More than Decent? or What does the future hold for Asset Management, Maintenance and Repairs?

2. More than Decent? or What does the future hold for Asset Management, Maintenance and Repairs? Presented by Greg Trimmer

3. Why are we here?

4. Agenda • We are going to hit the Decent Homes Standard, aren’t we? • Decent Homes – The Sequel: will there be one? • Emerging issues for maintenance standards • Greening our existing homes • Partnering and Maintenance – is it ‘old hat’? • Tackling Asset Management Challenges in a broken market

5. Decent Homes Standard - Background • Lots of rules about new housing • Existing housing largely ignored • A massive backlog of council housing maintenance • Long term underfunding £19bn in 2000 • 1979 brings a “new” government determined to set up a strong economic framework for the UK • “Fiscal prudence” • Target driven • More money only in exchange for more “value” measured by targets

6. DHS - Four Criteria • Fit for habitation • Not Old and in Disrepair • Reasonably Modern Facilities • Thermal Comfort

7. Decent Homes – the context • A commitment made by government • Macro level – used to promote 3 options • Transfer • PFI • ALMOs • “There is no 4th Option” - Prescott • Micro level - A soundbite promise • the ‘devil’ is in the detail • Financial Incentives • Extra borrowing approvals for PFIs & ALMOs • ALMO funding tied to DHS • No financial incentives for RSLs! • DHS failure rates: • LA = 31%(Apr 2007) • HAs = around 20%

9. Decent Homes Plus • Most of us think DHS is too low • Hence local standards and or DHS+ • Little consistency about what constitutes DHS+ • A response to local concerns and resources • Examples include: • shorter lifetimes for key elements, • elements not included in DHS (double glazing, lifts etc) • kitchens and bathrooms without the full modern facilities test • BUT – does DHS+ help you hit the target?

10. Are you going to hit the DHS?

11. BRE Research • Many councils are over estimating failure • Applying old or poor condition – not both • “The vast majority of LAs and RSLs are carrying out work well in excess of the thermal comfort criterion” • Some landlords are overestimating cavity wall insulation

12. Are we on target? • Largely – we think so • No HA’s (say they)expect to fail • A few ALMO’s started late – not of their own volition! • A few LA’s have major financing issues • Not sure - says CLG • English House Condition Survey suggests little or no reduction in DHS failures!

14. DHS The sequel • A revised definition • Retaining the same headline components • Codifying some of the existing flexibilities • Introducing additional exceptions • Monitoring • Probably by TSA, AC and EHCS • Probably no revised target date • Could compensation be introduced for tenants living in non DHS homes?

15. DHS - The Sequel • Thermal Comfort • Will they take the chance to use EPC’s as the measure? • Thermal Insulation • Most of the stock should have achieved recommended levels by now • Cavity wall insulation – hard to check, and in extreme cases hard to install • BUT – would a reduction in DHS be politically acceptable? • Could they introduce a higher insulation requirement?

16. Sustainability • Expect some new “green” requirements • Possibilities include • Requiring landlords to provide energy saving advice • Low emission lighting • Communal lighting systems and other communal energy systems • Water saving measures • Energy monitoring for every household

17. What should be in the Sequel? • Lifts • Safety/fear of crime issues • Basic disrepair – however old the component • Water butts for every garden • Energy monitoring systems • Consistent guidelines on acceptable kitchens • SAP ratings or EPCs • EcoHomes XB

18. Emerging Issues

19. Emerging Issues for Housing Maintenance • EPCs • Short notice Inspections • Euro-procurement rules get tighter • Digital TV • Digital inclusion: “We now need to consider how digital inclusion might best be embedded in housing policy.” - HM Govt Oct 2008 • Flood resistance • EcoHomes XB

20. EPC’s • Every social letting now needs an EPC • Likely to increase void turnaround times • Unlikely to promote energy efficiency • Strong case for energy improvements to existing stock • Who pays? = the landlord • Who benefits? = the tenant

21. Short Notice Inspections • For Fair HA’s only • For now, but watch this space! • 5 days notice • Increased focus on Customer Involvement • Limit on evidence • 5 documents in advance • Self assessment – if recent • Is yours?

