THE GLASGOW HOUSING ASSOCIATION LIMITED
MINUTES OF GHA BOARD MEETING
FRIDAY 30 October 2009
Present:
Sandra Forsythe (Chair), Alastair Dempster (Vice-Chair),
Ian Wall, Liz Walford, Alastair MacNish, Keith Kintrea,
Wilma Masterton, John Grant, Gordon Sloan, Robert
McCormick, Kate Willis, Councillor James Dornan and (In
Part) Councillor Philip Braat
In attendance:
Martin Armstrong (Acting Chief Executive), Mark Logan
(Executive Director of Finance and Business Services),
Peter Denheen (Executive Director of Organisational
Development), Graham Isdale (Interim Director of
Communications), Jim Sneddon (Executive Director of
Regeneration), Alex McGuire (Acting Director of Housing
and Customer Services), Julia Henderson (Interim
Company Secretary), Anthony Allison (Governance
Executive Officer) and (in part) Gosia Motler (Group
Treasurer and Chief Financial Planner), Lorna Wilson
(Head of Business Strategy), Lindsay Gemmill (Head of
Community Empowerment), Pauline Innes (Financial
Controller), David Fletcher (Assistant Director of
Regeneration), Jennifer Russell (Managing Director
GHAM), Lorraine McLaren (Neighbourhood Renewal
Manager)
The Chair informed the Board that Alex Neil MSP, the Minister for
Housing and Communities would be attending part of the meeting.
The Chair welcomed Councillor Philip Braat to his first Board meeting
and noted that Martin Armstrong, Alex McGuire, Mark Logan and Julia
Henderson were attending their first Board in their capacity as Acting
Chief Executive, Acting Director of Housing and Customer Services,
Executive Director of Finance and Business Services and Interim
Company Secretary respectively.
1.
Apologies for Absence
There were no apologies for absence.
2.
Declarations of Interest
Wilma Masterton declared an interest in the eviction report and noted that for
the GHAM item, she is a GHAM Board member.
Gordon Sloan declared an interest in the procurement item in relation to the
Carntyne Wingets.
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3.
Forthcoming Events
The Chair noted that the Business Transformation Committee was rescheduled
to 13 November and that there was a Tenant Participation event on
Wednesday 4 November.
Decided: The Board noted the information contained in the attached list
of forthcoming events.
4.
Action List
Decided: The Board noted the information contained in the action list.
5.
Minutes of Board Meeting held on 24 September 2009 and Matters Arising
A member requested that in the Chief Executive handover report, the role of
the Board in promoting stakeholder engagement be reflected.
Decided: The minute of the meeting, subject to the amendment noted
above, on 24 September was approved.
Matters Arising
The Chair noted that the papers on unit cost analysis and the proposed
Finance Committee were on the agenda.
6.
Committee and Subsidiary Minutes
Decided: The Board noted the Operations Committee minutes of 7
August and Regeneration Committee of 27 August.
7.
Business Performance
Alex McGuire introduced the report and provided a summary of performance in
Period 6. He noted that rents and letting performance continued to improve,
with arrears performance at GHA’s best ever level and lost rent is ahead of
profile.
Alex stated that cyclical maintenance continues to be monitored, with the end
of year target expected to be met.
Alex explained that the Delivery Plan remained on target, with only three items
unlikely to be achieved on target. Alex noted that for one of those unlikely to
be achieved, lets to homelessness within 6 weeks, a different priority had been
agreed with Glasgow City Council in order to achieve sustainable tenancies.
A member noted that sickness rates continue to be a concern. The member
noted that whilst long-term sickness was reducing, short term was increasing.
A member echoed the concerns raised and noted the differing absence rates
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within the various business functions.
Peter Denheen advised that Human Resources were working with managers to
understand the causes of absence and how it can be managed. He added that
a counselling service was available to staff and that we are engaging with
Trade Union colleagues in our approach to attendance management.
The Chair requested that a report be brought to the Board by the end of the
calendar year regarding absence levels and an action plan for addressing any
issues. A member asked that how GHA currently manages attendance be
included in the report.
A member requested that with regards to lets to homelessness, we reaffirm
with GCC the move away from the 42 day target to achieving sustainable
tenancies.
Decided: The Board noted the content of the report
8.
