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ASSET MANAGEMENT STRATEGY

RIVER CLYDE HOMES ASSET MANAGEMENT PLAN SUMMARY2

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Version Control

Author Version Date Changes made / Comments

Aileen Metcalfe 1.0 13 Apr 2017

David Falla 2.0 14 Apr 2017 AMP Format

David Falla 3.0 16 Apr 2017 Revision following feedback

David Falla 4.0 24 Apr 2017 Revision following away day

David Falla 5.0 4 May 2017 Executive Comments

David Falla 6.0 10 May 2017 Update following receipt of other

strategies

David Falla 7.0 18 May 2017 Draft Final Edit

David Falla 8.0 24 May 2017 Final Staff (Turner & Townsend)

EMT 9.0 7 June 2017 Final

RIVER CLYDE HOMES ASSET MANAGEMENT PLAN SUMMARY 3

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Contents

Foreword ..................................................................................................................... 4

Executive Summary .................................................................................................... 6

1 Purpose and Background ................................................................................... 15

2 Vision .................................................................................................................. 19

3 Methodology & Delivery ...................................................................................... 23

Sustainable Homes and Communities ................................................................... 23

Efficient and Effective Management ...................................................................... 24

Performance and Value for Money ........................................................................ 25

Core Principles of our Value for Money Approach ................................................. 26

Business Growth .................................................................................................... 27

Social Value ........................................................................................................... 28

Outcomes ............................................................................................................... 30

Sustainable homes & communities ........................................................................ 30

Efficient and Effective Management ...................................................................... 31

Performance and Value for Money ........................................................................ 31

Support Business Growth ...................................................................................... 32

4 Governance ........................................................................................................ 33

Organisational Structure ........................................................................................ 38

Responsibility for our Asset Management service ................................................. 38

Communications .................................................................................................... 39

5 Risk ..................................................................................................................... 41

Corporate Risk Register ......................................................................................... 41

Project Risks .......................................................................................................... 42

Risks to delivery of this Asset Management Plan .................................................. 42

6 Action Plan ......................................................................................................... 43


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Foreword

As the largest affordable homes provider in Inverclyde, we know we have a major

role to play in supporting an ‘excellent housing offer’ in all the neighbourhoods of

Inverclyde. We need to ensure that our homes are high quality, fit for purpose,

sustainable and meet the future needs of our customers. In order to achieve this,

we recognise the need for an effective Asset Management Strategy & Plan.

This new Asset Management Strategy & Plan details how we will carry out the

management of our housing and other associated assets over the next 5 years.

River Clyde Homes are facing new and legacy challenges arising from

demographic and economic changes, increasing customer expectations, the need

for more sustainable, energy efficient homes, and the need to ensure our housing

stock is up to the same national quality standard across the board.

We have set out our new Business Plan 2017 – 2022, this includes 4 outcomes

that are crucial to the success of River Clyde Homes:

§ A reputation for excellent customer experience;

§ All our homes to have a positive value;

§ A financially healthy and growing business; and

§ Well led, engaged and trusted employees.

These outcomes form the basis of this Asset Management Strategy, and allow us

to ensure everything we do is committed to achieving the best possible results for

our customers. This document outlines the detail of a strategy which underpins

these outcomes and how we intend to achieve this. It captures the current

position of our assets and outlines how we will improve and achieve success over

the next 5 years.


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River Clyde Homes wants to put its customers first – present and future – and

ensure that their needs and expectations are continually met. As well as new

developments, we have to consider how we can best utilise and improve our

current core stock. Another key factor that we have to consider is improving the

external environment around our homes. A good home needs to sit in a

surrounding that contributes to our customers quality of life. These factors are all

at the heart of our Asset Management Strategy & Plan.

By recognising where we want to be as an organisation and what we want to

deliver, River Clyde Homes will be positioned to ensure that we implement

effective asset management that will enable us to achieve the outcomes of our

Business Plan and provide the neighbourhoods of Inverclyde with excellence in

housing and customer service.

Gary Wilson

Executive Director, Property Services

River Clyde Homes


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Executive Summary

Introduction

This is the River Clyde Homes Asset Management Strategy 2017 – 2022, it is

aligned with River Clyde Homes Business Plan for 2017, which provides high

level direction for the document. It is a critical business tool to allow strategic

decisions to be made across the organisation to drive efficient and effective asset

management. River Clyde Homes is a registered social landlord, established in

December 2007 following a whole stock transfer from Inverclyde Council.

Currently owning 5,789 homes and factoring over 2,226 properties, we employ

269 members of staff that includes 58 specialist trade operatives; we are one of

the largest registered social landlords in Scotland. As the largest developer of

homes in Inverclyde, we maintain a significant new build development programme

that will deliver an additional 750 new homes over the next 5 years, on top of the

474 new homes we have built since 2007.

