Hra Business Plan 2004-2034

POOLE HOUSING PARTNERSHIP

REPORT TO HOUSING CONSULTATIVE PANEL

MONDAY 6TH SEPTEMBER 2004

HRA BUSINESS PLAN 2004-2034

1.0PURPOSE AND POLICY CONTEXT

1.1This report seeks to open consultation on the production of the latest HRA Business Plan.

1.2The completed Business Plan will require Cabinet and Council approval and will be submitted to the Office of the Deputy Prime Minister (ODPM).

1.3The Government will assess the Business Plan and Housing Strategy against “Fit for Purpose” criteria.

1.4The Plan must fit with wider Council Strategic objectives including the Housing Strategy.

2.0DECISION REQUIRED

2.1No decision is required.

2.2Discussion and Feedback on the draft plan will be welcomed.

3.0BACKGROUND

3.1The Council is required by Government, to produce a long term Business Plan for the Housing Revenue Account (HRA). This is the financial account associated with the Council housing stock.

3.2The previous two plans submitted together with the Housing Strategies, resulted in Poole moving in the Government’s housing assessment from “average” to “well above average” which is the top category.

3.3The new assessment is on whether the Business Plan and Housing Strategy meet the Government’s “Fit for Purpose” criteria.

3.4Earlier plans, resulted in an identified shortfall in resources required to meet the Decent Homes target by 2010.

3.5The subsequent Stock Options Appraisals recommended Stock Transfer or the setting up of an “Arms Length Management Organisation” (ALMO) as the only options available.

3.6In a ballot, tenants and leaseholders strongly supported the setting up of an ALMO.

3.7The ALMO, Poole Housing Partnership, has contracted to manage the HRA and produce the HRA Business Plan.

3.8The Plan must be produced to fit with the wider Housing Strategy.

4.0DRAFT PLAN

4.1Attached are key elements of the draft Business Plan.

4.1.1Financial Appraisal: Appendix A.

This confirms the shortfall in resources of £35.4 million to meet the Decent Homes target by 2010.

The ALMO funding will meet this shortfall, subject to a successful inspection.

4.1.2Stock Investment Strategy: Appendix B

This sets out the way that we will meet the Decent Homes target.

4.1.3Action Plan: Appendix C

This is a draft action plan for the housing service.

4.1.4Poole Housing Partnership “SWOT” analysis: Appendix D

This sets out the Strengths, Weaknesses, Opportunities and Threats to the service.

4.1.5Risk Assessments: Appendix E

This indicates the main areas of risk to the HRA and Poole Housing Partnership

4.1.6The staffing structure for Poole Housing Partnership: Appendix F

5.0CONCLUSION

5.1The Business Plan is still in development.

5.2Further sections will show:

Performance
Consultation
The Strategic Context

5.3All feedback is welcome.

Joe Logan

Chief Executive

JPL/slw/250804

APPENDICES A AND B ARE NOT AVAILABLE ELECTRONICALLY – PLEASE CONTACT DEMOCRATIC SERVICES SHOULD A COPY BE REQUIRED

HCP060920043 HRA.docPage 1 of 3

ORGANISATIONAL DEVELOPMENT

Strategic objective

/ Lead / Operational Measure /

Completion date

Develop Effective Governance of PHP
Develop PHP Management Team
Develop the Staff Team / Bill
Joe
Joe
Joe /

Develop the Board into an effective, strategic, cohesive body that provides leadership to PHP
Meet the obligations of the Companies Act
Meet the CHTF Governance Guidelines
Meet the Audit Commission inspection criteria

Create a cohesive, effective, strategic management team.
An effective working relationship with the Board based on a strategic/operational split
Review with Board, implementation of an overall organisational development tool such as EFQM

Achieve IiP Standard

/ Ongoing
Ongoing
Oct 2004
Oct 2004
Mar 2005
Mar 2005
Mar 2005
Develop Tight Financial Control / Anne
Columb
Columb /

Ensure effective training programmes
Amend financial reporting system to empower managers to effectively manage budgets

Review financial regulations and standing orders to ensure they support business effectiveness
Ensure programme of internal and external annual audit
Develop financial control function across Board and officers

/ Mar 2005
Mar 2005
Mar 2005
Mar 2005
Mar 2005
Ensure Value for Money across PHP and its services / Columb
Anne / “Value for money is the optimum combination of whole life cost and quality (or fitness for purpose) to meet the user’s requirements” H.M. Treasury.

