Management Order Contractor Procurement Bristols Experience

1. Management Order Contractor ProcurementBristol's Experience Options Preparation Process Top tips Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

2. Context - Bristol 15% of households in prs. Approx 5500 HMOs. 1500 – 2000 licensable HMOs. Pro-active approach has led to good relationship with landlords and universities generally. Poorer standard of accommodation in more peripheral areas. Some areas have problems caused by a high concentration of student properties. Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

3. Management Orders in Bristol Up to 150 potential management orders – based on no. of licensable HMOs with landlords with a history of prosecution. SIMOs proposed in areas experiencing ASB. EDMOs being considered as part of empty homes strategy. Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

4. Options for management Use existing arrangements :- in-house ALMO Private sector leasing scheme Joint venture company Procurement of external agencies :- RSLs managing agents Cover advantages and disadvantages (? Sep slide)Cover advantages and disadvantages (? Sep slide)

5. Procurement considerations and issues Potential for management orders. Capability and capacity of in-house or existing housing management providers. Potential for sub-regional working. Availability of support on procurement and legal issues. Point one – may not need to go any further – simply sit down and work out procedures. However, the exercise of producing a specification was really useful and prob need to go thru something similar just to get internal procedures right – likely to scare in-house. Ran away Does assume that own service doesn’t want to take this on Small Las may be able easier than large Consider highest no. – be safe If good relationship with local RSLs can encourage If decide to go external your LA procurement regs will cut in Sub region – can slow down, legal teams, can fall out, BCC legal advised against (Wessex) – slow, was possible, see Camden, more attractive For Bristol we drew heavily on Procurement and legal – it is a complex world, we are not experts. The world of cnotracts is prob not one in public service we get to grips with easily but in the real business your contract has to be spot-onPoint one – may not need to go any further – simply sit down and work out procedures. However, the exercise of producing a specification was really useful and prob need to go thru something similar just to get internal procedures right – likely to scare in-house. Ran away Does assume that own service doesn’t want to take this on Small Las may be able easier than large Consider highest no. – be safe If good relationship with local RSLs can encourage If decide to go external your LA procurement regs will cut in Sub region – can slow down, legal teams, can fall out, BCC legal advised against (Wessex) – slow, was possible, see Camden, more attractive For Bristol we drew heavily on Procurement and legal – it is a complex world, we are not experts. The world of cnotracts is prob not one in public service we get to grips with easily but in the real business your contract has to be spot-on

6. Further considerations and issues if procuring contractors Size of contract. Procurement Regulations. European tendering required if >£144,371 (exl VAT). Budget. Tenancy management and maintenance functions split or together? Should EDMOs be included as there are fundamental differences? Single contract or framework agreement? Point one – may not need to go any further – simply sit down and work out procedures. However, the exercise of producing a specification was really useful and prob need to go thru something similar just to get internal procedures right – likely to scare in-house. Ran away Can’t split contracts to avoid Eu tendering – not worth risk and doesn’t really add that much - Does assume that own service doesn’t want to take this on Small Las may be able easier than large Consider highest no. – be safe If good relationship with local RSLs can encourage If decide to go external your LA procurement regs will cut in Sub region – can slow down, legal teams, can fall out, BCC legal advised against (Wessex) – slow, was possible, see Camden, more attractive For Bristol we drew heavily on Procurement and legal – it is a complex world, we are not experts. The world of cnotracts is prob not one in public service we get to grips with easily but in the real business your contract has to be spot-onPoint one – may not need to go any further – simply sit down and work out procedures. However, the exercise of producing a specification was really useful and prob need to go thru something similar just to get internal procedures right – likely to scare in-house. Ran away Can’t split contracts to avoid Eu tendering – not worth risk and doesn’t really add that much - Does assume that own service doesn’t want to take this on Small Las may be able easier than large Consider highest no. – be safe If good relationship with local RSLs can encourage If decide to go external your LA procurement regs will cut in Sub region – can slow down, legal teams, can fall out, BCC legal advised against (Wessex) – slow, was possible, see Camden, more attractive For Bristol we drew heavily on Procurement and legal – it is a complex world, we are not experts. The world of cnotracts is prob not one in public service we get to grips with easily but in the real business your contract has to be spot-on

7. Contractual arrangements with external agencies Single contractor, or A number of selected contractors with contracts issued under the rules of a ‘framework agreement’ (contract only effective on individual property basis if accepted). Discuss rulesDiscuss rules

8. Single contracts v Framework agreement Greater flexibilty – check rules, could you offer different types of property to different contractors? Ours was a simple ranking Greater flexibilty – check rules, could you offer different types of property to different contractors? Ours was a simple ranking

9. Preparation (1) – decide features of the contract Bristol’s key features :- Agent to assume as much responsibility as possible. Bristol to have monitoring role. Agent to fund work from rent or loans – no LA budget available. Code of Good Management Practice defines standards incl. conduct and taking steps for ASB. Defined lines of communication (landlord can only contact Bristol CC). Agent carries any loss from rent arrears. Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

