Asset Management Strategy

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1 Asset Management Strategy Author I Jekyll Job Title Operations Director Approved by / Date 18 July 2012 Approved by Challenge Group / Date June 2012 Review Date July 2017 Cross Reference with All Staff sent 23/07/12 Timetable updated 23/07/12 Business Plan, Risk Management Strategy, VFM Strategy, Tenant Involvement Strategy, Added Value Strategy, Sustainable Energy & Affordable Warmth Policy \ 0

2 Contents Section Page Executive Summary 3 1 Introduction 5 Key Aims and Objectives 2 Our Housing Assets 6 Stock Profile Stock Condition Supply & Demand 3 Managing the Assets 10 Key Components & Tools Asset Optimisation 4 Investment Programmes 12 Five Year Asset Management Plan Transforming Homes Programme Aids & Adaptations 5 Funding the Strategy 15 Availability of Resources Long Term Future Investment Plans 6 Service Delivery 16 Contractors Staffing Categorisation of Maintenance Activities Responsive Repairs Voids Cyclical Maintenance Work Planned & Major Improvement Work 7 Health & Safety 21 Gas Servicing Electrical Testing Fire Safety Asbestos Management Legionella Control of Contractors 8 Affordable Warmth & Improving Energy Efficiency 24 9 Tenant Engagement & Partnerships 25 Working with Tenants Training Opportunities 10 Strategy Delivery & Monitoring 26 Budgetary Control Procurement Risk Management Performance Management 11 Equality & Diversity 28 1

3 12 Review Action Plan & KPIs 28 Appendices Appendix 1: Asset Management Framework Appendix 2: Decent Homes Standard Appendix 3: Option Appraisal Process Appendix 4: 5 Year Asset Management Plan Appendix 5: 30 year Asset Management Plan Appendix 6: Staffing Structure 2

4 Executive Summary Effective asset management is fundamental to the successful delivery of organisational objectives and business plan priorities. This Asset Management Strategy (AMS) is a key tool in delivering our overall strategic aims. It will highlight relevant asset management risks, including increasing investment costs, changing government policy, tenancy turnover and voids, housing need/demand and wider economic and demographic change. The 2012/ /18 Business Plan includes 8 strategic priorities, one of which relates directly to the AMS:- To ensure that we continue to meet & if possible exceed the Decent Homes Standard by facilitating a range of tailored services. To identify major repairs programmes that will reduce our reactive repairs costs and improve tenant satisfaction levels. Stock investment used efficiently for maximum impact and best value is achieved." The AMS is pivotal in supporting our Value for Money Strategy, as repairs and maintenance is one of the biggest areas of expenditure in the overall budget. This AMS has been developed from a review of the previous strategy, the introduction of new Asset Management software system (Keystone) and a rolling stock condition survey programme. The specific aims of this strategy are: Any asset management activity should preserve or increase the value of our assets. Best value for money is achieved. Funds committed to stock investment are used efficiently for maximum impact Tenants aspirations are met, high levels of customer satisfaction are maintained and tenant involvement in decision making is meaningful. To ensure the right tools are used to identify risks, liabilities and costs, to reduce exposure to acceptable levels. To provide a continuous improvement framework based on monitoring, performance reporting, and accountability to tenants. To provide a framework for decision making which uses financial, stock condition and housing management data in a rational and consistent way. Investment programmes are delivered in a cost-effective manner in accordance with sound procurement principles and in line with statutory requirements. We help to improve the communities we work in and provide local employment opportunities wherever possible. In February 2012 we entered into a key partnership with Futures Housing Group (FHG). This will help to ensure that our stock reinvestment programmes are managed as efficiently and effectively 3