Why an Asset Management Strategy?

The Asset Management Strategy sets out how River Clyde Homes will assess its

current core stock and any potential future assets to allow development of

improvement plans that align our homes with our customer’s needs, now and in

the future. The strategy & associated asset management plan have been

developed to ensure that we understand our assets, the neighbourhoods in which

they are located, the housing market that we operate in and the needs and

aspirations of our customers.

The purpose of the Asset Management Strategy is to provide a strategic

framework to support the ongoing development and management of our asset

portfolio, which fully reflects the implications and costs of the assets in a

sustainable way, covering the five-year period from 2017 – 2022. Additionally, it


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will build upon the previous good work that River Clyde Homes has carried out,

but will also create a step change in the way we manage our asset portfolio that

will allow the business to grow, mature and develop.

Our Asset Management Vision

By 2022 we aim to have an asset portfolio that delivers positive values for the

company as well as sustainable homes & communities, through the use of new

technologies and ways of working. We are committed to growing our business

and financial strength to propel River Clyde Homes into the top quartile of the

market.

Our Key Themes

Our Asset Management Strategy is built around four key themes:

§ Sustainable homes and communities;

§ Effective and efficient property management;

§ Performance and value for money; and

§ Support business growth.

We want to reach our full potential as an organisation, further developing the

services that we already provide, looking to deliver new services both within and

beyond Inverclyde. This is not just about bricks and mortar, or the physical assets

that we own, it is about providing a top of the market service delivery to

customers in our properties and owners of the properties in which we factor.

Business growth is a key ambition for River Clyde Homes in developing our

organisation.


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Key Priorities for River Clyde Homes

The key priority for River Clyde Homes is to understand our customer’s needs

and demands in order to provide attractive & sustainable homes at affordable

prices in communities and neighbourhoods that our customers will want to live in

long term. Our aim is not only to retain people in Inverclyde but to actually attract

newcomers into the area as part of a wider regeneration agenda. Social housing

is largely an asset based business, so it is important to have a robust asset

management strategy & plan in place to deliver an effective service.

Our Homes

There is a shortage of specialist housing, particularly in accessible locations and

there is a large demand for amenity housing and supported housing for older

people in Inverclyde, due to the changing demographics of an ageing population.

In light of the changes in demographics and customer profile, River Clyde Homes

focus needs to be on the following key areas:

§ Ensuring stock has the correct medical adaptions for customers i.e.

dementia friendly homes and flexible living accommodation;

§ Providing new enhanced mobility and wheelchair accessible homes;

§ The correct ratio of flatted properties to back and front door properties;

§ The correct size of homes, as the majority of current demand is for 1-2

bedroom accommodation or larger family homes; and

§ Ensuring that accommodation meets the necessary regulatory bodies’

requirements to ensure customers are living in comfortable and sustainable

homes.


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A high level summary of our core current stock shows:

§ 90% of our stock was built before 1982;

§ We have a disproportionate amount of high rise blocks at 15% of our total

stock but houses amount to only 32% of our stock;

§ The greatest proportion of our housing stock at 46% is 2 bedroom

properties; and

§ The smallest proportion of our housing stock at 2% is one room studio

apartments.

Although a large number of our homes have been surveyed, quality checks have

shown that more intrusive surveys are required in some areas to provide robust

information that will better evidence decision making for investment purposes. In

addition, the non-housing assets such as open spaces, car parks, retaining walls

etc. require to be surveyed to understand the full liabilities around the many

different assets inherited from the stock transfer. A full picture of the condition of

all assets is therefore required to understand the overall extent of RCH’s

liabilities.

Stock Condition Survey

It’s important that we know what condition our homes are in. This helps us plan

how we maintain and improve them in the future. So, every year we plan to visit

hundreds of homes to carry out a ‘stock condition survey’.

In the past, our stock condition based surveys were undertaken to specifically

target the quality standard set out by the Scottish Government. The standard was

known as the Scottish Homes Quality Standard (SHQS). SHQS was introduced


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by the Scottish Government in February 2004 with the target that all homes

rented from social landlords should meet this standard by April 2015.

Having undertaken a 100% survey of our housing stock to meet SHQS standard,

our next challenge was the introduction of the Energy Efficiency Standard for

Social Housing (EESSH). Its purpose is to help reduce energy consumption, fuel

poverty and the emission of greenhouse gases. It will also contribute to reducing

the countries’ carbon emissions by 42 per cent by 2020 and 80 per cent by 2050,

in line with the requirements set out in the Climate Change (Scotland) Act 2009.

To achieve EESSH compliance, we have set out an ambitious action plan to

undertake a highly detailed stock condition survey of our homes, and for the first

time, a full survey of our external environment and green spaces. The stock

condition survey will compile a significant amount of data on our assets so that

we are more strategically placed to deal with increasing standards and

governance.

