The EU General Data Protection Regulations (GDPR) and Data Protection Bill are the biggest change in Data Protection law in twenty years. The deadline for compliance was set at 25 May 2018. This note seeks to advise our almshouse membership on the changes and accompanies the Almshouse Association data protection policy.

Background

The GDPR is an extension of existing data protection laws. Under the Data Protection Act, you must:

• only collect information that you need for a specific purpose;
• keep it secure;
• ensure it is relevant and up to date;
• only hold as much as you need, and only for as long as you need it; and
• allow the subject of the information to see it on request.

As this is an extension to existing data protection laws, Almshouses should refer to the ICO top five tips on data protection for small and medium sized charities, if they have not already done so. These are:

1. Tell people what you are doing with their data
2. Make sure your staff are adequately trained
3. Use strong passwords
4. Encrypt all portable devices
5. Only keep people’s information as long as necessary

https://ico.org.uk/for-organisations/charity/

If an Almshouse charity already has these principles embedded in the organisation, compliance will be much easier.

EU General Data Protection Regulations

All these regulations will affect almshouse charities to a varying degree, depending on size, number of employees or how advanced their data protection is. The ICO has produced a package of tools aimed at small and micro organisations, including charities

• a guide to the GDPR;
• a getting ready for the GDPR self help checklist;
• a GDPR FAQs document;
• a new advice service helpline for small organisations; and
• a 12 steps to take now graphic

What can my Almshouse Charity do to get ready now?

When reviewing data protection within your Almshouse Charity it is important that you reflect the principles of GDPR.

https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/principles/

These can be simply defined as

1. Transparency – Make it clear to individuals that you intend to hold their data, why you hold their data, how they can access the data (Subject Access Request) and how they can edit or delete their data.
2. Relevancy – The data collected is for a legitimate and relevant reason.
   For example, it would be legitimate to ask for a resident’s next of kin but not for information on additional relatives.
3. Timely – You should hold data for no longer than is necessary and identify why you store for that length of time.For example, you may decide it is appropriate to store a resident’s file for a specified length of time (for example two years) after they have moved into a care home. However you are able to justify the two years because in your experience the care-home usually requests additional information for up to two years.
4. Security – Make sure that personal data is processed, stored and disposed of securely. For example if resident’s records are kept in a filing cabinet, make sure that it is locked. Or if a trustee legitimately stores information about residents on a home computer, which is accessed by other members of their family, that the file is password protected.
5. Accountability – It is important to demonstrate that trustees and staff are aware of their responsibilities to protect individual’s data. For example a trustee may be tasked to have a data protection responsibility and data protection is regularly reviewed at board level.

Conclusion

While data protection may seem intimidating, it is important to view it as a positive concept that can be used to improve processes that are already in place at your almshouse.

Only implement or revise measures that are appropriate to your individual almshouse and be able to justify why you took these decisions.

The ICO are extremely helpful and in conjunction with the Charity Commission have various materials available to assist almshouse charities

https://ico.org.uk/for-organisations/charity/

The ICO have a phone service is aimed at people running small businesses or charities. To access the new service dial the ICO helpline on 0303 123 1113 and select option 4 to be diverted to staff who can offer support.

If you are particularly concerned about compliance you should take professional advice.

Subject: EU General Data Protection Regulations
Date: March 2018, updated July 2018

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Some decades ago a number of almshouse charities became Registered Social Landlords, regulated by the Housing Corporation, in order to apply for social housing grant. The Housing Corporation has been abolished. Its regulatory function was taken over by the Homes and Communities Agency (‘HCA’), and Registered Social Landlords were re-named ‘Registered Providers of social housing’, or ‘Registered Providers’ for short.  In late 2017 the HCA became Homes England (HE) and the regulatory division is now called the Regulator of Social Housing (RSH).

Even if the charity’s original application for social housing grant was refused, the charity remains on the HCA register of Registered Providers unless and until the trustees successfully apply to have it removed.

The gateway page to everything to do with HCA regulation is here: https://www.gov.uk/topic/housing/social-housing-regulation-england

However, the rest of this briefing highlights some points about the key documents you will be able to access from the above web address.

