The Future Delivery of Repairs Services Event Pdfs/Housing Asset Man… · profile? 148 units: Bottom Current Cost Score Current arrears % Average void rent loss% Average R&VR per

Aberdeen City Council

The Future Delivery of Repairs

Services

John Quinn Aberdeen City Council

Donna Milton Arneil Johnston


Repairs Service Context

• Aberdeen City Council

– 23,000 houses

– 20% in multi storeys

– Large % of joint owners

– Location

– Competitive market

– Large Waiting List

– Mixed tenure demand



• >500 staff

– 160-360 in 5 years

– 120+ agency staff

– Staff age profile

• Apprenticeships

– 52 awards over 5 years

– Best apprentice 2012



• 30m revenue budget

– Low void level

• 50m capital budget

– SHQS…..EESH

• Trading business

• Head and body

Asset Mgt.

Development

Consultancy

Project Mgt.

Delivery


Approach

• What?

– A repairs service which has to be provided by a

landlord

• Why?

– Legal Requirement……tenancy agreements

• How?

– Planned Approach

• Who?

– Good Question………………………….


What!?

‘Certain repairs will almost always be

the landlord’s responsibility, whether

or not they are specifically mentioned in

the tenancy agreement’


What!?

– The structure and exterior of the premises (such as walls,

floors and window frames), and the drains, gutters and

external pipes

– If the property is a house, the essential means of access to

it, such as steps from the street, are also included in

‘structure and exterior’. It also includes garden paths and

steps

– The water and gas pipes and electrical wiring (including, for

example, taps and sockets)

– The basins, sinks, baths and toilets

– Fixed heaters (for example, gas fires) and water heaters but

not gas or electric cookers


Other Reasons Why…

• To provide a Service

– Regulated

• To provide Security

– To tenants

– Tenancy agreements

– Right to Repair

• To control Performance

Delivery

Performance

Security

Service


Again…. Why!?

• Knowledge of stock

• Age / History

• Knowledge of People – tenants

• Securing Investment

• Consistency of Service Delivery

• Consistency of Financial Profiling


So… How?

• In house team

• Outsourced

• Combination of two

– Managing Contractor

– Subsidiary Company

– JV, LLP, ALMO…


Determinates

• HRA

• Asset Management Plan

• Budget Planning

• Owners Rights

• Quality Standards

• Competitive Market Place


In House Team

• Market place

– Overheating

– Workforce planning

– Opportunity

– Corporate v Commercial

• Best value

• Performance


Outsourced

• Managing Contractor Capacity

– Is it there?

• Knowing the Competitive market

– Aberdeen’s overheating market

• Tenancy Liaison

– Who is ultimately responsible

• Procurement Options

– Quality v Price

– Framework options


Combination of Two

• Partnerships

– Relationships

– Community benefits

• JV

– Legal

– ROI

• LLP

– Become External Agent

– Legal allowances……..


What is the Future?

Where will the rented sector be in the future?

Who will be driving it?

Best Value

Investment Needs

Answer these questions…can attempt an answer to the future delivery of repairs services…...(Donna!!)


Thinking the Future…

• Partnership approach to repairs strategy,

planning and delivery

– Regeneration & Housing Investment

– Housing & Community Safety

– ACC Corporate Services

• Outcome focus: tenants, ACC & the City

• New philosophy, plans & tools

RHIS Service Plan

Integrated asset management

plan

Area based management


Regeneration & Housing

Investment Service

Response Repairs £7.5M

Void Works £3.5M Planned & cyclical

repairs £3.5M

Housing adaptations

£1.25M

Public building response repairs

£1.25M

Housing capital works £30-35M

Housing – Gas contract: £3m

Regeneration work: £?m

External contracts: other public sector,

RSL’s etc.

Major council building projects:

schools, care village etc.


