Business Plan 2015-2018 - Linstone · PDF fileBusiness Plan 2015-2018 ... Environmental Analysis (SWOT) F) Current Pressure Points (PESTLE) G) Risk Register H) Budget 2015/16

Business Plan 2015-2018

‘Improving homes, enhancing communities’

March 2015

Contents Foreword by Chairperson Executive Summary Background to Linstone Housing Association Purpose of the Plan Feedback from Previous Plan Vision, Mission and Aims Strategic Direction and 3 Year Strategic Objectives Business Objectives 2012-2015 Housing Stock Plans Risk Management Financial Plans and Resources Other Resources Monitoring Appendices

A) Key Facts and Figures B) Management Committee C) Management Team D) Organisational Staff Structure E) Environmental Analysis (SWOT) F) Current Pressure Points (PESTLE) G) Risk Register H) Budget 2015/16 I) 5 Year Financial Projections J) Financial Assumptions K) Sensitivities L) Key Performance Indicator Report

Foreword by Chairperson, Nanette J Reid BEM The last three years have been some of the most positive in Linstone’s history. With significant investment in our homes, continued improvements in our performance, an increased profile within the community and beyond and a new purpose built office it has been an exciting time for the organisation. We have been in operation for over 17 years and we have never been in a stronger position, both financially and organisationally. Each year brings new challenges and opportunities and this new Business Plan for the next three years from 2015 until 2018 identifies a range of activities the association will undertake to ensure that we are able to provide the best service to our customers. Our previous Business Plan for the period 2012-15 gave Linstone some challenging objectives which have generally been delivered successfully. Some of the main highlights for Linstone over the last three years include:

Implementation of a large scale insulation programme with our partners Eon and Renfrewshire Council

Successfully moving to our new purpose built and wholly owned office in the regenerated Linwood Town Centre

Completed a full refurbishment of 16 homes within Brown Street which were previously derelict

Attaining lottery funding to deliver an innovative support project (Connect4Renfrewshire) working with partners including RAMH, Renfrewshire Credit Union and Renfrewshire Council.

Introduced a range of enhanced communication tools including a revised website, text messaging, complaints and customer satisfaction.

Continued improvement across all performance measures with notable decreases in rent and factoring arrears and improved repairs performance

Strong governance and financial management frameworks which has given us the best platform to deliver our objectives.

So what does the next three years bring. We remain in the midst of uncertain times with the Smith Commission, Welfare Reform and ongoing political change (both locally and nationally) and this will impact on how we operate going forward.

Some of the main activities for Linstone going forward include:

Continuation of the ECO programme and identification of additional requirements to meet the 2020 EESSH target

Implementation of Universal Credit within Renfrewshire scheduled for June 2015

Enhancing our customer satisfaction and engagement methods

Explore options for increased partnership working with a range of external organisations, including FLAIR

Examining the creation of a social enterprise to in house services

Continued performance improvements including reducing the number of our empty properties and debt owed to the association

These are only a selection of the objectives for the coming years and as the world around us changes there will be other challenges and opportunities which arise. Our principle aims for the next three years is to continue to enhance the services provided to our customers, invest heavily in our homes and communities and explore ways of making our services more efficient to ensure the income we receive is reinvested in our communities. We will also continue to build on the strength of existing and new partnerships with FLAIR, the Local Authority, third sector organisations, external agencies and contractors to drive through the innovation and opportunities to deliver our goals in helping to strengthen communities. The following plan sets out Linstone’s future objectives for the next three years which has been developed through consultation with residents, staff, external partners and the Management Committee.

Nanette J Reid BEM Chairperson

Executive Summary In this three year plan we set out our vision of building upon what we have already achieved. The last three years have seen considerable change for Linstone and our future aims include continued investment in our homes and communities combined with growth and diversification within the organisation, where it proves beneficial to all parties. Over the longer-term we see Linstone continuing to operate as an independent locally based association providing high quality affordable rented housing, excellent factoring services and a range of services which support the wider community. Linstone has now been in operation for seventeen years following a stock transfer from Scottish Homes. During this time we have delivered significant achievements despite the restrictions of being a debt funded association which provides limitations on the income we have available to meet our aspirations. To this end we have developed a new three year business plan which focuses on looking both inwardly and externally at the services we deliver, to ensure the following is achieved:

Our customers’ needs and aspirations are at the heart of what we deliver

Every service is delivered in a high performing and efficient manner which focuses on ensuring value for money

We actively encourage and seek out opportunities to work in partnership with the community and relevant stakeholders

Our staff and management committee have the skills, motivation, knowledge and vision required to move the association forward.

This business plan outlines what we hope to achieve over the next three years, a review of the current environment in which we operate and the resources required to deliver our objectives. Our vision is:

‘Improving homes, enhancing communities’ From this vision we have identified 5 Strategic Objectives:

Provide excellent homes and communities by implementing our asset management strategy

Continuously improve our services to our tenants and customers by providing services that meets their needs and priorities.

Ensure good governance, effective financial management and regulatory compliance.

Value our staff and Governing Body through training, education, coaching and leadership

Develop and sustain effective partnerships which maximise the benefits to Linstone and our communities.

The financial plans and sensitivity testing carried out by the Association will ensure that we have sufficient resources available to meet our obligations and ambitions regarding tenants’ needs and expectations, legislative requirements, and the scope to make significant progress to help build more sustainable communities. The work Linstone has carried out in the last five years to ensure we are financially sound means that we are able to ensure that any rental increases take account of both the affordability for our tenants and the needs of Linstone to deliver high quality services and investment in our homes. Our main priorities over the next three years are:

To invest over £10m (including ECO / HEEPS and other funding sources) in improving, maintaining and repairing our homes and estates.

Provide a range of opportunities for effective resident involvement including governance, satisfaction, scrutiny, participation and communication

To achieve value for money and efficiencies in all our activities including investigating in-house services and partnerships with relevant organisations

To develop and implement high quality performance, benchmarking and risk management processes

Enhancing our activities through the use of technology

Seek out external recognition and validation where it furthers Linstone’s aims

Ensure that the association and our tenants are not significantly adversely affected by the introduction of Universal Credit.

Deliver projects which enhance the communities in which we operate including Connect4Renfrewshire, Belmar Court etc

Detailed information on the objectives for this period can be found later in this Business Plan. The Association will formally review progress against objectives on an annual basis, including identifying achievements and any barriers to success, exploring new issues may have arisen and identifying any opportunities for the following year. This will ensure that the business plan remains a ‘live’ document which is constantly reviewed and updated.

