Asset Management Strategy
2012/17
Document Tracking
Name of Document:
Strategy: X
Framework:
Policy:
Procedure:
Author & Department:
Date Approved by Exec:
John Bowker – Director of Assets
&
Paul Webb – Business Manager
Sustainability & Investment
Date Approved
by Board /
Committee:
January 2012
Version:
2
Dates of
Previous
Versions:
January 2009
Review Date:
January 2017
Filepath:
1.0
Overview / Introduction
This document sets out Six Town Housing’s Asset Management Strategy for the
next five years taking into account our current stock condition data, the level of
investment to date and our plans and aspirations for the future. The strategy
itself is set against a 30 year investment plan which will be an integral part of the
overall HRA business plan going forward.
The strategy will be instrumental in the achievement of the organisation’s overall
vision and aims along with our strategic priorities to:




Provide homes for the future
Create neighbourhoods to be proud of
Put customers first
Be a dynamic business
As a significant proportion of the company resources will be channelled into the
asset management of our stock, it is vital that this is delivered and managed in
the most effective way to ensure that we maximise the physical, social and
economic benefits that this investment can bring to our stock, tenants and
neighbourhoods. The strategy therefore aims to ensure that this is the case
through the achievement of high level asset management objectives which have
been set in conjunction with our customers and Board as highlighted in the
following sections.
2.0
Overall Aim of Strategy
The overall aim of this strategy links directly to our Business Plan priorities to
provide homes for the future and neighbourhoods to be proud of. The aim is
therefore to:
‘Provide well maintained, energy efficient homes and neighbourhoods that meet
the needs of our current and future customers through sustainable investment’
3.0
Key Objectives of Strategy
In order to achieve the above aim, the following 9 objectives have been
developed which will form the basis of our delivery plan. These objectives have
been agreed through consultation with Board and our customers:

To improve our stock beyond the decency standard and essential renewal
requirements;

To support our most vulnerable customers through targeted investment;

To improve the look and feel of our Neighbourhoods;
1
4.0

To maximise the use of our existing stock;

To increase the supply of affordable housing in the Borough;

To increase Six Town Housing’s own asset base;

To generate a financial return from our investment which can be used to
reinvest in our stock and neighbourhoods; and

To reduce the organisation’s carbon footprint and improve the environmental
performance of our homes and neighbourhoods.

To ensure Value for Money across all asset management functions and
services.
Current Stock Profile and Condition
The housing stock of Bury MBC was 8,228 properties as at 1st April 2011. The
stock is largely comprised of low-rise dwellings of traditional construction. There
are 2,954 low rise flats and 152 non-traditional houses and bungalows. The
stock is ageing with almost 40% dating from the pre-war period and with a further
35% dating from post-war to mid sixties.
Composition of Bury Council Housing Stock by Property Type
Property Type
No.
of % of Housing
Properties Stock
1945-64 Traditional Large Terrace/Semi/Detached
975
11.9
1945-64 Traditional Small Terrace Houses
82
1.0
All other Pre 45 Traditional Houses
1092
13.3
Bungalows
810
9.8
Medium Rise
409
5.0
Non Traditional House
152
1.8
Post 45 Low rise & Multi Occupied
2441
29.7
Pre 45 Low rise & Multi Occupied
513
6.2
Pre 45 Traditional Semi
1401
17.0
Pre 45 Traditional Small Terrace House
82
1.0
Traditional House 1965-74
147
1.8
Traditional House Post 1974
124
1.5
Total
8228
100
316 of the above properties are currently managed by Springs TMO and these
are subject to an option appraisal exercise that may lead to this stock becoming
subject to a small scale stock transfer. In addition to this stock there are 289
leaseholders of flats to which STH delivers a leasehold service.
2
The projected stock numbers from 2011/12 to 2017 are shown below.
(figures are at 1st April in each financial year)
Year
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
Total stock
at start of
financial
year
8,228
8,190
8,158
8,121
8,079
8,036
Disposal
/ Right
Demolition/
Buys
Conversion
26
-
12
32
37
42
43
44
To Total
anticipated
stock losses
38
32
37
42
43
44
The disposals in 2011/12 refer to the remaining Sheltered properties that were
approved for disposal/redevelopment but which were not empty at the start of the
financial year.
The Right to Buy (RTB) assumptions for 2012/13 onwards are based on the
levels assumed by the government in the HRA self-financing valuation and are
significantly higher than current activity would suggest. The government is
proposing changes to the discounts available under RTB (DCLG consultation
paper - Reinvigorating the Right to Buy and one for one replacement) and the
impact of these proposals is currently being assessed.
Over the last six years we have gathered detailed condition information on our
stock. We are now in a position whereby 80% of our stock has been surveyed
and this provides us with robust and accurate information to base our investment
plan on.
Our key focus since the ALMO was created was to ensure all our stock met the
government’s decent homes standard by December 2010 and this milestone was
achieved. We have sustained our stock at 100% decency levels since then. In
order to achieve this we have replaced the following number of components
within our stock:





1475 bathroom refurbishments
1648 kitchen refurbishments
2284 properties re-roofed including soffits, fascias and rainwater goods
2754 boiler replacements
2176 full central heating systems
In addition our investment programme to date has included environmental works
such as hard landscaping, off road parking and fencing as well as statutory
compliance works such as asbestos removal and fire safety works.
3
Aside from our general housing stock we also manage 41 shops on a repairing
lease basis and manage a number of garage colonies across the borough.
A key focus of the organisation over the last 6 years has also been to improve
the energy efficiency of our stock in which we have made significant progress.
The energy performance of our stock has been measured against the SAP2005
energy ratings and is summarised in the table below:
Property Type
45-64
Traditional
Large
Terrace/Semi/Detached
46-64 Traditional Small Terrace House
All other Pre 45 Traditional Houses
Bungalows
Medium Rise
No Traditional House
Post 45 Low rise & Multi Occupied
Pre 45 Low rise & Multi Occupied
Pre 45 Traditional Semi
Pre 45 Traditional Small Terrance House
Traditional House 1965-74
Traditional House Post 1974
Average
Current SAP Rating
69
68
68
75
70
66
73
75
68
70
59
70
70
The table above illustrates the current SAP ratings by property archetype. This
represents a step increase of 8 points from an average SAP rating of 62 in 2006.
This is a direct result of our targeted investment to date.
The table below shows the number of homes in each of the energy performance
bands used as part of the Energy Performance Certification rating.
EPC bandings December 2011
Band
A
B
C
D
E
F
G
No. of Properties
2
354
5381
2280
193
17
1
% of Properties
0.02
4.30
65.40
27.71 2.35
0.21
0.01
The most energy efficient homes are those that sit within energy bandings A-C
so the aim is therefore to increase the number of properties that fall within these
bandings.
4
Within 2012/13 we will be securing our first assets as a company with the
development of a 40 unit extra care scheme at Red Bank, Radcliffe. We are also
aiming to purchase 11 homes through the government’s mortgage rescue
scheme and have bid for funds to bring 15 empty homes back into use.
Whilst our stock has benefitted from significant investment over the last 6 years
and is in generally good condition, we are however faced with considerable
investment issues over the forthcoming years as is discussed further in the
following section.
5.0
Current Investment Issues
There are a number of investment issues that we currently face in relation to the
asset management of our stock and neighbourhoods. These were reported to
Board in September and can be summarised as follows:
Decent Homes Standard
As highlighted earlier, all our stock currently meets the government’s decent
homes standard, however this standard is relatively low. The expected life
cycles of components are significant and the standard requires two or more
failures for a property to become non decent. At STH’s inception in 2005 around
30% of the housing stock was non decent which led to the bulk of our investment
programme since then being channelled into making these homes decent. As
such around 70% of our stock has not benefitted from major investment since
2005. This is often a key source of dissatisfaction amongst our customers as
they find it difficult to understand why other properties have been improved when
their property has not. This is an area that we will look to address through our
asset management strategy going forward as part of a new Bury Standard.
Adaptations
The demand for adaptations to our stock continues to increase. In previous
years the demand has outweighed the resource which has meant that cases
have had to be held back until the following financial year. This is a recognised
national problem as people are living longer and choose to remain in their own
home. As part of the Housing Revenue Account reforms the government have
recognised this and have included an assumed allowance of £60 per property
within their offer. This equates to £495,000 per anum for Bury and this would be
sufficient to meet the current demand for adaptations in our stock and address
any backlog from 2011/12.
Sheltered Accommodation
Following the completion of the Council’s sheltered housing review last year,
three existing sheltered schemes (Elton Square, Wesley House and St Marys
5
Court) were closed and four schemes which had previously been mothballed to
new lets (Harwood House, Taylor House, Clarkshill and Mosses House) were
made available for new lets once more. As such the closed units were taken out
of our stock model and an active marketing plan was put into place for the
remaining schemes. Low level aesthetic works were carried out to these
schemes through our repairs team and we have had significant success in letting
the empty units. More fundamental capital works are required to our sheltered
schemes over the life of the investment plan in terms of essential replacements
and statutory compliance works.
There is still however uncertainty over the long term future of the four schemes
