ASDM Integrated Draft

8/2/2019 ASDM Integrated Draft

1/28

1

Survey Data Analysis & Recommendations

Prepared for the Housing Department Management Team by:

Nadine Adams-AustinSarah Berman-HoustonGareth BoswellFayzan Rotherham

22 July 2011


2/28

2

Table of Contents

Part A: Analysis of the data

1 Background ....................................................................................................................................... 1

2 Methodology ..................................................................................................................................... 1

3 Tenants' expectations, perceptions and gap scores across the 5 dimensions ........................ 3

4 Tenants' importance weightings across the 5 dimensions ......................................................... 5

5 Key expectations and gap scores within each dimension .......................................................... 5

6 A comparative analysis of key results across the 7 towns ......................................................... 6

7 Recommendations for performance improvement ....................................................................... 8

Part B: Evaluation of the Options1 Discuss the roles you played and how you used the CAUSE framework or other approachesto support your problem structuring ................................................................................................... 131.1

Alternatives .......................................................................................Error! Bookmark not defined.

1.2 Stakeholders .................................................................................................................................. 131.3 Uncertainties .................................................................................................................................. 131.4 External / Environmental ................................................................................................................ 132 Discuss the development of a value tree for the analysis of alternatives................................ 14 3 Explain the process of scoring and weighting you have used (and include a table or graphof values) ................................................................................................................................................ 144 Discuss the synthesis of information for each stakeholder or scenario and compare resultsacross stakeholders / scenarios .......................................................................................................... 145 Carry out appropriate sensitivity analyses and outline what you learned from these ........... 145.1 Staff/Unions/Residents stakeholder sensitivity analysis ................................................................ 165.1.1 Residents preferred option: Outsource the housing service to a local cooperative

housing association ............................................................................................................................. 165.1.2 Staff/Unions preferred option: A management buyout ............................................................. 165.1.3 Local tax payers preferred option: Outsource the housing service to a cooperativehousing association ............................................................................................................................. 16

5.2 Local and National government stakeholder sensitivity analysis ................................................... 175.2.1 Elected members preferred option: Option B: Outsource the housing service to alocal cooperative housing association ................................................................................................. 175.2.2 Local government preferred option: Option B: Outsource the housing service to alocal cooperative housing association ................................................................................................. 18

5.3 Housing Manager stakeholder sensitivity analysis ........................................................................ 185.3.1 Private company manager preferred option: management buyout .......................................... 185.3.2 Housing Service Manager preferred option: management buyout ........................................... 205.3.3 Local Authority Manager preferred option: Management buyout ............................................. 205.3.4 Bank Manager preferred option: management buyout ............................................................. 20

6 Recommend a course of action (this may be a decision, a need to consider furtheralternatives, a need to design a more robust or better compromise alternative etc ...) ................ 22


3/28

3

7 Appendix A - Stakeholders ............................................................................................................ 237.1 Staff Representatives and Union Representatives ........................................................................ 237.2 Local Residents (service users) ..................................................................................................... 237.3 Local Residents (those who pay for services through the local property tax) ................................ 237.4 Elected Council representative ...................................................................................................... 237.5 The Scottish Government............................................................................................................... 247.6

Housing service manager............................................................................................................... 24

7.7 Local Authority Housing Manager .................................................................................................. 247.8 Local Cooperative Housing Association (HA) Manager ................................................................. 257.9 Private Company Manager............................................................................................................. 257.10 Bank Manager ................................................................................................................................ 258 Appendix B - Value Tree Analysis ................................................................................................ 26 9 Appendix C Scores and Weights ............................................................................................... 2710 Appendix D Performance Profile ............................................................................................... 28


4/28

4

PART A: ANALYSIS OF THE DATA

1. Executive SummaryThis report has been prepared for the Housing Department to provide context and analysis for

the statistical outcome of a recent tenant survey. The report will present the relevant findings ofthe data, explain these findings in understandable terms, and provide recommendations for

responding to the needs of the tenant population.

A total of 550 questionnaires out of 2000 were returned, and have been analysed. Whilst

response rates have varied between towns, a suitable statistical test has confirmed that there is

no significant difference between the distribution of surveys returned compared with those

distributed. We can therefore be confident that an appropriate cross-section of customers is

represented by this data.

Gap scores have shown us that the major areas for performance improvement are Reliability

and Responsiveness. Some towns are more satisfied than others, however, and there is scopefor reallocating resources according to the varying degrees of their importance to tenants.

The towns of Erinlang and, to a lesser degree, Grantspey, require a large amount of strategic

attention in making the necessary service improvements. The survey has revealed that most

tenant dissatisfaction across the regions can be traced to poor staff performance. The

Department must address this issue if tenant satisfaction is to be improved.

As the intended audience is not of a statistical background, the body of this report has been

kept straightforward. However, details of the data, along with graphs and other materials, have

been added as appendices for those who desire to read further.

2. BackgroundA satisfaction survey has recently been circulated amongst a sample of the tenant population.The objective of this survey is to gain an understanding of current service quality, and to identifyareas for future improvement.

