Agenda item

The Chair introduced the item - a call-in of the Cabinet’s decision on 17 October to bring Cheltenham Borough Homes (CBH) services back in house – saying that although call-ins are rare, it is the intention that Cabinet and Overview and Scrutiny work in partnership to explore all options and keep what really matters at the heart of all decision-making.  She thanked the Chief Executive, Leader, and Cabinet Member for Housing for attending the meeting.  All responses to questions from the call-in group had now been published and would be taken as read, but Members can ask further questions if they wish.  She invited those Members of the call-in group who were present to set out their reasons for the call-in.

Comments from the call-in group

Councillor Harman began by thanking Bev Thomas and Democratic Services for their help with this rare event, and made the following points:

-       all agree that the housing service touches many lives in Cheltenham, and it is important to make the right decision.  He is not saying that bringing CBH back in house is wrong, but there are some issues about the process – the suddenness of the decision, the rushed timescale, and what could be viewed as apparent pre-determination.  It is important to expose this important issue to maximum scrutiny, and he hoped for a good and honest discussion; 

-       while the process is important, the people are even more important, and tenants may feel unsettled by this decision.  Some may not remember the position before CBH was created 20 years ago, and the general opinion is that CBH has provided excellent service and saved CBC a lot of money.  The report states that Members were briefed – this was not a formal session, and not much detail was shared, but he recollects asking whether the tenants had been consulted.

He looked forward to hearing from other Members.

Councillor Flynn also thanked Democratic Services, and commented as follows:

-       the 80-page 2020 Campbell Tickell Strategic Housing Review considered the option of bringing housing management back in house or continuing with the ALMO.  It included extensive consultation with a wide range of tenants, stakeholders and partners, discussed the pros and cons in a balanced way and, while leaving the final decision open, leant heavily towards retaining the ALMO;

-       the 30-page 2023 report was biased in favour of CBC taking CBH housing management back in house, and was mostly concerned with a target operating model.  There was no consultation with stakeholders who might have a view about retaining the ALMO, and it is noted that both employees and CBH board members have not been allowed to share their views publicly.  The only stakeholders consulted were CBC Cabinet Members and senior officers;

-       the 2021 report to Cabinet agreed from the outset that any review of the housing service would be jointly commissioned by CBH and CBC, who would develop the scope and brief together and, to complete a meaningful and rounded review, stakeholder engagement would be essential, including with CBC and CBH employees, councillors, CBH tenants, and board members;

-       the 2021 Cabinet decision was taken following that consultation, while the recent one was not, and it is therefore not in accordance with Principle D of Decision- making;

-       the recent decision is also not in accordance with Principle G, which states that there should be clarity of aims and desired outcomes.  The decision affects a huge number of residents, many of them vulnerable, but no direct tangible benefits to those tenants have been identified, and no evidence provided to suggest the present way of managing CBH doesn’t work well for tenants;

-       the report talks about new affordable housing provision, but doesn’t say whether current tenants or those on the waiting list will benefit.  It would be a different matter if there was a commitment to homes for social rent;

-       the 2020 report demonstrated CBH’s ability to deliver wider community outcomes and CBC’s strategic objectives within the legislative context and at an acceptable level of risk, yet the later report says CBC can do this  – but with no direct, tangible benefits to tenants, the people most affected;

-       to move from the status quo, there have to be clear, articulated benefits for tenants, but there are not.  A further report should be commissioned.

Councillor Nelson said her concerns were more about the process and the way in which CBC had shared its intentions.  She was sad and shocked to learn of its decision through a Member briefing, and also by the lack of notice to key stakeholders and the CBH Board.  She felt informing CBH employees had been handled insensitively, via a Teams meeting on Wednesday 04 October, and has resulted in a lot of people feeling nervous and worried about their future roles.  She stressed the need to keep employees on board, which was not being done at present.

There were no questions from O&S Members concerning the reasons for the call-in.

Decision-makers’ response to call-in

The Leader said that Campbell Tickell had been asked to look at the future of the ALMO and the option of bringing it back in-house three years ago, and following extensive engagement with many partners and stakeholders, it reported to Cabinet in 2021 that the preferred option was to retain the ALMO, and allow the partnership between CBH and CBC to strengthen and evolve– which was done and has worked well,  including the bringing together of the two communications teams. 

