Asset
Management
Strategy
2015 - 2020
Executive summary
This strategy sets out our investment plans up to 2020.
It described the approach to asset management that
is required to deliver the Corporate Plan objectives
and follows part one, the strategic review of our stock
approved by the Board in September 2014.
This strategy will:
l Deliver services that meet
customer needs through
improved technology,
improved contractor &
staff performance and
further building the right
culture through the
Institute of Customer
Services.
2
l Continue to improve the
energy efficiency of our
homes through improved
heating systems and other
measures and take
advantage of grant
funding to support our
green investment.
l Continue to achieve
value for money through
a comprehensive
procurement plan,
improved repair diagnosis,
and improving cost
certainty in services such
as renewable equipment
and gas servicing
programs. We will re
organise our major works
program to achieve lower
management costs.
l Provide safe homes
through the effective
management of risk
areas, we will continue to
implement the latest
industry practices and
achieve a nationally
recognised management
system for fire prevention.
l Review how services are
provided across our stock
recognising the diversity
of buildings and people
and needs of both rural
and urban residents.
1
Background and introduction
1.1 This document sets out our strategic
approach to Asset Management for the five year
period from 2015-2020 together with the
investment plan set out in appendix 1.
1.2 It is driven by Hastoe’s Corporate Plan and its
vision of ‘sustainable homes in sustainable
communities’ plus key strategic ambitions:
l To be distinctive in the quality of homes and
services
l To encourage innovation
l To safeguard rural communities
l To protect the climate
l To use our experience to influence national
policy
1.3 This strategy also supports and links to:
l Value for Money Strategy
l Greening Hastoe Strategy
l Affordable Warmth Plan
Asset Management Strategy
2015 - 2020
1.4 This paper is the second and final part of the
Asset Management Strategy. Part One was
approved by the Board in September. It included
a fundamental review of our approach to
strategic asset management which consisted of
a detailed quantitative analysis of our whole
stock portfolio, including calculations at the
individual property level. Its conclusions stand
alone and also provide a strong basis for this part
two.
1.5 In summary the vast majority of our stock
provides satisfactory levels of returns for the
nature of our business and that no estate or
scheme suffers from demand problems.
Therefore, beyond a modest programme of
‘trickle sales’ (disposal of properties at vacant
possession) any disposals of property that is
occupied would only be carried for strategic
reasons. This is addressed in section seven of this
strategy.
l Customer Service Strategy
l IT Service Plan
l Corporate Risk Map
l Diversity Strategy
3
2
Asset
Management
Strategy
2.1 This strategy has four key aims:
l To substantially improve
customer satisfaction with asset
management services
l To continue to improve the
energy efficiency of our stock
l To deliver ‘value for money’ in
the management of our stock
l To ensure residents live in safe
homes through the effective
management of risk
3
To substantially improve customer
satisfaction with asset management services
Where are we now?
3.1 We know that residents overall satisfaction
with Hastoe is significantly influenced by their
experience of our day to day repairs service and
the condition of their homes. We know
expectations differ amongst demographic
groups. Our current customer service strategy
shows that nationally customer expectations are
rising, particularly amongst younger people who
are better informed and often have greater
choice than previous generations. Our adoption
of the Institute of Customer Services’ (ICS)
framework will assist us in driving improvements in
our service
3.2 We know that despite improvements in some
key performance indicators, our repairs service in
the east and south regions has failed to deliver
lasting improvements in some key areas and that
this has made a considerable contribution to
residents’ perception of the service. On the basis
of this we ended the previous contractual
arrangements, designed a new model of delivery
and retender the services in those regions. In the
life of this strategy we will evaluate the
effectiveness of this new approach and consider
wider implementation of the new model.
3.3 We continue to meet the Government’s
Decent Homes standard and have made
considerable progress in improving the external
fabric, wind and weather tightness of our stock
and major components of our flatted buildings
such as roofs.
