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Cabinet - Tuesday, 11 February 2025 7:00 pm

February 11, 2025 View on council website  Watch video of meeting or read trancript
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Summary

At this meeting, the Cabinet approved changes to the Council Tax Support Scheme so that working-age residents in receipt of support will make a 25% contribution to their Council Tax bill. A £1.5 million hardship fund was also agreed to help mitigate the impact of these changes. In addition, the Cabinet approved the 2025-26 budget, which included a 4.99% increase in Council Tax, the Hounslow Companies Business Plan 2025-26 and an update on the progress of the SEND and AP programme and the Safety Valve.

Council Tax Support Scheme

The council is changing the way it supports residents with paying Council Tax. From April, all working-age residents who are eligible for a reduction in their Council Tax bill will pay at least 25% of their bill.

At the moment, some residents pay nothing at all towards their Council Tax because the Council Tax Support scheme uses a banded system based solely on income. The new scheme will also take account of the number of children in a household, providing additional support to households with children. In addition, people in receipt of Carers’ Allowance will only be liable for 10% of their bill.

The Cabinet agreed to make these changes to reduce the cost to the Council of providing Council Tax support. This cost is projected to be £27.5 million in 2025-26, which represents around 11% of the Council's total budget. The changes to the scheme, if they go ahead, are expected to reduce the cost of the scheme to around £15 million.

The Council consulted with residents about the proposed changes in 2024. The consultation documentation stated that the Council could decide not to change the council tax support scheme for the next year, but also set out the possible consequences of such an approach. It outlined that the Council could use its reserves to fund the gap, but that this would be unsustainable in the medium term; it could increase the Council Tax by a further amount (in excess of the maximum 4.99% already budgeted for); or it could make cuts to services such as reducing the frequency of waste collection, library and leisure centre closures or reducing park and street maintenance.

The consultation was designed to reach the residents most likely to be affected by the changes. Of the 124 responses received, 72% of the respondents said they currently claim Council Tax support. Only 25% of those who answered the question about the fairness of the proposals thought the proposal was fair in that it asked everyone to contribute. Over half (56%) said they thought the Council should keep the current scheme and use the alternatives to fund the spending gap. The summary of consultation responses provided a fuller breakdown of the results, including the views expressed by respondents on the possible methods of operating a hardship fund to support those residents who are most affected by these proposals.

The changes are likely to have a disproportionate impact on disabled people, women, and families with children. In particular, single women with children who are in receipt of Council Tax support were identified as being likely to be the most significantly affected, because their ability to increase their income by obtaining paid employment was considered to be more limited. These impacts are recognised in the Equalities Impact Assessment.

To help to mitigate some of the negative impacts of these changes, the Council is proposing to establish a transitional hardship fund to allow some offset against the increase in Council Tax liability for those residents who will be contributing to their council tax for the first time or whose contributions will increase. This will be for an initial period of 2 years, reviewed at the end of the first and second years. The draft Council Tax Support Scheme sets out in full how this hardship fund would work.

Budget 2025-26

The Cabinet approved the 2025-26 budget with recommendations, including a 4.99% increase in Council Tax, being made to Borough Council for approval. The proposed Council Tax increase consists of two parts, a 2% increase to fund adult social care, and a 2.99% general increase.

The budget process sought to address a £30 million budget gap (the difference between projected income and expenditure) for 2025-26. The provisional Local Government Finance Settlement released in December provided a funding uplift of £6.6 million but despite this, it was not possible to balance the budget without drawing on Council reserves and increasing Council Tax.

The financial outlook remains uncertain, significantly influencing funding for local government. The UK economy faces challenges from slow growth and high public sector borrowing, exacerbated by residual impacts of the COVID-19 pandemic. All local authorities, like Hounslow, must continue to consider economic indicators and funding changes when updating their financial strategies.

The report also recommends the realignment of General Fund reserves in 2024/25 to address the current year forecasted position, as reported in the Quarter 3 Financial Monitoring Update report elsewhere on this Cabinet agenda, and risks into the medium-term. In addition, it seeks approval to delegate actions for these reserve movements to the Executive Director of Finance and Resources.

