x 3 FTE

The HRS support team, which sits in Finance, analyse and challenge supplier invoices to

ensure they tie up with the job details in TASK. They liaise directly with the supplier and the

HRS team to resolve any issues prior to passing invoices onto the Council’s Accounts payable

Team. The team ensure accurate allocation of invoices and reporting for HRA, as a quasi

commercial operation, provides the necessary financial detail to the managers of HRS to

allow them to make necessary commercial decisions. There are similar services being

delivered within the Demand Directorate and out of scope of the SCC review. We will

undertake a review of the service and where there is duplication of tasks we will look for

efficiencies and explore the benefits of combining the team into one contract support team.

Procurement Team x 2 FTE

HfH is a contracting authority in its own right – body governed by public law. Its procurement

concern is anything on the company balance sheet. HfH can use suppliers set up by council if

council advertises them naming HfH on contract notice, or, if a group of councils are

advertising, opening the use of suppliers to housing companies or RSLs.

Quality Team

This team are strategic business improvement housing experts that assist the business achieve

the high levels of performance and service delivery to customers that the Business Plan and

new contract expects the organisation to realise. The quality and timeliness of the continuity of

this service is an important factor together with the ability to react and response to business

demands.

Quality Manager x 1 FTE

Leads the Quality team and drives improvement projects including challenge to the business,

lead client function on performance information SLA from the LBH. Responsible for delivering

the framework within which change and transformation and innovation will be delivered.

Programme Managers x 2 FTE

Internal, independent challenge to improvement, housing experts who fully understand the

business and sector best practice.

Business Analysis x 1FTE

Support to the programme managers in process reengineering

Housing Information Team – 9 x FTE

The services provided by the Housing Information Team (HIT) fall into four connected areas;

housing application development, information management & business application support.

Page 17 of 38

Homes for Haringey Board 2nd November 2015 Agenda Item

1 of 6

Report for Board

Title Budget Process – 2016/17

Report for Discussion

Business plan link Business planning

Risk map link B1 - Lack of alignment between HfHs Business Plan and LBHs

strategic objectives; and failure to deliver on these objectives

B2- Failure to exert financial control and appropriate forward

planning within approved budgets and new commissioning

Authority for decision The Board retains authority to approve the Homes for Haringey

budgets 2016/17

Officer to contact for more

information

Stephen Lloyd – Interim Head of Finance

Catherine Hardy-Smith – Head of Corporate Affairs

Executive Director Andrew Billany – Managing Director

Portfolio Holder Jenny Coombs

KEY ACTION: That the Board note this report as a discussion document to support the budget setting

process for 2016/17

INTRODUCTION

This report sets out the background to the 2016/17 budget preparation process and the issues that

will need to be taken into account during the process. Although 2016/17 is the second year of three

of the Medium Term Financial Plan (MTFP) and associated savings targets, there are still a number of

variables which will impact on the level of management fee we receive in 2016/17 and the size of

the managed budgets we are given by the Council.

These include the impact of the Business Infrastructure Programme (BIP), any agreed changes to the

services provided under the management agreement and any potential further savings required by

the Council.

Even greater focus will be required to review existing budgets and delivery methods in order for the

required MTFP savings to be achieved. A zero-based budgeting approach will be employed with

managers to ensure that budgets reflect the real cost of delivery and to provide accurate cost data for

when savings have to be identified.

This report sets out the starting position for budget setting (including the management fee) for

2016/17, the milestones for the budgeting process and some of the issues that might affect the final

budget position.

TIMING

The formal budget setting process has yet to start but this report, along with the Business Planning

and Performance reports, is intended to inform the Board of the context on the budget setting process

for 16/17 and inform the business plan process that has begun.

Page 18 of 38


2 of 6

BASE BUDGET ASSUMPTIONS

Company Budget

The normal starting position for the Company Budget is to take the current year agreed management

fee and reduce it by following year’s Company related MTFP savings target and adjust for any

additional investment allowances to achieve those savings. The resulting draft position for 2016/17

is:

Company Budget Budget

15/16

£000’s

Additional

Budget

£000’s

Proposed

Savings

£000’s

Net

Movement

Proposed

Budget 16/17

£000’s

HfH Management

Fee

(35,639) 40 925 965 (34,674)

HfH Running Costs 35,639 (40) (925) (965) 34,674

HfH Net Budget 0 0 0 0 0

Savings/Investment Theme Proposal 2016-17

£000’s

Unification Synergies Streamline & integrate housing

& related functions.

(150)

Repairs Achieve efficiencies in the

management of the repairs

service.

