Title: Corporate Asset Management Strategy

Transcription

1 Title: Corporate Asset Management Strategy Date of issue: January 2015 Date of next review: January 2016 Author: V Thornton Service area applies to: Operations/Development Link to the Corporate Plane: Yes Approved by: Board of Management Date approved: Electronic storage: Published on the web: 1

2 Contents Page 1. Purpose 3 2. Scope 3 3. References 3 4. Key Objectives 4 5. Customer Involvement 4 6. Monitoring against the Customer Top The Policy 5 8. Appendices 8.1 Appendix 1 Single Equality Impact Assessment 8.2 Appendix 2 Methodology Proforma 2

3 1. Purpose The purpose of the Asset Management Strategy is to provide a framework for the management of the Association s assets, and to ensure that the Association achieves the aims and objectives of its Corporate Strategy and its 3 year Business Plan. 2. Scope St. Vincent s principal aim is to provide and manage good quality affordable homes. Achieving the principal aim is underpinned by a number of supplementary objectives: - - Providing housing that are of a good quality, and reflects the aspirations of residents and potential residents. - Providing housing that meets the needs of residents who have a disability or are vulnerable and at risk within the home. - Maintaining the Decent Homes Standard as a minimum requirement from 2013 onwards. - Consulting residents in an open and supportive way about their priorities for the improvement of their property. - Providing housing that is appropriate for the needs of a diverse population - Going beyond the Decent Homes standard in offering more choice for customers - Protecting the Association s assets, ensuring they serve the Associations needs. - Providing homes that are efficient and contribute the minimum carbon as well as being cost effective to run. 3. References The Asset Management strategy links to the Association s other strategies and policies. Key policies relate to: - - Responsive Repairs - Disposal Policy - Cyclical Works - Planned Repairs - Major Repairs - Adaptations Policy - Asbestos Policy - URepair Policy - Stock Condition Policy - Decent Homes Standard - Environmental Strategy - Annual Servicing Contracts - Disposals/Acquisitions Policy - Resident Involvement - Procurement Strategy - Equality and Diversity - Development Strategy - HHSRS - HIP & EPC 3

4 4. Key Objectives The key objective of the Asset Management Strategy is to ensure that the Association utilises its assets in the most effective way for the benefit of both its existing and potential customers and the Business. This includes assessment of the assets value, use, demographic, suitability, income and cost of ownership. 5. Customer Involvement This is a key strategy which affect all customers and, as such customers will be involved in both the review of this strategy and the management of it via customer panels, committees and board In applying the policies and methodology we recognise that the assets are resident s homes and consultation with residents will be built in to all key stages of the process. 6. Monitoring against the Customer Top 10 Improving your home, Responding to Queries, Carrying out Repairs on time, Good Communication, Getting the Basics right and Going the Extra Mile. 7. The Policy 7.1 Strategic Asset Management St Vincent s understands that taking a strategic approach to asset management is important in ensuring that the housing stock continues to respond to the changing housing needs in the areas in which we operate and supported the business plan. By understanding the underlying value of the different groups and types of stock, considering both the financial performance and the broader housing and neighbourhood performance, the association is able to plan for the short, medium and long term. This involves understanding the relationship between management, maintenance and investment, between income and expenditure, between the short, medium and long term, and with the changing housing markets within which we operate and actively managing the business to make the most of it all. The Association will utilise the IS4 Housing Futures Assessment Tool which assesses the Social Housing Value of all properties by considering a range of hard and soft data. This system takes information from all the associations other databases and feeds into a software tool which will provide a picture on how individual properties; or an estate is contributing to the business. Financial Performance The financial performance will be evaluated by calculating a 30 year Net Present Value of net rental income on each individual property: Annual rental income = Gross rental income less: Rent loss from voids & bad debts Cost of management Cost of maintenance 4