Background Information

Linstone Housing Association Limited was set up in 1998 as a Charitable Housing Association to purchase most of the former Scottish Homes stock in Renfrewshire. We employ around 45 staff, managing just fewer than 1,600 properties. These staff provide also provide factoring and estate management services to a further 2,300 owner occupiers, as well as care and estate caretaking services. Key facts and figures about Linstone are contained in Appendix A.

Housing and Income Management

Linstone delivers a comprehensive housing management service to just less than 1,600 tenants.

These services include:-

Keeping a waiting list of people applying for rehousing and letting empty properties

Managing the estates, i.e. enforcing tenancy conditions, dealing with neighbour disputes, keeping the estates well maintained

Tenant participation through encouraging tenants and residents to become involved in the management of their homes and areas.

Provision of tenancy support to new and existing tenants

Rent and factoring arrears recovery combined with the provision of support services including welfare rights

Factoring Services

Linstone delivers a factoring service to approximately 500 owner occupiers who live in properties with common areas. Twice yearly, owners are billed for common repairs, caretaking services, landscape maintenance and insurance. In addition there are over 1,800 owner occupiers who receive an estate management service i.e. maintenance of common landscaped areas. The costs of this service are recharged on an annual basis.

Housing Support

Linstone has a dedicated housing support team involved in delivering Sheltered Housing Support Services to elderly people living in three sheltered schemes. The Association is registered with the Care Inspectorate and Supporting People teams. In addition the association has a Very Sheltered housing scheme where support services are provided by Renfrewshire Council.

Estate Services

Linstone provides a range of estate services provided either by our in-house estates team or sub-contracted to private companies. These services include close cleaning, minor repairs, special uplifts and painterwork.

Repairs and Improvements

Linstone delivers a day to day repairs service from its offices in Linwood to all our tenants and common areas. In addition, we carry out planned and cyclical maintenance programmes such as external wall insulation, rewiring, fitting central heating systems, painting and servicing contracts. The Association has a long-term 30-year plan for the maintenance of its properties where each aspect of the building is assessed to determine how long it will be before it needs to be replaced.

The association aims to ensure its stock reaches the Energy Efficiency in Scottish Social Housing (EESSH) standard by 2020 and has a Delivery Plan in place to achieve this.

Corporate Services

The organisation is also supported by a Corporate Services Team that provides services to both our internal and external customers. This includes ICT, Marketing and PR, Health and Safety, Human Resources, Wider Role and Customer Satisfaction. This team also includes a Finance Team, which ensures the association is properly managed in terms of finance including the production of management accounts, financial monitoring information and internal financial processing.

Membership

Linstone is a registered charity and Friendly Society. Membership is open to anyone over the age of eighteen (or sixteen in the case of Linstone tenants) following payment of £1 for a share in the association. As at the 31st March 2014 the Association had 165 members and we remain committed to encouraging interested persons to become members of the Association.

Governing Body

The formal control and strategic management of the Association rests with the Governing Body (or sometimes known as the Management Committee). Their role and responsibilities are set out in the Association’s Rules and Standing Orders.

All committee members receive thorough and detailed training on governance and other relevant matters on a regular basis. They sign up to our Code of Conduct on an annual basis. We currently have 14 committee members comprising of community representatives, professional representatives, tenants and a Council representative.

Appendix B lists the current Committee membership of the Association and a brief summary of background and experience.

The Committee Structure consists of the following:-

Management Committee

This meets every six weeks to consider corporate strategy, policies, and membership applications and oversee the operation of sub committees.

Finance and Income Sub Committee

This sub committee meets quarterly months to discuss internal audit reports, quarterly management accounts, financial policy and income management.

Housing and Property Services Sub Committee

This sub committee meets bi-monthly to receive performance information on housing and property services issues, agree housing policies and approve the planned and cyclical programmes.

Health and Safety Sub-Committee

This sub committee meets six monthly to review compliance with Health and Safety requirements.

In addition, the Association holds ad-hoc Working Group or Sub-Committee Meetings to deal with specific tasks or projects.

The Association’s Staff

As at 1st February 2015 we employ 48 people (44.5 full time equivalents). This includes 2 housing support staff within our Sheltered Housing Service and 5 estate based staff

Also included in this total is 3 Welfare Rights staff who operate across FLAIR and are funded by the four participating housing associations.

A number of the posts are funded posts either through Renfrewshire Council, Big Lottery or FLAIR and these account for approx. 6.5 FTE posts.

Responsibility for each department rests with a Management Team member and a brief summary of their skills and experience is included as Appendix C. An organisational chart is included as Appendix D.

FLAIR The Association is also constitutionally affiliated to FLAIR (Federation of Local Associations in Renfrewshire).This is a group of 5 RSL’s within Renfrewshire and East Renfrewshire who meet regularly to share ideas, staff resources, lobby collectively, attend working groups, apply for joint funding, etc. IFLAIR I – FLAIR is an extension to the above with the Associations in Inverclyde (Oak Tree, Cloch and Arklet in East Renfrewshire) .The purpose of IFLAIR is to jointly procure planned and cyclical works for the period 2012- 2017. A Framework Document was signed in January 2012 committing jointly £34M value of work in the areas such as gas safety, painterwork, landscape maintenance, kitchen replacement and installation of gas heating.

Purpose of the Business Plan

The Business Plan is the core document setting out the Association’s plans and strategies for the next 3 years, setting out our strategic aims and priorities.

The plan:

Defines the overall Strategic Objectives of the Association

Defines the short and medium term Business / Departmental objectives which will deliver the strategy

Defines the overall financial position and plans including our annual budgetary and medium term financial requirements of delivering these aims

Identifies key potential risks to Linstone and how these will be managed.

Is the mechanism which ensures an efficient and effective planning process and identifies the actions required for the day to day running of the association

Is a working document to allow management committee and management team to monitor progress against objectives and review priorities.

Progress reports on objectives will be made on a quarterly basis.

We will review this plan annually and develop our next 3 year plan by March 2018

We have developed this Business Plan in consultation with our key partners and stakeholders including tenants, residents, staff, Renfrewshire Council, Scottish Housing Regulator, the Scottish Government (Housing Investment Division) and our lenders to ensure that the Plan is focussed on real issues, realistic and achievable.