This survey is designed to identify the expected and perceived service levels among customersin 7 towns. Five service dimensions were surveyed:

Tangibles

Reliability

Responsiveness

Assurance

Empathy

The housing department wishes to use the survey results to identify the gaps in service levelsamongst the regions, and across the business as a whole. Rather than issue a simple


5/28

5

satisfaction questionnaire, the department decided on a more sophisticated gap approach.Statistical methodology was therefore chosen as the optimal method for analysing the outputs ofthe survey.

This report investigates how customer perceptions align with expectations, identifies key servicegaps, and makes recommendations for how these gaps can be addressed.

3. MethodologyCustomer response did not always conform to expected standards. Some questionnaires did

not respond to certain questions and gave no weightings, some questions received several

responses, and some customer weightings did not add up to 100. Our methods for addressing

these inconsistencies are detailed below:

Nine data items had more than one value assigned to each dimension. However, these

multiple responses were in series such as 5,6 or 5, 6, 7. In order to capture the nature

of the response, we took an average of the values given.

42 of the dimension questions were left blank, close to 10% of the data set. Rather thanassume a value, and risk distorting such a significant amount of data, we reduced the

sample size for each question by excluding these null value types. This will be reflected

in the reporting.

Weight value was empty for 15 out of 550 data items. We discarded these from the

weightings analysis, as no logical assumption was possible.

One value was given as a character instead of a number. This response was excluded,

as no logical assumption was possible.

Where a range of weight values were given, the values were averaged and scaled out to

reach 100.

30 questionnaires showed cumulative weights that added up to more than 100%. 26

questionnaires showed cumulative weights that did not add up to 100%. For this, we

scaled the individual values out of 100%

4. Tenants' expectations, perceptions and gap scores across the 5

dimensions

Tangibles

Measures of tangibility comprised the physical condition of facilities, modernity of equipment,staff appearance and communication materials.

The data clearly demonstrates that quality communication material is the most importantcriterion in this dimension for respondents, and their expectations in this area have not beenmet. However, the physical appearance of both facilities and staff match customer expectations.


6/28

6

The equipment provided exceeds expectations, making this a possible area for reallocation ofinvestment.

Reliability

Measures of reliability comprised timeliness of service, sincere interest in solving tenantsproblems, doing a job right the first time, keeping service appointments, and keeping accuraterecords. This is a primary area of concern, as perceived service quality falls far short of tenant

expectations across all measures of quality.

It is clear from the data that the service fails to meet expected standards of timeliness,efficiency, and genuine staff interest in its problem-solving duties. Accuracy of records faredslightly better in matching expectations, but there is still ample room for improvement.

Responsiveness

Measures of responsiveness comprised informing tenants of when work will be done, providingprompt service, staff willingness to help tenants, and never being too busy to respond to tenantrequests. None of these specific areas are currently satisfying customer expectations.

The data demonstrates that expectations exceed perceptions of quality in this dimension,sometimes by a good amount. The most common point of tenant dissatisfaction is that they arenot properly informed of when work will be performed.

Assurance

Measures of assurance comprised inspiring confidence in tenants, assuring confidentiality,being consistently polite and having sufficient knowledge to answer tenants questions.

The data shows that there are areas for significant improvement in this dimension. Althoughstaff courtesy and knowledge comes close to meeting expectations, tenants do not feel asconfident or informed as they expect to when interacting with the housing service.

Overall, customers have shown that their service expectations have not been met in thiscategory.

Empathy

Measures of empathy comprised informing tenants of what services are available, providingconvenient operating hours and office locations, having the tenants best interests at heart, andunderstanding tenants individual needs.

Tenants are satisfied with the convenience of operating hours. However, customers do not feelthey are given individual attention, or that their best interests are being looked after.

Perceptions do not meet expectation in these areas; in fact, the data shows that the servicegaps in this area are among the widest service gaps identified by the survey.


7/28

7

4.1 Gap Scores Across Dimensions

Displaying weighted gap scores is a useful tool for quickly visualising the overall relationship

perceptions and expectations. The table below shows that whilst no dimension achieved

complete satisfaction amongst tenants, some areas are underperforming more than others. The

largest service gaps are seen in Reliability, Responsiveness and Assurance, in that order.

Dimension Average Expectation Average Perception Gap Score

Tangibles 5.6 5.22 -0.41

Reliability 6.5 4.9 -1.6

Responsiveness 6.53 4.98 -1.55

Assurance 6.4 5.1 -1.4

Empathy 6.5 5.4 -1.1

4.2 Confidence Interval (95%)Applying a confidence interval to these results enables a level of statistical inference about thelarger population. A standard confidence interval of 95% was applied to the data set, allowingus to draw the following inferences about the majority of the tenant population:

Dimension Confidence Interval (95%)Expectations

Confidence Interval (95%) Perceptions

Tangibles 6 5

Reliability 6.5 5

Responsiveness 6.5 5

Assurance 6 5

Empathy 6.5 5.4

Tangibles

The majority of customers expects an average score of 6 across tangible services, but givesactual service quality an average score of 5. Although there is room for improvement, this is

the most narrow service gap perceived by the tenant population.

Reliability

The tenants expectations of quality in this dimension are among the highest in the survey.Perceived quality levels fall far short of these expectations.

Responsiveness


8/28

8

The tenant population also has quite high expectations around the responsiveness of theHousing Department, topping even reliability. Again, quality perception is exceptionally low inrelation to expectation, making this dimension a source of significant disappointment.

