Thirteen Group Ltd Strategic Plan

Transcription

1 Thirteen Group Ltd Strategic Plan

2 Contents Strategic Plan 2016/17 Message from the Chair 3 Thirteen Group - About us 4 Our Partner Companies Erimus Housing - Housing Hartlepool - Tees Valley Housing - Tristar Homes - Thirteen Care and Support Thirteen s Values and Strategic Priorities 8 Laying Firm Foundations 9 External Factors affecting Thirteen 10 Building a Stronger Business 11 Risk Management 12 Future Proofing Thirteen Transforming Thirteen 16 Financial Plans 17 Appendices Appendix A Geographical Profile of Thirteen Group 18 2

3 Message from the Chair George Garlick Chair of Thirteen Group After taking up the position of Chair of Thirteen in April 2016, I am delighted to welcome you to the Group s Strategic Plan for It will come as no surprise to hear that we are in a period of unprecedented change for the housing sector and one of increasingly difficult challenges. The impact of the outcome of the EU referendum is yet to be fully assessed but will, I am sure, bring additional challenges for the organisation. However we are in a robust position, ready to reshape, transform and futureproof the organisation to ensure we are resilient enough to not only face these testing times but also take advantage of future opportunities for us as a Group. The Board has already agreed to focus primarily on Tees Valley as our distinct zone of operation; with any profit we make being reinvested to benefit the area. As well as agreeing our key area of operation, we also want to be unsurpassed in our field making Thirteen the best landlord in the Tees Valley. We have a vital role to play in sustaining communities and that s just one of the reasons why we see our core business as being the 33,600 homes we own and the people who live in them. We want to excel at building and maintaining properties, letting properties in the best way possible and delivering the best possible services to our customers. We are already in a strong position through our successful work and relationships with all the local authorities across the Tees Valley. Now devolution brings a further opportunity to work with the new combined authority and make a real difference in the area. Thirteen has already become a key player thanks to the hard work and dedication of its employees, led by Alison Thain and the leadership team. It has been a privilege to work with Alison over the last few months as she moved towards the end of her long and successful tenure as Group Chief Executive. On behalf of all the board directors, I would like to take the opportunity to thank her for the incredible contribution she has made to Thirteen and the Tees Valley as Chief Executive of Tees Valley Housing, followed by Fabrick and finally Thirteen. I am sure everyone will join with me in wishing her well as she retires from the organisation to concentrate on a range of other activities. Now I am thrilled to welcome Ian Wardle as the new Chief Executive of Thirteen and I am sure his drive, enthusiasm, expertise and leadership will help guide Thirteen to become the organisation it aspires to be. I look forward to working together with Ian and the rest of the Thirteen team, along with local authorities, stakeholders, partners and tenants, to continue to build this organisation to ensure it realises its potential to be the best in the Tees Valley. 3

4 Thirteen Group - About Us One of the North East s leading providers of housing, care and support, the Thirteen Group employs around 1,400 people and manages more than 33,600 homes currently spanning from North Tyneside to York. The full geographical profile for Thirteen Group is provided at Appendix A. Thirteen provides a range of high quality affordable homes, managing general rented, sheltered and home ownership accommodation, reflecting the needs and aspirations of our customers. Our care and support arm assists vulnerable clients with complex needs to face a range of challenges. Thirteen Housing Group Ltd is a Registered Provider and Company Limited by Guarantee. The Board has 11 members, including the Group Chief Executive. The Chair of each of the five Partner Companies, as formal subsidiaries within the Thirteen Group, hold positions as non-executive directors and the balance consists of five additional independent non-executive directors, including the Chair of Thirteen and the Senior Independent Director. Thirteen Erimus Housing Housing Hartlepool Thirteen Care and Support Tees Valley Housing Tristar Homes Audit and Risk Committee Remuneration Committee Treasury and Investment Committee Optimus Homes Partnering Plus Portico Homes 4

5 Our Partner Companies Our lead partner in the Middlesbrough area, Erimus Housing is a not-for-profit registered housing provider, charity and developer, which owns and manages more than 11,400 homes, as well as a range of commercial properties across the town. Not only does Erimus Housing offer quality homes and improved neighbourhoods, it also has a raft of experience in delivering large-scale refurbishment and regeneration programmes, alongside newly built contemporary homes with a range of affordable ownership options to meet differing housing needs and create thriving communities. Committed to investing in Middlesbrough, Erimus Housing has a wealth of expertise working closely in partnership with Middlesbrough Council, neighbouring local authorities and partner agencies to deliver innovative projects that make a positive impact on people, communities and the wider area. Website: Housing Hartlepool, our lead partner in the Hartlepool area, is a not-for-profit, registered social landlord and charity formed in March 2004 to take over the ownership of the former Hartlepool Borough Council housing stock. The Company manages around 7,700 homes in Hartlepool and the surrounding villages as well as a number of shops. It has developed new homes in the wider Tees Valley area and in Durham and Gateshead. The majority of homes are for rent, but also include shared ownership, right to buy, outright sale and extra care schemes. Housing Hartlepool is committed to supporting the regeneration of communities. Working closely with residents and other agencies, the organisation works to improve and build homes, and improve the local environment and surrounding neighbourhoods. In partnership with the Local Authority, it has a successful Empty Homes Programme that is bringing problematic long-term vacant private properties back into use as affordable housing, and is continuing its pledge to build new, highly efficient affordable homes in both Hartlepool and the surrounding areas. Website: 5