Since then, interest rate rises, the cost of living crisis, increased energy and housebuilding costs, government pressure on private and public sector housing and additional responsibilities for councils have raised the question of the need for a ‘middle man’ solely accountable to a council. As a result, councils across the country are terminating their ALMO arrangements, with those retaining them increasingly outliers.

She stressed that the tenants’ voice is a key priority, and the question ‘why now?’ will be answered as we move forward.  Ultimately as Leader and shareholder, she has to act on behalf of all residents and businesses, and financial pressure has forced the Cabinet to look again at its ALMO.  Councillors in the call-in group suggest that the reasons are unclear, but as a Cabinet Member for over ten years and Leader for three, the current financial situation is the most challenging the council has faced,  following a decade of austerity and budget cuts. During that time,  the council has managed not to cut any of its key services, and protecting these services is paramount. In order to do this in the face of mounting challenges, the council must squeeze every possible efficiency across its partnerships to keep them secure – by joining together, making efficiencies, reducing duplication, and harnessing joint skills.  The alternative is to carry on with the status quo, making everyday challenges even greater for the people we have a duty to protect.

The Cabinet Member for Housing  reiterated the Leader’s comments, saying CBC’s priority is to make sure it continues to provide excellent services for tenants and leaseholders.  It remains committed to strengthening the tenant voice, and the report to Cabinet explains the proposal to create and consult on a new tenant offer, with greater influence on how housing services are delivered now and in the future.  Consultation with tenants is key, and the intention is to commission an independent organisation at the beginning of the transition period to engage with tenants and leaseholders.   This bold approach in pressing times will benefit tenants and the wider community, rather than risk the possible outcome of having the reduce services to those who need them most.

The Chief Executive addressed the concerns about how staff were briefed about the matter, acknowledging that it was good to challenge the process, but important to state that the meeting with CBH colleagues followed previous meetings with the CBH Chair and Board, and was not without their agreement.  

He said the 2021 and 2023 reports were part of a journey with all parties engaged in the process, but realised that the prospect of change is always worrying; CBC had to consider carefully the right time to inform CBH and CBC colleagues who would all be impacted, at a point before the information reached the public domain.  Officers went through various options, and in an ideal world, a face-to-face meeting of all staff would have been preferred, but in reality a compromise had to be reached and the chosen route was agreed. 

He added that this is not the end of the process – while the majority of posts are unaffected, he has subsequently attended a CBH colleague day, set up informal meetings, and made himself available for questions and concerns.  The official processes are yet to start, and he welcomes any challenges, but deciding on the best time to inform staff ultimately came down to a matter of judgement.  He said he cared deeply about CBC staff and all colleagues across CBH and Publica who do a fantastic job.  It is critical that everyone feels valued, that their hard work is recognised, and they are supported as well as they can be to ensure they continue to thrive.

Member comments

There were no questions from O&S Members concerning the response to the  call-in, although Councillor Nelson said that while she understood the balanced approach and was not disputing the underlying justification, it was the way it was handled and in particular the media release that was the problem – it appeared to be a done deal and had set hares racing.

The following points were made by Members:

-       it has been suggested that the decision was pre-determined, but it had been in the Forward Plan for some time – it is important that Members keep an eye on this - and all Members had the opportunity to ask questions at the Council meeting on 17 October;

-       call-ins are normal practice in local government – they are not criticisms, but form part of the important public examination of issues;

-       the Forward Plan doesn’t include detail of the items, and Members are not often in a position to call them in until that is known.  It is only when the decision is made and the detail known that Members may want to call it in, and this then has to be done within an urgent timeframe.

Member questions and responses

Members of the call-in group had received responses to their written questions and these were taken as read. 

The following questions were put by Members:

i.          Question:  Will CBC or the CBH Board take the final decision?

 

Response from the Leader:  The intention is to work with the CBH Board throughout the transition period, and the decision will be made by mutual consent by the Leader or the Board

 

ii.          Question: The Campbell Tickell report suggests that residents weren’t consulted.  Is that the case?