4
3.4 We have also successfully improved over 220
homes with new energy efficient heating systems
and 400 homes with improved insulation
3.5 Our latest investment plan, appended to this
strategy and based upon a stock condition
survey completed in 2014, provides opportunities
to enhance the service we provide through our
home improvement program as well as
continuing our green investment plan.
Where do we want to get to?
3.6 Our simple ambition is to provide services that
meet our high quality standards and the needs of
our customers.
3.7 This means that we will be vigilant to the
changing needs of our customers and use the
Institute of Customer Service framework to
improve what we do. We know from customer
feedback that we need to improve in the
following areas:
l Getting it right first time
l Communication with our residents through
traditional means and new media
l How we deliver services to different
demographic groups by strengthening our
work on diversity
l Differentiation of service delivery which is
addressed in section seven below
3.8 It also means accelerating the delivery of
home improvement works to our older housing
stock such as kitchen/bathroom/heating
upgrades whilst at the same time continuing to
meet our other statutory obligations.
Asset Management Strategy
2015 - 2020
How will we get there?
3.9 We will support the implementation of the IT
Service plan with regards to improving repairs
‘scripting’ to reduce misdiagnosis and also work
to improve options around repairs appointments.
3.10 We will build upon the launch of the home
improvements programme by increasing our
investment in tackling improvements to our older
stock.
3.11 We will substantial improve our approach to
communications with our residents, doing much
more to keep them updated with progress of
works, small and large and build a greater
understanding of what the service can deliver
internally with our staff, so that they can address
customer issues much more readily.
3.12 We will continue to improve the delivery of
major projects by directly supervising the works
ourselves and strengthening the role of resident
liaison.
Key Objective
Success measure/timeframe
Complete a review of all suppliers in the context of meeting our customer
service objectives
Contractors signed up to and delivering Hastoe’s values and vision for customer
satisfaction June 2017
Deliver customer satisfaction that compares favourably with the best in our
peer group.
We will use the ICS framework to better understand the drivers for customer
satisfaction and make a plan for achieving high performance whilst still
maintaining value for money. This will be reflected in new KPI’s with measurable
milestones that clearly monitor continuous improvement.
Develop our communications so that all residents can access all repair
information related to their property
Top quartile performance in our peer group as measured by our customer
satisfaction survey.
Verified by internal Performance Dashboard and benchmarked against peer
group performance.
Sep-17
5
4
To continue to improve the energy efficiency of our stock
Where are we now?
4.1 Our Hastoe Green homes standard sets out
our ambition to improve our older housing stock
up to a SAP score of a minimum of 65. This has
been validated by a recent Government
consultation on establishing a national minimum
standard for energy efficiency which sets a target
of 69 to be achieved by 2035 with an interim
target of 65 to be achieved by 2025.
4.2 At the end of 2014 our average SAP rating for
our stock was 73.9, putting us in the top quartile
performance indicator for the sector.
4.3 We continue to make good progress towards
this and will have completed the retrofit of highly
efficient heat pumps to 226 homes by the end of
the current financial year as well as having
successfully secured ECO funding for insulation
works which we have completed in some of our
high rise buildings.
4.4 A customer survey based on those residents
who have had works completed in recent years
has shown significant satisfaction with new
heating systems with:
l 96% of residents saying they were satisfied with
their new heat pump as opposed to just 16%
satisfaction with the previous storage heaters
l 60% of residents stating they have saved
considerable sums on their heating and hot
water bills following installation of the heat
pump
6
l 60% confirming that there has been an
improvement in reducing condensation and
mould growth in their homes
4.5 Despite this, there remain approximately 700
homes that will require significant investment to
achieve our standard.
Where do we want to get to?
4.6 Our ambition remains to bring our housing
stock up to the Hastoe Green Homes Standard
with (amongst other things) a minimum SAP score
of 65.
4.7 In order to achieve this by the Government
deadline of 2025 we will need to allocate
spending beyond the life of the current
investment cycle which ends in 2017. This will be
included in corporate planning prioritisation over
the coming years.