5 as possible, maximum value for money is achieved and high levels of customer satisfaction are maintained. As a result of this significant benefits have been achieved:- Projected 24% savings on major improvement programme costs Improved specification and quality of work and benefitting from a range of added value initiatives e.g. apprenticeship scheme Access to specialist asset management software. Enhanced our management and manipulation of stock condition data, assisting annual and long term budgeting. A cost effective stock condition survey programme, fully integrated with asset management software. Access to an EU procured responsive repairs service at nil cost FHG expertise and knowledge of procurement and contract management, a skills gap in our current Maintenance Team. Tenants have a role in shaping the delivery of this strategy. From RFH s perspective our housing stock represents a financial asset but to tenants it is their homes and it is therefore imperative that tenants views are at the heart of our investment decisions. The Tenant Involvement Strategy details the ways in which tenants can become involved in asset management and all other areas of operation. The strategy has been enhanced by the inclusion of: A specific 5 year Asset Management Plan A 30 year Financial Plan Plans to consult with tenants, leaseholders and stakeholders on strategy detail in line with regulatory guidance A suite of performance targets, and a delivery action plan, to help measure the success of the strategy. The AMS sets out the 5 year medium term investment plans and looks forward 30 years to 2042, assessing the stock investment needs and resources required to ensure the future life of existing stock and replacement of obsolete housing. A holistic approach to housing asset management is essential alongside the effective planning of its repairs and maintenance, voids and planned works programmes that represent value for money. The Decent Homes Standard alone cannot deliver the change necessary to improve neighbourhoods and meet our tenants aspirations. It is vital therefore that we make the best use of internal and external resources that may be available for investment. 4

6 1. Introduction 1.1 Key Aims & Objectives This strategy is deigned to act as the framework within which RFH makes strategic decisions on stock investment and, where necessary, disposal. It has been drawn up to complement the business plan, assist in meeting the requirements of the regulator and to set out priorities for the ongoing maintenance and improvement of RFH s housing stock. RFH has a number of long term strategic aims. They are:- To provide quality homes To deliver excellent services To demonstrate our community values in everything we do To exceed expectations In common with every other housing organisation, RFH has finite resources to spend on asset management. It must make the best use of these to obtain maximum benefit for tenants. Appendix 1 shows the framework for delivery of asset management at RFH. The Asset Management Strategy is central to this framework. It is intended to assist RFH s staff and Board of Management in meeting our strategic objectives and balancing competing needs for investment. The key objectives of this strategy are to:- 1. Meet statutory and regulatory requirements including 100% Decent Homes compliance 2. Provide safe affordable quality homes that meet current local housing need and that take account of future demographic changes tenant profile and aspirations. 3. Deliver a quality repairs and maintenance service which achieves high levels of customer satisfaction 4. Achieve a quantifiable reduction in repair and void expenditure without sacrificing quality 5. Maintain a robust procurement strategy for achieving value for money and maximise operational efficiencies. 6. Improve service whilst reducing costs by taking a planned elemental approach to repairs wherever possible, achieving an effective balance of expenditure on responsive, cyclical and capital works. 7. Tackle fuel poverty and the environmental impact of climate change on the housing stock, ensuring tenants have every opportunity to reduce energy consumption and the associated cost of heating their homes 8. Ensure capital and revenue resources are targeted to properties that have a long-term future and represent value for money by using Keystone and financial analysis costing techniques to determine future investment plans. 9. Ensure consultation with our tenants on medium term investment plans and priorities is effective and plans are clearly communicated to tenants. 10. Provide employment opportunities for the local community wherever possible. This strategy aims to help achieve the RFH s mission and guide investment decisions to enable us to deliver quality homes which achieve, and in some areas, exceed the Decent Homes Standard. 5

7 2. Our Housing Assets 2.1. Stock Profile RFH's stock is located in six local authority districts:- East Northamptonshire Wellingborough Kettering Corby Daventry Northampton The majority (92%) is located in East Northamptonshire. Our stock profile is as follows: 499 properties trickle transferred from East Northamptonshire Council; 63 new build properties constructed since 1995; 74 Existing Satisfactory/Purchase & Repair properties; 21 properties for market renting; 6 shared ownership properties; 150 properties managed for Circle Group. We also manage a small portfolio of up to 10 properties within a Private Sector Leasing Scheme, Key Solutions, in partnership with East Northamptonshire Council (ENC). RFH s property profile is as follows:- No. Property Type 1 bed flat 36 2 bed flat 2 2 bed bungalow 3 3 bed bungalow 2 2 bed house bed house bed house 19 5 bed house 1 Total 663 RFH's stock is currently valued 'at cost' in our balance sheet at 18,277,202 as at January During 2008 a re-valuation exercise of stock in charge to the Nationwide Building Society was carried out. Following this exercise RFH's stock is valued as follows: Basis of valuation 446 general needs units EUV-SH 17,031,000 Existing Use Value for Social Housing MV-ST 31,158,000 Market Value subject to tenancies MV-VP 47,000,000 Market Value with vacant possession Insurance reinstatement guidance 60,572,243 RFH has 132 unencumbered properties with an estimated EUV-SH of just over 5 million. 6