Our consultation has included:

Consultation took place with the Management Committee at a facilitated session to seek their views on the future direction of the association before production of a draft for further comment.

Newsletter and website articles outlining the production of a new draft plan with the plan included on our website for comment

Management Team has considered the future challenges and opportunities facing Linstone and identified a number of key issues requiring further action.

A consultation session was held with the full staff team at an away day giving them the opportunity to feed their views into the future priorities of the Association.

Meeting held with our Consultation Group which includes office bearers of a number of our RTO’s and other interested community representatives.

Linstone recognises the importance of partnership working in achieving our aims. As member of FLAIR (Federation of Local Associations in Renfrewshire) staff from all departments hold regular meetings and work collectively on a range of topics. Similarly we work in partnership with the Renfrewshire Council and the Scottish Government in developing common objectives, funding requirements, area wide strategies and policy development. This partnership dialogue is generally for specific areas of activity, for example, Local Housing Strategy, Joint Procurement, Development activities, Housing Management Activities, Community Planning and Wider Role. These discussions and partnership approach ensure that the association is aware of our partner’s future direction on the relevant topics.

We hold regular liaison meetings with Renfrewshire Council on a range of issues, including the Housing Providers Forum and Local Housing Strategy working groups. We input our views on key local authority documents relating to community and housing planning. A draft of this plan was circulated to the Scottish Government, Renfrewshire Council and FLAIR for comments, which were then incorporated into the final plan.

A consultation draft of the plan was also sent to our lender, Nationwide Building Society, for comment. Linstone liaises on an ongoing basis with the Nationwide to ensure that our lender is aware of our plans and that we are meeting all the obligations within the terms of our current loan agreement.

To ensure our Business Plan is relevant and robust, we have carried out an updated environmental analysis with staff and Management Committee at various consultation sessions. This involved an updated assessment of the Association’s Strengths, Weaknesses, Opportunities and Threats (SWOT) and also an analysis of the current pressure points through a PESTLE analysis. The information gathered from the SWOT and PESTLE analysis is contained in Appendix E and F.

Links to other corporate plans

This document links to the main strategies to be followed by the Association and the business plan itself links to a number of our business planning documents:

Risk Management Policy including identification of key risks, assessments of potential severity and planned actions to minimise risk.

Key Performance Indicators reported to the Management Committee and Sub-Committees on a regular basis

Our externally facilitated financial review (April 2011) produced template Five Year and Thirty Year Financial Projections and detailed cash flow predictions. These forecasts have been reviewed and updated in-house on an annual basis.

Budget for 2015/2016 and quarterly management accounts detailing the current year’s financial assumptions and expected income and expenditure as well as performance against budget.

Strategy documents relating to specific activities of the Association e.g. ICT, Wider Role, Tenant Participation, Asset Management, Training & Staff Development

Business objectives and individual personal objectives are then developed throughout the association. These are developed through Linstone’s staff Performance Review System in line with the objectives contained within this plan.

Links to Regulatory Expectations

As a social landlord we are regulated by the Scottish Housing Regulator and This Business Plan takes account of their recommended practice produced in 2012 including incorporating each of the seven critical components identified by the regulator which are:

Strategic objectives

Risk assessment

Operational targets

Environmental analysis

Asset management

Financial forecasts

Scenario planning The plan aims to ensure delivery of the expectations clearly defined within the Scottish Social Housing Charter.

Progress update on Previous Plan 2012-15 The last three years have seen significant progress for the association in a variety of areas. While this plan had a broad range of business objectives at the core of our approach was to ensure that Linstone sought to improve our services, manage our finances, develop our people, work in partnership and enhance our homes and communities. On reviewing progress against the plan it can be identified that generally the strategic objectives have been delivered upon. Improving services – we have improved performance across most areas including tenancy sustainment, reduction of debt and void management and continue to look at how customer satisfaction and complaints can inform improved service delivery. Manage our finances – we have continued to show prudent financial management and over the period of the plan ensured that we have increased our cash balances from £3.6m to over £4.5m despite significant financial investments during this period in increasing the number of homes in our ownership (20+), ownership of a new purpose built office and external wall insulation to 1100 tenants and residents. Developing our people – over the period we have implemented a staff structural review to ensure skills are deployed effectively, an increased number of staff completing further education, enhanced the range of diverse skills within the Management Committee and sought to employ trainees, apprenticeships, those marginalised within the employment market etc wherever possible. Working in Partnership – this continues to be evident through the partnership with FLAIR in which we lead on a range of areas and i-FLAIR. Other partnership working through the Connect4Renfrewshire project which brings a range of voluntary agencies together has improved the lives of those residents engaging with the services. Our partnership with Eon and Renfrewshire Council has helped lever in significant funding to improve energy efficiency within homes. Improving our Homes – services like the introduction of the Estates Services employed directly by the association, continued investment in the properties (particularly in relation to ECO works), refurbishment of Brown Street etc have helped ensure we have delivered on this strategic objective. The purchase and development of the new office accommodation provides a strong asset to the association The above represents only a selection of the progress made against that last business plan and highlights where some of the key successes were achieved. Generally the association has performed well against all of the key areas of work during the last three years and the intention is to build on this success going forward.

Financial Management Using the information contained within the annual accounts produced for the period 2010 - 2014, the Association has seen continued positive results in almost all key areas. The table below is designed to highlight some of the trends which identify that:

Turnover has increased by 16% since March 2010

Interest payable has decreased by 11% since March 2010 due to the continued reduction in interest rates

Cash in our bank accounts has increased by almost £4m since 2010, although this is to cover significant expenditure in 2014-2016

Management costs have increased by around 20% since 2010 primarily as a result in salary increases and increased pension contributions

Reactive repairs expenditure has increased in 2014; however this is primarily due to how costs were allocated in this year an following further analysis reactive repairs costs remain around 20% below the 2010 figure

