yhn board 10 may 2016 non confidential

Your Homes Newcastle Limited. Registered in England and Wales Registration Number 5076256 Registered Office: Newcastle Civic Centre, Barras Bridge, Newcastle upon Tyne NE1 8PR. A company controlled by Newcastle City Council

YHN Limited

Tuesday 10 May 2016 at 5.00 pm

YHN House, Benton Park Road, Newcastle upon Tyne NE7 7LX

Contact Officer: – Tel: (0191) 2788624 Email: [email protected]

AGENDAPage No

Introduction Items

1. Reminder to switch off mobile phones

2. Apologies for Absence

3. Declarations of Interest

4. Chairs Items 1 - 2

Items for decision

5. Finance and Performance Quarter 4 3 - 20

6. Financial Regulations 21 - 88

7. Strategic Risk Register 89 - 104

Item for approval

8. Minutes of 15 March 2016 105 - 108

Items for information

(a) Repairs & Maintenance Service Review 109 - 114

(b) Universal Credit update 115 - 126

(c) Delegated Decisions 127 - 128

(d) Board Forward Plan 129 - 130

2

To exclude the press and public during discussion of agenda item 10 - 15 because of the likely disclosure of confidential information. The definitions of what is considered confidential are contained within Section 16 of the Company's Standing Orders

Protect not for publication

Items for approval

10. YHN Investments in Abri Trading and Asfaleia 131 - 176

11. Treasury & Cashflow update 177 - 184

12. Byker Community Trust Contract update 185 - 190

13. Confidential minutes 15 March 2016 191 - 196

Items for information

14. Finance and Performance Quarter 4 confidential appendix 197 - 200

15. Delegated Decisions 201 - 208

Date of next meeting 21 June 2016 5pm YHN House

Board 10 May 2016Chairs ItemsReport by Chair

For discussion

1. Background information

Board members are aware of our journey over the last year, starting with the internal governance health check, our away day at the Mansion House, implementing the Governance improvement plan and all the governance and financial changes in relation to disaggregation and the new company structure. We are now entering into new and challenging times, with lots of changes to our operating environment due to welfare reform and the Housing and Planning Bill, which will require robust decision making as we move the organisation forward. With a new 10 year management agreement signed and a new Managing Director joining us in June 2016, it is the ideal time to take stock of where we are and how we operate to ensure we are fit for purpose.

2. Governance review

I am proposing to Board that we undertake an externally facilitated governance review, to look at all areas of our Board, subsidiaries, committees, decision making and reporting. I am not at this point being prescriptive about what needs to be looked at and changed, if anything, all Board members will have an input into the scope of the review and should be prepared to be fully engaged. During the work on the governance improvement plan, we agreed that an external review would be completed and due to the recent concerns over decision making and financial scrutiny, and the appointment of a new Managing Director, I think this is an ideal time.

3. Issues to consider

Two issues that are immediately affected by this proposal are Board member training and the Directors appointments in September.Training:Unfortunately Jill has been unable to secure a date where enough board members can attend to make the full day session cost effective, at any one of the dates proposed less than half of board members were available.I am proposing to put this on hold till after the review. I would like Jill to continue with the other parts of the learning and development plan as these are important to our role as Board members, so she will be in touch to arrange the shorter sessions

on specific topics such as Health & Safety and Equality and Diversity.Directors appointments:May is usually the month we set out the recruitment timetable for directors re-appointments prior to the AGM. This year the following board members are due to retire;Elaine Snaith, Paul Scope, Julie Purvis and John Reid.I will be speaking with these Board members over the next couple of weeks to discuss their intentions, although Paul Scope has already indicated a wish to stand for re-election and John Reid will be retiring following a very successful 9 years on the Board.I have also received Loraine Wilson’s resignation from the Board as she is no longer a YHN tenant following her buying her own home.Rather than set out and conduct a recruitment process whilst a governance review is being under taken, I am proposing that we make the re-appointments of the Directors who put themselves forward, and we leave any positions vacant pending the review. My rational for this is that any recruitment and selection process can be informed by the outcomes of the review.

4. Finance

Finally, following discussions at last months’ board meeting regarding understanding financial information, as an interim solution pending any outcomes of the review, Lisa Forrest has offered to make herself available for pre-meetings prior to every board to answer any questions or discuss financial issues in more depth with board members. Lisa will be contactable as always by telephone but will also be available from 4pm at every board meeting if board members wished to arrive earlier and speak directly to Lisa.

As always if any board member wishes to discuss these issues please feel free to contact me directly.

Olivia GrantChair

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 2788624 or email [email protected]

mailto:[email protected]

Board 10 May 2016

Performance Report – Year EndReport by Director of Tenancy Services

For approval


1.1 This report details our financial and non-financial performance against our 2015-16 strategic targets at the end of the financial year. Appendix one is a graphical summary of the 20 strategic targets.

2. Proposals and decisions made at previous board meetings

2.1 Our strategic targets were approved by YHN Board in March 2015 as part of the annual delivery plan. These indicators used the latest benchmarking information available (using information from HouseMark) and were developed in close consultation with officers from Newcastle City Council and reflecting tenants’ priorities.Appendix one provides Board with the following information:

Trend information from 2014-15 (where available); Actual performance for 2015-16, and HouseMark benchmarking information as at quarter three (where

relevant). This is the latest benchmarking data we have. Data from quarter four should be available from HouseMark by the end of May.

3 Financial performance

3.1 This section sets outs the headlines for YHN Group’s financial performance for the year. A more detailed income and expenditure account and balance sheet by company is included in the confidential papers.

3.2 F1 - Surplus before tax (YHN Group, £'m)Our forecasts of the Group surplus before tax have been steady since Q2.

£2.13£2.67 £2.76 £2.76

£0.00£0.50£1.00£1.50£2.00£2.50£3.00£3.50£4.00

Q1 Q2 Q3 Q4

Surplus before tax forecasts

Our understanding of the Group’s profitability has increased throughout the year as we developed the disaggregation business model and generated efficiencies.

3.3 F2 - Efficiency Log (£'m)As reported in Q3, the efficiency target for 2015-16 has now been achieved, and these amounts have been removed from operational budgets.

£1.08

Q1 Q2 Q3 Q4

Achieved Target

The 2015-16 efficiencies were:

Concierge Review 250,000Garden Care and Tenancy Management 177,500Development Team reductions 180,000Finance Team reductions 32,000Increased Leazes Homes income 150,000HR and OD changes 63,500Office and facilities costs reduced 154,000

Reduction in Technical Surveyor staff 72,000Total 1,079,000

The budget paper presented to Board in March set out the planned efficiencies for 2016-17 which are already included in budgets.

3.4 F3 - YHN Notional Cash balance (£'m)F3 gives an indication of the YHN Group cash balance since April. NCC continues to carry out the majority of YHN’s day to day banking. The chart below shows an aggregate of our actual cash balance and the amounts that NCC has paid/received on our behalf. The chart should give Board members a sense of the cash flow throughout the year.

£1.84

-£6.00

-£4.00

-£2.00

£0.00

£2.00

£4.00

£6.00

£8.00

Open 1 2 3 4 5 6 7 8 9 10 11 12

Cash balances

NCC has now been approved to create a BACS Bureau which will mean greater cash independence for the YHN Group and a greater need for cash control. The project group to set up the Bureau is formed, with some aspects implemented in September.We have had the benefit this year of using NCC’s banking facilities which allowed us to delay invoicing during P7 to P9 while some technical issues with our invoicing systems were resolved. This resulted in a “virtual” overdrawn position in P10. All invoicing issues are now resolved and regular invoicing has resumed.

3.5 F4 - Tax liabilityAs discussed through the disaggregation approval process this year, the YHN Group structure has been devised with the intention that the current activities of the Group would not attract a new Corporation Tax charge.

Asfaleia AbriProfit before tax -0.00 1.24Gift Aid 0.55 -0.55 Subtotal 0.54 0.70Corporation Tax -0.11 Total to reserves 0.54 0.59

Any taxable profit that Abri Trading or Asfaleia create over and above the

assumptions in the model will attract a Corporation Tax charge, but given that this is entirely new profit, this is not a bad thing.Our current estimated Corporation Tax charge is £110,000 payable by Abri Trading.

3.6 F5 – HRA investment oversightYHN is paid by NCC to oversee the HRA Capital Investment programme.

1 2 3 4 5 6 7 8 9 10 11 12

Q3 forecast Q4 actual

Totals:Target: £55.2mQ3 forecast: £53.9mQ4 actual: £51.9m

Following the government’s announcement of an enforced 1% reduction in rents, YHN was asked by NCC to reduce the levels of capital expenditure during 2015-16. YHN put a hold on any works where there was no contractual commitment to proceed. This action dropped the proposed programme from around £60m to £55.2m.The actual spend for the year was £51.9m. The indicator is shown as amber, as the spend target was not achieved, but this underspend gives more headroom for projects in future years.The profile of expenditure across the last months of the year was more heavily weighted to P12 than was expected in Q3. The reasons for this are

Bad weather delaying external works; Bonds required from contractors delaying start of works; and The graph above does not include accrued expenditure for months 1 to

11. Work was carried out during the year, but not invoiced until P12.

3.7 F6 – surplus by company

£2.03

£0.77

£0.03

£1.53

£1.24

£0.00

YHN Abri Asfaleia

Q3 forecast Q4 actuals

As planned, the majority of the surplus across the group is generated within YHN. This is the preference, as the profits can be used most usefully here for restructuring costs and investing in technology to drive efficiencies. Furthermore, ALMO profits are not subject to Corporation Tax.Higher profits in Abri Trading and a lower than planned deficit in Asfaleia have led to the tax liability described for indicator F4.Since Q3 there has been a shift in the distribution of profits in the group. Although overall Group surplus is steady, profit has transferred from YHN to Abri Trading. The main reasons for the change are:

Higher costs in YHN since Board approved voluntary redundancy applications

Higher than expected profits in Abri Trading as income has outperformed expectations and depreciation of furniture has come in lower than estimated.

There have been other changes as we have gained a better understanding of how costs are distributed within the group and fine-tuned the details of the disaggregation model.The additional profit in Abri Trading means that it has retained a level of reserves that can help protect against future trading uncertainties.

3.8 Group Income and ExpenditureA draft Income and Expenditure Statement for the year has been drawn up and is shown below with the forecasts at Q3 alongside for comparison.The Income and Expenditure Statement shows how the group has earned its profits during 2015-16. The total profit or loss for the group will be added to the opening reserves of £2.076m to give the opening reserves for 2016-17.

Q4 actual Q3 forecast Change Notes

Operating IncomeHRA Management Fee 23,199 23,167 32 1Other Landlord Fees 3,067 3,125 (58)Service Charge Fees 4,732 4,850 (118)Furniture Rentals (External) 3,105 2,836 270 2Furniture Sales 1,459 1,279 180 2Telecare Income 652 711 (59)SP Income 1,019 1,039 (21)Other Income 1,536 1,281 255 3

Operating Income Total 38,768 38,287 481

Operating ExpenditureStaff (26,713) (25,752) (960) 4Premises (953) (1,301) 348 5Transport (938) (829) (109)Supplies and Services (2,751) (2,708) (43)Furniture cost of sales (956) (769) (186) 2SLAs and recharges (1,962) (2,107) 145 5Depreciation (1,610) (1,861) 251 6Central Contingency (50) 50

Operating Expenditure Total (35,883) (35,378) (504)

Finance CostsInterest Costs (122) (145) 23

Finance Costs Total (122) (145) 23

Total before gift aid and tax 2,764 2,764 0

Corporation Tax (111) (147) 36Total to reserves 2,653 2,616 37

The overall profit after tax has remained steady since the Q3 forecast. However, there have been some large moves within the income and expenditure categories. Notes1. YHN has received additional funding for approved actions to tackle Welfare Reform. This income has offset an expected drop in management fee to reflect the cost reductions described in note 5.2. Abri Trading income has been higher than expected, which attracted some additional cost of sales.3. The Group is now earning income from a Home Office contract to provide housing and support for Afghan interpreters and Syrian refugees.4. Staff costs have increased since the Q3 forecast mainly due the decision by YHN Board to fund voluntary redundancies.5. Costs have reduced in the Premises and SLAs categories. This is due to some fine-tuning of the disaggregation model where costs have been re-aligned between NCC and YHN. 6. Detailed analysis of the furniture stock data has yielded a depreciation figure that is lower than earlier estimates.

3.9 Group Balance SheetThe Group balance sheet is set out below. The balance sheet gives a snapshot of all the assets owned and the liabilities owed by the Group. The total assets less the total liabilities are called the net assets, and this is another way of expressing the total reserves of the Group.

£'000sGroup Balance Sheet - Draft Group

Non Current AssetsOperational Assets 11,972Property, Plant, Equipment 84Depreciation (6,583)

5,473Current Assets

Inventory 754Debtors 6,373Prepayments 548Balances with NCC (5,926)Cash Floats 4Bank 7,766

9,520Current Liabilities

VAT Creditors (1,610)Creditors (1,989)Accounts Payable (165)

(3,764)Non Current Liabilities

Loans (6,500)(6,500)

Net Assets 4,729Reserves

Reserves 2,076Profit for the year 2,653

Total reserves 4,729

CommentsOperational Assets – This category refers mainly to the furniture and community alarm assets transferred into the Group at disaggregation. Debtors – This value is higher than we would wish as too much cash income is bound up in sales invoices or waiting to be invoiced. By far the largest debtor is NCC, and the delays in invoicing are related to the realignment of the disaggregation model referred to above. We have no concerns about receiving payment for these amounts and more structured invoicing has begun in the new financial year.Prepayments – the prepayments figure relates mainly to IT maintenance contracts paid in advance.The total Group reserves at the beginning of 2016-17 will be £4.73mCash and Balances with NCC – The Balances with NCC category tracks all

the income and expenditure handled on YHN’s behalf by NCC. Broadly speaking, we would expect this amount to remain relatively small, reflecting the cash generated by YHN operations.In the first stage of the cash separation project, YHN has now begun receiving cash payments for services supplied to NCC (e.g. management fee). This has had the effect of boosting Group bank balances in recent months but has led to an increase in the amounts owed to NCC, as there is now an asymmetry in those cash flows. These amounts will be monitored and a cash settlement made if necessary.

3.10 Financial Close updateThe figures above are draft, subject to the completion of the financial close and subsequent audit.The following items have yet to be finalised:

1. Review of arrears and slow moving stock. Any trade debts that are doubtful or any stock that has low value may need to be written out of the accounts, reducing profits.

2. There are consolidation adjustments required for some intra-group sales. This is expected to remove approximately £100k from both the income and expenditure but have no material impact on the overall surplus.

3. The Corporation Tax charge is an estimate at this stage, subject to more detailed work in conjunction with our auditors EY.

4. There are some final adjustments to be reflected within the current asset and liability categories on the balance sheet.

5. The accounts may be adjusted for any material differences uncovered during the audit process.

As always, the accounts are subject to change up until they are signed at the AGM in September if any large post balance sheet events come to light.

3.11 More detailed breakdown of the Group Income and Expenditure and Balance Sheets are found in the confidential appendices.

4 Non-financial performance – targets not achieved

4.1 The sections below provide information on those targets which have a red status at the end of the financial year.

4.2 The void rent loss amount not to exceed 1.28% (£1.46m) by 31/03/2016 (Target 1)The void rent loss at the end of quarter four is 1.48% (£1.71m). This has reduced very slightly from the end of quarter three, when void rent loss was 1.49%. As reported to Board throughout the year, low demand for high rise flats in Walker had the biggest impact on our performance against this target. The rent loss for the high rise flats managed from the Walker Hub was 14.58%.

Each hub, including Walker, when high rise are properties are excluded, achieved the target (see table below). The higher void rent loss in Sheltered housing is due to low demand for a small number of schemes. We have remodelled two schemes to remove the unpopular bedsit accommodation and three more have either started on site or are being cleared for work to take place.

14.6%

2.2%1.1% 1.0% 1.0% 0.8% 0.7%

Walker high rise ShelteredOuter WestWest End East End KentonWalker (excluding high rise)

Void rent loss 2015-2016

The review of the void end to end process concluded in quarter three. When this work is implemented we expect to see an improvement in the re-let period for most properties, which in turn will reduce the void rent loss in 2016-17.

4.3 The average re-let time for all standard voids not to exceed 25 days by 31/03/2016 (Target 2)The average re-let time for standard voids at the end of quarter four is 42 days. This is above the 25 day target.Excluding Walker high rise flats the re-let time for standard voids would have been 33.1 days. The improvements we are making to the void management process will help us reduce the re-let time for these types of properties.In 2016-17 we will be introducing a new approach to managing transfers (where a tenant moves from one council owned property to another). Transfers are the single largest reason for tenants terminating their tenancies. Reducing the number of tenants who wish to move, where there is no housing need, will help reduce the void re-let time and rent lost from voids as well as decreasing the amount of money spent on void property repairs.Last summer board approved the establishment of a time limited committee, focusing on voids. Work has been progressing and the final meeting of the committee is in May, which will be followed by a report on the outcome of the work, to board in June.

4.4 Red: Reduce sickness per full time equivalent (FTE) to 8.2 days (Target 4)The sickness figure for 2015-16 was 8.34 days absence per full time equivalent (FTE). Although the target has not been achieved, this means we have reduced sickness absence by 2.46 days per full time employee during

the year.A combination of factors has helped to achieve the reduction, including:

The introduction of the new trigger point of ‘three or more days in three months’, has given managers the means to tackle absence at an earlier stage, especially for frequent and/or short term absences. Not having a lower level trigger was considered a barrier for some managers in managing absence.

Offering free NHS health checks to all staff at a variety of locations across YHN. Staff were given time to attend during working hours, which resulted in 40% of staff attending a health check. We know some staff were immediately referred to their GP for further treatment/tests, which may have prevented serious health problems occurring for those individuals.

YHN’s Health and Wellbeing group have implemented a number of new sustainable approaches over the last year which has encouraged staff to lead healthier lifestyles. A ‘pedometer challenge’ was a great success, along with healthy eating breakfast seminars, reflexology and Indian head massages at various offices across the organisation; and also free taster yoga and kettlebell sessions.

The RELATE counselling is offered to staff as an alternative to the counselling service offered through Occupational Health. We know staff have benefitted from using RELATE, and we know this has prevented absence for the staff who have received treatment.

The introduction of a new Absence Case Management tool helps managers and senior managers to keep track of absences with their teams/areas. Closer monitoring by managers has enabled them to tackle sickness absence in a more effective and productive way.

Strategic HR and Operational HR continue to work closely together along with managers in order to continue to keep reducing sickness absence further.We want to sustain this significant momentum. The target for 2016-17 is 7.5 FTE days, and throughout the coming financial year we will need to consolidate and build upon the improvements we have made in the past 12 months.

4.5 Increase by 25% the amount of demographic data we hold about council tenants by 31/03/2016 (Target 5)We have increased our collection to 14.34%, which is an increase of 5.5% since quarter two.During quarter three we:

Continued to telephone those customers for whom we have the least amount of demographic information. Officers in the enquiry centre collected the information by completing the calls during quieter periods of the day.

We transferred the information from the 5,195 paper surveys sent to tenants to collect demographic data.

Officers in the sheltered housing service continued to collect demographic data from the tenants they work with.

We identified an error in the processes used to transfer data between our core IT systems, which had meant that data was not being shared between systems. We have now resolved this problem.