mentioned above as the Council review suggests that the schemes have a future
no longer than 2025. Any significant spend on these schemes therefore needs to
be considered against the fact that the schemes may not have a long term future.
Physical Environment
Investment in the physical environment of our neighbourhoods has been limited
over the last six years as the decent homes standard did not cover works outside
the fabric of the home. Whilst we have carried out ad hoc fencing and off road
parking schemes, the majority of our neighbourhoods have not benefitted from
environmental improvements. As such the look and feel of our neighbourhoods
is adversely affected by the appearance of the physical environment and this has
led to a level of criticism over recent months. Our asset management strategy
should therefore explore ways to address this issue within our neighbourhoods
over the forthcoming years.
Energy Efficiency Low Carbon
Whilst the thermal comfort of our homes was considered as part of the decent
homes standard, this standard does not go far enough in tackling the required
reductions in carbon emissions, energy usage, fuel poverty or reducing fuel bills
for our tenants. The government has committed the UK to a legally binding
reduction in green house gases of at least 80% by 2050 with a waypoint of 34%
by 2020 and housing will need to play a key part in the achievement of these
targets. Furthermore as energy prices rise, the number of our tenants in fuel
poverty continues to increase which is a worrying trend when considering this in
addition to the impact of welfare reforms.
As such significant investment is required to considerably improve the energy
performance of our homes and reduce the organisation’s carbon footprint. There
are however opportunities to secure external funding to offset the cost through a
range of national energy efficiency and carbon reduction initiatives such as
Green Deal, Energy Company Obligation (ECO), Renewable Heart Incentive etc.
Furthermore the opportunity is still there to explore opportunities to introduce
renewable technology which takes advantage of the Feed in Tariff despite the
6
fact that the rate has reduced. Our strategy therefore needs to ensure that
energy efficiency remains a key priority for the organisation and that we
maximise the available opportunities.
New Build
One of our key strategic objectives is to increase the supply of affordable housing
within the Borough and one way of doing this is to build more homes. There is
massive demand for affordable housing in Bury with over 3000 people currently
on the Council’s waiting list so the need for new homes is significant. We have
had some success over recent years with our first new build scheme, Red Bank
currently on site. This will provide 40 Extra Care units in Radcliffe to meet the
needs of Bury’s older population. We have also secured grant for 34 new family
homes through St Vincents Housing Association which will be built over the next
3 years. However the need for more affordable homes remains based on the
significant shortage within the Borough. Our strategy therefore must ensure that
we continue to explore options to build more homes in our own right and/or in
partnership with others.
Empty Properties / Property Purchases
Bringing empty homes back into use is high on the agenda as thousands of
homes are empty across the country despite there being a massive shortage of
housing. In Bury this is a particular problem as there are over 3000 empty
homes across the Borough, 2000 of which have been empty for over 2 years. It
is therefore a key Council priority to bring as many of these properties back into
use and we therefore need to consider how our strategy can assist in this aim
and benefit our own communities. A bid to bring 15 ex right to buy properties has
been submitted to the Homes and Communities Agency as a start, but more will
need to be done over the forthcoming years if we are to make a significant
impact.
Non Housing Assets
Aside from our general housing stock we also manage a number of garage
colonies across the Borough. The garage sites have been under review for
some time and the outcome of this review is likely to suggest alternate used in
some cases and highlight popular sites which may require investment. We also
manage 41 shops on a repair and lease basis. We are responsible for the
external fabric of the building and as such the shops will require low level
investment over the life of our business plan.
As can be seen from the above we are faced with a range of varied investment
issues each of which relate directly to the objectives set out in Section 3. As
such our strategy will need to ensure that these investment issues are addressed
7
appropriately through the achievement of the objectives set. This will be covered
under Section 7.
6.0
Stakeholder Consultation
In order to develop this strategy, feedback was gained in a variety of ways to
ensure that a balanced view was gathered through effective consultation. As
such feedback was gathered through the following methods:





Customer Survey – sent to all our key customer groups i.e. TRA’s, Home
View Group, BME Group, Young View Group and Leaseholder Group
Customer Stakeholder Event – held in November 2011
Board Member Workshop – held in October 2011
General feedback from regular customer feedback and learning from
complaints.
General feedback from Council member enquiries.
The feedback from the above was reported to Board in November 2011 and the
joint Council/STH Housing Strategy Programme Board in January 2012, where
the key investment priorities were determined and approval was given to further
develop the options to determine our overall strategy.
When summarising the feedback gained from the above, it is clear that the
internal condition of the homes we manage remains the key priority for our
customers. Customers who had not yet benefited from improvements remain
dissatisfied with the condition of the key components within their homes.
Unsurprisingly their priorities for investment are kitchens, bathrooms, heating and
external doors. Customers feel that the decent homes standard is too low and
that the life cycles for key components are too long as can be seen below when
assessing the decent homes standard requirements against the views of our
customers:
Decency Standard Life Cycles
Kitchen
20 Years
Bathroom
30 Years
Roof
50 Years
Windows / Doors 30 Years
Heating
15 Years
Average Customer Life Cycles
Kitchen
15 Years
Bathroom
20 Years
Roof
46 Years
Windows / Doors 24 Years
Heating
15 Years
Interestingly customers also ranked energy efficiency as their number one priority
at our event in November. It is clear therefore that the effects of rising energy
prices as well as general cost of living increases is a key consideration for
customers which highlights the need for investment in this area.
Aside from the internal condition of the homes, the feedback gained from Board
and our stakeholders also highlighted the appetite for investment in other areas
8
such as environmental works, empty properties / property purchases and new
build.
Overall this consultation highlighted the need to prioritise our future investment
into the key components of our stock to ensure that all properties reach a
standard that meet our customer expectations. It also highlighted the need to
invest in energy and the environment as well as seeking ways to increase the
supply of affordable housing in the Borough. Section 7 of this report will
therefore outline how we intend to deliver this going forward.
7.0
Investment Proposals
When considering the investment issues highlighted in Section 4 along with the
consultation feedback highlighted in Section 6, it is proposed that our future
investment requirements are split over 4 distinct levels as highlighted below:
Level 1 – Ensure all homes remain decent; Carry out essential component
replacement and statutory work; Deliver public sector adaptations
In essence this level would provide the same standard of investment that we
currently provide to our stock and would therefore include the following works:

Essential Component Replacements – our stock condition database indicates
when components are due to be replaced based on age and condition. This
includes internal and external works which in turn ensures that our stock is
sustained going forward.

Statutory Requirements – this includes statutory compliance works such as
DDA works to communal areas, electrical works to meet current regulations,
fire safety works and asbestos removal, e.g. to sheltered schemes.

Decent Homes Compliance – The cycle of improvements based on the stock
condition information would ensure that our stock continues to meet the
decent homes standard. As stated earlier this sets a minimum standard for
our stock.
Level 2 – Ensure all homes meet new Bury Standard
It is clear from customer feedback that the current decent homes standard falls
short of their expectations. As such this level proposes a new Bury standard
which goes beyond the decent homes standard for every property as follows:



Kitchen – No older than 15 years old and in reasonable condition
Bathroom – No older than 20 years and in reasonable condition
Heating – Modern and full central heating system in all rooms with a boiler no
older than 15 years
9




Windows and External Doors – Thermally efficient, secure and no older than
25 years
Roof – No older than 50 years and in reasonable condition
Fencing – Secure and in good condition (unless open plan)
Thermally efficient – All properties to meet Band C SAP Energy Rating
Level 3 – Improve the Physical Environment
This level would provide investment in the physical environment of our
neighbourhoods thus improving the look and feel of areas. Items covered under
this level would include:








Large scale fencing replacements
Off road parking
External lighting
Improved open spaces / derelict land
Improvement to the aesthetic appearance of stock
Creation / improvement of community gardens and play areas
Providing recycling / composting facilities
Improvements to garage colonies
As can be seen this level would make a big impact on the look and feel of our
neighbourhoods.
Level 4 – Invest to Return Projects / Initiatives
This level would include the investment in other areas outside of our current
stock requirements set out within the previous levels. Items included in this level
have the ability to bring in income to offset or pay back the initial investment.
This would include the following:

Large scale energy efficiency works - such as the investment in renewable
technology that would benefit from the feed in tariff or renewable heat
incentive for example.

New Build - using available resources / headroom to offset loan requirements
required to build new homes which will be paid back through new rental
income.

Empty Properties / Property Purchases – bringing empty homes back into use
or purchasing new properties utilising funds / headroom which will paid back
through new rents.
These levels are in order of priority and the cost of each is provided in the
following section. The overall aim is to deliver all four levels through this strategy
as the delivery of works across all four levels would meet each of the investment
10
issues highlighted in Section 5. Options to determine the affordability of these
levels is therefore a primary task within the Asset Management Action Plan.
The high level actions therefore to take the strategy forward are highlighted
below against each of the objectives listed in Section 3.

To improve our stock beyond the decency standard and essential
renewal requirements;
 Explore options to determine the affordability of Levels 1 & 2 of the
proposed investment plan.
 Finalise new Bury Standard once affordability has been determined
 Develop 5 year programme which meets new Bury Standard.
 Promote the standard internally and externally to highlight the positive
message.
 Seek customers’ views on new standard and review annually.

To support
investment;
our
most
vulnerable
customers
through
targeted
 Deliver public sector adaptations to our tenants to meet the demand.
 Reduce the average time taken to deliver adaptations to our stock.
 Determine which tenants are in fuel poverty and channel time and
investment into addressing this.
 Develop sheltered housing improvement programme based on latest
stock condition information and local knowledge.
 Continue to deliver training and local employment initiatives through
the investment programme.

To improve the look and feel of our Neighbourhoods;
 Explore options to determine the affordability of Level 3 of the
proposed investment plan.
 Determine sustainability levels for each neighbourhood based on
agreed indicators / measures.
 Seek ways to improve the sustainability rating of each neighbourhood
through targeted intervention.
 Develop ‘look and feel’ scores for each neighbourhood
 Determine and deliver environmental work programmes based on
intelligence gathered through integrated neighbourhood teams.

To maximise the use of our existing stock;
 Reduce the number of void properties and improve the average time
taken to let properties.
 Ensure all sheltered properties are let in full thus maximising income.
11
 Determine demand levels for all stock types based on outcome of
Housing Needs Survey.
 Consider longer term asset management implications in terms of
estate remodelling and/or stock rationalisation.

To increase the supply of affordable housing in the Borough;





Deliver first new build scheme, Red Bank
Oversee development of 34 homes being built through St Vincents.
Explore ways to bring more empty properties back into use.
Develop options to continue to build more homes within the Borough
in our own right or in partnership with others.
To increase Six Town Housing’s own asset base;
 Ensure our financial management systems and processes are
equipped to manage our own assets.
 Determine options to build new homes in our own right without grant.
 Explore options to purchase stock within the Borough taking
advantage of external opportunities such as mortgage rescue and
empty properties funding.

To generate a financial return from our investment which can be used
to reinvest in our stock and neighbourhoods;
 Develop in house business case model / financial appraisal that
enables the viability of new investment opportunities to be assessed.
 Maximise opportunities to lever in external funding to support our
investment plans.
 Work in partnership with the Council to develop innovative solutions
to finance new projects on an invest to return basis.