Asset Management Strategy
2015 - 2020
How will we get there?
4.8 We will review our Hastoe Green Homes
Standard in light of our review of our urban
estates and the government consultation on the
national fuel poverty strategy and following the
general election to assess the impact of any
changes to government policy.
4.9 We will continue to review our approach to
improving the energy efficiency of our homes by
evaluating best practice across the sector.
4.10 We will seek opportunities to augment our
investment plan by seeking to maximise external
funding streams such as ECO, RHI and FITs.
4.11 Continue to work with the village of
Barcombe to support their endeavours to secure
a community communal energy system and
continue to search for other opportunities in the
communities we work in.
4.12 We will build upon the success of our ‘Green
Doctors’ initiative and evaluate opportunities
that our investment programme may present to
improve the health of our residents i.e. through
schemes such as ‘prescribe a boiler’ as piloted
by Gentoo.
Key Objective
Review Hastoe Green Homes Standard
Success measure/timeframe
December 2015
7
5
To deliver ‘Value for Money’ in the management of our stock
Where are we now?
5.1 We have benchmarked our costs across a
number of indicators through Housemark. We
compare favourably across the sector being in
the upper quartile group when comparing
average costs per property for voids and
responsive repairs.
5.2 Our recent procurement exercise for new
contracts in the South and East Regions indicate
that, across the six contract areas, there are
potential savings of 5% on current costs. This
reflects the fact that we have sought to appoint
contractors within more distinct and localised
areas and also that many of them have a greater
degree of IT sophistication offering savings on
overheads.
5.3 In addition we have adopted a “per property
cost” approach for gas servicing and repairs
across several areas. This will provide cost
certainty and reduce our current costs per unit.
The feedback we have received from
contractors confirms that this is very much a result
of the previous investment we have made in new
boilers over the last six years and also the
servicing module that we previously introduced
to manage our programme.
5.4 In the last year we have also fine tuned our
major works costs for all residential buildings by
completing a further highly detailed stock
condition survey, moving away from an average
cost to individual block costs. This has created
further capacity within our future investment
programme which may allow us over the course
of the next five years to increase our investment
in home improvement works, which are required
if we are to improve customer satisfaction.
Asset Management Strategy
2015 - 2020
Where do we want to get to?
5.5 A service that is value for money and
improves customer satisfaction.
5.6 We will maintain at least a 70/30 split for
capital investment/routine repairs and seek to
improve this as we increase investment into home
improvement work
5.7 Costs maintained in line with inflation and
property growth
5.8 We will appoint a range of different
contractors that strengthen the delivery of our
services
How will we get there?
5.11 We will continue to analyse those properties
where repair costs are significantly above
average and establish action plans to reduce
future costs.
5.12 We will evaluate the 3 star gas servicing
contracts and consider extending this model to
all gas appliances.
5.13 We will strengthen further our procurement
plan for asset management.
5.14 We will review the structure of the in-house
major works delivery team
5.15 We will analyse the possibility of creating a
Direct Labour Organisation.
5.16 We will continue to maximise opportunities for
external funding to augment our investment plan.
5.9 We will continue to scrutinise our repairs costs
through effective control of variations and post
inspections as well as benchmarking our costs
against our peer group.
5.10 We will work to improve the repairs scripting
for Hastoe Hub to ensure that the risk of repairs
misdiagnosis is minimised.
Key Objective
Success measure/timeframe
Evaluate the advantages and disadvantages of ‘3 star’ gas servicing arrangements
Implement proposals for new repairs contracts by December 2015
Tackle those properties with significant maintenance costs
Complete the delivery of a procurement plan for all future asset management services
Evaluate possibility of introducing DLO
Prepare action plan by June 2015
Feed into Corporate procurement project by September 2017
Produce options appraisal identifying risks and possible savings by May 2016
6
To ensure residents live in safe homes
through the effective management of risk
Where are we now?