 

Response from the Chief Executive:  There was no tenant consultation on the second Campbell Tickell report, but the Cabinet recommendation states the intention that consultation will be part of the process going forward. A third party organisation will carry this out with more rigour, and this demonstrates that CBC is taking the consultation with tenants and leaseholders very seriously.

 

iii.          Question:  The call-in ignores the context and need for urgency in this area, with a recent survey suggesting that 52% of councils don’t expect to balance their books in the face of government spending cuts and financial pressures.  The opportunity to make a £2m saving plus £600k in management efficiencies is important, but could more time have been taken over the decision?

 

Response from Cabinet Member for Finance and Assets: The stark reality is that we have to make tough choices to continue providing services, and cuts are needed to do this.  A lengthy consultation was carried out in 2020, including full engagement with tenants and staff, but in view of the current financial situation, we need to make decisions in a timely manner, and the inclusion of consultation as part of the process going forward is considered a different way to get to the same end result.

 

iv.       Question:  Is there any evidence that tenants are unhappy with the proposed consultation process?

 

Response from the Chief Executive:  The council wrote to every tenant and leaseholder, setting out its intentions and providing contact details.  There has been no indication so far that tenants are not happy, just some tenant questions via the local MP’s office.  It is important that the council engages with tenants and leaseholders throughout the process.  The Leader attended the CBH AGM recently and spoke with the tenant representatives on the board – neither raised any concerns at that time;

 

v.       Question:  Has there been any consultation with the unions about the process, and do they have any concerns?

 

Response from the Leader:  CBC takes pride in its good working relationships with unions, and there have been conversations between the unions and CBC’s governance officer and HR team.  They are supportive of the move in principle, particularly with the main message being that most jobs are secured.

 

vi.       Question:  While Members were told that no decision had been made, a press release the day after Cabinet stated that the decision had been made to take back control of managing the housing stock – could this be clarified? 

 

Response from the Leader:  We cannot have uncertainty when managing people and their lives.  It is the council’s clear intention to take CBH back in house.  We are at the start of the journey, and there will be consultation on future housing services, taking into consideration the huge impact on and input from tenants, leaseholders and all Cheltenham residents.    Until the final decision is made to wind up the company, CBH will remain in existence.

Summing up – Call-in group

Councillor Harman said this decision had been brought here today for scrutiny, and hopefully the answers have helped with the process, but in reality, the decision has been taken and we must take the tenants with us.  They are not necessarily cognisant of what the changes will mean to them, and ward members need to listen and work with them, help them through the process and continue to ask questions, which may be difficult at times.

Summing up – Decision Maker

The Leader returned to the fact that tenants will always be at the heart of decision-making, as are all the residents of Cheltenham, and recalled similar concerns about staff when CBH was set up in 2003 and staff needed to be transferred from CBC

Recommendations

The Chair invited any Members to move any of the four recommendations set out in the report.

 

Councillor Harvey echoed Councillor Harman’s comments about openness and the call-in being part of the democratic process.  He moved the accept Recommendation (a): support the decision without qualification or comment, in which case the decision can be implemented immediately ; this was seconded by Councillor Tooke.

 

Councillor Nelson felt that an Overview and Scrutiny Task Group should be created to look at all options, and proposed Recommendation (d).

 

The Monitoring Officer advised that motions must be taken one at a time, and enquired whether Councillor Harvey would be prepared to accept the setting up of task group as part of his recommendation.  Councillor Harvey rejected the amendment and therefore the committee proceeded to the vote on accepting Recommendation (a): Support the decision without qualification or comment, in which case the decision can be implemented immediately

 

Vote on Recommendation (a): Support the decision without qualification or comment, in which case the decision can be implemented immediately 

6 in support

3 in objection

1 abstention

APPROVED

 

Councillors Nelson moved that a scrutiny task group be set up, whose role would continue throughout the consultation and transition period. This was seconded by Councillor Harman

 

The Leader said she would be happy to attend O&S meetings to update on progress. 

 

Vote on Councillor Nelson’s move to set up an O&S Task Group

5 in support

5 in objection

CARRIED with the Chair’s casting vote

 

It was agreed that the membership of the group would be agreed outside the meeting.