6 Tees Valley Housing, a community benefit society, owns and manages around 4,200 properties from York to Northumberland and is the lead company in the Spirit development partnership, which aims to build better quality, affordable homes cost effectively and efficiently. Tees Valley Housing believes in investing in neighbourhoods through new and innovative services and initiatives, helping to develop sustainable communities. Website: Tristar Homes is a not-for-profit, registered social landlord and registered charity, and our lead partner in the Stockton area. Previously Stockton Borough Council s Arms Length Management Organisation since 2002, it took over the ownership of the Council s housing stock in 2010 following an overwhelming vote of support from Council tenants. This move gave Tristar the ability to unlock more than 100 million to invest in homes and neighbourhoods, and deliver a 5-year investment programme to support safe and sustainable communities, investing in homes for future generations, providing new and enhanced high quality services and making a real difference in the quality of life for customers and their families. Tristar owns around 10,400 homes in Stockton Borough (Stockton, Thornaby, Billingham, Yarm and surrounding villages), as well as some shops, and is building new homes for sale and rent, helping people onto the property ladder and supporting the local economy. Website: 6

7 Thirteen Care and Support - our care and support partner is a registered charity, which provides support to vulnerable groups including young parents, exoffenders, and veterans, people with drug or alcohol issues and troubled families. Personalised packages of support are developed for every client to ensure they get the specific help they need. The experience, expertise and commitment of staff allows Thirteen Care and Support to provide a service which assists clients with complex care and support needs to face a range of challenges, helping them think differently and seek out opportunities to improve their lives. Website: 7

8 Thirteen s Values and Strategic Priorities The Group s overarching values and strategic priorities, which were articulated by the Boards in 2014 when Thirteen was established, remain relevant and continue to underpin the culture, ethos and focus of the Group and its activities. Our values We are: passionate about our social purpose flexible and open minded professional and accountable supporting entrepreneurship and solutions that deliver showing respect and optimism credible and ethical These values help us to demonstrate how we care about the people and communities we serve and the partnerships we develop. They illustrate the kinds of partners we want to work with, those who share our values and our passion and commitment to help bring to life the business we are striving to create. Our Strategic Priorities Promoting Resilience and Sustainability In our: - Business; - Assets; - Customers and clients; - Neighbourhoods and communities. Committed to Growth and Adding Value - Developing aspirational homes and community facilities; - Ensuring existing partnerships deliver; - Forging new partnerships and making connections. Building a Great Organisation - Delivering profit for social purpose; - Delivering great services; - Generating social capital; - Doing business in an ethical way; - Investing, learning and innovating; - Being well led and accountable. 8

9 Laying Firm Foundations In 2015/16 the second year of operation for Thirteen - the Thirteen Group Board and five Partner Boards, together with the Executive and wider management team, collectively aligned themselves behind the aim of Laying Firm Foundations, as follows: Letting, managing and maintaining good quality homes; Maximising rental and other income; Completing a series of office accommodation moves; Preparing for and implementing ipacs - our integrated property and customer services system; Keeping us legal and safe; and Continuing our work developing people and teams. This strategic statement of intent re-emphasised what was intended to be a short to medium term objective of prioritising those activities core to our business and central to underpinning our future growth, and helping Thirteen to become the organisation it aspired to be. Whilst much progress was made during 2015/16, a number of challenges both external and internal - hampered our ability to fully achieve these objectives. The Government s post-election budget in July 2015 has had a dramatic effect on the housing sector and as a result, Thirteen, along with all registered providers (RPs), has had to review its business plan and reprioritise activities to ensure we are able to deliver our objectives. The resulting service reviews and problems associated with the implementation of some elements of a new computer system, Orchard, have also had an impact on service delivery. As a consequence, many of the Laying Firm Foundations objectives are just as relevant in 2016/17, when we will continue to focus on delivering core activities whilst ensuring we achieve efficiency targets. 9