(300)

Management Reduce internal monitoring (75)

Management Achieve year on year

efficiencies

(400)

Investment Reduction for 2015/16

investment

(40)

Total (965)

Despite the above table showing the starting position for the Company Budget for 2016/17, there

are a number of significant factors that will determine the final position. These factors will need to

play out over the next three months or so prior to the final budget being agreed:

Business Infrastructure Programme – Decisions are currently being made which will determine

the support services that will continue to be provided by staff employed by HfH and those

which will be provided through an SLA with the Council. In theory there should be no net

impact on the overall Company budget, initially, though overall efficiencies are expected.

Page 19 of 38


3 of 6

New Management Agreement – The services provided under the new Management

Agreement could differ from those currently provided. This could result in budgets moving to

and from the Company Budget to Managed Budgets. For example, it may be desirable to

have the overhead budget for Housing Demand become part of the Company Budget (albeit

strictly a General Fund element of our management fee) leaving the direct costs of procuring

temporary accommodation as a General Fund managed budget.

Bottom up review of Management Fee costs by Council – The Council are planning to carry

out a bottom up assessment of whether the current management fee correctly reflects the

services being provided by HfH.

Further savings – although nothing specific has yet been stated on further savings, the current

state of the Council’s General Fund and HRA reserves suggest that further savings may be

required. This will require scenario planning and modelling for an operating environment

with significantly smaller budgets.

Pay award – no assumption is made in the above figures for allowance of a pay award in

2016/17. This is normally agreed with the Council and the Management Fee adjusted

accordingly.

HRA Managed Budgets

The managed budgets we will be given for the HRA are still to be determined. We are working with

the Council to establish, amongst other things, the impact of the following key factors:

The government’s proposals to reduce social rents by 1% from April 2016.

The level of planned maintenance programme that can be accommodated within the HRA

following the end of Decent Homes funding.

Council decisions with regard to proposed increases in rents for garages and service charges

for sheltered schemes.

There is one specific MTFP saving identified for HRA managed budgets in 2016/17. This relates to

£250k additional income from garage rents as a result of bringing back into let garages which

previously had been un-lettable due to disrepair. This is in addition to the £250k savings target for

the current year resulting from the planned decision to consider an increase in existing garage rents.

The 2015/16 saving is already at risk due to delays in the fee review process, though this will be

recoverable over the longer term – assuming agreement of a fee increase.

General Fund Managed Budget (Housing Demand)

There are fundamental flaws in the 2015/16, and consequently 2016/17, base budgets for Housing

Demand. Current year forecasts are already indicating close to a £5m overspend in this area. This is

fundamentally as a result of the increasing demand and cost of temporary accommodation, both

Nightly Rated and Private Sector Leasing. The table below shows how the base budget will be further

reduced in 2016/17.

Although strategic measures are being put in place to try and control the rising demand and cost of

temporary accommodation, we are faced with a worsening budgetary position in 2016/17. Although

this is a managed budget, with the council ultimately having to find any shortfall from reserves or

other General Fund areas, we have a responsibility to actively manage income and costs in this area.

Page 20 of 38


4 of 6

This will be subject to detailed and strategic reporting to the Board, via the Managing Director and

Director of Housing Demand, during the course of the year.

Housing

Demand

Budget 15/16

£000’s

Additional

Budget

£000’s

Proposed

Savings

£000’s

Net

Movement

Proposed

Budget 16/17

£000’s

Housing

Demand

6,254 100 (1,125) (1,025) 5,229


£000’s

Early intervention/Prevention Reduce use/cost of temporary

accommodation

(800)

Unification Synergies Streamline and integrate

housing and related functions

(150)

Management Achieve year on year

efficiencies

(175)

Investment TA Reduction Strategy 100

Total (1,025)

General Fund Managed Budget (Other)

There is one additional area of General Fund budget which we continue to manage in 2016/17. We

have been commissioned to establish a lettings agency that will, amongst other operational

objectives, generate some additional income to the General Fund. We were provided with a £200k

set up budget for 2015/16 and the current MTFP allows for £250k in 16/17. However, there is also

an expectation that net income will be generated from operations of £225k resulting in a net budget

of £25k.

Lettings

Agency

Budget

15/16

£000’s

Additional

Budget

£000’s

Proposed

Savings

£000’s

Net

Movement

Proposed

Budget 16/17

£000’s

Lettings

Agency

200 50 (225) (175) 25

Page 21 of 38


5 of 6


£000’s

Additional Income Create a Lettings Agency (225)

Set Up Costs Create a Lettings Agency 50

Total (175)

ZERO BASED BUDGETING

Given the continuing pressure on budgets and the need to achieve the MTFP savings, a thorough

zero-based budgeting approach will be taken to setting budgets for 16/17. This will provide the basis

for understanding the true costs of delivering our services and enable informed decisions as to which

budgets to cut and the impact they would have on service delivery.