5 Cost of investment / life cycle replacement The Financial Performance will importantly consider: The Net Book Value of the property Any loans presently secured against the property and the flexibility to release a property form a loan and the implications and costs of doing so Historic Grant received on the property and the implications of recycling the grant Housing & Neighbourhood Performance The Housing & Neighbourhood Performance will be assessed using the local knowledge of housing management staff, customers and other relevant sources. The indicators that will be considered are: Turnover Length of tenancy Demand House prices The housing management experience Neighbourhood and home satisfaction Deprivation Energy Rating How will St Vincent s use the outcome of the IS4 Asset Management Tool? The information provided from the IS4 HFAT system will be evaluated by the Asset Management Group. The IS4 system will Rank properties based on their contribution to the associations business. On reviewing this data, the Asset Management Group; made up of senior managers, will propose a course of action for poor performing schemes/ properties. This may include: Intervention Investment Divestment St Vincent s will use the Social Housing Value from the IS4 system to consider the options available: To invest in the a particular group of stock to improve the NPV of the property To make changes to the Lettings Policy for a single property or group or type of properties To undertake an options appraisal in terms of redevelopment or alternative uses 5

6 To consider disposal taking into account the Net Book Value To consider a stock swap, stock transfer with another Registered Provider To consider a change to housing management Nothing required as asset is performing well All recommendations will be presented to the Risk Appraisal Panel and then to the relevant committee for final decision. 7.2 ASSESSMENT OF INVESTMENT PRIORITIES Assessment of works required will be based on the following factors: 1. Stock condition survey, including Decent Homes requirements. 2. Observations by surveyors and housing officers 3. Consultation with residents 4. Frequency of day-to-day repairs 5. Void & Relet Levels 6. Local Authority proposals e.g. Clearance Priorities will be assessed in the following order: - 1. Health & Safety e.g. dealing with trip hazards 2. Security 3. Need to invest in stock to protect the investment & meet the Decent Homes standard 4. Sustainability of the asset & its surrounding area The investment decisions will also be influenced by other factors as set out in the Asset Management Strategy e.g. residents aspirations. 7.3 RESPONSIVE REPAIRS The Association will set out clearly what items of repairs it is responsible for in the Tenant s Handbook and the policy document. The Association will set out, publish and categorise repairs providing target timescales for each category. A robust appointments system is in place. The Association will provide a dedicated low-cost number for the reporting of repairs during normal office hours. The Association will provide a 24 hour responsive service with an appropriate out of hour s service. The Association will employ recognised contractors within appropriate contracts that offer longevity and value for money to undertake the repair work. These contractors will be provided with details of the Association s Customer Care Policy and receive training in this area including the making of appointments, carrying of ID and reporting back to the Association as required by the Contract. All Contractors are to sign up to the Associations Code of Conduct. Where in-house maintenance staff are employed they will be trained in the Association s customer care requirements including the making of appointments, carrying of ID and reporting back to Managers. 6

7 The Association will monitor the performance of the repairs service and monitor value for money. The Association will actively seek to move the balance of works from responsive to planned repairs and will set targets to achieve this. 7.4 VOID PROPERTY STANDARD The Association sets a standard to be achieved for all void properties. The standard sets down what residents might expect when moving into a property in respect of:- i. Cleanliness ii. Security iii. Condition of components and fittings iv. Heating & ventilation v. Decoration The Association maintains the right to change this Void standard to fit in with the overriding business needs as and when it sees fit. Reductions and enhancements can be made to the published standard where it meets the organisational needs. All works pertaining to Health & Safety will be carried out along with the works according to the Void Standard. 7.5 CYCLICAL WORKS The Association undertakes internal and external decoration works on a Seven-year cycle, or a cycle deemed appropriate by the Board. The Association will seek, in partnership with suppliers and contractors, to extend the cycle beyond seven years using innovative products and approaches to cyclical maintenance. 7.6 PLANNED REPAIRS The Association has developed a five-year rolling programme of planned works, based, initially, upon the information contained within the stock condition survey. Information from staff, resident consultation and the frequency of day-to-day repairs will also be incorporated into the final programme, each year. Reality surveys will also form part of the decision making process. The Association will develop its budgetary and procurement practices to assist in the effective delivery of the planned works programme. 7.7 MAJOR REPAIRS The Association sets aside a fund for all properties to fund any major repairs, linked to the business plan. Major repairs are those works so defined by the Regulators and as advised by the Association s Auditors from time to time. The Association will develop a five-year rolling programme of major works based upon the information contained within the stock condition database and reality surveys. 7

