The Bermondsey West Partnership Stage Four Peer Review 25 th October 2005

1. The Bermondsey West PartnershipStage Four Peer Review25th October 2005

2. The Presentation Team • Peter Norman Principal Asset Management Officer LB Southwark • Paul Greenwood Best Practice Director United House Ltd • John Fletcher Resident Representative Dickens TRA

3. Background • LB Southwark investment programme >£100M pa • Opportunities: • improved service delivery • cost savings • resident involvement in decision making • Trial partnering to achieve objectives • Pilot partnering contract, awarded July 2002 • Potential for extending contract • Client reorganisation, January 2005 • Contract extension awaiting approval

4. The Stakeholders • Customers • Residents (tenants and leaseholders) of Bermondsey • Client • LB Southwark - Housing • Supported by: • Southwark Building Design Services • Southwark Technical Services • Constructor • United House Ltd • Supported by Baily Garner Ltd

5. Alfred Salter Neighbourhood Partnership Capital Works To achieve Decent Homes 3,000 homesAlfred Salter Neighbourhood Estimated budget £7 million 3 (+2) years TPC 2001 Variant Partner constructor/designer Bermondsey West Partnership Capital Works To achieve Decent Homes 3,000 homes Bermondsey Area Budget allocation now £19 million to March 2006 The Partnership Became

6. 1.1 The Innovation‘Strategic Resident Involvement and Satisfaction’ Residents involved in: • Defining the partnering strategy • Constructor procurement • Partnership establishment • Initial works programme • Management of each project within the partnership • Partnership oversight - Continuing high level of involvement

7. 1.2 Implementation of the InnovationProcurement Programme • Establish project team • Client, resident reps plus partnering adviser • Agree procurement route - restricted procedure • Pre-Qualification • Partnering capability and experience • Resident involvement • Technical expertise • 34 responses • Tender • Partnering method statements and proposals • Baseline rates (selected external works), overheads and profit • 6 invitations • Award

8. 1.2 Implementation of the Innovation (continued)Residents as Full Partners • Kick-off workshops • Development of resident focussed Charter • Agreement of organisation • Project launch with a residents fun day

9. Core Group Permanent Resident representation Strategic direction of partnership Project Delivery Team Permanent Resident representation Management of individual projects 1.2 Implementation of the Innovation (continued)Organisation • Partnership Team • Temporary pool of expertise • Resident representation • Sub-groups establish all key structures, systems and processes • Performance Monitoring and Continual Improvement Group • Permanent • Forum for systematic improvement

10. 1.2 Implementation of the Innovation (continued)Developing the Partnership Sub-Groups for: • Pre-possession programme • Organisation, roles, communications and information flow • Risk management • Design and specification • Dispute avoidance • Quality management • KPIs, performance monitoring and improvement • Open book accounting, shared savings, payment and final account • Master programme • General site establishment

11. 1.3 Motivation for the InnovationImproved Services for Residents • Improved service delivery • Better programming • Defining and disseminating best practice • Better use of scarce professional resources • Working toward cost savings • Developing processes for benchmarking costs • Removing the cost of conflict • Incentivisation and sharing benefits • Resident involvement • Use resident knowledge and expertise • Better value targeting • Improving trust

12. 1.4 Key Change DriversThe People • Leaseholder/Tenant Councils • Neighbourhood/Area Forums • Tenant and Resident Associations • Councillors • Procurement staff

13.  Strong client leadership  This is the project’s Innovation  All key aspects of the project have been driven by the partnership team  Recognised as one of the keys to customer satisfaction  Commitment to customer, staff and community objectives is at the heart of the Innovation 1.4 Key Change Drivers (continued)Egan 5-4-7

14. 2.1 Main Benefits and ImpactVirtuous Cycle ofCustomer Satisfaction • Formalised resident involvement • Individual projects better able to meet resident needs • Better overall project performance • More constructive relations with and between LB Southwark areas/departments/units/…/staff • Less tactical management required by LBS staff • Improved LBS staff morale • LBS staff better able to manage strategic issues • Improved overall community satisfaction & sustainability