It is proposed that all identified savings are built into the base budget and that plans are put in place

in advance of the new financial year to ensure that the full year effect of savings are achieved. This

will no doubt include coordination with the Council where they are required to make policy decisions

to enable the savings to be achieved.

TIMESCALES

Formal dates for the budget setting process have yet to be agreed with the Council. However, for

HfH the following key dates are in place:

Budget Timetable

Board Final Approval 29/02/2016

Board First Review 25/01/2016

ELT Final Approval 20/01/2016

(may require earlier/special meetings

depending on timescales for Board Papers)

ELT First Review 16/12/2015

Finance Review completed by 11/12/2015

Budget Reviews with managers Nov-15 (Individual dates to be Diarised)

Risks

Any risks have been highlighted in the relevant section of the report.

Page 22 of 38


6 of 6

Finance

The budget setting process for 16/17 will be tighter than ever with prior year’s savings being added

to with further savings. Services are likely to come under pressure as a result and cost effective ways

to reduce costs without affecting service will be of paramount importance.

RECOMMENDATION

1. That the Board use this report as a discussion document to support the budget setting

process for 2016/17

Page 23 of 38

Homes for Haringey

Audit & Risk Committee 07 December 2015 Agenda Item 3

Meeting: Audit and Risk Committee Meeting

Date: 14th

September 2015

Venue: 48 Station Road, Level 1

Present: Jenny Coombs (JCo) - Chair, Philip Goodwin (PG), Roger Bush (RB),

Adzowa Kwabla-Oklikah (AKOk), Joanna Christophides (JCh)

In Attendance: Charlotte Currie (CC), Anne Woods (AW), Andrew Billany (AB), Maurice

Dickenson (MD), Ray Green (RG), Astrid Kjellberg-Obst (AKOb), Chris Liffen

(CL), Price Water House Coopers (PWC), Patricia Forrest (PF) - minutes

Apologies: Keith Jenkins (KJ), David Sherrington (DS), Catherine Hardy-Smith (CHS)

Distribution: All Board Members, ELT and Committee Members

Item Minutes Action

1. Welcomes

The Chair welcomed all to the meeting.

2. Declarations of Interest

No new declarations.

3.

Minutes of meeting held on 19 May 2015

The minutes were approved as an accurate record.

Action: The Committee requested a forward plan including agenda items.

Matters arising

Outstanding actions are addressed through the reports.

PF

4. Item 4 Draft Statutory Accounts & Associated reports

AB introduced and welcomed Ray Green to Homes for Haringey as Interim

Head of Finance.

The Chair introduced Price Waterhouse Coopers, external auditors and

welcomed them to the meeting.

JC explained that PWC are here to give background and overview of the

report. Officers left the room while PWCs’ report was discussed. PF and CC

remained.

PWC gave an introduction to the report and explained rating keys and

advised the audit was conducted as planned. PWC confirmed they are

entirely independent.

Audits are all complete subject to the Cabinet meeting at which LBH will

confirm a new contract for HFH. An updated letter of on going support will

Page 24 of 38

Homes for Haringey


Item Minutes Action

need to be produced following 15th

September Cabinet meeting to

demonstrate that HfH is a going concern.

There are no misstatements.

PWC advised that since auditing HfH direction of travel in terms of

performance has remained consistently of a good standard.

Officers were invited back into the room at 6.42pm

The Committee discussed employee pension adjustment.

PWC clarified that the final pension sum is calculated by the actuary at the

end of the financial year and not month to month. This will be updated as a

final position at the Board meeting on 28th

September 2015.

JCo stated Haringey Council take this cost as part of their group account. If

this did take us into deficit the Council would be responsible for the cost.

AKOk highlighted that the decline in customer satisfaction presented on page

19 is not included in the text.CL explained that this decline is owing to a

change in approach of information collection and measures.

Action: The accounts have to be correct and show the position at the date

Board views it. Some of the current detail does not reflect position as at 28th

September e.g. in manager’s forward. The whole report will need checking to

ensure all content is current.

Action: KPIs (page 90) performance has declined but this is not reflected in

the narrative. Customer Satisfaction narrative needs clarification to explain

the decline in performance. Where the numbers suggest a significant change

in performance this must be reflected in the narrative.

PWC left the meeting at 6.50pm

The Committee noted the report and approved that it be recommend, with

the changes, to the Board at its next meeting.

AA

RG

RG

5. Financial Reporting

JCo stated there has been a great deal of work to get financial reporting as

accurate as possible to enable the board to query in the way that they

should. JCo invited the committee to provide feedback on presentation and

advise officers what they need in order to support them.

Presentation discussion

RB suggested some graphical reporting, as from the report there isn’t

Page 25 of 38

Homes for Haringey


Item Minutes Action

a clear message standing out.