Ensure that VFM principles are maintained when major post-procurement changes are necessary

Make intelligent use of benchmarking techniques

Instil the concept of VFM in all those managers that make procurement decisions by running an appropriate training session.
Maintain regular Capital Programme progress reviews

Achieve annual efficiency savings to 2% of budgets to be reinvested in stock improvements

Ensure value for money from services purchased from the Borough of Poole
Carry out Best Value Reviews of each ‘bought back’ service

/ Mar 2005
Mar 2005
Mar 2005
Mar 2005
Mar 2005
Mar 2005
Ensure effective Business Planning for PHP and HRA / Joe
Joe/
Columb /

Consultation with key stakeholders

Submit ‘fit for purpose’ business plan for 2004.

Develop PHP Business plan with Board.

Ensure Plans are understood by staff, Board and other stakeholders

Meet action plan targets

/ Oct 2004
Oct 2004
Oct 2004
Mar 2005
Mar 2005
Create an independent ‘arms length’ organisation / Joe /

Move to new offices.

Become a key player in the Federation of ALMOs

Establish the ‘branding’ of PHP through Marketing strategy

/ Dec 2004
Dec 2004
Mar 2005
Maximise Business opportunities /

Review income opportunities
Track wider ALMO development
Support lobbying of Minister

/ Mar 2005
Mar 2005
Mar 2005

ASSET MANAGEMENT

Strategic objective / Lead / Operational Measure /

Completion date

Achieve Decent Homes
Asbestos Management / Mark /

Carry out stock condition and enhanced level ‘O’ Energy Surveys to 15% of the housing stock.

Remodel stock condition data to produce accurate forecast for decent homes compliance and future targets, including future investment requirements.

Develop and implement an asset management strategy.

Develop and implement a capital works procurement strategy.

Complete the 2004/5 investment programme to the housing stock

Finalise and agree the ‘Poole Standard’ with all stakeholders. A policy document that defines Poole Housing Partnership’s performance specification for repair and improvement works, policies and standards.

Procure and implement an asbestos management software system

Ensure a process for asbestos surveying and sampling

May 2004

July 2004
Aug 2004
July 2004
Mar 2005
Aug 2004
Aug 2004
July 2004
Embrace Egan agenda / Mark /

Procure and appoint preferred partners to deliver 5 year investment programmes for;
Bathroom replacement
Warm deal – central upgrading and insulation scheme.
Safe as houses – electrical improvement scheme
Asbestos sampling/surveying
Asbestos removal/remedial action

Audit and review existing partnering contracts, to include:

Kitchen replacement
Door replacement
Electrical repair
Gas servicing and maintenance
External repair and redecoration

Carry out review of responsive repair contract including standards, policies and procedures.

Implement recommended actions arising from the Housing repairs and systems review.

/ Sept 2004
Sept 2004
Sept 2004
July 2004
Sept 2004
Provide Energy Efficient Homes / Mark /

Achieve 2 members of staff to become fully qualified NHER Registered Assessors.

Achieve Board commitment to developing a ‘best practice’ energy efficiency strategy for PHP.

Develop energy efficiency strategy and action plan.

Develop an investment plan for all sheltered schemes to ensure affordable warmth to all elderly residents.

Negotiate with energy suppliers to maximise discounting for communal heating systems to sheltered housing.

/ Mar 2004
Mar 2004
Aug 2004
Aug 2004
Aug 2004

DELIVER EXCELLENT SERVICES

Strategic objective / Lead / Operational Measure /

Completion date

Achieve high satisfaction from:

External customers

/ David /

Publicise annual performance report to all residents

Analyse outcome of 2003/4 tenant satisfaction survey and communicate results. Develop action plan arising from the results of the survey to improve satisfaction ratings.

Develop customer feedback systems in repairs and estate management functions.

Carry out annual resident satisfaction survey

Achieve Chartermark on reassessment

/ Nov 2004
Nov 2004
Oct 2004
Feb 2005
Achieve high satisfaction from:

Staff

Achieve Investors in People Award / Sandra
Sandra
Sandra
Joe/Board
Sandra
Joe/Sandra/Personnel Sub-group /

Meet all commitments in Communication Strategy

Carry out annual staff survey based on IiP survey

Spend 1.5% of staffing budget on training and development

Review all staff contracts terms and conditions to ensure equitable and fair.

Review staff handbook and publicise to all staff.

Prepare for IiP inspection

Achieve accreditation

/ Mar 2005
Oct 2004
Mar 2005
Mar 2005
Mar 2005

Sept 2004

Oct 2004
Provide continuously improving high quality services / Joe /

Implement a performance management culture.
All managers clear on areas of accountability
Achieve top quartile position in most performance indicators against all ALMOs

Mar 2005

Mar 2005
Mar 2005
IT / Sue /

Implement Academy system;

Phase 1
Phase 2
Phase 3

Develop electronic interface with maintenance contractors
Implement Document management
E.Govt

Mar 2005

Mar 2005
Mar 2005
Mar 2005
Prepare for Inspection / Joe /

Implement recommendations of the sheltered housing best value review.