The data collected from the surveys will be analysed, to allow the asset team to

create a robust cyclical repair plan, forecast capital investment over the next 30

years, whilst at the same time creating a programme of works to ensure EESSH

compliance.

Our Customers

Future projections on Inverclyde’s housing demand indicate a continued loss of

population over the 20 year period to 2036 – the loss is projected to be circa.

13,447 people. This figure points to Inverclyde having the largest population

decline across Scotland in the next 20 years. Similarly, due to a currently ageing

population, single adult households are set to increase by 11% over the next 25


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tears, while all other types of households will decline over the same period of

time.

The way we need to work in the future

In the future River Clyde Homes therefore needs to focus on service delivery in

key aspects of the business, these include but are not limited to:

§ Maintaining and improving our core stock within our neighbourhoods,

ensuring that our new build properties and our external areas/surrounding

environment are maintained to the best standard;

§ Continuing to lower the number of voids we have, and ensuring that new

voids are not created;

§ Providing customers with homes that are as sustainable and flexible as

possible;

§ Building new homes in areas of high demand within Inverclyde boundaries;

§ Keeping our asset information as up to date as possible and easily

accessible to the whole organisation; and

§ Putting into place a five-year cyclical maintenance plan that would take

account of planned and cyclical maintenance based on information from

our Asset Management Information system (Active H).

Improving our factoring service to retain and expand our customer base. More

robust, effective and customer focused processes will be established to address

failure demand and move our factoring service to one that provides accurate

billing information in a timeous manner through clear, concise communications

with our customers.


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Asset Investment

Going forward, when making decisions regarding asset investment we will use a

robust options appraisal process to determine if the project should go ahead

based on factors such as time, value, priority and benefits. We will have a better

balanced portfolio by the end of this 5-year period, ensuring that all our customers

are happy and our homes have a positive value.

New Opportunities

River Clyde Homes wants to continue to develop as an organisation and we will

do this through a number of new opportunities that will stimulate business growth,

as well as building upon our current service offering.

Initial market testing shows opportunities to provide services in the following

areas:

§ Buildings & Contents insurance;

§ Gas servicing;

§ Internal repairs;

§ Investment programmes;

§ Garden and open space maintenance;

§ Communal lighting and utility charges;

§ Alarm responses / call handling;

§ Key holding;

§ Out of hours response services;

§ Bin store cleaning;

§ Letting services for private landlords; and


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§ Property Management service for owners trying to sell their homes.

Delivery & Risk

In order to monitor and review our progress we will develop Key Performance

Indicators, which will be assessed regularly to track where we need to focus our

efforts. We will increase the use of risk registers, ensuring that there is one at a

corporate level and one for each project.

Financial Plan

Our assets and the environment have suffered from under investment for many

years which has resulted in the challenges that we now face, in terms of

improving our existing housing stock and building a significant number of new

homes, to support changing demand.

The process of establishing a new Financial Plan that is aligned with the 2017-

2022 Asset Management Plan and our Business Plan for the same period is

underway and the Senior Management team are carrying out this work in tandem

with our re-financing project.

The Financial Plan will also identify the need to work more efficiently and realise

savings that require to be made across the organisation, including those in

relation to asset management delivered through the Property & Business

Development team. This Asset Management Plan recognises these key drivers

and will help drive efficiencies, new ways of working and implementation of new

technology across RCH.


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Review & Challenge

Proper and effective challenge of our housing and non-housing assets provides

the cornerstone of asset management. Asset Management is a continuous

process that is always evolving and we must continually review our stock to

ensure it is aligned with our customer’s current needs and ensure that we are

spending the right money in the right places.

Action Plan

Most important to this Asset Management Strategy is the associated Action Plan

contained in section 6. The Action Plan shows the key activities that RCH will

need to carry out in order to meet the requirements of the Asset Management

Strategy and the key priorities and challenges of RCH as an organisation.


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1 Purpose and Background

The purpose of this Asset Management Strategy and the associated Asset

Management Plan is to provide a strategic framework to support the ongoing

development and management of our asset portfolio, which fully reflects the

implications and costs of the assets in a sustainable way, covering the five year

period from 2017 to 2022.

Effective and efficient management of the asset portfolio supports the delivery of

our Business Plan in a number of ways:

§ The quality and functional suitability of our properties plays an important

role in delivering sustainable assets and an excellent customer experience.

We have an obligation to provide properties that meet the needs and wants

of our current and future customers. This will reduce the risk of creating

future void properties if we can address the needs of a changing

demographics and customer profile now;

§ The configuration, quality and size of our properties plays a significant role

in ensuring that our customers are safer and better supported in homes

that they can afford; and

§ Significant business growth is one of our key goals. Effective asset

management will allow us to identify new opportunities and areas of the

business that we can grow.

