Meeting documents

1 THE ISSUE

1.1 The Housing Act 1985 gives the Council both powers and duties in relation to enforcing minimum standards of fire precautions, amenities and repair within houses in multiple occupation (HMOs).

1.2 This report details the current situation with the Council's proactive HMO inspection and enforcement programme. It details the Council's non-compliance with a statutory obligation contained within The Housing (Fire Safety in Houses in Multiple Occupation) Order 1997. This report sets out a number of options to address this issue.

2 RECOMMENDATION

2.1 Decide on preferred option from those set out in part 8 of this report.

2.2 Agree funding for the preferred option (if appropriate) from savings in the voluntary grants budget as detailed in paragraph 9.

Printed on recycled paper

3 FINANCIAL IMPLICATIONS

3.1 This report sets out a number of options. With the exception of the status quo these all have either capital or financial implications. These are additional funding requirements and cannot be realised from existing allocations. The financial requirements are detailed more fully in section 8, with funding options set out in section 9.

4 COMMENT & ADVICE FROM MONITORING OFFICER

4.1 The Solicitor to the Council has been alerted to the fact that the Council has, for some time, failed to comply with its duties under the law as outlined in this report. This duty under such circumstances is to report on the matter to the Council Executive with a view to ensuring that the Council Executive is fully aware of the Council's obligations and able to take appropriate action. He is satisfied that the proposals outlined in the report at options 2, 3 and 4 will all amount to a sufficient indication of the Council's determination to discharge as best it can (given its current position and resource limitations) its statutory responsibilities. He would advise against Option 1.

5 BACKGROUND & LEGAL FRAMEWORK

5.1 An HMO is defined as a "house which is occupied by persons who do not form a single household". This includes bedsits, hostels, shared student houses and houses converted into flats. Based on a survey of HMOs undertaken in 1990 by Bath City Council, there are an estimated 3,000 HMOs within the district - one of the largest concentrations outside London.

5.2 There is a plethora of independent evidence that confirms residents of HMOs suffer the poorest housing conditions of any sector, are often the most vulnerable members of society and crucially, are six times more likely to die or suffer serious injury in a fire than residents of conventional properties. It is for these reasons that Government has legislated to give local authorities a wide range of powers and duties in relation to HMOs.

5.3 The primary legislation relating to HMOs is the Housing Act 1985 (as amended). This provides local authorities with an extensive range of powers including powers of entry, the ability to require the installation/improvement of fire precautions and other fire safety measures, the power to limit the number of occupants, require works of repair or the installation of additional amenities.

5.4 With the introduction of the Housing (Fire Safety in Houses in Multiple Occupation) Order 1997, referred to in this report as the Fire Safety Order, the Government legislated to make these powers a duty for local authorities in relation to all HMOs that are three storeys or more, unless they fall into one of the exclusions in Article 4(2) of the Fire Safety Order. The Fire Safety Order gave local authorities until the 29^th February 2000 to fully comply.

5.5 Recent survey work has identified approximately 500 properties that are likely to fall within the remit of the Fire Safety Order. Following the operational enhancements detailed below Housing & Regeneration is now aiming to achieve an improvement rate of 105 HMOs per annum with an estimated 85 of these falling under the terms of the Fire Safety Order. This will therefore mean that it will take until at least 2008/9 to comply with this legislation.

6 LEGAL EXPOSURE DUE TO NON-COMPLIANCE WITH ORDER

6.1 An assessment of the Council's legal exposure for non-compliance with this statutory duty has been obtained from Legal Services. Their comments are included in 6.2 below:

6.2 There is no penalty contained with the Fire Safety Order for non-compliance. However, failure to carry out a duty could render the Council liable to judicial review or a claim for damages for breach of statutory duty should any person suffer loss as a result of the Council's failure to act. The Council could be exposed to civil claims if an individual was killed or injured within an HMO that is covered by the Fire Safety Order. Primarily any injured party could take an action against the landlord under contract and or negligence. Depending upon the circumstances the Council could be included as a third party to any potential claims, possibly for breach of statutory duty and for any other relevant claims. It is correct to say that there is a potential unknown liability/cost to the Council. In any potential litigation, the Council is always likely to be a potential defendant by virtue of the fact that it carries insurance and also is a "body of substance" so far as meeting any debts are concerned.

7 CURRENT SITUATION & OPERATIONAL IMPROVEMENTS

7.1 In light of the current situation Housing & Regeneration have taken the opportunity to review their strategic and operational priorities. This has resulted in the team focusing on the core functions at the expense of peripheral and non-essential services. For example building control and planning application screening has now been discontinued and HMO grants, which were often complex and time consuming, have been replaced with small, highly targeted and easily administered fire precautions grants. In addition, the capitalisation of a post within Housing & Regeneration has provided the funding to enable the appointment a further 0.5FTE officer to the HMO team.

7.2 The team is now clearly focused on the twin track approach of encouraging and assisting responsible landlords while taking firm and prompt enforcement action where necessary. The encouragement and assistance to landlords comes in the form of user-friendly information and guides on meeting the necessary standards, publication of Letting Today, free advice and assistance and finally the highly successful voluntary accreditation scheme with access to fire precautions grants. In parallel with this the team have taken a more enforcement-orientated approach, as recommended by the Audit Commission. To ensure this is effective and targeted the team have introduced a risk-assessment scheme to prioritise all known HMOs. This allows us to deal with HMOs in a logical sequence, that is, on a "worst first" basis. In addition individual officers within the HMO team now have the Audit commission suggested target of improving 30 HMOs per officer per annum as a performance target.