Tables need labelling and are too small

Reports need to easily and clearly highlight the good and the bad

Narrative and table should be presented on the same page

Include narrative on what we are trying to achieve

Trends could be better presented with graphics

Action: NB JCo had more specific comments which she said she would send

to ABi separately.

AB noted that we have moved positively to a position where we have one

report to look at. The finance session on 16th

September 2015 has been

planned to help support Board Members and the Executive.

AB noted generally we are on track financially with the exception of

Temporary Accommodation. This is comparable across London.

We will be presenting options to the Board to enable monitoring of

performance in this area, for example the allocation of Modular homes to

ease pressures on Temporary Accommodation.

PG noted his concern that the responsibility of tackling the overspend already

associated with Temporary Accommodation has now been to transferred to

Homes for Haringey from Haringey Council, particularly whilst there is an

ongoing expectation of making savings.

AB stated that Haringey Council has been very supportive and positive with

the service transfer.

AB advised that we have to explore multiple solutions to tackle housing

demand as our current approach is too narrow and we maybe impacted by

the crisis in Syria, if people move to London this will add pressure on

demand.

AB explained Haringey Council are responsible for the pension deficit as part

of the management agreement. The actuary will set the pension every three

years, this will not be a lump sum for the Council to pay but spread over 20

years.

Action: PG would like better information on the Planned Preventative

Maintenance (PPM) programme spend, delays noted in the Board Bulletin as

owing to scaffolding. Information needs to be complete and in date and a

proper reflection of the current position.

CL explained that there are multiple factors contributing to the delay,

including procurement phasing. We have also investigated pricing for

scaffolding, contractors had been charging for incorrect level of works. This

RG

JCo

CL

Page 26 of 38

Homes for Haringey


Item Minutes Action

has now been corrected and PPM is starting on site this month.

CL is meeting with DS and Capital Project team week commencing 21st

September and will be able to provide an update on progress.

Action: CL notes that Capital Works always are presented one period behind

and he will be working with the Finance team to include a line in reporting

for accruals to present a more accurate picture of spend.

JCo notes we are projecting a £4mill deficit.

MD explained that as the year progresses forecasting becomes more

accurate, but managers will re-estimate for each reporting period.

AB notes improvement needed in forecasting within Housing Demand, staff

are transitioning from the Council to HfH staff and will be supported to

forecast more accurately as in other HfH service areas.

AKOk stated that we forecast the Housing Demand overspend and have

external consultancy support looking this area.

The Committee noted the report.

RG

RG

6. Quarterly Health and Safety Update

CL highlighted compliance issues in Temporary Accommodation. We are

currently reviewing our contract with freeholders, as we would like to be

responsible for tackling access issues to ensure gas safety checks can be

carried out.

We are currently working to identify compliance gaps;

looking at the information and data being collected on gas testing

lightening protection and certification, identifying those that have not

been included in Decent Homes programme

JCo expressed her concern in this area, highlighting to the Committee that

the responsibility for this area falls directly on the Board.

Ridge consultants are carrying out compliance review and gap analysis of

H&S compliance in Temporary Accommodation. Their report is due mid-

October which will inform an action plan.

CL noted that we are confident that staff have the right information to work

safely; health and safety induction was not picked up at the start of

employment previously, and is now part of corporate Learning and

Development.

ABi stated we are currently looking at minimum and reasonable standards for

Temporary Accommodation. We do have concerns about properties that are

Page 27 of 38

Homes for Haringey


Item Minutes Action

deemed as boarder line.

CHS is working with the council to address the issues at the 48 Station Road

office. There is an action plan and a Health and Safety committee at

Executive Level.

AKOk suggested that with the current vacancy for Head of Health and Safety

position there may be a need for a bigger cultural campaign with staff on

how we treat Health and Safety in the organisation.

CL advised that there is a job advert for a Health and Safety manager ready

for recruitment pending the decision of Cabinet on 15th

September 2015.

PG offered the Board support to Executive team to challenge blockages in

progress and asks the Executive if we are being robust enough in our

challenge to protect staff.

Action: AB noted we are working collaboratively with Haringey Council to

progress issues and suggested a report to the Committee on the use of 48

Station Road, including snagging, all outstanding actions be presented at the

next Audit & Risk Committee.

Action: The Committee also requested an action plan around discharging

our duty of care to employees in this office, picking out issues of compliance

with regulation.


CL

7. Head of Audit annual report

AW provided copies of reports to PWC. AW’s service provides internal audit

support; this is outsourced to Mazars, HfH benefits from a subsidised fee.

AW noted some changes to the Audit Plan requested by the Executive and

approved by Audit & Risk Committee.