The River Clyde Homes portfolio is made up of a diverse range of assets, ranging

from homes of a number of different types and configuration, to a war memorial,

an orchard, an air raid shelter and other open spaces. In addition, we also own a

number of car parks, street lighting, retaining walls and fences. When our assets

were inherited from Inverclyde Council they were in poor condition and the cost to

fix and maintain our homes is extremely high, and thus far there has not been a

sufficient budget to cover all the work required.


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There are issues with the level of demand for back and front door properties as

opposed to flatted properties. The current ratio of flatted properties to back and

front door and four in a block properties is approximately 70:30, which means that

we cannot meet the demand and aspirations of all our customers. Furthermore,

the changing demographics in Inverclyde with an ageing population means, there

is a need to have more frail mobility impaired adapted properties to meet the

needs of our elderly customers.

There has been a steady decline in the population of Inverclyde. From 1981 to

2014 there was a loss of 21,322 people, this is a steep drop, and the trend is set

to continue over the next 20 years albeit the rate of de-population is now slowing

down.

Better asset management can play a key role in overcoming the current and long

term challenges. It will allow the identification of new opportunities, stimulate

business growth, meet the needs of current and future customers and begin to

address the wider regeneration goals of the Inverclyde area.

Background

There is a powerful case for change and this has been acknowledged by River

Clyde Homes. As the third largest social housing provider in Scotland and the

largest developer in Inverclyde, we have a responsibility to provide the best

homes we can for current and future customers. There is a significant

maintenance backlog and imbalance of reactive repairs to planned repairs and we

also do not have the right types of properties in the right locations for all our

customers.


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The headline facts and figures are:

§ Number of homes: Approximately 5,789;

§ Value of the assets: The current value of River Clyde Homes housing and

non-housing assets is £146,369,000; and

§ EESSH Compliance cost: the estimated cost of bringing the portfolio up to

the River Clyde Homes standard is £13,765,507

Key challenges for River Clyde Homes are:

§ Meeting demand: the availability of stock does not necessarily meet the

demand from our customers and this has caused potential customers to

move to private landlords. There has been a 19% loss in customers in a 3

month period to private landlords. Private landlord properties are less

regulated and have the ability to be more competitive in terms of rental

costs. In addition, Inverclyde has an ageing population, and with this

comes a high demand for homes from the elderly. River Clyde Homes

loses some of these customers to residential care and other supported

accommodation. The current projections show a continued increase in the

number of older households, River Clyde Homes will therefore need to

ensure they can meet the needs of this customer profile;

§ Maintenance issues: Maintenance issues are increasing due to the poor

condition of a number of assets. The maintenance process is reactive, and

is not addressing long term issues with our portfolio;

§ Stigma: There is a stigma attached to particular areas of Inverclyde. These

areas suffer from a lack of amenities and poor public perception, which can

be difficult to change;

§ EESSH Compliance: All properties need to be compliant by 2020,

however there are some properties that will never achieve EESSH


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compliance. Therefore a decision making matrix for when to invest or

disinvest in an asset needs to be developed;

§ Fuel Poverty & Energy Efficiency: The term fuel poverty describes

households on low incomes with high energy costs, often caused by poorly

insulated homes and inefficient heating systems. Becoming EESSH

compliant will be our primary focus in helping address fuel poverty levels in

the social housing sector. We will also focus our green strategy on de-

carbonising our distributed heat and power provision, focusing more on

renewable technology and moving away from natural gas systems.

§ Quality of data: 100% of our housing stock has been surveyed for SHQS

compliance, however this does not include the external environmental,

green and open spaces. Some of the survey data is not as robust as it

could and lacks detail to allow evidence based decision making on whether

to invest or disinvest;

§ External and environmental maintenance: There is currently little

investment in external and environmental areas of River Clyde Homes’

assets, and this is something that needs to be addressed in the future;

§ Owner challenge: River Clyde Homes currently face challenges in

obtaining owners buy-in and acceptance to carry out

maintenance/improvement works. Lack of accurate data on costs and

delays in communicating with customers is causing issues with owners not

paying their portion of the work, and River Clyde Homes being unable to

recover all the costs of the works; and

§ Factoring: We currently do not fully understand and gather accurate costs

for factoring services leading to under recovery of the costs, which results

in lost income.


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2 Vision

“By 2022 we aim to have an asset portfolio that delivers positive value for the

company as well as sustainable homes & communities, through the use of new

technologies and ways of working. We are committed to growing our business

and financial strength to propel River Clyde Homes into the top quartile of the

market.”

Our Mission

Where we want to be…

“A customer focussed and inspirational business creating aspirational homes and

communities.”

