Inside Knowledge: Client Briefing
Roll call: who you need to know n Keith Exford, chairman of the G15 group of London’s largest housing associations Newly 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 Agency Mr 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 People Mr 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 Circle Appointed 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.
36 | 30 June 2011
Clients raise expectations New funding rules create fresh challenges but greater certainty social housing
“We are looking for firms that can take on a development partner role”
michael lane
neal hunt, Poplar HARCA
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.”
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. cnplus.co.uk/Firstbuy_ allocations The full list of which housebuilders have been allocated government funding through FirstBuy
Adaptability a must for contractors Interview: John Cross
In 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
John Cross chief executive Bedfordshire Pilgrims Housing Association
“We want it to be profitable because we cannot afford a Rok or Connaught” bidding contractors at the prequalification and tender stages for its maintenance framework. They will also be involved in specifying what is done to their properties and assessing contractors’ performance.
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.” www.cnplus.co.uk