AW noted positive ownership and responsibility from the Executive. A new

process has now been put in place which should avoid reports from getting

stuck with service areas. The Decent Homes audit has been formally deferred

and the report due next week.

AW notes no ‘no assurance’ reports.

Action: JC suggests the target on Performance of Internal Audit completed

(to final report) is changed from 95% to 100%.

AW & ABi highlighted the positive current collaborative counter fraud work.

AW

Page 28 of 38

Homes for Haringey


Item Minutes Action

AW & AKOb provided an overview of activities included as part of this work

and advised the Committee we will be able to give a full picture of positive

work at the end of Q2 in November/December on outcomes.

CC gave Mazars’ apologies for not attending the meeting; this is owing to

staff sickness. ELT have seen the audit plans and a process in place. Debt

write off is a key issue and the big focus is on debts over two years old.

Action: AW to check if there any priority one recommendations regarding

temporary staff.

Within Tenancy Management there are limited level of assurances one

priority one & two priority two.

Since the 2013/14 audit tenancy checks performance has deteriorated from

substantial to limited. AKOb clarified that this is owing to an increase in

patch size for tenancy management officers (TMOs) from 350 homes to 700.

AKOb gave assurance that we are changing IT systems enabling TMOs to

work more efficiently and to put us back to substantial.


AW

8. Item 8 Audit and risk

CC highlighted the recommendations that are outstanding. There is a link

with the majority of outstanding recommendations and IT improvements that

are underway.

Audit & Risk committee are responsible for reviewing risk map before it is

presentenced to the Board.

Action: The Committee requested see direction of travel included e.g. if the

last report was substantial and we get a limited assurance, what has

changed, what are we doing differently? Why has it gone up or down?


AW

9. Procurement Update

No comments. The committee noted the report.

10. Risk map

CC explained that red risks relate to Temporary Accommodation overspend

and H&S issues and Directorate risks maps will describe each risk in more

detail. JCo noted the importance of the risk map being reviewed at each

Audit & Risk committee meeting.

Page 29 of 38

Homes for Haringey


Item Minutes Action

The Committee noted the risk profile and the report.

AOB

AKOb advised the Committee of a new additional risk identified in Supported

Housing.

We have identified that 50% of residents in Supported Housing have support

plans that are older than 12 months; this means they are out of date. AKOb

has introduced a new checking process for staff and has a programme in

place to ensure we are fully compliant by 28th

September 2015 Board

meeting. Going forward we will be looking at quality of support plans and

how we sustain compliancy. We are looking at IT systems, including moving

staff to tablets; ensuring information sharing is efficient and effective. This has

also highlighted where teams need more support and whilst currently

uncomfortable reading this process has enabled us to learn more.

The Committee noted the update.

Meeting close 8:30pm

Date of next meeting: 07 December 2015

Page 30 of 38

Homes for Haringey


Summary of Approvals/Delegations


Minutes 15th

May 2015 3 Approved

Statutory Accounts 4 Approved for recommendation to the Board

Summary of Actions and progress

Date of

meeting

Item

number

Action Officer Due date Comments

14/09/15 Minutes The Committee requested a forward plan including agenda items PF 7/12/15

14/09/15 4 An updated letter of on going support to be produced following 15th

September Cabinet meeting to demonstrate that HfH is a going

concern.

AA 15/9/15

14/09/15 4 Some of the current detail in the accounts does not reflect position as

at 28th

September e.g. in manager’s forward. The whole report will

need checking to ensure all content is current.

RG 15/9/15

14/09/15 4 KPIs and Customer Satisfaction performance has declined. Any

significant change in performance must be reflected in the narrative.

RG 15/9/15

14/09/15 5 Further changes to be made to the layout and presentation of the

financial reporting as members felt it was still difficult to read.

RG 7/12/15

14/09/15 5 Improvements are required with the forecasting for Housing Demand

overspend.

RG 7/12/15

14/09/15 5 Information on the Planned Preventative Maintenance (PPM)

programme spend needs to be complete and in date and a proper

reflection of the current position. CL to work with the Finance team to

include a line in reporting for accruals to present a more accurate

picture of spend.

CL 7/12/15

14/09/15 6 A report to be presented to next Audit & Risk Committee of an action

plan of outstanding actions following the move to 48 Station Road.

DS 7/12/15

Page 31 of 38

Homes for Haringey


14/09/15 7 JC requested that the target on Performance of Internal Audit

completed (to final report) is changed from 95% to 100%. Also if

there any priority one recommendations regarding temporary staff.

AW 7/12/15

14/09/15 8 The Committee requested that direction of travel is shown in the new

audit reports e.g. if the previous report was substantial but the latest is

limited assurance, it needs to be clearer and should also try to reflect

what has changed, what we may be doing differently to have caused

the deterioration.