Regulatory Framework

HE has set out the obligations on Registered Providers of social housing in England (‘RPs’) in its Regulatory Framework, the most recent version of which is the April 2015 updated April 2017. The gateway to the Regulatory Framework documents is here: https://www.gov.uk/government/collections/regulatory-framework-requirements

An almshouse charity which is an RP should be complying with these framework documents.[1]

You will see the Framework documents assume that all RPs have tenants who pay rent, which is not true of almshouse residents at common law. Therefore you need to substitute ‘resident’ for tenant, and ‘WMC’ for rent as you read through the Framework documents.

The Framework documents are divided into the so-called ‘Economic Standards’ and the ‘Consumer Standards’. Some of the obligations in the Consumer Standards relate to circumstances which have no good analogy in the almshouse world, eg in relation to residents swapping tenancies with each other.

Target Rent/Formula Rent

This part amplifies and updates the explanation of Formula Rent at paragraph 5.13 of Standards of Almshouse Management.  In this part we will refer to paragraphs of the following Framework documents:

• the April 2015 Rent Standard: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/419203/Rent_Standard_2015.pdf
  
• the April 2015 Rent Standard Guidance: https://www.gov.uk/government/publications/rent-standard-guidance

As a Registered Provider, your charity is subject to the Formula Rent regime (previously known as Target Rent). The formula for Target/Formula Rent is based on:

• The average earnings for the area compared to the national average
• The number of bedrooms in the property
• The value in January 1999
• The national average housing association property value in January 1999.

The current market value of properties in the area is not relevant. The Equivalent Fair Rent is also irrelevant.

The short April 2015 Rent Standard is the Framework document which sets out the basic rules about levels of ‘rent’ which can be charged. The April 2015 Rent Standard Guidance amplifies the Rent Standard. When reading both those documents, bear in mind that:

• All RPs provide ‘low cost rental accommodation’ for the purposes of s.69 Housing and Regeneration Act 2008 (‘HRA 2008’)
• However, ‘low cost rental accommodation’ itself comprises either ‘social rent’ accommodation or the more expensive ‘Affordable Rent’. Your almshouse accommodation will be ‘social rent’, unless it was re-modelled or built within the last few years with the help of a grant from the HCA.

Para 2.2 of the Rent Standard gives the headline rules about levels of ‘rent’. The easier and more helpful read, however, is the April 2015 Rent Standard Guidance, in particular:

• part 3 about ‘social rent’ accommodation
• appendices 1 – 2b on the detail of how to calculate Target/Formula Rent for a particular social rent dwelling with a worked example.

In a nutshell, some years ago it was thought desirable that Registered Providers should be able to charge higher rents to ensure they remained financially viable, but not so much that they became unaffordable for social housing tenants. The government therefore came up with the concept of Target/Formula Rent and, to avoid residents facing steep rent increases, gave all RPs a ten year window within which to increase up to Target/Formula Rent. Unfortunately that window expired in 2012. The default now is that wherever your charity’s WMC was set at the end of that window, even if you had not yet climbed as high as your Target/Formula Rent, thereafter you were only allowed to increase by a certain percentage per year.  For the year starting April 2018, that percentage is CPI+1% which works out at 4% overall. (The CPI figure is taken from the September figure of the previous year).

As you will be aware, the Association obtained full exemption from the rule in the Welfare Reform Act 2016 that Registered Providers must actually reduce ‘rent’ by 1% a year for four years.

FAQS

Are you sure the charity is a Registered Provider? Our trustees have never applied for social housing grant.

Unfortunately the application may have been made decades ago by previous trustees and your charity is likely to have stayed on the register even if the application for grant was refused.  However, you can double-check by looking for your charity’s name in the HCA’s up to date list of Registered Providers, accessible at: https://www.gov.uk/government/publications/current-registered-providers-of-social-housing

The list will also tell you the year in which your charity became a Registered Provider.

We didn’t realise about Target Rent and we think we may sometimes have increased WMC by a little more than CPI + 1% per year. Should we worry?

