Starter homes initiative

Report: 10
Date: 7 March 2002
By: Commissioner

Summary

The Metropolitan Police has been allocated funding from the Starter Homes Initiative and earlier papers to the Estates Sub-Group and Finance, Planning and Best Value (FPBV) Committees contained details of funding and how the scheme will operate. The FPBV Committee approved the scheme in principle but resolved that the administration fee should be met by the individual receiving the grant. The Home Office and DTI have now stated that the ability of the Authority to meet the fee was an integral part of the grant and this will be raised with the FPBV Committee. A further paper setting out the criteria for prioritising applications was requested by the Human Resources Committee. This paper sets out the background to the scheme and principles for prioritising applications from police and civil staff. It also explains the current position in respect of the administration fee.

A. Recommendations

1. Members’ views are sought on the principles proposed for setting the criteria used for prioritising applications from police and civil staff for Starter Homes funds.
2. Members’ views are also sought on the management fee.

B. Supporting information

1. Following a successful bid for funds the report attached at Appendix 1 was considered by the Estates Sub-Group at its meeting on 19 November 2001 and by the Finance, Planning and Best Value Committee on 6 December 2001. Both committees endorsed the principles contained in the paper, including the way in which the funds should be targeted and the ratios of police and civil staff to be assisted. At the Estates Sub-Group it was agreed that a further paper developing the criteria for prioritising applications would be submitted to the Human Resources Committee.

2. The amount awarded will enable the Authority to assist approximately 350 police officers and 125 civil staff. Initially, it was intended that the funds would cover a three year period, but it has now been confirmed that they can be spread over two years. It is envisaged that the scheme will commence from 1 April 2002.

3. The funds are paid out through the Housing Corporation each time an individual buys a property under the scheme; the funds do not pass through the MPA. Applicants apply directly to the housing associations involved in the scheme, who will then use the criteria set out below to sift applications. It has been suggested that the funds should be targeted to encourage retention; however, it is not permissible to impose restrictions that require the redemption of the allowance if staff leave the service but do not wish to move home. The Housing Corporation has been consulted about the proposed criteria and is satisfied that they meet the provisions of the scheme. The MPS will receive monthly feedback about applications and grants.

4. As a general criteria, staff should currently be occupying accommodation provided by the MPA or from either a local authority or housing association where the tenancy will be surrendered on receipt of the grant. The property to be purchased will need to be located in a London Borough within reasonable travelling distance to their place of work or to which they have been advised they will be posted to or in a non-London Borough adjoining the borough in which they are posted. The following additional criteria will also apply.

5. For police officers, it is suggested that the focus should be to encourage residence in London and, in view of the joint income limitation, it will only be possible to target the funds at constables rather than higher ranks. Those officers who have successfully completed the first year of their probationary period and are no longer eligible for provided accommodation will be eligible under this scheme. If further prioritisation is required, preference will be given to those officers who moved to the MPS from other parts of the country or are considering leaving the MPS and moving away from London.

6. For civil staff specific targeting will again help in the prioritisation. Staff should have successfully completed one year’s employment with the MPA. In addition, priority will be given to posts that would otherwise be filled by police officers extracted from “street” duty, such as communication officers, or staff in those posts that are specialist or difficult to recruit. The allocation could be targeted to those posts that currently experience significantly higher wastage than the average level. Wastage across all civil staff posts is currently 11.4%. At present, those posts with particularly high turnover include Scientific Support Staff (21.1%), Analysts (18.5%), Communications Officers (12.8%) and Station Reception Officers (10.6%). The wastage rates and criteria will need to be regularly reviewed in order to ensure that preference is directed towards Service priorities. The Director of HR may also designate other civil staff posts which either release officers for street duty or are deemed “hard to recruit”. Preference will be given to those civil staff who moved to the MPS from other parts of the country.

7. The Partnering Associations will administer the initiative and have the responsibility of processing applications, in line with the prioritising criteria explained in this report. MPA/MPS officers will receive monthly feedback from the housing associations on the initiative. For this work, the housing associations will charge a ‘one-off’ management fee for each application. The fee is £1600 per property. This charge has been negotiated with the associations and is an improvement on the original proposal that was based on a percentage of the assessed disposal value of the properties purchased under the scheme. Firstly it gives certainty of future financial commitment and secondly, it equates to a lower charge per property than the standard scale rate for such charges as recommended by the Housing Corporation.

8. At the 6 December 2001 meeting, FPBV Committee did not support the recommendation that the MPA should bear the expense of the management fee but that such charges should be met by those individuals benefiting from the scheme. This view was taken in the context of a tight budgetary position for 2002/03 and the lack of an identified budget provision for the cost of this initiative.

9. Both the Home Office and Department of Transport, Local Government and the Regions have subsequently stated that the ability to meet the administration fee was integral to the decision to award the grant, and any change to this would lead them to consider withdrawing the grant entirely. This was reported back to FPBV Committee at the 21 February 2002 meeting.

10. The estimated costs of the management fee are significant (see Financial Implications below). However, it is evident that the risk of not resolving this matter quickly will be to jeopardise the grant. The Starter Home initiative is an important component of the retention strategy. Accordingly a further report responding to additional information requests by Members and addressing the issue of funding the management fee element of the scheme is being proposed for Co-ordination and Urgency committee on 12 March 2002.

C. Financial considerations

1. There are no financial implications in respect of these selection criteria. Applications will be processed by the Housing Associations and, whilst the MPS will receive monthly feedback on the Starter Homes Initiative, it is expected that analysis of the feedback can be assimilated into current workloads.
2. The management fee charges associated with this scheme as defined, are estimated to be £770,000 in total. This covers the two years of the scheme 2002/03 and 2003/04. As previously reported (paragraph 8) there is no budgetary provision for these charges in 2002/03.
3. In consultation with MPS Director of Resources, the MPA Treasurer advised FPBV Committee at 21 February meeting that this funding requirement could suitably be fulfilled by creating an ‘ear-marked’ reserve from the projected underspend position for 2001/02. This will be formally recommended in the paper referred to in paragraph 10.

D. Background papers

• Background Papers: Report 13, Finance Planning & Best Value Committee, 6 December 2002

E. Contact details

Report author: Michael Shurety, Director of HR Services (in conjunction with Property Services Department).

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

Report on stater homes initiative considered by Finance Planning & Best Value Committee on 6 December 2002.

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