On average the association has invested around £1m per annum on major repairs

Current and former rent arrears have demonstrated a 8% decrease since March 2010

Factoring debt has demonstrated a 60% decrease since 2010

Rental income collected year or year remains around 99%

2010 2011 2012 2013 2014

TURNOVER 5,398,142 5,530,039 5,775,944 5,991,467 6,460,478

GAIN ON SALES 57,883 9.059 59189 26,895 122,613

INTEREST PAYABLE 388,025 378,030 368,948 354,890 346,541

INTEREST RECEIVED 9,985 5,478 33,646 62,749 44,748

CASH AT BANK 2,173,560 3,030,758 3,673,561 4,725,894 6,125,626

MANAGEMENT COSTS 1,507,465 1,574,021 1,626,351 1,787,712 1,889,144

REACTIVE REPAIRS 842,392 786,287 727,894 766,505 954,611

MAJOR REPAIRS 1,340,893 1,192,914 772,096 389,465 1,647,090

BAD DEBTS 109,851 82,329 58,835 55,607 64,583

ARREARS (RENT) 348,696 308,238 331,952 302,000 322,569

ARREARS (FACTORING) 1,574 1,572 1,569 1,568 1,566

RENT INCOME COLLECTED 99.10% 99.20% 98.34% 99.2% 102.2%

CURRENT FACTORING DEBT

262102 281648 226069 145,425 102,355

Performance

The table below indicates the Association’s Key Performance Indicators over the previous three years with actual performance taken directly from completed APSR / ARC returns:

Performance Measure 2011-12 2012-13 2013-14

Current Rent Arrears £213,503 £183,073 £191,491

% of rent that comes from housing benefit

60.2% 59.1% 58.7%

Amount of factoring arrears £277,887 £194,581 £123,350

Number of houses allocated during the year

171 175 183

Average time taken to allocate a property

50 days 67 days 51 days

% of tenancies sustained more than 1 year

85% 85.4% 88.2%

Number of applicants on housing waiting list

1191 1212 845

% of the total rent collected in the year

93.8% 99.2% 102.2%

% of rent lost through empty properties

2.29% 3.18% 2.5%

% of properties that received an annual gas safety check

100% 100% 99.9%

% of staff sickness absence 7.39% 2.55% 2.7%

The QEF report at Appendix L indicates how the Association currently benchmarks performance against 32 other housing associations based primarily on the ARC returns. Due to the complexity in comparing information between landlords, particularly with the introduction of the Annual Return on the Charter and the revised Charter Indicators it is difficult to provide true comparisons at this point in time. Once comparative data emerges in future years this table will be revised to meet current performance reporting mechanisms.

Customer Satisfaction In 2014 the association, in partnership with our FLAIR colleagues commissioned Research Resource to carry out an independent customer satisfaction survey of out tenants and residents taking into account the ARC requirements. This survey involved face to face interviews with 668 tenants, 190 factored owners and a postal survey of other owners. This extensive survey asked a range of questions relating to the services provided by the association, their neighborhood, their home and customer service. It is not the intention to highlight all the aspects of this survey and for the purposes of this business plan will only focus on the responses of tenants in relation to the Charter Indicators. While there were a lot of positives contained within the survey it highlighted a range of areas where potential further work should be undertaken. A customer satisfaction action plan has been developed and will be implemented together with areas contained within the ARC, staff feedback and complaints monitoring. Due to the change in methodology it can be challenging to determine why performance has been reported or identified differently from the 2011 survey. Scottish Housing Regulator indicators (Tenants only, with the exception of satisfaction with the factoring service)

Renfrewshire

Average Linstone

2014

Taking everything into account, how satisfied or dissatisfied are you with the overall service provided by Linstone Housing Association? (% very/ fairly satisfied)

89% 85%

How good or poor do you feel Linstone is at keeping you informed about their services and decisions? (%very good/ fairly good)

92% 91%

How satisfied or dissatisfied are you with the opportunities given to you to participate in Linstone‘s decision making process? (% very/ fairly satisfied)

69% 70%

Thinking about the LAST time you had repairs carried out, how satisfied or dissatisfied were you with the repairs and maintenance service provided by Linstone? (% very/ fairly satisfied)

76% 74%

Overall, how satisfied or dissatisfied are you with the quality of your home? (% very/ fairly satisfied)

87% 79%

[IF LIVED IN THEIR PROPERTY FOR LESS THAN 12 MONTHS] Thinking about when you moved in, how satisfied or dissatisfied are you with the standard of your home? (% very/ fairly satisfied)

83% 77%

Taking into account the accommodation and services Linstone provides, to what extent do you think that the rent for this property represents good or poor value for money? Is it… (% very good value/ fairly good value)

85% 55%

Overall, how satisfied or dissatisfied are you with Linstone’s management of the neighbourhood you live in?

60% 87%

Taking everything into account, how satisfied or dissatisfied are you with the factoring service provided by Linstone?

63% 58%

Vision, Mission Statement and Aims Linstone has now chosen to adopt a revised vision statement for the future, which we think encapsulates our main aims:

‘Improving homes, enhancing communities’ We have also revisited our Mission Statement:

“Linstone’s aim is to continue to be an excellent housing association. We will continue to deliver high quality services to our tenants and customers and provide good quality affordable homes. We will ensure the association’s finances are well managed and put to good use to benefit our tenants and communities.” The key principles in delivering this mission statement are:

To maintain and further develop our effective governance mechanisms to allow the Governing Bodies to fulfill its role in setting the Association’s strategic direction and to ensure robust performance monitoring in all aspects of the Association’s business.

To implement our asset management strategy which informs our future investment in our stock and any plans for development of new housing

To further develop our approach to risk, aiming primarily to minimise risk to the organisation, our tenants and customers.

To manage our income and expenditure prudently, including ensuring we have a sound understanding of our finances, now and over the next 5 years.

To provide a “customer first” culture where services are delivered that we know meet needs and aspirations.

To work in partnership with relevant stakeholders with the aim of delivering benefits to the wider communities in which we operate.

To empower our staff and make a suitable policy framework available to allow staff to make effective decisions and to maximise the impact they can make through their work with us.

As an ethically sound organisation, to ensure that openness, trust, fairness and transparency are central to everything we do.

Strategic Direction and 3 Year Strategic Objectives The strategic direction outlines the general direction the association wishes to take over the next three years and beyond.

Over the next three years, we aim to continue along similar lines as the previous three years incrementally building on these successes and examining ways to enhance our services to customers further. We intend to achieve this through continuous improvement in all the services, exploiting opportunities to attain additional funding, major investment in our communities and partnership working where appropriate.

Our intention is to continue to invest heavily in our homes with around £5m of our own resources earmarked for major repairs investment over the life of this plan with year one continuing to focus on the ECO programme where we can lever in funding to progress these works.