Benchmarking Report – Period 6
Alex McGuire introduced the report and provided a summary of performance
across the network during Period 6. He advised the Board that GHA had
received initial feedback from the Regulator on the Annual Performance and
Statistical Return (APSR) and that a more detailed report would be taken to the
Operations Committee.
A member requested that any future unit cost analysis be considered within the
context of the methodology used by the Regulator.
Martin Armstrong advised that in terms of APSR performance, we continued to
show a clear improvement in performance from 06-07 to current performance.
He added that we are now consistently amongst the top performers in a
number of areas.
A member recognised the improvement of our performance reporting over the
past few years. The member suggested that any comparative analysis
undertaken should also include comparison with data removing our
performance from the overall cohort, as well as comparisons including GHA in
the cohort. The member also requested that the distinction between urgent
and other repairs be made clear, and that LSS performance be shown on a
cumulative basis.
Alex McGuire advised that the performance and benchmarking reports were
being refined and that any feedback would be welcome. Alex also advised that
there are variations in the way repairs are classified by different organisations.
A member noted the continuing positive trends in performance and requested
that the data be accompanied, or replaced where appropriate, with a succinct
summary. The member noted that there continues to be variations in
performance across the network and suggested that this be a key area of
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focus.
A member noted that there remain void properties awaiting decisions and
actions and sought clarity on what those decisions and actions were. The
member also suggested that anticipating a reduction in a volume of repairs be
done conservatively as this is often difficult to achieve.
Alex McGuire advised that the voids data required stock categorisation and
that this exercise would be undertaken quickly. He also explained that repairs
costs and volumes were currently reducing and he anticipated this trend would
continue.
Decided: The Board noted the content of the report
9.
Improvement Plan
Alex McGuire introduced the report and recapped on the origin of the
Improvement Plan. He explained that we remained on target to achieve all our
outstanding actions and that the Regulator was satisfied with our progress.
Decided: The Board
1) Noted the significant progress we have made against Responses 3-8,
2) Approved submission of the report for July-September 2009 to the
Regulator, and
3) Delegated authority to the acting Chief Executive to make any
necessary amendments prior to the report being submitted to the
Regulator.
10.
Finance Report
Mark Logan introduced the report and provided a summary of performance up
to September 09. He noted that there were adverse variations between
forecast and actual receipts relating to Right to Buys (RTBs) and grant income.
Mark explained that the adverse variations had been broadly offset by savings
achieved in other areas of the business.
A member noted that Capital Investment Income was significantly under profile
and sought clarification on the reasons. Mark Logan explained that the budget
setting process had led to the mobilisation of the programme not being aligned
to the budget profile and that this required to be updated going forward.
Martin Armstrong stated that the budget process will be improved to ensure
that there were not significant deviations from profiled income and expenditure,
except under exceptional circumstances.
A member noted that the variation in RTB sales was likely to be substantial and
sought clarification on why income was anticipated to be so far from forecast
profile. Mark Logan explained that the initial forecast was optimistic, based on
market conditions and analysis undertaken by GHA and its advisers at the
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time. He added that work was underway to offset the loss of income and
analysis was being undertaken to ensure that the 2010-11 forecast was more
accurate.
Martin Armstrong explained that the revised Housing Bill and the potential
impact on RTBs would also need to be factored into the Business Plan
assumptions.
A member noted that employee costs had increased compared to 2008-09 and
that particular divisions were running over budgets, both in employee costs and
against total budget. The member proposed that this be considered in more
detail by the Finance Committee. Pauline Innes explained that areas such as
early retirement, inflationary increases and bringing services in-house had
made a significant contribution to the increase, but that savings would be
realised elsewhere with regard to early retirement and bringing services in
house.
A member noted that spend on Neighbourhood Management remained under
profile and requested that this be considered, given this is frontline activity that
can have a real impact for tenants. Martin Armstrong advised that this was
expected to meet profile by the end of the year with further activity scheduled
over the coming months and agreed that a fuller update report would be
provided to the December Board meeting.
Decided: The Board noted the management accounts for Period 6.
11.
Quarterly Treasury Report
Gosia Motler introduced the report and provided an update on Treasury
operations up to 30 September.
A member asked how discussions were progressing regarding the possible
funding restructure. Mark Logan explained that discussions remained ongoing
and advised that any restructure needs to be linked to the ongoing strategic
options review.