AW 7/12/15

Page 32 of 38

Homes for Haringey Residential Community Interest Company trading as 51

Degrees North Agenda item

51 Degrees North


Date: 2pm, 20th

April 2015

Venue: HfH Managing Directors Office, Alexandra House

Present: Andrew Billany (AB), Chris Liffen (CL), Astrid Kjellberg-Obst (AKO),

Catherine Hardy-Smith (CHS)

Officers in

Attendance:

Apologies:

Distribution: All Board Members, Executives

Item Minutes Action

1. Welcome and apologies


2. Declarations of interest

The Board noted that director declarations for Homes for Haringey Limited

apply to 51 Degrees North. The register will be updated.

CHS

3. Appointment of Chair, Secretary and Director

The Board approved that Andrew Billany be appointed as Chair and that

Catherine Hardy-Smith be appointed as Company Secretary and Director. The

register will be updated.

CHS

4. Bank Accounts

The Board approved the opening of the Bank accounts with Santander and

approved the initial signatories as the Company Directors and the Head of

Finance, with 2 signatories required at any one time.

CHS

5. Commission structure

The Board approved that the year one commission structure should be:

Director of 51 Degrees North: YR 1 Guaranteed Bonus of 20k (total package

£85k)

Negotiator: YR 1 Guaranteed Bonus £15k

Property Manager: YR1 Guaranteed bonus £5k

Administrator & Finance Officer: YR1 Guaranteed n=bonus £3k

YR 2 and beyond: To be agreed with each years business plan and will be a

combination of a % of individual income generation and an amount linked to

the companies bottom line performance. The total salary and commission

package will have a cap of £110k. Exceptional performance by the individual

and Company may be rewarded over this cap by the agreement of the Board

Page 33 of 38



51 Degrees North

as an exception and non consolidated payment.

6. Brand and trading name

The Board reviewed the branding story and approved the trading name of 51

Degrees North (subject to other stakeholder feedback) and the branding.

7. A.O.B

1. Audit- schedule of audits to be put in place for 2015/16 once trading

begins- Board to approve then to HfH Audit and Risk Committee for

approval and monitoring

2. Financial model to be demonstrated at next meeting

CHS

CHS

Page 34 of 38



51 Degrees North


Date: 11.30am, 29th

July 2015

Venue: Large meeting room, 48 Station Rd

Present: Andrew Billany (AB), Chris Liffen (CL), Astrid Kjellberg-Obst (AKO),

Catherine Hardy-Smith (CHS)

Officers in

Attendance:

Kate Townrow (KT), Andrie Neophytou (AN) , Ajmal Mian (AM),

Rebecca Begej (RB)

Apologies: None

Distribution: All Board Members

Item Minutes Action

1. Welcome and apologies


2. Declarations of interest

There were no new declarations.

3. Minutes from the Board meeting held 20th

April 2015 and matters arising

The minutes were approved as an accurate record of the meeting.

Matters arising:

Bank accounts: the Company Secretary reported that the required controls

around the bank account were not in place. Dual signatures and individual log

ins along with the required process were not in an auditable position. To

provide a roust over sight the Board approved that the Company Secretary be

appointed as the banking representative for Santander and that she be the sole

bank controller until all controls were in place.

Re forecast of Move 51 Degrees North financial requirements: The AD of

Finance at LBH is considering if the additional investment is better put onto

commercial terms, to avoid any conflict with State Aid requirements in the future

if there is additional investment required for growth, and to enable a draw

down facility to be developed. Any new investment conditions will need to be

agreed by Board of HfH. Until this decisions is received we are unable to

provide the LBH COO with the re forecast and business case for additional

investment.

CHS

4. Financial Regulations & Scheme of Delegations

CHS presented the Financial Regulations and the Scheme of Delegations for

the Company.

Financial Regulations:

CHS

Page 35 of 38



51 Degrees North

Alterations were made as follows:

Policy2: Any lending will need to be approved by the Board and the

HfH Board.

Policy3: Maximum credit card limit of £1k.

Policy 4: Company contracts to be added to HfH contract register and

reported to the Audit and Risk committee for monitoring.

Policy 5: Add to supplier information: credit check to include criminal

record cheks

Policy 7: Expenses incurred to be claimed through payroll.

The Board approved the Financial Regulations

Scheme of Delegations:

The Board approved the Scheme of Delegations.

AM

5. Project update

KT presented the update.

Key discussion points:

VAT position to be clarified. VAT advisors to the LBH state that there is

no impact on group VAT by the interaction between HFH invoicing

landlords and Move 51 Degrees North invoicing HFH. This doesn’t

appear correct so Matthew Gaynor at LBH is being re consulted.