Undertake reviews of:

Rent accounting and arrears management
Estate management services
Tenant participation service
Leaseholder service

Prepare for Audit Commission inspection in October 2004.

/ Mar 2005
Oct 2004
Mar 2005
Sept 2004
Mar 2005
Oct 2004

BUILDING SUSTAINABLE COMMUNITIES

Strategic objective / Lead / Operational Measure /

Completion date

Develop Tenant Participation / David /

Undertake review of tenant participation.
Improve representation of different sections of the community.
Establish focus groups that represent all sections of tenants/leaseholders.

Sept 2004

Mar 2005
Sept 2004
Meet Equalities Agenda / David /

Ensure compliance with CRE code of conduct for rented housing.
Develop performance management systems to measure fairness of service delivery.
Develop race equality scheme
Monitor key services by ethnicity to ensure fairness
Carry out annual refresher training for frontline staff, managers, resident representatives, Board members

Aug 2004

Sept 2004
Aug 2004
Sept 2004
Oct 2004
Meet Supporting People Agenda / David /

Appoint Supporting People Manager
Revise shopping and cleaning service.
Prepare services for Reviews

July 2004

Aug 2004
Mar 2005
Support Sustainable Communities / David /

Develop involvement of residents through tenant participation review.
Ensure rigorous programme of estate inspections.
Allocate a proportion of the capital budget to estate planning initiatives and environmental works.
Work in partnership with other agencies to tackle anti-social behaviour.

/ Sept 2004
Mar 2005
Feb 2005
Sept 2004

WORKING IN PARTNERSHIP

Strategic objective / Lead / Operational Measure /

Completion date

Embrace wider Council and Government objectives and 5 Council Priorities / Joe /

Link Business Plans to wider objectives
Link through to staff appraisals

Oct 2004

Mar 2005
Maintain close working with Council. / Joe /

Monthly Monitoring meeting with client to develop service
Review cross boundary working with key SUHs
Present effective annual report to Cabinet
Chief Executive to attend Council PD Group meetings

Monthly

Mar 2005
Oct 2004
Fortnightly
Identify and work jointly with key partner agencies / Sue /

Develop working arrangements with the following:
Dorset Race Equality Council
Local RSLs
Local Housing Authorities
Police
Citizens Advice Bureau

/ Mar 2005
Mar 2005
Mar 2005
Mar 2005
Mar 2005

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HCP – 6 September 04 - Appendix D

POOLE HOUSING PARTNERSHIP

SWOT ANALYSIS

(in draft)

Strengths / Weaknesses
Staff
Managers
Board
ALMO “energy”
Ability to deliver
Innovation
Independence
2x2* audit assessments
Chartermark
IIP Principles
Strong Investment planning
“Well above average” service
Good track record
Strong Federation of ALMOs
Good relationship with Council
Good cross service working
Track record in partnerships with tenants and leaseholders
78% investment is programmed
Investment in IT / Development of Performance Monitoring reports
Coping with diverse demands
Need to develop middle managers
Tenant Participation too narrow
Still in Civic Centre (ind)
Development of finance function
Capacity to cover all areas of development
Ability to appoint/retain technical staff
Currently not meeting CRE Code of Practice.
Recruitment and retention in competition with RSLs
Opportunities / Threats
Use of new computer system
Greater freedoms for excellent ALMOs
New areas of business
Joint procurement
New offices will support Independence
Use of European Foundation for Quality Management (EFQM) as development tool
Cross border working with LA’s and RSL’s
Improved staff terms and conditions / Continuing stock reduction
Failure to achieve 3/2*
Loss of HIP/Regional Board priorities
Rising building costs
Capacity of the construction industry to meet demand
Unforeseen problem with stock
Capacity: Board
Staff
Rising rent costs
Loss of management and maintenance allowances
Pressure on void and responsive repair budgets
Not enough surveyors/builders in market place
Resurgence in Right to Buy disposals

HCP 6 September 2004 – Appendix E

HRA BUSINESS PLAN

Risk Assessments

(in draft)

1= low likelihood/impact5 = High likelihood/impact

Risk Category key:18-25 = high

12-17 = medium/high

6-11 = medium/low

1-5 = low

1.Failure of PHP to meet minimum 2* in Audit

Careful preparation, and two 2* inspections, including a pre-inspection, make this a relatively low risk.

The potential impact is high; failure to achieve the £35.4 million required to meet the Decent Homes target.

LikelihoodImpactRisk LevelRisk Category

2x5=10(low/medium)

2.PHP overspend on Responsive Repairs and Voids Properties Budget

Both of the above budgets are vulnerable to overspends as both are “reactive” to demand.