The budget is considered to be sustainable and deliverable, however there remains a £35.3 million recurrent budget gap across the medium term. Key risks impacting on the budget are inflation, interest rates, and demand pressure for Adult Social Care. The risk assessment identified that the minimum level of balances should be increased to £18m to address the significant risks in relation to Adult Social Care and the likelihood of ongoing need to use reserves to support 2025/26 budgets. The council also approved £12.2 million of savings to support the 2025-26 budget. A full list of savings proposals is in Appendix B1 of the report. Alongside the budget, the Cabinet also approved the fees and charges schedule, which includes provision for inflation to ensure full cost recovery and the impact of the National Insurance Employer increase. A minimum increase of 2%+2% has formed the basis of this review, with further increases considered on a case-by-case basis. The Capital Programme, which totals £173 million, was also approved. The report requested the substitution of borrowing with £5.0m from the Community Infrastructure Levy in financing the capital programme. The cabinet also considered the updated Capital Strategy, the Treasury Management Annual Strategy, the Annual Investment Strategy, the Statement on Minimum Revenue Provision, and Prudential and Treasury Indicators.

Hounslow Companies Business Plan

The Cabinet approved the Hounslow Companies Business Plan 2025-26. The Companies, which are wholly owned by the Council, deliver a wide range of services that residents value including housing repairs, leisure, greenspace, and waste and recycling services.

At the Shareholder Committee meeting in December 2024, it was reported that the financial position of the Group is expected to show a cumulative loss of £13.4 million by the end of the 2024/25 financial year. This loss is mainly due to:  Lampton 360 Ltd. facing a number of challenges, including increased overhead costs;  Coalo Ltd. not having an agreed contract or pricing with the Council; and  Lampton Investment 360 Ltd. facing higher maintenance costs and lower rents. Actions are being taken by the companies to address this. The companies business plans include a financial recovery plan to stabilise and then offset losses and a sustainable growth strategy.

Additional HMO Licensing

The Council is proposing to extend the existing Additional House of Multiple Occupancy (HMO) licensing scheme, which covers HMOs not covered by the mandatory national scheme and which is due to expire in July 2025.

HMOs are becoming increasingly common in the borough and they are a standard feature of life in Hounslow. A large proportion of these HMOs are managed ineffectively and inefficiently and this can lead to problems for both tenants and residents in the surrounding area. In particular, a number of issues have been identified in relation to the condition of these properties and their management, such as noise, fly-tipping, and other forms of anti-social behaviour. The Council does not consider this to be acceptable and is keen to put measures in place that will prevent these issues from recurring.

It is a statutory requirement for landlords to license HMOs which have 5 or more tenants from 2 or more households living in the property where amenities are shared. This is known as mandatory licensing. Councils have the discretion to extend this to other HMO properties that are not required to be licensed under the national scheme. This is known as additional licensing.

The proposed Additional Licensing scheme will cover all Houses of Multiple Occupancy (HMO) that are not covered by national mandatory HMO licensing. It will apply to:  all S254 HMOs occupied by 3 or more persons, including Flats in Multiple Occupation (FMOs) in large purpose-built blocks of flats. These are not included in the current scheme, and  all S257 HMOs where there is no sharing of amenities, and the units are self- contained flats or studios. The new scheme will consider extending this further to cover all S257 HMOs, including those where not all the flats are rented or where they are not under the same ownership or control. In order to extend the existing additional licensing scheme the Council must prove that there is a need for it, which in this case means demonstrating that a significant proportion of the HMOs of that description in the area are being managed sufficiently ineffectively as to give rise, or to be likely to give rise, to one or more particular problems either for those occupying the HMOs or for members of the public.

The Council will consult on the proposed scheme to gather evidence to justify the scheme in line with its statutory obligations. More detail about the evidence gathered to support the scheme can be found in Appendix 1 to the report.

Revision of Hounslow’s Local List of Heritage Assets

The Council is updating its Local List of Heritage Assets. The Local List recognises buildings, sites, and structures which have architectural and/or historic interest of local significance which may not be worthy of national designation, these are known as “non-designated heritage assets”. Local lists, statutory listing and conservation areas contribute significantly to the character of an area and the quality of the built environment.