4.6 Build at least 11 new council owned homes by 31/3/2016 (Target 13)There were three new build projects which were due to be completed in 2015-16. Two of these schemes were completed on time, resulting in eight new properties being built. The third scheme is an apprentice led scheme being delivered by Building and Commercial Enterprises (BCE). This scheme was due to be completed by the end of March but is currently running four weeks behind schedule. Works were delayed by over a month last summer as BCE overlooked the requirement for grouting contained within the site investigation report. Poor weather conditions over the last few months have contributed to the delay.Over the last two months BCE has brought in extra staff and worked some weekends which resulted in an anticipated completion date of 29 April 2016.

4.7 87.5% customers who are satisfied with the service provided by YHN by 31/03/2016 (Target 20)70% of customers who believe that YHN listens to their views and acts on them by 31/03/2016 (Target 19)80% of customers who are satisfied with the condition of their neighbourhood by 31/03/2016 (Target 18)These were reported to Board as red in quarter three. A more detailed report was presented to Service and Strategy Delivery Committee in April 2016. More detail on the satisfaction targets is provided in appendix one.

5 Non-financial performance – targets achieved

5.1 This section highlights two of the strategic targets which we achieved during the year that we wish to draw to board’s attention. The detail of all targets achieved is provided in appendix one.

5.2 Collect 99.49% (£112m) of rent from current and former tenants as a percentage of rent owed (excluding arrears brought forward) by 31/03/2016 (Target 6)The current tenant arrears as a percentage of the annual rent debit not to exceed 2.34% (2.66m) by 31/03/2016 (Target 7)The income service had a successful year achieving a collection rate of 99.84% against an income collection target of 99.49%. This represents £369,497 of income collected during the year above the target. This additional income collected contributed to achieving our current tenant arrears target. The year-end current tenant arrears position was £240k below the target. The team promote a payment culture where officers proactively ask tenants in arrears to make a payment at every contact and encourage tenants to pay rent by direct debit.

Income Recovery Officers focussed on encouraging customers to sign up to direct debit as the preferred method to pay their rent. During the year the number of customers paying their rent by direct debit rose by 29% from 5,749 customers to 7,435 customers.In November 2015 NCC stopped taking cash payments in their customer service centres. The growth of direct debits meant we continued to maintain our collection rates after the service was withdrawn.The team working with Universal Credit claimants have provided intensive support and guidance to the customers who migrated onto Universal Credit during 2015-16. As expected the Universal Credit claimants rent collection was lower than non- Universal Credit customers, however the collection rate of 89% for the Universal Credit customers was higher than the projected collection rate of 86.8%.We have used Rentsense arrears software since December 2014. The software uses a predictive method based on payment patterns to identify accounts in arrears earlier in the process. Using it is enabling Income Recovery Officers to identify issues at the earliest opportunity to maximise rent collection and prevent arrears accruing.

6 The Business Implications

6.1 Mission and Strategic Objectives: The purpose of this report is to allow board to ensure YHN is working appropriately towards its strategic objectives.

6.2 Value for money/efficiencies: This is covered in the main part of the report.

6.3 Financial Implications: This is covered in more detail in the main part of the report.

6.4 Other Resources (property, technological or human): None

6.5 Impact on services/performance: This monitoring report allows board and staff to drive improvements to performance.

6.6 Outcomes for tenants/leaseholders: The purpose of this report is to allow board to ensure YHN is working appropriately towards its strategic objectives which are focussed on outcomes for our landlords, tenants and their neighbourhoods.

6.7 Risk (reputation, relationship): Risks can be identified through issues raised by this monitoring report.

6.8 Environmental: None

6.9 Legal: None

6.10 Equality and Diversity and Community Cohesion: We have a target which focuses on equality and diversity as part of a much wider strategy.

6.11 Stakeholder Involvement/consultation: Our key stakeholders were involved in setting most of the performance targets being monitored in this report.

Regular meetings take place with senior NCC and Leazes Board to discuss the ongoing performance against relevant targets.

7. Conclusion and recommendations

7.1 Board are asked to:

comment on performance and refer any areas of performance that require additional scrutiny to

Service and Strategy Delivery Committee.

8. Implementation

8.1 Board will receive the report for quarter one (2016-17) at the August Board meeting.

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Lisa Forrest by telephone on 0191 278 8616 or email [email protected] or Louise Horsefield by telephone on 0191 278 8720 or email [email protected].



Target Actual performance Previous year Year to date

Void rent loss (target 1) Average re-let time for standard voids (target 2) Tenant demographic data (target 5)The void rent loss has reduced slightly to 1.47% (£1.69M) this period.

Excluding low demand stock (Walker high rise) the rent loss has reduced to

0.99% (£1.10M).

The average void relet has reduced in Q4 from 43.0 to 41.8 days. Excluding

low demand stock (Walker high rise) the relet time has reduced by 0.5 to 33.1

days (also in Q4).

The amount of demographic data we hold about council tenants by

31/03/2016 has increased by a total of 14.34%.

The quarter three performance was in the median quartile based on the

HouseMark benchmarking.

The quarter three performance was in the lower quartile based on the


No benchmark data.

Building new homes (target 13) Satisfaction results (targets 18,19,20) Staff sickness (target 4)Reduction in satisfaction in two areas. Target not met in all three. Significant improvements since August 2015. There were fewer absenses

throughout the year and often sickness was taken for shorter periods of time.

Periods of long term sick remained unchanged. Unfortunately the target was

not achieved with 8.34 days sickness per full time equivalent.

Overall satisfaction - The quarter three performance was in the lower median

quartile based on the HouseMark benchmarking.

Listens & Acts - The quarter three performance was in the median quartile

based on the HouseMark benchmarking.



No benchmark data. Neighb/d satisfaction - The quarter three performance was in the lower

median quartile based on the HouseMark benchmarking.

One scheme was completed in January. The other scheme due to complete

in March has been hampered by poor weather. The contractor is ensuring

that extra staff are brought in and that work continues over the weekends and

work should be completed by the end of April.

1.47%

1.28%41.8

25

85.2%87.5%

79.0% 78.9%

66.7% 67.4%

2.3%

1.0%

3.3%

Overall satisfaction2015

Overall satisfaction2014

Neigbourhoodsatisfaction 2015

Neigbourhoodsatisfaction 2014

Listens & acts 2015 Listens & acts 2014

Satisfaction results

0.60%2.33%

8.79%

14.34%

25%

Q1 Q2 Q3 Q4

YTD: 8.34

Rolling: 8.34

Rent collection (target 6) Arrears (target 7) Average repair (target 8)Rent collection rate has exceeded the target at 99.8%. The target has been achieved. Arrears have increased slightly compared to

last year (2.08%).

The cost of repairs has increased slighlty over the winter months.

This performance was in the upper quartile based on the annual HouseMark

benchmarking.





Stock turnover (target 3) Anti social behaviour (target 10) Management fee (target 9)Current turnover of 8.3% of stock is 0.2% lower than the profiled target. 95.4% of ASB cases have been resolved. Management Fee spend target has been achieved.



The quarter three performance was in the upper quartile based on the


See financial information in confidential appendicies

99.8%99.5%

2.1%

2.3%

£83.06 YTD

2,172

2,438

9 3 1137

115

April May June July Aug Sept Oct Nov Dec Jan Feb Mar

Unresolved ASB cases

2015-16 2014-15

Life cycle improvements (target 14) SAP rating (target 12) Digital inclusion (target 12)Delivered 4797 life cycle improvements. The SAP rating for council properties is 68.26. Engaged with 747 tenants to ensure that they are digitally included.

No benchmark data. The quarter three performance was in the lower quartile based on the


No benchmark data.

Efficiency saving (target 16) Traded services (target 17) Employability (target 11)Achieved a £1.08m efficiency saving. Target has been achieved for traded services. 46 out of the 57 people employed through our Employability programme

moved on to further employment, education or training.

See financial information in confidential appendicies. No benchmark data.

See financial information in section 3.3 of the Board

report.

4061

4797

489

593679 747Target: 700

YTD: 80.7%Target: 80%

68.26

Board 10 May 2016

Revision of YHN Group Financial Regulations Report by Company Secretary

For Decision


1.1 Financial Regulations provide the framework for the financial administration of Your Homes Newcastle Group (YHN Group) with a view to ensuring that YHN Group’s financial affairs are conducted in a sound and proper manner, constitute value for money and minimise the risk of legal challenge to YHN Group. Financial Regulations are not intended to constitute a set of detailed rules to respond to every contingency.YHN is constrained by Newcastle City Council (NCC) Financial Regulations and Standing Orders as part of the agreements made in setting up the company.

1.2 Last Financial Regulations approved September 2015

A change in Public Sector Procurement regulations in 2015 led to amendments being made to Financial Regulation Eight - Procurement and Contracts. The Financial Regulations were updated and published to staff following Board’s approval in September.

It was also reported to Board in September that the review of the remainder of YHN Financial Regulations had commenced. Officers assessed the needs of the Group with regard to the changes in YHN Group’s operating environment.

2. Changes in YHN Group’s Operating Environment

2.1 NCC Review and Disaggregation The NCC review of YHN concluded that the strategic management of the HRA should go back to NCC. As a result, in October 2015, non-core landlord trade transferred from NCC and this along with other decisions led to the following changes:

A new relationship with NCC

New group companies

Chief Executive post deleted

2.2 A new relationship with NCCThe Management Agreement effective from April 2016 is based around NCC’s priorities for core landlord activity. Previous versions of the Financial Regulations aimed to encapsulate YHN expending HRA funds under the full delegation to Board. There are now two distinct areas:

1. YHN spend for which we need our own clear Financial Regulations;

2. HRA capital expenditure for which we must follow NCC regulations subject to the delegation to work within capital programme limits.

2.3 New group companiesAbri Trading Limited and Asfaleia Limited became active entities in October 2015. They are both subsidiaries to YHN although Asfaleia Limited must demonstrate a level of independence to qualify for charitable status. In September, Board agreed an Intergroup Agreement between YHN and the new entities. This agreement means all group companies should follow the same policies. The current Financial Regulations made no reference to Abri Trading Limited and Asfaleia Limited.

2.4 Chief Executive post deletedIn December 2015, the YHN Chief Executive position was deleted. The current Financial Regulations refer to this position throughout.

3. Proposals

3.1 The proposed revised Financial Regulations set out in Appendix 1Headline changes:

Abri Trading Limited and Asfaleia Limited are expected to follow group regulationsClear responsibilities for Abri Trading Limited and Asfaleia Limited boards are now set out which include meeting YHN’s budgetary requirementsYHN officers will be able to follow these regulations for all group company activityHRA: where we have oversight of NCC expenditure or delivering NCC procurements, we will follow NCC Financial Regulations to the delegation to work within capital programme limits.

3.2 For completeness, the detailed changes can be seen in a tracked version of the Financial Regulations in appendix 2 of this report.

4. Other Issues to be incorporated later

4.1 Director References References to Chief Executive have now been replaced with Managing Director as the post is confirmed. As the new Managing Director is likely to instigate some management restructuring, it is proposed that the references to Directors are left for the time being, and reviewed at a later date.

4.2 The Purchase to Payments process (P2P) review: YHN Finance is undertaking a review of the P2P process to achieve streamlining and efficiencies whilst improving the user experience. This may well lead to a requirement to change the current financial regulations. This will be reported back to board as and when it is necessary.

5. The Business Implications

5.1 Mission and Strategic Objectives: Financial Regulations are intended to support the strategic objectives of YHN by protecting financial resources from inappropriate use.

5.2 Value for money/efficiencies: Financial Regulation 8 is a key strand in achieving value for money through effective procurements.

5.3 Financial Implications: No direct implications of implementation

5.4 Resources (financial, property, technological or human): Financial Regulations are intended to protect financial resources from inappropriate use.

5.5 Impact on services/performance: There should be no direct impact on services or performance as a result of the proposed changes to Financial Regulations.

5.6 Outcomes for tenants/leaseholders: There should be no direct impact on outcomes for tenants/leaseholders as a result of the proposed changes to Financial Regulations.

5.7 Risk (reputation, relationship): Financial Regulations are an important internal control to protect financial resources from inappropriate use and therefore protect YHN’s reputation and relationship with its member - NCC.

5.8 Environmental: NA

5.9 Legal: Financial Regulations are an important internal control within the governance of the company and ensure robust and transparent decision making, and prevent any litigation with regard to bribery or corruption.

5.10 Equality and Diversity and Community Cohesion: NA

5.11 Stakeholder Involvement/consultation: The NCC Cabinet Paper in March 2015 stated:“YHN will still retain responsibility for development of an annual Delivery Plan and its own Corporate Strategies and Service Plans. Their programme of Service Improvement activity will also continue. YHN will retain its own financial regulations and Standing Orders. YHN Board will retain the following functions in relation to YHN business:

- Forward planning and budget strategy for YHN;- Incurring and controlling revenue spending and income in relation to YHN

business;- Incurring and controlling the investment programme – within the priorities

allocated by Cabinet;- Changes to the financial regulations will be a matter for Board to approve or

amend;- Monitoring of YHN’s financial performance during the year and consideration of

any significant developments affecting the financial position of the company.”


6.1 Board is recommended to approve the revised YHN Group Financial Regulations in appendix 1.

7. Implementation

7.1 Subject to approval, The revised YHN Group will be publicised to YHN staff. Officers

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Lisa Forrest by telephone on 0191 278 8616 or email [email protected]


NOT PROTECTIVELY MARKED1

Financial RegulationsApproved on 10 May 2016

Financial Regulations(version: 10 May 2016)

Contents

Introduction to the Regulations

Page No

3

Financial Regulation One 5

Financial Regulation Two 9

Financial Regulation Three 10

Financial Regulation Four 12

Financial Regulation Five 15

Financial Regulation Six 16

Financial Regulation Seven 17

Financial Regulation Eight 18

Financial Regulation Nine 19

Financial Regulation Ten 20

Appendices 33

INTRODUCTION TO FINANCIAL REGULATIONS

Your Homes Newcastle Group is made up of a parent company; Your Homes Newcastle Ltd and two subsidiary companies; Abri Trading Ltd & Asfaleia Ltd. Full details of these companies and their relationship can be found in the Group Governance Handbook (2.1 to 2.5)

These Financial Regulations provide the framework for the financial administration of Your Homes Newcastle Group (YHN Group) with a view to ensuring that YHN Group’s financial affairs are conducted in a sound and proper manner, constitute value for money and minimise the risk of legal challenge to YHN Group. Financial Regulations are not intended to constitute a set of detailed rules to respond to every contingency.

YHN is constrained by Newcastle City Council Financial Regulations and Standing Orders as part of the agreements made in setting up the company. These financial regulations have been written with a view to encapsulating the relationships specific to YHN Group. Should there be any conflict between NCC and YHN Group’s financial regulations, the NCC financial regulations take precedence. Should there be any conflict between YHN Group’s supporting governance policies and the articles or rules of the subsidiary companies, the articles and rules take precedence.

These Financial Regulations should be read in conjunction with the Group Governance Handbook.

Financial Regulation 1 defines responsibility for financial control.

Financial Regulations 2, 3, and 4 lay down the tasks required of YHN Group, the Board, Committees or officer, for the fundamental financial processes of:

• forward planning and budgetary strategy;• incurring and controlling revenue spending and income; and• incurring and controlling the Investment Programme.

Financial Regulation 5 covers the requirements for Risk Management.

Financial Regulations 6 and 7 cover the standards required for:

• accounting; and• audit.

Financial Regulation 8 governs procedures for obtaining goods, materials, works and services.

Financial Regulation 9 defines the responsibilities governing partnership arrangements.

Financial Regulation 10 regulates the ‘day to day’ financial systems. It requires the Managing Director to ensure that prescribed controls are present.

All financial decisions and decisions with financial implications must have regard to proper financial control. Any doubt as to the appropriateness of a financial proposal or correctness of a financial action must be clarified in advance of the decision or

action.

Financial instructions and Financial Procedure Notes will be issued from time to time where assistance is needed with the interpretation of Financial Regulations.

Failure by officers to observe Financial Regulations and the codes and guidance issued under them may result in action under YHN ’s disciplinary procedures.

Failure by Board members to observe Financial Regulations may amount to a breach of the Code of Conduct for Board Members.

Amendments to Financial Regulations require the approval of YHN Board following a report from the Company Secretary. The Head of Finance will amend as necessary the supporting advice and guidance to Financial Regulations, including financial procedure notes issued under FR 10.

FINANCIAL REGULATION ONE - RESPONSIBILITIES

1.1 Responsibilities to the Company

All Board Members and employees of YHN Group are responsible for ensuring that they use the resources and assets entrusted to them in a responsible and lawful manner. They should strive to achieve value for money and avoid legal challenge to YHN Group. These responsibilities apply equally to Board Members and employees when representing YHN Group on outside bodies. Board Members must also comply with the Code of Conduct for Board Members.

1.2 Personal Responsibilities

1.2.1 Any person charged with the use or care of YHN Group’s resources and assets should inform him or herself of the requirements under Financial Regulations. If anyone is in any doubt as to their obligations, then they should seek advice. Unresolved questions of interpretation should be referred to the Head of Finance.

1.2.2 All employees must report to their manager or supervisor any illegality, impropriety, breach of procedure or serious deficiency in the provision of service. Employees shall be able to do this without fear of recrimination providing they act in good faith and in such circumstances managers must record and investigate such reports and take action where appropriate (Code of Conduct for Employees). Compliance with the policy statements on whistleblowing, and Anti-Bribery and Corruption and the Code of Conduct for Employees is mandatory.

Note: YHN Group Policies for confidential reporting of concerns exists to:

• make employees feel confident to raise concerns and to question and act upon concerns about practice;

• give employees avenues to raise concerns and receive feedback on any action taken, in the case of concerns about the manager of the individual, upwards or lateral avenues should be available;

• guarantee that an employee will receive a response to his or her concerns raised and that he or she is aware of the process to follow if not satisfied; and

• reassure an employee that he or she will be protected from possible reprisals or victimisation.

1.3 YHN Group

1.3.1 YHN BoardThe general responsibilities of the YHN Board are set out in YHN Group Governance Handbook 3.7

1.3.2 The financial responsibilities are; the adoption and revision of these Financial Regulations.

the determination of the policy framework and annual revenue, capital

and cash flow budget;

providing the Managing Director with sufficient staff, accommodation and other resources to carry out his/her duties.

controlling the Company’s financial resources, proposing the revenue budget and discharging the executive functions in accordance with the policy framework and revenue budget. Review and approve new increased revenue budget over £100,000

changes to staffing levels or organisational structures that have an additional cost of £100,000 a year or more or where there is no budget provision unless in either case the change is incidental to a key decision taken by the Board

1.4 Abri Trading Ltd Board1.4.1 The general responsibilities of the Abri Trading Board are set out in YHN

Group Governance Handbook 3.3

1.4.2 The financial responsibilities of Abri Trading Board are the same as those for YHN Board in respects to the traded elements of NFS and Palatine. Abri Trading will be expected to meet the overall Group budgetary requirements in setting its own budgets.

1.5 Asfaleia Ltd Board1.5.1 The general responsibilities of Asfaleia Ltd Board are set out in YHN Group

Governance Handbook 3.3

1.5.2 The financial responsibilities of Asfaleia Ltd Board are the same as those for YHN Board in respects toCCAS/Ostara, Employability, Sheltered Housing, Advice & Support and Young People Service. Asfaleia will be expected to meet the overall Group budgetary requirements in setting its own budgets.