Last year saw an increase in voids turnaround, in particular in the hostels, and Choice Based Lettings as well as some less popular sheltered housing sites, saw overall increased void costs.

The changeover in computer system, loss of the Responsive Repairs Manager, and increased demand, saw a higher spend less than anticipated on responsive repairs.

Both areas could have a major impact on the delegated PHP budgets.

LikelihoodImpactRisk LevelRisk Category

3x3=9(low/medium)

3.Failure to meet Decent Homes target

We will be investing in the order of £58 million in the building market in Poole over the next five years.

This is dependant on being able to find high quality builders and suppliers to meet our needs; with large numbers of kitchens, bathrooms and boilers.

The building market needs to expand to meet the “demands” nationally of housing, education, health and other public sector investment.

LikelihoodImpactRisk LevelRisk Category

2x4=8(low/medium)

4.Building Cost Inflation pushes up costs higher than currently anticipated in the Business Plan.

We are already seeing a heating up of the building market, and shortages of key trades, with inflationary pressures on costs. Costs rising higher than anticipated, could jeopardise the Business Plan.

Whilst we are working with local colleges, and are requiring contractors to train more apprenticeships, we are likely to be affected by the national picture.

LikelihoodImpactRisk LevelRisk Category

4x2=8(low/medium)

5.Drop in rent income collected hits ALMO funding

A drop in rent income could have a significant impact on funding from the HRA, as well as the political and “performance” damage to the perception of the new organisation, and of the Borough of Poole.

However, despite integrating the rent team into the ALMO, and transferring to a new computer system, we collected 98.18% of rent in 2003/2004; higher than anticipated.

LikelihoodImpactRisk LevelRisk Category

2x3=6(low/medium)

6.HIP Allocation

With the Regional Housing Board’s making recommendations on the overall allocation of HIP, there is a risk that we could see a drop in the current Poole allocation of 70% to the Council housing stock and 30% to affordable housing.

The existing Business Plan is dependent on existing sources of investment remaining.

This could mean the HRA Business Plan is no longer viable, with no alternative source of funding to make up the shortfall.

We have raised this with the ODPM and in our response to the consultation on HIP allocations.

LikelihoodImpactRisk LevelRisk Category

2x3=6(low/medium)

7.Inability to fill key technical posts

We are struggling to find senior surveyors to run our contracts.

Costs are higher if we use a strategic partnership with a surveying company. This however, remains an option we are exploring.

We will use trainee schemes and management development to develop our own surveyor managers in time, but will then need to be able to retain them.

LikelihoodImpactRisk LevelRisk Category

2x3=6(low/medium)

8.ALMO fails to meet Management Agreement and Delivery Plan.

This could ultimately result in the ALMO being wound up and require another option for the Council, such as a stock transfer.

This would meet opposition from residents, who strongly supported the ALMO.

However, given current performance, this is seen to be an unlikely outcome.

LikelihoodImpactRisk LevelRisk Category

1x5=5(low)

9.Right to Buy sales drop and reduce capital resources

We are seeing a steady reduction in RTB as prices increase to the 2003/2004 year average valuation of £94,474.

The trend in receipts over the first quarter of 2004/2005 shows a continued decline to an estimated 29 per annum.

Further reductions could jeopardise future capital resources. This could potentially be offset by Prudential Borrowing by the Council.

LikelihoodImpactRisk LevelRisk Category

4x1=4(low)

10.Pension Fund Contributions continue to rise

This year, the employers contributions from PHP was higher than budgeted for, given the age profile of PHP staff.

This could put further pressure on PHP budgets, in future years. Pension provision will remain an area of pressure.

LikelihoodImpactRisk LevelRisk Category

3x1=3(low)

11.Relationship between the ALMO and the Council

Currently there is a good relationship between the ALMO and the Council.

Performance or financial pressures could undermine this.

LikelihoodImpactRisk LevelRisk Category

1x3=3(low)

Joe Logan

Chief Executive

Poole Housing Partnership

HCP060920043 HRA.docPage 1 of 3

Risk Register

High Likelihood (4/5) /

Right to Buy sales drop and reduce capital resources

Building Cost Inflation pushes up costs higher than currently anticipated in the Business Plan.

Medium Likelihood (2/3) /

Pension Fund Contributions continue to rise

PHP overspend on Responsive Repairs and Voids Properties Budget

Drop in rent income collected hits ALMO funding

HIP Allocation

Inability to fill key technical posts

Failure of PHP to meet minimum 2* in Audit

Failure to meet Decent Homes target

Low Likelihood (1) /

Relationship between the ALMO and the Council

ALMO fails to meet Management Agreement and Delivery Plan.

Minimal Severity (1) / Moderate Severity (2/3) / Severe Severity (4/5)

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