Asset Management Strategy ( )

Transcription

1 1.0 Aim 1.1 The aim of this strategy is to ensure that the identified objectives are managed towards successful implementation within the timescales identified. It will ensure that subsequent policies and Asset Management Plans clearly relate to the strategy and accurately reflect what is to be achieved and how. The purpose of the strategy is threefold: i) To provide the Group with a framework and a plan to inform decisions on the retention of and investment in its existing assets, on the disinvestment of assets and the development or purchase of new assets; ii) iii) To inform the targeting and development of tenancy management, environmental improvement and community enhancement initiatives; To provide an objective, means of measuring the effectiveness of decision-making over time. In managing its assets the Group will critically review investment and management decisions to ensure that its current and proposed property portfolio meets or is being developed to meet the following corporate aims: Place customers at the heart of what we do. Improve our customer services and access to those services. Provide and develop a range of excellent quality homes. Invest in our communities to improve their sustainability. Grow our business, expanding our customer base, and our range of products and services. Create an economic, efficient and cost effective value for money business. Be a well governed organisation, and recognised as a first class employer. Be a key player on the National stage. The overall objectives relate to the Group. However, each delivery organisation has an Asset Management Plan with general as well as specific actions around what they need to do in order to demonstrate that the objectives can be achieved. The actions arising from this strategy will take account of these, thereby ensuring that the outcome clearly meets with the overall objectives of the organisation. V2.February 2013 Page 1

2 2.0 Background Asset Management Strategy ( ) Making a Better Future Together is the Together Housing Group s (THG s) shared vision. In addition to this, there is a focus on delivering results to an excellent standard, seeking to innovate, learn and improve and the adoption of a professional, value for money approach. All of which underpin this strategy. 2.1 There are two key elements to asset management: our assets and our liabilities. Land and property assets are held to support our main business to provide housing and other services to tenants. The housing stock has little or no value and cannot be considered an asset unless there is a need now or in the future for the property or the land on which it stands. Our assets are therefore the rental income derived from the properties and our residents. Our liabilities, generally, are the cost of providing their homes. 2.2 Asset Management is therefore a range of activities undertaken to ensure that the Group s housing stock and any other assets meet its corporate objectives and contribute towards its financial viability. An appropriately developed, applied and monitored strategy will help the Group to consider the risks that would impact on these assets and liabilities (rental income and expenditure) in providing the products that we offer. 2.3 There are a range of issues currently facing the housing sector including the revised regulatory approach, embedding co regulation, the economic climate, impact of welfare reform and the continuing demand for accommodation whilst the framework for funding new homes has altered significantly. 2.4 There is an expectation that Housing Associations should consider a range of options to deliver better value for money from their assets. In the context of asset management the new value for money requirements means the focus has to be on demonstrating that we fully understand our assets - in terms of appropriate condition data; income and expenditure profiles over the long term (30 years); market demand analysis and performance data - so that we can plan and adopt rational strategies ranging from continued investment, change of use e.g. affordable rent, replacement, and for poorly performing properties, disposal, as well as opportunities for new development where opportunities allow. 2.5 In producing this guidance we are looking to establish a set of common principles and minimum standards to create a framework which facilitates the benefits of the Group structure and complements members own asset management plans, captures best practice and ensures consistency where appropriate. V2.February 2013 Page 2

3 It will set out the key objectives and provide an action plan for considering these issues. Monitoring of the action plan will ensure progress towards the deadlines is maintained. 3.0 External Influences 3.1 Market Context National Perspective: The downturn in the housing market and the general economic deceleration being experienced are causing some anxiety and uncertainty for the social housing sector in which we operate. At the present time declining house sales and tougher lending markets are both challenges to providers of affordable housing. Access to funding - both borrowing and grant subsidy is restricted and more challenging and there is recognition that attracting institutional investment into the development of new housing products is a necessity. But the reality is that the need for affordable homes remains high. Sub Regional Evaluation: The THG Growth Strategy sets out the aspirations of the group to expand its services, products and stock portfolio within and beyond its current geographical locations. For our existing stock, being great landlords and investing in communities are seen as vital components to sustaining tenancies against the threats of an expanding private rental market and more choice on one hand and the adverse impact of the Government s austerity measures, including welfare reform, on the other. The challenge will be to balance increased housing growth targets with the continued need to address market failure in our deprived communities. Moreover, linking the housing on offer to economic aspirations is seen as crucial if both the housing market and the economy are to be revitalised. The strategy provides a rationale to help the Group and its members to determine which markets to pursue and provides a means for evaluating opportunities and to make an informed choice on investment decisions. In the northern regions in which we operate our priorities are focused upon helping people to access the housing market within their means: Increasing the supply of affordable homes; Offering choice of tenure to meet individual aspirations; Facilitating progression along the housing ladder; V2.February 2013 Page 3

