Asset Management Policy

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A decision made (04.06.07) to approve Policy HD18 on Asset Management.

Subject:	Approval of Policy HD18 – Asset Management Policy
Decision Reference:	MD-H-2007-0033	Exempt clause(s):
Type of Report: (oral or written)	Oral	Person Giving Report (if oral):		Carl B Mavity – Director of Estate Services
Telephone or e-mail Meeting?		Report File ref:
Written Report – Title		Written report - author
Decision(s): The Minister approved Policy Document HD18 – Asset Management Policy.
Reason(s) for decision To ensure that the Department has clear and appropriate policy in respect of asset management.
Resource implications Financial: NIL Manpower: NIL Property: NIL ICT: NIL Law Drafting: NIL
Action required:
Signature: (Minister/ Assistant Minister)			Date of Decision:

Asset Management Policy

STATES OF JERSEY HOUSING DEPARTMENT

ASSET MANAGEMENT POLICY

POLICY HD 18

POLICY DOCUMENT HD18 – ASSET MANAGMENT

INTRODUCTION

The Purpose of the Asset Management Policy

This Asset Management Policy has been developed to compliment and inform the Department business plan and to set out priorities to maintain and improve the housing stock within the resources available to the Department.

The Policy aims to:

· Keep dwellings in good condition cost effectively

· Respond to resident’s priorities

· Achieve the decent homes standard by 2016

· Care for the external environment as well as for the individual homes

· Balance expenditure on responsive, cyclical and capital works

Strategic Objectives

Our vision is derived from the States Strategic Plan 2006 – 2011 (Commitment 3.8) To provide a good standard of affordable accommodation for all.

Underlying that vision there are a number of key objectives all of which impact on asset management:

• Increased levels of home ownership

• Reduction in the number of people waiting to be adequately housed

• A supply of homes that better meets the Island’s housing requirements

• Building standards that are equal to those in the UK

• Increase in the percentage of homes in public ownership at Decent Homes Standard

• Increase in provision of Island-wide sheltered housing

Asset Management Components and Tools

The Department has a range of tools to assist in the process of delivering its policy. These are:

A schedule of work set out in the Property Plan

A business plan, which supports the programme of work

Stock condition data

Standard specifications for all new build and refurbishment homes

Schedule of fixed price repair rates for response repairs

Schedule of fixed price repair rates for Void Property refurbishment

These tools enable the Department to take informed decisions and use the following to deliver results:

 The property plan to generate income and achieve the decent homes standard by 2016

 A planned maintenance programme to prevent deterioration on the physical condition of the stock

 A cost effective responsive maintenance service

 An efficient and effective voids refurbishment service, protecting and maximising revenue

 The demolition or disposal of properties that cannot be made decent cost effectively

ASSET PROFILE

Type of Stock

The Department’s housing stock of 4,602 (at 1st January 2007) dwellings is a mix of high and low rise, mostly traditional in construction.

Figure 1 – Dwelling Types

The age profile of the stock is set out in figure 2 below.

Figure 2 – Age of Stock

2003 Stock Condition Survey

A Stock Condition Survey was carried out by consultants NS Mercer & Bailey in 2003. Just over 10% of the properties of all types in all locations were surveyed. This information is held in a database. The remaining 90% of the property information is cloned. The survey data produced the conventional outputs of catch – up repairs and future element renewals needed over the next 30 years.

Overall 18% of our homes were found to be none decent homes standard compliant.

The key factors producing the decent homes standard failures were:

§ Heating (including insulation)

§ Windows and Doors

§ Kitchens and Bathrooms

§ Roof coverings

§ Structural Works

Due to the age of the stock (with large numbers over 50 years old) the need to spend in the next decade is primarily to fund element renewals rather than catch up repairs.

This includes provision for major structural works to the non – traditional and high – rise stock. It is our practice when faced with particularly high cost repairs to carry out a detailed option appraisal focusing on whether demolition with or without replacement, or outright disposal, is the better option. Some of the high – rise flats have had substantial external works in the last decade, specifically to target progressive deterioration of the concrete and reinforcement through calcification. Most of the remaining non – traditional properties are being sustained with modest repair works on the cyclical planned maintenance programme, centred around the 5 year external decoration cycle.