Mark explained the funders’ position and stated that we must continue to
engage with stakeholders over the underpinning reasons for any restructure.
The Chair of the Board of GFL explained that we need to ensure that a
sufficient proportion of our facility is hedged and that the facility is reflective of
stock levels as the SST programme progresses.
Decided: The Board approved the borrowing as set out in the report and
noted the contents of the report.
12.
Unit Cost Measurement and Targets
Pauline Innes introduced the report and explained that the paper sought to
further refine our unit cost analysis.
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A member noted what was being proposed to be removed from any
comparative figure, but suggested that as the Customer Service Centre and
concierge should not be removed entirely. The member stated that where
concierges are integral to the viability of certain types of stock it should be
included and that Customer Service Centre activity (other than one-off set up
costs) should be attributable as management and administration costs.
Martin Armstrong explained that whilst we should have a clear understanding
of our costs, the comparability of the data must be considered when comparing
with other organisations. He explained that an understanding of how
comparisons can be made on a like-for-like basis needs to be developed,
which will be influenced by how others measure their costs.
Mark Logan stated that we will continue to measure and monitor all costs, but
in comparing with others, would take into account whether this is on a like-forlike basis.
A member concurred with the comments with regard to concierge and
Customer Service Centre costs, but understood that any comparison must be
like-for-like to offer a genuine comparison of costs.
A member suggested that we establish connections with the Finance
departments of those organisations we feel are suitable comparators, to
improve knowledge of comparability and to share best practice. The member
noted that the key issue was to understand our own costs and to drive them
down and for this, tracking internal trends was often more important than
external comparisons.
A member stated that it is critical that we establish a baseline, against which
future performance can be measured. Martin Armstrong agreed and stated
that this would have a key link to future business plan assumptions.
Decided: The Board agreed the use of a target measure as set out in the
report.
The meeting was adjourned for 30 minutes to welcome Alex Neil MSP, the
minister for Housing and Communities to meet members of the Board.
The Chair reconvened the meeting and welcomed Alex Neil MSP to the
meeting. The Chair thanked the Minister for taking the time to come and meet
the Board and join the meeting.
The Chair noted the recent changes to the GHA Board and the opportunity for
GHA to continue progressing as an organisation.
The Chair explained that it has been a busy period for GHA, with three more
Second Stage Transfers (SSTs) completed. The Chair also noted that Stage 2
notices were imminent for Cernach HA, Pineview HA and Queens Cross
Hamiltonhill HA. She reiterated GHA’s commitment to delivering the SST
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programme and working towards this with prospective purchasers.
The Chair advised that the strategic options review continues to progress well,
with the Board having held a workshop the previous day as it continues to
manage the process. She outlined the progress with phase 2 of the new build
programme and that work was due to get underway in the coming months.
The Chair stated that this is an exciting time for GHA and its tenants, as we
continue to progress our partnership working and stakeholder engagement.
She reaffirmed our commitment to delivering, in tandem with our partners and
stakeholders, a holistic service for tenants, which recognises that housing goes
beyond bricks and mortar.
The Minister thanked the Board for inviting him to the meeting and for giving
him the opportunity to meet with members. He concurred with the Chair’s view
that housing goes beyond bricks and mortar and welcomed the news that the
Scottish Index of Multiple Deprivation 2009 General Report, published on 29
October, showed that Glasgow was improving, in relative terms. The Minister
stated that he was committed to delivering regeneration in Scotland, with
housing providers having a key role beyond managing housing stock.
The Minister explained that new build, for renting and buying, was a priority
moving forward, with a strong focus on quality which would support tackling
fuel poverty and meeting statutory targets with regards to climate change.
The Minister welcomed the significant progress GHA has made in transforming
its relationships with key stakeholders in recent months and thanked Sandra
Forsythe and Martin Armstrong for their work in transforming the relationships.
He stated that GHA must continue to have iterative and constructive dialogue
with its stakeholders.
The Minister welcomed the significant progress with regards to the
Transformational Regeneration Areas over the last few weeks and reaffirmed
the Scottish Government’s commitment to the programme. He stated that the
TRAs are an investment for the communities of Glasgow and congratulated
Sandra Forsythe and Martin Armstrong and his team for their part in the
progress, reiterating that the Scottish Government will continue to support the
programme.