10. Preparation (2) – decide on what basis contractors will be selected Bristol’s key features :- Bids to be % of rental income the contractor would retain. Potential contractors would need to demonstrate knowledge of HMO licensing and experience of managing HMOs as well as business capability, equal opps and H&S policy etc. Bids assessed on 70/30 on quality/cost - based on case study submission and draft management scheme (Quality broken down into experience, project management, knowledge, problem solving and general management). Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

11. Preparation (3) - produce contract terms and specification Standard contract clauses eg parties / termination / breach etc Specific clauses for agents duties eg :- Keeping accounts and payments to landlord New tenancies and deposits Insurance / furniture Good and efficient management incl monthly inspections Prior approval for work >£2500 Production of draft management scheme Dedicated local point of contact Compliance with own H&S policy Meet performance indicators for rent collection and repairs Payment to landlords incl penalty % rate if not done As per reqs of HA04Payment to landlords incl penalty % rate if not done As per reqs of HA04

12. Specific clauses for Bristol CC Carry out legal responsibilities Provide information to the agent (tenancies, rents etc) Communicate with landlord as required Identify work to be included in management scheme Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action Training just on HMOs – not empty props One of the main changes brought about by HA 04 is the move from ‘property’ to ‘people’ as under HA85, unlike control orders management orders are more focused on a failure of management and there are a much broader range of circumstances. Disc experience of Control Orders -one of reasons that Control Orders were not favoured was the sheer involvement of taking over management, not geared up, very few done. Lot of criticism. Hearts sank when HA 04 came up with ‘son of control orders’, not only were they there but there was a duty to use them, they could in theory continue ad infinitum and don’t really appear to be not much of a sanction – Control Orders had an option of CPO. ODPM didn’t really accept this and believe landlords wouldn’t want LAs to manage their properties – may or may not be the case, but when landlords see regular payments coming into there account without them having to do anything it could be all too convenient to have LA manage their property. I think LAs would be happier to use heavy prosecution powers unless tenants at risk. In putting together our procedure we have looked at making this as painless as possible for BCC - we will only use MOs as a last resort - we can recover costs, so why not contract out the management - we will not look to allow these to be never-ending but will look to use CPO action

13. Restricted Tendering Process Prepare tender documentation. Advertise – Official Journal of European Union (OJEU) if necessary, . Send pre-qualification questionnaire. Evaluate (incl. experience etc). Invite to tender. Evaluate (incl.quality/cost etc). Select contractor(s) – single contract or included in ‘framework arrangement’. Restricted and Open tendering process – see LACORS Evaluate – as discussed earlier, business capability etcRestricted and Open tendering process – see LACORS Evaluate – as discussed earlier, business capability etc

14. Bristol’s experience Tendered for single contract in 2006 15 expressions of interest 1 pre-qualification questionnaire returned 0 bids Tendered for ‘framework agreement’ in 2007. Held agents’ evening event 3 pre-qualification questionnaires returned 2 bids 2 contractors appointed Included Indian companyIncluded Indian company

15. Top tips Use procurement and legal teams' expertise. E-tendering. Arrange implementation meeting to agree procedures with successful contractor(s). Agree how emergency health and safety work is to be carried out – consider ERA. If ‘framework agreement’ liaise with contractor to ensure individual contract commences on date MO made. Establish points of contact with contractor and monitor contract carefully. Make FMO as quickly as possible. Keep good records – in case of legal challenge. Try and suggest that other person eg agent be LH or manager Tie in with enforcement policy, but eventually may need to consider MO – warning letters should include ref. to making a MO. Some discussion as to whether or not we should prosecute first and perhaps if we developed a streamlined procedure to get cases to court quickly then this would meet ‘the no reasonable prospect’. However, cases can take a while to get to court and with adjournments can be protracted so will need to consider prospects of fairly early resolution in each case. Another ground could be that licence holder hasn’t convinced you that there are satisfactory management arrangements in place – in Bristol we don’t go into funding arrangements and generally if there is someone local then we pass this through, rightly or wrongly. We may look into it more if the LH lives in Abu Dabi etc. I spose we rely on our Code of Good Management Practice and if the LH failed in this they wouldn’t be F&P.Try and suggest that other person eg agent be LH or manager Tie in with enforcement policy, but eventually may need to consider MO – warning letters should include ref. to making a MO. Some discussion as to whether or not we should prosecute first and perhaps if we developed a streamlined procedure to get cases to court quickly then this would meet ‘the no reasonable prospect’. However, cases can take a while to get to court and with adjournments can be protracted so will need to consider prospects of fairly early resolution in each case. Another ground could be that licence holder hasn’t convinced you that there are satisfactory management arrangements in place – in Bristol we don’t go into funding arrangements and generally if there is someone local then we pass this through, rightly or wrongly. We may look into it more if the LH lives in Abu Dabi etc. I spose we rely on our Code of Good Management Practice and if the LH failed in this they wouldn’t be F&P.