Branding- slight delay to project (2 weeks) as brand had to be re

worked due to Trade Mark risks. Slightly altered brand sits well with

stakeholders and has been approved by Chair of HFH Board and Cllr

Strickland. Message and story beneath remains the same.

Main risks remain: PI cover being in place by launch (delays in

quotations for start up business); and ARLA registrations.

Visibility of operational links between HFH and Move 51 Degrees North

to be discussed with AKO separately.

Financial model was not available however AM took the Board through

the financial report. CL has been through the model with AN.

The Board noted the report.

CHS

KT

6. A.O.B

1. Timings of meeting to be reviewed to incorporate enough time for

project and Board considerations.

CHS

Page 36 of 38

Homes for Haringey Residential Community Interest Company trading as 51 Degrees North

Agenda item

51 Degrees North

Decision Log

Action Log

Date of

meeting

Agenda

Item

Action Action

owner

Action due to be

completed

Action completed and

comment

20/04/2015 AOB Schedule of audits to be put in place for 2015/16 once trading

begins- Board to approve then to HfH Audit and Risk Committee for

approval and monitoring

CHS By end of August

2015

20/04/2015 AOB Financial Model to be demonstrated at next board meeting CHS delete Model not available. Board

taken through financial report.

27/07/2015 5 VAT position to be clarified in writing from LBH CHS ASAP

29/07/2015 5 Operational links to HFH to be clarified to AKO KT ASAP

29/07/2015 4 Financial Regulations to be updated with changes AM ASAP

29/07/2015 AOB Meeting schedules to be reviewed CHS ASAP


Minutes from the Board meeting held on 20th

April 3 Approved

Bank authority 3 Approved the Company Secretary will be the bank controller until further notice

Financial regulations 4 Approved with amendments

Scheme of Delegations 4 Approved

Page 37 of 38

Risk Ref

Risk Residual Risk RAG Status - After Controls

Causes Effects Specific Control Measures Date the Control Measure will be completed

Control number

Additional Information

Lack of influence at a strategic level with LBH

Lack of autonomy to deliver wider growth/added value objectives; possibility that decisions/approvals are withdrawn after the event

Business plan approved & financial forecasting reviewed monthly by LBH

In place L1.1

LBHs political position is in conflict with the commercial aspect of the agency or affects/delays decisions

Restrictions on the agency's ability to publicise the service; Failure to deliver growth within the timescales required within the business plan

Allow for flexibility in reacting to significant changes in the operating environment and potential new opportunities through regular reports / suggestions being made to Cabinet

Ongoing L1.2

Reporting & monitoring processes are ineffective or unreliable

Loss of confidence in Board's ability to deliver

Robust and closely managed suite of KPIs in place

In place L1.3

Key staff are ineffective, or leave the organisation

Lack of continuity / failure to deliver business plan

Board to oversee scrutiny of outcomes and progress against the business plan

Board to oversee structured exit and handover periods for temporary staff to avoid loss of critical skills

In place L1.4

Financial modelling cannot predict demand where the business has no inherent market share or acquired business.

We can only rely on projections which may not be accurate

Financial projections are based on conservative estimates to leave as much elbow room as possible within the business plan, and are scrutinised and challenged by the Agency Board.

Ongoing L2.1

Risk appetite not defined / opportunities taken without due diligence


Very clear controls in place around decision making, which is overseen and underwritten by LBH

Constant scrutiny of intiatives being employed by other social landlords and comparable organisations across London

In place L2.2

Financial planning, resources, monitoring and management is inadequate

Failure to produce / understand financial performance information and failure to maximise profits

Sensitivity testing in place around cashflow / budgets

New management accountant in post to re-examine all the financial analysis undertaken to date

ASAP L2.3

Lack of cashflow Inadequate time / resources to launch the business

Requesting for LBH to provide more of a "float" to allow the business room / time to develop

Attempting to access additional funding e.g. Diversify the business by moving into sales

1.12.15 L2.4

Financial regulations and the controls around the use of assets are not embedded, understood or effectively monitored

Breach of FCA regulations

Financial loss

Review and monitoring of adherence to the financial regulations (two Directors have to authorise a payment with the bank)


In place L3.1

Inadequate internal controls in place to prevent money laundering

Reputation is adversely effected

ARLA registered, therefore apply best practice rules around identification of cases. Area to undergo internal audit next year.

Ongoing L3.2

Controls around management of third party (client) accounts are not robust

Theft of third party money by an employee with access to the bank

Robust financial regulations tested against FCA control measures.