Assurance

There is a service gap for the majority of the tenants, but it is not a major point of dissatisfaction.However, the Department should be aware that they are not instilling the confidence they could

be in their customers.

Empathy

Most tenants have high expectation for the empathy of staff, but the perception of quality fallsquite short of these standards. The majority of the population feels a lack of empathy in certainservice areas, and the Department should focus on these points of contact.

5. Customer Weightings across DimensionsTenants were asked to assign relative importance weightings to each of the five dimensions,according to how relevant each factor was to their individual needs. After cleansing the data asexplained in the Methodology section, the weightings clearly demonstrate that reliability and

responsiveness are the most important factors to tenants, whilst tangibles are the leastimportant.

The weightings were also analysed on a regional basis. Again, reliability is the most importantaspect of service across all towns. Responsiveness is a close second, particularly in the townsof Bracklin and Grantspey. Assurance and empathy are important to all regions, particularly inthe towns of Arnmuir and Deebank.

6. Key expectations and gap scores within each dimension

Tangibles

Communication materials, equipment and facilities are clearly of high importance to the tenant

population. Tenants expect accessible and attractive tangible goods. The data shows that thisperformance in this area could be improved by roughly 50 percent. This is an area wherestrategic changes could make a difference. However, the gap scores show that this dimensionis performing well in relation to the others.

Reliability

This dimension contains a number of key tenant expectations. Accuracy of paperwork, and staffprovision of appropriate and timely service, stand out as the areas of greatest importance. Thedata shows that a great deal of improvement can and should be achieved here.

Responsiveness

The highest expectations in this dimension concerns department staff: prompt service,enthusiasm, and willingness to help tenants. The data demonstrates a service gap of roughly 25percent around these areas, with the highest gap occurring in the area of being kept informedby staff of work schedules. These scores clearly indicate that staff training would go a long waytoward improving tenant satisfaction levels.


9/28

9

Assurance

The key expectation in this dimension is for tenants to feel assured of their confidentiality. Thesecond most significant expectation is that staff will be consistently polite. Gaps of 20 and 26percent, respectively, show that these areas fall short of customer expectations. Although theseare not the most significant service gaps, assurance is an area that the department would dowell to improve.

Empathy

Tenants expect that their best interests will be important to staff, but their perceptions in thisarea do not match these high expectations. The tenants also expect the department tounderstand their individual needs, but again, perceptions do not align with these expectations.On a positive note, the housing department is meeting tenant expectations in its schedulingrepairs and maintenance.

7. Comparative analysis of key results across the 7 towns

ArnmuirThe weakest service performance in the town of Arnmuir is in the dimension of Reliability. Mostdisappointing in this dimension is staff ability to get a job right the first time the data showsthat perception of this service area falls particularly short of tenant expectations. The other areain the Reliability dimension that tenants find particularly unsatisfactory is staff interest in solvingtheir problems.

Another dimension that showed very low perceptions in relation to expectations was Assurance.Tenants expected to feel confident in the Departments abilities, and they expected staff to beconsistently polite. These factors in particular scored badly in the survey.

Low scores were also given to Responsiveness. The most significant service gaps in this

dimension concerned being informed exactly when work was to be carried out, and staff beingtoo busy to respond to their questions.

However, whilst the tenants in Arnmuir are dissatisfied across all dimensions, their perceptionsare the closest to expectations of all the towns surveyed. Although there is room forimprovement, the Department does not have far to go to bridge the service gap in Armuir.

BracklinThe tenants in Bracklin reported satisfaction with more areas than any other region.

Perceptions aligned with expectations in communication materials, sincere interest of staff, staff

knowledge, and work being performed at convenient times. These tenants were also the

closest to being completely satisfied with Tangibles.

However, the dimension of Responsiveness is a major weakness in Bracklin. Tenants are

equally unhappy with all aspects of this dimension. The second worst performing dimension is

Reliability. Of particular concern is getting a job done by the time it is promised, and getting a

job done right the first time. These two factors fall equally short of expectations.


10/28

10

CambusAlthough the data shows ample room for improvement of services, the tenants of Cambus are

not hugely dissatisfied. In fact, their expectations are exceeded by the quality of Tangibles.

Reliability performance scored the worst, especially in the area of getting a job done right the

first time, and done by the time it is promised. Dissatisfaction with the sincere interest of staff

accounts for a large service gap as well. However, this is somewhat mitigated by the fact that

Reliability received a particularly low importance weighting.

The dimension of Responsiveness also shows poor perceptions against expectations. The

major pain points are being informed exactly when work is carried out, and receiving prompt

service

Cambus tenants weighted Assurance the lowest of all the regions.

DeebankThe tenants of Deebank report the highest expectations of Tangibles. Happily, these high

expectations are exceeded by the quality of Tangibles.

The Deebank population is the least disappointed by the quality of Reliability, and are the

closest to being satisfied by promptness of service and staff attitude. They are also reasonably

satisfied with Responsiveness. They have high expectations of Assurance, along with high

perceptions. In fact, the data shows that Deebank has the lowest service gaps in the Assurance

dimension. Deebank has the highest perception of office location convenience.