1.6 Group Audit Committee1.6.1 The general responsibilities of Audit Committee are set out in YHN Group

Governance Handbook 3.4.1

1.6.2 The financial responsibilities of the Group Audit Committee are as follows;

1.6.3 The Group Audit Committee is responsible for recommendations to the Group’s Boards in relation to the appointment, remuneration and terms of engagement of the external auditor

1.6.4 To monitor and review the external auditor’s independence, objectivity and effectiveness, taking into consideration relevant UK professional and regulatory requirements.

1.6.5 To monitor and review the effectiveness of YHN Group’s internal audit function.1.6.6 Recommend the annual financial statements

1.6.7 T o review YHN Group’s internal financial control system.

1.6.8 To review YHN Group’s risk management systems.

1.7 Service & Strategy Delivery Committee1.7.1 The general responsibilities of the Service & Strategy Committee are set out

in the YHN Group Governance Handbook 3.4.2

1.7.2 This committee has no direct financial responsibilities

1.8 Remuneration Committee1.8.1 The general responsibilities of the Remuneration Committee is set out in YHN

Group Governance Handbook 3.4.1

1.8.2 The financial responsibility is as follows;

1.8.3 The Remuneration Committee is responsible for deciding the process for the appraisal and remuneration of the Managing Director.

1.9 Time Limited Committees1.9.1 The general responsibilities of Time Limited Committees is set out in the

YHN Governance Handbook 3.4.4

1.9.2 These committees have no direct financial responsibilities but may be given a financial project which would be set out within a project plan with clear tasks, roles, timescales and resources which would be used to monitor and evaluate progress. The project recommendations will ultimately be recommended by board

1.10 Financial Governance1.10.1 The Managing Director shall appoint an officer who shall be responsible

for ensuring the proper administration of YHN Group’s financial affairs.

1.10.2 The Directors shall issue, and keep under continuous review, such instructions, give such advice or establish such procedures relating to financial matters as they consider necessary to secure the proper administration of the Group’s financial affairs.

1.10.3 The Managing Director is responsible for reporting, where appropriate, breaches of Financial Regulations to the appropriate Board.

1.10.4 The Managing Director has the duty to report to the appropriate Board, and external auditor where it appears that YHN Group or an officer has made or is about to make a decision that would involve unlawful expenditure, unlawful action likely to cause a loss or deficiency or an unlawful item of account, or if proposed expenditure is in excess of available resources. Where appropriate Newcastle City Council will be informed.

1.10.5 The Head of Finance has responsibility for ensuring compliance with the requirements of the latest relevant Accounts and Audit Regulations relating to accounting records, control systems and audit.

1.11 Managing Director and Directors

1.11.1 The Managing Director and Directors are responsible for ensuring that all

staff under their control are aware of the existence of YHN Group’s Financial Regulations and other regulatory documents and that they are observed throughout all areas under their control and shall;

• provide the Managing Director with such information and explanations as the Managing Director feels is necessary to meet his or her obligations under Financial Regulations;

• ensure that the Managing Director has sufficient opportunity to comment on all proposals with unbudgeted financial implications, before any commitments are incurred;

• ensure that Board Members are advised of the financial implications of all significant proposals and that the financial implications have been agreed by the Managing Director;

• inform immediately the Managing Director of failures of financial control resulting in additional expenditure or liability, or loss of income or assets;

• inform the Managing Director where amendment to FinancialRegulations is considered necessary;

• be responsible for ensuring the legality of all actions.

For these Regulations the terms Director or Directors or Heads of Service is to be taken to include the Managing Director and their authorised staff.

1.12 Exceptions to Financial Regulations

1.12.1 Exceptions to these Financial Regulations shall be made only:

• in cases of urgency or where it is in the interests of YHN Group to do so; and• with the prior written approval of the Managing Director and the Chair/Vice Chair of the YHN Board.

1.12.2 The Head of Finance shall keep a record of all such exceptions and submit them to the next board meeting.

1.13 Arrangements for the discharge of responsibility

1.13.1 The Managing Director and Directors of Service are required to carry out their tasks in accordance with these Financial Regulations. These officers may arrange for their staff to carry out tasks for which they have responsibility as set down by these Financial Regulations provided that the terms of the arrangement are clearly defined and documented. A record of all such arrangements will be prepared by each Director and submitted to the Company Secretary on an annual basis.

1.13.2 Notwithstanding such arrangements, the person making the arrangements remains responsible for compliance with these Financial Regulations.

FINANCIAL REGULATION TWO - FORWARD PLANNING AND BUDGET STRATEGY

NCC commissions YHN to provide specific services through the management agreement. From 1 April 2016, the management fee will be agreed annually with the delivery plan.

YHN Board decides on the annual YHN budgets and recommends the HRA capital programme.

2.1 Directors shall provide information to the Head of Finance to enable him/her to produce and submit to the Board annually a five year financial forecast.

2.2 The Managing Director shall annually after consultation with the ManagementTeam and NCC advise the boards on:

• financial planning and budget strategy matters;• procedures, timetables and estimated resources for planning revenue

and capital spending; and• the annual revenue budget, investment programme and level of

Management Fee.

2.3 Each Director in consultation with the Head of Finance shall prepare revenue estimates, and trading account forecasts. In doing so, Directors shall ensure that :

• the estimated expenditure and income, or the cost of any proposal submitted by them are as accurate as possible and provide provision for all costs involved;

• the revenue estimates are consistent with YHN policy; and• the revenue implications of the investment programme are fully

included in revenue estimates.

FINANCIAL REGULATION THREE -INCURRING AND CONTROLLING REVENUE SPENDING AND INCOME

YHN Board monitors financial performance during the financial year and considers any significant developments affecting the financial position of the Company and the Group as a whole. The boards of Abri Trading Limited and Asfaleia Limited will monitor the financial performance of their respective areas of business.

3.1 The Head of Finance, after consultation with Management Team, will advise the relevant Boards, on a quarterly basis, on:

• progress against the budget; and• significant developments affecting the financial position of YHN Group

3.2 The Head of Finance shall:

• provide guidance on and co-ordinate the budget monitoring process;• prescribe the form, basis, supporting information and timetable for the

preparation of final accounts•

3.3 Each Director shall:3.3.1 Authorise revenue spending and collect income within the estimates, targets and/or

limits approved by the Board provided that:

• There is a clear business case;• the expenditure is lawful;• Financial Regulations have been complied with;• expenditure is within approved revenue budget; • expenditure is in respect of Company policy, and• authorise variations to budget heads within delegated limits.

3.3.2 New or increased revenue budgets may be authorised within the following limits;• the director must approve new increased revenue budget up to £20,000• new increased budget between £20,000 and £100,000 must be referred

to Management Team for approval.

3.3.3 Seek, the approval of the Board to budgetary changes that would have a significant impact on the nature or level of service provided. New revenue budget over £100,000 is considered significant and must be referred to Board

3.3.4 Directors must ensure that transfers between budgets (virement) fulfil the following requirements:

• That the budget being reduced/transferred from will still have sufficient resources to meet expected outcomes;

A clear business case for the virement must be made transfers apply only to the transfer of funds within the delegated budget

of the Director;• the proposal must be consistent with Company policy;• any virement over £100,000 is a significant decision and must be approved

by Board.

FINANCIAL REGULATION FOUR - INCURRING AND CONTROLLING INVESTMENT PROGRAMME SPENDING AND INCOME

The Group Board oversees the YHN Group investment programme and approves the award of contracts in accordance with the Financial Regulation Eight. This is distinct from the HRA investment programme which is recommended by YHN but approved by NCC.Abri Trading and Asfaleia are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the YHN Managing Director.

4.1 The Managing Director shall, after consultation with the Management Team, advise the Board quarterly on:

• progress on implementation of the investment programmes;• additions and amendments to the investment programme; and• the procedure for the commitment of investment programme

expenditure.

4.2 The Director of Property Services shall:• provide guidance and co-ordinate the HRA investment programme

monitoring procedures; and

4.3 Each Director shall:• authorise investment programme spending in accordance with the

Procedure for the Commitment of Investment Programme Expenditure;

• monitor progress on implementation of the investment programme and provide the Director of Property Services and Head of Finance with such information as requested;

• only commit to match funding arrangements for which investment programme approval has been obtained; and

• undertake the disposal of land and buildings in accordance with theProtocol on the exercise of officer delegations.

4.4 Investment Programme expenditure – Definition

For the purposes of this regulation, investment programme expenditure is deemed to include the procurement, improvement or enhancement for HRA or YHN purposes of fixed assets as defined in current UK GAAP and YHN accounting policies, regardless of how financed. Expenditure below the de minimis sum determined by the Director of Property Services is not investment programme expenditure. If there is doubt whether expenditure forms part of the investment programme, the decision of the Managing Director is final.

PROCEDURE FOR THE COMMITMENT OF CAPITAL EXPENDITURE (FINANCIAL REGULATION 4)

1 . Authority to commit capital expenditure is based on the Investment Programme (the Programme).

a. The YHN Group Investment Programme is approved by YHN Boardb. The HRA Programme is approved by NCC and is updated regularly to

reflect changes in the cost and phasing of schemes and the addition of new schemes.

c. The Leazes Homes Programme is approved by Leazes Homes Board and is updated regularly to reflect changes in the cost and phasing of schemes and the addition of new schemes

2. Schemes are included in the Programme after consideration of investment proposals by Service & Strategy Delivery Committee on the recommendations to be made to Board.

3. Inclusion of a scheme in the Programme gives authority to begin procurement and contract procedures subject to the limitations below.

4. For schemes included in the Programme for commencement in the first financial year (i.e. current financial year), Directors have the authority to progress a scheme to contract signature subject to:

• the Procurement Strategy;

• full compliance with the provisions of Financial Regulation 8 on tenders and quotations;

• tender costs not exceeding programme provision by more than 10% or£100,000, whichever is the lower, provided the source of funding for the additional cost has been identified;

• completion of a tender summary report in the form prescribed by the Director of Property Services; currently the intranet officer’s decision form (not required for contracts with a total estimated cost of under £10,000 or sub-contracts);

• certification by the Procurement Manager of the tender summary report.

Schemes not meeting these conditions, or where:it is proposed to accept other than the lowest tender (where price is the determining criteria), or YHN Group Board or NCC has directed its approval is required

must be reported to Board or NCC for authority to proceed.

5. Financial Regulation 8 covers contract signature requirements.6. For schemes included in the programme for commencement in any subsequent

financial year, Directors have authority to prepare plans and carry out other preliminary work during the first financial year up to a maximum of £50,000.

7. Proposals to incur preliminary expenditure or commitments above £50,000 must be considered by the Management Team. The approval by Management Team must be recorded by the Head of Finance as a delegated decision.

(Note: This authority for preliminary expenditure only applies to schemes in the programme. Confirmation of scheme approval must be sought at the earliest opportunity if significant changes, either in objective, estimated cost or phasing, are proposed.)

8. Once commenced, Directors have approval to incur:

• additional expenditure arising from the operation of a ‘fluctuation of price’ clause;

• increased costs exceeding 10% of the contract value or £100,000 whichever is the lower.

subject to the increased amount being reported for inclusion in the Budget Monitoring Reports to Board (where deemed significant by the Managing Director) and inclusion in the Investment Programme at the earliest opportunity.

FINANCIAL REGULATION FIVE – RISK MANAGEMENT

The importance of risk management to the wellbeing of the YHN Group is outlined in its Risk Management Policy and Strategy Framework.

The Managing Director is responsible for ensuring that risk management is an integral part of the management processes and activities in all parts of the organisation.

Abri Trading and Asfaleia are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the YHN Managing Director.

5.1 The Managing Director will assign clear roles and responsibilities for managing risk.

5.2 The Managing Director is responsible for ensuring that a register of significant risks is maintained, reported and monitored.

5.3 The Managing Director will:

• Produce a strategy for the management of risk in the service;• ensure that risk considerations are embedded into planning and

decision making processes;• identify those activities which have or may give rise to significant loss

producing events;• measure the impact of potential loss;• take reasonable physical or financial steps to avoid or reduce the

impact of potential losses;• allocate risk management resources to areas of identified priority;• maximise risk management opportunities that can impact positively

on the YHN Group’s reputation, aims and objectives;• ensure managers and employees are equipped with the necessary

skills to manage risk effectively;• ensure that strategic partners and service providers are aware of the

importance of risk management;• report the risk implications of recommended strategies, policies, and

service delivery options to Board Members and senior officers of the YHN Group.

FINANCIAL REGULATION SIX – ACCOUNTING


• recommend accounting systems and procedures and the form of financial records and statements to the Managing Director;

• provide guidance and advice on all accounting matters;• monitor accounting performance to ensure an adequate standard for

all services;• certify financial returns, grant claims and other periodic financial

reports required of the YHN Group.

6.2 Each Director shall:

• implement accounting procedures and adopt the form of financial records and statements as determined by the Managing Director ;

• obtain the prior written approval of the Managing Director before introducing or changing significantly the form or method of existing accounting systems and procedures, financial records or statement (see below),

• complete and pass to the appropriate officer financial returns and other financial reports requiring certification;

• keep a proper and effective separation of duties for staff with financial responsibilities.

NOTE: Approval procedure for changes to financial systems

Prior approval is to be requested from the Managing Director in writing. The request must give details of the proposed change and the anticipated benefit from the change, an estimate of the costs involved and the proposed implementation date. Internal Audit advice should be soughtfor all proposed changes at as early a stage as possible.

Approval is not required where the Director certifies in writing that a change has no corporate implications and does not weaken departmental financial controls.

FINANCIAL REGULATION SEVEN – AUDIT

YHN Board has responsibility for all matters of financial significance. The Group Audit Committee reviews matters arising from audit, both internal and external. The Group Audit Committee is responsible for overseeing issues relating to financial probity. Reference should also be made to the YHN Group’s Policy statements on whistle blowing and Anti-Bribery and Corruption.


7.1 The Managing Director shall:

• maintain an adequate and effective system of internal audit of the accounting records and control systems of the YHN Group;

• report annually to Group Audit Committee on progress on the strategic (long- term) audit plan;

• advise YHN Board of material issues of financial control and report toGroup Audit Committee on the adequacy of the systems of internal control:

7.2 The Managing Director or his or her representatives are authorised to:

• visit any establishment of the YHN Group;• have immediate access to all records and documents;• require the immediate production of cash, stores or any other property

owned or held by the YHN Group; and• require and receive promptly full and accurate explanations to any

points requested.


• ensure that all reasonable assistance and co-operation is given to auditors;

• respond fully without undue delay to any enquiries or recommendations made by a Director or the Managing Director;

• inform a Director or the Managing Director, as soon as possible, of failures of financial control, including matters that involve, or may involve, financial irregularity.

where evidence of fraud, bribery, misappropriation or theft is discovered, decide after consultation with the relevant Head(s) of Service, whether to refer the matter to the Police.

7.4 The Managing Director and each Director jointly shall investigate failures of financial control, including matters that involve, or may involve, financial irregularity.

FINANCIAL REGULATION EIGHT - PROCUREMENT AND CONTRACTS

8.1 The Procurement Procedure Rules which are appended to these Financial Regulations (as Appendix 1) shall apply and be followed whenever the YHN Group wishes to arrange for:

(a) the purchase of goods, materials and related services (that is, services which are integral to the provision of those goods or materials, such as installation, servicing, maintenance etc);

(b) the execution of works; or

(c) the provision of other services (including consultancy).


8.2 The Procurement Procedure Rules are part of this Financial Regulation 8 and failure to comply with them shall amount to a breach of financial regulations.

8.3 Subject to the specific provisions of the Procurement Procedure Rules, YHN officers shall in undertaking any procurement of goods, materials, works or services always have regard to and seek to implement the following general principles:

(a) the need to ensure the YHN Group obtain good value for money and staff and customers are properly protected as consumers of the goods, works or services;

(b) the need to ensure and demonstrate true and fair competition, without unlawful discrimination;

(c) the need to ensure the procurement process is transparent and accountable and susceptible to full audit; and

(d) the need to ensure the elimination of any opportunities for fraud or corruption .

FINANCIAL REGULATION NINE – PARTNERSHIP ARRANGEMENTS

9.1 YHN Group boards are responsible for approving Partnership arrangements with other local public, private, voluntary and community sector organisations.

9.2 The Managing Director will ensure the due diligence and legality for all partnership arrangements.

9.3 The Managing Director and Directors must ensure that accounting and auditing arrangements adopted relating to partnerships and joint ventures are satisfactory and that the overall corporate governance arrangements are satisfactory when contracts are arranged with external bodies.

9.4 The Directors must ensure that the risks have been fully appraised before agreements are entered into with external bodies and that appropriate approvals are obtained before any negotiations are concluded in relation to work with external bodies.

9.5 Partnerships are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the Managing Director.

9.6 NCC approval is required prior to delegation of any function or responsibility to a third party.

FINANCIAL REGULATION TEN - FINANCIAL CONTROLS

10.1 As required by Financial Regulation One, the Managing Director and Directors are, for the areas under their control, responsible for ensuring that the arrangements, guidelines and procedures for the proper administration of financial affairs are operated in accordance with Financial Regulations.

10.2 Directors are required to ensure that the controls as listed in FinancialProcedure Notes are present.

10.3 The Financial Procedure Notes issued under this regulation are

FPN1 Orders for work, goods and services

FPN2 Income

FPN3 Payment for works, goods and services

FPN4 Payment of grants and benefits

FPN5 Security and control of assets

FPN6 Insurance

FPN7 Staffing and payroll

FPN8 Reimbursement of expenses and payment of allowances

FPN9 Banking arrangements and cheques

FPN10 Investment and Borrowing

FPN11 Information Technology and Data Protection

10.4 Further Financial Procedure Notes or amendments may be made from time to time by the Head of Finance.

10.5 Further advice on all areas of financial control is available from the Head of Finance. The Head of Finance will issue detailed guidance notes on specific controls as necessary. These will be referred to as Financial Best Practice Notes.

10.6 YHN Board may amend all other Procedures, Policies, Codes and Checklists referred to in these Financial Regulations.

FPN1 – ORDERS FOR WORK, GOODS AND SERVICES

(a) Objective

To ensure that work, goods and services are only ordered for the purposes ofYHN Group business and that the resulting expenditure is within budget.

(b) Application

This Financial Procedure is mandatory for all officers.

(c) Control Checklist

To achieve the above objective, systems should be present to ensure that:-

• there is adequate budget provision before committing expenditure;• any necessary approvals have been obtained.

Purchases are in accordance with the Purchasing Policy;• where the purchase order system is not used that order documentation meets

the requirements of the Checklist for Official Orders and Contract Clauses.

Note: Official orders must:• for YHN orders be headed ‘Your Homes Newcastle Ltd’;• for NCC orders be headed ‘Newcastle City Council; for Abri Trading Ltd orders must be headed Abri Trading Ltd for Asfaleia Ltd orders must be headed Asfaleia Ltd• state ‘Official Order’;• be numbered;• include the name and address of the ordering department, and delivery

address if different;• show the cost code to be charged;• be signed by, and state post of an authorised officer, and• include the information required in the Checklist.

The order must be signed only by staff who have been given authorisation to do so.

(d) Comments

Staff authorised to order work, goods and services must ensure that they are aware of any necessary committee authorisations required and of the Purchasing Policy.

The Purchase Order Processing System (POPS) must be used whenever possible as it facilitates compliance with the above requirements and collects data to support development of the Purchasing Policy.