22. What will Inspectors look for? • Continuous Improvement • Appointment systems • Inspection regimes • Procurement strategies • E-procurement • Procurement Clubs • Asset Management is top of their list!

23. Greening Our Homes

24. Greening our existing homes • Sustainability major political issue • Recent announcements • 80% saving of greenhouse gasses • 27% of CO2 comes from housing • CO2 from housing up by 5% since 1997 • Expect to do more!

25. Greening Our Homes – Possibilities • Insulation • Is it as high as you can get? • Low energy lighting • Have you claimed your free gift yet? • Smart Monitoring • Can you get a power company to pay? • Boiler replacements • A grade wherever possible

26. Renewables • Micro-Generation promoted this year • But now being questioned • CHP can make sense for communal heating systems • Bio-fuels from local sources • Wind energy • Solar Water Heating • Photo-voltaics • Heat pumps • But – the funding dilemma.

27. Other sustainable ideas • Water butts • Soft surfacing • Spray taps, and more showers • Promoting cycling • and recycling • Low carbon vans • Less paper use • Monitor/reduce construction related waste • Joint projects with energy companies

28. Partnering and Maintenance – is it ‘old hat’?

29. RETHINKING CONSTRUCTION • Egan – over ten years old! • Now everyone is “partnering” • Or are they…. • Continued confusion: • What partnering is • Why are you doing it? • Is it cost-saving, or profit-sharing or risk-sharing? • A belief by landlords that the savings are all onteh contractor’s side

30. The Spirit of Partnering • Partnering should be tough! • Based around a new – and re-freshed – review of what you value • Money? • Service? • Community engagement • Know what’s in it for you • And what’s in it for the contractor • Share with your contractor • Use partnering to become a Learning Organisation

31. Case Study - Gallions HA • Out sourced their DLO • New Partnering Repairs Contract • Private sector management of works process • All staff retained – many still employed four years later • Better satisfaction • Better value • similar cost but more outputs

32. Case Study 2 – Responsive Repairs at Broomleigh • Contractor deals with whole process from tenant call through to final inspection • Whole organisation needs to be involved • Took 5 years; 18 months to implement from decision to “go” • Better quality, better satisfaction, lower costs • £½M admin savings • Eg instead of 42,000 invoices a year, now just 24!

33. A Broken Market –The Asset Management Challenges

34. Should we be worried? • Disposals funding • Major investment projects • In some cases underpins viability • Do you need to sell? • Even if you do, can you wait a year? • Is the auction market holding up? • Alternatives to disposal

35. What can we do? • Major regeneration projects • Consider other mixes of uses • Think long term • Most schemes take years to get off the ground • Look again for grant funding

36. The Fallout • Unmet Housing Need will increase • 223,000 new households pa • 100,000 (?) new homes this year • Tenants may find it harder to pay rent • Shared ownership staircasing and RTB will reduce • Leaseholders under pressure too • Can you reduce service charges? • Some of our contractors will fail • What’s your contingency plan?

37. Are there upsides? • Buying up housebuilders surplus • different standards • Pressure on prices • Oil prices • Materials prices • Social Housing Market still strong • £2.2bn spent by HA’s in 2006/7 • New contractors • More staff available • Now is the time to forge partnerships!

38. Conclusions • The National focus has moved back to new housebuilding • A strong emphasis on energy efficiency and sustainability • How green are our buildings? • Expect DHS to be revamped • We need to make sure that what we own supports what we are trying to do • Our tenants deserve good living standards • Its our job to define those standards, and deliver their - and our - aspirations

39. thank you for listening. www.trimmercs.co.uk