8 2.2 Stock Condition Stock Condition Surveys The RFH engaged external surveyors, Property Techtonics, to undertake a 100% stock condition survey (SCS) in 2009/10. This data has recently been transferred onto the new Keystone asset management software and used to produce the financial forecasts included within this strategy. Following the last stock condition survey we agreed to adopt an alternative approach, surveying our stock on a rolling programme over 5 years, rather than the whole stock every five years. This would provide more accurate and up to date information, enabling us to monitor our position in relation to the Decent Homes Standard more effectively. Futures Housing Group monitors their stock like this, and offers this service at a very competitive price to partner organisations. RFH has therefore chosen to employ FHG to carry out ongoing stock condition surveys, effective 1st April The new stock condition survey programme has commenced. The original plan to do 20% each year has increased to a 25% year on year rolling survey of all properties. This was partly due to concerns about the quality of the previous stock condition data but also to enable us to capture the condition of all homes in a 4 year plan that feeds into the 4 year major improvement programme. Surveys are completed by FHG s in-house surveyors using palmtop computers which are synchronised with the Keystone Asset Management system. The stocks needs in terms of investment for short, medium and long term plans will be derived from data held in Keystone. The management of stock condition data will be validated by an independent specialist Chartered Surveying organisation every five years Stock Condition Information Ensuring that investment needs and funding required is accurate requires staff time and use of stock condition information systems to manage, check, challenge and make adjustments as both the number and condition of housing changes. RFH, supported by the Futures Housing Group (FHG) Asset Management Team, manages an Asset Management database for strategic planning, including Decent Homes, capitalised repairs and planned maintenance programmes. Responsive repairs are managed through the Omniledger housing management system. Asbestos data is currently managed using the Omniledger system, but following surveys carried out prior to major improvement works, we intend to start a new asbestos database. This data will be stored on specialist Property Compliance Manager (PCM) software, accessible to contractors as well as members of staff. 7

9 The Asset Management Plan is based on stock condition information recorded in Keystone which is used for scenario planning of improvements and priorities of work. The plan identifies the key replacement elements and the timescale in which replacement is required. This data forms the basis of annual major improvements required to maintain Decent Homes Standard. Details of the Decent Homes Standard can be found at Appendix 2. The projected serviceable life of elements forms the basis of modelled stock investment needs and medium and long term financial cost projections. Profile reports are generated and projects the capital costs for the replacement of key elements over a 30 year period. Investment decisions are informed by the Asset Management database but the final decisions are informed by other factors which include: Life Expectancy of the stock Ensuring programmes are planned for cost effective delivery by contractors The possibility of extending the life expectancy of the component by cost effective repairs Tenant demand, aspirations and priorities Spreading elemental renewal programmes to optimise the use of financial resources. All of the RFH s properties had met the Decent Homes Standard by Age is the most significant factor affecting RFH s stock. It is fundamental to this Asset Management Strategy. The table below shows the numbers and percentages of the stock in 10 year ranges. Age Range Number % 0-9 years % years % years % years % years % years % years % years % 80+ years % The expected life of the main structures of a property i.e. walls and foundations, is 80 years. The above table shows that nearly a fifth of the stock has exceeded this life expectancy and a further 30% will do so in the next 10 years. Although the quality of construction of older properties generally results in this 80 year life cycle being exceeded, the effects of an aging stock on future investment decisions need to be considered. It is anticipated, for example, that increased budget provision may have to be made for roofing and roofline works, repointing, re- rendering and replastering from 2012 onwards, partly because some of these costs have been increasing in recent years in relation to both void costs and reactive repairs expenditure but also because stock condition data indicates a high number of potential Decent Homes failures due to the age and condition of property structure. 8