The updated List includes new additions arising from nominations submitted by residents and local groups. Local listing does not impose any additional planning constraints, nor does it restrict an owner’s permitted development rights. It is, however, a material consideration when the Council is considering planning applications.

The Cabinet agreed to notify owner/occupiers of the proposed list and, if any objections are raised, for these to be considered in consultation with the lead officer before the final review and adoption of the list.

Update on Progress of the SEND and AP Programme and the Safety Valve

The Cabinet received an update on the progress of the Special Educational Needs and Disabilities (SEND) and Alternative Provision (AP) programme, and the Safety Valve.

The programme is designed to ensure young people and their families have access to the right support, education, training, and employment, in line with the Corporate Plan priority of a 'Thriving Hounslow'. In October 2024, Ofsted and the Care Quality Commission (CQC) inspected Hounslow’s SEND and AP services, and while they found that a lot of positive change is underway, they also identified some areas requiring further development.

The Ofsted and CQC inspection report identified five areas for improvement:  The local area partnership needs to develop and implement a more effective strategy for working with children and young people through a cohesive approach to genuine co-production and ensuring the voice of children and young people is captured.  Leaders across the partnership need to accelerate their work to improve the timeliness and quality of some aspects of their strategies that relate to EHC planning.  Leaders should develop more coherent strategies to coordinate and evaluate their work in relation to a more inclusive approach within mainstream education, including use of part-time timetables and alternative provision; how they support young people 19 and over to sustain education, employment and training.  Leaders across the partnership need to ensure that practitioners are better placed to support children, young people and their families, through a better understanding of SEND and supporting preparation for adulthood; staff knowing the range of advice, guidance and pathways that are available to signpost more effectively; develop strategies to share information more collaboratively across education, health and social care.  Leaders in health and other commissioners in the partnership need to ensure that they prioritise reducing waiting times for a neurodisability assessment; commission a pathway to enable young people to have a coordinated learning disability assessment; establish a system that provides oversight of the impact of funds that are directly allocated to education providers on children and young people’s therapy outcomes. The programme is on track to be delivered within the existing resources allocated. A further report on the programme is due to be delivered to Cabinet in Q3 of 2025/26.

Hounslow Land Acquisition - Allotments

The Cabinet approved the acquisition of Park Road Allotments in Isleworth, which are currently owned by the Northumberland Estate.

Allotments in Hounslow are in high demand, and there is a demonstrated local need for allotment space. There is a statutory duty for the Council to provide allotment space, and the waiting list for allotments in the Isleworth area, where Park Road Allotment is located, currently has 411 residents. The Council has found that the current supply of allotments in Isleworth is limited and that there are no other suitable sites available for new allotments within a reasonable distance.

Park Road Allotments was previously leased to the council for 100 years until 2015, after which time the Estate submitted planning applications to develop the site for private housing. However, both of these applications were refused by the Council, and an appeal against the second application was dismissed in 2023.

The Council considers that retaining the site as allotments would be in the best interests of the community. To ensure this, the council has listed the site as an Asset of Community Value. It is now proposed that the Council seeks to purchase the site, either as a freehold or through a long-term lease. A confidential appendix to the report set out the available budget for the acquisition.

Delivery Plan Monitoring

The Cabinet received an update on progress with the Delivery Plan. This report is provided to Cabinet on a quarterly basis to update Members on progress with the council's Delivery Plan programmes and projects.

The Delivery Plan sets out the council’s large, ambitious programmes and projects which will impact across the whole (or large part of) the organisation, place or population. It also details the activity that is taking place to ensure that the Council has the required systems, processes and structures established and is prioritising its capital investment to enable the delivery of high-quality public services.

The report covers all four of the Council’s Delivery Plan portfolios; the People portfolio, the Place portfolio, the Capital Portfolio and the Digital Portfolio, highlighting their overall status, what has been achieved and the key activity planned over the coming period.

The Radical Overhaul of Consultation and Engagement (ROCE) programme is to be formally closed, with the roll-out of the new model being implemented through business as usual operations. The report noted that a new operating model for consultation and engagement has been agreed, which will help to improve the way the Council engages with its residents, businesses, partners, and community organisations, in line with the corporate plan commitment to ensure every resident, business, partner and community organisation is aware of and able to shape decisions about issues that matter to them.

