In 2023-2024 we completed 75 call outs where the TV aerial system at a block of flats has failed and needed to be repaired. This is a small volume of repairs against the 775 blocks of flats we have in our stock.

We are part of a partnership of four local authorities where Cambridgeshire County Council Insurance Team procure and manage all our insurance requirements. 

In May 2022 we consulted all leaseholders about procuring what is called a Qualifying Long-Term Agreement (QLTA) for buildings insurance, including terrorism cover for a period of three years, with an option to extend this contract for a further two years. 

Through A J Gallagher, an insurance broker, Cambridge secured a contract with Aspen Insurance for this 3 + 2-year contract.  The policy started on 1 October 2022 and has an annual price increase on its anniversary. 

In setting estimated charges for 2023-2024, we took advice around what the premiums may increase by, and we are pleased to say our estimated were very close.  The difference you see between our estimate and your actual premium is likely to be the premium for the terrorism cover. 

The Insurance Sector is changing as it reacts to uncertainty in economies driven by conflicts abroad and increasing volumes of claims due to climate changes, mostly flooding in the UK. 

We have seen insurers asking for increases in the sum insured, as repairs and replacement costs of both materials and labour have risen sharply since the pandemic and actual premiums have risen due to increasing claim volumes. 

Our colleagues at Cambridge CC have been in discussions with Aspen Insurance who have suggested provisionally that our renewal from 1 October 2024 would see premium increases by around 10%. They have also told us that an increase in the excess will be necessary to reflect the increasing number of claims coming from rented leasehold properties. 

This appears to be something affecting the insurance markets, where the number of insurance companies offering large scale insurance cover to rented and leasehold properties is dwindling. 

Our inhouse caretaking service is part of our Neighbourhoods Housing Team. Our caretakers undertake a wide variety of tasks to blocks of flats. 

In 2023, as part of the Rents & Service Charge Consultation, we were asked by the Tenant and Leaseholder Group to extend the scope of the project to review both the caretaking and cleaning services, as residents felt they needed improvement. 

This was completed and you can see the outcomes of this additional review on these web pages. One key outcome was the drafting of a service standard for both cleaning and caretaking services under this link. 

Historically not all leaseholders have been recharged for the caretaking service, even though they receive the service.  As a result, we have only recharged the capped limit of £100 for 2023-2024, even though the actual cost to us is around £225 per property. 

Our inhouse cleaning service is part of our Neighbourhoods Housing Team. Our cleaners undertake a wide variety of cleaning tasks to blocks of flats. 

Historically the cleaning service has been recharged according to the actual running costs of providing the service for each block. However, the consultation in 2023 saw a change to how this was recharged to tenants and leaseholders as customers asked us to take the total operating cost of the service and divide it equally by the number of properties receiving the service, so everyone pays the same service charge each week. 

We do have around 30 schemes for housing for older people, which have communal spaces, common rooms and laundry areas. Cleaning at these schemes is undertaken by an external contractor and the costs are therefore recharged to tenants based on the actual cost invoiced by the contractor each year. 

This new service charge expenditure element was only introduced last year following changes to working arrangements linked to fire safety. As a landlord we are now required to inspect any door that connects to any communal space or area. This inspection looks at the doors construction, design and surroundings and our contractor will also add the inspection results to our property asset database. 

Where a door to a flat fails an inspection, we will contact the leaseholder with a view to replacing the door as major works piece of work. 

These inspections currently cost £30.09 per door. 

As a landlord we have various rules and regulations we must comply with otherwise the amount of money we can recover from a leaseholder is capped. 

One of these regulations is The Service Charge (Consultation Requirements) (England) Regulations 2003. This requires us to consult any tenant or leaseholder where: - 

• Any Qualifying Long-Term Agreement is in place to provide services which costs more than £100 to any customer in any one year and the contract is for a period of greater than one year, or 
• Any qualifying works where the cost of the works is more than £250 for any leaseholder in a block of flats. 

Whilst reviewing each of the works order records from Mears our repairs and maintenance contractor, it was clear that during the year we had completed works which had cost more than £250 for any leaseholder and therefore under the regulations must be capped.

The consequence for us is that we can now only charge you the sum of £250 even if the cost that would have been collected from you through a Major Works Account would have been much higher. 

A small number of leaseholders will therefore see on their Annual Certificate and Statement of Affairs for the 2023-2024 year a recharge of either £250, £500 or £750, where we have completed works, but did not consult you. 

This means that leaseholders only pay the capped amount of £250, even where their contribution to the costs of these works would have been greater. 

We continue to work with our repairs and maintenance contractors to reduce the number of jobs completed without the formal Section 20 consultation being completed.

There will always be some works that we just need to complete to save larger costs, such as during storms and flooding where to stop works to comply with these consultation regulations is likely to cause greater costs and further property damage.  In these situations, we will communicate clearly and promptly with our customers, so they know what is happening and what we propose to do to remedy any damages etc 

The 2023-2024 year saw a relatively small number of repairs completed to door entry systems. Our total recharge to leaseholders being only £15,849. Repairs are generally calls where the system is not working at a specific property, but the fault can be relating to the operating system covering all properties.

Electrical maintenance works tend to relate to things like supply disruption and fuse boxes etc. This year our contractors have completed a high number of five yearly inspections, and this has generated a higher number of remedial works needing to be completed. 

In some cases, the total cost of these electrical works should be triggered a section 20 consultation, which has not been completed, so the costs to leaseholders have been capped at the maximum level of £250. 

Moving forward we will work with our new repairs and maintenance contractors to look to separate periodic testing and any required remedial works to give us time as the landlord to complete the necessary consultations.

As electricity is a dangerous source, we will of course always complete works that are relating to health and safety immediately as then update residents accordingly, as your safety is of upmost importance to us at all times. 