Our Values

The key principle we live by…

Figure 1 – RCH Values

Every...

Customer Happy

Home Loved

Opportunity Taken

Penny Counts

Person Positive


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Asset Management Strategy themes

In a workshop environment and through discussion and debate, the Management

Team identified the following themes to focus the development of the Asset

Management Strategy:

§ Sustainable homes and communities;

§ Efficient and effective management;

§ Performance and value for money; and

§ Support Business growth.

These themes will be used to develop the Asset Management Plan (AMP), and

will tie the two documents together – the Asset Management Strategy explains

the ‘what’ and the AMP explains the ‘how’, and combined provide River Clyde

Homes with an effective strategy and robust operational plan for the management

of the asset portfolio over the next 5 years.

Figure 2 – River Clyde Homes Asset Management Themes


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Our Values and Asset Management

Figure 3 – Our Values Linked to Asset Management

Whilst developing the asset management strategy and plan we have had a strong

focused on the values of River Clyde Homes. Figure 3 demonstrates where we

have synergy between our values and the asset management themes.

Asset Management Plan

The purpose of the AMP is to support the delivery of our vision for River Clyde

Homes and will provide a strategic framework to facilitate fit for purpose assets

which will ensure our homes and other associated assets continue to play a pro-

Key: § A)Sustainablehomesandcommunities

§ B)Efficientandeffectivemanagement

§ C)Performanceandvalueformoney

§ D)SupportBusinessgrowth


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active role in the delivery of our services. The AMP sets out River Clyde Homes

approach to the management of its asset portfolio by:

§ Supporting our Business Plan outcomes and priorities and how they will be

achieved through the effective and efficient management of our asset

portfolio;

§ Presenting an overview of the extensive range of assets owned by River

Clyde Homes;

§ Identifying the internal and external influencing factors and challenges

affecting River Clyde Homes service delivery;

§ Identifying a number of activity themes to improve the performance of our

assets ; and

§ Outlining the investment plan that we will develop for our assets over the

next 5 years.


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3 Methodology & Delivery

Sustainable Homes and Communities

Homes should meet the needs of our people and communities, not the other way

round. We want to have an asset portfolio that focuses on our customers,

ensuring that we can provide the right homes, in the right locations, to support the

needs of our customers.

The quality, design and location of our homes is key to ensuring that we can meet

the needs of our current and future customers on a long term basis. Furthermore,

the consistency in our stock will be a powerful mechanism for establishing our

brand in Inverclyde, and further afield.

The quality, design and location of our homes can be a driver for change within

the industry, enabling the creation of sustainable communities in Inverclyde that

will support those living here in achieving a better quality of life, which starts at

home.

Our investment programmes such as SHIP have been developed with the future

customer profile and changing demographics in mind. We want to ensure any

investments we make not only provide sustainable homes but homes that are

flexible to the needs of our customers.

Key targets for the asset portfolio include:

§ Assets that are easy and cost effective to maintain;

§ Benchmarking & performance management of the asset portfolio;

§ Customer profiling for the next 5-10 years to determine future needs and

requirements; and


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§ Building positive relationships with customers / owners / stakeholders to

understands their needs.

Efficient and Effective Management

The asset portfolio needs to be efficiently managed and maintained in order to

ensure the quality and sustainability of our homes. In order to ensure the quality

and sustainability of our homes we need to implement an efficient and effective

management approach to our asset portfolio. Part of this will be using smart

technology, proficient information systems and robust demand analysis, which

considers the overall strategic direction as well as the long term vision for

business growth.


§ Spend to save approach to investment;

§ Development of a matrix that includes a decision making tool for when to

hold, invest in or dispose of an asset;

§ Whole life cost approach to investment ;

§ Rebalancing of reactive and planned maintenance to shift to a more

planned approach rather than reactive;

§ Meeting all Statutory Regulations, including full compliance with all EESSH

& SHQS regulations;

§ Improved quality and condition of homes that require substantial

maintenance; and

§ Prioritised investment.


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Performance and Value for Money

The asset portfolio should deliver value for money and outperform targets. River

Clyde Homes’ aspiration is to have an asset portfolio that meets the needs of the

current and future customer profile, creates sustainable homes & communities

and delivers best value. Furthermore, we need to ensure that we are maximising

income generation, recovering all costs from work carried out, and establish more

streamlined procurement processes. In turn, key benefits will be achieved through

a reduction in maintenance (particularly reactive) and void costs of the asset

portfolio.


§ Use of new and smarter technologies;

§ Maximising recovery of income, for example, through factoring;

§ Better use of current resources – increased efficiency in the way that we

work, moving to a more lean operation;

§ Hitting key performance and productivity targets;

§ Better utilisations of our resources; and

§ Establish procurement frameworks that are better aligned to River Clyde

Homes’ needs.