15. 2.1 Main Benefits and Impacts (continued)Added Value Spin-Offs • Improved partnership flexibility • More responsive to changes in requirements • Additional works undertaken within original budgets • Better able to focus on works needed for Decent Homes • Improved project management and incentivised performance • Benchmark against LB Southwark’s traditionally contracted projects and new partnerships • Support for the Comprehensive Performance Review undertaken by the Audit Commission

16. Customer satisfaction Service Product Incentivised Client satisfaction Service Product Cost predictability Design Construction Incentivised Time predictability Design Construction Agreement of final account Defects Safety Waste 2.2 Measures and MechanismsPerformance Measures

17. 2.2 Measures and Mechanisms (continued)Performance - Customer Satisfaction • Consistently exceeds targets of 85% satisfaction • Small drops on blocks where known problems exist

18. 2.2 Measures and Mechanisms (continued)Performance - Client Satisfaction • Early growth and plateau • Now improving again

19. 2.2 Measures and Mechanisms (continued)Performance – Cost Predictability • Normally under GMP • Consistently better than industry average • Savings channelled into additional estate works

20. 2.4 BeneficiariesThe Stakeholders • Customers • Residents of the Bermondsey Area • Other LB Southwark residents, generally • Client • Bermondsey Area team • Housing team • LB Southwark, generally • Constructor • Project teams • United House, generally • The housing sector • RSLs and LAs via this demo project

21. Challenges Establishing buy-in, commitment and momentum Restructuring the procurement process Adapting to changed LBS processes Solutions Strategic vision and drive Early communication with enabling groups Audit • Legal • Others Early involvement Traditional stakeholders Residents Constructor Use of a partnering advisor 3.1 Barriers and IssuesGeneral Culture and Processes

22. Challenges New larger Area created from former Neighbourhoods Complete change of operational staff and location Impacts Relationships Expectations Informal processes … Client satisfaction Solutions Induction workshop Briefing meetings Procedures Manual Operational alignment Communication 3.1 Barriers and Issues (continued)LBS Reorganisation

23. Challenges Inappropriate cost framework Tender rates/costs not applicable to actual works Difficulty in proving value for money Leaseholder challenge- potential for Proving Best Value Hard cost Additional benefits Solutions Market test sub-contractor packages Partnering culture impact Open-book accounting process Independent financial audit - with cost benchmarking LBS traditional contracts External contracts Comprehensive KPIs - with CE benchmarking 3.1 Barriers and Issues (continued)Technical/Financial

24. 3.2 TransferabilityOngoing Innovation Transfer • To other LBS Services • Responsive repairs • Other term contracts • To other LBS Areas • Promoting the innovation/process and its potential benefits • Compiling a comprehensive Partnership Procedures Manual • Developing performance measures for wider use • Establishing performance benchmarks • Exchanging Information with new partnerships through a Strategic Partnering Group • To other Local Authorities • Communicating using the demonstration project process

25. 3.3 Lessons LearnedThe Views of the Residents “Interested to get involved in contractor selection“ “Interested to see how Council undertook this process” “It was a rewarding experience” “It enabling me to see how we worked together to select the best firm” “Will continue to observe & comment” “Good to see more resident involvement” “We should see plenty of beneficial changes” Resident Workshop, 2004

26. 3.3 Lessons Learned (continued)From LBS’ viewpoint • Need to ensure robust pricing in tender documents • Continuous cost comparisons to ensure value for money • Ensure there is partnering through the supply chain • True open-book processes in place • Carry over processes to future partnering contracts

27. Conclusions • Full resident involvement • Positive impacts • Early stakeholder involvement • Positive input from all parties • Early identification and resolution of many problems • Robust Process • Benefited from a change in client team • Managed a change in client works strategy • Developing comprehensive benchmarking process • Overall benefits • Positive benefits of joint working • Demonstration Project status • Provided a wedge behind some of the changes • Enables wider dissemination of good practice