Although the Deebank tenants are fairly content, there are areas that need attention. In the

Responsiveness dimension, tenants show poor perceptions of promptness of service, and

being informed exactly when work will be carried out.

And although Assurance performs well in general, improvements can be made in staff

knowledge and assurance of confidentiality.

ErinlangThis town is dissatisfied with everything, and by quite a lot, although they are almost satisfied

with the quality of Tangibles. However, Tangibles was given only a medium amount of

importance by tenants.

Perceptions of Reliability are exceptionally low in relation to expectations. The worst scorers

are the sincere interest of staff, and getting a job right the first time. These two areas showed

equally bad perceptions.

The second worst performer is Responsiveness. Being informed of exactly when work will becarried out, and receiving prompt service showed particularly wide service gaps.

The tenants of Erinlang are the most dissatisfied with service quality of any population in theregions. This town requires a high level of Department attention.


11/28

11

ForthsideTenants in Forthside are satisfied with tangibles, for the most part, but the data shows at least

some dissatisfaction with everything else.

Perceptions of Reliability are the lowest, and account for the lowest gap score in the data set.

The lowest perceptions against expectations are reported around sincere interest of staff, and

getting a job right the first time.

Responsiveness also scored very low. The Forthside tenants have high expectations for

prompt service, and perceptions do not come close to matching these expectations. Tenants

also reported wide service gaps around staff being too busy, and less than willing, to help with

their questions and concerns.

GrantspeyThe population in Grantspey is satisfied with the quality of Tangibles, but dissatisfied by a good

bit with everything else.

The worst service gaps are in the dimension of Reliability. In particular, the sincere interest of

staff, and getting a job right the first time, were scored quite low by tenants. There are also

quite low perceptions in the dimension of Responsiveness - being informed exactly when work

will be carried out, and staff too busy to respond, are the worst performers in this data set.

Grantspey also identifies major service gaps in Empathy. Most problems here concern staff

attitudes, and staff understanding of individual needs.

8. Recommendations for Performance Improvement

The data is remarkably consistent across the regions: all towns report their primary dimensionsof dissatisfaction to be Responsiveness and Reliability. Deebank is the one exception, with thepoorest performing dimensions being Reliability and Assurance.

Tangibles show the highest perceptions against expectations, satisfying and even exceedingexpectations in some regions. Cambus and Deebank clearly receive over-investment inTangibles, evidenced by exceeded expectations in these towns. The fact that perceptionsexceed expectations is clearly demonstrated by the positive weighted gap scores. Thisinvestment can and should be reallocated to staff training and/or recruitment, as the majority of

service gaps concern the quality of staff competence and attitude.

The town of Deebank in particular seems content with most dimensions, whilst Erinlang tenantsare highly dissatisfied with the quality of service they receive from the Department. If possible,a staff exchange should take place between these two regions. This would allow morecompetent staff members from Deebank to model best service practice for Erinlang staff in alive environment whilst improving service for Erinlang tenants.


12/28

12

The data also shows that getting a job right the first time and informing tenants of maintenanceschedules are major problems in most towns. At its heart, these issues demonstrate a lack ofconsideration for the customers experience. In fact, the tenants may not be perceived ascustomers at all, an attitude which would account for some of the low scores across Reliabilityand Responsiveness.

The Department must create a customer-focused service culture amongst its operations staff.This includes implementing a Customer Experience programme which maps contact points,identifies appropriate behavior, and builds accountability into performance evaluation. In short,the Department must see itself as a business, and treat its staff like professionals. Holding staffto a high standard, and rewarding them appropriately, will improve measures of service qualitymore effectively than a simple round of compulsory staff training.

Along the same lines, in order to function at an optimal level the Department must regularlyassess customer perceptions and reallocate resource accordingly. For example, the town ofCambus gave Assurance a low importance rating, which indicates that Department spend in thisarea would go further toward customer satisfaction if it were reallocated to another town.Deebank, for example, reports quite low perceptions of Assurance, and would benefit from thereassignment of a particularly knowledgeable staff member.


13/28

13

PART B: EVALUATION OF THE OPTIONS

1. Problem structuring and Stakeholder modelling

The CAUSE framework was used to support problem structuring. It also provided guidance in

evaluating the four options currently under consideration by the Housing Department:

Option A: Staff training

Option B: Outsource the housing service to a local cooperative housing association

Option C: Outsource the housing service to a private sector company

Option D: A management buy out

1.1 Stakeholder Modelling

After careful analysis of the brief provided by the Department, eleven distinct stakeholders in

four categories were identified (see Appendix A Stakeholders). Each stakeholder has unique

priorities and primary considerations, making it necessary to explore the four options from

multiple perspectives. Modelling of these perspectives was performed as indicated below:

Gareth

o Staff Representatives and Union Representatives

o Local Residents (service users)

o Local Residents (those who pay for services through the local property tax)

Nadine

o Elected Council representative

o The Scottish Government

Sarah

o Management buy-out Housing Service/Local Authority Housing/Housing

Association/Private Company Manager

o Bank Manager

Fayzan

o Analyst and facilitator

Each author had an established role from the outset of the evaluation process. This gave each

key decision maker an equal voice in the decision analysis.

1.2 Uncertainties

Defining the roles for the group made the brainstorming of uncertainties easier, as each teammember was positioned to contribute from their unique viewpoint. This is discussed is more

detail in the next section.