10 2.2.3 Housing Health and Safety Rating System (HHSRS) We have built HHSRS methodology into our stock condition survey programme and tackle any Category 1 (severe) failures immediately. Any works related to less urgent failures are built into our forward plans. 2.3 Supply & Demand Over the next 30 years stock numbers will change as some properties are lost through disposal or Right to Buy sales. However, we expect at least the equivalent stock numbers to be gained. The present Government s proposals to reinvigorate Right to Buy include the intention to double the discounts available. The Government wants to see a significant increase in sales to fund new social housing on a one for one replacement. The proposals are targeted at local authority stock at present so RFH is currently unaffected but it is unclear how Registered Providers (RP) will be affected in the future. It should be noted that almost all of our stock is currently excluded from the Right to Buy/Right to Acquire. In terms of stock expansion, RFH is a member of the Quantum Consortium, led by East Midlands Housing RFH, but is not currently developing properties. Our position in relation to property development will be reviewed as part of our decision making process regarding the use of affordable rent and flexible tenancies. The views of our local authority partners will be taken into account on these issues as well as advice in relation to RFH s charitable status. RFH is seeking additional borrowing of around 2m, as outlined in the Business Plan. Recent negotiations with our funders in relation to additional borrowing have not been successful, due to the short term nature of the funding available. During 2012 we will be investigating alternative sources of funding to enable us to maximise our borrowing to support future growth. Due regard will be given to the local Strategic Housing Market Need Assessment when considering future growth. RFH introduced customer profiling in 2010 and we now have profile data on 92% of our customers. Our main client group are predominantly young families, headed by a woman of working age. Despite this, a surprisingly high percentage has a disability (15%). The Welfare Reform Act, which came into force in March 2012, introduced new property size criteria for housing benefit claimants in the social housing sector, also known as the bedroom tax or under occupation penalty. This new criteria means that any working age household deemed to be under occupying their home will lose part of their housing benefit from April Housing benefit will be reduced by 14% for claimants with one extra bedroom and 25% for two or more extra rooms. We estimate this is likely to affect around 17% of the RFH s tenants, including disabled people living in an adapted property. Many of these tenants may be forced to move to smaller properties either within the RFH s stock or with another RP. 9

11 The new rules are expected to lead to higher void and relet costs as tenants downsize. We also expect unmet demand for smaller properties and a corresponding impact on demand for 3 bedroom properties, which make up over 60% of the RFH s stock. The table below shows the numbers of properties under occupied by size and the likely corresponding increased demand. Some of the demand for 2 bedroomed properties will be offset by the tenants moving out of these under occupied properties into one bedroomed properties. Bedrooms Under Occupied Potential Additional Demand Total Managing the Assets 3.1 Key Components & Tools Reducing costs, whilst maintaining excellent service delivery, is a key business priority. To this end, in February 2012 we formed a partnership with Futures Housing Group for the delivery of our major repairs service, stock condition surveys, asset management software. As a result, RFH now has new tools to deliver this strategy. These include: Stock condition data, updated regularly, collected using statistically reliable and verifiable stock survey techniques A comprehensive and dynamic stock condition database A formal Option Appraisal Process to assess major capital Investment proposals An informed experienced workforce, internally (and externally via FHG), to deliver quality projects on time within budget. These are the basic tools required to enable RFH to take informed decisions. Once strategic decisions are taken, RFH may use the various strategic components to deliver results including:- Refurbishment of dwellings so that they continue to meet modern requirements and tenant expectations A planned maintenance programme, achieving economies by replacing components just as they reach the end of their lifecycle, anticipating changes in minimum acceptable standards, and reducing future requirements for demand driven maintenance Cyclical maintenance to prevent deterioration in the physical condition of the stock and annual servicing to comply with legislation A responsive maintenance service to address unforeseen sporadic repairs An efficient and effective voids repair service, helping to protect RFH s revenue and minimise the number of rejected offers on the grounds of poor condition An effective option appraisal process that considers different forms of intervention including disposal. 10

