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1. Slide Title Flat Block Procurement Leaseholder Forum 18:30, 13/07/2016 Neil Wilson-Prior Interim Head of Asset Management Laura Hodgskin Service Manager - Leasehold & Lettings Paul O’Donnell Housing Procurement and Delivery Manager Presentation Title Time Venue

2. Key Facts We have identified a need to invest in the purpose build flat blocks. We want to procure a contract worth £50m – the largest single housing contract in a generation There are 550 flat blocks in Stevenage. We believe this investment will provide long term returns, to balance the HRA. We want to use a more traditional model of procurement to maximise value for money, retain control over the contracts and deliver a lasting legacy to the Borough. Leaseholders will be required by Law to contribute to the works; the Council’s discretion to limit the financial impact on Leaseholders is limited. We want to award the works to two suppliers, to encourage competition and distil the risk. Flat Block Procurement Leaseholder Forum Briefing

3. Agenda Context Why do we need to do this? What do we need to do? What we have done so far… Consultation Leaseholders and the Law Leaseholder Implications Flat Block Procurement Leaseholder Forum Briefing

4. Why do we need to this? General inflation and construction specific price fluctuations (measured through the BCIS) are predicted to rise. Stevenage, like other towns that expanded rapidly post WW2, have a more uniform build-date across its portfolio. This means that ‘bulk’ investment is needed across large geographic areas simultaneously. The most recent, significant investment into the portfolio was the “Decent Homes” work. This was largely to only the homes of Tenants and only to the kitchen, bathroom, electrics and heating. External works are required to ensure the stock continues to perform and to provide a return on that investment. There are distinct economic advantages to be found in ensuring that a large, planned programme of works reduces the burden on the HRA and Leaseholders in future years… Flat Block Procurement Leaseholder Forum Briefing

5. Why do we need to this? Investing in this stock now is considered preferential because: The works will be more expensive in future years; the cost of construction is predicted to rise and all costs are subject to inflation; Failing to invest will increase the risks associated with responsive maintenance and expensive “one-off” repairs; Failing to invest will increase the risks of insurance claims and disrepair claims; Our revenue is best protected when our homes are attractive; we want to improve the quality of all of our neighbourhoods; We can use this project to drive investment into the local community, provide job opportunities for local people, provide training and reduce anti-social behaviour Flat Block Procurement Leaseholder Forum Briefing

6. Why do we need to this? The need is there: Flat Block Procurement Leaseholder Forum Briefing

7. What do we need to do? We need to invest in our purpose built blocks of flats (“Flat Blocks”). There are 550 such blocks across the Borough. Based on the most recent surveys we estimate the investment needed is c£45m. We want the stock to be economical to maintain and to perform well. We want to substantially reduce the cost of maintaining the stock over the course of the Business Plan. We want to procure a contract that offers well-designed solutions to the most expensive problems for excellent value for money. We want to invest in our communities and inspire resident-led initiatives. Flat Block Procurement Leaseholder Forum Briefing

8. What do we need to do? We need to take a holistic approach to this project. We intend to refurbish: Roofs Structural Repairs and Alterations Windows Internal and External coverings Footways and Boundary Control Landlords’ Electrical Systems and Door Entry Systems Flat Block Procurement Leaseholder Forum Briefing

9. What have we done so far? We have conducted a detailed review of the stock, with a specific focus on the economic performance of the asset-base. We have identified the areas of investment required in the short, medium and long term future. We have worked with industry experts to plan a thorough, competitive and transparent procurement plan. We have built up detailed block-by-block specifications; this is uncommon, at this stage, for such a large project. This will remove some of the risks that might otherwise have been included in a contractors tender. We have appointed a specialist cost and procurement consultant. Flat Block Procurement Leaseholder Forum Briefing

10. Consultation We want to involve resident stakeholders from an early point in the process; certainly before we procure the works. Our statutory duties are defined by Section 20 of The Landlords and Tenants Act; we view this as the minimum acceptable standard and we want to be clear about processes, costs and contract management. We want the consultation to be informed, reciprocal and open. We will involve Officers, Tenants, Leaseholders, Members and, once procured, Contractors. We propose a Steering Group model as these offer the best opportunities for quality discussions. Flat Block Procurement Leaseholder Forum Briefing

11. Leaseholders and the Law Section 20 provides a framework for consultation and sets out the obligations of Landlords and Leaseholders. This is a two way process, with obligations encumbered upon the Landlord as much as the Lessee. The Council must demonstrate necessity, value and quality. Absolute diligence and integrity must be demonstrable every step of the way. Leaseholders will have to contribute financially. Helping Lessee’s understand why this is the case, how they can pay and what options exist is critical. Leaseholders have many sources of independent advice and ultimately have recourse to a First Tier Tribunal (LVT) to contest anything felt to be unfair or amiss. Flat Block Procurement Leaseholder Forum Briefing

12. Leaseholder Implications The first indication of the amount payable by an individual Leaseholder is an ESTIMATE. It is important to acknowledge that estimated sums, especially in construction, can rise or fall. It is also important to understand the process, checks, balances and probity that is involved in turning an estimated figure into a payable figure. We will not pay for anything that is unnecessary, not in accordance with the specification or quality standards. Therefore, no unnecessary costs will be passed on. Value engineering will be an integral part of the project throughout its lifecycle. The Steering Group will also have complete visibility of the process, with opportunities to challenge, inform and contribute to the project management. ‘Tick-box’ consultation is meaningless, risky and counter-productive. We must genuinely cooperate to guarantee the best results for everybody. Flat Block Procurement Leaseholder Forum Briefing

13. Questions Neil Wilson-Prior Head of Asset Management neil.wilson-prior@stevenage.gov.uk Paul O’Donnell Procurement & Delivery Manager paul.o'donnell@stevenage.gov.uk Laura Hodgskin Service Manager – Leasehold and Lettings Laura.hodgskin@stevenage.gov.uk Flat Block Procurement Leaseholder Forum Briefing