1.3 External / Environmental

Our analysis included discussion of how wider environmental factors could affect the decision

making process. For example, although we did not consider other Local Authorities to be

relevant stakeholders in our analysis, we do recognise that they will have an impact on policies


14/28

14

produced by the central Scottish government, which may in turn affect the Housing Department.

However, every action and decision by a variety of external group and individual presents the

risk possible knock-on effects for the Department. The decision was taken to focus our analysis

on the known perspectives and priorities of the primary stakeholders.

2. Developing a value tree for the analysis of alternatives

By playing the defined roles, each author was able to ensure that the root of the value tree wascomprised of the key uncertainties. These uncertainties were then split into the appropriate sub

categories. This ensured that the each node of the value tree was relevant to, and understood

by, all stakeholders.

We debated the most appropriate composition, such as nodes representing uncertainties, or

nodes representing stakeholders. However it became clear that this problem required

uncertainties. The final output is shown in Appendix Value Tree Analysis.

2.1 Scoring and weighting process

Please see Appendix C Scores and Weights, which contains the final scores we reached. For

all the uncertainties, we chose to use a Local Scale for our reference points, where 0

corresponds to least important and 100 to the most important.

Role play assisted in VISA Step 3 Set Scores. Each team member provided insights from the

stakeholders that they represented, which in turn allowed us to arrive at a considered view as to

the local scale for each uncertainty.

To facilitate a discussion for VISA Step 4 Set Weights, each team member separately

produced weights for the uncertainties, which the facilitator then merged for further review in a

group discussion to arrive at a final consensus. The final weights that we arrived at can be seen

in the diagram in Appendix B - Value Tree Analysis.

Discuss the synthesis of information for each stakeholder or scenario

and compare results across stakeholders / scenarios

To enable opinions to be more fully formed and considered, we conducted the Part B assignment over

multiple group meetings. In preparation for each meeting the facilitator requested that the other team

members prepare appropriate input for group reflection that highlighted the positions of their

representative stakeholders. At this point we had produced:

Scores, see Appendix C Scores and Weights

Weightings, see Appendix C Scores and Weights with the diagram in Appendix B - Value Tree

Analysis

Please see Appendix D Performance Profile, which shows a breakdown of Best and Worst

uncertainties for each of the four alternatives. At this point the two alternatives Outsource thehousing service to a local cooperative housing association and A management buy out clearly

appear to be two options that are worth considering further.

Carry out appropriate sensitivity analyses and outline what you

learned from these

Once we had reached Step 5 - Analyze Value Tree, using sensitivity charts etc. enabled each team

member to produce results that reflected the aspirations of their stakeholders. This showed that it was


15/28

15

possible for one stakeholder to imply that the results showed in their favour, when in actuality charts

needed to be compared alongside representations for all the views of the other stakeholders.


16/28

16

Staff/Unions/Residents stakeholder sensitivity analysis

Residents preferred option: Outsource the housing service to a local cooperative housing

association

The sensitivity chart indicates that having taken adjusted each

criteria weight according to the preference of residents, the

preferred option is to outsourcing to a local cooperative housing

association.In this situation, the best interests of the residents are deemed

to be met, these being management of service gaps, to deliver

a high quality service by addressing all service needs. This

option is well suited to achieve this objective, considering that

the residents have direct representation in the appointed

housing association, which precludes poor communication of

service needs and facilitates a rapid response to any service

quality issues in the shortest possible time.

Staff/Unions preferred option: A management buyout

A management buyout appears to favour the best interests of

the staff and the associated unions.A principal concern for all staff, and by default, the unions is job

retention as the housing service undergoes ownership and

management change. Although TUPE regulations are expected

to protect these rights, thereby providing assurance to the

staff/unions at the initial stages of a change in the business

ownership, there is no long-term guarantee that the status quo

will be maintained. Many employees in this service will remain

in the department over the medium to long term, and this

uncertainty therefore creates a significant uneasiness in the

ranks of personnel employed by the local authority.

A management buyout thus empowers the employees to manage their own future and imparts a sense of

job security in that the future of their employment is placed firmly in the hands of those whom they already

rub shoulders throughout the working day, and who shall therefore empathise with them most over job

security issues.

Local tax payers preferred option: Outsource the housing service to a cooperative housing

association

Local taxpayers have many interests in the decision to improve

service delivery, beyond the obvious management of service

gaps and service quality delivered in fulfilment of service needs.

From the perspective of the tax payer, there are deeper

concerns such as the budget allocation of government funding,

and their own contributions through tax payment which they

expect to be managed optimally to deliver the best servicepossible in the short to medium term.

In the short term, the operating budget is a sure indicator of

where these funds are allocated to and maintenance of full

control over the management of funds shall assure these

remain allocated to deliver optimal results.

From the perspective of the tax payer, local authorities may, either through historical experience or as a

result of distrust in politicians, not be the best custodians and administrators of these funds. Local


17/28

17

authorities may also not have the best interests of the taxpayers at heart when decisions are made in

respect of resource allocation and control, considering that the actions are not directed solely by the

taxpayer, but more so by government policy, over which the tax payer may feel they have insufficient

representation and/or immediate control.