Investment in housing is important, however, we are now entering a period
where budgets will be tight. He explained that there is a need to look at
innovative funding options, beyond the current Housing Association Grant
(HAG), to ensure that sufficient, quality, new build would be delivered.
The Minister also touched on the issues for owners participating in GHA’s
improvement programme. He was keen to see GHA take a lead in developing
alternative funding options for owners such as equity release. He would
welcome further discussion with GHA on this in the new year.
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The Minister stated that he is committed to seeing Second Stage Transfer
(SST) delivered and that GHA should continue to ensure that it delivers the
programme as efficiently as possible. He stated that beyond the conclusion of
the current SST programme, there was a need to focus on the delivery of the
TRA programme, Investment Programme and mixed tenure for the benefit of
the people and communities of Glasgow.
The Minister wished GHA well in keeping up the momentum and successful
delivery of the SST and TRA programmes.
The Minister was keen to discuss the ways in which GHA though its investment
is tackling fuel poverty and climate change. He suggested that a workshop on
these topics should be arranged in January with the Board.
The Chair thanked the Minister for attending and welcomed the opportunity for
a future discussion at the January workshop to be arranged.
13.
Strategic Options Review Update
Lorna Wilson recapped on the previous day’s workshop and the next stages
moving forward with the review.
Decided: The Board noted the content of the report.
14.
2010/11 business plan/budget – targets and process update
Mark Logan introduced the report and provided a summary of the report
Mark Logan and Gosia Motler then delivered a presentation covering the
following areas:
Key highlights
Mark outlined the key areas driving the Business Plan in terms of income
streams, running costs and predicted efficiencies. He explained that all areas
were achievable within our current funding envelope, with a possible funding
restructure ongoing.
Business plan targets
Mark stated that for the first time, the business plan, budget and delivery plan
will be prepared together. He explained that the ‘live’ 2009/10 business plan
would be updated to reflect delivery plan targets and form the basis of the
2010-11 business plan.
Mark outlined the predicted impact of our key opportunities and challenges on
peak debt and closing cash within the business plan. He set out the Year 1
targets in respect of employee and running costs.
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Key challenges and opportunities
Gosia Motler outlined the main challenges and opportunities for the 2010-11
business plan in terms of impact on Year 1 of the business plan, peak debt,
closing cash and Net Present Value (NPV).
Budget and operational targets
Gosia explained that the 2010-11 budget targets are fully aligned with the
business plan targets and set out the target for management and
administration costs per unit. She then set out the operational targets for
routine voids, bad debts, current tenant arrears and former tenant arrears.
2010/11 Business Plan and SST – process update
Gosia explained the timeline for the development of the business plan between
now and the final version, scheduled for February 2010.
A member asked what stage the option to bring the Landlord Services contract
in house was at. Alex McGuire advised that the Board approved, in principle,
the service being brought in house. He explained that this was subject to a
business case being brought to the Board.
A member suggested that the forecast reduction in employee costs was
ambitious and sought an assurance that this was not overly stretching. Martin
Armstrong agreed that it was challenging but as we prepared for an
organisational review, he was confident that it was realistic. He added that a
report on the organisational review would be brought to the Board in
December.
A member noted the significant expenditure planned on the development and
building of a low carbon/low energy home and development and
implementation of additional housing options. The member requested that
more detail on these projects be brought to a future Board.
A member asked how we would fund any increase in employee costs linked to
our pay and reward strategy. Peter Denheen explained that efficiencies would
be found to cover any increase in employee costs linked to our pay and reward
strategy. Peter explained that we would also continue to engage with our
Trade Union partners in doing this. Following discussion on the wider
economic climate, it was agreed that the wording of 4.7.1 should not pre-judge
the situation and should therefore read “any” staff pay increase.
Decided: The Board noted the content of the report
15.
2010/11 Rent Setting
Alex McGuire introduced the report and explained that the recommended
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option met GHA’s commitments to tenants with regard to rent changes. He
explained that should the Board reach an agreement it was proposed that the
consultation process be started.
A member asked if the possibility of a reduction was considered. Alex McGuire
explained that it remained a third option, but outlined the adverse impact this
would have for the organisation in terms of the Business Plan, a point which
Mark Logan also emphasised.