12 3.2 Asset Optimisation The AMS has to optimise the use of funds available to enhance the stock and benefits that tenants should enjoy. Long term planning and continuous annual monitoring is therefore essential. Where investment does not reflect service priorities or value for money then alternative solutions such as disposal or other routes will be explored. We expect a significant number of properties will continue to remain structurally sound, despite the age profile of our stock. However, we must plan for a proportion to fail structurally, with resulting high repair costs in relation to the value of affected properties. However, non-financial factors such as the continuing high demand for social housing in our area of operation means that is unlikely that we would consider disposal or demolition, except in very extreme cases. The full range of options must be considered and evaluated when deciding on the future of a property. The intention will be to find long term solutions to any issues. Escalating actions include the following:- Minor works to improve lettability Major works to resolve fundamental issues Tenure change to address demand issues Disposal by transfer to another organisation or sale Reasons to consider disposal include high management costs, demand issues, long term viability, customer aspirations (linked to demand), condition/cost of repairs and sustainability of worthwhile investment (damp, sound insulation, access issues, health and safety issues etc.). The benefits of disposal are that it can address problems that are beyond the scope of reasonable investment, meet customer aspirations, improve services and reduce overhead costs. Some properties are disproportionately time consuming and expensive to manage and will never achieve high levels of customer satisfaction. It should be noted that the consent of the Homes and Communities Agency is required should RFH wish to consider disposal or demolition of any properties that have been grant funded. The indicators that will be taken into account when considering disposal include high marginal costs of management, for example arising from distance or low stock numbers in a location, high comparative costs of maintenance or refurbishment and housing management based indicators such as voids, tenancy turnover, abandonment and tenant complaints. The appraisal process and the key data that is used to inform the assessment are set out in Appendix 3. Appraisals take into account both the current and future value of assets, ongoing maintenance, repairs and investment to maintain the assets to arrive at a Net Present Value (NPV). The NPV informs us whether it is sensible to continue to invest in certain types of properties. A negative 11

13 score for example may indicate that despite investment the value of the asset will never offset the costs. The model allows for an objective and consistent way of assessing properties and we plan to use this approach as part of our continuing work to carry out option appraisals on all the stock. As part of this process we may also consider the disposal of high value larger properties that do not require significant investment in the future. Funds released from these sales would be recycled to purchase properties that would assist us to meet future demand for smaller homes. 4. Investment Programmes In the appendices, the 30 year plan and the 5 year plan set out the amounts required to maintain and improve RFH s housing stock over time, based on stock condition survey information which is regularly updated with works undertaken. These plans also identify risks to RFH posed by any part of its property portfolio, and will assist in the management of these risks. Objectives for the investment and maintenance of RFH s stock are set out below: Effective and responsive maintenance of the property portfolio Investment in properties with a long term future Ensuring that properties meet a defined lettable standard To maintain the Decent Homes Standard, and meet revised Standards Engagement with tenants in making decisions When taking decisions on our portfolio, we will have regard to: Costs of management and maintenance and rents that can be achieved Future investment required for properties to meet Decent Homes Standard Lettability of property types or in specific locations Other regeneration initiatives in the area and how the property contributes to this 4.1 Five Year Asset Management Plan The AMS uses as a starting point the current known stock condition at Our current resources mean that our main focus will be to continue to maintain 100% compliance with the Decent Homes Standard. This will be achieved through the Major Improvement Programme, also known as Transforming Homes Programme, and a series of planned programmes, all of which will consider potentially non-decent issues. Appendix 4 attached to this report shows the 5 year Asset Management Plan for the period 2012/13 to 2017/18. The Major Improvement Programme budgets assume total resources in the region of 2.75M over the period, most of which is capitalised. In addition to this, Revenue Repairs, Cyclical Maintenance and Voids costs are estimated to be 2.9M over the 5 years. 12