Ordering systems must be reviewed at least annually to consider the feasibility of using POPS.

FPN2 – INCOME

(a) Objective

To ensure that all income due to YHN Group is promptly collected, banked and properly accounted for.

(b) Application




• budgeted income is fully and promptly collected;• the Managing Director and Directors are promptly informed of all new sources

of income, the sums anticipated and collection arrangements;• the advice of the Head of Finance is sought prior to the signing of

agreements which provide for variable income.the basis and level of fees and charges are regularly reviewed;

• income is collected in advance of service, or where not possible, by official invoice;

• all cheques received are made to “ the appropriate company within YHN Group”. Uncrossed cheques received are crossed payable the appropriate company within YHN Group

• money received is acknowledged by the issue of an official receipt, ticket or voucher (See (d) below.);

• the transfer of official money between staff is evidenced;• income collected is banked promptly and held securely prior to banking;• money held awaiting banking is insured against theft;• money banked is credited to the correct financial account and compared to

budget estimate;• arrangements for payment by instalment are authorised in advance by the

appropriate Director;• prior authorisation is obtained to the write-off of uncollectable income by the Managing Director for amounts within YHN Group. HRA write off will require NCC sign-off• grant claims requiring certification in the name of a Director are approved by

the appropriate Director..

(d) Special requirements

Personal cheques must not be cashed out of money held on behalf of YHN.

FPN3 - PAYMENT FOR WORKS, GOODS AND SERVICES

a) Objective

To ensure that payments are made only for works, goods or services received byYHN Group and have been certified as such.

b) Application



1. To achieve the above objective systems should be present to ensure that:-

Pre-payment checks are undertaken to ensure that;

• the goods have been received and examined, meet the required specification and work has been done or services rendered have been satisfactorily carried out;

• the invoice is in accordance with the contract or order, is arithmetically correct, and has discounts due deducted;

• the payment has not previously been made;• the payment is authorised (this will be done via the POPS system).

2. For payments made outside the POPS system the POPS/payroll number and POP authorisation group of the officer authorising the payment must be clearly recorded in a form that facilitates checking against the approved list of authorised officers

3. The method of payment is appropriate;

• by use of the corporate creditors system for payment by BACS or cheque (note BACS is the preferred method and must be used wherever possible);

• by imprest account or petty cash for minor sums;• by some other means as agreed with the appropriate Director.

4. Payment is timely;

• to meet supplier/contractor terms of trade and legislative requirements;• justification is provided if urgent payment or dispatch of cheque by

department required.

5. Transactions are properly accounted for, including;

• proper use of financial codes;• compliance with HM Revenue and Customs regulations;• the maintenance of a Register of Contracts by the Head of

Development and Procurement.

(d) Special requirements - Advance payments

No commitments shall be entered into for goods, work or services for which the supplier or contractor requires payment in advance until the Director has confirmed the financial standing of the payee with the Head of Development and Procurement.

FPN4 - PAYMENTS OF GRANTS AND BENEFITS

a) Objective

To ensure that only properly authorised grant and benefit payments are made, and where discretionary, to ensure that the purpose of the payment is achieved.

b) Application



To achieve the above objective systems should be present to ensure that:-

• application forms are required and checked;• awards are made in accordance with the relevant payment conditions;• authority to approve payment is restricted to authorised officers;• conditions of grant are made known to applicants and applied to approved

grants;• discretionary payments are phased and payments are subject to grant

monitoring;• externally funded payments satisfy the requirements of the funding body;• YHN Group’s financial interest is safeguarded e.g. use of a legal charge (the Managing Director should be consulted on this matter)

• the submission of bids and grant claims for European funds conform to the financial procedure note issued under FR 10.4.

(d) Comment

The provision of services to organisations in which YHN Group has an involvement as a partner and/or as a funder or provider of resources for a project is subject to YHN Group’s Procurement policy.

FPN5 - SECURITY AND CONTROL OF ASSETS

a) Objective

To ensure the proper use and safeguarding of assets owned by YHN Group or for whichYHN Group has responsibility.

b) Application

This Financial Procedure is mandatory for all officers



• proper security is maintained at all times;• assets are recorded and accounted for;• the use of assets is restricted to authorised YHN Group business; and• surplus assets, except land and buildings, are disposed of in accordance

with agreed procedures.

(d) Comment

This financial procedure note applies to all assets, including stocks, stores equipment and vehicles (with either an individual value of £500 or more or a collective value of £2,000 or more) and all cash, land and buildings, that are owned by, or are in the possession of YHN Group and for which YHN Group is responsible. The form and content of the record is for local decision following consultation with the relevant Director but must be sufficient to allow verification and to support Balance Sheet entries.

FPN6 - INSURANCE

(a) Objective

To ensure that YHN Group, manages all potential insurable risks and liabilities and to limit the authority for arranging insurance cover to the Managing Director.

(b) Application




• new risks and any alterations to existing risks are reported to theManaging Director immediately;

• Departmental risks are reviewed annually in accordance with the timetable issued by the Head of Business Strategy;

• claims are reported in accordance with the guidelines issued by the City's Insurance Section and supporting information is provided within required timescales;

• policy requirements and warranties, notified by the Insurance Section, are complied with at all times;

• insurers’ loss control requirements are responded to within the relevant timescales.

(d) Comment

Each Director is responsible for identifying, assessing and reporting risks to the Managing Director.

The Head of Finance is responsible for arranging all insurance cover and for ensuring the annual review of insurance cover.

FPN7 - STAFFING AND PAYROLL

(a) Objective

To ensure that staff are appointed in accordance with the Code of Practice on Recruitment and Selection, are paid in accordance with their Contract of Employment and to ensure leavers are removed from the payroll.

(b) Application



To achieve the above objective, systems should be present to ensure that;

• the Code of Practice on Recruitment and Selection is observed in the appointment of staff;

• amendments to the payroll - appointments, resignations and changes to Contracts of Employment are notified to Employee Services Manager in accordance with payroll deadlines and in the form specified;

• details of salary and wage amounts to be paid are provided in a form and to a timetable determined by the Managing Director;

• uncollected payments are promptly returned to the Employee Services Manager; and• an annual check of staff paid and charged to the financial accounts is

undertaken.

FPN8 - REIMBURSEMENT OF EXPENSES AND PAYMENT OF ALLOWANCES

(a) Objective

To ensure that the reimbursement of allowances and expenses to staff and board members is in accordance with the appropriate agreements and legislation.

(b) Application

This Financial Procedure is mandatory for all Board Members and officers.


To achieve the above objective systems should be present to ensure that:

STAFF

• claims are submitted within one calendar month of the expensebeing incurred and include sufficient information to allow verification;

• allowances and expenses are as approved for payment to YHN staff;• payment is made in accordance with procedures determined by the

Managing Director .

BOARD MEMBERS


• allowances and expenses are as approved for payment to Board members;

• payment is made in accordance with procedures determined by theCompany Secretary.

(d) Comment

Particular care must be taken to ensure that all payments to individuals, including additional payments to employees, meet the requirements of the HM Revenue and Customs.

Expenses claims should be supported by receipts whenever possible.

FPN9 – BANKING ARRANGEMENTS AND CHEQUES

(a) Objective

To ensure sound banking and payments arrangements by limiting responsibility for same to the Managing Director.

(b) Application



To achieve the above objective systems should be present to ensure that:• No bank account, or similar, is to be opened except with the authority of the

Managing Director.• The maintenance of YHN Group bank accounts is in

accordance with arrangements determined by the Managing Director.

• Cheques shall be ordered on the authority of the Managing Director and controlled securely prior to use.

• The approval of the Managing Director is obtained to any proposal to enter a credit agreement.

FPN10 - INVESTMENTS AND BORROWING

(a) Objective

To limit the authority for managing YHN Group’s Investments and Borrowing to the Managing Director and to ensure that activities in this area are properly regulated.

(b) Application


Control Checklist


no investment or borrowing transaction is undertaken except with the prior written authority of the Managing Director;

YHN Group bank accounts do not become overdrawn.

(d) The Head of Finance shall ensure that:-

• all investments and borrowing are made in the name of YHN, Abri Trading or Asfaleia Ltd as appropriate;• all securities are held by the Company Secretary;• the Company Secretary is the Group’s Registrar of Stocks, Bonds and Mortgages;• investments held should be reported to Group Audit Committee each by

exception and at the end of each financial year to the relevant Boards by the Managing Director as soon as possible after 31 March;

• all Treasury Management activities are conducted in line with the relevant CIPFA Code of Practice for Treasury Management in Local Authorities; and

• there is an adequate division of duties between arranging and settling of transactions.

Any exceptions to the above can only be authorised by the relevant Board/s.

FPN11 - INFORMATION TECHNOLOGY AND DATA PROTECTION

(a) Objective

To ensure the orderly and secure development of information technology and the proper control of information held.

(b) Application



To achieve the above objective, systems should be present to ensure that:

1. Investment in Information Communications Technology(ICT) complies with ICT strategies and policies.

2. All ICT purchases:• comply with corporate standards and guidelines (including the

procurement guidelines) unless there are sound reasons to do otherwise;

• are in accordance with the approved ICT Strategy Information policy & looking after information Staff handbook ;• have necessary approvals in place;• are notified on completion to the appropriate Director to maintain

the register of IT assets.

3. The use of ICT and the control of information held is subject to theYHN Policy for looking after and sharing information

NOT PROTECTIVELY MARKED1

Financial RegulationsApproved on 22 Sept 201510 May 2016

NOT PROTECTIVELY MARKED

Financial Regulations(version: 22 Sept 201510

May 2016)

Contents

Introduction to the Regulations

Page No

3

Financial Regulation One 5

Financial Regulation Two 9

Financial Regulation Three 10

Financial Regulation Four 12

Financial Regulation Five 15

Financial Regulation Six 16

Financial Regulation Seven 17

Financial Regulation Eight 18

Financial Regulation Nine 19

Financial Regulation Ten 20

Appendices 33


INTRODUCTION TO FINANCIAL REGULATIONS

Your Homes Newcastle Group is made up of a parent company; Your Homes Newcastle Ltd and two subsidiary companies; Abri Trading Ltd & Asfaleia Ltd. Full details of these companies and their relationship can be found in the Group Governance Handbook (2.1 to 2.5)

These Financial Regulations provide the framework for the financial administration of Your Homes Newcastle Group (YHN Group) with a view to ensuring that YHN Group’s financial affairs are conducted in a sound and proper manner, constitute value for money and minimise the risk of legal challenge to YHN Group. Financial Regulations are not intended to constitute a set of detailed rules to respond to every contingency.

YHN is constrained by Newcastle City Council Financial Regulations and Standing Orders as part of the agreements made in setting up the company. These financial regulations have been written with a view to encapsulating the relationships specific to YHN Group. Should there be any conflict between NCC and YHN Group’s financial regulations, the NCC financial regulations take precedence. Should there be any conflict between YHN Group’s supporting governance policies and the articles or rules of the subsidiary companies, the articles and rules take precedence.

These Financial Regulations should be read in conjunction with the Group Governance Handbook.

Financial Regulation 1 defines responsibility for financial control.

Financial Regulations 2, 3, and 4 lay down the tasks required of YHN Group, the Board, Committees or officer, for the fundamental financial processes of:

• forward planning and budgetary strategy;• incurring and controlling revenue spending and income; and• incurring and controlling the Investment Programme.

Financial Regulation 5 covers the requirements for Risk Management.

Financial Regulations 6 and 7 cover the standards required for:

• accounting; and• audit.

Financial Regulation 8 governs procedures for obtaining goods, materials, works and services.

Financial Regulation 9 defines the responsibilities governing partnership arrangements.

Financial Regulation 10 regulates the ‘day to day’ financial systems. It requires the Chief ExecutiveManaging Director to ensure that prescribed controls are present.

All financial decisions and decisions with financial implications must have regard to proper financial control. Any doubt as to the appropriateness of a financial proposal


or correctness of a financial action must be clarified in advance of the decision or action.

Financial instructions and Financial Procedure Notes will be issued from time to time where assistance is needed with the interpretation of Financial Regulations.

Failure by officers to observe Financial Regulations and the codes and guidance issued under them may result in action under YHN ’s disciplinary procedures.

Failure by Board members to observe Financial Regulations may amount to a breach of the Code of Conduct for Board Members.

Amendments to Financial Regulations require the approval of YHN Board following a report from the Company Secretary. The Head of Finance will amend as necessary the supporting advice and guidance to Financial Regulations, including financial procedure notes issued under FR 10.


FINANCIAL REGULATION ONE - RESPONSIBILITIES

1.1 Responsibilities to the Company

All Board Members and employees of YHN Group are responsible for ensuring that they use the resources and assets entrusted to them in a responsible and lawful manner. They should strive to achieve value for money and avoid legal challenge to YHN Group. These responsibilities apply equally to Board Members and employees when representing YHN Group on outside bodies. Board Members must also comply with the Code of Conduct for Board Members.

1.2 Personal Responsibilities

1.2.1 Any person charged with the use or care of YHN Group’s resources and assets should inform him or herself of the requirements under Financial Regulations. If anyone is in any doubt as to their obligations, then they should seek advice. Unresolved questions of interpretation should be referred to the Head of Finance.

1.2.2 All employees must report to their manager or supervisor any illegality, impropriety, breach of procedure or serious deficiency in the provision of service. Employees shall be able to do this without fear of recrimination providing they act in good faith and in such circumstances managers must record and investigate such reports and take action where appropriate (Code of Conduct for Employees). Compliance with the policy statements on fraud, corruption, whistleblowing, and Anti-bBribery and Corruption and the Code of Conduct for Employees is mandatory.

Note: YHN Group Policies for confidential reporting of concerns exists to:

• make employees feel confident to raise concerns and to question and act upon concerns about practice;

• give employees avenues to raise concerns and receive feedback on any action taken, in the case of concerns about the manager of the individual, upwards or lateral avenues should be available;

• guarantee that an employee will receive a response to his or her concerns raised and that he or she is aware of the process to follow if not satisfied; and

• reassure an employee that he or she will be protected from possible reprisals or victimisation.

1.3 YHN Group

1.3.1 YHN BoardThe general responsibilities of the YHN Board are set out in YHN Group Governance Handbook 3.7

1.3.2 The financial responsibilities are; the adoption and revision of these Financial Regulations.

the determination of the policy framework and annual revenue, capital


and cash flow budget;

providing the Chief ExecutiveManaging Director with sufficient staff, accommodation and other resources to carry out his/her duties.

controlling the Company’s financial resources, proposing the revenue budget and discharging the executive functions in accordance with the policy framework and revenue budget. Review and approve new increased revenue budget over £100,000

changes to staffing levels or organisational structures that have an additional cost of £100,000 a year or more or where there is no budget provision unless in either case the change is incidental to a key decision taken by the Board

1.4 Abri Trading Ltd Board1.4.1 The general responsibilities of the Abri Trading Board are set out in YHN

Group Governance Handbook 3.3

1.4.2 The financial responsibilities of Abri Trading Board are the same as those for YHN Board in respects to the traded elements of NFS and Palatine. Abri Trading will be expected to meet the overall Group budgetary requirements in setting its own budgets.

1.5 Asfaleia Ltd Board1.5.1 The general responsibilities of Asfaleia Ltd Board are set out in YHN Group

Governance Handbook 3.3

1.5.2 The financial responsibilities of Asfaleia Ltd Board are the same as those for YHN Board in respects to CCASCCAS/Ostara, Employability, Sheltered Housing, Advice & Support and Young People Service. Asfaleia will be expected to meet the overall Group budgetary requirements in setting its own budgets.

1.6 Group Audit Committee1.6.1 The general responsibilities of Audit Committee are set out in YHN Group


1.6.2 The financial responsibilities of the Group Audit Committee are as follows;

1.6.3 The Group Audit Committee is responsible for recommendations to the Group’s Boards in relation to the appointment, remuneration and terms of engagement of the external auditor

1.6.4 To monitor and review the external auditor’s independence, objectivity and effectiveness, taking into consideration relevant UK professional and regulatory requirements.

1.6.5 To monitor and review the effectiveness of YHN Group’s internal audit function.1.6.6 Recommend the annual financial statements

1.6.7 T o review YHN Group’s internal financial control system.


1.6.8 To review YHN Group’s risk management systems.

1.7 Service & Strategy Delivery Committee1.7.1 The general responsibilities of the Service & Strategy Committee are set out

in the YHN Group Governance Handbook 3.4.2

1.7.2 This committee has no direct financial responsibilities

1.8 Remuneration Committee1.8.1 The general responsibilities of the Remuneration Committee is set out in YHN

Group Governance Handbook 3.4.1

1.8.2 The financial responsibility is as follows;

1.8.3 The Remuneration Committee is responsible for deciding the process for the appraisal and remuneration of the Chief ExecutiveManaging Director.

1.9 Time Limited Committees1.9.1 The general responsibilities of Time Limited Committees is set out in the YHN


1.9.2 This These committees hasve no direct financial responsibilities but may be given a financial project which would be set out within a project plan with clear tasks, roles, timescales and resources which would be used to monitor and evaluate progress. The project recommendations will ultimately be recommended by board

1.10 Financial Governance1.10.1 The Chief ExecutiveManaging Director shall appoint an officer who shall

be responsible for ensuring the proper administration of YHN Group’s financial affairs.

1.10.2 The Directors shall issue, and keep under continuous review, such instructions, give such advice or establish such procedures relating to financial matters as they consider necessary to secure the proper administration of the Group’s financial affairs.

1.10.3 The Chief ExecutiveManaging Director is responsible for reporting, where appropriate, breaches of Financial Regulations to the appropriate Board.

1.10.4 The Chief ExecutiveManaging Director has the duty to report to the appropriate Board, and external auditor where it appears that YHN Group or an officer has made or is about to make a decision that would involve unlawful expenditure, unlawful action likely to cause a loss or deficiency or an unlawful item of account, or if proposed expenditure is in excess of available resources. Where appropriate Newcastle City Council will be informed.

1.10.5 The Head of Finance has responsibility for ensuring compliance with the requirements of the latest relevant Accounts and Audit Regulations relating to accounting records, control systems and audit.


1.11 Chief ExecutiveManaging Director and Directors

1.11.1 The Chief ExecutiveManaging Director and Directors are responsible for ensuring that all staff under their control are aware of the existence of YHN Group’s Financial Regulations and other regulatory documents and that they are observed throughout all areas under their control and shall;

• provide the Chief ExecutiveManaging Director with such information and explanations as the Chief ExecutiveManaging Director feels is necessary to meet his or her obligations under Financial Regulations;

• ensure that the Chief ExecutiveManaging Director has sufficient opportunity to comment on all proposals with unbudgeted financial implications, before any commitments are incurred;

• ensure that Board Members are advised of the financial implications of all significant proposals and that the financial implications have been agreed by the Chief ExecutiveManaging Director;

• inform immediately the Chief ExecutiveManaging Director of failures of financial control resulting in additional expenditure or liability, or loss of income or assets;

• inform the Chief ExecutiveManaging Director where amendment to Financial

Regulations is considered necessary;• be responsible for ensuring the legality of all actions.

For these Regulations the terms Director or Directors or Heads of Service is to be taken to include the Chief ExecutiveManaging Director and their authorised staff.