The Need for a RHIS Service

Plan…

Purpose of & ambition for the service

Service priorities to achieve purpose

Our resources & how we coordinate & deploy them

How we monitor progress

How we continuously improve

Clear blueprint to ensure all activities are

propelled towards a common

purpose & for longer term

co-ordinated activity


To be a strong & proactive partner in

developing & delivering an asset management

strategy

To improve intelligence on stock condition

To complete data management, process &

systems review

To embed asset management philosophy

into service

To support the delivery of the asset management

action plan

To deliver area based inspection/management

plan approach

To deliver a fit for purpose housing stock that meets statutory

requirements

To develop an energy efficiency strategy for the

ACC housing stock

To develop & maintain asbestos register

To further develop void repair strategy

To develop a coordinated response to delivering SSHC

outcome reporting

To deliver customer focused repairs, improvement &

maintenance works to a high standard

To systematically review performance management

framework

To perform data quality review

To develop consistent approach to procurement

across RHIS

To develop an integrated strategy on whole life costs

To increase efficiency through expansion of capability, capacity &

profitability

To deliver business development strategy based

on sound market intelligence

To implement a workforce development & skills

strategy

To establish trading accounts & sound financial

reporting mechanisms

To achieve ISO & implement service improvement

strategy

Vision: To deliver a property maintenance & investment service that is innovative, commercially focused, delivers best value & is well coordinated so that we meet the needs & demands of Aberdeen City by continuously improving housing quality & supporting the regeneration of

communities

Strategic Aim 1 Strategic Aim 2 Strategic Aim 3 Strategic Aim 4


The Future for Repairs

Planning & Delivery….

Integrated asset

management

Service Planning • Delivery & performance

Financial Planning • Business planning &

return on investment

Investment Planning • Long term costed

maintenance & repair


Not just focused on SHQS but on

business impact of asset from every

perspective…

If future costs are high, current costs are high and demand is low…

Should we continue to invest? Can we afford to invest?

Service Planning

Does the housing stock meet the needs & aspirations of tenants?

Do we manage & maintain it effectively & efficiently?

Investment Planning

Do we have a long term costed plan for the repair and maintenance of the housing stock?

Financial Planning

Can we afford to manage, maintain & invest in our housing?

Does any part of the housing stock cost more than we collect in rent?


Is stock fit for purpose?

Current Cost

• Void Rent Loss: 1.4%

• Arrears: 4.5%

• Management Costs: £687

• Response Repairs: £586

• Net Present Value: £12k

Future Costs • 30 year SHQS: £23,200

• Structural costs: £15,800

Housing Demand • Turnover: 0.3

• Refusals: 0.2

• WL/Turnover ratio: 170:1

Assess relationship

between 3 key factors


GIS format enables detailed scrutiny of current cost, future

cost & demand


Asset Management in

Practice

Why is the response & void cost per unit

so variable in this street?


14% 31% 55%

ACC Housing Asset Base Headlines

75% stock has +ve NPV Total NPV of

ACC Asset Base: £263M

8% stock has NPV -£25k

48% red assets have poor

current cost score

Response & Void Repairs

16% >£1k per unit 5% >£2k per unit

21% stock has capital

investment costs >£45k per unit

1,300 traditional properties cost over

£63M

36% amber is borderline

green

21% amber is borderline red

16% stock has management costs

>£1k per unit


• 45% stock arrears >10%

• 25% Voids > 10%

• 53% Response & void repairs >£1,500

• 55% Management costs > £1,500

• 47% Total capital spend > £40k

What is driving NPV

performance?

10% Stock > -£25k

Total NPV: £263M

NPV Avg. • £11k

Max.

• £125k

Min

• -£281k 33% 42% 25%

25%-ve 75% +ve

Net Present Value


What is the financial impact of performance improvement in stock with high current cost

profile?

148 units: Bottom Current Cost Score

Current arrears %

Average void rent loss%

Average R&VR per property

Management cost per unit

NPV per unit

Total NPV

Current Profile

39%

12%

£2,321

£1,449

-£69,858

-£10,338,963

Improve Performance to

Benchmark

4.5%

1.4%

£590

£690

£5,266

£779,314

Drains HRA by £10.3M HRA impact of performance

improvement: £9.5M


Evidence Based & Integrated

Repairs Strategy

Critically assess outcomes &

interrogate database

• Review asset performance

• Understand why stock is red, amber, green?

• Is performance driver controllable?

Strategic decision making

• How should we target management, maintenance and investment strategy in light of the findings?

Test impact on interventions: what

happens if we alter…

• Maintenance standards & outturns

• The costs, timing or nature of investment

• The customer impact of the stock

Test impact of targeted performance

measures on NPV

Test impact of interventions on HRA

business plan


New philosophy

New systems & approach

New relationships &

culture

Total business approach to

investment strategy

Asset management model & action plan

Asset management strategic group

Asset sustainability

Repairs contribution

Training & development

Systems review

Data validation

Information protocols

Stronger partnership

Joint planning

Focus on outcomes

An Integrated Approach:

Future of the Repairs Strategy

Documents

The Future Delivery of Repairs Services Event Pdfs/Housing Asset Man… · profile? 148 units: Bottom Current Cost Score Current arrears % Average void rent loss% Average R&VR per