7.3 One of the main benefits from this refocusing has been the ability of the author to transfer more staff to work on the HMO programme. The effect of these changes can been seen in the chart below showing the number of pre-formal and formal notices served in the last four years compared to the extrapolated number for this year, based on performance from April until September.

7.4 Despite the reallocated staff resources and the additional 0.5FTE post about to be recruited this service is still resourced below that of other authorities with significant numbers of HMOs. The chart below, which compares the number of FTE staff per 1,000 HMOs in similar authorities, highlights this fact.

7.5 One of the Public Service Agreement bids that the management board has agreed to pursue relates to fire safety. While not solely targeted towards HMOs, if successful, it would provide additional funding for the voluntary property accreditation scheme grants. More importantly to demonstrate support for this bid Avon Fire Brigade have verbally agreed to make available to the HMO team the services of one of their Fire Safety Officers on a part-time basis for two years. On the Audit Commission figures of 30 HMOs per officer per annum this equates to another 30 HMOs improved.

7.6 Efforts have been made to establish the current position of other ex-Avon authorities. Neighbouring authorities are understandably reluctant to formally divulge any information which may suggest non-compliance with their statutory duties. However, telephone conversations with Bristol City Council, North Somerset Council and South Gloucester Council have revealed, in no particular order, that one has completed the "vast majority of inspections" and the other two aim to fully comply with their statutory duties by March 2003 and March 2004. While the progress of other authorities does not have a direct bearing on this authority's situation it does provide a useful benchmark.

8 OPTIONS FOR THE WAY FORWARD

8.1 Option 1 - Status quo

With the improvements in performance detailed above and factoring in the outputs from any successful PSA bid it is still unlikely that the team will comply with the requirements of the Fire Safety Order until at least 2008/9, that is, over 8 years after the implementation deadline.

This option does not reduce the risk of death or injury to residents due to residential fires and it exposes the Council to the greatest amount of legal risk from judicial review or claims of negligence. It does not however, have any additional capital or revenue implications.

8.2 Option 2 - Increasing in-house staff resources

Increasing the staffing establishment of the HMO team would significantly impact on the number of HMOs improved and our ability to comply with our statutory duties. Inspecting HMOs is a time consuming, complicated and often risky job. It is therefore policy that two officers undertake inspections. This allows a suitable division of labour and reduces the health and safety risks. For this reason it useful to look at the cost of an inspecting team which comprises of an EHO and Housing Surveyor. The cost of such a team, including pension, National Insurance contributions and car allowances is between £51,000 and £56,000, depending upon spinal column point. Each team would increase the number of HMOs improved per annum by 60.

This option has the benefit of significantly increasing the improvement rate, thus reducing risks to residents and reducing our legal exposure. It does however have significant revenue implications during the term of the contract.

8.3 Option 3 - Outsourcing Inspections

There are a number of private sector companies that specialise in undertaking the inspection part of this work. Generally these companies would be contracted to organise the visits, undertake inspections, and produce schedules of work. It would then be for the Council to take any enforcement action based on their information. Initial advice from one such company is suggesting an inspection and schedule price in the region of £300 per property. Further investigation would be required to establish the exact price and the contractual detail e.g. who takes responsibility where the company is unable to gain entry to the property etc.

The main advantage of this option is speed coupled with clear and defined outputs. The concerns relate to the burden of risk for abortive and unforeseen works. It is common for contractors to make provision for transference of risk to employers. In addition, this service would only cover one part of the process. The more complex and time-consuming enforcement element would still rest with the Council.

8.4 Option 4 - Hybrid of above 2 Options

This option is a combination of options 2 & 3. This would involve entering into a contract with a private company to undertake a number of inspections, possibly in two tranches of around 125 properties, while also employing an additional inspecting team to meet the demands of the generated enforcement work.

While this option would have significant financial implications it would also generate the greatest performance outputs thus dramatically decreasing the time for us to comply with our statutory duties.

8.5 The table below summaries the cost of each option and the corresponding time estimated for compliance with the Fire Safety Order. Options 2 & 4 are Officers' preferred Options.

9 FUNDING

9.1 There is limited scope to fund Options 2, 3 & 4 from within existing resources. The capitalisation of two posts within Housing & Regeneration has removed the scope to use this approach to fund any additional posts.

9.2 Local authorities do not currently have the power to charge landlords for HMO inspections. Under draft proposals in the Local Government Bill: Powers to Trade and Charge (the Bill), this may change. CPA (Comprehensive Performance Assessment) high performing councils such as Bath & North East Somerset Council are to be afforded "freedoms and flexibilities", which may include the power to charge for some statutory services. As the Bill is still in draft form, it isn't possible to give a timescale for enactment of the Bill or to be clear about whether any new powers to charge would apply to HMO inspections. Officers will continue to monitor the progress of the Bill and will report to the Executive if and when charging for HMO inspections becomes an option for consideration.

9.3 The option that will have least impact on service delivery is to use savings already identified in the housing voluntary grants budget.

9.4 Although voluntary grants are commissioned on a three-year basis, all grants are subject to an annual review. This year's annual review has identified two grant-funded services that can be funded from other sources:

9.5 In light of the availability of alternative sources of funding, the discontinuation of these two voluntary grants to Bath Churches Housing Association has already been decided upon. This releases £51, 038 from the voluntary grants budget. It is recommended that rather than taking this money as savings as part of the Council's financial planning process, it is used to fund one additional team as detailed in Option 2, paragraph 8.5 above. This proposal would then have a neutral effect on the overall budget setting process.

This version was printed 27-Jan-03 11:22 a22/p22