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VfM Approach

Understanding Costs

Social Value/ Community

Benefit

Customer Involvement

Asset Management

Risk Management

Performance Monitoring

Procurement

RCPM Development

Figure 4 – Performance & Value for Money Model

Core Principles of our Value for Money Approach

Figure 5 – Core VfM Principles

Key Performance

Indicators

Investment Strategies

Lean Ways of Working

Maximum Income

Recovery

Effective Procurement

Performance and Value for

Money


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Support Business Growth

The asset portfolio should be a key enabler for River Clyde Homes to achieve our

business growth aspirations. We want to reach our full potential as an

organisation, further developing the services that we already provide, looking to

deliver new services both within and beyond Inverclyde. This is not just about

bricks and mortar, or the physical assets that we own, it is about providing a top

of the market service delivery to customers in our properties and owners of the

properties in which we factor. Business growth is a key ambition for River Clyde

Homes going forward.

Key targets include:

§ Using our subsidiary company River Clyde Property Management to deliver

more cost effective property services, generate savings to re-invest in our

stock and deliver projects in shorter timeframes through streamlined

procurement processes;

§ Identifying new opportunities that can promote business development –

looking beyond what we have i.e. expanded factoring service;

§ Implementing robust service delivery plans to drive Service transformation;

§ Evaluating our financial strengths and weaknesses to identify where

improvements can be made;

§ Ensuring all stakeholders are bought into River Clyde Homes’ vision for

business growth; and

§ Introduction of forward thinking new technologies that can improve service

delivery and create new commercial opportunities with external companies.

RIVER CLYDE HOMES ASSET MANAGEMENT PLAN SUMMARY28Page 28 of 50

Figure 6 – Growing our Business

Social Value

In line with the Public Services (Social Value) Act 2012, RCH are committed to

enhancing the social, environmental and economic values of our local

communities, through procurement, community regeneration, social inclusion,

community cohesion, asset management and performance & financial

management. Social Value can be measured under three main considerations:

§ Social: contributing to a vibrant community and achieving community

based actions, equalities, diversity, inclusion and cohesion. It also

considers local relations, partnerships and including people from seldom

heard groups

§ Environmental: improving the look and feel of the local environment. This

can mean prioritising investment works where it is most necessary to

improve the external environment around our homes

Service Transformation

& New Technologies

Expanding our Service Offering

into New Markets

Identify New Opportunities

Beyond Inverclyde

Supporting Business Growth


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§ Economic: contributing to the local economy, i.e. retaining, re-circulating

and leveraging funds in a local area. It also takes into consideration the

wider contribution to skills and tackling worklessness.

Social Value takes into account the direct effects of interventions but additionally

the wider effects on other areas of the economy should also be considered. The

housing sector is continually striving to review its approaches to social value and

how best to measure it against specific social value outcomes.

RCH can achieve both value for money and social value through early and

efficient inclusion of social considerations in our capital projects and investment

decision making process. We will consider a number of initiatives to implement

going forward that will improve the overall social value of our organisation:

§ Digital Inclusion: Community WiFi schemes & digital education programmes

§ Employability Programmes: Offering those in need of new skills and

sustainable employment the opportunity to be involved in our maintenance

programmes and become part of the delivery team

§ External Environment: Reviewing our current maintenance programme to

ensure that all our assets have a high standard of external environment and

make a positive contribution to the local environment and quality of life of our

customers.

As ideas and thinking on social value mature, we will incorporate best practice into

this AMP to ensure that our assets are maximising the positive impact that they can

make on our customers in terms of wellbeing, employment, training, feeling safe in

their neighbourhood etc.


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Figure 7 – Social Value Outcomes

Outcomes

The key outcomes that we aim to achieve through our Asset Management

Strategy are outlined below:

Sustainable homes & communities

§ A more positive offering in areas that currently suffer from poor public

perception;

§ Minimum level of voids and an increase in bringing long term empty homes

into use;

§ Making a positive contribution to Inverclyde’s wider regeneration;

§ Stronger communities and cohesive neighbourhoods; and

§ Creation of safer and more secure neighbourhoods.

Social

• Active and safe communities

• Social inclusion • Communities well served and better connected

Economic

• Jobs and growth • More people in local work

• Third sector engagement

Environmental

• Reduced carbon emission

• Improved external environment

• Communities use of public / open spaces

Social Value


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Efficient and Effective Management

§ Step change in maintenance from reactive to planned;

§ More focused and evidence based decision making processes for asset

investment;

§ Investing the right money, in the right places at the right time to reap the

maximum benefits for the organisation and its stakeholders;

§ Better compliance with Statutory and Regulatory requirements; and

§ Having the right type of homes to meet customer needs and demand in the

future.