8 The Association will develop its budgetary and procurement practices to assist in the effective delivery of the major works programme whilst achieving Value for Money. 7.8 ADAPTATIONS FOR RESIDENTS WITH A PHYSICAL DISABILITY The Association recognises that residents needs will change and that there may be a need to address health & safety issues that will assist older and disabled residents to continue to enjoy the use of the property or to live independently. This may include the installation of grab rails, specialist equipment or other adaptations as advised by the Occupational Therapist or, in the case of minor adaptations, our own assessment. The Association will utilise its Handyman Service to carry out as many minor adaptations; including grab rails, hand rails etc, as possible to ensure value for money. To facilitate future adaptation the Association will aim to construct houses to Lifetime Homes standard. Lifetime Homes will also be built into Planned/Major works where appropriate. Where appropriate, the Association will seek funding utilising Disabled Facilities Grant and, if that is not available, from the Association s own resources; if appropriate/available, to adapt its existing homes. The Association will maintain an up to date register of all property that has been the subject of any adaptation. 7.9 ASBESTOS MANAGEMENT The Association will manage asbestos as required by the Control of Asbestos at Work Regulations (Regulation 4). The Regulations refer to common areas only. However the Association will apply the principles of the Regulations to all areas when developing its Asbestos Register. The Association has retained the service of a specialist environmental health consultant to advise on issues relating to Asbestos. The intention is that asbestos will be left undisturbed unless it is likely to be disturbed by works or is breaking down. Contractors are warned via the IT interface; if asbestos is present and can view details through the Web-Based Portal where appropriate STOCK CONDITION SURVEY The Association will update the survey annually, surveying 25% of the stock during other routine surveys, and the information gathered will be entered onto the database. The information gathered will be reviewed every four years to determine if a full stock condition survey update is required. The stock condition survey will, in addition to recording information on condition and life expectancy of components, provide detailed information for the completion of the Asbestos Register. The survey will also take into account the provisions of the Decent Homes Standards, identifying when properties might fail to meet the standard if investment is not made. Any items requiring immediate repair identified during the survey will be reported to the appropriate manager as a matter of urgency. 8

9 The stock condition information will be collated in a database, and will be used to provide cost information to enable the forecasting of likely expenditure in the short, medium and long term. The Stock Condition Survey information will be regularly updated to take account of replacement programmes and to incorporate new stock DECENT HOMES STANDARD The Association s stock was required to meet the Decent Homes Standard as a minimum standard by The condition of the stock in respect of the Decent Homes Standard will be incorporated into the stock condition survey and recorded in the Stock Condition Database. The cost of ensuring that the stock continues to meet the Decent Homes Standard will be an integral part of the planned works and major repairs budget ENERGY EFFICIENCY The Association will maintain a record of the Standard Assessment Percentage (SAP) in each dwelling. The Association will, as part of the planned works budget, set aside a sum each year for the improvement of the energy efficiency of its stock. The Sustainability team will manage this project under the control of the Asset Manager and will constantly review available technologies and best practices. This approach is underpinned by the Environmental Strategy 2012 The Association will investigate the use of alternative forms of energy and when this is both sustainable and cost effective to install, alternative forms of energy will be utilised. The Association aims exceed the Decent Homes Standard in respect of energy efficiency and in the improvement of the stock to satisfy customer s expectations URepair Service The Association will provide a mechanism for customers to carry out their own repairs and to be paid for these repairs. The association will publicise this Service and monitor its usage and effectiveness as part of the standard Business Targets 7.14 ANNUAL SERVICING CONTRACTS The Association will ensure that all key equipment installed at schemes is the subject of an annual service contract. The frequency of services within the contract to be as recommended by the manufacturer. Appendix 4 contains the schedule of items to be serviced. Individual burglar alarms will not be serviced or replaced. Any existing in void properties will be removed prior to reletting 9

