Why VFM needs great Asset Management. Karen Heaney: Director of Asset Management Home Group

Transcription

1 Why VFM needs great Asset Management Karen Heaney: Director of Asset Management Home Group

2 Who is Home Group?

3 Our Footprint

4 Our Asset Profile: General Needs < > Unknown Total Stock 3% 15% 28% 30% 16% 10% Geographic split Units <SAP 60 SAP units Central 12.79% % 369 North East 40.53% % 932 North West 15.86% % 1933 Scotland 13.25% % 269 South 17.58% % 1258 Number % 01: Solid : Cavity : Timber frame : Stone : Stone cavity (blank)

5 Existing property by ownership Summary of existing arrangements Ownership Count of buidings Leased in (over 2 years) 112 Leased in (under 2 years) 28 Managed by Stonham on behalf other 28 Owned Lease Over 21 Years 25 Owned Outright Freehold 533 Other 47 Grand Total 773

6 Our Strategy Housing with Care Strategy Home Group s mission (why we exist) is to help our customers and clients to open doors to new opportunities and healthy lives. Home Group s target customers and clients include the most vulnerable or excluded in society... through: improving the quality of their housing through the provision of reliable and fit for purpose housing and housing services; improving their access to affordable housing by increasing the supply of housing through building more homes; and providing accommodation-based interventions which support aspects of their mental and physical health or welfare.

7 Value for Money: What does the Regulator Say? England: main expectation on providers; Understand how they are using their assets and resources to deliver their objectives, plan to optimise the return on assets (the income or result divided by the asset value) and understand alternative options for use and delivery Understand the cost drivers and outcomes of specific services In Scotland: consultation on the Charter Indicators; Social landlords manage all aspects of their businesses so that: Tenants, owners and other customers receive services that provide continually improving value for the rent and other charges they pay.

8 Business Drivers Households lose 1,615 a year due to welfare reform Housing associations expect their rent arrears to increase by more than half as a result of the government s welfare reforms. Empty homes a 'disgraceful waste' Benefit cuts may undo work to end homelessness Code for sustainable homes could be scrapped Affordable rent could be introduced in Scotland 10m home sales a month for Scottish scheme Scottish Government releases fuel poverty plan

9 Maintenance Review Outsourced national maintenance service to 5 contractors via 6 contracts Contracts include responsive, servicing, voids and planned Bonus/malas contract TUPE transfer of 300 DWF Full review of all processes involving CSC Generating in excess 5M savings

10 Procurement and Supply Chain 81M savings achieved since 2005 Consolidated components e-tendering portal introduced Regional procurement forums established Component rate agreed Material rebates Purchase2pay

11 Procurement and Supply Chain

12 Footprint Disposal Disposed of 2312 generating surplus of 60.7M Development programme requires to be in current footprint

13 Our Approach to Managing Assets Asset Management Plan approved December 2012 Creation of Home Standard 100% stock surveys within 2 years Retain and Invest in Assets with a long term sustainable future Consider Alternative Options for remaining assets Regional asset panels to review options Consideration of Care and Support assets

14 Asset Management Development of Home Investment Standard Minimum SAP 60 Install showers Install security lights Environmental improvements EWI funded through ECO Understand the productivity of our assets Map out NPV Data, data, data 100% stock condition surveys completed by 2015 Consistent design specifications Deliver Home Investment Standard within 4 years

15 Current Position Includes: DHS Rental Income Scheme level costs Management Maintenance Overheads Footprint Efficiency Future Position Will Include: DHS+ Management Cost Variable by CSP Example: Schemes High NPV: Hylton Lane (NE) Douglas Bader (South) Low NPV: Langley Park (NE) Allerton Bywater (Mid)

16 Options Appraisal: Model 4 options including a no change option Variable outputs model, I&E and Cashflow, to assess short and long term commercial viability. Main Highlights Graphical summary output Inflation and variable voids rates Maintenance including assumption for exclusions Consistent approach with Options and Foot print efficiency model Cashflow output to link with Treasury

17 Options Appraisal Process 20k cap for maintenance major works on voids Apply Sustainability Indicators to Scheme Consideration of demand and payback

18 Cumulative Cumulative Option Summary KPI Information NPV Per Scheme NPV Per Unit Year Option 1 NPV - 36,912-36,912 Option 1 Maximum Negative Impact on I & E - Year 30-16,422 Do Nothing KPI's Cumulative Surplus/Deficit on I & E Year ,665 Option 2 NPV 38,098 38,098 Option 2 Maximum Negative Impact on I & E - Year 30 3,211 Invest in Property KPI's Cumulative Surplus/Deficit on I & E Year ,253 Interest Cover 2.23 Debt Fully Repaid (Year) >30 Option 3 NPV 21,678 21,678 Option 3 Maximum Negative Impact on I & E - Year 30 1,530 Sell Property KPI's Cumulative Surplus/Deficit on I & E Year ,966 Appraisal Process Option 4 NPV #VALUE! #VALUE! Option 4 Maximum Negative Impact on I & E - Year 30 #VALUE! Demolish Property KPI's Cumulative Surplus/Deficit on I & E Year 1-5 #VALUE! 150,000 Cumulative Cash Flow 100,000 50, Do Nothing Invest Sell Property Demolish - 50, ,000 Year Cumulative I & E 300, , , , ,000 50, , , , , ,000 Do Nothing Invest Sell Property Demolish Year

19 Office Strategy

20 Home Group 30 Offices

21 Mobile Working Assumptions Mobile working allows colleagues to spend longer away from the office Colleagues can visit a number of customers in a single trip Colleagues homes are already spread throughout the Homes Group housing stock As the office is visited infrequently, journey times can afford to be longer Customer Colleague CSC Customer Customer Home Group Office

22 Development and Design Development Strategy approved July units per annum Mainstream development and design; Work to align development and retrofit specification Gateway process to ensure transparency of decision making and ensure linkages Customer Service involved at appraisal stage Design panel Component detail handovers

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30 Thank you Questions and Discussion