The Independent Living Programme is also to be formally closed, with much of its activity transitioning to business as usual. The report noted that the programme had succeeded in putting a focus on preventative and early intervention across the Delivery Plan.

HRA Business Plan Update

The Cabinet approved an update to the HRA Business Plan, which sets out the financial sustainability of the HRA. Since the previous business plan was approved in January 2024, a number of factors have combined to reduce the long-term financial stability of the HRA. These include:  higher interest rates, with rates now forecast to be in the region of 5% compared to the previously expected 3-4%. This impacts the cost of borrowing for schemes in both the Council House Building and Estate Improvement programmes;  lower rent increases. It had been anticipated that the Council would be able to apply the existing rent policy of CPI +1% for a further 5 years. However, the Government has announced that it is proposing to introduce a new rent policy from 2026/27;  increased demand for Right To Buy (RTB) sales. In its budget on 30 October 2024, the government reduced the current RTB discount in London from £136k to £16k. The short notice period for this new discount led to a surge in the number of applications received by the council before the 21 November deadline. These are now being processed and, even though it is expected that only a proportion may proceed through to completion, this represents a potentially significant loss of units to the HRA that, in the current housing and financial climate, will be challenging to replace;  the need to invest in existing properties, as a number of pressing issues, outside the scope of the approved Estate Investment Programme, have been identified in relation to, for example, fire safety. In the longer term, further pressures are anticipated from the proposed update to the Decent Homes standard, which will likely introduce new requirements to the existing regime, but for which there is currently no detail or any government funding; and  the need to replenish the HRA reserve. It is recommended that the HRA should have a working reserve of 15% of annual rental income (around £14 million). However, the current level of reserves is forecast to be just £6 million by the end of the financial year and would remain below the recommended level for a number of years without intervention. A range of measures have been identified to manage these pressures, these include:  an additional £1.1 million of savings to the HRA revenue budget;  an additional programme of HRA revenue savings of £3 million from 2026/27;  re-profiling of both the Estate Investment Programme and Council House Building Programme to ensure the cost of capital financing remains within acceptable limits; and  an application for £1.7m of budget support funding to be drawn from the Council’s general fund reserves to support the revised capital programme. The report also sought delegated authority for the Director of Housing, in consultation with the Lead Member for Housing Management and Homelessness, to determine the specific use of new council accommodation units, for example for use by residents on the Council’s housing register and for care leavers, and for the Director of Asset Strategy, in consultation with the Lead Member for Housing Management and Homelessness, to be able to approve changes to the Estate Investment Programme that are within the approved programme budget.

Tenancy Strategy

The Cabinet approved the updated Tenancy Strategy 2025 and recommended that Borough Council agree to replace the existing flexible 5 year fixed-term tenancies currently granted to council tenants with secure, lifetime tenancies.

In 2013, following the introduction of the Localism Act, the Council’s Tenancy Strategy introduced fixed term flexible tenancies to be awarded to new tenants of council properties. Flexible tenancies were intended to help the council to manage its housing stock more effectively by enabling an earlier intervention in the case of a breach of tenancy and facilitating households being right-sized to tackle under-occupation.

However, over the last 10 years, flexible tenancies have not delivered the anticipated benefits and are considered to be a significant administrative burden on the Council. The Council is seeking to improve the efficiency of its tenancy management service and has therefore concluded that the benefits of flexible tenancies do not outweigh the costs, and that they should be discontinued in favour of awarding all council tenants secure lifetime tenancies, after a 12-month probationary period.

The consultation exercise carried out in October and November 2024 found that 58% of respondents were in favour of the proposal to move to secure lifetime tenancies. The improved security of tenure that indefinite lifetime tenancies offer over flexible tenancies were seen as a significant benefit to the proposals by respondents. No respondents expressed concern that the changes to tenancy type would unfairly disadvantage a specific equality group. This is also confirmed in the Equalities Impact Assessment.

Admission Arrangements

The Cabinet approved the admission arrangements for community schools for 2026-2027.