Outsourcing this service to a local cooperative thus resonates well with the interests of the taxpayer,

considering that fund allocation and control is more focussed on the tangible service needs of the

customer, thus amounting to effective short and medium term administration of the tax payers

contributions.

Local and National government stakeholder sensitivity analysis

Elected members preferred option: Option B: Outsource the housing service to a local

cooperative housing association

Elected members have a number of conflicting priorities and

concerns, with a need to ensure that the cuts required of central

government are delivered, and a seemingly conflicting need to

influence residents in such a way that they perceive an improvement

in quality, which in the short to mid-term could impact on future local

election decisions. Hence, there is an underlying political focus on

any key decision being made.

Budget options are therefore highly important, whether on a local

level in terms of dictating exactly how much money is available for

any of these options and identifying cost savings, or in terms of

looking at alternative options beyond the four given such as finding

alternative funding from external sources or building a case for more

funding from government because of specific causes.

It should be noted hence that regardless of the results indicated from

the management software, it is likely to be used as a contributing

factor to the final decision politically, and elected members would be

seeking out more information, for instance looking at what is

happening in neighbouring regions, risk factors associated with each

option, and possible political repercussions of choosing any one

option, before proceeding.

As part of being seen to represent and consider the needs of local

residents, elected members would also be interested in accounting

for service needs. Elected members will also be reluctant to take any

option which will regarded as a relinquishment of control, unless they

could fully demonstrate how this would deliver improved service

quality and reduce costs with minimal risk to the council (and indirectly to local residents taxes).

Staff-related concerns would be of less concern to elected members. While it would be beneficial to have

staff and unions on side, neither party can argue against the need to save money and provide a higher

quality service, from the findings of the resident survey. One possible viewpoint is that current staff have

helped to contribute to the current perception of the councils services, and if they are unwilling to admit tothis problem, then no amount of union argument or training being made available will help improve the

situation.

From these priorities, the software shows that the preferred option would be to outsource the housing

service to a local cooperative housing association. Depending on the nature of the councils

arrangements with the housing association, there may be scope for an element of control to be kept,

especially considering that the local authority will be assisting with set up costs and contributing to the

Housing Associations annual costs.


18/28

18

However, as indicated above, it is believed that elected members would want more information about this

option before committing further, as it would be important to them to be able to communicate the benefits

and savings to be achieved by following this route, and they would want to assure themselves that in the

current political and economic climate that residents would be broadly in support of their option choice

or that they had appropriate plans in place to be able to deal with any opposition.

Local government preferred option: Option B: Outsource the housing service to a local

cooperative housing association

The local council as a whole will be directed the priorities of the

elected members, given its function to help deliver elected

members strategies and visions over a political term. The main

point of difference for local government is that it would also have

to consider operational issues and staff concerns. For instance,

losing any staff as a result of making training mandatory, or

through some of the options, will incur costs and time.

There may also be implications to service quality if Option 1

were chosen for instance the organisation might have to

consider how a temporary dip in service quality could be

managed while change and improvements were being

embedded. So for local government, while staffing issues wouldbe less important than the other areas, it would not necessarily

be zero weighting.

With this extra consideration, the software also shows Option B as the recommended option. As local

government decisions would then be expected to go for approval by the senior management team(s) and

/ or elected members, a robust case would need to be developed to take this option forward if it was

supported by the elected members, notably, assertions such as the, Housing Association should in

theory at least be able to provide high levels of service quality to tenants, would need to be substantiated

further.

Housing Manager stakeholder sensitivity analysis

Private company manager preferred option: management buyout

The private company manager is concerned with Budget

both the capital budget and the operating budget rate high on

the list of priorities. With the exception of setup costs which

figure highly, Political Needs and their sub-criteria do not

factor into this managers decision making process.

Staff-related concerns do figure into the decision, but only at

a mid-weight ranking. The private company manager is not

overly concerned with the residents perception of quality

and service gaps are only important in that the bare minimum

must be done in order to retain the customer base.

As for Management sub-criteria, the major areas of concern

are the business plan and budget allocation. Both of these

rank quite highly. Managing service gaps is a factor, but not

a major one. The important Stakeholders are the shareholders this category gets the maximum

weighting. The bank is important as well, but to a lesser degree. Residents weigh in only slightly.

Taken together, the software predicts that a management buyout would seem the best option to the

private company manager. There are simply too many aspects of this business that that he/she has no

experience with, no time for, and no interest in. In his/her professional opinion, the requirements of this


19/28

19

project would be best served by retaining human resources which possess the required knowledge,

experience and commitment to its objectives.


20/28

20

Housing Service Manager preferred option: management buyout

The housing service manager is highly concerned with all

aspects of budget, political needs, local authority

government, staff and residents. He/she is less concerned

about the Scottish Government, but it does have some

weight as a consideration. As for Management, he/she is

highly concerned with managing service gaps and budget

allocation, but is not so concerned with the business plan.The only stakeholders this individual really values are the

residents shareholders and the bank do not factor in at

all.

The preferred outcome is a management buyout. Given the

complexity of the business and the number of factors that

are of serious concern, simple staff training will not suffice,

and a private company is not an appropriate environment

for a project with so many political needs and public stakeholders.