6.1 We have established a comprehensive risk
management program across all residential risk
areas and have adopted a comprehensive IT risk
management system to support its delivery. Over
the past 4 years our approach has significantly
reduced all risk areas and embedded a routine
planned approach to risk management. We are
not complacent however and remain vigilant to
continue to seek best industry practice in risk
management
6.2 We have again completed our gas servicing
program and achieved a “good” rating following
our recent gas audit with no ‘substantial’
recommendations for improvement.
6.3 We have also completed our bi annual fire risk
assessments to all relevant buildings. We have
also introduced a new fire risk strategy and aim to
achieve nationally recognised accreditation in
this area. Resultant works to buildings are
programmed into our investment plans
6.4 We have completed a programme of
improvement works following Legionella risk
assessments and introduced schemes of control.
Key Objective
Achieve accreditation against British standard ‘PAS 7’
8
Where do we want to get to?
6.5 Our aim is to ensure that all Hastoe properties
continue to be safe for our residents and that
whilst risk can never be eliminated completely it is
effectively understood, constantly monitored and
skilfully managed.
6.10 Where the responsibility for risk remains with
our residents we will ensure they have access to
good quality advice through our tenants’
handbook, relevant information leaflets, website
and regular features in our resident newsletter.
How will we get there?
6.6 We will ensure we comply at all times with
relevant statutory obligations including approved
codes of practice.
6.7 We will maintain a robust servicing
programme that ensures that all plant and
machinery is maintained to the highest standards.
6.8 We will evaluate and deliver best practice
across the sector and seek 3rd party verification
of our approach to risk management. In
particular we will seek to achieve certification
against the ‘PAS 7’ British Standard for fire safety
management. This will provide us with a quality
assured system of fire risk management
6.9 We will ensure that our staff have the
appropriate training necessary to manage risk
and access to expert consultancy services where
required.
Success measure/timeframe
Certified by independent auditors by June 2016
7
Stock diversity, service differentiation
7.1 In part one of this strategy we concluded that
our stock performs at the right level, in terms of
return on investment and letability to meet our
corporate objectives. A small programme of
stock disposal, known as ‘trickle sales’ were
agreed, to support our development and retrofit
programme.
Age profile of stock
Town estates built in the 1960’s
Asset Management Strategy
2015 - 2020
7.2 With this agreed it has highlighted a need to
refresh our approach to service delivery across
the diversity of the homes we own, which is set
out in this strategy.
7.3 The graphic below illustrates the age profile
and design of our stock.
Rural homes built since 1990
9
7
7.4 We customise the services for our different
stock. For example on our urban estates we
provide:
✓ Estate based services (caretakers)
✓ Community rooms
✓ Gardening clubs
✓ Specialist leasehold service
7.5 In the life of this strategy we will strengthen
that approach by
l Reviewing our Green Homes standard, in 2015,
to ensure that the needs of the urban stock are
keeping pace with the improvements to our
rural homes and
l Look again at opportunities to develop on sites
within our urban schemes
7.6 This advance, together with the key
objectives above, should see real improvements
in customer satisfaction and value for money.
7.7 The Board has agreed that there is no
economic driver to commence a strategic
disposal of our urban stock but accepts that from
time to time there might be opportunities that
offer financial gain and improved service delivery
for our customers.
7.8 Whilst flexibility is important, this strategy
outlines the Boards approved framework within
with advantageous disposal could be
considered.
10
7.9 For stock that is in existing use to be
considered for disposal, the factors below would
influence the decision to dispose to or swap with
another social landlord.
l Low level of customer satisfaction/Customers
wish to transfer
l High arrears and or high turnover/voids
l Disproportionate amount of short/medium
term investment required
l High frequency of responsive repairs
l High potential risk (gas / fire / legionella)
l Lack of spare land for development
Excellent local housing provider interested in
purchase at favourable price
7.10 The criteria provides a framework for
consideration, so that proposals can be
evaluated at an early stage before formal
consideration. Any decision to dispose of stock
rests with the Board.