There are no changes proposed to the admission criteria. The proposed scheme does, however, reduce the published admissions number for two community primary schools:  Isleworth Town Primary School  Wellington Primary School

This change was approved by the Central Hounslow Planning Area to address the issue of falling rolls in these schools.

Hounslow Heat Network Project

The Council is proposing to develop a heat network in the borough, initially taking waste heat from Mogden Sewage Treatment Works to supply low-carbon heat to Council, public sector and private sector buildings in Isleworth and Brentford.

The Council previously commissioned a feasibility study to look at the options for a heat network in Hounslow, the results of which were reported to Cabinet in

  1. The study confirmed that a heat network could contribute towards a reduction in carbon emissions across the borough, potentially saving 38,900 tonnes CO e per year2. However, the cost of delivering a borough-wide network is prohibitive (at c£450m) so a smaller initial scheme has been developed.

The proposed phase 1 scheme, taking waste heat from Mogden sewage treatment works, is expected to deliver 41.9GWh of heat per year to 31 buildings across Isleworth and Brentford. The total cost of delivering this scheme is £53.2m, of which £10m of capital funding is to be requested from the Government’s Green Heat Network Fund.

The scheme is expected to be the most cost-effective means to decarbonise heating for these buildings and will deliver on the following Critical Success Factors:  Environmental Performance – the network will provide heat with an average carbon emission level similar to air-source heat pumps. It is anticipated that carbon emissions for the network will be in the region of 45 gCO2/kWh.  Customer Protection – the scheme must ensure that all residential customers receive fair levelised heat tariffs, when compared with continued use of gas boilers. In particular, the scheme should protect vulnerable customers.  Suitability for Funding – the scheme is designed to meet the gated metrics of the GHNF and offer a competitive level of support.  Project Financial Returns – the reference scheme is anticipated to offer a 10% return on investment, which would make it attractive to potential delivery partners.  Future Expansion – the phase 1 scheme is to be developed to ensure it can be scaled up to form a larger, borough-wide network.  Delivery Risks – Off-takers – the scheme design prioritises off- takers who have demonstrated support for the project. It is considered that a sufficient level of confidence in achieving contractual agreement from prospective heat off-takers exists.  Delivery Risks – Heat Supplier – the scheme design focuses on delivering a heat network that utilises heat suppliers who have demonstrated support for the project. Thames Water will be engaged to obtain a letter of support. Longer term, the risks regarding the availability of low carbon heat are understood and can be mitigated.  Social Benefits – the scheme will provide wider benefits, such as improvements to air quality and public realm. A draft Outline Business Case has been produced, but Cabinet approval was only requested for a bid to be made to the Green Heat Network Fund to deliver the scheme. Further reports detailing a proposed delivery model, commercial structure and any potential Council capital investment, will be brought to Cabinet at a later stage.

Infrastructure Funding Statement and Update on CIL and S106 Allocation

Process The Cabinet approved publication of the Infrastructure Funding Statement for 2023/24 and the allocation of Strategic Community Infrastructure Levy (CIL) funding to support delivery of several infrastructure projects in the Borough. The total value of CIL receipts that were collected in 2023/24 was £1.8 million. The report included a summary of income generated since CIL was first introduced in 2015.

CIL is a levy or charge which is made on new development by local planning authorities. CIL can only be used to fund infrastructure needed to support the growth of the borough.

The report proposed allocating a total of £11,683,840 of Strategic CIL to be applied in the current financial year. The proposed allocations were made through a prioritisation matrix and following an Expression of Interest exercise that invited bids from external infrastructure providers. This exercise sought to deliver the council’s wider ambition to make more effective use of CIL to support the timely and coordinated delivery of the council’s own capital programme and to encourage collaboration and partnership with other bodies in meeting the borough’s infrastructure needs.