1.12 Exceptions to Financial Regulations

1.12.1 Exceptions to these Financial Regulations shall be made only:

• in cases of urgency or where it is in the interests of YHN Group to do so; and• with the prior written approval of the Chief ExecutiveManaging Director and the Chair/Vice Chair of the YHN Board.Chair of YHN Board

1.12.2 The Head of Finance shall keep a record of all such exceptions and submit them to the next board meeting.

1.13 Arrangements for the discharge of responsibility

1.13.1 The Chief ExecutiveManaging Director and Directors of Service are required to carry out their tasks in accordance with these Financial Regulations. These officers may arrange for their staff to carry out tasks for which they have responsibility as set down by these Financial Regulations provided that the terms of the arrangement are clearly defined and documented. A record of all such arrangements will be prepared by each Director and submitted to the Company Secretary on an annual basis.

1.13.2 Notwithstanding such arrangements, the person making the arrangements remains responsible for compliance with these Financial Regulations.


FINANCIAL REGULATION TWO - FORWARD PLANNING AND BUDGET STRATEGY

NCC commissions YHN to provide specific services through the management agreement. From 1 April 2016, the management fee will be agreed annually with the delivery plan.

YHN Board decides on the annual YHN budgets and recommends the HRA capital programme., rent increases and use of reserves to NCC for approval.

2.1 Directors shall provide information to the Head of Finance to enable him/her to produce and submit to the Board annually a five year financial forecast.

2.2 The Chief ExecutiveManaging Director shall annually after consultation with the Management

Team and NCC advise the bBoards on:

• financial planning and budget strategy matters;• procedures, timetables and estimated resources for planning revenue

and capital spending; and• the annual revenue budget, investment programme and level of

Management Fee.

2.3 Each Director in consultation with the Head of Finance shall prepare revenue estimates, and trading account forecasts, in accordance with such guidelines as set out by the Finance and Resources Committee. In doing so, Directors shall ensure that :

• the estimated expenditure and income, or the cost of any proposal submitted by them are as accurate as possible and provide provision for all costs involved;

• the revenue estimates are consistent with YHN policy; and• the revenue implications of the investment programme are fully

included in revenue estimates.


FINANCIAL REGULATION THREE -INCURRING AND CONTROLLING REVENUE SPENDING AND INCOME

YHN Board monitors financial performance during the financial year and considers any significant developments affecting the financial position of the Company and the Group as a whole. The boards of Abri Trading Limited and Asfaleia Limited will monitor the financial performance of their respective areas of business.

3.1 The Head of Finance, after consultation with Management Team, will advise the relevant Boards, on a quarterly basis, on:

• progress against the budget; and• significant developments affecting the financial position of YHN Group


• provide guidance on and co-ordinate the budget monitoring process;• prescribe the form, basis, supporting information and timetable for the

preparation of final accounts•

3.3 Each Director shall:3.3.1 Aauthorise revenue spending and collect income within the estimates, targets

and/or limits approved by the Board provided that:

• There is a clear business case;• the expenditure is lawful;• Financial Regulations have been complied with;• expenditure is within approved revenue budget; • expenditure is in respect of Company policy, and• authorise variations to budget heads within delegated limits.

3.3.2 New or increased revenue budgets may be authorised within the following limits;• the director must approve new increased revenue budget up to £20,000• new increased budget between £20,000 and £100,000 must be referred

to Management Team for approval.

3.3.3 Seek, the approval of the Board to budgetary changes that would have a significant impact on the nature or level of service provided. New revenue budget over £100,000 is considered significant and must be referred to Board

3.3.4 Directors must ensure that transfers between budgets (virement) fulfil the following requirements:

• That the budget being reduced/transferred from will still have sufficient resources to meet expected outcomes;

A clear business case for the virement must be made transfers apply only to the transfer of funds within the delegated budget

of the Director;• the proposal must be consistent with Company policy;• any virement over £100,000 is a significant decision and must be approved


by Board.

3.3.5 Directors shall, in an emergency (being a situation which demands action of a nature that could not have been anticipated and for which there is no budget), with the prior written approval of the Chief Executive and the Chair/Vice Chair of YHN Board, have authority to incur unbudgeted expenditure.


FINANCIAL REGULATION FOUR - INCURRING AND CONTROLLING INVESTMENT PROGRAMME SPENDING AND INCOME

The Group Board oversees the YHN Group investment programme and approves the award of contracts in accordance with the Financial Regulation Eight. This is distinct from the HRA investment programme which is recommended by YHN but approved by NCC.Abri Trading and Asfaleia are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the YHN Chief ExecutiveManaging Director.

4.1 The Chief ExecutiveManaging Director shall, after consultation with the Management Team, advise the Board quarterly on:

• progress on implementation of the investment programmes;• additions and amendments to the investment programme; and• the procedure for the commitment of investment programme

expenditure.

4.2 The Director of Property Services shall:• provide guidance and co-ordinate the HRA investment programme

monitoring procedures; and

4.3 Each Director shall:• authorise investment programme spending in accordance with the

Procedure for the Commitment of Investment Programme Expenditure;

• monitor progress on implementation of the investment programme and provide the Director of Property Services and Head of Finance with such information as requested;

• only commit to match funding arrangements for which investment programme approval has been obtained; and

• undertake the disposal of land and buildings in accordance with theProtocol on the exercise of officer delegations.

4.4 Investment Programme expenditure – Definition

For the purposes of this regulation, investment programme expenditure is deemed to include the procurement, improvement or enhancement for HRA or YHN purposes of land, buildings, vehicles and equipment and the provision of grants to external organisations to enable the purchase of land, buildings, vehicles and equipmentfixed assets ias defined in current UK GAAP and YHN accounting policies, regardless of how financed. Expenditure below the de minimis sum determined by the Director of Property Services is not investment programme expenditure. If there is doubt whether expenditure forms part of the investment programme, the decision of the Chief ExecutiveManaging Director is final.


PROCEDURE FOR THE COMMITMENT OF CAPITAL EXPENDITURE (FINANCIAL REGULATION 4)

1 . 1. Authority to commit capital expenditure is based on the Capital and LeasingInvestment Programme (the Programme).

a. The YHN Group Investment Programme is approved by YHN Boardb. The HRA Programme is approved by NCC and is updated regularly to

reflect changes in the cost and phasing of schemes and the addition of new schemes.

c. The Leazes Homes Programme is approved by Leazes Homes Board and is updated regularly to reflect changes in the cost and phasing of schemes and the addition of new schemes

2. Schemes are included in the Programme after consideration of investment proposals by Customer and Service & Strategy Delivery Committee on the recommendations to be made to Board.

3. Inclusion of a scheme in the Programme gives authority to begin procurement and contract procedures subject to the limitations below.

4. For schemes included in the Programme for commencement in the first financial year (i.e. current financial year), Directors have the authority to progress a scheme to contract signature subject to:

• the Procurement Strategy;

• full compliance with the provisions of Financial Regulation 8 on tenders and quotations;

• tender costs not exceeding programme provision by more than 10% or£100,000, whichever is the lower, provided the source of funding for the additional cost has been identified;

• completion of a tender summary report in the form prescribed by the Director of Property Services; currently the intranet officer’s decision form (not required for contracts with a total estimated cost of under £10,000 or sub-contracts);

• certification by the Procurement Manager of the tender summary report.

Schemes not meeting these conditions, or where:it is proposed to accept other than the lowest tender (where price is the determining criteria), or YHN Groupthe Board or NCC has directed its approval is required

must be reported to Board or NCC for authority to proceed.

5. Financial Regulation 8 covers contract signature requirements.6. For schemes included in the programme for commencement in any subsequent

financial year, Directors have authority to prepare plans and carry out other preliminary work during the first financial year up to a maximum of £50,000.


7. Proposals to incur preliminary expenditure or commitments above £50,000 must be considered by the Management Team. The approval by Management Team must be recorded by the Director Head of Finance and Resources as a delegated decision.

(Note: This authority for preliminary expenditure only applies to schemes in the programme. Confirmation of scheme approval must be sought at the earliest opportunity if significant changes, either in objective, estimated cost or phasing, are proposed.)

8. Once commenced, Directors have approval to incur:

• additional expenditure arising from the operation of a ‘fluctuation of price’ clause;

• increased costs exceeding 10% of the contract value or £100,000 whichever is the lower.

subject to the increased amount being reported for inclusion in the Budget Monitoring Reports to Board (where deemed significant by the Chief ExecutiveManaging Director) and inclusion in the Investment Programme at the earliest opportunity.


FINANCIAL REGULATION FIVE – RISK MANAGEMENT

The importance of risk management to the wellbeing of the YHN Group is outlined in its Risk Management Policy and Strategy Framework.

The Chief ExecutiveManaging Director is responsible for ensuring that risk management is an integral part of the management processes and activities in all parts of the organisation.

Abri Trading and Asfaleia are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the YHN Chief ExecutiveManaging Director.

5.1 The Chief ExecutiveManaging Director will assign clear roles and responsibilities for managing risk.

5.2 The Chief ExecutiveManaging Director is responsible for ensuring that a register of significant risks is maintained, reported and monitored.

5.3 The Chief ExecutiveManaging Director will:

• Produce a strategy for the management of risk in the service;• ensure that risk considerations are embedded into planning and

decision making processes;• identify those activities which have or may give rise to significant loss

producing events;• measure the impact of potential loss;• take reasonable physical or financial steps to avoid or reduce the

impact of potential losses;• allocate risk management resources to areas of identified priority;• maximise risk management opportunities that can impact positively

on the YHN Group’s reputation, aims and objectives;• ensure managers and employees are equipped with the necessary

skills to manage risk effectively;• ensure that strategic partners and service providers are aware of the

importance of risk management;• report the risk implications of recommended strategies, policies, and

service delivery options to Board Members and senior officers of the YHN Group.


FINANCIAL REGULATION SIX – ACCOUNTING


• recommend accounting systems and procedures and the form of financial records and statements to the Chief ExecutiveManaging Director;

• provide guidance and advice on all accounting matters;• monitor accounting performance to ensure an adequate standard for

all services;• certify financial returns, grant claims and other periodic financial

reports required of the YHN Group.


• implement accounting procedures and adopt the form of financial records and statements as determined by the Chief ExecutiveManaging Director ;

• obtain the prior written approval of the Chief ExecutiveManaging Director before introducing or changing significantly the form or method of existing accounting systems and procedures, financial records or statement (see below),

• complete and pass to the appropriate officer financial returns and other financial reports requiring certification;

• keep a proper and effective separation of duties for staff with financial responsibilities.

NOTE: Approval procedure for changes to financial systems

Prior approval is to be requested from the Chief ExecutiveManaging Director in writing. The request must give details of the proposed change and the anticipated benefit from the change, an estimate of the costs involved and the proposed implementation date. Internal Audit advice should be soughtfor all proposed changes at as early a stage as possible.

Approval is not required where the Director certifies in writing that a change has no corporate implications and does not weaken departmental financial controls.


FINANCIAL REGULATION SEVEN – AUDIT

YHN Board has responsibility for all matters of financial significance. The Group Audit Committee reviews matters arising from audit, both internal and external. The Group Audit Committee is responsible for overseeing issues relating to financial probity. Reference should also be made to the YHN Group’s Policy statements on fraud, corruption whistle blowing and Anti-Bbribery and Corruption.


7.1 The Managing Director shall:

• maintain an adequate and effective system of internal audit of the accounting records and control systems of the YHN Group;

• report annually to Group Audit Committee on progress on the strategic (long- term) audit plan;

• advise YHN Board of material issues of financial control and report toGroup Audit Committee on the adequacy of the systems of internal control:

7.2 Chief ExecutiveThe Managing Director or his or her representatives are authorised to:

• visit any establishment of the YHN Group;• have immediate access to all records and documents;• require the immediate production of cash, stores or any other property

owned or held by the YHN Group; and• require and receive promptly full and accurate explanations to any

points requested.


• ensure that all reasonable assistance and co-operation is given to auditors;

• respond fully without undue delay to any enquiries or recommendations made by a Director or the Chief ExecutiveManaging Director;

• inform a Director or the Chief ExecutiveManaging Director, as soon as possible, of failures of financial control, including matters that involve, or may involve, financial irregularity.

where evidence of fraud, bribery, misappropriation or theft is discovered, decide after consultation with the relevant Head(s) of Service, whether to refer the matter to the Police.

7.4 The Chief ExecutiveManaging Director and each Director jointly shall investigate failures of financial control, including matters that involve, or may involve, financial irregularity.


FINANCIAL REGULATION EIGHT - PROCUREMENT AND CONTRACTS

8.1 The Procurement Procedure Rules which are appended to these Financial Regulations (as Appendix 1) shall apply and be followed whenever the YHN Group wishes to arrange for:

(a) the purchase of goods, materials and related services (that is, services which are integral to the provision of those goods or materials, such as installation, servicing, maintenance etc);

(b) the execution of works; or

(c) the provision of other services (including consultancy).


8.2 The Procurement Procedure Rules are part of this Financial Regulation 8 and failure to comply with them shall amount to a breach of financial regulations.

8.3 Subject to the specific provisions of the Procurement Procedure Rules, YHN officers shall in undertaking any procurement of goods, materials, works or services always have regard to and seek to implement the following general principles:

(a) the need to ensure the YHN Group obtain good value for money and staff and customers are properly protected as consumers of the goods, works or services;

(b) the need to ensure and demonstrate true and fair competition, without unlawful discrimination;

(c) the need to ensure the procurement process is transparent and accountable and susceptible to full audit; and

(d) the need to ensure the elimination of any opportunities for fraud or corruption .


FINANCIAL REGULATION NINE – PARTNERSHIP ARRANGEMENTS

9.1 YHN Group bBoards are responsible for approving Partnership arrangements with other local public, private, voluntary and community sector organisations.

9.2 The Chief ExecutiveManaging Director will ensure the due diligence and legality for all partnership arrangements.

9.3 The Chief ExecutiveManaging Director and Directors must ensure that accounting and auditing arrangements adopted relating to partnerships and joint ventures are satisfactory and that the overall corporate governance arrangements are satisfactory when contracts are arranged with external bodies.

9.4 The Directors must ensure that the risks have been fully appraised before agreements are entered into with external bodies and that appropriate approvals are obtained before any negotiations are concluded in relation to work with external bodies.

9.5 Partnerships are expected to adopt these Financial Regulations, where appropriate, or an equivalent version approved by the Chief ExecutiveManaging Director.

9.6 NCC approval is required prior to delegation of any function or responsibility to a third party.


FINANCIAL REGULATION TEN - FINANCIAL CONTROLS

10.1 As required by Financial Regulation One , the Chief ExecutiveManaging Director and Directors are, for the areas under their control, responsible for ensuring that the arrangements, guidelines and procedures for the proper administration of financial affairs are operated in accordance with Financial Regulations.

10.2 Directors are required to ensure that the controls as listed in FinancialProcedure Notes are present.

10.3 The Financial Procedure Notes issued under this regulation are

FPN1 Orders for work, goods and services

FPN2 Income

FPN3 Payment for works, goods and services

FPN4 Payment of grants and benefits

FPN5 Security and control of assets

FPN6 Insurance

FPN7 Staffing and payroll

FPN8 Reimbursement of expenses and payment of allowances

FPN9 Banking arrangements and cheques

FPN10 Investment and Borrowing

FPN11 Information Technology and Data Protection

10.4 Further Financial Procedure Notes or amendments may be made from time to time by the Head of Finance.

10.5 Further advice on all areas of financial control is available from the Head of Finance. The Head of Finance will issue detailed guidance notes on specific controls as necessary. These will be referred to as Financial Best Practice Notes.

10.6 YHN Board may amend all other Procedures, Policies, Codes and Checklists referred to in these Financial Regulations.


FPN1 – ORDERS FOR WORK, GOODS AND SERVICES

(a) Objective

To ensure that work, goods and services are only ordered for the purposes ofYHN Group business and that the resulting expenditure is within budget.

(b) Application




• there is adequate budget provision before committing expenditure;• any necessary approvals have been obtained.

Purchases are in accordance with the Purchasing Policy;• where the purchase order system is not used that order documentation meets

the requirements of the Checklist for Official Orders and Contract Clauses.

Note: Official orders must:• for YHN orders be headed ‘Your Homes Newcastle Ltd’;• for NCC orders be headed ‘Newcastle City Council; for Abri Trading Ltd orders must be headed Abri Trading Ltd for Asfaleia Ltd orders must be headed Asfaleia Ltd• state ‘Official Order’;• be numbered;• include the name and address of the ordering department, and delivery

address if different;• show the cost code to be charged;• be signed by, and state post of an authorised officer, and• include the information required in the Checklist.

The order must be signed only by staff who have been given authorisation to do so.

(d) Comments

Staff authorised to order work, goods and services must ensure that they are aware of any necessary committee authorisations required and of the Purchasing Policy.

The Purchase Order Processing System (POPS) must be used whenever possible as it facilitates compliance with the above requirements and collects data to support development of the Purchasing Policy.

Ordering systems must be reviewed at least annually to consider the feasibility of using POPS.


FPN2 – INCOME

(a) Objective

To ensure that all income due to YHN Group is promptly collected, banked and properly accounted for.

(b) Application




• budgeted income is fully and promptly collected;• the Chief ExecutiveManaging Director and Directors are promptly informed of

all new sources of income, the sums anticipated and collection arrangements;• the advice of the Head of Finance is sought prior to the signing of

agreements which provide for variable income.the basis and level of fees and charges are regularly reviewed;

• income is collected in advance of service, or where not possible, by official invoice;

• all cheques received are made to “ the appropriate company within YHN Group”. Uncrossed cheques received are crossed payable the appropriate company within YHN Group

• money received is acknowledged by the issue of an official receipt, ticket or voucher (See (d) below.);

• the transfer of official money between staff is evidenced;• income collected is banked promptly and held securely prior to banking;• money held awaiting banking is insured against theft;• money banked is credited to the correct financial account and compared to

budget estimate;• arrangements for payment by instalment are authorised in advance by the

appropriate Director;• prior authorisation is obtained to the write-off of uncollectable income by the Chief ExecutiveManaging Director for amounts within YHN Group. HRA write off will require NCC sign-off;• grant claims requiring certification in the name of a Director are approved by

the appropriate Director..

(d) Special requirements

Personal cheques must not be cashed out of money held on behalf of YHN.


FPN3 - PAYMENT FOR WORKS, GOODS AND SERVICES

a) Objective

To ensure that payments are made only for works, goods or services received byYHN Group and have been certified as such.

b) Application



1. To achieve the above objective systems should be present to ensure that:-

Pre-payment checks are undertaken to ensure that;

• the goods have been received and examined, meet the required specification and work has been done or services rendered have been satisfactorily carried out;

• the invoice is in accordance with the contract or order, is arithmetically correct, and has discounts due deducted;

• the payment has not previously been made;• the payment is authorised (this will be done via the POPS system).

2. For payments made outside the POPS system the POPS/payroll number and POP authorisation group of the officer authorising the payment must be clearly recorded in a form that facilitates checking against the approved list of authorised officers

3. The method of payment is appropriate;

• by use of the corporate creditors system for payment by BACS or cheque (note BACS is the preferred method and must be used wherever possible);

• by imprest account or petty cash for minor sums;• by some other means as agreed with the appropriate Director.

4. Payment is timely;

• to meet supplier/contractor terms of trade and legislative requirements;• justification is provided if urgent payment or dispatch of cheque by

department required.

5. Transactions are properly accounted for, including;

• proper use of financial codes;• compliance with HM Revenue and Customs regulations;• the maintenance of a Register of Contracts by the Head of

Development and Procurement.