14 This is more than the current 5 year budget, which accompanied the business plan approved in March This is largely due to a new workstream being identified (re-pointing and re-rendering), and other increasing costs due to the age of the stock, as detailed at However, it should be noted that the component replacement dates and associated costs included in the 5 Year Asset Management Plan are only an indication of work that may need to be carried out, not work that necessarily will be carried out. The majority of the replacement dates are based on the 2009 stock condition survey carried out by Property Techtonics, which needs to be verified. In addition to this, costs are based on 2011 figures and are therefore due to be updated on Keystone in the near future with the new schedule of rates following recent tenders. Because of these two factors it is prudent to wait until we have more accurate information later this year before making any significant changes to the budget. Nevertheless, it is apparent that it will be necessary to start making some budgetry provision from 2013 for a new work stream to undertake re-pointing and re- rendering. This will need to be addressed by examining ways to reduce these costs to bring them closer into line with the overall budget, securing additional funding, reprofiling the major repairs budget or increasing the overall major repairs budget allocation. It is likely to be a combination of all these approaches. The budgets are of course subject to annual review and challenge. 4.2 Transforming Homes Programme The current 4 year Major Improvement programme, also known as the Transforming Homes Programme, was tendered in partnership with Futures Housing Group. RFH and tenants were involved at all stages of the process and maintained control over timings and work specifications. The procurement process followed an EU Restricted Procedure and resulted in Lovell Partnership Limited being appointed as the contractor by both organisations. The programme was launched in April The total budget for RFH s 4 year programme is approximately 1.2m. Without this improvement programme pockets of stock will progressively become non-decent. The main programme will therefore continue to be: New windows and external doors where required New kitchens and bathrooms Upgrades or rewires to the electrical system New roof coverings. The programme will be completed by 31st March It will be subject to ongoing re-profiling in response to information obtained from the rolling stock condition survey and any identified nondecent properties that will be in the programme. Properties earmarked for Major Improvement works occupied by Tenants that have refused the works for various reasons, are monitored and included in the database. They will either be improved when void or revisited at the end of the programme. 13

15 The contract with Lovell is managed by FHG with ongoing involvement from RFH s Property Services Manager. Various regular meetings across the partnership will occur to audit progress/stalls, etc. These will include: - Operational/Progress : weekly - Steering Group Meeting : monthly - Partnering Board Meeting : bi-monthly - Commercial and Supply Chain Meetings : monthly - Tenant Liaison Group (Repairs & Improvement Group)- bi annually Health and Safety and Construction Design & Management will be monitored by FHG in conjunction with ARC Consultants. A suite of KPIs monitor handovers, completed works, waste management (environmental issues), time in properties, property storyboards, activities on site, health and safety, etc. The individual household storyboard is also part of the handover pack highlighting the customer journey and is measured according to a scoring system. 4.3 Aids & Adaptations Work The Aids and Adaptation Policy outlines RFH s approach to providing a range of property adaptations that give elderly, disabled tenants and people with special needs housing that suits their physical needs, improves their quality of life, and enables them to be independent. RFH adopts a customer focused approach to all aspects of our service delivery and we will consult, inform and involve tenants at all stages of the adaptations process. We will offer tenants a degree of flexibility and choice in the style of aids and adaptations where possible and where funding arrangements will allow. While providing tenants with suitable housing for their individual health needs is the key priority, the suitability and future use of the housing stock must be considered and look at ways in which the stock use can be maximised and households provided with alternative suitable adapted homes. We are committed to working in partnership with the relevant agencies and professional services to ensure that the work is co-ordinated to deliver the most appropriate solutions for people in need of Aids and Adaptations. Adaptations are split into two categories minor and major. These distinctions are based on the nature of the work required in order to implement the adaptation and do not correspond to the impact the adaptation will have on the individual requiring such work. It is understood that both minor and major adaptation work can impact significantly on an individual s quality of life. Below are examples of the types of work categorised as either minor or major: Minor adaptations; (typically under 1250) include the provision of ramps, handrails, grab rails, hoists, bath-boards, seating in shower area and lever taps. 14

16 Major adaptations; (Over 1250) require more extensive and complex work and include the installation of stair lifts and level access showers; over bath showers; bathroom and kitchen conversions; access alterations. The starting point will again be an Occupational Therapist assessment to ensure the work is appropriate and the best way forward. Works will normally be being funded through the Local Authority Disabled Facilities Grant. This is a means tested grant where tenants may be required to make a contribution to the cost of the works irrespective of value and may take up to 12 months to be sanctioned from the date of the formal OT recommendation. OT recommendations for more significant work may be incorporated into other planned works. In view of budget limitations the wait for such adaptations could be considerable and in view of this and with the tenant in focus RFH will consider a range of measures to help improve the situation in the short term. This could include; Temporary (or permanent) provision of a `Lifeline` alarm call system Minor adaptation work as an interim measure Liaison with any other support agencies Welfare Reform is likely to impact on how we deliver disabled adaptations in certain cases. Any changes will be reflected in the Aids and Adaptations Policy. 5. Funding the Strategy 5.1 Availability of Resources RFH should have sufficient funds available for the lifetime of the business plan to undertake all works necessary to maintain the current 100% compliance with the Decent Homes Standard, dependant upon the impact of welfare reform and other factors. However, as mentioned at 4.1, the costs indicated in the 5 year Asset Management Plan, which takes into account potential non decency as well as renewal of some additional components, are higher than those allowed for in the five year Business Plan budget. Availability of resources and updated stock condition data will be reviewed on an annual basis and the AMP revised accordingly. In addition to the Business Plan funding we will work closely with the funders to find ways to secure the required resources when they are needed for the purchase of new properties. 5.2 Long Term Future Investment Plans The AMS 30 year plan is currently based on there being sufficient funding to meet RFH s future investment needs and this level of resources will be made available through normal funding routes. 15