Another central theme is that we look to ensure financial sustainability and manage the association’s rent and factoring arrears. This is particularly challenging and presents a serious risk to the association in terms of the potential implications of welfare reform.

One of the main priorities for Linstone in the next three years is to enhance the customer experience and ensure that our tenants, residents and service users have the opportunity to both receive services and engage with us in a way which suits them. This will include innovative approaches to communication, increased focus upon customer service and continued support within our communities. We will seek to capitalise on any opportunities which arise for new projects or development which help to meet our overall objectives.

Over the longer term, we will aim to work toward reducing the overall level of debt carried by the association and only consider further borrowing for financially sustainable projects.

Building on the strategic direction developed for the Association the main three year objectives are:


Continuously improve our services to our tenants and customers by providing services that meets their needs and priorities

Ensure good governance, effective financial management and regulatory compliance

Value our staff and Governing Body through training, education, coaching and leadership

Develop and sustain effective partnerships which maximise the benefits to Linstone and our communities.

Specific Business Objectives 2015/16

Business Objectives set out the Association’s key objectives for each financial year. These objectives are the specific actions which will assist Linstone in delivering against our higher level three year strategic objectives. Where it defines a lead person for the specific Business Objective this is: CEO – Chief Executive DFCS – Director of Finance and Corporate Services DHPS – Director of Housing and Property Services These individuals or team will have overall responsibility for ensuring that the business objective is achieved, although in some instances through the Performance Review process responsibility for the objective may be devolved to another staff member / team.

Strategic Objective 1 – Asset Management


Action Date

1.1 Develop a strategy which continues to reduce the number of void properties within our stock: - Void loss lower than 2.1% - Days to relet at below 30 days

DHPS 31st August 2015

1.2 Carry out a full assessment of how our properties meet the 2020 EESSH requirements

DHPS 31st January 2016

1.3 Undertake ECO programme phase 2 to over 500 properties

DHPS 31st March 2016

1.4 Implement actions identified from our Health and Safety and Fire Risk Assessment audits in 2014

DFCS 31st October 2015

1.5 Successfully implement a new reactive repairs contract including enhanced services (repairs appts, communication, customer feedback etc)

DHPS 30th June 2015

1.6 Carry out a review of our flatted accommodation identifying improvements required in terms of lighting, environmental, close cleaning etc

DHPS 30th November 2015

Strategic Objective 2 – Continuous Improvement Continuously improve our services to our tenants and customers by providing

services that meets their needs and priorities

Action Date

2.1 Develop a clear customer satisfaction and complaints framework which is used to refine services

DFCS 31st August 2015

2.2 Develop a revised performance management framework which meets aspirations and regulatory requirements

DFCS 31st July 2015

2.3 Ensure that Linstone is cited as an exemplar of good practice and seeks award recognition

DFCS 31st March 2016

2.4 Explore opportunities for efficiencies and shared services with other similar organisations

CEO 31st March 2016

2.5 Exploit opportunities to further promote the Linstone brand including signage for properties, visibility of staff, increased marketing etc

DFCS / DHPS

31st March 2016

2.6 Develop and implement a social media / on-line communication strategy to ensure widest participation / information available

DFCS 31st October 2015

2.7 Implement a range of Capita software modules which enhances performance including anti-social behavior, tenants on-line, planned maintenance and gas servicing

DFCS 31st January 2016

Strategic Objective 3 – Governance and Financial Management Ensure good governance, effective financial management and regulatory

compliance

Action Date

3.1 Work with FLAIR, Renfrewshire Council and others to mitigate impact of Universal Credit / Welfare Reform

DFCS 31st July 2015

3.2 Deliver a reduction in arrears, both tenanted and factored

by 31st

March 2016: - Reduce current non technical debt to 2.75% of net

rental income - Reduce factoring debt below £100k

DFCS 31st March 2016

3.3 Develop and implement a more robust risk management framework

DFCS 31st January 2016

3.4 Identify the strengths of existing Management Committee and op-opt where skills are required

CEO 30th September 2015

3.5 Undertake an externally validated review of our 30 year financial projections

DFCS 31st August 2015

3.6 Carry out a full review of our rent charges seeking to implement from 2016/17 onwards

DHPS / DFCS

31st December 2015

3.7 Implement a policy review timetable including reviewing and adopting at least 10 policies per year

CEO 31st March 2016

Strategic Objective 4 – People Development Value our staff and Governing Body through training, education, coaching

and leadership

Action Date

4.1 Enhance the financial understanding and awareness of the Management Committee

DFCS 30th September 2015

4.2 Implement a Tenant Scrutiny Panel

DHPS 28th February 2016

4.3 Develop a new performance appraisal process for staff and committee incorporating a training plan

DFCS 31st July 2015

4.4 Implement any changes identified through mini-structure review and staff questionnaire

CEO 31st October 2015

Strategic Objective 5 – Partnership Working Develop and sustain effective partnerships which maximise the benefits to

Linstone and our communities.

Action Date

5.1 Maintain and improve on relationship with Local Authority

CEO 31st December 2015

5.2 Identify and explore opportunities for partnership with others

CEO 31st October 2015

5.3 Continue to grow and develop the C4R partnership subject to successful funding

DFCS 30th November 2015

The above 27 business objectives represent a significant amount of work for the association during the financial year. As this is a plan which sets out our main priorities the timescales, relative priority of some of these objectives may evolve throughout the year. While we recognise that achievement across all of these objectives will be challenging it is anticipated that they are deliverable. In a number of instances work has already commenced, plans are in place and the organisation has a clear understanding of what needs to be achieved.

Specific Business Objectives 2016/17 Business Objectives set out the Association’s key objectives for each financial year. These objectives are the specific actions which will assist Linstone in delivering against our higher level three year strategic objectives. Where it defines a lead person for the specific Business Objective this is: CEO – Chief Executive DFCS – Director of Finance and Corporate Services DHPS – Director of Housing and Property Services These individuals or team will have overall responsibility for ensuring that the business objective is achieved, although in some instances through the Performance Review process responsibility for the objective may be devolved to another staff member / team. On an annual basis the Business Plan is reviewed in detail and the objectives revised to meet changing priorities or landscape. The below areas are provisional objectives currently identified which will be reviewed at the time of the annual Business Plan update to determine their relevance and level of priority together with providing clear action dates.