A member noted that the difference in GHA rents from comparable RSLs had
reduced from 24% greater to a predicted 6% greater since transfer. The
member stated that we must continue to strive to offer affordable rents with the
best services.
A member asked if the rent increases of other RSLs had been established.
Mark Logan explained that other RSLs were currently budgeting and this
information was unlikely to be available until December. Mark explained that
the requirement to meet the Scottish Housing Quality Standard (SHQS) would
be a factor in any decision for RSLs.
A member sought clarification on the level of increase applied in 2009-10.
Martin Armstrong explained that the increase was the level of RPI, not the
maximum RPI + 1%. In discussion, the fact that GHA had not implemented the
maximum rent increase last year was considered an important factor in
considering a rent freeze rather than a rent reduction this year.
Decided : The Board
1) Agreed in principle to a rent freeze for 2010/11 on core and non core
stock, to be confirmed in November in the context of the draft 2010/11
Business Plan, and
2) Note that following consultation a report will be submitted to the
January 2010 Board meeting for approval of final proposals.
16.
Wellhouse HA Business Case Submission
Lindsay Gemmill introduced the report and explained that it had previously
been to the Business Transformation Committee.
A member noted that Wellhouse’s performance, when benchmarked across the
network, was one of the lower performers. The member also noted that the
Regulator last audited Wellhouse HA in 2000.
Martin Armstrong suggested that this may be an issue for GHA to speak to the
Regulator about.
Lindsay explained that Wellhouse HA had experienced issues with
performance, but that an improvement plan was agreed which was being
complied with and that performance had not deteriorated further. This led to
the assessment of performance as “good”, as agreed with the Regulator.
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A member asked if prospective purchaser’s unit costs were made available
ahead of any ballot. Lindsay explained that a direct comparison with our unit
cost is not routinely provided, but that they were higher than those of GHA.
On both their points, a member stated that we must always ensure that
sufficient information is provided to tenants before any ballot, so that they could
make an informed choice.
Decided: The Board invited Wellhouse Housing Association to submit a
business plan for second stage transfer in line with GHA Guidance.
17.
North Glasgow HA Business Plan Submission – Change Request
Lindsay Gemmill introduced the report and explained that a request had been
received from North Glasgow Housing Association to submit three individual
Business Plans rather than a consolidated one.
Decided: The Board agreed to North Glasgow HA’s request to submit, if it
chose to do so, three separate business plans for its three LMC areas on
the basis that each submission complies with GHA’s guidance, including
meeting the transfer value for the relevant stock.
18.
New Build Phase 2
Jim Sneddon introduced the report and explained that it had been considered
in detail by the Regeneration Committee, who requested that the specifications
be improved.
A member asked if the properties had flat roofs.
properties would be at a minimum shallow pitch.
Jim explained that all
A member noted that the unit cost still appeared to be higher than might be
expected. The member requested that a clear breakdown of unit costs be
brought back to the Board to allow them to understand the breakdown. The
member also asked that we look at how we could deliver further efficiencies
under the current arrangements.
David Fletcher advised that the intention was to get started before Christmas.
Decided: The Board
1) Approved that GHA enters into Commencement Agreements with the
contractor as detailed in the report
2) Approved the maximum total project costs as set out in the report,
3) Noted the previously approved provision for general risk
4) Delegated authority to the Chair of the Regeneration Committee as a
signatory of the Commencement Arrangements.
19.
GHAM Governance Arrangements
Jennifer Russell introduced the report and explained that the proposals had
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been subject to detailed discussion by the GHAM Board.
A member noted that there was no formal right for GHA to appoint the Chair of
the GHAM Board and suggested that as a wholly owned subsidiary this should
be the case, and that a range of other governance links should be clarified.
This was echoed by other members.
After further discussion it was agreed that a further report would be brought
back to the November meeting.
Decided: The Board agreed that Liz Walford be nominated to the GHAM
Board.
[Having declared an interest, Wilma Masterton left the meeting]
20.
Eviction Report
Alex McGuire provided a summary of each of the cases presented for eviction
and the circumstances of each case
Decided: The Board approved the cases for eviction and for the relevant
court action and request for a Decree of Eviction be pursued as required.
[Wilma Masterton rejoined the meeting]
21.