Local Authority Manager preferred option: Management buyout

The local authority manager has

one overriding priority cope withthe impending budget cuts whilst

ensuring that enough money

remains to cover the considerable

responsibilities of the local

authority.

This individual is greatly

concerned with all aspects of the

budget, giving these criteria a

heavy weighting. Political needs

are a consideration as well, but

taxation, possible savings and initial setup costs are the most important of these. Staff and residents get

middle weighting. They are a consideration, but this manager has a huge amount of staff and customers

across a range of public services.

The management practices of this particular business are not of great concern either. They do rate, but

only in as much as they get the most value for money and keep the customers happy enough not to

cause issues. The residents are the only stakeholders who figure in this scenario, as meeting residents

expectations is an important indicator of this Managers job performance.

The preferred outcome is a management buyout, as this represents a viable chance to save considerable

money and reduce the local authoritys burden of service, whilst maintaining staff consistency for the

tenants.

Bank Manager preferred option: management buyout

The bank managers priorities are simple: budget, business plan,shareholders and, of course, the bank. Criteria around staff,

residents and service quality do get some weight, but only as far as

they are managed enough to achieve sufficient return on

investment.

Due to the bank managers relatively limited scope of interest, this is

a simple decision. As long as the business plan is strong and the

budget is well-managed, he/she will support the management


21/28

21

buyout. This aligns with the fact that the bank as already expressed interest in backing this project.


22/28

22

Recommend a course of action (this may be a decision, a need to

consider further alternatives, a need to design a more robust or

better compromise alternative etc ...)

Having arrived at Step 5 -Analyse the Results, and having

reviewed each of the stakeholders sensitivity analysis, we arrive

at the XY Chart. This presents a very simplistic view of theresults. The XY Chart conclusions are also corroborated by the

Appendix DPerformance Profile, which shows a break down

of Best and Worst uncertainties for each of the four alternatives.

From these charts and the above sensitivity analyses, enables us

to draw two key conclusions:

Alternatives to be immediately dismissed

The two alternatives: Staff training and Outsource the housing

service to a private sector company have much lower overall

scores, were not selected by any individual sensitivity analyses and should be immediately discounted.

Alternatives to be considered further

The remaining two alternatives Outsource the housing service to a local cooperative housing

association and A management buy out achieved very similar scores. This can be concluded both from

individual stakeholder sensitivity analyses, where team members were permitted to change weights, to

reflect their stakeholders opinions, in addition to the overall XY Chart. Therefore, we suggest that the

key decision makers within the Local Authority should review these findings, and combine with additional

insights from elsewhere, which should include:

More detailed financial analysis

Consider ways that the stakeholder needs can be adequate met and measured, such as allowing

the Local Authority some amount of control over ongoing operations.

The research findings detailed in Part A of this report clearly indicated that the dimensions of Reliability

and Responsiveness are of the greatest importance to tenants. It is understood by the analysis alreadyundertaken, that in theory outsourcing to a local cooperative housing association would be best approach

for improving service quality such as in these areas. Also local and national governments may expect to

have greater control over a local cooperative housing association, rather than a management buy out

company. It is stated that residents perceive that service quality such as Reliability and Responsiveness

would not actually improve from a management buy-out, and with operating budgets being cut, this may

be expected to further negatively impact this performance.

Therefore taking the above points holistically into account, we recommend that the option to be pursued

should be that to outsource to a local cooperative housing association.


23/28

23

Appendix A - Stakeholders

Staff Representatives and Union Representatives

Option A

o Provide additional staff training focussed primarily on those areas where the largest

service quality gaps have been identified through your own analysis. The training will be

focussed on how staff can realistically improve the service they provide tenants given

existing budget constraints. Such training will not necessarily incur a high cost as it is

thought that much of the training can be done in-house and that staff can be released

from their day-to-day activities in small groups so as to minimise disruption.

Option C

o Staff currently working in the housing service would need to apply for their jobs with the

successful private bidder and there are no guarantees as to how many would be

employed or what terms and conditions would be. Understandably the local trades/labour

union is concerned about the impact on its members of this option (although only around

40% of housing service staff are union members)

Option D.

o It is anticipated that most staff would transfer over to the new organisation after the buy

out but this is not guaranteed.

Local Residents (service users)

Option C

o tenants have expressed concerns that the private company would be able to raise rents

as it wanted

Option D

o Local residents are concerned that quality of service may not improve given that it would

be the same management and the same staff as at present

Local Residents (those who pay for services through the local property tax)

Option A

o Still in council control so continuing impact on taxes

Option B

o the local authority would pay an annual contribution to the HAs running costs of around

500k

Option C

o The cost savings to the housing service however under this option are considerable

Option D

o Might be less burden on shareholders

Elected Council representative

Option B

o The HA should in theory at least be able to provide high levels of service quality to

tenants. Most of the existing housing service staff would automatically be transferred to

the HA with existing terms and conditions. However, there would be the option for staff

who did not want to transfer to take voluntary redundancy. The local authority estimates itcould incur a one-off cost of between 250k and 350k for this. In addition, the setup

costs to the local authority for this option would be relatively high (around million) as

the authority supports the new HA to get established (offices, IT systems etc) and the

local authority would pay an annual contribution to the HAs running costs of around

500k.