To reduce the organisation’s carbon footprint and improve the
environmental performance of our homes and neighbourhoods; and
 Deliver agreed Environmental and Sustainability Strategy
 Improve all stock to reach the SAP Energy Rating Band C by 2016.
 Explore and develop energy efficiency / low carbon initiatives utilising
available headroom and external funding opportunities.

To ensure Value for Money across all asset management functions and
services.
 Determine procurement route for investment programme which offers
optimum VFM.
 Increase the ratio of planned repairs to responsive repairs.
12
 Deliver a higher proportion of investment and adaptation works in
house.
 Review all procurement activity to determine on-going efficiencies.
These actions are detailed within the Action Plan in Appendix 1 with proposed
outcomes and timescales. The cost and affordability to deliver these proposals is
covered in the following section.
8.0
Financial Position
Detailed financial modelling has been undertaken to determine the cost of Level
1 and 2 across the 30 year life of the business plan.
The cost to fund Level 3 would very much depend on the type and level of work
highlighted through our integrated neighbourhood team in terms of environmental
improvements. However for the purpose of financial planning we have assumed
an annual figure of £300k per anum, plus a standard fees/overheads percentage,
which is based on current projections.
No costs have been included for Level 4 at this stage as this will depend on the
level of headroom available and the appetite of Board and the Council going
forward.
Overall 30 year investment costs and annualised sums to deliver Levels 1- 3 are
provided in the table below. Columns 2 and 3 are based on our current stock
levels and Columns 4 and 5 have been adjusted to account for the projected
RTB levels assumed in the business plan model and as highlighted in Section 4.
Level 1
Level 2
Level 3
All 3 Levels
Based on Current Stock Level
Annual Cost 30 Year Cost
8,602,516
258,075,500
1,972,146
59,164,399
392,041
11,761,200
10,966,703
329,001,099
Based on Forecast Stock Level
Annual Cost 30 Year Cost
7,927,949
237,838,498
1,829,449
54,883,459
359,479
10,784,355
10,116,877
303,506,312
In financial planning terms the most appropriate figures to use would be those
adjusted to account for RTB’s as this is how our business plan has been
determined.
Over the first 5 years the costs for all 3 levels are higher, based on the stock
requirements over this period as can be seen below:
Based on Current Stock Level
Annual Cost
5 Year Cost
12,616,066
63,680,331
13
Based on Forecast Stock Level
Annual Cost
5 Year Cost
12,459,923
62,299,615
The new HRA Business Plan, which is currently being developed, assumes an
annual capital investment of £7.336million which leaves £16million headroom
over the 30 year life of the Business Plan.
As such, based on the above, the available resources fall short of our total
investment requirements Levels 1-3 considering the annual requirement over the
30 years is £10.116million. Detailed work will therefore take place over 2012/13
to explore the financial options available when developing the business plan with
the aim of determining an affordable solution to deliver the full investment
requirements within this strategy.
9.0
Repairs & Maintenance
The delivery of a high quality repairs service is integral to the success of our
organisation as such it is vital that we ensure that we continue to provide a cost
effective and high performing service in order to meet our customer demands
and offer value for money.
Over recent years we have made significant strides forward in driving down
repair costs and improving the quality of service we provide. We have saved
£1million per anum from our operating costs since 2008 by reducing sub
contractor spend, increasing operative productivity, working more efficiently and
reducing our overhead costs. This has been achieved whilst improving the
quality of service we provide.
Going forward however we need to continue to improve and ensure that repairs
are delivered in the most cost effective and productive way as spend on repairs
is a significant proportion of the company’s revenue requirements within the
Business Plan. A key development in this area will be the need to increase the
percentage of planned repairs we deliver against the responsive repairs, as this
provides a much more cost effective way of delivering repairs going forward.
A review of the current void standard will also be a key action going forward with
a view to determining a standard that meets our stock requirements, that offers
VFM and that provides our customers with a positive start in their new home.
Emphasis also needs to remain on letting properties as quickly as possible to
reduce rent loss and increase the revenue income into the business plan.
Furthermore the repair service has the potential to bring in additional resources
into the organisation through delivering repairs for others. Currently the
Contracts Section within the team delivers work primarily for Council public
buildings including schools. There is the potential to grow the service going
forward by offering repairs to the wider market including other social landlords or
the private sector. There is also the potential to deliver more internal services
through the repairs service such as public sector adaptations and capital
14
improvements. This should therefore be explored further as part of a Repairs
and Maintenance Growth strategy.
Consideration should also be given to how the service is currently managed
through the organisations accounts. There is the potential to set up a separate
trading arm within the company structure for repairs as is the case with many
other social landlords and ALMO’s. This should be considered as part of any
future growth plans alongside the organisations value for money strategy.
10.0
VFM / Efficiencies
Value for Money needs to remain a key focus of the asset management strategy
going forward to ensure that we maximise the levels of investment in our stock
and neighbourhoods with the resources available.
A fundamental way of ensuring VFM is to have robust and effective procurement
systems which, through the quality of outputs and cost effectiveness, offer real
value for money. The bulk of our capital programme is currently delivered
through two main sources as follows:

Partnering Framework – This was established in 2007 and is due to expire by
the end of 2012/13. Through the framework two main contractors, Caseys
and Seddons deliver the bulk of our programme through the PC2000 contract.

Procure Plus (formerly GM Procure) Framework – Procure Plus is a
regeneration company established to enable bulk purchasing of construction
materials and labour for social housing clients within Greater Manchester and
beyond. We currently deliver smaller scale contracts through this framework
such as our external painting programme and heating replacement schemes.
These two procurement routes are being run in parallel and both offer financial
benefits, as opposed to individual tendering per scheme. They also provide
additional added value in terms of the quality of service provided and the added
community benefits, such as local training and employment, contribution to local
initiatives and supporting local agencies and service providers.
As our Partnering Framework expires at the end of 2012/13, we will need to
determine the most effective procurement route for our capital programme going
forward which offer the best value for money and benefit to our customers. As
such the various options will be explored with proposals being brought to Board
early in 2012/13. Following this review we will determine the most effective
procurement route for our capital programme for 2013/14 and beyond which
offers the best VFM for the organisation and our customers. This may result in
the full programme being procured through one of the above routes.
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The investment cost model has identified a number of high cost areas which will
be further reviewed to ensure we can secure value for money in the procurement
of these components and associated costs. These will need to be given due
consideration in relation to the procurement process and packaging of
investment works.
Components / Activity
Bathrooms
Pointing and Rendering
Window replacements
Kitchens
Roofing
Central Heating
Electrical Rewiring
Disabled Adaptations
Environmental Schemes
Repairs & Maintenance Capital Works
Site / Head office overheads
Fees
Enhanced Lifecycles
Potential Cost over 30 years (£’s)
15,721,650
6,543,150
16,713,175
36,712,684
17,638,203
30,578,000
20,925,000
15,345,000
9,300,000
6,277,500
87,841,499
23,322,869
39,343,123
Aside from the capital programme we must ensure that the most effective
procurement methods are in place for our Repairs Service and Home
Improvement Agency. A key part of this will be the procurement of a new
contractor framework for both services which is currently underway. The aim of
this is to reduce the cost of contractor spend, increase choice and competition
and improve services. Furthermore regular benchmarking of material costs for
both services will be a key action going forward to ensure that we are procuring
goods and materials effectively for both service areas.
11.0
Integrated Neighbourhood Management
During 2011/12 we have introduced our new organisation structures which are
intended to improve neighbourhood management and ensure closer working
relationships across the organisation.
Our integrated management team made up of representatives from all
directorates will be continuing to work together to develop neighbourhood
investment needs and priorities for action. These teams will feed into the new
Asset Management Steering Group that has been set up to determine investment
priorities within our neighbourhoods arising from a range of sources including:
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Local intelligence
Neighbourhood Walkabouts
Repair Analysis and Trends
Neighbourhood Sustainability Indicators
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Customer Feedback
Stock Condition Data
‘Look and Feel’ Indicator (for neighbourhoods)
Estate Profiling Data
The estate profiling data will be fundamental to creating neighbourhood
indicators and standards which will be subsequently monitored as part of Six
Town Housing’s performance management framework.
Estate profiling indicators will be complied and assessed on a traffic light basis in
order to determine the performance of an estate. These are currently being
developed but will include:
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% of current voids
% void turnover
% households in arrears
% Right to Buy sales
% of offers accepted and refused
% of antisocial behaviour cases
% of non Bury Standard properties
This information will be fundamental in determining our neighbourhood
investment priorities to be delivered that will help to shape our investment plan
going forward
12.0
Future Asset Management Decisions
Our investment plan which feeds into the overall HRA Business Plan is based on
our existing stock levels taking account of RTB’s, but going forward there may be