Performance and Value for Money

§ River Clyde Homes performance hitting the top quartile of the market;

§ Increased lean and efficient operations throughout the organisation;

§ Income generation is maximised throughout the organisation – particularly

through recovering full factoring and re-charge costs in a shorter time

frame;

§ More focused and streamlined procurement processes that ensure value

for money;

§ Maximising the use of smart technologies in service delivery and

maintaining/improving our assets. And

§ Measuring performance against structured KPI’s and performance criteria.


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Support Business Growth

§ An effective and efficient Subsidiary company with a diverse service

offering which will increase opportunities for River Clyde Homes both within

and beyond Inverclyde;

§ An organisation that develops and provides new services to meet our

customer’s demands; and

§ Becoming the “go to” organisation for factoring, procurement and housing

maintenance within Inverclyde.


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4 Investment Plan

Business Plan and Financial Planning

The Financial Plan is based on a 10-year plan approved by the Board in March

2016 and is summarised in figure 8. The investment plan’s priority over the next 5

years will be to transform the service delivery from a reactive organisation to

repairs, which is often more costly, to a more sustainable and efficient

organisation the looks ahead and plans work in advance of failure. Our drive is to

improve our homes to reduced turnover, reduced fuel poverty and increased

satisfaction with homes and services. This will lead to a reduction in. As part of

the planned works we are aiming to be EESSH compliant in 2018.

Figure 8 – Financial Plan

RCH has suffered from a considerable lack of investment for many years which

has resulted in the challenges that the organisation now faces in terms of

improving our stock condition.

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

CyclicalPlannedRepairs

NewBuilds

Refurbishmentprojects

EESSH

Demolitions

NewOffice


Page 34 of 50

The new Financial Plan, which is aligned with the 2017-2022 Asset Management

Plan, is underway and the Senior Management team are carrying out this work in

tandem with our re-financing project. This work will feed into River Clyde Homes

new Business Plan for 2017 – 2022 which should be published in spring 2017.

The Financial Plan will also identify the need to work more efficiently and realise

savings that require to be made across the organisation, including those in

relation to asset management delivered through the Property & Business

Development team. This Asset Management Plan recognises these key drivers

and will help drive efficiencies and new ways of working (through new technology)

across RCH.

Revenue / Rent Strategy

Higher than RPI rent increases, which has led to RCH becoming uncompetitive as

compared to private landlords, have been replaced by RPI alignment only (the

increase for 2014/15 was 0.7%) and will revert to CPI only. We are also aiming to

make 2017/18 the last year with RPI increases.

Loan Facility

The current loan facility is restricting our asset management planning on our

existing stock as well as our potential to develop new housing and service

products.

The re-financing of the current arrangements with our funders RBS and

Nationwide Building Society is therefore intended to lead to improved payment

terms which should lead to greater monies being available to invest in RCH’s

properties through planned and cyclical maintenance, improved external

environments and help deliver the aspirations of the SHIP. This re-financing

process which will facilitate additional borrowing will be a key driver in delivering

the Asset Management Plan and is expected to be completed by mid-2017.


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Other Funding Sources – Commercial Activity and Grants

RCH will continue to maximise the use of grants where these are available and

where this type of funding is aligned to the Asset Management Plan. Funding has

been secured in the past for a number of energy efficiency measures and to

support the capital programme. Securing all available funding will be managed by

the individual Technical Officers responsible for each project and they will be

responsible for maximising all opportunities available.

Owner Contributions

Processes, information and communications around owner contributions will be

improved to allow RCH to fully recover the true cost of all works from the relevant

parties. Systems are being improved to pick up all costs associated with works

carried out, to allow accurate invoices to be prepared from the right information.

The full extent of liabilities will also be established before preparing a plan to

recover all costs is put in place.

By providing clearer, more concise invoices that reflect the actual work carried

out, RCH will be able to maximise the revenue input from owners. Invoices will be

issued more timeously with clearer communication on the “what and why” of the

works carried out.

New Build Investment Plan

To date, River Clyde Homes have built 474 new home. As part of the asset

management strategy, we are planning new build investment that will be

supported by the new five-year Social Housing Investment Plan (SHIP)

(September 2016). The SHIP has been supported by the Scottish Government’s


Page 36 of 50

Strategic Local Programme which confirms grant funding for 4 of these

development schemes over the initial three year period 2016-19. All sites to be

developed by RCH are owned by the company. Figure 9 shows the ‘new build’

investment plan and the associated new build projects. Figure 10 breaks down

the costing plan for the new build projects.