Only a small number of our 775 blocks have fire alarm systems installed.  These days having smoke alarms installed is considered to be better. 

The costs incurred in the 2023-2024 year for leaseholders were minimal at only £1,231. 

Over the past two years we have not completed as many of the fire risk assessment inspections as we were planning to procure a new contractor to start works in late 2024. 

As a landlord keeping up to date with the latest rules & regulations and best practice is a challenging task, so like most landlords we employ the services of expert external consultants who give us advice and guidance about fire safety. 

Our new consultants have told us that we now need to extend the types of properties that must have a fire risk assessment. Historically, where a building has any communal parts, then a regular FRA would be required. It’s now necessary for ALL buildings with multiple properties to need to be inspected. 

Generally, the frequency of fire risk assessments is dependent on a number of different factors. For example, a scheme for housing for older people, which has communal lounges and laundries will need to be inspected annually. Whereas a small block of flats with a single staircase is likely to only need an FRA every two or three years. 

As part of last years’ service charge consultation, we proposed to use what is called a Reserve fund to administer service charges for fire risk assessments. This will stop service charges from going up and down based on when an FRA is completed and instead spread the cost over the frequency of the inspections, so a block that requires an inspection every 2 years, the cost would be split 50% for year one and 50% for year two. 

Service charges for general repairs and maintenance can vary from year to year for a number of different reasons, which makes the setting of estimated service charges a challenge sometimes. 

Therefore in 2022 to try and reduce possible large deficits and surpluses, we introduced a simple set of bandings, details of which are shown in the table below. 

We used the actual cost of repairs recharged for each block and then apportioned for each property to place your property in one of the below bandings. 

Now that we have completed the Actuals service charges for 2023-2024, we now have 2 years of data in which to set estimated service charges for 2025-2026.  We believe that the 5 bandings give us enough flexibility to manage service charges, but we may need to estimated cost to be recharged, as this year we have spent over £100k more on repairs that we had originally estimated. 

Please rest assured that where we estimate an amount for communal repairs and the spend is less, then your service charges are reduced, and the sum is dealt with through the deficit or surplus adjustment posted to your service charge account in August / September each year. 

As a local authority we procure our electricity and gas through a consortium called LASER. This gives us extremely competitive rates for gas and electricity which for last year were around 18% lower than the rates after the governments price cap.  In 2022, we saw increases of 224% for gas and 66% for electricity. 

Whilst setting service charge estimates for 2023-2024 we knew that our contract had a price increase taking place from 1 October 2023 and were told to expect another high increase of around 65%. Luckily after setting the estimates the energy market appeared to stabilise and in October 2023, we only saw increases of around 10%. 

You can see from the table showing the difference between estimated charges and actual charges 2023-2024 there is an overall surplus (credit) on heating charges of £269,582 being returned to leaseholders this year. 

There are a handful of exceptions this year. This is mostly down to our supplier being late last year with billing so for 2023-2024 we have paid 5 bills, making the spend higher than we originally estimated. 

We have this year consulted leaseholders on a new contract with LASER, so we are confident in securing continued value for money for gas and electricity by remaining with LASER for another 5 years of service. 

As we are unable to comply with The Service Charge (Consultation Requirements) (England) Regulations 2003 whilst procuring this new contract we have successfully applied to the First Tier Property Chamber Tribunal for dispensation that has been granted unconditionally. 

Our expenditure on electricity to landlord supplies to blocks of flats was slightly less than we had estimated as the projected price increasing from 1 October 2023 did not happen, so there is an overall surplus going back to leaseholders of £28,545 for the 2023-2024 year. 

As above, we are re-procuring electricity through the LASER consortium to keep costs as low as possible. 

Only one block of flats containing a leasehold property has a lift and this building falls within one of our development areas, so is proposed to be demolished and replaced with new social housing over the next few years.

There were no recharges in the 2023-2024 year for this reason.

Management charges are only collectable from leaseholders where the terms of the lease allow. Our management charges for outright leaseholders are based on our operating costs for the following items: - 

• Staff salaries, including employer national insurance and pension contributions 
• Facilities recharges for office, IT and equipment 
• Central recharges for support services e.g. finance and HR 
• Licence fees for software and Housing IT systems 

We estimated our management fee for 2023-2024 at £155 per leasehold property. During the rents and service charge consultation we discussed with the tenants and leaseholder group what items should be covered by the management charge and who should pay the fee. From 2024-2025 we adopted a new method of management calculation, so decided to set the actual fee for 2023-2024 the same as the estimate. 

Pest control measures are completed by external specialist contractors and this year appear to have been centred around large blocks of flats, so only a small number of leaseholders will see any pest control charges on their service charge account. 

The total spend across all our housing stock was around £100,000 last year. Recharges to leaseholders was £10,292, so around 10%. 

These are small sums of money, normally only £10 a year which form part of the lease covenants. Regulations require the landlord to demand ground rents annually using a prescribed form. 

As part of the service charge consultation, we asked leaseholders if we could simply include the ground rent as a service charge item, to save on the administration of having to ask for it separately and this was agreed. 

If any leaseholder declines to pay this sum as it is not correctly demanded, we may choose to make a demand up to the time limitation as ground rents are always payable on demand even if made retrospectively. 

Last year we provided leaseholder with access to repairs data, so they could see all of the repairs completed in their block and the total cost across each of the service charge expenditure items. This information was appreciated by leaseholders and reduce the number of repairs queries. 

This year as we are currently undertaking the procurement process for a new repairs and maintenance contractor and for new compliance works contractors, we are unable to share with you each repair cost and other works contracts relating to compliance and inspection works as this data is now commercially sensitive.  

However, should you wish to see the repairs details for your block only, we will be more than happy to provide you with this information.