Option C

o Elected representatives serving on the local authority have also expressed concern about

the lack of control over the private company


24/28

24

o The cost savings to the housing service however under this option are considerable

Option D

o Elected representatives have argued that the local authority would have no future

influence over local housing policy which could cause major problems for economic

growth and development, tourism and so on.

o From this it appears that the elected official will be directly responsible for the housing

budget allocated, and by shrinking the budget too far, may break the viability of the

private company.The Scottish Government

The Scottish Government provide grants to each LA for social housing. Therefore they will wish

to have influence over how each local authority prioritise spending such as on social housing

Housing service manager

The housing service currently has an annual operating budget of around 1.5 million which goes on staff

costs, operating costs and the cost of property repairs. Under current economic conditions, the service

anticipates that its operating budget is likely to be cut considerably over the next few years putting further

pressure on the service in terms of quality and service. Any budget cuts are likely to lead to a reduction in

staff numbers although it is hoped this can be done through natural wastage rather than redundancy. The

capital budget allocated to the service for property upgrades and new build is likely to fall to zero.

Option A.o The Departmental manager is aware that staff training will not necessarily address all the

gaps identified. The manager is also aware that such training is not necessarily a

guarantee of improved performance and quality as some staff have been very reluctant to

accept any responsibility for the service quality gaps identified.

Option D.

o Existing management and staff of the housing service to organise a management buy

out. This would involve the existing management team paying the local authority an

agreed amount for the existing housing stock. The new service would then be

responsible for providing the service to local tenants and the local authority would have

no more involvement. It is anticipated that most staff would transfer over to the new

organisation after the buy out but this is not guaranteed.

o The manager needs to build a business plan that anticipates budget cuts, by seekingalternative revenue streams (such as renting properties privately), and planning for staff

reductions

Local Authority Housing Manager

Option B

o The HA would be run by a Board made up of people nominated by the local authority to

ensure good governance and also by elected representatives of the tenants who would

therefore have a direct involvement in the running of the service. The HA should in theory

at least be able to provide high levels of service quality to tenants. Most of the existing

housing service staff would automatically be transferred to the HA with existing terms and

conditions. However, there would be the option for staff who did not want to transfer to

take voluntary redundancy. The local authority estimates it could incur a one-off cost of

between 250k and 350k for this. In addition, the setup costs to the local authority for

this option would be relatively high (around million) as the authority supports the new

HA to get established (offices, IT systems etc) and the local authority would pay an

annual contribution to the HAs running costs of around 500k.

Option D

o There is also a risk to the local authority that if the new service is not financially viable in

the medium term and goes out of business, the local authority will have to pick up the

pieces.


25/28

25

Local Cooperative Housing Association (HA) Manager

Option B

o The second option is to outsource the entire service to a local cooperative housing

association (HA). HAs are non-profit organisations run by their tenants but employing

professional staff to carry out the day-to-day activities of the service and also to provide

professional management.

Private Company Manager

Option C

o The third option would be to outsource the entire service to the private sector. This would

be done through an invitation-to-tender process whereby private companies would bid for

the annual payment they would require from the local authority to provide the service.

The local authority would then pay that fee each year to the successful bidder to provide

the service for the next 5 years. It is not clear, given the current recession in the UK, what

level of payment private firms might require but a guesstimate is that it could be as low as

250k. The private company would also retain the rental income generated by the

housing stock from providing the service.

Bank Manager

Option D

o A Scottish bank has already indicated it would consider providing the funding for the buy-out. Its not known what the current value of the housing stock is but an informal estimate

is between 10-15 million.


26/28

26

Appendix B - Value Tree Analysis

This diagram depicts the value tree that our group collectively built, showing our key uncertainties, and

how that breaks down into sub-sections. The weights that were defined in VISA Step 4 Set Weights,

are also shown.


27/28

27

Appendix C Scores and Weights

For all the uncertainties, we chose to use a Local Scale, where 0 implies least important and 100 is

most important.

We took the combined views of all the stakeholders to arrive at the decision, as to how each uncertainty

would be impacted by the four alternatives. It should be noted that at face value, some scores might not

immediately seem logical, however within the context of our arguments become clear. For example, the

impact of the Unions as an uncertainty, are least important to the Staff Training option, as weconsidered the unions would approve of this, whereas the alternative to Outsource to a third party, might

cause significant disquiet within the Unions, therefore making this most important.

The weights that we collectively arrived at, are shown in the above diagram in 5 Appendix B - Value Tree

Analysis.


28/28

Appendix D Performance Profile

Although there is a lot of volatility which can mask differences between the four alternatives, its easy to

see which alternatives come out best and worst, with the results shown in the following table. We can

draw the following conclusions from this:

All options have a similar number of uncertainties that come out Best

Staff training and Outsource the housing service to a private sector company have significantuncertainties that come out worst

Overall Outsource the housing service to a local cooperative housing association and A

management buy out appear to be two options that are worth considering further.

Alternative # of uncertainties,

considered Best

# of uncertainties,

considered Worst

Difference between

Best and Worst

Staff training 4 -13 -9

Outsource the housing service to

a local cooperative housing

association

4 -1 3

Outsource the housing service to

a private sector company

6 -7 -1

A management buy out 4 -3 1

Documents

ASDM Integrated Draft