36 | 30 June 2011 www.cnplus.co.uk

Inside Knowledge: Client Briefing

bidding contractors at the pre-qualification and tender stages for its maintenance framework.

They will also be involved in specifying what is done to their properties and assessing contractors’ performance.

Mr Hunt says contractors are changing their services as a result of the shifting economic climate in the sector, with some firms already developing funding packages to aid development.

The increases in social tenants’ rent – allowing housing associations to charge up to 80 per cent of market value – could also benefit maintenance contractors.

“As rates increase then turnover of properties will increase and our maintenance and voids allowances will have to increase,” he says.

Contractors should also be more aware of low-carbon projects. Mr Hunt says any more waves of funding to come are likely to favour green issues and projects.

The Homes and Communities Agency’s head of intermediate markets Jamie Ratcliff believes the new funding criteria could

actually provide contractors with more certainty. He says previously every project had to be assessed to gain funding from the HCA, but now that clients must outline their pipeline of work, the future could be clearer for contractors.

“We’re agreeing a four-year plan of development and providers will know roughly how many homes they are going to build and where they are going to deliver them.”

Of the 150,000 housing units the government has pledged to deliver by 2015, 56,000 units-worth of funding are still up for grabs.

Clients that are successful in gaining funding will now receive only around £25,000 per unit, as opposed to £100,000 per unit previously.

As part of these new funding criteria, the HCA will also require clients to increase the efficiency of their procurement, which means more of a squeeze on contractors.

The funding changes outlined in the 2011-15 Affordable Homes Programme are going to alter what clients in affordable housing want from their contractors.

Under the new rules drawn up by the government and the Homes and Communities Agency, housing associations and other providers can still apply for funding but will now have to raise more of their own cash by increasing rents and using existing assets.

Poplar HARCA’s development director Neal Hunt says: “We are moving from a capital-based system to a revenue-based system. Cost is now much more important to us but the obvious difficulty is that standards have to go up.

“We are looking for value-added opportunities, not just straight contractors but firms that can take on a development partner role so we can maximise our land value.”

Clients raise expectationsNew funding rules create fresh challenges but greater certainty

n Keith Exford, chairman of the G15 group of London’s largest housing associationsNewly promoted from his previous role as vice-chairman for G15, Mr Exford is also the chief executive of the Affinity Sutton housing association. Other roles include being a non-executive director of the Housing Finance Corporation, an organisation which supports the funding needs of housing associations and a member of the Joseph Rowntree Foundation’s housing market taskforce.

n Richard Hill, director for programmes and deputy chief executive of the Homes and Communities AgencyMr Hill focuses on investment, policy, the national affordable housing programme, strategy, HomeBuy and other low-cost home ownership products. His previous roles include director of investment at the Housing Corporation, head of strategy and policy at the NHSU and head of policy and public affairs at the New Opportunities Fund.

n David Cowans, group chief executive of Places for PeopleMr Cowans works with a wide range of institutions to encourage policy change in relation to housing, development and sustainability issues. Places for People manages 62,000 homes and is a major developer of affordable housing. Mr Cowans is a chartered director of the Institute of Directors and a fellow of the Royal Society of Arts.

n Mark Rogers, group chief executive of CircleAppointed to his current role after the merger of Circle 33 and Anglia Housing in 2005, Mr Rogers heads up one of the largest providers of affordable housing in the UK. He is responsible for setting the direction of the organisation and overseeing its operations. Mr Rogers was previously director of customer services at Circle 33 and also chief executive of Nene Housing Society. In 2003 he became chief executive of Anglia Housing Group.

Roll call: who you need to know

Adaptability a must for contractorsInteRvIew: John cRossIn light of the tough investment climate, Bedfordshire Pilgrims Housing Association is looking to increase collaboration to drive efficiency. “As an organisation we are going back to and reviewing everything we do,” says chief executive John Cross.

“You need a strong relationship with your framework contractors – trust them to do even the niggly bits right.”

BPHA has recently reviewed its repair and maintenance operation and introduced new measures during procurement, as well as targeting further areas for savings.

Residents of the association’s portfolio were invited to assess

But it is not just residents who will benefit from such changes.

“If it all works out we will have a 10-year contract in place. Everyone wins,” he says, adding that contractors operating below cost will not help those involved.

“The message to contractors is: ‘We want it to be profitable for you because we cannot afford it to be a Rok or Connaught.’”

He says firms that embrace the difficult climate will benefit the most: “There is an opportunity for those really good contractors who adapt.