(d) Special requirements - Advance payments

No commitments shall be entered into for goods, work or services for which the supplier or contractor requires payment in advance until the Director has confirmed the financial standing of the payee with the Head of Development and Procurement.


FPN4 - PAYMENTS OF GRANTS AND BENEFITS

a) Objective

To ensure that only properly authorised grant and benefit payments are made, and where discretionary, to ensure that the purpose of the payment is achieved.

b) Application




• application forms are required and checked;• awards are made in accordance with the relevant payment conditions;• authority to approve payment is restricted to authorised officers;• conditions of grant are made known to applicants and applied to approved

grants;• discretionary payments are phased and payments are subject to grant

monitoring;• externally funded payments satisfy the requirements of the funding body;• YHN Group’s financial interest is safeguarded e.g. use of a legal charge (the Chief Executive Managing Director should be consulted on this matter)

• the submission of bids and grant claims for European funds conform to the financial procedure note issued under FR 10.4.

(d) Comment

The provision of services to organisations in which YHN Group has an involvement as a partner and/or as a funder or provider of resources for a project is subject to YHN Group’s Procurement policy.


FPN5 - SECURITY AND CONTROL OF ASSETS

a) Objective

To ensure the proper use and safeguarding of assets owned by YHN Group or for whichYHN Group has responsibility.

b) Application

This Financial Procedure is mandatory for all officers



• proper security is maintained at all times;• assets are recorded and accounted for;• the use of assets is restricted to authorised YHN Group business; and• surplus assets, except land and buildings, are disposed of in accordance

with agreed procedures.

(d) Comment

This financial procedure note applies to all assets, including stocks, stores equipment and vehicles (with either an individual value of £500 or more or a collective value of £2,000 or more) and all cash, land and buildings, that are owned by, or are in the possession of YHN Group and for which YHN Group is responsible. The form and content of the record is for local decision following consultation with the relevant Director but must be sufficient to allow verification and to support Balance Sheet entries.


FPN6 - INSURANCE

(a) Objective

To ensure that YHN Group, manages all potential insurable risks and liabilities and to limit the authority for arranging insurance cover to the Managing Director.

(b) Application




• new risks and any alterations to existing risks are reported to theManaging Director immediately;

• Departmental risks are reviewed annually in accordance with the timetable issued by the Head of Business Strategy;

• claims are reported in accordance with the guidelines issued by the City's Insurance Section and supporting information is provided within required timescales;

• policy requirements and warranties, notified by the Insurance Section, are complied with at all times;

• insurers’ loss control requirements are responded to within the relevant timescales.

(d) Comment

Each Director is responsible for identifying, assessing and reporting risks to the Managing Director.

The Head of Finance is responsible for arranging all insurance cover and for ensuring the annual review of insurance cover.


FPN7 - STAFFING AND PAYROLL

(a) Objective

To ensure that staff are appointed in accordance with the Code of Practice on Recruitment and Selection, are paid in accordance with their Contract of Employment and to ensure leavers are removed from the payroll.

(b) Application



To achieve the above objective, systems should be present to ensure that;

• the Code of Practice on Recruitment and Selection is observed in the appointment of staff;

• amendments to the payroll - appointments, resignations and changes to Contracts of Employment are notified to Employee Services Manager in accordance with payroll deadlines and in the form specified;

• details of salary and wage amounts to be paid are provided in a form and to a timetable determined by the Chief ExecutiveManaging Director;

• uncollected payments are promptly returned to the Employee Services Manager; and• an annual check of staff paid and charged to the financial accounts is

undertaken.


FPN8 - REIMBURSEMENT OF EXPENSES AND PAYMENT OF ALLOWANCES

(a) Objective

To ensure that the reimbursement of allowances and expenses to staff and board members is in accordance with the appropriate agreements and legislation.

(b) Application

This Financial Procedure is mandatory for all Board Members and officers.


To achieve the above objective systems should be present to ensure that:

STAFF


• allowances and expenses are as approved for payment to YHN staff;• payment is made in accordance with procedures determined by the

Chief ExecutiveManaging Director .

BOARD MEMBERS


• allowances and expenses are as approved for payment to Board members;

• payment is made in accordance with procedures determined by theCompany Secretary.

(d) Comment

Particular care must be taken to ensure that all payments to individuals, including additional payments to employees, meet the requirements of the HM Revenue and Customs.

Expenses claims should be supported by receipts whenever possible.


FPN9 – BANKING ARRANGEMENTS AND CHEQUES

(a) Objective

To ensure sound banking and payments arrangements by limiting responsibility for same to the Chief ExecutiveManaging Director.

(b) Application



To achieve the above objective systems should be present to ensure that:• No bank account, or similar, is to be opened except with the authority of the

Chief ExecutiveManaging Director.• The maintenance of YHN Group bank accounts is in

accordance with arrangements determined by the Chief ExecutiveManaging Director.

• Cheques shall be ordered on the authority of the Chief ExecutiveManaging Director and controlled securely prior to use.

• The approval of the Chief ExecutiveManaging Director is obtained to any proposal to enter a credit agreement.


FPN10 - INVESTMENTS AND BORROWING

(a) Objective

To limit the authority for managing YHN Group’s Investments and Borrowing to the Chief ExecutiveManaging Director and to ensure that activities in this area are properly regulated.

(b) Application


Control Checklist


no investment or borrowing transaction is undertaken except with the prior written authority of the Chief ExecutiveManaging Director;

YHN Group bank accounts do not become overdrawn.

(d) The Head of Finance shall ensure that:-

• all investments and borrowing are made in the name of YHN, Abri Trading or Asfaleia Ltd as appropriate;• all securities are held by the Company Secretary;• the Company Secretary is the Council'sGroup’s Registrar of Stocks, Bonds and Mortgages;• investments held should be reported to Finance and Resources

CommitteeGroup Audit Committee each by exception and at the end of each financial year to the relevant Boards Board by the Chief ExecutiveManaging Director as soon as possible after 31 March;

• all Treasury Management activities are conducted in line with the relevant CIPFA Code of Practice for Treasury Management in Local Authorities; and

• there is an adequate division of duties between arranging and settling of transactions.

Any exceptions to the above can only be authorised by the relevant Board/s.


FPN11 - INFORMATION TECHNOLOGY AND DATA PROTECTION

(a) Objective

To ensure the orderly and secure development of information technology and the proper control of information held.

(b) Application



To achieve the above objective, systems should be present to ensure that:

1. Investment in Information Communications Technology(ICT) complies with ICT strategies and policies.

2. All ICT purchases:• comply with corporate standards and guidelines (including the

procurement guidelines) unless there are sound reasons to do otherwise;

• are in accordance with the approved ICT Strategy Information policy & looking after information Staff handbook ;• have necessary approvals in place;• are notified on completion to the appropriate Director to maintain

the register of IT assets.

3. The use of ICT and the control of information held is subject to theYHN Policy for looking after and sharing information

Board 10 May 2016

Strategic Risk Register 2016-17Report by Head of Business Strategy

For Decision


1.1 Formal risk management is a key part of our well established assurance framework. The assurance framework enables us to check whether we are doing the right things in the right way and to manage any risks that may arise. In addition to risk management the assurance framework also includes audit, performance management, scrutiny, accreditations, service reviews, benchmarking and customer involvement.Our Strategic Risk Register outlines the most significant risks we face as an organisation. It details the perceived threat level of each risk, the controls in place to mitigate these risks and the actions required to improve the controls.

1.2 Our approach to the management of strategic risk was agreed by board in May 2013, and consists of:

Annual review of the strategic risk register approved by board, and

Quarterly monitoring and assessment of the register reported to Group Audit Committee.

Attached as appendix two is an extract from the YHN Risk Management Framework which shows how we score the likelihood and impact of each risk. This has been used when scoring the risks set out in the draft Strategic Risk Register (appendix one).

2. Annual review of Strategic Risk Register

2.1 The Risk Management Framework outlines a process to formally review the strategic risk register every year.The review of the Strategic Risk Register this year took account of the following:

An assessment of whether the current risks in our Strategic Risk Register were still appropriate;

The establishment of our new group structure;

External pressures to the YHN group following government announcements in their budget, autumn statement or legislative programme, and

Pressures Newcastle City Council or the Housing Revenue Account is under that may present a pressure to the YHN management fee.

Abri Trading Ltd and Asfaleia Ltd boards have identified risks specifically relating to the services they oversee. They have reviewed and agreed the risks, identified the current controls and additional improvement actions required by the services they oversee. In addition, we have consulted with senior officers in YHN to review the risks affecting the services being provided to NCC, Leazes Homes or Byker Community Trust.

2.2 In February 2016 we reported to Group Audit Committee our work to develop the 2016-17 Strategic Risk Register. This report showed separate risk registers for each entity. In each register we detailed:

The company the risk affects; How we have defined the risk; Our current controls; The untreated risk score (based on its likelihood and impact); Our additional actions to improve the controls (to manage the risk),

and The treated risk score.

We committed to Group Audit Committee that we would undertake additional consultation with the Committee Chair, Abri Trading Ltd and Asfaleia Ltd to assess the relative size of each risk (based on the impact and likelihood) to each of our two subsidiary companies and the whole YHN group.These discussions led to the creation of the group Strategic Risk Register, attached as appendix one. The group Strategic Risk Register was created by grouping by theme the risks from the subsidiary registers. There have been no substantial changes to the Strategic Risk Register since it was reported to Group Audit Committee.The treated risk score column shows Board the effect of completing the additional actions to improve the current controls. To calculate this score we reassessed the risk using the risk management framework which sets out how we define the likelihood and impact of risk to YHN.

2.3 Group Audit Committee, Abri Trading Ltd and Asfaleia Ltd boards also agreed that the Head of Business Strategy could consult with representatives from each entity during the year to discuss any changes to the Strategic Risk Register.This means that we can respond to any changing or emerging risks in a timely manner, without having to wait for a scheduled board meeting. The Head of Business Strategy will report to each board the actions taken to manage the risks faced by Abri Trading and Asfaleia every six months or sooner if the need arises.For board’s information, the representatives from each subsidiary board are:

Abri Trading Ltd – Paul Scope, Philip Dibbs, Tony MooreAsfaleia Ltd – Nitin Shukla, Gordon Burns, Lorraine Wilson

3. 2016-17 Strategic Risk Register

3.1 In the following list are the most significant changes to the Strategic Risk Register (compared to the 2015-16 Strategic Risk Register):

New risks have been added to reflect the new company structure at YHN;

The increased importance of the risks relating to income into the YHN Group and control of expenditure, and

The inclusion of a column showing the “treated risk score”. This was introduced following feedback from Group Audit Committee. It provides board and committee with reassurance that the improvement actions we are committing to will effectively manage the risks we face.

3.2 The Strategic Risk Register has also been updated to ensure that the proposed controls and improvement actions reflect our priorities during this financial year. The improvement actions are primarily aligned to the following in our annual delivery plan:

Strategic business targets; Service Improvement Programme, and Operational service plans.

3.3 For each risk, officers have reviewed and updated the:

Current controls; Actions to improve controls; Likelihood and impact score, and Effectiveness of our current controls to manage the risk.

Each of the current controls and actions to improve controls has a responsible officer. They provide updates on their actions on a quarterly basis, this forms the basis of the information reported to Group Audit Committee.


4.1 Mission and strategic objectives: Effective risk management contributes to all of our service objectives:

Keep the housing stock decent, and neighbourhoods clean and safe; Collect the rent and let properties efficiently, and Promote health and wellbeing and support vulnerable people to enjoy

independence

4.2 Value for money/efficiencies: Managing the risks outlined in appendix one will enable us to continue to deliver the actions outlined within the YHN Value For Money Strategy.

4.3 Resources (financial, property, technological or human):Appendix one outline risks that pose a threat to YHN group resources. However, it also outlines the controls we have in place to mitigate them.

4.4 Impact on services/performance: Appendix one outline risks that pose a threat to the services YHN group delivers. However, it also outlines the controls we have in place to mitigate them.

4.5 Outcomes for tenants/leaseholders: Appendix one outline risks that pose a threat to the services YHN group delivers. However, it also outlines the controls we have in place to mitigate them. Effective management of these risks enables us to continue to provide services to tenants and leaseholders.

4.6 Risk (reputation, relationship): Managing strategic risk is the primary focus of this report. The risks detailed in the appendices are mitigated by the revised approach to risk management.

4.7 Environmental:None in relation to this report. Environmental issues were considered in the creation of the register but not included due to the level of controls in place.

4.8 Legal: The Strategic Risk Register reflects our exposure to legal risks and we have outlined controls to minimise legal challenges the YHN group may face.

4.9 Equality and diversity and community cohesion:Improved risk management processes will place YHN group in a better position to manage the risks it faces. It will have significant organisational benefits as well as improving YHN Group’s ability to achieve its equality and diversity objectives and mitigate against any relevant risks.

4.10 Stakeholder involvement/consultation: Consultation on the development of the YHN group 2016-17 Strategic Risk Register was carried out with senior officers across YHN, Abri Trading and Asfaleia boards.


5.1 Board is asked to:

Approve the 2016-17 Strategic risk register (subject to any amendments or board requests).

6. Implementation

6.1 All improvement actions are to be completed during 2016-17, and

Quarterly updates will be presented to Group Audit Committee during 2016-17.

Background Papers YHN Risk Management Framework.

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Louise Horsefield by telephone on 0191 278 8720 or email [email protected]


Risk No

Risk description and date raised Risk Owner

Risk Type How well do we manage this?

Current controls Likelihood score

Impact score

Risk score

Actions to improve current controls

Treated risk score

GR1 Group income does not meet expectations and plans

Cause

Management Fee from NCC is reduced further than expected

Unexpected reduction in the Management Fee paid to YHN from Leazes Homes

Loss of external traded contracts

Housing and Planning Bill (or other Government legislation) places additional pressure on HRA that affects YHN management fee

Numbers of telecare customers reduce significantly

Little or no promotion of the telecare service by social care

Amount of Housing Benefit received for tenancies after April 2016 capped at Local Housing Allowance levels

Consequence

Inadequate time to adapt to the reduced income

Major changes to service delivery required

Damage to reputation

Greater efficiency savings required than planned for

Fixed costs related to telecare service cannot be recovered

Unable to provide telecare service at

Managing Director

Financial Partially effective

Management agreement and fee principles between: YHN and NCC and YHN and Leazes Homes

Monthly financial and non- financial performance reported to YHN management team

Performance information reported to YHN Board, NCC, Leazes Homes, Abri Trading Ltd and Asfaleia Ltd

YHN Business Strategy 2016-2020

YHN Delivery Plan 2016-17

Contingent reserves held – (with a minimum of £2.6m)

Financial stress testing of YHN Group

3 3 9 GR1.1Confirm 2017-18 Management Fee with NCC by 31/03/2017

GR1.2Seek YHN Board approval of 2017-18 Delivery Plan and Budget by 31/03/2017 GR1.3Develop the Finance Strategy and action plan 31/03/2017

GR1.4Deliver actions from the Value for Money Strategy during 2016-17

GR1.5Complete projects and reviews outlined in YHN 2016-17 Service Improvement Programme

GR1.6Implement new Telecare pricing structure during 2016-17

GR1.7Retain 80% of funded customer on the Ostara Respond by 31/03/2017

GR1.8Retain 95% of self-funded customers on the Ostara Flex or respond service by 31/03/2017

GR1.9Deliver actions from the Care Services Business Plan during 2016-17

6Impact reduced to 2

competitive price

Abri Trading unable to pass gift aid to Asfaleia

Reduction in furniture service and/or Palatine

Loss of customers to other providers

Date raised: November 2015

GR1.10Change service delivery model following closure of North Kenton Young Persons accommodation by 30/09/2016

GR1.11Deliver actions in the NFS service review action plan and business plan during 2016-17

GR2 Group costs fail to meet requirements and expectations

Cause

Failure to deliver cost savings planned for in YHN Group Budget

Expectations of clients (NCC and Leazes Homes) to deliver the same or increased services within a reducing management fee Change in demand of customers following reduction of services provided by NCC or other charities

Increase in running costs, inflation and overheads

Changes in political or external environment affecting both businesses and customers

Consequence

Additional revenue spending required to meet contractual obligations


Damage to relationships with partners and contractors

Inability to plan for changes required in service delivery

Managing Director

FinancialReputation

Partially effective

Management agreement and fee between: YHN and NCC and YHN and Leazes Homes

Management fee agreement in principle of no further decrease during 2016-2020

Sub-contract fee between YHN and Asfaleia Ltd

Service agreement with Abri Trading Ltd and Asfaleia Ltd

YHN Business Strategy 2016-2020

YHN Delivery plan 2016-17

Business and financial planning for impact of 15% reduction in budgets

Performance information reported to YHN Board, NCC, Leazes, Abri

3 3 9 GR2.1Confirm 2017-18 Management Fee with NCC by 31/12/2016

GR2.2Seek YHN Board approval of 2017-18 Delivery Plan and Budget by 31/03/2017

GR2.3Develop the Finance Strategy and action plan by 31/03/2017

GR2.4Deliver actions from the Value for Money Strategy during 2016-17

GR2.5Complete projects and reviews outlined in YHN 2016-17 Service Improvement Programme

GR2.6Carry out impact assessments on 2017-18 NCC budgets during 2016-17

GR2.7Realise efficiencies from workforce scheduling for NFS during 2016-17

GR2.8

6Impact reduced to 2

Reduction in support to customers

Abri Trading Ltd unable to pass gift aid to Asfaleia Ltd

Significant loss of contracts

Significant loss of customers


Trading Ltd and Asfaleia Ltd

Contingent reserves held – (with a minimum of £2.6m)

YHN Service Improvement Programme 2016-17

Financial stress testing of YHN Group

Deliver actions from the Newcastle Furniture Service (NFS) business plan during 2016-17GR2.9Analyse impact of welfare reform and Housing Benefit changes on NFS and Palatine business by 30/06/2016

GR3 Failure to comply with statutory Health and Safety (H&S) regulations

Cause

Inadequate H&S training

Staff negligence

Risk assessment and policies and procedures not followed correctly

Consequence

Fines for corporate manslaughter

Fines for breach of H&S legislation

Staff deaths / injuriesCustomer deaths / injuries

Court casesLegal costs

HSE improvement and prohibition notices served

Loss of reputation


Director of Property Services

Legal compliance

People

Partially effective

Health and safety policy

Mandatory health and safety staff training

Insurance policies (public liability, director’s and employee liability

Additional health and Safety training for staff (as required)

Health and safety training to board members including corporate manslaughter

Health and safety six monthly updates to board

Potential Risk Indicators (PRI) system for staff / contractor safety

2 3 6 GR3.1Achieve compliance with the British Standards Institute BSI audit assessments during 2016-17

GR3.2Ensure 100% fire risk assessment compliance during 2016/17

GR3.3Complete all fire risk assessment actions within required timescales during 2016/17

4

Reduced impact to 2

Contractor Management Policy

Comply with construction design and management (CDM) regulations 2015

British Standards Institute (BSI) OHSAS (occupational health and safety management system)

Finance and procurement processes

Gas servicing programme

GR4 Substantial damage to YHN Group’s reputation

Cause

Loss of confidence in senior management

Failure to comply with regulatory requirements - such as Her Majesty’s Revenue and Customs, Charities Commission, Homes and Community Agency (for services provided to Leazes Homes)

Failure to comply with legislation and policies and procedures (equality and diversity, safeguarding)

