Business Development Director, Just Housing Group
& Chair of the Direct Works Forum
The current economic situation and a government hostile to social housing demands a radical revision of the way in which the sector manages void properties and planned maintenance programmes. This article sets out ways in which organisations can drive greater value and reduce costs from these activities. With the introduction of new private landlords like Legal and General, intent on building 3000 houses/year to rent, the sector will be compared to operators who will spend nowhere near the average cost of £1700 – £2000 to re-service a void property. This article suggests the ways in which the sector can use some of these private sector practices to reduce costs in an ever challenging environment. We need to begin to think differently about our approach to managing our assets, putting life cycle costing and return on investment (ROI) at the centre of our thinking. This will require a much improved database of information about the stock to enable accurate decisions to be made on investment.
Managing Assets – Your primary function
The disaggregation of the management of the property portfolio has been a huge mistake in the sector. It is not uncommon to have a Development Director building houses, an Operations Director managing technical responsibilities such as planned and cyclical maintenance and a Housing Director managing the Day to Day, Voids and the customer service centre. Not only is this organisational structure expensive, it is clearly bonkers! The sector needs to address the fact that it’s primary function is the management and development of its property portfolio and not delivering a range of housing services that are the responsibility of social services, police and other organisations. The obvious solution to this dilemma is to place the management of the whole property portfolio with one Director, to ensure that the cost of building poor quality homes and not recording critical asset management data becomes the responsibility of one team.
It is not uncommon in the sector for organisations to spend more on housing management than on the property portfolio. How on earth can we make such a complex and protracted process out of allocating a property when we have thousands of people on our waiting lists?
Improving the Management of Voids
The current time and cost involved in turning round void properties is unsustainable in the new environment. Listed below are a series of good practice measures that will address the current situation.
- The agreed affordable Lettable Standard should be clearly defined and always adhered to unless the tenant has a disability.
- Every tenant should be formally introduced to their property and be given a clear understanding of their responsibilities, explaining the minor repairs which they are responsible for. This should also include instructions on how to operate the heating system, lighting, extractor fans etc.
- The most frequent users of the housing repairs service should be identified and constructive intervention should take place to effect behavioural change as they may well be tenants vacating properties.
- The property should be inspected by the voids team as part of the end of tenancy and any damage caused by unfair wear and tear should be recharged and payment received before any mutual exchange or move to another landlord’s property takes place.
- All the void activities should be managed by one team to avoid duplication, save time and gain consistency.
- Utilise dynamic resource scheduling complex project planning software, to optimise the management of teams or individual resources and gain real-time visibility.
- Gas and electric checks are essential as a part of the landlord function.
- Social landlords should adopt the role more akin to a reputable letting agent.
- All planned housing maintenance should be undertaken with the object of maintaining and enhancing the value of the property.
- The standardisation of components is essential and should be sourced for quality and lifespan as well as aesthetics. Measuring the cost in use is essential to inform future decisions.
- Just like regularly servicing a car, regular property checks (MOT’s) every 3 to 5 years will improve the lifespan of components. Use this planned activity to re-enforce to tenants that any activity that is evidence of damage to the property resulting from such things as blocked air vents, disconnected extractor fans, cooking fat in waste pipes and traps etc. will be recharged.
- Accurately record the warranties on components ensuring they are enforced.
- Record any component failure to inform future maintenance programmes.
- Replace or paint nothing that does not require it. We threw away untold £millions worth of perfectly good kitchens, baths, windows etc. on the Decent Homes Programmes.
The poor quality of procurement staff in the sector is a reflection of the quality in the country at large, hence the debacle of government IT, NHS and defence contracts. The proliferation of Framework Contracts for both materials and services in the sector continues to be a method of convenience in addressing the OJEU requirement by a sector short of good procurement skills. They have been a disaster in terms of value for money and a money spinner for the hosting organisations.
The model is unknown in any commercial business sector outside of social housing and no one in a commercial business would enter into 5 or 10 years supply agreement without testing the market at regular intervals. One important fact to remember is that the framework myth of greater volumes drives lower prices, is just that – a myth! A supplier will give you the best price when you can give them a definite number of items such as boilers, kitchens etc. and a definite delivery schedule, neither of which a framework generally offers. This is easily and inexpensively achieved by the use of e-procurement software.