8
Conclusion
8.1 To deliver the ambitions
set out above, which are in
line with those set out in our
Corporate plan, requires at
least £30mil of investment
over five years set out in the
appendix below.
8.2 We have integrated a
degree of flexibility to be
prepared for most
eventualities. The strategy
sets out the way to deliver
on our aspirations but is
subject to the annual
budgeting cycle.
9
Asset Management Strategy
2015 - 2020
Investment plan - Appendix 1
Our investment plan for the next 5 years is detailed below. It reflects the most up to date stock condition surveys.
Capital Expenditure
Roof
Windows
Walls
Doors
2015/16
2016/17
2017/18
2018/19
2018/19
1098268
685264
405145
469944
46224
4380
6175
90000
402967
337481
120439
Boilers
228808
Storage heaters/Heating improvements
229558
153158
0
150000
Radiators & Pipework
Kitchens
Bathrooms
Lifts
Provision for adhoc component/capital renewals
Total
Financial Plan
Variance
Green Investment (capital)
Revenue Expenditure
Electrical Rewires to dwellings
12840
564960
0
124292
147290
23818
82689
37878
41610
117935
109282
1572
89173
222132
172056
466255
439290
173701
450000
450000
87312
118128
213144
720496
0
117072
0
46224
643892
0
202872
1448617
450000
0
300000
300000
300000
300000
300000
2534989
2574057
2751700
2848099
2993499
889.53
-43142.19
0.05
-0.26
-0.44
1071000
1109000
0
0
0
0
200000
200000
200000
218550
2534100
2617200
Fire Safety Management
80000
80000
40000
40000
40000
595949
603109
601028
769170
754089
50000
50000
50000
50000
50000
External Works to schemes
Decorations
Asbestos Management
Consultancy - repairs/keystone/stock condition
Legionella Management
50000
24000
24000
0
50000
24000
24000
0
50000
24000
24000
32034
2993500
46658
2314
0
2848100
Communal Electrical Rewires to Blocks
Door Entry Systems
26083
2751700
0
50000
24000
24000
21631
0
50000
24000
24000
Continued on next page...
11
8
Investment plan - Appendix 1 (continued)
Capital Expenditure
Roofs - Leaseholders
Windows - Leaseholders
Walls - Leaseholders
Lifts - Leaseholders
2016/17
2017/18
2018/19
2018/19
424040
120892
0
0
0
0
0
6917
809
7384
68123
71655
34378
97978
0
30127
0
6806
13678
0
0
0
0
Communal Electrical Rewires to Blocks - Leaseholders
33270
28486
Decorations - Leaseholders
73050
110690
198171
72229
140010
1687004
1766490
1866324
1946445
2014485
526260
551056
582199
607193
628418
Door Entry Systems - Leaseholders
Risk Management - Leaseholders (assumed 20% recovery)
Response repairs
Servicing Contracts
Empty Property Repairs
Aids & Adaptations
Estate Improvements
Total
Financial Plan
Variance
Total Amounts due from leaseholders
Forecast leaseholder income
Financial Plan
Variance
Revenue net of leaseholder recovery
Actual
Financial Plan
12
2015/16
Variance[1]
7150
32000
439736
52531
73544
0
32000
460454
53845
75382
0
22000
486477
55460
77644
0
22000
507362
57124
79973
0
22000
525097
58837
82372
4229235
4331997
4348959
4552844
4765148
150335
58397
-207240
-200255
-191051
4078900
4273600
4556200
4753100
4956200
577238
367577
291827
165541
273667
-147538
77222
168472
310858
219432
429700
444800
460300
476400
493100
3651997
3964420
4057132
4387302
4491481
2797
135620
-38767
110602
28380
3649200
3828800
[1] Where the projected outturn exceeds the annual financial plan allocation we will prioritise spend through the budget setting process.
4095900
4276700
4463100