“Part of the problem is there have been some good contractors that have not been able to adapt and gone to the wall.”

soCiAL HousinGMICHAEl lANE

“We are looking for firms that can take on a development partner role”NEAl HUNt, POPlAR HARCA

cnplus.co.uk/Firstbuy_allocations The full list of which housebuilders have been allocated government funding through FirstBuy

JOHN CROSSCHIEF ExECUtIvEBEDFORDSHIRE PIlGRIMS HOUSING ASSOCIAtION

“We want it to be profitable because we cannot afford a Rok or Connaught”

30 June 2011 | 37www.cnplus.co.uk

social housing Forecast starts on site (£m)

Excludes individual projects of more than £100m and frameworks Source: glenigan

0

300

600

900

1200

1500

Q1 '13 (f)Q3 '12 (f)Q1 '12 (f)Q3 '11 (f)

top 10 clients in social housing in 2011

client contracts awarded Value (£m)

London & Quadrant Housing Trust 10 496

Bedfordshire Pilgrims Housing Association 2 306

The Scottish Future Trust 1 300

Port of Leith Housing Association 1 130

Homes & Communities Agency 4 104

West Lothian District Council 5 32

Orbit Group 9 29

Sanctuary Housing Group 9 28

London Borough of Hackney 3 27

The Guinness Partnership 10 24Source: glenigan

Partnership Publishing

Produced in collaboration with Plastic Surgeon

Green is key for Plastic SurgeonFor specialist finishing contractor Plastic Surgeon, strong sustain-ability credentials are central to operating successfully in the social housing sector, particularly since the whole-life property costs are a key responsibility for RSLs.

The firm says that by repairing damaged items and reducing waste, it can provide hard data for reporting on corporate social responsibility, IS0:14001, and can cut waste to landfill commitments.

Plastic Surgeon managing director Rob Mouser says: “There’s also a key requirement under the Code for Sustainable Homes, where all new dwellings will have to meet Level 6 by 2016 (or net zero carbon). It’s yet another cost implication at a time when budgets need to be controlled.”

The firm says that in 2010 it:n Saved 64,938 items from landfill;n Saved 1,750 tonnes from landfill;n Saved customers £84,000 in landfill taxes;n Carried out 2,170 shower repairs – average cost per repair is £20;n Carried out 25,183 glass window repairs – average saving is £286;n Repaired 2,774 baths, saving 69 tonnes from landfill.

Social consideration and security for residents is another crucial area. New Charter Housing Trust initially recruited Plastic Surgeon just to take over the work on its void properties, but soon extended the work to include all tenanted properties as well.

New Charter void maintenance manager Dawn Reynolds says: “In four months we’ve saved 750 kg of environmental waste and our average repair cost has dropped from £250 to under £30.”

For more information, visit www.plastic-surgeon.co.uk/social email social@plastic-surgeon.co.uk

social housing starts by region so Far in 2011

Excludes individual projects of more than £100m and frameworks Source: glenigan

%Yorks & HumberWest MidlandsWalesSouth-westSouth-eastScotlandNorthern IrelandNorth-westNorth-eastLondonEast of EnglandEast Midlands7

7

23

344

20

8

7

2

96

hca to sell 7,400 hathe homes and communities agency has revealed the 7,438 ha of land it intends to sell over the next two years.

the move is part of wider government plans to sell off £10 billion of previously developed public land to help solve the housing crisis.

the hca aims to make sure the

process is as transparent and quick as possible.

new mansell division mansell is to launch a new renewables division focusing on design, funding, installation and maintenance of solar panels.

the firms hopes to present solutions as an alternative to direct procurement and receipt of

the feed-in tariffs from landlords.

pV deal clinchedWates, apollo property services and Keepmoat are among those that have won places on a solar framework worth up to £225m.

the four-year agreement falls under a joint retrofit arrangement between Fusion 21 and procurement for housing.

Social houSinG newS round-uP

London continues to dominate the social housing sector as the region with both the largest overall share of the market (23 per cent this year) and the top client (London and Quadrant).

Unfortunately, however, London’s recent trend in project starts is all too indicative of the national decline in social housing work: just £368 million of work has been awarded in the capital so far this year, compared with £1.4 billion for the whole of 2010.

This decline is repeated across the country, with the North of England, Northern Ireland and Wales the hardest hit.

Government spending cuts have seen the Department for Communities and Local Government’s capital budget set at a total of £9.4bn over the four-year period ending 2014-2015. By comparison, capital spending for the one-year period of 2009-10 was budgeted at £9.2bn.

As a result, business intelligence unit Glenigan expects significant falls in the value of project starts over the next two years, with a 27 per cent decline in 2011 followed by a 21 per cent fall the following year.

Rather than new builds, spending on social housing will focus more on refurbishment and maintenance.

This shift in emphasis away from new capital works can clearly be seen in the value of detailed planning approvals across the country: in May, the value of new schemes given the go-ahead hit a nadir of less than £200 million, down sharply from a peak in March 2010 of more than £800 million.