Self-financing for TMOs What difference does it make?

Self-financing for TMOs

What difference does it make?

It’s amazing what you can discover

when you do some digging

Q1:What’s all the fuss about?

Traditional TMO funding

Q2:What are your residents looking for

from tenant management?

A:• A nicer, safer, more-desirable place

to live… with a strong sense of community

• Not what the Council is offering – but better!

What the Council offers to TMOs

What the Counciloffers to TMOs

• The same services

• Delivered in the same way

• By the same people

• With the TMO taking the credit for how well it’s done…. or not!

Q3:How do we break free and give

residents what they want?

How our self-financing works

Q4:How can I make this happen?

Making it work (1):Know what you’ve got

• Detailed stock condition survey – knowing every block, building and land– what needs doing– when it needs doing

Making it work (2):Making the numbers work

• Detailed 30 year financial projection– Costing every service and piece of work– What and when spending is required

Making it work (3):Planning for the future

– 30 year major works and improvement plans for the whole estates

Is this only for the bold?

All TMOs need to keep a close eye on services

• Do you know what you are paying for?

• How much?

Have you got a grip on contracts?

The JMB Story

• The Horseshoe pub: Life on Mars ends-JMB self financing begins

Why do it?• This is the next stage in the JMB’s

development – ‘growing up’• No longer an annual argument with Southwark

about allowances and funding• Ability to plan major repairs and

improvement programmes• More control over services and contract

management• Leaseholders can plan their major work

payments

Making it easier and manageable for the TMO

• We commissioned a housing finance expert- Graham Moody

• Did the stock condition survey ourselves/ validated by Ridge consultants

• £25,000 paid to consultants/ most work done by JMB Manager/ Finance Manager & Major Works Manager

What is really needed to make it work?

• Resident support (canvas of residents): Financial not a legal change. Council tenants are still council tenants. The JMB is still a TMO.

• Highly capable & well respected board• Excellent financial and major works management (six

years of very hard work)• Political support• Key officers: need a champion at chief officer level

(Martin Green) & someone who can package the proposal for the Council and CLG (Lee Page)

Partnership and goodwill have made it happen

• Neither Southwark nor the JMB negotiated too hard

• This year (2013) we are buying £1.3m of services from Southwark

• This year and on - for optional services we need to more rigorously evaluate value for money & negotiate service level agreements

Up there in the Government’s mind

• CLG like this model: route for other TMOs?• Southwark Housing Commission say it’s the future• Within the modular management agreement - tweaked• Greater financial control, at a fraction of the price of a stock transfer• Partnership with, rather than divorce from Southwark Council- much

less contentious than a stock transfer

So to make it work

• Get in the driving seat

• Build your alliances

• Focus on your services

• Get a grip on contracts

The result – a marriage, ..aiming to be long & happy

And finally… what do the underlying figures say?

Stock for Rent

Self financing Valuation £m

Subsidy Capital Financing Requirement £m

Self financing Settlement Payment £m

Indicative Borrowing Limit £m**

Debt per Dwelling £

Hackney 22,707 106.9 887.4 -780.5 106.9 4,706

Westminster 12,307 308.0 257.1 50.9 308.0 25,025

Southwark 39,337 500.9 775.1 -274.1 500.9 12,735

Wandsworth 17,202 489.0 106.4 382.6 489.0 28,426

Islington 25,927 442.1 859.6 -417.5 442.1 17,053