Internal audit

01/11/2015 L3.3

Staff fail to declare conflicts of interest

Staff member is able to enter into a private arrangement with a landlord

Robust process of registering conflicts of interest in place

01/11/2015 L3.4

Legislative requirements are not understood e.g. Right to Let and FCA legislation

Failure to keep track of emerging legisation around the private rented sector and/or failure to adapt processes and controls to ensure compliance

Regulatory intervention and / or judicial challenge

Informed, adequate legal advice is purchased wherever necessary

As well as the new financial control manager, the head of finance at HfH will have ongoing access and will be doing regular spot-checks. We are working out an audit plan with Mazars to begin once clients come on board; this will include checking the client account. The Mazars audit programme will have the oversight of HfHs Audit and Risk committee.

The Company Secretary and Director are qualified ARLA and the rest of the staff are becoming qualified (within 3 months)

31/12/2015 L4.1

New AML regulations mean that a Trowers Client Account would be considered third party and not compliant from Jan 2016 unless Trowers become ARLA members.

We cannot get company registration without a client account

Pursue setting up an account via Barclays

ASAP L4.2

Uncertainty over rules relating to e.g. Contracts and procurement

We fail to adhere to our own internal procedures

Clear procedures in place around accountability and where powers of decision-making sit

01/11/2015 L4.3

Failure to follow appropriate financial and management rules around how the business should be run

Financial loss from substantial and/or unlimited fines; reputational damage

*Compliance with ARLA code of conduct and FCA regulations*Member of Property Ombudsman*Use of Tenancy Deposit Service (TDS) to offer client money protection (ARLA provide insurance on this)

In place L4.4

Failure to identify and manage risk effectively

In place L5.1

Lack of robust understanding and management of the responsibilities that fall to the agency

In place L5.2

Inadequate research Risk Management process is ineffective and not embedded into the business at all levels

L1 Lack of alignment between Lettings Agency Business Plan and LBHs strategic objectives; and failure to deliver on these objectives

30 16.10.15: This risk has been given overall amber rating due to restrictions around our ability to control changes that may be made by LBH, or to the possibility that the strategic direction of the agency may get changed which will render it unviable. This has already materialised as LBH made changes to the comms plan and stopped the press releases from going out as they felt there was a political conflict. We are yet to see the impact of their actions on our ability to procure business. This may fall away as LBH see that we can control this new area of business.

L2 Failure to exert financial control and appropriate forward planning within approved budgets and new commissioning

30 16.10.15: This has an overall grading of amber. £450k has been approved by the COO. There is still modelling to be completed and KPIs to be set which will be completed by the end of October. It is difficult to forecast when and how much income may be expected as it is impossible to predict when landlords may come forward with properties.

L4 Failure to comply with statutory obligations (e.g. data protection, code of governance, regulatory requirements etc)

L3 Incident of major fraud

16 16.10.15: The lettings agency is not yet registered with FCA. Not all procedures are in place yet as we work through requirements under new Right to Let legislation and FCA requirements. Under Right to Let M51*N would share responsibililty with a landlord to keep tabs on any tenant whose visa was nearing expiry (it would be illegal to refuse a tenant on these grounds). If a landlord failed to evict a tenant who had no right to remain, M51*N would have to terminate the contract with them.

As it is a new area of business, controls need to be robust and well tested and financial performanceand governance will be scrutinised. This will become more focussed as clients join the business.

The issue at L4.2 regarding the Client Account materialised 22.10.15. Board will be updated on the latest developments at the meeting.

20 16.10.15: Currently amber due to the fact we are unable to fully control the possibility that a rogue staff member may be able to enter into an arrangement that has not been entered on any of our systems therefore is invisible. Once the business gets bigger this may be more of a risk as it will be busier and managers may not always know everyone's precise caseload.

With regard to theft of third party money, we need a volume of third party clients before the controls around this can be tested.

L5 Health and Safety incident leads to serious injury or death of a customer or staff member

16.10.15: Lone working procedure has been developed but needs sign-off by Jamie. Once approved, trainng will take place and be refreshed every 12 months. An overall risk assessment template has been completed but should be tested.L6 Failure to anticipate

and prepare for an act of god disaster/ major incident

20 Criminal action against liable officersFines and reputational damage

Public indemnity insurance of £10million

Use of "Aspasia" system which provides a checklist e.g. a tenancy agreement cannot be produced without a gas certificate. Director checks issue of all TAs. Contractors will be cross-checked L6.1 16.10.15: A BCP is in place for the

business but requires updating. It will address what is expected of staff, but in a major incident there are limitations

0.00009

Directorate plans adversely affected by a disruption in delivery of goods/services

Robust disaster recovery / business continuity plan in place

01/12/2015

Page 38 of 38

Documents

Homes for Haringey November 2015 N22 7TY onfidential · Board 02 November 2015 Agenda Item 3 Page 5 of 7 options. The Board noted the content of the report 9. Minutes of the Audit