Of the total sum, £9,920,708 will be used to support a number of identified infrastructure projects in the council’s Capital Programme, including:  £7,874,709 towards master planning and improvement of parks and green space;  £997,000 to enable delivery of cycling infrastructure and highways improvements;  £861,000 to support adult education improvements; and  £188,000 to support refurbishment and improvement works to the Heston Pools and Fitness Centre. £1,763,132 was allocated to support infrastructure projects to be delivered by external partners. This includes:  £714,000 to be applied to progressing the West London Orbital – an overground rail link for Hounslow;  £649,000 for two health projects, covering new NHS facility development at West Middlesex University Hospital; and  £400,000 for the Chiswick House & Gardens Trust to support a new heritage/greenspace/learning hub. The allocation of Strategic CIL to support capital projects will reduce borrowing, and thus generate revenue savings through reducing the cost of interest on borrowing in line with the One Hounslow Financial Strategy. A saving of £700k on the cost of interest on borrowing for the General Fund is anticipated from these allocations. The report also notes that the Thriving Communities Fund (TCF) has been expanded to encompass the entirety of Local CIL funds for allocation to local, borough-wide community-based projects. In addition, the Cabinet noted the changes made to the council’s allocation process for CIL and S106 contributions, following the review of CIL and S106 allocation processes approved by Cabinet in February 2024. The key changes include:  allocating Strategic CIL to projects already identified as priorities, rather than running a separate annual bidding process;  allocating Section 106 funds on a quarterly basis, rather than on an annual basis; and  clarifications on the operation of the local CIL allocation processes in relation to CIL Regulations.

Confirmation of an Article 4 Direction

The Cabinet agreed to confirm an Article 4 Direction to withdraw permitted development rights for:  changes from commercial, business and service uses to residential uses (Class MA); and  the demolition of vacant offices/light industrial/research and development buildings and replacing them with housing (Class ZA); in certain areas of the borough. These areas are:  town centres;  large neighbourhood centres;  small neighbourhood centres;  strategic industrial locations;  locally significant industrial sites; and  key existing office locations. This Article 4 Direction will come into force on 22 April 2025.

In 2021 the Government introduced several permitted development rights that allow changes of use to residential development, without requiring a full planning application. However, the Council is concerned that these rights could have a detrimental impact on the borough's economy and communities if they are not managed properly.

These permitted development rights would make it easier to:  convert shops, offices and other commercial, business and service premises to housing; and  demolish some types of vacant office blocks and light industrial buildings and replace them with housing. The Council is concerned that these changes could:  lead to the loss of shops, offices and other vital community facilities, particularly in town and neighbourhood centres, which would harm the Council's efforts to create thriving high streets;  lead to an increase in poorly designed homes, as it would not be possible to influence the layout, appearance or type of housing; and  make it more difficult for the Council to control the delivery of affordable housing, as developers converting buildings to residential under permitted development rights would not be required to provide affordable housing as part of their schemes. In addition, the Council is also concerned that the demolition of vacant office blocks and light industrial buildings under permitted development rights could lead to a loss of employment land in the borough.

The Council’s view, as supported by recent evidence, is that employment land is a critical component of the borough’s economy and that, in the context of a limited supply of such land, the current safeguards in the permitted development rights legislation and the prior approval process do not provide adequate mitigation against the potential harmful impacts of conversion.

For these reasons, the Council made a non-immediate Article 4 Direction to withdraw permitted development rights from areas of the borough considered most vulnerable. This means that full planning applications will be needed for these types of development in the designated areas, enabling the Council to manage this type of development in accordance with its priorities and ensure that any new homes that are built are of a good quality, contribute to local character and support sustainable development.

A public consultation was undertaken on the proposed Article 4 Direction, which ran from 22 April to 31 May 2024. A report on the consultation was included in Appendix 1 to the report. The representations received during the consultation exercise included:  3 objections from developers who wished their sites to be excluded from the Direction, with their objections based on concerns that the proposed Direction did not meet the legal requirements to protect local amenity or the well-being of the area;  a suggestion from a local group that a further location should be included within the Direction (the Chiswick Tower); and  support from Historic England for the proposed Direction. Having reviewed the consultation responses, the Council continues to consider that the making of the Direction is justified and that it would be necessary to prevent the occurrence of wholly unacceptable adverse impacts.

Financial Monitoring Update

The Cabinet received an update on the Council's financial performance, in the Financial Monitoring Update report for Quarter 3, 2024/25.

The report contained a review of the progress made in achieving the projected income and expenditure targets that were agreed by the council when it set its budget in February 2024, including updates on the collection fund, Delivery Plan programmes, and the performance of the

Decisions to be made in this meeting

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