In our experience, small almshouse charities in these circumstances are typically charging below Target Rent, sometimes significantly below. Any technical breach of the Rent Standard you may have committed is likely to be trivial. While we cannot guarantee what the RSH would do if they became aware of the facts in this FAQ, we know that they are keen to take a proportionate approach to regulation. We doubt they would take any action beyond asking the trustees for assurance that they now understood their obligations about levels of WMC.

How do we go about working out the Formula/Target Rent for our dwellings?

Simply ask a local property valuer to calculate it for you, directing them to the webpage above where they can find the detailed formula and worked example calculation. You will see the formula involves them valuing the dwellings at the value they would have been in January 1999 if they had been on the open market, instead of being owned by an almshouse charity.

We are now interested in applying to the HCA to cease being a Registered Provider. Can you help?

Yes. We have provided detailed, step-by-step guidance and advice in the form of a number of documents in the members’ login area of our website, each with ‘De-Registration Toolkit:…’ included in the title. Please start with the document called ‘De-Registration Toolkit: Start Here’

I can’t access the members’ login area and/or can’t remember my password

Any trustee and clerk of a member charity can register in his or her own right to access the Members’ Login area of our website and we would encourage everyone to do so. If you have not previously registered to access the Members’ Login area, or your login no longer seems to be working because you have not used it recently or cannot remember the password you chose, you need to apply to register (which is free provided your charity has paid its annual subscription to the Almshouse Association for the current year). Registration applications can take up to 3 working days to turn around due to the pattern of staff working days, but after that you should have no difficulty in accessing the documents in the Members’ Login area.

To apply to register, go to the following web address, click on ‘To Register’, then complete and submit the form which pops up:  http://www.almshouses.org

To complete the form:

• you will need your Almshouse Association membership number beginning M…(not your registered charity number), which appears on the most recent subscription request from the Association.
• you will also need to choose a password. Please remember the password you choose, because our system does not keep a record of it. If you forget it, you can always re-register but as explained above that can take a few working days to process.

© The Almshouse Association

Reviewed February 2018

[1] Surprisingly, a charity which is an RP counts as a ‘private registered provider’ for the purposes of the Framework, or more specifically a ‘private not-for-profit registered provider’. The contrast is with public bodies.

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Since 2007 there have been changes to Powers of Attorney.  There are now two types.

Many readers will be familiar with Enduring Powers of Attorney which allowed you to appoint one or more attorneys to look after your financial affairs.  An Enduring Power of Attorney could be made effective immediately but it was quite common for a restriction to be included to say that the power would only be operative if you actually become mentally incapable.

Whilst Enduring Powers of Attorney were quick and easy to set up, they only covered your financial affairs. In addition, the Government and Law Commission felt there was evidence to suggest that some attorneys were abusing their powers.  Following extensive consultation, the Mental Capacity Act was passed in 2005.  As from 1 October 2007, it has no longer been possible to sign Enduring Powers of Attorney although Enduring Powers of Attorney signed before that date still remain perfectly valid.  We now have Lasting Powers of Attorney, of which there are two types: a Property and Affairs Lasting Power of Attorney covers your finances in the same way as Enduring Powers of Attorney; a Personal Welfare Lasting Power of Attorney allows you to appoint one or more attorneys to look after your personal welfare.  This includes decisions about where you are to live and what clothes you are to have.  It is also possible to give your attorneys power to give or refuse consent to life sustaining treatment of your behalf.

You can sign both or either Lasting Powers of Attorney, according to your wishes.  As with Enduring Powers of Attorney, a restriction can be included within a Property and Affairs Lasting Power of Attorney to say that the document will only become operative if you actually become mentally incapable.  A Personal Welfare Lasting Power of Attorney will only ever become operative if you can no longer make personal welfare decisions yourself.  This means that, while you have capacity, it will be your decision, and not your attorneys’, as to whether or not you are to receive life sustaining treatment.

Under the new regime, a Lasting Power of Attorney can only be used when it has been registered with the Office of the Public Guardian.  When Lasting Power of Attorney were first introduced, at least one other person had to be notified that the Lasting Power of Attorney had been signed.  This requirement has now been abolished so that notification is optional.  If, however, you do decide you would like people to be notified that you have signed a Lasting Power of Attorney, they will still need to be notified when you apply to register your Lasting Power of Attorney with the Office of the Public Guardian.

