assets and rethinking strategies Ann Santry September 2012 Outline - - PowerPoint PPT Presentation

September 2012

CIH Conference 4 April 2014

Rethinking assets and rethinking strategies

Ann Santry

Creating homes, shaping communities, changing lives

Outline

Creating homes, shaping communities, changing lives

• Who we are
• The challenge
• Starting point for our review
• The research and review process
• Conclusions

September 2012

Who we are

Creating homes, shaping communities, changing lives

25 years of Sovereign

• 1989 – 7k homes Newbury District Council
• 1999 – 3.5k homes developed but 70+ LAs
• 2000 – First Strategic Plan
• 2005 – Group structure + Twynham HA
• 2007 – Vale HA
• 2009 – Kingfisher / HVHS
• 2011 – One Sovereign
• 2014 – 37k homes

Creating homes, shaping communities, changing lives

Overarching strategy

• Phase 1 – Growth – to improve efficiency

and create savings for:

• Investment into better services
• Investment into new homes
• Investment in expertise and to attract

talent

• Phase 2 – Simplification
• Stock rationalisation – buy, sell and swap
• One Sovereign

Creating homes, shaping communities, changing lives

Current housing stock profile

September 2012

Looking back before looking forward…

Creating homes, shaping communities, changing lives

Emergence of social housing: timeline

Creating homes, shaping communities, changing lives

Subsidised housing requires subsidy

Creating homes, shaping communities, changing lives

Views about income management have evolved

Screening residents HB takes the strain

Creating homes, shaping communities, changing lives

Complex balancing act

Creating homes, shaping communities, changing lives

The Challenge

Meet housing need in a way that is sustainable for:

• The individual
• The community
• The organisation

September 2012

Strategy 2014 Who, what, where & how…

Creating homes, shaping communities, changing lives

Old Approach

• Five year strategies with annual review
• Environmental scanning
• PEST / SWOT
• Stakeholder involvement
• Business plan modelling
• Options

= Agreed plan

Creating homes, shaping communities, changing lives

New Approach

Creating homes, shaping communities, changing lives

Aim to:

• Develop our evidence base
• Develop shared insight
• Exploit diversity and engage widely

Approach:

• A wide variety of projects
• Sponsors across Sovereign
• Results shared and recognised

Creating homes, shaping communities, changing lives

Components

• Research and data – Six months
• Big ideas
• PEST /SWOT
• Business plan – Stress testing
• Stakeholder interviews
• Scenario planning – Based on ‘experts’ views

Creating homes, shaping communities, changing lives

Housing markets

Creating homes, shaping communities, changing lives

A changing market

• Since 1991:

– Number of homes up 1% a year – 76% of housing growth in PRS – PRS now bigger than social sector for the first time since 1961

13,397 14,838 14,693 1,767 2,133 4,140 4,507 4,236 3,981 1991 2001 2011 combined social Private renting and tied Owner occupied

Source: CLG Table 104 (Dwelling stock by tenure (thousands))

Creating homes, shaping communities, changing lives

• By 2022:

– Owner occupation will have continued to shrink – Private rent could become the dominant tenure for families in London, and – The dominant rented tenure outside London for families

1991 2001 2011 2022? combined social Private renting and tied Owner occupied

Creating homes, shaping communities, changing lives

So who are our customers?

Creating homes, shaping communities, changing lives

So who are our customers?

Creating homes, shaping communities, changing lives

Residents’ needs and aspirations

Creating homes, shaping communities, changing lives

Residents’ needs and aspirations

Berkshire Devon Dorset Hants Oxon W of E Gender Female Female Female Female Female Female Age 39 33 36 37 36 31 Household Make-up 2 adults and 2 children 2 adults and 2 children 2 adults and 2 children 2 adults and 2 children 2 adults and 2 children 2 adults and 2 children HB? Yes Yes Yes No No Yes Employed Household? Yes Yes Yes Yes Yes Yes Income £20k - £30k £10 - £20k About £20k £20k - £30k £30k - £40k £20k - £30k

Creating homes, shaping communities, changing lives

Affordability

• Aim: A common understanding of what housing

choices are affordable to our current and future residents across our different areas.

• The key metric we decided to benchmark across
• ur areas is a household’s ‘living income’.

Living income = Total net income1 - Net housing cost2

• 1. Net earnings + tax credits + child benefit
• 2. Total housing cost – housing benefit

Creating homes, shaping communities, changing lives

The data models

We designed two models:

• 1. A typical household in low paid work

= lower quartile earnings + benefits. Allows comparison of similar low income households.

• 2. A household on a median income

= CACI overall household income data. This model gives a feel for an average household in an area.

Creating homes, shaping communities, changing lives

Affordability by geography

Living income for a couple with two children, on low paid work, in a general needs rented home

Creating homes, shaping communities, changing lives

Affordability by geography

Living income for a couple with two children, on a median income, in a general needs rented home

Creating homes, shaping communities, changing lives

Potential impact of the Benefit Cap (currently £26k)

Creating homes, shaping communities, changing lives

Potential impact of the Benefit Cap (potentially £20k)

Creating homes, shaping communities, changing lives

Social value

This project aimed to evaluate social value, incorporating the following principles:

• Widen definition of value into non-financial terms
• Discuss and articulate the different aspects of value

associated with different tenures

• Attempt to sort and score these values without, at

this stage, deeming one element to be more important than the other

Value for the household Value for Society Value for Sovereign Wellbeing Finances Economy Exchequer Assets Income

Creating homes, shaping communities, changing lives

Summary Matrix

Creating homes, shaping communities, changing lives

• What will shape our

future?

• Can we describe the

world as it could be?

• In these possible

future scenarios, would our strategy:

• Meet the needs of
• ur current and

future residents?

• Be deliverable?

Scenarios: Testing our ambitions

Creating homes, shaping communities, changing lives

Conclusions

• The world is Rusty!!
• Time to think, test and plan
• Need to redefine our relationships
• Real partnership working
• Greater efficiency to enable choices
• Affordability and WBR – key risk
• Ultimately a more independent future

September 2012

Thank you