Dear Column J
Re Proposals to introduce service charges for communal area services
In July we wrote to customers living in our flatted homes about proposals to introduce
service charges for services provided to the communal areas of their blocks (ie
cleaning and lighting of staircases, corridors and deck landings and grounds
maintenance of communal gardens). We also advised you of the start of a formal
customer consultation period from 7th July to 5th August 2016. All affected customers
were invited to consultation events held across the borough to find out more, ask
questions and to give their feedback.
478 customers attended these events and a further 32 sent e-mails. We answered
individual questions and responded to issues raised following any outstanding issues
(including service requests) after the sessions. We would like to thank all customers
who provided invaluable feedback about the proposals, our services and about their
homes and neighbourhoods. A summary of the feedback is included in this letter.
The FCHO board has considered the feedback received and has now made its
decision. We are writing to formally give notice that their decision is to proceed to
introducing service charges with effect from 7th November 2016. We have enclosed
your service charge schedule with this letter.
The charge will be phased in over 3 years with the full charge payable from April
2019. The amounts you will pay per year until the service charge has been fully
introduced are as follows:
7th November 2016
Column K
1st April 2017
Column L
1st April 2018
Column M
1st April 2019
Column N
The full service charge that you will be charged from April 2019 has been calculated
as detailed below based on the services you receive:
Communal
Lighting
Electricity
Column S
CCTV
Monitoring
Cleaning
Ground
Maintenance
Column Q
Column T
Column R
Total
service
charge to be
paid from April
2019
Column N
Full details of the consultations and the Frequently Asked Questions are available on
the FCHO website www.fcho.co.uk. Alternatively you can e-mail us with any further
enquiries to [email protected].
Customer Consultations
Background to the introduction of service charges
FCHO currently provides a variety of additional services to customers within its
flatted accommodation, as these customers receive a service level above the sole
provision of accommodation alone. Many of our customers, mainly living in houses
and bungalows, do not receive these additional services yet currently contribute to
paying for them.
These additional services include grounds maintenance, communal electricity and
caretaking and cleaning services.
In July 2015 the Government announced in their post-election budget that social
housing rents would reduce by 1% per annum for each of the following 4 years. With
the impact of inflation this reduction in rental income requires FCHO to reduce costs
by over £15m during this period. FCHO have made many costs savings to meet this
challenge but continuing to provide these additional services to flatted homes free of
charge has also had to be considered. Most social landlords already charge
separately for these communal services.
Some additional FCHO services are already charged separately to customers (e.g.
TV aerials and independence living services) and FCHO’s tenancy agreements
already allow for the introduction of new service charges.
Summary of Customer Consultation Feedback
Over 500 customers engaged in the consultation process and the main issues raised
fell broadly into 3 areas:
1. Fairness and Reasonableness to introduce service charges
Typical questions and responses included:
Why are FCHO charging customers for services that they previously
have not had to pay for or have paid for through rents? Is this charge
necessary and fair?
We explained to customers the reasons for service charges now being
considered and required. We explained that most social landlords have
already introduced service charges to recover their costs and have done for
some time.
We also provided details on the impact of the rent reductions on FCHO, the
steps we have already taken to reduce our costs (including the loss of 88 jobs
from the business) and why we now needed to recover this income to pay for
essential additional communal services that many customers in non-flatted
homes don’t receive.
I live on the ground floor (or first floor) so why do I have to contribute to
the costs of caretaking, cleaning and lighting for stair towers and deck
accesses (or grounds maintenance) for areas that I don’t regularly use?
And similarly
Why do I have to pay to maintain communal areas which anyone can
use (e.g. unenclosed communal grounds) and/or that I may chose not to
use?
The rationale for this was explained highlighting the terms and conditions of
your tenancy agreements or leases stipulating service charges for communal
maintenance and services are applied across the whole block.
2. Affordability of the charges
Typical questions and responses included:
How much will I have to pay? From when? How will the phasing in
work?
Details were given of proposed charges that may be applied to individual
blocks and how they are proposed to be phased in, with charges proposed to
commence in November 2016. The figures given at the time were proposed,
the summary in the letter attached are the correct amounts.
Is the proposed service charge payable by Housing Benefit or Universal
Credit? What do I have to do ensure any benefit payable is paid?
Reassurances were given and benefits entitlements were explained and
advice was given on what customers have to do. For customers on housing
benefit their housing benefit will automatically cover the costs of service
charges. Customers in receipt of Universal Credit will need to inform the DWP
Universal Credit Service Centre of the increase in service charges on 0345
600 0723 and their benefit entitlement will be adjusted accordingly.
I am concerned I won’t be able to afford it – what can be done to help
me?
The impact of the 1% rent reduction and the phasing in of service charges
simultaneously over the next 3 years was explained to customers. This will
mean many customers will either be paying less overall than they have
previously or that the impact of the introduction of service charges will be
much reduced. It is accepted that for approximately 400 customers they will
be paying more than previously as the costs of providing these services to
their homes is greater than the rent reduction.
Advice was also given to many customers on how they can get further help in
paying for these and other living costs. This advice included information on
access to our employment service and other training and development
options or how to reduce their own household bills and costs. Further welfare
and debt advice was also offered where required.
3. Value for Money of the Communal Services Provided
Typical questions and responses included:
How have the proposed service charges been calculated? Have the
communal or grounds maintenance areas and charges for my block
been applied correctly?
Communal lighting charges are based on actual electricity bills for each block.
Communal cleaning and ground maintenance charges are calculated using
the square meterage of the communal areas to be cleaned and common
grounds to be maintained.
Any queries regarding the correct area and charges being applied are dealt
with individually, this includes visiting some of the disputed areas with the
customers concerned. Any anomalies identified have been corrected.
How will I know what service standards to expect and if these services
provide value for money? How will you ensure service standards are
maintained and adhered to?
The service standards we have agreed with our Customer Forum are
enclosed. Details of how our service compare with other similar landlords has
been provided to our board to ensure value for money. We are charging
comparable amounts and in most cases we are charging less than others.
The charges we are introducing only cover direct staffing, transport,
equipment and materials costs, it does not cover overheads or indirect costs
(such as tipping fees). We are also only charging for the planned routine
cleaning and grounds maintenance services we provide. We are not charging
for the reactive caretaking and grounds maintenance services we also
provide. This includes work such as clearing fly tipping, removing offensive
graffiti, completing unplanned emptying and changing of large communal
rubbish bins and unplanned litter picking).
Part of the role of our NeighbourhoodCare operatives, environmental and
neighbourhood officers and service managers is to help ensure service
standards are met, maintained and improved. It is the role of the FCHO
Board, our customer congress and customers themselves to hold us
accountable to ensure this is the case.
The service does not meet my expectations currently (or I have some
specific issues) and what are you going to do to address my issues?
The individual issues raised were dealt with at the meetings where possible or
soon after. Responses were given for all concerns raised. The service
standards customers can expect have been agreed with a representative
customer forum and are enclosed.
Our customers “Frequently Asked Questions” factsheet was updated on the website
after the meetings to address the main concerns being raised and keep customers
informed. An update on the consultations was also provided on the website on 25th
July providing responses to many of the questions asked.
FCHO Board decision
All the above points were carefully considered by the board on the 24th August 2016.
The board received the responses and reassurances they were seeking from FCHO
management before they agreed to any service charges being introduced. They
agreed to proceed with the proposed introduction of service charges phased in over 3
years with effect from 7th November 2016.