Once you and the certificate provider have signed the Lasting Power of Attorney, it must be signed by all the attorneys.  The registration process can then take up to two months and there is a fee of £82 for each Lasting Power of Attorney registered.

For those of you who signed an Enduring Power of Attorney before the deadline of 1 October 2007, there is no need to sign a Property and Affairs Lasting Power of Attorney.  You may, however, wish to consider signing a Personal Welfare Lasting Power of Attorney.  Both Lasting Powers of Attorney have space for you to give guidance to your attorneys about the way in which they are to exercise their powers. In a Personal Welfare Lasting Power of Attorney, this guidance may include the circumstances under which you do not want to be resuscitated if you are terminally ill.

Although Lasting Powers of Attorney are more complex documents than Enduring Powers of Attorney, they are still very much to be encouraged. In particular, a Property and Affairs Lasting Power of Attorney will avoid the considerable costs and delays and annual fees which will be incurred in the Court of Protection if you lose your mental capacity and have not signed a Power of Attorney to cover the situation.

…………………………………………………………………………………………………………

This article was written by Alexander Astley of Gullands Solicitors, Maidstone, Kent was updated on 23 January 2018.

Gullands solicitors can be contacted by Tel: 01622 678341 or by Email: a.astley@gullands.com

The firm has a dedicated charity law section.  Please contact Blair Gulland at b.gulland@gullands.com

for more information.

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Do opportunities exist for almshouse charities to gain exemption from VAT on certain costs?

Although the withdrawal of zero-rating for listed building works in 2012 resulted in fewer VAT saving areas, the good news is there are a number of opportunities where Almshouses can reduce their VAT costs, provided they are aware of when the zero-rating and reduced rate of VAT applies.

The following building works are likely to be zero-rated for VAT purposes:

• The installation of wet rooms or bathrooms for disabled residents
• The widening of corridors or doorways in Almshouse properties
• The construction of ramps
• The widening of a pathway across the Almshouse grounds
• The installation of a vertical lift, chair lift or stair lift
• The installation of a warden call system

If any charities have incurred VAT on any of the above expenditure within the last four years, it is possible to approach the supplier, providing they are still in business, and seek a refund of the VAT charged.

Zero-rating can also apply to expenditure which is closely connected with the above works such as repairs, refurbishment or servicing to the lifts, warden call system and works to almshouse bathrooms.

Should any charities change the number of units within their properties, perhaps by reducing the number of flats within a building, the associated building works could well qualify for the reduced rate of 5% VAT.

If an almshouse charity has any property which has been empty for over two years and decides to refurbish the property, the VAT rate applicable to the work will again be at the reduced rate of 5%, quite a considerable saving.

The reduced rate of VAT can also apply to a number of energy saving costs, but unfortunately the legislation is much more complicated. The energy saving materials that may qualify for the reduced rate of VAT of 5% when installed by a building contractor are:

1. The insulation for walls, floors, ceilings, roofs, lofts, water tanks, pipes and other plumbing fittings;
2. Draught stripping for windows and doors;
3. Central heating system controls, including thermostatic radiator valves;
4. Hot water system controls; and
5. Solar panels

Should an almshouse charity receive a grant for the installation of certain heating equipment, the reduced rate of 5% will apply to the extent that the supply is grant-funded. The type of expenditure covered is as follows:

• Closed solid fuel fire cassettes;
• Electric dual immersion water heaters with factory-insulated hot water tanks;
• Electric storage heaters;
• Gas fired boilers;
• Gas room heaters with thermostatic controls;
• Oil-fired boilers; and
• Radiators
• Central heating systems
• Renewable source heating systems

The irony here is the reduced rate only applies to the grant funded portion of the works and should the charity use its own funds the work will attract the standard 20% rate of VAT.

Advertising by charities is zero-rated and covers all forms of adverts including newspapers, magazines, radio and television.

Finally, it is worth mentioning that for all almshouse charities’ residential accommodation, the reduced rate of 5% applies to supplies of electricity, gas and oil used for heating and lighting.

