Mergers: Motives, Message Management and Morale Richard Thomas, Agency Manager Care & Repair Cardiff / Care & Repair in the Vale Matthew Thomas, Director of Customer and Community Services Cardiff Community Housing Association
Outline A bit about Care & Repair Our journey so far Partners HA Boards Staff
Who are we? We are two local organisations that provide support to older people in Cardiff and the Vale of Glamorgan
Our current status Cardiff Agency hosted by CCHA Vale Agency hosted by Newydd HA
Our key stakeholders:
What do we do? We support older people to repair, adapt and maintain their homes thereby enabling them to live as independently as possible with increased safety, security, warmth and comfort
How are we funded? Estimated Income 2014/15: 69,000 62,000 105,000 213,000 592,000 Welsh Government ICF HAs LAs Fee Income Big Lottery 697,000 Total = 1,738,000
Staffing Compliment 30 staff comprising of: Management Caseworkers Technical Officers Handypersons Occupational Therapists Administrators
Key Partners:
Governance Primarily conducted through a Strategic Business Planning Committee (SBPC) made up from representatives of: Cardiff Council Vale of Glamorgan Council Cardiff and Vale UHB C3SC VCVS CCHA (both SMT & Board) Newydd HA (both SMT & Board) Taff HA
Governance Ultimately, the buck stops with the two HA Boards
The Journey So Far
The Journey So Far Shared Agency Manager since Oct 2010 Positive attitude between CCHA & Newydd HA towards collaboration Positive attitude towards collaboration in SBPCs & with partners in LAs & UHB
The Journey So Far Start of 2013/14: Significant local funding challenges Unsustainable costs Potential future WG grant reductions National strategic drivers to regionalise service delivery
National Funding Challenges
Review with Partners Issues reviewed by both SBPCs in July 2013. 4 options for the future considered: Option 1 Do nothing Option 2 De collaborate Option 3 Merge and remain hosted Option 4 Merge and go independent SWOT analysis undertaken for each option Financial appraisal undertaken for each option
Outcome of Review Both SBPCs concluded that the two Agencies should seek to merge Option 3 (merge and remain hosted) and Option 4 (merge and go independent) should be further analysed to determine the most beneficial way forward SBPC s agreed to merge from Oct 2013 onwards
Further Review with Partners Options to merge and remain hosted or merge and go independent were reviewed in more detail at the first joint Cardiff and Vale SBPC meeting in Oct 2013
Key Issues Reviewed Income Opportunities potential to access alternative charitable funding if merged Agency became an independent charity potential for better success rate in funding applications as a smaller organisation potential social enterprise opportunities in both hosted and independent models
Key Issues Reviewed Staffing costs savings from reduced managerial costs already made which ever model adopted, likely to be significant redundancies. By 1 st April 2015: if hosted, anticipated 10 posts ending If independent, anticipated 6 posts ending
Key Issues Reviewed Staff On Costs Pensions currently SHPS costs approx 106k per annum across both Agencies unknown if future costs will increase only 60% of current staff are members moving to a standard defined contribution pension scheme with contributions of 6% of salary costs towards pensions for all staff, would generate savings of over 65k per annum change more easily achieved through establishing an independent merged Agency
Key Issues Reviewed Office Costs operating from one office from 2015/16 onwards would enable the merged Agency to reduce office costs by an estimated 40k pa change can be achieved in both hosted and independent models
Key Issues Reviewed Business Costs if hosted, HR, IT and Finance services would continue to be provided as a contribution in kind by the host HA if independent, Agency would need to purchase these services at estimated cost of 30k pa
Outcome of Review Analysis undertaken demonstrated that merging into a new, independent, charitable organisation provides the best opportunity in Cardiff and the Vale to: improve efficiencies increase sustainability improve service delivery strengthen the position of the merged Agency in the sector
Key Risks Costs and resources insufficient resources available to effectively sustain the new organisation Governance fail to establish a management body of trustees that does not effectively govern the new organisation Operational framework fail to plan for, and establish, a new organisation which can deliver the charitable objects Partners the new organisation fails to achieve buy in from existing partners Transition failure to manage the process of transition from the two existing organisations to the new merged Agency effectively
SBPC Recommendation Joint SBPC recommended that the Agencies merge and become a new, independent, charitable organisation Recommendation to be taken to CCHA s and Newydd s Board of Management for consideration in early 2014
HA Governance Process Issues discussed at CCHA s Board meetings on 29 th Jan and 5 th March 2014 Issues discussed at Newydd s Board meeting on 19 th March 2014
HA Governance Process CCHA s Board agreed that: Care and Repair Cardiff and Care and Repair in the Vale of Glamorgan should become an independent, charitable organisation, subject to meeting the due diligence criteria set by the respective Boards, Chief Executives and Finance Directors and in accordance with the best practice requirements of funders Support and assistance will be provided by the two housing associations for up to 12 months post independence during 2015/16 to assist Care and Repair in Cardiff and the Vale to reach independence as a sustainable and effective organisation, and to minimise external risk for the parent bodies. The extent of this support and assistance will be agreed, in both value and time, at the same time as the two Boards agree to the formation of the new organisation and will be at the discretion of the Boards of CCHA and Newydd HA The date for the creation of the independent organisation is presumed to be at or around the 1st April 2015 subject to the proposed arrangements, including a business plan that meets the requirements of the due diligence, meeting any Board or Welsh Government requirements
HA Governance Process Newydd s Board agreed that subject to a further report on the due diligence exercise that confirms the sustainability of the new business: Members APPROVED that Care & Repair in the Vale of Glamorgan merges with Care & Repair Cardiff Members APPROVED that the new merged agency is established as an independent charitable organisation
HA Governance Next Steps Task and Finish Group established comprising of representatives from CCHA & Newydd s Boards T&F Group reviewing Due Diligence framework to assess whether the future Agency should be independent Final decision anticipated by end of July 2014
Our Greatest Asset:
Consultation and Communication Updates provided at team meetings throughout 2013/14 In April 2014, meetings held with staff from both Agencies and comprehensive update of direction of travel provided Joint team meetings held from May 2014 onwards
Concerns and Worries Job security Office location T&Cs following merge
Support from Resources
Any Questions?