the need to undertake a more fundamental review of our stock base which could
result in more fundamental asset management decisions being taken such as
estate remodelling or stock rationalisation. We currently have a high proportion
of flats within our stock and whilst there is currently demand for such units this
may not be the case going forward as the demand for family housing continues
to increase. The new Housing Needs Survey, the results of which a due shortly,
will be a good early gauge of this.
Furthermore as Bury Council review all their assets this may pose future
opportunities and challenges for STH in terms of the housing stock. Our strategy
therefore needs to be flexible and allow the opportunity to fundamentally review
our approach to asset management going forward.
13.0
Risk Management
Throughout the life of our Business Plan there will be significant risks associated
with the delivery of our asset management strategy. This is because we operate
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in an ever changing environment where resources are limited and expectations
are increasing. It is therefore vital that our strategy is robust and flexible in order
to ensure that ongoing risks are managed and that our plans are delivered to the
benefit of our customers and neighbourhoods. The most significant risks
associated with the success and delivery of the strategy are:
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Failure to meet our customer expectations
Council priorities for HRA impacts on the delivery of the plan
Changes in national agenda
Welfare reforms impact on income levels and the affordability of the strategy
Void levels increase thus impacting on affordability
Failure to develop successful integrated management approach
RTB projections are underestimated
The above high level risks will therefore need to be managed through our risk
management framework going forward.
The new self financing Housing Revenue Account however provides more
certainty than we have ever had before as it allows us to develop a robust
Business Plan aligned with our investment plan over 30 years. Whilst this plan
will need to be flexible and will be reviewed every year, it allows much more
effective forward planning rather than relying on annual negotiations and
settlements. This therefore reduces the risk of failing to deliver the strategy as
intended.
14.0
Measures of Success
It is vital that this strategy remains a living document that is an integral part of the
daily services that we deliver. As such tasks and actions that form part of the
Asset Management Plan will be monitored through our performance
management system and will be regularly reviewed through the Asset
Management Steering Group going forward.
The following high level indicators will determine the overall success of the
strategy and these will be monitored and tracked along with local indicators to
determine trends and measure success.
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% customers satisfied with condition of their home
% customers satisfied with their neighbourhood
% of stock in SAP Energy Banding C or above
Value of Council housing stock
Value of STH own asset base
Estate sustainability - % of estates scoring a ‘green’ rating
% of homes meeting new Bury Standard
Eco Homes XB rating of stock
% of customers in fuel poverty
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15.0
No. of new homes built
No of empty properties brought back into use
Planned v Responsive % split
Value of external funding secured
% rent loss due to voids
% customers satisfied with repairs service
% customers satisfied with void service
Annual repair and void costs
Next Steps
During the first year of the strategy we will deliver a capital programme that
meets Level 1 of the strategy along with a proportion of Levels 2 and 3 within the
available resources of £7.3million.
During 2012/13 we will explore the options, through the development of the HRA
business plan, to meet the aspirations set out in the strategy in accordance with
all four levels.
The immediate tasks within the strategy are therefore focussed on determining
these options with a view to creating an investment plan which is affordable and
deliverable and which meets with our customers and stakeholders expectations
going forward.
16.0
Conclusion
Overall this strategy sets out our asset management requirements going forward
in order to ensure that our stock and neighbourhoods are sustainable and that
our customers’ needs and expectations are met.
The delivery of the action plan will therefore be an integral part of the
organisation’s delivery plan which will require buy in and support from the whole
organisation to ensure that we achieve the ambitious outcomes set out in the
strategy.
16.0
Appendices
(i)
Asset Management Action Plan
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