Figure 9 – New Build Investment Plan

Figure 10 – New Build Investment Budget

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26

Other Slaemuir Phase 2 East Crawford Selkirk Road St Stephens High School Drumfrochar Bow Farm Chalmers Street Peat Road James Watt Dock Mallard Bowl Woodhall Phase 4 Slaemuir Phase 1 Bay Street

17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 Total Bay Street 2.1 2.1 Slaemuir Phase 1 4.8 4.0 3.1 11.9 Woodhall Phase 4 2.4 2.4 Mallard Bowl 2.6 2.6 James Watt Dock 1.3 4.5 4.5 10.3 Peat Road 2.0 10.0 9.1 21.1 Chalmers Street 0.4 3.6 4.0 Bow Farm 0.7 5.2 1.2 7.1 Drumfrochar 3.0 3.6 6.6 St Stephens High School 5.6 8.0 2.2 15.8 Selkirk Road 0.3 2.1 2.4 East Crawford 0.5 4.8 5.3 Slaemuir Phase 2 0.4 3.8 4.2 Other 0.8 17.2 5.0 5.0 5.0 33.0Total 16.3 37.0 40.3 2.2 0.8 17.2 5.0 5.0 5.0 0.0 128.8



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5 Governance

Organisational Structure

River Clyde Homes recognises the need to manage its property asset base

corporately and has introduced a new structure with clear roles & responsibilities

and clarity of accountability and control. The new structure consists of three

departments, each with a senior executive lead, these departments are:

Figure 11 – Executive Management Team

The organisation chart outlines the structure of the Property and Business

Development Team who will be responsible for delivering the overall asset

management function within our organisation and the Action Plan contained. The

Head of Service for Assets will manage the day to day delivery of our asset

management services and report directly to the Executive Director of Property

Services.

Chief Executive Kevin Scarlett

Group Services Executive Director

Richard Turnock

Property Services Executive Director

Gary Wilson

Customer Services Executive Director Sandra McLeod


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Responsibility for our Asset Management service

The Chief Executive has overall responsibility for all property asset management

matters in River Clyde Homes, whilst the Executive Director of Property Services

manages property assets corporately.

The Director of Property and Business Development is specifically charged with

pushing forward asset management initiatives and making sure all projects are

progressed on time and to budget and that all property assets are managed and

considered strategically and performance targets are met.

Furthermore, RCH Heads of Service for Operations and Assets will have

responsibility for the delivery of the Asset Management Plan & Strategy within

their divisions.

Communications

Effectively communicating our Asset Management Strategy and Plan across the

organisation and to wider stakeholders will be the key to our success.

A communications plan will be designed to help the asset team and the

organisation to communicate effectively and meet core organisational objectives.

The Asset Management Strategy and Plan was first presented and discussed at

our Business Planning event in November 2016, to ensure all requirements were

captured before presentation to the board in June, before its launch in summer

2017. It is intended to be a live document that will be used throughout the

organisation and in particular by Technical and Housing Officers and others with

an involvement in delivering property services.


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6 Risk

Corporate Risk Register

Corporate risks are managed by the River Clyde Homes Finance and

Transformation team and are reviewed regularly by the Board and the

Management Team. Key strategic Asset Management risks are fed into the

Corporate Risk Register as they are identified.

Major risks at a corporate level that require managing and reporting to the Board

over the next 12 months have been identified as:

§ Lack of access to capital or liquidity;

§ An inadequate Asset Management Strategy;

§ Welfare reform reducing income and increasing bad debts;

§ Failure to achieve a competitive housing offer for our customers;

§ Failure to achieve value for money; and

§ Ineffective planning for diversification initiatives.

§

At a Corporate level, the River Clyde Homes Board and Management team

recognises that:

§ Strategic risk assessment and management needs to be an increased

priority and an embedded feature of key decision making;

§ Risk must have a major influence in business planning and be an integral

part of the business planning cycle; and

§ There is a need to strengthen the business assurance role.


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Project Risks

In light of the corporate approach to risk outlined above and our robust Project

Management requirements, all projects will have their own Risk Register and

Issue Log, managed by the Technical Manager for that project, to provide

consistency in managing project risk. These risk registers will follow best practice

and use a scoring matrix to assess the risk and appoint owners who will be

responsible for delivering mitigating actions within pre-defined time scales.

A summary Risk Register at the Property & Business Development team level will

be used to monitor all the key project risks and feed up into the Corporate Risk

Register.

Risks to delivery of this Asset Management Plan

A Risk Register in relation to delivery of this Asset Management Plan is contained

in Appendix 6. The Director of Property and Business Development will be

responsible for this Risk Register.


River Clyde Homes: Roxburgh House,

102 - 112 Roxburgh Street, Greenock, PA15 4JT

River Clyde Homes is a company limited by guarantee, registered in Scotland (SC329031)

and a Scottish Charity (SC038584). Property Factor Registration Number: PF000152.

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