Unsuccessful transfer of services provided by YHN to Byker Community Trust (BCT)

Fraud / malpractice

Corporate manslaughter

Managing Director

People Partially effective

External audit of accounts

Health and safety training to Board Members including corporate manslaughter

Internal Audit Service Level Agreement

Group Audit Committee

Fraud Prevention Policy

Information Governance Policy

Service Level Agreement in place for out of hours

2 3 6 GR4.1Collaborate with other partners to strengthen our organisational approach to safeguarding and domestic violence to ensure a holistic approach during 2016-17

GR4.2Deliver equality and diversity training to staff during 2016-17

GR4.3Successfully manage transfer of service provision to BCT during 2016-17

GR4.4Achieve 10% (3 employees) progression for work choice employees by 30/10/2016

6

Negative media coverage

Change of focus of Palatine from sustainable supported employer to pure profit making division of the business, including

Reduction in support offered to Palatine supported workforce

Reduction in number of work choice placements offered by Palatine

Consequence

Law / court proceedings

Fines for corporate manslaughter

High staff turnoverTargets not being met

Customers and staff lose confidence in services / business

Loss of contracts

Loss of supported business status

Loss of supported business funding

Work choice employees not supported into alternative employment

Date raised November 2015

communications between YHN and NCC

HR employee policies and procedures and code of conduct

Mandatory safeguarding training for staff

YHN Safeguarding and Domestic Abuse Forum

Project group established to ensure compliance with Financial Conduct Authority regulations

GR 4.5Develop a Communications Strategy Statement by 30/06/2016

GR5 Significant disruption to service provision affecting YHN, Abri Trading Ltd or Asfaleia Ltd CauseUnable to access core IT systems

Damage to premises

Staff industrial action / illness

Fire/explosion

Managing Director

Resources Partially effective

Business Continuity Policy and plans

Annual business continuity impact assessments

Business continuity training to relevant staff and service areas available

3 2 6 GR5.1Carry out review of business impact assessments during 2016-17

GR5.2Complete Emergency Plan and launch to staff during 2016-17

GR5.3Successfully manage transfer

4

Reduced likelihood to 2

Suppliers unable to meet contractual obligations

ConsequenceLoss of service

Loss of life

Loss of contracts

Customers do not receive goods or services on time



YHN Group Emergency plan

NCC major incident plan

Out of hours arrangements for all critical systems through NCC ICT Services

of service provision to BCT during 2016-17

GR5.4Deliver actions in the NFS service review action plan and business plan during 2016-17

GR6 Ineffective governance of YHN Group

Cause

Ineffective communication between YHN Board and subsidiary boards

Ineffective scrutiny by YHN committees

Failure to fill Board member vacancies in a timely manner

Ineffective Board member training programme

Consequence

YHN, Abri Trading Ltd or Asfaleia Ltd Boards unaware of decisions which affect the services they oversee

Inability of Boards to provide adequate oversight or challenge to officers


Managing Director

Governance Partially effective

Increased resource in YHN governance team

SLA with NCC for governance support

Electronic newsletter sent to stakeholders pre and post board meetings

YHN Governance handbook

Board Member, Committee, Chair and Vice Chair job descriptions

2 2 4 GR6.1Asses the effectiveness of the Board and Committee remit and cross-Board communications by30/09/2016

GR6.2Undertake annual Chair and Board member appraisals during 2016-17

GR6.3Complete Board Member training programme during 2016-17

GR6.4Complete review of governance structure by September 2016

4

GR7 Inability of YHN staff to fulfil the business needs of the Group

Cause

Significant changes to YHN Structure

Managing Director

People Partially effective

Service level agreement in place with YHN and NCC for HR, OD, employee services and occupational health

3 3 9 GR7.1Complete the review of YHN Management Structure during 2016-17

GR7.2Complete projects and

6

Reduced likelihood to 2

Significant changes to service delivery requirements

YHN, Abri Trading Ltd or Asfaleia Ltd do not have the staff to meet their needs

Staff require significant training and development

Increase in staff turnover

Inadequate training and development of YHN staff

Increased staff turnover

Reduced capacity to deliver services

Consequence

Failure to meet contractual obligations

Reduced motivation and productivity of staff

Loss of organisational knowledge and skills

Staff health and wellbeing is reduced

Increase in referrals to occupational health

Staff sickness / absence increases

Disruption to services and meeting service targets

Service user needs not met

Increase in support required for staff


Service agreements in place with YHN and Abri Trading Ltd

Service agreements in place with YHN and Asfaleia Ltd

On-line recruitment tool to advertise to a wider audience

Training and development programme

Delivery Plan 2016-17 (incorporating operational service plans)

Regular staff appraisals and 1:1

Team brief to keep staff up to date and involved

YHN Service Improvement Programme 2016-17

YHN staff benefits and rewards package including health and wellbeing

reviews outlined in YHN 2016-17 Service Improvement Programme during 2016-17

GR7.3Implement a new People Strategy action plan during 2016-17

GR7.4Develop new organisational values to reflect the new People Strategy during 2016-17

GR7.5Develop and deliver a development programme for YHN managers to equip them for the future during 2016-17

GR7.6Carry out actions in the Health and Wellbeing Action Plan during 2016-17

GR7.7Deliver the outcomes in the E&D action plan (as reported to Service and Strategy Delivery Committee) by 31/03/2017

1

Appendix two: extract from YHN Risk Management Framework 4.1.2 Risk analysis

The level of risk attached to individual strategic risks is assessed by looking at the cause of the risk and the potential impact if the risk occurs.

A risk matrix is used to determine a score that reflects impact and likelihood of occurrence. This ensures that there is consistency in grading risks.

Risks that score highest are those with the highest potential impact on the organisation and are the most likely to occur

The three tables below are the resources used to assign a risk score:

1. The key used for assessing the impact of a risk if it occurred2. The key used for assessing the likelihood of that risk occurring3. The risk matrix that is then used to assign the risk score

1. Assess the impact of the risk if it occurs

High Showstopper/Critical

Fundamental loss of confidence/harm to business, this could include:

Inability to deliver a number of organisational priorities or strategic objectives

Major disruption to or loss of a number of important services

Wide scale deaths and or major personal injury, financial loss in excess of £2.8m

Long term reputational damage

Medium- Significant

Serious harm to business and reduction in confidence Inability to deliver an organisational priority or strategic

objective Major disruption to important service Death or major personal injury of one or more people Financial loss of more than £1m Damage to national reputation Major impact on ability to achieve the project’s objectives

Low - Moderate

Some harm to business and reduction in confidence Inability to deliver a service objective that is not key to the

delivery of an organisational priority or objective Significant disruption to important service Serious injury or ill health Financial loss of more than £100,000 Damage to local reputation Moderate impact on ability to achieve the project’s

objectives

2

Negligible

Minimal impact on business and on confidence Minor personal injury Financial loss of less than £100,000 Minor impact on delivery of strategy or operational

activities Brief disruption of important service Minor/significant disruption to non-crucial service

2. Assess the likelihood of the risk occurring

3. Risk matrix

ImpactNegligible(1)

LowModerate (2)

MediumSignificant(3)

HighShowstopper/ critical(4)

Almost Certain(4)

4 8 12 16

Possible(3)

3 6 9 12

Unlikely(2)

2 4 6 8

Like

lihoo

d

Rare(1)

1 2 3 4

Likelihood Likelihood of Occurrence

Probability of Occurrence

Almost CertainMonthly This event may be imminent or

occurring at present. It is expected to occur or occurs regularly.

PossibleAnnually The event will probably occur. It is

likely to occur in most circumstances.

UnlikelyOnce is every 3 years

The event could occur. It is likely to occur at some time even if controls operate normally.

Rare

Once in every 10 years

The event has a small chance of occurring at some times or will occur only in very exceptional circumstances.

Board 15 March 2016 (5.00pm to 6.45pm) Present: O Grant (Chair), P Dibbs, L Doherty, V Dunn, P Dutton, D Huddart, J McCarty (from 6.05), T Moore, M Page, J Purvis, J Reid, P Scope, D Slesenger, J Streather, L Stephenson, J Streather, M Talbot, L Wilson. In attendance:

J Davison Company SecretaryN Scott Director of Tenancy ServicesS Breslin Assistant Chief Executive & Director of Corporate ServicesD Langhorne Director of Property ServicesL Forrest Head of FinanceD Creighton Executive Assistant to the Chief ExecutiveJ Urwin Head of Housing Options (until 6.05)L Horsefield Head of Business StrategyR Burns Lead Service Quality Officer (Until 6.10)G Ellingham Head of ICTH Garbutt Environmental Services ManagerA Allison Head of Income & TenancyM Burn Head of Support and CareB Elder Strategic HR ManagerP Bond Property Services ManagerI Gallagher Head of Property MaintenanceA Baker Governance Support OfficerA Senior Newcastle City Council (until 6.05)C McMullen Newcastle City Council

452 WELCOMEThe Chair welcomed everyone to the meeting.The Chair requested that all members turned their mobile phones off.

453 APOLOGIESApologies were received from Ammar Mirza and Elaine Snaith.

454 DECLARATIONS OF INTERESTSV Dunn declared an interest in items 7i, 11 and 12 as Portfolio holder for Resources at Newcastle City Council.

455 CHAIRS ITEMSThe Chair informed the Board she had spoken with Tina Drury, new Managing Director and confirmed a start date of 1 June. Tina was excited about joining YHN, and with the agreement of her current employer will be able to spend some time with us prior to June to get to know the organisation and the people.The Chair noted that the notes of the private sessions of board had been circulated.

V Dunn addressed the board regarding the issue she previously raised concerning the circulation of minutes of the private sessions, and explained she had a really helpful discussion with the Chair and thought the email with regard to reviewing the governance and the way forward reflected the concerns and welcomed it. It was requested that the notes were made available to the Audit Committee.

456 HCA DE-REGISTRATION

Submitted: Report by the Head of Finance and Company Secretary (previously circulated, copy attached to Official Minutes).

Lisa Forrest presented the report, and reminded board members that registration with the HCA was not with regard to HRA stock, but as a short term solution whilst Leazes Homes was set up and registered with the Charities Commission.Registration with the HCA brings an administrative burden, but as YHN has no social housing properties in its ownership is not a requirement. On contact with the HCA they indicated they regularly review the register and ask non active providers to de-register.L Forrest noted that the only concern may by transparency, but a review of reporting and disclosures indicates that the information we were required to put in our statutory accounts because of the Housing SORP, we already include in our tenant annual review and will continue to do so. The only exception is the disclosure of staff paid above £60,000 and it was recommended to continue to include this in the statutory accounts along with an explanation.Questions/CommentsA Board member questioned if the organisations situation changes would we be able to re-register.L Forrest confirmed that all the guidance from the HCA states there are no barriers or restrictions on re-registration.RESOLVED that the Board agreed to;

Deregister as a Registered Provider of social housing with the HCA

Continue to report emoluments over £60k in the interests of transparency, with explanatory narrative.

457 MINUTES OF 2 FEBRUARY 2016

The Chair noted an item of accuracy which required an amendment. Minute 443 should read 11 families not 20.

RESOLVED that the Board;Considered the minutes of the meeting held on 2 FEBRUARY 2016 and approved them as a correct record.

A Board member raised a question with regard to the Digital by Choice report, enquiring if the IT was available to other social housing providers and could we sell it to them. Geof Ellingham replied this is not something we sell to others.

A Board member raised a question with regard to the Universal Credit report, enquiring if the consent of the tenant was required for alternative payment or whether we could demand the payment direct. Neil Scott confirmed that where a tenant qualifies, we can make a request to DWP for a direct payment of rent due to our trusted partner status. These cases depend on the tenants circumstances but we do not require the tenants consent. The Chair added that this is a real advantage in these times of uncertainty and a credit to the team to achieve the partner status.

458 ITEMS FOR INFORMATION

459 NCC UPDATE ON TENANT AND LEASEHOLDER ENGAGEMENT

A Board member raised a question with regard to receiving a future report on the independence and the roll out of the service. The Chair responded that the report was a Newcastle City Council report, and this was their service to commission, it will come back to YHN board once there is more detail and it was an issue that YHN will take into consideration how it links in with our customer involvement team.

460 DELEGATED DECISIONS

A Board member raised a question with regard to the delegated decision on asbestos sampling and how many properties were involved. D Langhorne responded that legislation set the levels of sampling required, this is completed as work comes up and if any asbestos is identified this is completed as part of the works. D Langhorne added that they were currently looking at putting in an internal resource to reduce the cost to the HRA.

461 BOARD FORWARD PLAN

A Board member requested that a longer view of future meetings is included in the forward plan not just the next meeting. J Davison to action from next month.

462 RESOLVED – That the following items be received for information:

7iv) Committee Minutes: Group Audit Committee 19 November 2015

463 EXCLUSION OF PRESS AND PUBLIC

RESOLVED – That in accordance with the organisation’s Access to Information provisions, the press and public were excluded from the meeting during the consideration of all further agenda items.

………………………………………..Mrs O GrantChairman10 May 2016

Board 10 May 2016

Repairs and Maintenance Contract ReviewReport by Director of Property Services

For Information


1.1 On 1 July 2006 Newcastle City Council’s Building and Commercial Enterprise (BCE) service (formerly City Build) were appointed to provide a responsive and cyclical repairs and maintenance service on behalf of YHN.BCE were appointed following a competitive procurement exercise, and appointed to deliver services through a Term Partnering Contract. Although a contract was drafted and signed it had no legal standing as the Council cannot enter into contract with itself.The contract was extended by Board in January 2010 and December 2011, through to its maximum ten year term (30 June 2016).

1.2 The current contract term expires on 30 June 2016. To ensure there is a consistent service delivered to Byker Community Trust (BCT) tenants it is proposed current contractual arrangements are extended through to 2 October 2016, to align with Isos taking over responsibility of the repairs service on behalf of BCT on 3 October.

2. Current Service Delivery Model

2.1 The repairs and maintenance contract was awarded to City Build and commenced on 1 June 2006. The contract was subsequently extended for a period of two years by Board in January 2010 and for a final term of three years in December 2011.The contractual arrangement in place to manage the repairs and maintenance service formally expires on 30 June 2016, however legal advice from Trowers and Hamlins advise a variation agreement can be introduced to formally extend the repairs contract through to 2 October 2016.From 3 October 2016 a revised service delivery model will be agreed by NCC

and implemented. The type and length of the revised arrangement will be an integral part of the review.

3. Future Service Delivery Model

3.1 The City Council has informed YHN that they intend to undertake a comprehensive review of the repairs service. A new service level agreement with BCE is an option under consideration. Future service delivery options will be reflect the principles set out in YHN’s Management Agreement.

3.2 Legal advice has been sought from Trowers and Hamlins, who advised YHN and NCC in 2005/06 when the current contract was drafted and implemented.Trowers and Hamlins confirmed the letting of a contract directly to BCE can be achieved without procurement as the service would be covered by the Teckal exemption. Teckal is an exemption under Regulation 12 of the Public Contracts Regulations 2015, and allows work to be awarded directly to a department within the Council, or to an organisation owned by the Council if 80% or more of the work carried out by that department or organisation is on behalf of the Council.

3.3 YHN has a fundamental role in the establishment of the future delivery model for the repairs service. Section 6.2 of YHN’s Management Agreement states:YHN’s responsibilities in regard to the letting and administration of revenue funded Stock Maintenance Works Contracts will comprise the following potential arrangements:

Procurements and provision of maintenance services through partnering or commissioning arrangements comprising a number of agencies acting together;

Procurement and provision of maintenance services through any service level agreement between YHN and the Council; or

Procurement and provision of maintenance services by direct delivery by YHN.

3.4 To facilitate the transition from current to future arrangements a joint NCC/YHN working group has been established with the following members:YHNDavid Langhorne – Director of Property ServicesIan Gallagher – Head of Property MaintenanceNCCTony Kirkham – Director of ResourcesMichael Murphy – Director of Communities

Mark Nicholson – Assistant Director, Financial ServicesDavid Hall – Assistant Director, Building and Commercial EnterpriseAmanda Senior – Head of Fairer Housing UnitAndrew Lister – Lead Corporate AccountantIan Potts – Quantity Surveying ManagerThe group has met once and has begun to identify tasks and associated timescales for new working arrangements to be implemented from October.

3.5 The working group will focus on three key areas to assess the requirements for future working arrangements and to ensure the service delivered by BCE meets the expectations of tenants and leaseholders:

Customer satisfaction – delivering a tenant focussed service

Operational performance and quality – ensuring the service delivers against tenant, YHN, NCC and other stakeholder expectations

Operational costs – ensuring the service delivers value for money.The working group will also consider opportunities for more efficient working between YHN and NCC. The transfer of Contract Coordinators from BCE to YHN in May 2016 demonstrates the potential for greater alignment of roles and delivery of efficiencies.

3.6 To inform the future service delivery model, YHN’s Customer Involvement team have commenced an extensive tenant and leaseholder consultation exercise. Key areas of work include:

Analysis of historical repairs and complaints data to identify trends and target consultation resources

Face to face contact at four prearranged public roadshows

Employee consultation (YHN and BCE)

Email survey to up to 9,000 tenants and leaseholders

Customer insight and journey mappingUpon completion of the consultation an action plan will be collated to inform the approach to repairs and maintenance delivery in the future.


4.1 Mission and Strategic Objectives:The repairs service impacts on the following service objectives:

Keep the housing stock decent and neighbourhoods

Collect rent and let properties efficiently

Promote health and wellbeing and support vulnerable people to enjoy independence

4.2 Value for money/efficiencies: The review of the repairs and maintenance service will incorporate an assessment of value for money.

4.3 Financial Implications:There are no direct YHN financial implications from this report. Pending implementation of a variation agreement, extending the R&M contract from 1 July 2016 to 2 October 2016 represents expenditure of c. £5 million for the HRA.

4.4 Resources (financial, property, technological or human):None from this report

4.5 Impact on services/performance:Extension of current contractual arrangements through to 2 October 2016 should negate any impacts on services or performance for NCC, Leazes Homes or BCT tenants and leaseholders.Future impacts on services or performance will be considered as part of the review of contractual arrangements.

4.6 Outcomes for tenants/leaseholders:Tenants and leaseholders will be the primary focus of the repairs and maintenance service review. Section 3.6 details the work planned which will inform the new service delivery model.

4.7 Risk (reputation, relationship):The proposal to extend current arrangements through to the end of the Byker Community Trust contract should eliminate any risks associated with the implementation of new working arrangements.

4.8 Environmental:None from this report

4.9 Legal:To extend current arrangements through to 2 October 2016 the City Council are required to implement a variation agreement, extending the current contract to align with the transfer of the Byker Community Trust contract.

4.10 Equality and Diversity and Community Cohesion:None from this report, however equality and diversity and community cohesion will be integral parts of the review of the repairs service.

4.11 Stakeholder Involvement/consultation:Review of the repairs and maintenance service is being undertaken by a joint YHN/NCC project group. Wider stakeholder consultation (including Leazes Homes) will be carried out through the review process.


5.1 Board are recommended to:

Note the proposal to extend the current repairs and maintenance service delivery model to 2 October 2016

Note the content of the report, and approach to developing a new repairs and maintenance delivery model.

6. Implementation

6.1 Upon completion of the review of the repairs and maintenance service Board will receive an update report in September 2016.