The main investment needs are: -

· Roof coverings and repairs to brickwork

· Upgrading kitchens, bathrooms and plumbing

· Rewiring and boiler renewals

· Upgrading insulation

· Repairing fences, boundary walls and paths

· Window and door renewals

Updating Stock Condition Information

The Database is being updated with: -

· Asbestos data

· New Capital Valuations

· Full internal and external surveys of each property are undertaken prior to any refurbishment work, in order to identify the exact repairs required

Currently the process of updating records relies on manual entry onto the system whenever an element is renewed as part of a programme or responsive work. A more intuitive and automated system is actively being sought.

RESOURCES

Capital Resources

The main resources available for capital investment will be: -

· £30m provided from Treasury Capital Funding (£5m per annum 2007 – 2011)

· Housing Department Rolling Vote (£2.4m as at 1st January 200&)

· Revenue (Planned Maintenance) allocation

Funding Required to Achieve Decent Homes Standard

A detailed property plan has been devised to achieve the decent homes standard for all homes by 2016.

This 10 year plan details that expenditure and funding will be required as follows (Figure 3):-

CAPITAL EXPENDITURE ANAYSIS
YEAR	1	2	3	4	5	6	7	8	9	10

COST £m	£14.3	£17.8	£7.7	£14.2	£9	£4.9	£3.3	£0	£8	£8

FUNDING £m
Capital	£6	£6	£6	£5	£7
Sales	£7.5	£12	£2	£9.2	£2	£5	£3.3		£8	£8

Figure 3

Meeting the Decent Homes Standard

The Property Plan details the proposed programme of investment works by estate, which will achieve the decent homes standard by the end of 2016.

This should allow the level of non – compliance to be reduced to 0 by 2016. The forecast change in decent homes levels is:-

Forecast Change in Decent Homes Levels

YEAR 2007 2008 2009 2010 2011 2012 2013 2014 2015

Non Decent Homes

As Percentage of

Stock

at 31st March (%) 18 13 11 9 8 4 2 1 0

SPECIFIC ISSUES AFFECTING TENANTS

Access

The need to respond to the diverse nature of tenants and the variety of ways in which they wish, and need, to access services has highlighted a wide range of desirable service and physical improvements:

▪ Lifts to allow elderly tenants in all retirement and sheltered schemes to come and go from their homes freely

▪ A wide range of adaptations for disabled people identified by the occupational therapists

▪ Homes which are life time homes compliant

▪ Homes which are safe and secure

▪ Community Facilities

▪ Digital TV for those flats with communal aerials, before the analogue switch off (programmed for 2012)

▪ Homes which are economic to maintain, operate and run

Energy Efficiency

The carbon footprint of Housing Department homes will be reduced by 2016.

By 2016 all properties with cavity walls and roof spaces will have cavity wall insulation or external wall insulation and at least 250mm of loft insulation (or equivalent).

The thermal efficiency of non-traditional properties and multi - storey flats will be achieved by means of over cladding with insulation.

By 2016 solid fuel as a means of providing primary heating and hot water will be eliminated. These measures will raise the average SAP rating (a measure of energy efficiency).

Waste

All major sites will have an internal waste management strategy

Health & Safety

Many vital initiatives will increase the health and safety of residents:-

▪ Removal of asbestos when this option is preferred to managing it in situ. Further details are contained in the Asbestos Management Policy HD19

▪ All homes are already provided with mains powered smoke detectors

▪ Homes with solid fuel, gas or oil fired heating systems or fires will be equipped with Carbon Monoxide (CO) Alarms where appropriate

▪ All homes will have an adequate heating system

▪ All homes should have access to mains water

▪ All homes should have access to mains drainage

▪ The 57 lifts in the multi-storey blocks are all subject to an annual testing and planned maintenance regime. Occasional major renewals of motors or lift cars will be carried out as required.

All lifts will have tactile controls and voice annunciation by 2010 (excepting those on schemes due for demolition or regeneration within 3 years).

REGENERATION

There are some obsolete dwellings that need complete remodelling to become acceptable modern housing. Usually these are the result of obsolete design or need. Examples are:-

▪ Bed-sit accommodation.

▪ Some high-rise accommodation (those with poor accommodation mix)

▪ Non-Traditional buildings which do not fit with a social housing portfolio

In the case of bedsit accommodation the remedy is often conversion of a pair of units to provide a single, self-contained flat to modern space and life time homes standards. There are numerous examples of this within the stock.

In respect of certain high rise buildings, the property plan sets out that whilst refurbishment and conversion is an option, another approach may be demolition and replacement with more modern and appropriate low rise homes.

