Asset Management Strategy & Policy Review

Maximising Housing AssetsMaximising Housing Assets

12.06.12

• Mathew Baxter – Managing Directorechelon consultancy

• David Lingeman – Group Director of Property Services a2dominion

“Asset Management is the range of activities undertaken to ensure that the Housing Stock meets the needs and standards for the future.”

National Housing Federation

Defining Asset Management

Why is effective Asset Management critical?• £4bn spent on maintaining social housing in UK

• Equates to £1000 per property/per year on average

• 70% of budget on 30% stock?

• Releasing value back to centre

• Detailed forecasting – control

• Cost predictability – component accounting

• Maintainability & standardisation – reduces costs/risk

• Engagement with Service Providers – they know your stock

What makes a good AMS?• Clearly set objectives

• Bespoke to needs of a2d & its stakeholders

• Fully ‘owned’ by a2d and its stakeholders

• Must be organic

• Regular scrutiny/review and update

• Concise and clear links to supporting documents

• Clear procedures and processes

• Must be financially viable

a2dominion Scenario

•Existing AMS created in 2009 at merger

•34,000 homes across 90+ LA areas

•Development of model for strategic purposes

•Ability to model alternative solutions for assets – development of toolkit to do so

•Consideration of affordable and market rent impact

•Impact of rent review – opportunity or threat?

•Focus of ‘difficult’ properties by area

a2dominion Scenario

•Develop better relationships with LA Partners

•Ensure all options considered

•Visibility and access internally and externally

a2d Mind Map

Scoping Process

•2 x Workshops 20/1 & 27/1 (Joint Report issued)

• Identified 68 Success Factors from workshops

• 11 Internal Stakeholder 1:1s held

• 7 External Stakeholder 1:1s held

• Identifying Strengths & Weaknesses

• Detailed Summary Report

• Series of recommendations…

External Stakeholders - what did they say?

• Not proactively provided with AMS

• Encouraging closer working relationships

• Open to innovative ideas

• More emphasis on local issues – ring-fencing

• Affordable Rents – impact

• General over-supply of 1 and 2 bed – temp accom. needs

• Identifying specific needs

Scoping Process

•2 x Workshops (Joint Report issued)

• Identified 68 Success Factors from workshops

• 11 Internal Stakeholder 1:1s held

• 7 External Stakeholder 1:1s held

• Identifying Strengths & Weaknesses

• Detailed Summary Report

• Series of recommendations – ‘AMP Test’

The ‘AMP Test’

• Pre agreed criteria to inform decision making process

• Extracts data from various data sources (rather than

reliance on stock condition data) to include:

• External stakeholder data

• Internal stakeholder data

• Data from UH (Housing Management Database)

• Lifespan data

• ‘Soft’ data (e.g. demographics)

The ‘AMP Test’ - delivery

• Existing structure is functional but improvements identified

• Improvements will include:

• Clearly define criteria – new templates

• Extended use of Lifespan

• Creating ‘on-line’ AMP Test

• Accessibility to AMS documents/outputs (internal and

external)

• Standardised reporting templates

The ‘AMP Test’ – roll-out

• Initial meeting held with Lifespan

• Lifespan keen to develop product with A2D/echelon

• Further meetings to develop specifications

• Define selection criteria

• Develop ‘Decision Trees’

• Develop new process (full process maps)

• Finalise delivery model across a2d

Case Study - 12 Birkbeck Road

12 Birkbeck Road – Setting the Scene

• Victorian mid-terrace property

• Converted to 3 flats

• Ground floor – 1 bed (occupied elderly/reluctant

to move)

• First floor – 2 bed flat (void)

• Second Floor – 2 bed flat (void)

• Reasonable repair but soundproofing and thermal

insulation issues

12 Birkbeck Road – Previous Work

•Sound issues appraised – costs for upgrading sound and thermal (£206k ex fees)

•Costs include window renewals and kitchen and bathroom refurb (but not complete replacement)

•30-Year costed maintenance programme

12 Birkbeck Road – Previous Work

•Options identified by A2D:

• Complete refurbishment as costed

• Partial refurbishment of upper floor (limited sound proofing) - market rent potential

• Disposal

12 Birkbeck Road –Review approach

•Identified as atypical scenario for A2D

•Undertook visit to property to familiarise

•Reviewed work to date against AMS

•Requested additional information

•Desktop review of options

•Produced summary output report and findings

12 Birkbeck Road –review findings

•Additional DCF and sensitivity analysis undertaken

•Full financial details reviewed

•Process identified 4 further options for consideration:

• Retain existing layout and upgrade

• Convert to single large family unit (5 bed+)

• Convert to two units

• Include roof conversion

12 Birkbeck Road – LB Ealing Perspective

MB met Head of Housing Supply as part of scoping:

Identified following needs/aspirations:

•Early involvement in decision making

•More focus on developing a 3rd way/change of use

•Over supply of 1 beds (70% of social housing stock)

•Not enough 3 bed+

•Mixed tenure welcome

•Keen to work with A2D on 1 bed reduction

12 Birkbeck Road –Review outputs

•Costed 30-year option appraisals for each option

•Standardised spreadsheet for future use in new AMS

•Clarity on engaging LA Partner(s) in process

•Identification of all options through scorecard (decision tree)

•Specific consideration of conversions/extensions

•Impact of mixed tenure - payback

12 Birkbeck Road – Summary Costings

•Option 1 - Retain existing layout and upgrade

•Option 2 - Convert to single large family unit (4 bed+)

•Option 3 - Convert to two units

•Option 4 - Include roof conversion

Next Stage – Launch

• Formal sign-off process for new AMS• Present internally – operationally & EMT/Board• Internal briefings for staff/EMT/Board Meetings• Present externally – key external stakeholders• Residents Groups/LA/RP Partners• Ensure all stakeholders fully aware

Scrutiny

• Establish review process• Ensure document is created to allow it to evolve• Continuation of AMS Review Group in ‘check’ role• Interventions points • Annualised review• Standard reporting templates to a2d stakeholders

Thank you – Questions?

Contacts

David Lingeman - David.Lingeman@a2dominion.co.ukwww.a2dominion.co.uk

Mathew Baxter – mathew@echelonconsultancy.co.ukwww.echelonconsultancy.co.uk