4 Reducing the number of unfit or empty dwellings; Encouraging independent living for an ageing population; and Improving the environmental impact of our housing stock. 3.2 Local Priority: Investment decisions will need to recognise the needs and aspirations of our customers and local residents. The current rent regime allows us to charge different rents and maximise revenue. Developing a greater understanding of local housing markets, particularly the private rented sector, is central to reviewing and setting rents. The impact of welfare reform and the pressures on under-occupation will lead to a new dynamic which will inform priorities for investment and might lead to the release of existing homes to address unmet needs. Partner boards need to ensure our research and approach enables them to identify and respond to the needs and demands of our neighbourhoods, including the impact of others investment or lack of it. Key to developing our understanding will be working with local authorities and other strategic partners; creating new relationships; and using customer information. V2.February 2013 Page 4

5 4.0 Internal Influences 4.1 This strategy is concerned with Group wide management issues and will be derived with the following principles: An integrated approach between the partners and the Group centre; local responsibility for asset management; clear Group wide objectives for holding property; a performance measurement system with sufficient data to inform strategic decisions. 4.2 The strategy needs to be developed within the context of other corporate strategies, namely the: financial capacity outlined in the business plan; main risks and challenges identified in the risk management strategy and associated risk maps; principles and objectives of the VFM strategy; aspirations outlined in the Growth strategy the aims outlined in the THG Corporate Plan. 4.3 Within the Group wide corporate planning framework it is intended that the Asset Management Strategy will become a key tool in the decision making process and in helping to shape the future direction of the Group. The strategy enables the necessary oversight and control at Group level whilst offering discretion and choice in achieving maximum value from our assets in each of our key localities. 5.0 Social Influences 5.1 The strategy will take account of social influences such as the impact of welfare reform and universal credit changes on the current and future stock provision. It will also consider the local context of the demographic profile and housing need. V2.February 2013 Page 5

6 6.0 Technological Influences 6.1 The ongoing development and implementation of Aareon and associated systems (first touch etc) as well as the development and roll out of Evaluator for the evaluation of stock sustainability will impact on the strategy. 7.0 Interdependencies 7.1 During the strategy development process, a number of interdependencies have been identified. This is where certain aspects of service delivery is either dependant on, or is heavily influenced by other service areas. These are specifically: The links between the Investment Programme and Repairs. The links between tenancy management and the demand for repairs services The links between the future development programme and demand for certain architypes. 7.2 The action plan attached with this strategy will take account of those relationships and activities to ensure that the strategic outcomes across the organisation are achieved. 7.3 Maintaining Existing Assets Investment plans are derived from stock condition data, independently validated and reflected in member company business plans. Resources earmarked for the remaining period of the plan are summarised in the following table: Number 2013/ / /16 Total Total of Units m m m m Per unit Chevin 8, ,418 TVH 7, ,161 HP 3, ,193 GVH 3, ,071 Pennine 12, ,193 Total These resources will be used to maintain the fabric and components of the existing stock using predicted lifecycles to plan the replacement of components; scheduling inspection and servicing regimes to maintain key V2.February 2013 Page 6

7 components; and responding to reported failures and tenancy changes to maintain property condition. Outputs to be derived from this investment include: Meeting or exceeding the decent homes standard; Mitigating demand for reactive maintenance; Enhancing the energy efficiency of homes; Improving customer satisfaction; and Contributing to sustainable communities. 7.3 Developing New Assets Investment plans need to be a reflection of the financial and delivery capacity of the Group. The Group s growth strategy aspires to continued development in vast areas across the north of England. Through its reputation and array of networks and strategic relationships the Group and its members will identify a wide range and variety of development opportunities. To achieve the biggest impact and make the most effective use of its assets the Group needs to demonstrate the flexibility to target its financial resources in pursuit of the most desirable opportunities. A balance is therefore needed to enable impact in localities whilst maximising business development. The financial resources available across the Group for growth activities consist of 137m earmarked in partner boards business plans to meet existing commitments, delivering 1,500 new homes.. This investment will secure the completion of the following contracts: The AHP contract to deliver 783 units at a cost of 81m, with grant subsidy of 15m; The AHGP contract to deliver 212 units at a cost of 23m, with grant subsidy of 5m; The Empty Homes Programme commitment to refurbish 300 empty dwellings at a cost of 10.6m with grant subsidy of 3.7m; The Derbyshire PFI contract to deliver 197 units at a cost of 22.6m. In addition the Group has sufficient unencumbered assets, which will be supplemented with new assets developed during this strategy period, to secure new finance and support an extension of this scale of programme over future phases. The Group s medium term financial plan has estasblished a capacity of 143m to support the next 3 year development cycle. V2.February 2013 Page 7