10 7.15 CONSULTATION WITH RESIDENTS Residents will be consulted through the Tenant Forums and other customer groups in respect of strategy, budget proposals and priorities. Residents will be consulted over the quality of the service provided in respect of all aspects of the repair work and servicing and such consultation exercises will obtain feedback on the performance of both. Residents affected by proposed works will be advised at the start of each year of the proposal, and consulted further at a meeting specifically called for the purpose. Consultations will be on the overall proposals, timing and sequencing of the work and, where appropriate, on choice of materials and finishes. Where the requirements of the Association to protect the asset may conflict with the wishes of resident s consultations will be held to explain the reason for the Association s proposals, and to obtain the views of residents. Should the Association be considering disposing of or changing the use of a property, consultation with residents will take place prior to any decision being made GROUNDS MAINTENANCE Some sites; where a service charge is levied, the association will maintain the common grounds of a scheme. This will be in line with the Landscaping specification though an appropriately procured contractor. The sites will be maintained and checked on a regular basis but officers, site staff and the Landscape Manager In the event on extreme weather (ie, Ice, Snow), The Association will not provide a gritting service but, based on risk assessments of the clients, may provide the raw materials for tenants to use PROCUREMENT Works shall be procured following procedures set out in the Financial Regulations and as developed during the implementation of the Client s Charter. As set out in the Procurement Strategy, the Association will ensure all procurements full comply with OJEU regulations where appropriate with Value for Money at the forefront. The aim is to develop a partnering approach to works to maximise the benefits as set out in the report Rethinking Construction EQUALITY AND DIVERSITY The Association will comply with all statutory requirements on equal opportunities and relevant codes of practice such as the Commission for Racial Equality s Code of Practice in Rented Housing. 10

11 It is the Associations intention to ensure its assets meet the diverse needs of all its customers regardless of religion, ethnicity and sexuality. The Association has set a target that 5% of the firms it employs as either BME firms or BME led firms of its total complement of Contractors & Suppliers. The Association will look at ways of meeting and increasing this target. The Association will also encourage the employment of other minorities in construction, through, for example, the employment of local firms or specialists. The Association will also seek to support training initiatives that widen the access to achieving a recognised trade or professional qualification (e.g. PATH) DISPOSAL POLICY The Association realises that disposals should considered the requirement to balance the needs of the association together with those of the tenants and sector overall. All disposals should follow the requirements of the latest the latest version of the Capital Funding Guide. We will ensure that disposals are at best consideration (usually open market value) and that we protect public grant invested in dwellings. The Association is aware where a large number of disposals are required as part of the Affordable Rent Programme a policy can be developed for approval with the HCA to avoid having to obtain individual consents, the Association will keep this under review. The Association may dispose of property without the requirement for HCA consent in the following cases: 1. A disposal to a person who has the Right to Buy where the disposal is made under the statutory right or otherwise. 2. A disposal to a person who has the Right to Acquire. 3. A compulsory disposal, within the meaning of Part V of the Housing Act 1985; 4. A disposal of an easement or rentcharge (which includes the grant of a new one). These require consent under s.172 where they relate to social housing dwellings; 5. A disposal of an interest by way of security for a loan or other private finance facility. These require consent under s.172 where they relate to social housing dwellings; 6. A grant of a secure tenancy. 7. A grant of an assured tenancy (which includes most shared ownership leases). The Association will consider disposals which require S172 Consent and will follow the procedures in eth Capital Funding in the following instances: 1. Where a property has been identified in the IS4 HFAT asset management system as a poor performing property which fails to meet the current demand for social housing, produces a low Net Present Value, is disproportionately costly in terms of management and maintenance costs or any combination of the above. 2. Where there are operational reasons for the association to consider disposals and acquisition of stock, for instance where stock swaps are considered, or in cases of stock rationalisation.. 3. Where the association is using stock disposals as part of an agreed HCA Contract to develop new homes, such as the Affordable Rent Programme. 11

12 4. Where a disposal takes into account the Net Book Value of the Property and the grant and the resulting proceeds for disposal do not have an adverse impact on the association s financial viability. 5. To encourage home ownership by offering property to sitting tenants. These disposals include: 1. Transfer of vacant dwellings within the social housing sector 2. Transfer of tenanted dwellings within the social housing sector, the association will aim to achieve the best value for the properties whilst balancing that with the needs for social housing. 3. Disposals to sitting tenants where a discount is to be offered, the policy is that it should not exceed the discount available under the Right to Acquire. In exceptional circumstances great discounts would be considered. 4. Disposals of vacant dwellings out of the sector, the association will provide the opportunity to other RPs to acquire firstly. All disposals will be carried out in accordance with the association s Disposal Methodology. 12