Background Papers

March 2016 – Repairs and Maintenance operational ResourcesJanuary 2010 and December 2011 – Repairs and Maintenance Contract ReviewDecember 2005 – Repairs and Maintenance preferred bidder

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Ian Gallagher by telephone on 0191 2787728 or email [email protected]


Board 10 May 2016

Universal Credit UpdateReport by Director of Tenancy Services

For Information

1. Background

1.1 This report is to provide Board with an update on Universal Credit (UC) and a summary of key activity since the board report in February. It sets out the progress the implementation project has made, learning from the initial roll out for single people on UC and the information available for the introduction of the full service in May 2016.

1.2 Universal Credit aims to reduce poverty, by making work pay, and to help claimants and their families to become more independent. It also aims to simplify the benefits system by providing a single payment based upon the circumstances of the household. Support for housing costs, children and childcare costs are integrated in the new benefit. It also provides additions for disabled people and carers. The following benefits will be replaced as Universal Credit rolls out.

Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance Income Support Working Tax Credit Child Tax Credit Housing Benefit

Universal Credit was introduced in April 2013 in pathfinder areas of North West England. Since October 2013, it has progressively been rolled out to other areas. 690 Jobcentre Plus Offices have started to introduce Universal Credit.

2. Implementation

2.1 National PositionThere were 225,002 people on Universal Credit as of 10 March 2016. This is an increase of 10% when compared to the number of people on UC in February 2016. In March, there were more males on UC than females (66% compared to 34%).

Of the people on UC in March 2016, 39% (87,592) were in employment and 61% (137,414) were not in employment.

2.2 Newcastle PositionAs at 10 March, 2,217 residents of Newcastle have claimed UC as shown in the table below. Of those 1,828 residents have made the claim, accepted their claimant commitment and have current active UC claims.

Male Female

Newcastle City 535 239

Newcastle West 647 266

Newcastle East 379 151

3. Progress of Universal Credit Delivery

3.1 Board will be aware that UC is being introduced in various ways across the country. In Newcastle, it will begin to be rolled out in two ways depending on the area a person lives. UC was introduced on the 27 April 2015 for single people who would have otherwise claimed Job Seekers Allowance. The Department for Work and Pensions (DWP) call this the ‘live service’ of UC.

From the 25 May 2016 the DWP are introducing the ‘full service’ which for those tenants living in the area covered by the City Centre Job Centre Plus office means they will start to take claims for all types of claimant. The roll out in this area will take place in three ways;

If someone makes a claim for one of the six ‘legacy benefits' that UC is replacing, they will have to claim UC and this will have to be done online.

If someone is already on one of the ‘legacy benefits' but has a change in circumstances, which necessitates a change from one benefit to another, they will be told to claim UC.

If someone is already on Universal Credit – because they already had to claim it as a single person – they will be contacted at some stage by the DWP and told they have to claim full UC. If they don’t make that claim, their benefit could stop.

As previous updates to board explained, the government’s driver to accelerate other groups being moved onto UC is the full service. The DWP began testing the full UC service in November 2014 in some areas of the country. The full service provides more online features, giving claimants greater control over their UC claim, with one on-line account for payments, reporting changes of circumstances, and receiving job alerts and work coach feedback. The full expansion of Universal Credit is planned by transferring remaining existing benefit claimants between 2018 and 2021.

4. Spring Budget and Wider Welfare Reforms

4.1 In March the Chancellor made the following announcements in relation to welfare;

Support for the self-employed on Working Tax Credit and Universal Credit – providing access to business support and extending mentoring support offered on the New Enterprise Allowance scheme to self-employed Universal Credit claimants.

Improving support for ESA work Related Activity Group claimants – the government propose to fund an additional £15m in each year from 2017-18 to help Employment and support Allowance claimants pay for the additional costs of preparing for work and improving the process for reassessing claimants placed in the work related activity group.

Confirmed announcements for recipients of Guardians allowance, Carers allowance and the carer’s element of UC from the benefit cap from autumn 2016.

Capping Housing Benefit in the social rented sector – confirming that the date from which new or renewed tenancies in the social sector will be subject to the cap on HB at the relevant local housing allowance rate be deferred for supported accommodation until April 2017 so the government can complete a review of supported accommodation.

Housing benefit and pension credit; limiting temporary absence – the

budget stated that the government would delay in the ending of payments of HB and Pension Credit to claimants who travel outside of Great Britain for longer than 4 weeks consecutively to May 2016 (This has now been delayed until the summer)

4.2 Personal Independence Payment

As part of wider reforms to welfare, Personal Independence Payment (PIP) was introduced to replace disability living allowance. From the 8 April 2013 people aged 16 to 64 were invited to claim PIP rather than disability living allowance (DLA).Prior to the Spring budget it was announced that following completion of an independent review the government was changing the assessment criteria for the daily living component of PIP to ensure the system was fairer with money targeted to those who need it most. The independent review found that the assessment criteria may not be working and the health professionals involved in conducting the review identified that a number of people receive the benefit despite having minimal or no ongoing daily living extra costs. DWP suggested that many of the aids and appliances for which points are awarded are likely to be already found in people’s homes, provided free by the NHS and local authorities.The budget proposed that changes would be made to the way PIP is determined and reduce the number of assessment points awarded for needing to use an aid or appliance to carry out the daily living activities assessed. They proposed this would take effect for new cases and re-assessments from January 2017.Following the widely publicised resignation of Iain Duncan Smith (former secretary of state for work and pensions) and the appointment of Stephen Crabb the government has back tracked on this proposal. Following his appointment he announced that ‘the government would not be going ahead with changes to PIP and that there will be no further plans to make welfare savings in this parliament’.

4.3 Under Occupation Challenge – Upper Tribunal Administrative Appeal

There has been a recent case presented to the Upper Tribunal in relation to the under occupation charge and classification of a bedroom, (Stevenage Borough Council v ML). The Upper Tribunal in February 2016 has set aside an original first tier tribunal decision. The Judge deemed the original first tier decision to have been incorrect in its interpretation of the law and has left it open for a new tribunal to make a new decision based on the facts and his guidance, which includes an earlier three panel Upper Tribunal decision - the Nelson decision.The history of the case is that the claimant lives in a social sector rented accommodation and is in receipt of housing benefit. The original tribunal found that the room in question had a square footage of about 63 square ft. with a sloping ceiling that reduced its usable space

considerably. The room in question was now not a bedroom because it had been used as a store room since the claimants son had left. It further found that the room in question would not qualify as a bedroom for the purposes of the provisions relating to the size of a bedroom for an adult in houses in multiple occupation. The Upper Tribunal judge stated in his judgement that the tribunal;

a. clearly took into account the use of the room at the date of the decision

b. It solely considered whether the room in question could be used by an adult and

c. It took into account legislation relating to overcrowding.However, the judge set the decision of the tribunal aside and stated that given the room’s sloping ceiling, other factors such as size, configuration and overall dimensions, access, natural and electric lighting ventilation and privacy had not been properly considered based upon the Nelson decision. We have heard that the claimant is seeking leave to appeal to the Court of Appeal. If this is successful it could be some unknown time before the issue is finally decided. Until then, the Nelson decision remains.The decision of the tribunal may cause some tenants to make contact with YHN or to request an assessment of bedroom size, but until the case has been re-heard we will not be in a position to take any action to consider whether any decision of the Upper tribunal will impact on any of HRA housing stock or council tenants.

5. YHN Implementation Response

5.1 Universal Credit Implementation Project and Action Plan

YHN are aware of 334 council tenants currently claiming UC, the rent collection rate for these tenants at year end was 88.7%. The Income Recovery Officers who are acting as UC specialists are continuing to provide support to tenants to maximise rental income. We are currently working towards raising awareness with other staff groups and upskilling other front line staff. The average age of an YHN tenant claiming UC is 40 and 64% of current claimants are male. 44% of the current cohort is under occupying with 7% of those having a 25% reduction in their housing costs as a result of having 2 or more spare rooms. Progress is being made with the Project plan and communications on the introduction of the full service amongst other benefit updates have been included in April’s Homes and People. We are currently working on be-spoke E-learning packages for Welfare Reform and UC for staff and updating our internal intranet and external websites.

5.2 Introduction of reduced Benefit Cap

In the Summer Budget 2015 the Government announced the intention to lower the benefit cap further. The reduced levels of the benefit cap are:

£385 per week for couples and lone parents

£258 per week for single adults The policy was due to be implemented in April 2016 but Lord Freud announced in February 2016 that it would be introduced ‘in the autumn’. The city council have recently been informed that they will receive confirmed dates of implementation on the 6 May, however we have had early indications from the DWP suggesting at the very earliest this will be November 2016. The DWP are hoping to make available to local authorities the details of residents of who may be affected on the 9 May and residents of Newcastle will start to receive correspondence from 24 May advising them that they ‘may be impacted’ on the implementation of the reduced cap. We have begun to target those identified as being at risk of the reduced benefit cap. The data produced in August 2015 identified 575 households that potentially could be affected. This has been cross-checked against Housing Benefit data in February 2016 which gave the following results:

291 households were identified as currently exempt or likely to be exempt from the cap once the Carers Allowance rules are changed

276 households were identified as likely to be cappedOut of the 276 households identified:

185 households are lone parents with children 97 households are couples with children No single person households have been identified The average householder affected is 35, female and white British

with 3 children in a 3 bedroomed property A family with 3-4 children will have to pay partial rent A family with 5 or more children will have to pay full rent

Work has begun to help and support those who have been identified as facing a reduction to try and assist them off the cap or into employment. We are doing this by a targeted benefit take up campaign to help those that may qualify for any exemption benefit and working with YHN employability team and Newcastle Futures to support people into work.

5.3 Alternative Payment Arrangements

Alternative Payment Arrangements (APA’s) are available in circumstances for claimants who are unable to manage their monthly payment. YHN have applied for 112 APA’s to receive the housing element as a ‘managed payment to landlord’ and currently have 95 in payment.

6. Partnership Working

6.1 YHN continue to work in partnership with the Council and other partners to develop learning. The council and the DWP signed a ‘Delivery Partnership Agreement’ for one year which lasted until 31 March 2016. The DWP and NCC agreed to work in partnership to deliver the services to claimants following the Universal Support Delivered Locally principles (formally Local Support Services Framework). The DPA recognises that partnership working will deliver services that are flexible and sensitive to local needs.The DPA supports the national expansion of UC as an interim arrangement until the full universal support offer is in place. The DPA covers three elements of work;

Supporting customers get on-line to make a claim

Provide Personal Budgeting support to residents

Provide UC with assistance with complex housing cost claims and providing a manual intervention for council tax claims.

Board will recall that as part of the DPA YHN are delivering an element of personal budgeting support for council tenants and have assisted 127 customers to date.

6.2 Co–location with Job Centre Plus

Board may recall that from July 2015 the YHN Universal Credit specialists began a pilot to test out the benefits of co-locating in the city’s job centresCo-location was piloted to try and enhance the working relationships between the Job Centre Plus (JCP) staff and YHN staff to ensure that UC claims were set up correctly and to support those who may struggle with money management or the transition to monthly payments. Co-location has improved communication within the Job Centre Offices and support has been provided to work coaches to increase their understanding of housing and personal budgeting support. The on-going relationship has proved to be useful and the presence of staff continues to remind JCP work coaches of YHN and the support that can be provided to tenants. Further benefits of being co-located with the JCP;

protect rental income at earlier time of the claim

fulfil contractual obligations for PBS

triage out to specialist services where people need more intense support

speak to JCP staff directly about UC claims and understand issues around payments

remove administration and trying to resolve issues

being proactive and preventing customers attending many different appointments with different agencies

Ensuring council tax claims are made in a timely manner.

Co-location has been evaluated and a proposal submitted to the council for future service delivery. The recommendation is that we create three new posts, two permanently and one temporarily to represent both YHN and NCC at the City Jobcentres. We are hoping for a decision on this soon.

6.3 Universal Credit Trusted Partner Pilot

The Trusted Partner Pilot began 7th March 2016 and since this date we have applied for 27 Alternative Payment Arrangements (APA’s). Board will recall we are able to apply for APA’s on day one of the UC claim for those who may be unlikely to pay their rent.We have been made aware that as a result of Newcastle City Jobcentre going to full service on the 25 May this may mean that applications for APA’s revert back to the old system and fall out of the pilot. We understand currently the DWP are trying to develop a ‘work around’ and will keep board updated on any progress or decisions they make. The DWP are currently completing a data cleanse and we expect to receive a scan of all YHN customers on UC. This will be helpful to cross check against those accounts and our own estimates and to understand if tenants are managing themselves and assess the success of our current delivery model.

7. Internal Audit

7.1 As board will be aware from the last update, Internal Audit was commissioned to review the effectiveness of the arrangements in place for managing tenants in receipt of UC. The overall objective of the audit was to assess whether significant risks in relation to managing tenants in receipt of UC are adequately and effectively controlled. This was done through review of the following objectives:

There is a project plan covering implementation of UC and YHN’s response to this which is reviewed and updated in light of lessons learned as implementation progresses.

All tenancies affected by UC can be clearly identified and appropriate arrangements are in place to support tenants and minimise risks of non-payment of rent.

Where appropriate, Alternative Payment Arrangements (APA’s) have been agreed and relevant support is provided to address the underlying issues.

Appropriate, relevant performance management arrangements have been established and effective monitoring takes place.

Procedures are in place to achieve value for money and identify efficiency.

This audit has now concluded and the findings are that they consider there is full assurance that there is a highly effective system of internal control in place designed to achieve the objectives reviewed with no issues being

identified. A final ‘Audit Report Memorandum’ has been issued to YHN officers and will be formally presented to Audit committee in May 2016.

8. Income Management Strategy

8.1 Progress continues with the Income Management Strategy action plan.

The withdrawal of the cashiering service has had no negative impact on arrears performance. We continue to actively promote direct debit as our preferred method of payment and in the last three months 42.5% of income collected has been by direct debit with 8,379 tenants now paying by this method.

9. Business Implications

9.1 Purpose and objectives

By taking an approach that maximises income collection whilst supporting tenants we will contribute to our service objectives of;

Collect the rent and let properties efficiently Promote health and wellbeing and support vulnerable people to

enjoy independence

9.2 Value for money and efficiencies:The implementation project includes actions that are intended to ensure we deliver efficient services that are value for money. As part of the revised project plan we are looking at how services work together in will look to calculate the impact UC has on current service delivery.

9.3 Financial Implications

YHN Board previously agreed to establish a reserve specifically for welfare reform related activity. This reserve is now managed by the council and we are currently liaising with the city council on expenditure for 2015/16 and anticipated budget for 2016/17.

9.4 Impact on services / performance

We continue to monitor the collection rate for tenants claiming UC separately. Arrears for this group of tenants remain higher than those of the total tenant population however since the time of the last report the collection rate has increased from 79.3% to 88.6% at year end. The year- end collection rate for all tenants including UC claimants was 99.8% exceeding the target of 99.49%.

9.5 Outcome for tenants/leaseholders

A large percentage of council tenants and leaseholders will be affected by Universal Credit. Currently over 65% of working age tenants are currently in receipt of Housing Benefit and will be responsible for managing a monthly payment and paying their rent directly to YHN.

9.6 Risk (reputation and relationship)

YHN and the City Council have worked in partnership to minimise evictions and reduce homelessness. The introduction of Universal Credit presents a risk of increased rent arrears which could ultimately lead to eviction. This may affect our relationship with statutory and voluntary sector partners. The trusted status pilot does present an opportunity to build positive relationships with the DWP and influence how landlords can assist tenants and protect rental income.

9.7 Environmental

There are no direct environmental impacts following the introduction of Universal Credit.

9.8 Legal

UC is a significant element of the Welfare Reform Act 2012 and its implementation is determined by further regulation and guidance. In terms of our implementation project there may be changes to tenancy agreements and further updates will be brought back to Board.

9.9 Equality and Diversity and Community Cohesion

The introduction of Universal Credit may increase tenancy turnover and homelessness which could impact on community cohesion and sustainability of estates.

9.10 Stakeholder Involvement/consultation:

We have been working with the council and other partners as part of the welfare reform strategy board. We have recently worked to support NCC’s financial inclusion seminar to update other agencies on YHN’s implementation and learning of UC.


10.1 Board is recommended to

Note progress made on delivery of the Universal Credit Implementation Project.

11. Implementation

11.1 Reports will be brought back to Board on a quarterly basis during 2016-17.

Background Papers

Universal Credit reports to YHN Board throughout 2015 Universal Credit report to YHN Board February 2016

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Neil Scott, by telephone on 0191 278 8711 or email [email protected]


Board 10 May 2016

Delegated Decisions – Schedule of non-confidential Delegated Decisions taken between 23rd February 2016 and 28th April 2016

No.Directorate/

Delegated Officer

Scheme Cost/ Budget provision Units Contractor WardsOfficer

1 YHN – Neil Scott ICT Consultancy£45,000 from IT Revenue

Budgets N/AIan Rowell

Consultancy N/A Mark Allaway

2HRA -David Langhorne Ridgewood Gardens PB

£54,174.77 from the participatory Budget 12 HLS East Gosforth Mark Hutchinson

3HRA -David Langhorne

Matlock Gardens boundary wall

replacement£31,678.10 from the investment

programme – spend to save 10 BCE Westerhope Joanne Giles

4

Asfaleia – Neil Scott

Night time cover at Learning Disability

housing developments 80,135 from Revenue budgets N/A Coquet Trust N/A Rob Clark

5 YHN – Neil ScottJontek Maintenance

Agreement 40,001 from Revenue budgets N/A Jontek N/A Rob Clark


Participatory Budget 29 - Gibson Street Fencing

£25,145.30 from the participatory Budget 104

Building Commercial

Enterprise Ouseburn Patrick Parker


2016/17 Roofing Programme - Asbestos

Surveys£26,303.90 from the Investment

Programme - Lifecycles 367

MIS Environmental

Ltd Cross City Patrick Parker


Asbestos Sampling £75,000 from the asbestos revenue budget. N/A MIS / SGS Cross City Ian Gallagher

9YHN – Sheila

BreslinFinance Leadership

Council £13,760 from revenue budget. N/A CEB N/A Lisa Forrest

10HRA – David

Langhorne

Sheltered Housing Heat Allocation Units

Installation£98,368.00 from Investment

Programme – Improving customer services. 167 Switch2 Cross City Norman Peters

All projects were approved as part of the Investment Delivery Programme contained within a report entitled ’30 Year HRA Financial Model and Other Financial Issues’ which was considered by the Board on 11 December 2012.

Board 10 May 2016

Board Forward Plan

1 Board Forward Plan

1.1 This Board Forward Plan lists the reports known at the present time that will be presented at the next three Board meetings in 2016 (or amended date subject to confirmation)

21 June 2016

Group Governance Handbook amendments For approval

Anti-Slavery and Human Trafficking Statement For approval

Voids Time Limited Committee report and recommendations For approval

Health and Safety 6 monthly report For discussion

2 August 2016

Annual Report and Financial Statements For approval

Investment Programme – Four Year Plan For approval

Finance and Performance Quarter 1 report For discussion

Service and Strategy Delivery Committee annual report For discussion

20 September 2016

AGMMinutes of AGM 2015Appoint External AuditorsRetirement and Appointment of Board membersAnnual Accounts and Financial Statements

For approvalFor approvalFor approvalFor approval

Board meetingReview of Governance Group Audit Committee Annual report to BoardChurchwalk Regeneration and Cruddas Park Shopping

For approvalFor approvalFor approval

yhn board 10 may 2016 non confidential

Documents