The aim of this article is to provide charity Trustees and staff with information to assist with reviewing past expenditure which may qualify for the reduced rate or zero-rate of VAT. If it is found the standard rate of VAT has been charged to the almshouse charity on any of the areas outlined above, an opportunity may be available to seek a retrospective refund of VAT.

Charities VAT Services offer a free VAT help-line for members of the Almshouse Association. Therefore if you require confirmation on whether VAT reliefs exist in connection with any of the expenditure areas highlighted above, please do not hesitate to contact us.

Glenn Havenhand, Lorraine Kimpton – Charities VAT Services. Member of the Panel of Consultants of the Almshouse Association. Tel: 01709 709727. Email: glenn.havenhand3@btopenworld.com

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All housing organisations including almshouses will have insurance for buildings, offices, loss of rent and other risks but often the sum insured is not reviewed and the insurance cover continues from year to year with perhaps a small allowance made for inflation. Whilst this is not given much thought by some, it is important to review the insured figure for a number of reasons:

1. If the worst were to happen and the building burnt down, the sum insured could turn out to be inadequate to cover the cost of rebuilding the property. If this is the case the insurers will not pay the full costs required to reinstate the building. They are likely to apply an average whereby the amount of the claim is reduced proportionally to the value of underinsurance.

2. Conversely the sum insured could be higher than that actually required meaning that the premium paid could be greater than necessary, this could also serve to unnecessarily increase residents’ contributions or service charges.

3. Recent trends in building prices have shown drastic fluctuations and, depending on when the insured level was last set, the rebuilding figure could have significantly changed.

Who should set the level insured?

The person responsible for insuring the building will vary but will usually be the property owner (or managing agents where appointed), they may also be responsible for setting an appropriate level of cover. Insurance brokers will sometimes assist with the level of insurance but this is not usually the case.

Many domestic insurance policies aimed at the private householder market now offer unlimited rebuild costs up to a defined limit such as £1,000,000. This is rarely the case with policies taken out by housing organisations, which have set amounts for rebuilding included in the Schedule of Insurance.

Why does the figure need to be reviewed?

The BCIS (Building Cost Information Service) part of the Royal Institution of Chartered Surveyors, publishes regular indices of tender prices for a large range of building types. These show that tenders for new building work rose fairly consistently from the mid 1990’s until the 4^th quarter of 2007, following this it fell by 17% up to the 1^st quarter of 2010 and then increased again peaking in the 1^st quarter of 2015. So if the rebuilding sum was set at the time of any of these extremes it could now be wildly out of date. For example between the 1^st quarter of 2010 and the 1^st quarter of 2015 building costs increased by 33%!

Who should do the assessment?

The Royal Institution of Chartered Surveyors suggests using the name “Insurance Reinstatement Cost Assessment” to avoid confusion with other types of valuation or survey and defines it as an ‘assessment of building reinstatement cost for insurance purposes’. The assessment is usually carried out by a Chartered Building Surveyor either on an elemental basis or by application of a rate per square metre, typically using BCIS rates.

On particularly complex historic buildings a more detailed approach may be needed and in extreme cases production of approximate quantities by a Quantity Surveyor may be the only viable approach, involvement of an Accredited Conservationist may also be useful.

The Assessment also includes the costs of demolition, professional fees, and Local Authority charges for Planning and Building Regulations. There will be a fee to be paid to the surveyor, but the landlord can recover this cost as part of normal service charges.

What should the building be insured for?

The building must be insured to cover the full cost of demolition and rebuilding together with any other allowances required by the lease terms. Insurance policies and leases should checked to establish what is included in the cover. This may cover alternative accommodation for the tenants, the way in which VAT is covered also varies and these matters should be clarified with the insurance company or broker.

Many almshouses are listed or in conservation areas, this adds additional costs to rebuilding, as do original features such as stonework and leaded lights all of which must be taken into account in the assessment.

The RCA makes no allowance for anything other than the rebuilding cost.

An example of the application of a Reinstatement Cost Assessment

Assessments were carried out on two blocks of flats owned by a Midlands Housing Association. The first block was built in the 1970s and the second in the 1980s. Both were insured for figures set some time ago, probably based on the cost of construction at the time they were built. Assessments were made using costs per square metre based on BCIS rates and including allowances for demolition, rebuilding, landscaping, professional fees and local authority charges.