8 8.0 Risks 8.1 In order to ensure that neither the service nor the organisation is exposed to unnecessary risk, the following areas have been considered as part of the action planning process. Management of these risks will be the responsibility of the author and monitoring groups. 8.2 The group currently invests circ 120m per annum in maintaining its existing housing stock and supporting its ongoing development programme. The long term financial forecasts for the Group are contained within the respective business plans. Whilst loan facilities are in place to support business plan objectives there are some areas of uncertainty to meet aspirational targets. The raising of the bond finance in 2012 has helped to provide much needed resource to continue with the group s development ambitions for new homes. Consideration needs to be given to the scale of annual development programmes to ensure that programmes are sustainable and provide the asset base to secure new finance for future years. In addition the group has identified high ambitions in its service reviews to improve the energy efficiency of its homes to assist residents in meeting high energy costs and thus sustain tenancies. With an ageing population there is an appreciation that the investment needs of the companies will need to recognise the requirements to maintain and develop homes to support life time tenancies through adaptation and service provision. Consideration will need to be given on the level of reliance on securing external funding from less traditional sources and through more innovate means such as Joint Ventures and leasing arrangements. V2.February 2013 Page 8

9 Further debate will be needed on the group s appetite for deflecting costs of capital improvements which generate energy efficiency savings onto tenants through the application of service charges. The success of the strategy will be in balancing our aspirations, liabilities and assets within the limitations of the projected resources available. In addition, the increased frequency of tenancy terminations and related increases in demand for reactive repairs to properties has challenged the sustainability of current service standards and requires further innovations in management of tenancies to control investment costs. 8.3 RMAC monitor specific Risk Maps relating to the Asset Management Strategy and these include: Development Programme Sales Programme Asset Management Plan including compliance Repairs and Maintenance 9.0 Equality & Diversity 9.1 When implementing this strategy we will ensure that we will comply with The Equality Act (2010). Through implementation of this strategy, we do not discriminate on the grounds of any protected characteristic, namely: age; disability; gender; gender reassignment, marriage and civil partnership; maternity; race and ethnicity; religion or belief; and sexual orientation Strategic Plan 10.1 This strategic plan will focus on 5 key strategic objectives which have been developed to ensure that the outcomes and objectives from the strategy are managed towards successful implementation within the timescales identified Given the identified internal and external influences, the key strategic objectives are as follows: V2.February 2013 Page 9

10 i) Ensure the long term viability and sustainability of the stock; ii) iii) iv) iv) Maintain and manage the stock to meet the current and future needs of customers; To ensure the Group targets investment initiatives to support local needs and maximise our social impact; Reduce cost and demand of maintenance in the long term; Ensure our assets have a reducing impact on fuel bills and the environment; 11.0 Action Plan 11.1 Each company within THG will refer to the Asset Management Plan and strategic action plan, which will focus around the key strategic objectives. The action plan will be SMART, (specific, measurable, achievable, realistic and timely). The plan will be reviewed by each THG Local Board at six monthly intervals and also in line with any identified monitoring regime Monitoring 12.1 The action plan will be reviewed by the relevant teams six monthly and overall performance monitored annually by the authorising body Evaluation 13.1 An annual report shall be submitted to the respective Board to discuss this strategy s performance over the previous 12 months Benefit Realisation 14.1 Throughout the implementation, each strategy report shall evidence the savings (cashable & non cashable) and benefits to the Group. Consider time, cost and resources of current processes, baseline current performance and compare this against time and cost of new processes. V2.February 2013 Page 10

11 15.0 Review Asset Management Strategy ( ) 15.1 This strategy (and where appropriate, associated policy and/or procedures) will be reviewed every three years or more frequently if required. Author and Organisational Leads: Kevin Ruth Angela Stuttard State approval body and date approved: Group Board/Partner Board/Leadership/SMT Date: 26 th February 2014 Issue No: 2 Review date: January 2015 V2.February 2013 Page 11