13 Appendix 1 Disposal Methodology METHODOLOGY The methodology (which is currently under review) comprises two sections. Firstly the options available to the Association, and, secondly, the factors that influence the option to be selected. Factors will be recorded in the IS4 Software System comprising of information from Pyramid, Lifespan (the stock condition database) and market data. The IS4 system will Rank properties based on their contribution to the associations business and, on reviewing this data, the Asset Management Group; made up of senior managers, will propose a course of action for poor performing schemes/ properties. The Asset Management group will also consider reclassification of certain properties due to the impact of regulatory changes and Welfare Reform, to prevent obsolescence from changes to funding. The initial IS4 assessment will be undertaken during the course of It is intended that the programme will be run annually thereafter as a review. OPTIONS Routine Property Management (This would incorporate work to ensure compliance with the Decent Homes Standard, the Association s Voids Standard and the undertaking of planned works to meet tenant s aspirations.) This option should be the norm and is followed when the property: i. fulfils its function; ii. requires routine property maintenance with normal life cycle replacement only; iii. Contributes positively in a financial and / or social manner to the Association s objectives. The Association will keep in touch with future changes to funding to specialist properties; such as supported housing. The Association will developing a strategy for alternative use, Landlords Repairing Obligations Only Where repairs are kept to a minimum as required by statute and the Association s contractual obligations as set out in the tenancy agreement. This level of repair could be applied where a tenanted property: i. has limited life (less than 3 years). ii. is designated for demolition: iii. is designated for re-development or re-improvement; iv. is designated for rehabilitation or conversion. Long Term Void A property may be retained as a long term void where it is: 13

14 v. allocated for demolition; vi. is awaiting redevelopment or re-improvement; vii. is unlettable; viii. has management problems. Where a property is deemed to be a long term void it shall be removed from the rent roll. The property will be made safe and will be adequately secured. Sale The Association may seek to dispose of a property where The IS4 HFAT Asset Management System indicates that that disposal is one of the options available to association as the property: i. No longer meets housing need; ii. the property is unlettable; iii. there are management problems or it is uneconomic to manage; iv. the property no longer fits the organisations strategy, but options such as stock transfer, stock swaps or outright disposal are viable options. v. Where there the property has become obsolete due to the removal of funding and alternative uses are unavailable. vi. Where the disposals are part of the commitment to a HCA delivery programme. Where a vacant property is identified for disposal it shall be taken off the rent roll. The property will be made safe and will be adequately secured. The Association will obtain HCA Section 172 Consent before disposing of any property asset and will work in accordance with Capital Funding Guide s regulations on disposals Demolition In exceptional Circumstances and taking into account Net Book Value and historic grant a decision may be taken to demolish and redevelop the site. A decision to demolish may be taken as long as it ties into the Associations strategy and HCA framework: Re-development/Remodelling A property may be included in a re-development/remodelling programme where the IS4 System indicates that property is not performing and an options appraisal confirms that it is financially viable to do so. Refurbishment A property may be included for refurbishment where, the longer term demand has been confirmed, it has become uneconomical to repair and the options appraisal has confirmed that it is financially viable to do so. Management by Others The decision to let on lease or management agreement to others may be taken. This may be considered where: 1. the association does not wish to dispose of the property for financial or other reasons 2. The Demand and the use of the property remain viable, but there are benefits to having alternative management arrangements. 3. There are geographical, financial or other considerations to consider this arrangement. 14

15 PROCEDURE The asset management methodology will be applied to properties managed by the Association as necessary to inform decisions about appropriate action The data collected will be used to determine which options should apply. If a property is assessed as other than Routine Property Management a report will be presented to the Association s Risk Panel for consideration. The Risk Panel will consider the options available, consult with the Operations Committee, and make a recommendation for the Board of Management in respect of the continuing use of the Asset. Prior to the implementation of any decision that affects the continuing use of a property in its current form a consultation exercise shall be undertaken with tenants who may be affected. An annual Asset Management Plan will be developed for presentation to the Board of Management meeting in September prior to the budget process. A review of the Asset Management Strategy will take place every three years or sooner should circumstances change or legislative changes take effect. There will be an ongoing continuous assessment of the strategy and the association s assets. 15

16 8. Appendices 8.1 Appendix 1 Single Equality Impact Assessment 8.2 Appendix 2 Methodology Pro-Forma 16