17 Appendix 5 provides detail on the level of investment needed over the next 30 years to carry out general maintenance and elemental improvements as they are needed. The total investment required is estimated to be 26m. All costs are exclusive of professional fees, management and administration costs and are based on current prices because it is not possible to predict inflationary increases, or changes to market prices of labour and materials over 30 years. Costs, however, are inclusive of preliminaries and VAT at the current rate. Taking into account forecast resources set out above we will develop our future plans around the investment needs and resources available. There will be a core of investment to maintain the retained stock at a reasonable standard and to ensure we continue to meet the current Decent Homes Standard. Any changes to the Decent Homes Standard will trigger a review of this strategy and associated financial forecasts. Further consideration will need to be given to improving the energy efficiency and environmental sustainability of our properties. There is a need to work with other agencies and our tenants to develop plans and associated resources required to achieve this. 6. Service Delivery 6.1 Contractors Our community values are evidenced by our long standing commitment to use local contractors wherever possible; approx. 75% of our total repairs expenditure is delivered by this means. RFH has an approved contractor list, reviewed annually. Following a recent tender exercise run in partnership with FHG the RFH s responsive repairs are now carried out by an approved list of around 9 Framework contractors under Term Partnering Contracts (TPC2005). Joining arrangements have been agreed with individual contractors and they are all required to comply with our Contractor Code. These are mostly small and medium-sized local businesses. Both organisations have benefited from current market competitiveness. RFH, in particular will share the benefits of extended material warranties and lower unit costs on materials that Framework Contractors will be able to purchase through Futures procurement agreements. Three contractors carry out RFH s cyclical programmes, under Measured Term Contracts. One of these contractors is also a Framework contractor. These five year contracts run until 31st March Contractors are subject to performance monitoring of customer satisfaction, complaints, value of orders etc., to ensure that the service they provide meets the standards set. This monitoring enables any performance issues to be identified and addressed at an early stage. Regular contractor meetings take place, to exchange information, provide good practice and legislative updates and deliver refresher training. 6.2 Staffing 16

18 The current staffing structure is set out at Appendix 6. We have adequate staff resources to deliver this strategy and manage the asset management process but will procure suitable external assistance as and when required. RFH works closely with FHG Asset Management Team. We will take every opportunity to benefit from their expertise. 6.3 Categorisation of Maintenance Activities RFH subdivides stock maintenance into a number of different types of work, each of which is used to fulfil a particular purpose during the life of a dwelling. The five principal types are: Responsive repairs Void repairs Cyclical maintenance Planned maintenance Refurbishment and improvement. A key component of this strategy is to provide a responsive repairs service for irregular unexpected failures, for example, burst pipes or broken locks. Our tenants consider an efficient and cost effective responsive repairs service as one of their top priorities (Jan 2012 Business Plan Survey), as well nationally being recognised by the regulator as a high priority for tenants. Projected resources for this work over the next five years are set out in Appendix 4. A key aim of this strategy is to reduce long term responsive repair costs through targeted investment and a pro-active planned repair programme. We propose to increase the proportion of pre-planned work and to improve on our current performance. The budget for responsive repairs is based on developing a long term reduction in costs due to the effective management of the stock and investment in major improvements. The benchmark ratio of planned repairs to responsive is 60 : 40 of which the responsive repairs should be aimed at the benchmark priority ratio of 10:20:70, (Emergency:Urgent:Routine) wherever possible. We are currently achieving a 63:37 planned to responsive repairs and responsive repairs priority ratio of 5:27: Responsive Repairs The majority of the 2500 repairs carried out each year are reported directly by tenants to the Tenant Services Team. RFH spends approximately 300K a year on responsive repair work. To achieve responsive repairs within the funding limits, repair requests from tenants are standardised against a responsive performance service level agreement, which is included in the updated Repairs Handbook following consultation with the RFH s tenant forum, the Challenge Group. 17