PROCUREMENT

We have adopted a procurement process for major programmes and the main responsive and void refurbishment contracts that includes the following features:

· involvement of the Tenants Forum throughout the process from specification of design and service standards, through evaluation of method statements, to contractor interviews

· compliance with States of Jersey procurement best practice

· encouraging active competition

· emphasis on both quality and price in evaluation to seek true value for money

· emphasis on tenant participation during tender processes

· consideration of modern partnering arrangements embodied in suitable contract formats

· pursuit of long term contracts wherever possible (to minimise the wasteful effects of repeated tendering for small contract packages)

Partnering in Practice

In 1998 a Construction Task Force was set up by the Deputy Prime Minister to advise him of opportunities to improve the efficiency and quality of the of the output of the construction industry. This task force was led by Sir John Egan and, in July 1998, published a report, “Rethinking Construction”. There is now a growing body of good practice in partnering in the social housing field and we have drawn heavily on this in devising our approach.

In the event that the Property Plan is approved, it will present an opportunity for the Department to consider using partnering arrangements as a means of procuring capital works. Consideration will also be given to using the partnering approach to procure responsive and planned maintenance works.

There are some variations in the detail but both programmed and responsive arrangements share the key features of partnering:-

· a strategic partnering agreement to which a group of contractors carrying out related work, all sign up, committing all partners to work together to solve problems, seek continuous improvements and ensure effective, timely, efficient service delivery.

· tasks being carried out by the most appropriate partner and particularly a greater role for contractors in diagnosis, design and tenant liaison

· focus on safety and reducing accidents

· full information sharing amongst partners

· open book approach to appropriate issues

· encouragement of training investment, including joint training, to promote a competent and stable workforce

· development of electronic links for the transmission of data

· appointments for all jobs

· a focus on customer care and tenants exercising choices

· celebrating success together

· and above all, a commitment to communication and a non-adversarial approach

Effective use of resources

Many key elements of the contracts are aimed at delivering improved services and Value For Money, including:

· Appointments for jobs and inspections to minimise the waste of failed access visits

· A detailed fixed price repair schedule for both response repairs and void refurbishment. This will be developed further to achieve a drastic reduction in the number of items in the schedule with single items covering all the tasks involved in, say, fitting a new bath

· the principles of contractor diagnosis and multitasking in areas such as void inspection to the void lettability standard. The approach limits the number of visits a tenant should receive before work is completed with most jobs being completed on the first visit.

· Catering for inflation fluctuations within contracts

· Proactive identification by all partners of work that can more effectively be undertaken on a programmed basis. Increasing the proportion of repairs done on a planned maintenance basis opposed to responsive works from the present 64:36.

· Electronic invoicing

· Post inspection protocols with a focus on contractors’ own quality controls

· Simplified payment mechanisms for refurbishment programmes based on the target cost and a very short menu of variations, leading to a reduction in cost of technical staff for both contractor and client

Performance Management

It is essential to monitor:

· the impact of works on stock condition

· the experience of tenants and workforce

· the effective use of resources

· the outcomes to achieve targets in all these areas.

The key measures of the impact of works on stock condition are:

· decent homes compliance

· lettability

· rental yield

· energy efficiency.

The experience of tenants will be measured by:

· tenant satisfaction

· incidence of complaints and their resolution

· analysing the experience of diverse groups

· timeliness of responsive repairs

· time taken to complete programmed works

· rectification of defects

Whilst the workforce experience is reflected in:

· reportable accidents

· management of the contractor and reaction to defects

The effective use of resources can be assessed by:

· delivery of programme to target

· the programmed responsive balance (presently 64:36) (long term target 70:30)

· open book accounting / partner comparisons

· benchmarking

Performance against targets is reported to:

· the Minister

· the Tenants Forum

· the States

LINKS TO OTHER DOCUMENTS

1. States Strategic Plan 2006 – 2011

2. The Property Plan 2007 - 2016

3. Housing Department Business Plan 2007

4. Housing Department Repairs Strategy HD9 (Draft)

5. Fixed Price Schedule of Repair Rates

Policy Drafted	9th February 2005	C Mavity Estate Services Manager

Policy Review	Date	Reviewed By
Policy Review	23rd February 2006	C Mavity – Director of Estate Services
Policy Review	5th March 2007	C Mavity – Director of Estate Services