Block 1 was found to be underinsured by £300,000 – a considerable sum and one which would be difficult to cover from the association’s reserves should a total loss have occurred. By way of a contrast Block 2 was found to be over insured by a figure of £220,000.  In this case the overall impact on the organisation was minimal as the cost saving on the Block 2 went some way to cover the additional costs of the premium on Block 1, however, the assessment was invaluable as it highlighted the potential shortfall which was a considerable hidden risk to the association.

Conclusion

The Royal Institution of Chartered Surveyors recommends that an annual adjustment is made to take into account inflation (important to remember that this is building cost inflation and not general prices inflation) and a full review and reassessment every three years or when any extensions or significant alterations are made.

There are a number of Building Surveyors experienced in this type of work on the Almshouse Association Panel of Consultants.

Tim Richardson MCIAT MCIOB MSAI MRICS
Chartered Architectural Technologist, Chartered Construction Manager, Chartered Building Surveyor, CIAT-Accredited Conservationist and Member of the Association’s Panel of Consultants.

Contact details:51 Derwent Road, Stirchley, Birmingham  B30 2UY

Email: tim@timothyrichardson.co.uk

Tel: 0121 471 1478  Mobile: 07500 185203

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Employees who are off sick can have a significant impact on productivity, the ability to run services and/or the business in general.  Prolonged periods of sickness absence can also negatively impact staff motivation and morale.

While it may be difficult to plan for unexpected absences, as an employer there are steps you can take to help you deal with the problem and minimise the potential disruption.

Step 1:  Clear Policies and Procedures
You should have a clear policy on sickness absence reporting and pay arrangements. These should be clearly communicated to all a staff so that policy and procedure can be followed consistently.  Your sickness absence policy should include:

• Details of how an employee should notify you if they will be late for work, they will be absent from work due to illness, or absent for any other reason.
• When they should submit a self-certification form or a medical certificate.
• Statutory and contractual sick pay arrangements – this should be covered in the written statement of terms and conditions of employment(employment contract).
• When time off might be permitted, e.g time off for emergencies involving dependents, jury service etc
• The consequences of not complying with company policy

Many organisations as a standard management activity conduct a return to work interview.  This should be completed upon their return to work and can range from a discussion on what has happened during their time off, even if only a day, to questions that might establish whether there is an underlying problem that is contributing to their absence. This approach can also deter employees from faking illness.

Step 2:  Monitor and Measure Absence

The national average for the number of sick days of absence per employee is approximately 5 days per year.  This is a good standard to benchmark your employees against.   Tracking the particular days of the week, the amount of days and the reason can help identify patterns in not just individual employees but also departments. Trends to look for are particular days of the week, or patterns linked to time of year , management style, possible bullying or poor working conditions.

Step 3:  Support Sick Employees

Maintaining regular contact with an absent employee will help prevent them from feeling isolated, whilst providing you with a clearer idea of their current situation.  Gaining an employee’s permission to access their medical reports and working with an occupational health specialist can provide an indication of how prolonged the illness is likely to be. This method can be used for both employees who are on long term sickness absence, and also those who have accumulated a number of days of absence over a period of time.  This method can identify whether their illness could be considered a disability and if so whether there are any reasonable adjustments that can be made to support them returning to work.

It is important to ensure that all cases of sickness absence are handled sensitively, even if the genuineness of the absence is in question.

Step 4:  Focus on Morale

Creating a friendly environment where staff feel valued as part of a team, are clear on their job role, goals and targets;  and where flexible, family friendly policies are in place is likely to prove effective in keeping absenteeism to a minimum. Unhappy staff are more likely to take time off.

This article was written by Judi Badenoch, an HR Consultant and Panel member of the Association.

For further advice please contact:
Ms Judi Badenoch
Cranbrook Consulting
Room 346, 5 High Street, Maidenhead, Berkshire,SL6 1JN
Tel: 01628 857771, Mob: 07979 421325
judi@cranbrookconsulting.co.uk
www.cranbrookconsulting.co.uk

Reviewed February 2018

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