1.1 Investigate the feasibility of providing in-house services including estates services / gas maintenance etc

DHPS

1.2 Develop revised 30 year Life Cycle Costs following completion of Phase 2 of the ECO programme

DHPS


DHPS

1.4 Deliver ECO Phase 3, provided funding in place

DHPS

1.5 Investigate the feasibility of providing an in-house reactive repairs service either as Linstone or in partnership with others

DHPS

1.6 Produce a development strategy for consideration in terms of new build and off the shelf properties

DHPS

1.7 Carry out a review of our sheltered housing service to ensure efficiency and sustainability

DHPS



2.1 Implement a document management system which reduces paper / increases efficiency

DFCS

2.2 Implement a revised factoring service based on good practice internal audit

DFCS

2.3 Ensure that Linstone is cited as an exemplar of good practice and seeks award recognition

DFCS

2.4 Identify and implement appropriate external validation, for example Quality Scotland or Investors in people

DFCS

2.5 Identify opportunities for utilising technology to support committee involvement

DFCS


compliance

3.1 Carry out a review of all the associations costs to determine any efficiencies which can be achieved

DFCS

3.2 Deliver a reduction in arrears, both tenanted and factored by

31st

March 2017: - Reduce current non-technical debt to 2.5% of net rental

income - Reduce factoring debt below £85k

DFCS

3.3 Implement a new rent charge regime following rent review assessment

DHPS / DFCS


and leadership

4.1 Undertake a cultural audit of the association

DFCS

4.2 Explore development of a training academy with FLAIR and other potential partners

DFCS

4.3

Identify opportunities for increasing employability opportunities to various groups of individuals

DFCS

4.4

Provide recognised qualifications for our estates team DFCS



5.1 Explore opportunities for closer partnership working with third sector organisations

CEO

Specific Business Objectives 2017/18 Business objectives set out the Association’s key objectives for each financial year. These objectives are the specific actions which will assist Linstone in delivering against our higher level three year strategic objectives. Where it defines a lead person for the specific Business Objective this is: CE – Chief Executive F&CSD – Director of Finance and Corporate Services H&PSD – Director of Housing and Property Services Mgt Team – Management Team These individuals or team will have overall responsibility for ensuring that the business objective is achieved, although in some instances through the Performance Review process responsibility for the objective may be devolved to another staff member. On an annual basis the Business Plan is reviewed in detail and the objectives revised to meet changing priorities or landscape. The below areas are provisional objectives currently identified which will be reviewed at the time of the annual Business Plan update to determine their relevance and level of priority.




DHPS

1.2 Develop a business plan and financial model for the implementation of an in-house Gas Service which delivers a

range of services to Linstone by 31st

March 2017

DHPS



2.1 Carry out a full satisfaction survey DFCS


compliance

3.1 Deliver a reduction in arrears, both tenanted and factored by

31st

March 2016: - Reduce current non technical debt to 2.0% of net rental

income - Reduce factoring debt below £70k

DFCS


and leadership

4.1 Following cultural audit implement a range of revisions to organisational practice to meet future direction

CEO

4.2 Explore the provision of a governance framework and qualification for all committee members

CEO



5.1 Explore opportunities with other organisations for the provision of services and organisational growth

CEO

Housing Stock Plans Investment The Association has invested heavily during the last three years focusing on external insulation to maximise the available supporting funding streams like ECO and HEEPS. In previous years the focus was on bathrooms, kitchens, heating and windows with the external fabric not receiving as much attention. Currently taking account of the investment in our insulation programme which includes renewal of gutters, fascia’s and downpipes the Director of Housing and Property Services is developing revised 30 year Life Cycle Costs. It is still assumed that we will look to invest in the region of £50m in planned / major repairs programmes over the next 30 years and bringing forward the insulation works to utilise the available funding means that we should be able to focus on other areas including roofs, door entry and other areas which relate to SHQS and EESSH together with renewal cycles in terms of heating, windows etc. A full programme for the next thirty years is in the process of being developed, which will be revised annually to take account of failing elements within our stock or opportunities which arise to attain funding by bringing forward works. SHQS / EESSH In our 2013/14 Annual Return on the Charter (ARC) submission we projected that all properties, excluding those where we are unable to secure agreement from owners to complete door entry systems, will have met the SHQS. We can demonstrate that we could deliver the SHQS standard for the 2015 deadline with the exception of those works which require owners consent without affecting the Association’s financial viability, or deviating from our Investment Programme, agreed previously with our tenants and residents. Our focus for the next three years will be on meeting the 2020 EESSH target and the works we have undertaken in the last few years should assist greatly with this. The Association has been actively carrying out Stock Condition surveys and gathering energy ratings, to assist in providing an up to date and accurate assessment of our stock which will be analysed on a continuous basis. This data is fed into an Access database which is maintained and updated to provide a robust record of our SHQS / EESSH data and activities carried out to meet the Standard.

Stock Growth Intentions The Association remains keen to look at potential opportunities to develop where this meets the needs of the communities and the priorities contained within the Local Housing Strategy. While we have various small areas of land available there are no current plans outlined within the Strategic Housing Investment Programme (SHIP) to develop in these areas. The costs involved in building new homes continue to limit the potential for future development; however where opportunities arise we will carry out a full risk appraisal and financial assessment to examine whether this could be in the best interests of Linstone and our tenants. Given the limitations of potential development opportunities the association will continue other options to ensure growth of the organisation and our housing stock. This may include, but not limited to, the various options outlined below.

Stock transfer / Group Structures – while larger scale stock transfers remain off the agenda within Scotland the opportunities for small scale transfers of properties may arise during the life of the plan. These would primarily be with Renfrewshire Council although this could occur with another housing association provided the right set or circumstances arose.

Mortgage to Rent – the association purchased a number of properties through this Scottish Government scheme over the last three years. We continue to have a healthy cashflow available to us and we will explore the opportunities to purchase properties within our geographical location which would provide benefits in increasing our stock and retaining ownership of an estate.

We are been approached on various occasions recently about ‘buying back’ properties within our communities on the open market. Typically these are properties that were sold at one point through right to buy and the owner is now looking to sell. We have implemented a policy over the last few years which allows for this occurrence provided certain conditions are met, primarily the financial viability of any purchase.

Consideration is also given to the disposal of properties where our interest in the estate or block is relatively limited. When the properties become vacant we may consider selling these on the open market and eliminating our need to manage the block. The proceeds of these sales are ring fenced for the purchase of a property which enhances our portfolio and / or provides a more effective asset management approach.