Finance Committee
Julia Henderson introduced the report and explained it was in response to the
Board’s request that a Finance Committee be created. Julia outlined the
consequential work which would be required with regards to GHA’s Standing
Orders and Schemes of Financial and Non-Financial Delegation. Julia
explained that early amendments would be made to establish the Committee
but that more detailed cross functional work would be required to amend the
scheme of financial delegation.
A member requested that the Finance Director and Chief Executive’s
attendance be mandatory in the Terms of Reference.
This was agreed. The
member also asked if the Committee would consider GHA’s subsidiaries and
their finances.
It was agreed that the Committee would consider subsidiary finances and
report back to the relevant subsidiaries’ Boards and the Board of GHA.
A member proposed that the Audit Committee membership form the nucleus of
the Finance Committee membership, with further membership to be agreed
with members.
Decided: The Board
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1) Agreed the Terms of Reference, with the amendment as noted above,
2) Instructed the Interim Company Secretary to review the Standing
Orders, bring them up to date and to reflect the introduction of a
Finance Committee with the revised Standing Orders (including the
scheme of financial delegation) to be brought back to the Board for
approval, and
3) Instructed the Director of Finance to review the revised scheme of
financial delegation to bring it up to date and to reflect the
introduction of the Finance Committee.
22.
Approval of Committee Chairs
Decided: The Board approved the appointment of Keith Kintrea, Wilma
Masterton, Ian Wall and Alastair MacNish as Chairs of the Business
Transformation, Operations, Regeneration and Audit Committees
respectively.
23.
Transformational Regeneration Areas – proposal for Shadow Board
David Fletcher introduced the report and explained that this represented real
progress.
Decided: The Board
1) Agreed that GHA should participate in the TRA Shadow Board to be
established in conjunction with the Scottish Government and Glasgow
City Council,
2) Nominated Ian Wall and Gordon Sloan to represent GHA on the
Shadow Board,
3) Noted that the Acting Chief Executive and the Executive Director of
Regeneration will ensure representation from GHA senior
management to support GHA Board members participation in the TRA
Shadow Board,
4) Agreed to receive, at future meetings, a further update on any further
feedback received from the Scottish Government on their intended
representation on the TRA Shadow Board, and
5) Noted that progress reports on the operation of the TRA Shadow
Board will be presented at future meetings of the Regeneration
Committee.
24.
Capital Programme Re-Procurement Strategy
Alex McGuire introduced the report and outlined the strategy being proposed.
A member noted that the recommendations on the award were due to come to
the Board in April and that this was after the current contracts expired. Alex
McGuire acknowledged that the timescales were challenging and explained
that the current contracts could be extended for a short period to cover any
overlap.
A member suggested that Internal Audit look at the procurement strategy to
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ensure that the lessons learned from previous procurement exercises have
been reflected in the strategy and procurement. This was agreed by the
Board.
A member noted reference to contractor designed installation and sought
clarification on what this entailed. Alex McGuire explained that this would be a
contractor speciality, but that choices and minimum specifications would be set
by GHA as part of any contract.
Alex advised the Board of the 3-way sign off process for the completion of any
work between the tenant, quality and maintenance officer and contractor.
A member requested that the wording throughout the strategy be refined.
A member asked if there would be an ongoing or guaranteed value engineering
requirement. Alex McGuire confirmed that work allocation was based on
performance, with minimum requirement to receive future allocations of
contracts.
Decided: The Board
1) Approved the approach outlined in the report and attached strategy,
subject to further refinement of the wording, and
2) Noted the governance arrangements for the procurement project, and
[Councillor James Dornan and Gordon Sloan declared an interest and left
the meeting]
25.
Carntyne Wingets
Jim Sneddon introduced the report and outlined the proposals contained
therein.
Decided: The Board agreed the recommendations as set out in the report
and the award to the contractor as detailed in the report.
[Councillor James Dornan and Gordon Sloan rejoined the meeting]
26.
AOCB
Lorraine McLaren explained to the Board that we had won another award, this
one being for our work in Wider Action as part of the Operation Reclaim
project.
The Chair thanked Lorraine and the wider action team for their work on behalf
of the Board.
I certify that the above minutes have been approved as a true and accurate
reflection of the proceedings:
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Signature: …………………………………………….
Date: …………..……
SANDRA FORSYTHE
Chair of Board
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