Last year we made changes to how we manage service charges. These changes were designed to simplify service charges and make them easier to understand. We did this after listening to feedback and complaints from tenants and the Customer Panel.
To make service charges even more simple, fair and consistent for tenants, we have asked Arneil Johnston to carry out a review for us. Arneil Johnston are an independent housing consultant and they have worked with other housing associations to successfully simplify their service charges.
It is important that you let us know what you think about the proposals that Arneil Johnston have come up with. Our Board will consider your feedback before service charges are confirmed for 1 April 2021. As thank you for getting involved we’ll enter all completed surveys in to a prize draw to win two £30 gift vouchers.
What are service charges?
In addition to your rent, you also pay a service charge. This money goes towards the day-to-day running costs of your development and is used to cover communal costs such as:
- Staffing, for example, a Court Co-Ordinator or Handyperson
- Cleaning of communal areas, such as stairwells
- Grounds maintenance and gardening
- Repairing/servicing of communal areas, such as door entry systems or lighting
- Repairing and servicing lifts
- Gas and electricity to communal areas, such as common rooms in our courts
Does Cairn make money from service charges?
Cairn is a non-profit making charity and we don’t make a profit from your service charge. You are only charged the cost of providing services and repairs, which includes an administration fee that covers the cost of us managing the services and contracts.
What changed last year?
- Rather than having different pricing structures in place, we moved to fixed rates for communal services (with the exception of staffing costs) for all tenants. For example, the same fixed cost is now applied across all our locations for communal electricity.
- Staffing costs were charged using an hourly rate based on whether this was provided by internal Cairn staff or an external company, and this was calculated depending on the number of hours provided at each location. This is currently block/estate/scheme or court specific and not pooled across all locations. It currently means that tenants will pay different amounts for staff depending on where they live.
- Service charge statements were updated following consultation with the tenant Communications Group and a leaflet was issued explaining charges.
What are we proposing could change next year?
- Because we estimate costs in advance for the coming year, the actual amount spent is sometimes more or less than we estimated. This means that block/estate/schemes or courts would see surpluses or deficits on their accounts and charges would go up or down the following year to balance it out. Fluctuations in service charge amounts is something that tenants have complained a lot about.
To make service charge costs more consistent every year, we are proposing that all service charges are pooled across all developments at Cairn. This means that the overall cost of these services would be spread over one thousand properties and tenants would experience consistent charges, which would help tenants with household budgeting.
- All service charges, including staff costs, will be at fixed rates, which will provide fairer charges at every location. This means that we will have standard charges for services at all of our developments or courts.
- We will need to change your existing service charge amounts to align them to proposed service charges. This will mean a phased introduction over a number of years to gradually bring in changes, and we are looking for your feedback on this.
- To improve our visibility and accountability on service charges we intend to publish an annual report on all service charge income and expenditure.
- During 2021 we will provide a written statement of services to all tenants detailing what has been provided.
- Contracts will continue to be managed by Cairn and we will continue to make sure that services are procured in line with our procurement policy and they provide value for money.
How to get involved
Please complete our online survey by 4th January 2021.
We are currently unable to hold meetings in person due to coronavirus restrictions, but we will be holding an online video meeting using Microsoft Teams on Wednesday 16th December at 2pm and 6pm.
If you would like to come and find out more from Jordan Henderson (Arneil Johnston) and Derek Adam (Cairn’s Director of Finance and People), then please email email@example.com with the time you would like to attend, and we’ll get a meeting invite out to you. You will have the opportunity to ask questions but if you would rather submit a question in advance please let us know when you email to book your place at the event.