The areas outlined above represent a selection of the opportunities we may explore which would increase the size and scale of the association. Each opportunity will only be considered where tangible benefits to Linstone, our residents or the wider community have been identified.

Risk Management

The Association has developed a robust approach to risk management. The following key principles outline the responsibilities for risk management and internal control:

Governing Body (Management Committee)

The Governing Body is responsible for overseeing risk management in the Association as a whole, specifically:

Agreeing the risk management framework within the Association

Setting the risk appetite for the Association

Directing the risk strategy

Receiving reports and demand action where appropriate

Management Team

The management team is led by the Chief Executive and has responsibility for:

Implementing policies on risk management and internal control.

Identifying and evaluating the key inherent risks faced by the Association. These risks will be set out in a “risk register”.

Providing adequate, timely information to the Governing Body and its sub committees on the status of risk and controls.

Undertaking an annual review of the effectiveness of the system of internal control and providing a report to the Governing Body.

Operational staff are responsible for the co-ordination of the risk management review and liaison with the Finance team on the transfer of risks to insurers, where appropriate.

Finance and Income Sub Committee

A sub-committee of the Governing Body, the Finance and Income sub committee satisfies itself that the risk management process is effective, taking advice from the senior management team and internal audit. The internal audit function has a central role in reviewing the governance, risk and control issues within the Association. Advice is also obtained from the external auditor as part of the review of governance in the annual audit.

Risk management incorporates a number of elements that together facilitate an effective and efficient operation, enabling the Association to respond to a variety of operational, financial and commercial risks. These elements include:

Policies and Procedures

Attached to key risks are a series of policies that underpin the internal control process. The policies are set by the Governing Body and implemented and disseminated throughout the Association by the management team. Written guidance supports the policies.

Quarterly Reporting

Comprehensive quarterly reporting on performance is designed to monitor key risks and their controls. Decisions to rectify problems are made at regular meetings of the management team or by the Governing Body on a quarterly basis as appropriate.

Business Planning and Budgeting

The business planning and budgeting process is used to set objectives, agree action plans and allocate resources. Progress towards meeting Business Plan objectives is monitored quarterly.

Risk Register

The risk register is compiled by the management team and helps to facilitate the identification, assessment and ongoing monitoring of risks significant to the Association. The document is formally appraised annually as part of the Business Plan process but emerging risks are added as required. The management team also reviews the document on a six monthly basis.

Internal Audit Programme

Internal audit is an important element in the internal control process. Internal Audit ensures that risk management is embedded within the Association and is responsible for carrying out individual assignments to enable the delivery of proactive advice to the Governing Body. The internal audit programme will address the key risks within the Association. effectiveness of the internal control system, and the extent to which it can be relied upon however as importantly it will focus on providing and enhancing good practice within our activities.

External Audit

External audit provides feedback to the Governing Body on the operation of those aspects of the internal control system reviewed as part of the annual audit. They shall also provide a comment on the general governance arrangements within the Association.

Third Party Reports

From time to time the use of external consultants will be necessary in areas such as health and safety, development and human resources. The use of specialist third parties for consulting and reporting can increase the reliability of the internal control system.

The Scottish Housing Regulator

The Scottish Housing Regulator will review performance within the Association across a range of areas, the results of which can help to strengthen the internal control system.

A copy of the Association’s Risk Register as at October 2013 is attached as Appendix G

Financial Plans and Resources Required

Ensuring that effective financial plans and resources are in place is paramount to the long term success of the Association. In order to ensure that our finances are effectively managed Linstone carries out various financial processes including development of an annual budget, production of 5 year financial projections and annual reviews of our 30 year cashflows.

Budget 2015/16

The Association continues to develop monitoring and control systems to ensure it has effective financial management in place.

We produce an annual budget, balance sheet, cash flow and quarterly budget monitoring reports. The Finance and Income Sub-Committee considers these reports in depth on a quarterly basis. The current year’s (2015/16) budget included the following assumptions:

Rental increase by 1.8% based on the Retail Price Index at October 2014 (+0.5%)

Salaries increase by 1.5% in line with agreed increase

Voids rent loss of 2.1% based on previous performance and current downwards trends

Major repair programme of around £2.3m

Net reactive repairs costs of approximately £650k

Cashflow at 31st March 2015 assumed at £3.3m

Taking into account all the association’s income and expenditure for 2015/16; we envisaged a planned deficit of £389,000

A summarised version of the 2015/16 budget can be found at Appendix H.

5 Year Financial Projections

On an annual basis five year financial projections are submitted to the Scottish Housing Regulator in September each year. This financial information has been derived from 2013-14 actual performance, the 14-15 budget together with the projections developed in the 30 year plan for the following three years. As this is a guide from 2015-16 onwards the figures outlined in these five year projections are now not necessarily accurate in terms of future projections, however still present a useful picture of the organisation’s activities going forward.

A copy of the 5 year projections can be found at Appendix I

30 Year Cashflow

In 2013 the association last produced a detailed 30 year cashflow. Some of the main areas that were reviewed included a full revision of the life cycle costings and major improvement programme for the next 30 years, management costs, loan costs, additional borrowing needs and a detailed review of all budget headings.

In developing a 30 year plan we have made a range of assumptions regarding interest rates, rent increases, reactive, cyclical and major repairs costs, management costs and loan costs. While these assumptions are designed to be as realistic as possible, we recognise that external changes can have a significant impact, for example, the continued low interest rates have been extremely positive for the association and reduced our loan interest repayments by approximately £300,000 per year from 2010. In general, it is expected that we will be able to out perform these assumptions with particular mention required of the interest rates. For the purpose of the plan we assume interest rates at 6% across the 30 years. Information on the assumptions made to populate the 30 year business plan together with a summarised version of the cumulative surpluses in each scenario / sensitivity has been detailed in Appendix J. Various sensitivities analyses have been considered in line with our business objectives within our Business Plan. The range of general assumptions contained in Appendix J were factored in for each of the scenarios examined to ensure consistency of comparison the success of these cashflows are all dependent on the association’s rental income stream.

It is appreciated that other efficiencies and income maximisation processes (such as cost savings, methods of reducing debt and the introduction of service charges) will also play a part in the association’s future financial plan projections. Similarly potential risk areas like welfare reform, low demand and stock condition could have a significant detrimental impact on the association’s cashflows.

