Decision - TV Aerial Installations

To approve the recommendation to tender for a 20 year citywide contract to lease and maintain an IRS (integrated reception system) digital aerial systems with a secondary system for foreign language channels for all HRA blocks with existing communal aerial systems.

1          That the recommendation to tender for a 20 year citywide contract to lease and maintain an IRS (integrated reception system) digital aerial systems with a secondary system for foreign language channels for all HRA blocks with existing communal aerial systems, be approved.

2          That the Director of Adult Social Care & Housing be given delegated powers under CSO 9.1 to approve the award of the contract for the such a system, following financial due diligence and cost comparisons of the tenders offered under an OJEU tendering process, following consultation with the Cabinet Member for Housing.

1          The only system that meets all the government criteria at present is to provide an integrated reception system (IRS) with a secondary system for foreign language channels.  This has the advantage of access to all channels and interactive services, including dual feed recordable satellite signals, e.g. Sky plus, HD and foreign language channels.

2          One alternative to the high capital outlay and to help balance the business plan is to lease the Digital IRS system over 20 years with the cost, which includes maintenance and technology upgrades for the life of the lease, passed to residents as a service charge. This would be little different from the council installing the system and depreciating over time, other than the fact that a leasing company would manage all maintenance calls through a partnership with the council.

            The table below sets out the capital outlay against the leasing option - 20 years based on an IRS with secondary system and dual feed recordable satellite signals, e.g. sky plus. See Appendix A for alternatives

3          The costs of adaptation/ conversion, upgrading or replacing the infrastructure of a communal aerial system that supports free-to-view channels and satellite services are deemed Housing Benefit eligible where levied as a service charge (Schedule 1, paragraph 1(a) (iii)).

4          Landlords should ensure that the money received from tenants who receive Housing Benefit should contribute this to the upgrade of their communal aerial system and be shown separately in the service charge schedule.

5          Paragraph 1(a)(iii) of schedule 2 in the Housing Benefit Regulations were amended in April 2007 to ensure that Housing Benefit service charges relating to the relay of Freeview channels via communal aerial systems continue to be eligible for Housing Benefit. (See JSA Regs, Sch 2, para 16(1)(b); IS (Gen) Regs, Sch 3, para 17(1)(b); SPC Regs, Sch II, para 13(1)(b).)

6          There is no benefit available to assist with any rental or purchase of television equipment, nor for subscription charges or license fee payments. It is the intention that Housing Benefits contribute to a service charge or an increase in service charges and therefore cover the maintenance of the communal aerial system but not the initial capital cost.

7          It would not be appropriate for Housing Benefits to cover the costs of additional pay to view channels i.e. over and above the free-to-view channels that are accessible via digital TV through an aerial (Freeview) or satellite. Additional subscriptions to pay for TV services should be treated in the same way as licence and rental fees.  This includes all cable and broadband services.

            For more information visit the Department for Work and Pensions website: http://www.dwp.gov.uk/publications/dwp/dmg/memletrs/m-10-07.pdf

8          Consultation with residents to date has shown that should the charges be within the estimated levels of £40-45 per annum, it would be an acceptable cost for maximising choice in the TV viewed and to have a maintenance service that responds quickly to breakdowns, freeing the capital outlay needed for other capital works.

Install MATV system to all blocks with a maintenance agreement:

.1         This would give access to Freeview only, giving no choice for other channels or foreign language channels unless residents installed either a satellite dish or Cable TV. The cost of this is estimated at £1.4m (excluding maintenance) and includes recabling as the existing wiring is in a poor condition.

.2         The cost of providing a simple MATV system on a four year programme to all blocks of flats is as follows

3          These costs would need to be depreciated over 20 years reducing the council’s capital outlay enabling us to maximise the council’s capital budgets. These costs do not include any annual service contract which would need to be added to the depreciation to calculate the annual service charge.

            Install IRS to all blocks with a maintenance agreement:

4          While this gives full choice of channels it excludes any diversity by not giving access to foreign language channels. See appendix A for estimated costs.

            Install IRS with secondary system for foreign language channels to all blocks with a maintenance agreement:

5          This meets the government’s and the council’s criteria.  However, as with all options above the capital outlay has not been allowed for in the business plan. See Appendix A for estimated costs

            Lease an IRS with secondary system for 10 or 15 years.

6          Similar to the recommended option but lease for only 10 years. The reason for recommending 20 year is that it allows the leasing company to spread their risk over the life of the installation enabling them to give lower annual costs. Retendering after 10 years could give the benefit of the remaining 10 years life of the equipment to others. See appendix A for estimated cost comparison.

            Capital depreciation

7          In addition to looking at leasing the systems the council have also looked at the possibility of installing the capital part of the all options and then depreciating the cost of the installation over the life of the system, the setting up of a sinking fund to cover the cost of replacing the system in 20 years time. The disadvantage of this is the need for a capital outlay up front and risk of future proofing is covered by the council.

            Other options

8          There are two further options open to the council: the first is Cable (IPTV). Unfortunately, unless Virgin have 75% of residents in a specific block signed up to its’ services they will not install it.  This is a subscription service (pay for view) and would require the council to ask individuals on low incomes to pay for the basic service.

9          The second further option is ‘broadband’. This is suitable for individuals [not sure what this means] but would require everybody in a block to have access via a computer. This is the long term option but presently the infrastructure is missing and it is pay for view at present.