19 Each repair request will be given one of the following priorities based on RFH s statutory and regulatory obligations:- Emergency (make safe within 12 hours). Repairs needed to avoid an immediate danger to personal health or safety or serious damage to property Urgent (to be completed within 5 working days). Repairs needed to avoid substantial inconvenience to the tenant or continued damage to the property Routine (to be completed within 21 working days). During the life of this strategy we will aim to introduce a further category; Programmed, which is non urgent work that could be completed as part of a programme in order to provide greater flexibility and achieve potential efficiency savings. Works such as external groundworks and rainwater goods could be included in this category. An emergency out of hours service is provided via one of the Framework Contractors, MAW Services, with support provided from officers as required. In 2012/13 only one KPI was not achieved or exceeded. During annual review, targets are renegotiated to improve and challenge service delivery. Lean Systems Thinking was implemented at RFH in 2011 and repairs and maintenance was the first review. As a result of this review, there have been a number of efficiencies in the repairs service. In addition, there are a variety of other mechanisms to review and monitor the success of the repairs service, some involving Tenants. Recent improvements include : Tendering work under Framework Agreements on 60/40 price/quality basis. resulting in better prices whilst maintaining quality and a reduced Approved Contractor List who get a greater share of work Better prices on materials via FHG s procurement agreement with Travis Perkins on average achieving savings of around 16% Delivering 99.5% of all repairs within agreed timescales Achieving 96% tenant satisfaction Consolidating the invoice process to reduce officer time Using Customer Feedback to systematically improve the service such as offering reduced timescales for responsive repairs Redefined Out of Hours emergency repairs arrangements with 23% reduction in works undertaken out of hours through improved controls and enhanced telephone advice Reducing Out Of Hours emergency cover costs by 33% Implementing a new text messaging service which aims to reduce call times and missed appointments and provide a more seamless service. Also, the use of tenant profiling information will help further tailor the service to our tenant s needs, as detailed in the Customer Insight Strategy. 18

20 6.4.1 Property MOTs During the life of this strategy we will explore ways of reducing our responsive repairs expenditure including the introduction of Property MOTs, an annual scheduled visit by a contractor, often combined with the annual gas check, to identify and carry out any minor repairs. Pilots have shown significant reductions in unplanned maintenance costs as a result of property MOTs Tenant Cashback RFH is required, as part of the revised statutory standards for the provision of social housing, to implement some form of repair and maintenance cash back scheme with effect from April Whilst the standard set by the Social Housing Regulator is not particularly prescriptive, all social housing landlords must provide tenants with the opportunity to be involved in the:- Management of repair and maintenance services, such as commissioning and undertaking a range of repair tasks, as agreed with landlords and the sharing in savings made. No guidance (other than a letter outlining the scheme) has been issued by the Department for Communities and Local Government (DCLG). The scheme aims to encourage tenants to take control of their own minor repairs or commission them locally, and benefit from any savings made. RFH has concerns over the costs of such a scheme, how we would keep control of the works carried out and potential health and safety problems created by poor standard repair work. In addition to this, we are not sure our tenants are actually in favour of such a scheme. RFH has opened discussions with tenants and will use this feedback to develop a scheme which fulfils our obligations, meets our tenants needs and RFH s business objectives Repairs Charter The Chartered Institute of Housing launched its Repairs Charter in June It is a framework that aims to drive improvements in the delivery of responsive repairs. Sign up is voluntary and based on self assessment. The Charter includes a set of commitments, underpinned by a range of outcomes, against which organisations can assess where they are now and where they aspire to be. Once we have carried out our self assessment in consultation with the RIG or Challenge Group, we aim to sign up to the charter as a public commitment to delivering a high quality repairs service. 6.5 Voids Void properties are unoccupied dwellings that arise when there is a change of tenancy. Repairs are carried out in line with an agreed lettable standard. The lettable standard was initially agreed with tenants in 2011 to ensure compliance with relevant legislation and to bring void properties up to a common standard. 19

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