Sensitivities Analyses The 30 year cashflow scenarios have been developed to ensure that the Association had made an accurate assessment of our anticipated income and expenditure requirements over the short / medium and longer term.

The association almost solely relies on the income generated through rents (over 90%) to allow us to provide services, maintain homes and enhance our communities. From an expenditure perspective our main costs relate to repayment of our existing long term loan, staffing costs and the maintenance / improvement of our homes.

Welfare Reform

This represents the single biggest risk to the association and our tenants / residents future income streams. Almost 60% of our existing tenants receive some form of housing benefit and the implementation of Universal Credit, the provision of direct payments to tenants and index linked benefit payments to the Consumer Price Index (CPI) rather than the Retail Price Index (RPI) will present challenges to the association’s rental collection in future years. If approximately £3m of our income is based on housing benefit a straightforward assumption that the association experiences a drop in income of around 10% this would mean a £300k loss of funds to the association. While it is difficult to know the exact impact of Welfare Reform this conservative estimate highlight the dangers being presented with this Government policy change.

Increased void and low demand issues

The association’s stock is predominantly some form of flatted accommodation which invariably reduces the demand for the product. While until now we have managed to ensure that there is limited low demand within our stock this challenge continues. From a sensitivities perspective a 2% increase in void loss represents around a £100k reduction in rental income received by the association.

Maintenance Costs

Our single biggest expenditure relates to repairs and improvements to our homes which generally represents almost 50% of our annual expenditure. While the construction industry has had challenges in recent years through the recession there is now an increased level of work available for contractors and this is likely to at some point increase the cost of purchasing materials, employing contractors etc

The association has worked hard to ensure best value within our maintenance and repairs programmes and have managed to reduce costs in reactive maintenance significantly in the last five years, however any increases would increase expenditure significantly.

A 10% increase in maintenance and improvement costs would represent an increase in expenditure of approximately £250k.

Interest Rates In 2007 the association re-financed its existing long term loan on extremely favourable terms prior to the global recession. Currently our loan interest repayments are significantly lower than our projections at 6% per annum and represents approximately £300k of additional income to the association. As our loan is still over £10m any increases in interest rates may add significant costs to the association.

Staffing Costs

Outwith maintenance and improvement costs the association’s staff costs is our largest expenditure. Current issues relating to the pension scheme have resulted in the association paying increased past service deficit employer contributions and this shows no sign in resolving the current deficit. It is unknown the future pension costs which may be attributable to the association and these require to be considered as a financial risk. The changing face of housing associations and reductions in public services also places strains on the association’s staff costs. Increased emphasis on support, welfare rights and an ageing population could mean the requirement for higher staff costs in order to deliver services in the future.

Energy Efficiency In Scottish Social Housing Targets

Until now the association has been progressing with meeting the Scottish Housing Quality Standard. The introduction of EESSH targets means more emphasis is likely to be placed on ensuring homes meet these standards which may come at significant financial expense to the association.

These six areas highlighted provide a flavour of some of the key financial sensitivities the association has to consider going forward and by no means are the only financial considerations. Appendix K provides further information on the sensitivities analysis conducted by the association.

Other Resources All resources are a critical aspect of how the association operates. The main resources that allow Linstone the platform to deliver services are our staff, ICT and office location. Human Resources Linstone Housing Association recognises that one of its most valuable assets is our staff team and that training and personal development of all employees will assist the organisation in achieving the business objectives contained in this document. We are committed to providing opportunities for staff to develop their skills through training, further education, temporary employment opportunities and job shadowing.

The Association will ensure that all staff are aware of the broad aims and objectives of the organisation through their involvement in drawing up the Business Plan and effective communication during the lifetime of the Plan.

Having drawn up its Business Plan, the Association will consider the organisation’s training and development needs to deliver the Plan. The major areas of training and development for the organisation are produced each year in a separate plan. There will also be team and individual training and development actions agreed through the Staff Performance Review System.

Furthermore as members of EVH we have access to support in terms of Human Resources issues combined with standard terms and conditions for all employees.

ICT Resources The Association invests heavily in our ICT to ensure that staff has the tools to deliver their role effectively. We operate our housing management and maintenance systems through a bespoke housing software solution which is one of the best in this field. In terms of equipment Linstone has a modern IT infrastructure in place with relatively new hardware in most areas. We have a Corporate Services Officer (ICT) within the association who provides ICT support and development to Linstone’s staff. We also have a detailed ICT Strategy which outlines how our IT infrastructure operates and identifies the anticipated objectives for each of the three years of the strategy. This strategy is subject to an annual review and new objectives are added as and when they arise.

Office Resources In 2014 Linstone took ownership of our new purpose built office within Linwood Town Centre. This wholly owned building now represents a significant asset, from a financial, functional and reputational perspective for the association. Having purchased this office for a significantly reduced price than the market value it now represents an asset to the association in terms of our balance sheet and comparatively renting a similar office for a period of less than 10 years would have cost the association the same amount of financial resource. Functionally the office has been designed to provide a high quality working environment for staff and an excellent resource for customers. Various features have been introduced to improve working practices. From a reputational perspective the office has received widespread attention from our customers, the local community, partner organisations and the wider housing sector. This has enhanced our profile both locally and nationally.

Monitoring We will monitor the delivery of the objectives in this plan in a variety of ways including a quarterly update to the Management Committee on progress and performance in relation to the business objectives. This report will outline performance in the association’s key business areas combined with examining how we are meeting each business objective. To ensure that performance is delivered within these key objectives it will be the responsibility of the Chief Executive and Management Team to organise and manage the resources and time required to complete the objectives. This will be done through regular progress meetings, individual one-to-one progress discussions and via the Association’s Performance Review process.

The Business Plan is a fluid document that will continually evolve to respond to the changes in the internal and external environment to ensure Linstone can deliver its business effectively and to a high standard.

An annual review and update will also take place to examine performance against the business objectives, review achievements, explore what new issues may have arisen and identify any opportunities to consider. This will ensure that Linstone has a rolling three year Business Plan which is up to date, consistent with our strategic direction and a robust planning tool in the short to medium term.

The most recent report which contains this data for discussion can be found at Appendix L

Documents

Business Plan 2015-2018 - Linstone · PDF fileBusiness Plan 2015-2018 ... Environmental Analysis (SWOT) F) Current Pressure Points (PESTLE) G) Risk Register H) Budget 2015/16