10 External Factors Affecting Thirteen We are operating in a time of unprecedented changes within the housing sector. While many of the welfare reforms in the July 2015 budget were expected, the reduction in regulated residential social rent was not; similarly, proposals to cap housing benefit for social housing tenants at Local Housing Allowance (LHA) levels to align with the private sector. The impact of restricting housing benefits to LHA rates that apply in the private sector is an increasing concern. A thorough analysis is being undertaken of which of our housing stock will see the biggest impact, but given that LHA is inclusive of service charges, it is clear that schemes such as high rise flats and those with communal facilities and sheltered and supported housing will be particularly vulnerable. Investment decisions in current stock and development opportunities for new schemes will need to be thoroughly analysed to ensure viability. There is also a perception that the Government feels that housing providers are not developing homes quickly enough to address the national housing shortfall and help more people into home ownership. This is further exacerbated by the requirements of the voluntary right to buy scheme. Whilst the Government has confirmed that it will pay grant to RPs as compensation for the discount, concern remains as to how this will be funded and, in our case and in large parts of the North, how we will bridge the gap between value and cost of replacement. Welfare reforms continue to have an impact, particularly the bedroom tax and Universal Credit. There are mounting pressures on the financial position of many of our customers and local communities and greatly reduced prospects, particularly for those in the 16 to 24 age bands (and potentially extending to those up to 35 years through the single room rate being applied as we align with the LHA regime). In addition, social and demographic changes continue to present specific needs gaps for those very elderly, in poor health or disabled and for the others who, collectively, remain the most vulnerable members of our communities. The impact of the outcome of the EU referendum is yet to be fully assessed but will undoubtedly bring additional challenges for the organisation. There are potential opportunities for the Group, however, as devolution agreements move ahead with regard to the proposals for a Combined Authority for Tees Valley. The role of the Thirteen Group within the combined arrangements continues to be the subject of great interest and discussion with Combined Authority colleagues, with thoughts around a delivery function and joint investment vehicle. Regulatory requirements continue to be a key priority for the Boards, with the focus very much on governance and financial viability, along with service delivery elements such as gas servicing. Keeping us legal and safe remains a key strategic objective in 2016/17 and beyond, and it is essential that whilst we continuously strive to improve and enhance our product and customer offer, we also ensure we meet regulatory requirements and expectations, particularly with regard to customer and employee safety, delivering efficiencies and value for money and building new homes. 10

11 Building a Stronger Business While cuts and Government pressures continue to take their toll, we know that creating the Thirteen Group was the right thing to do to help us continue to deliver effectively and efficiently into the future as a financially robust organisation in a changing and ever more difficult environment. The formation of Thirteen Group was predicated on delivering efficiencies and maximising capacity. The 2015 Summer Budget further highlighted the need for significant efficiencies to be delivered and the Group s revised financial plan, which was submitted to the Homes and Communities Agency (HCA) in October 2015, detailed how the loss of rental income of 55m would be offset to deliver a sustainable business plan. The challenge of this cannot be underestimated, coming as it does on top of an increasingly difficult and hardening operating environment where Government cutbacks in welfare and increased austerity, together with increased competition from the private sector in a low value economy, all add to our challenges. In this time of huge change for our sector, the Thirteen Board, in conjunction with its Partner Boards, has reviewed the Group s strategic priorities, to ensure clarity of purpose and focus, to future-proof Thirteen and enable us to meet the internal and external challenges facing us over the next four years and beyond. After embedding Firm Foundations and learning from the Good to Great project, we need to transform our business, focusing on performance and on being more streamlined and efficient, with a clear purpose and identity. Our objectives for 2016/17 will enable us to Build a Stronger Business through six key objectives: Transforming our structure and business; Focusing on core business renting, repairing, re-letting and renewing our assets and delivering efficiencies; Delivering great service to all our customers; Being more commercially aware understanding the cost and value of what we do; Ensuring we are a business with considerate (in their behaviour), smart (in the way we do things) and progressive (they move things on) employees; Ensuring we are legal and safe. 11

12 Risk Management The Boards have agreed a set of strategic risks taking into account the sector risk profile, the Regulator s expectations and key themes from Board risk discussions. They have also articulated their risk appetite and tolerance for each of those risks. These risks were reviewed at a Board Development event in April 2016, taking account of the outcomes of scenario and stress testing of the financial plans, and ensuring alignment with the Building a Stronger Business strategic objective agreed for 2016/17. They reflect the areas the Boards feel require focus to meet the challenges faced by the organisation over the coming years. These risks are shown in the table below. Risk 1 Risk 2 Risk 3 Risk 4 Risk 5 Risk 6 Risk 7 Risk 8 Risk 9 Risk 10 Increased pressure from political and regulatory environment Ability to remain relevant Inability to comply with regulatory and statutory requirements Failure to ensure Group s infrastructure informs and supports the business Failure to deliver the Building a Stronger Business objectives Ability to set and collect appropriate rents Risks associated with development Failure to maintain asset base Failure to remain financially viable Failure to drive and demonstrate efficiencies Group Directors and Heads of Service own and monitor the strategic risks, ensuring that controls are in place and/or planned to mitigate them. The Audit and Risk Committee monitors the mitigating controls on behalf of all Boards. The strategic risks are supported by operational risk registers, which are owned, updated and monitored by Heads of Service in each Directorate and reported to Audit and Risk Committee on an annual basis. 12

13 Future Proofing Thirteen Identifying our priorities with clear strategic messages for the future will bring clarity and deliver success. The Group needs to position itself in the best way possible to take advantage of any opportunities that arise from the devolution agenda and establishment of a Combined Authority. There are potential opportunities for Thirteen to have a strategic leadership and influential role in Tees Valley. Positioning Thirteen In Building a Stronger Business, we will articulate our strategy for moving forward as a Group, managing what we have today and setting out short, medium and long-term goals to transform and position Thirteen. Who, what and where we are We are - Thirteen We need to strengthen our identity with all stakeholders, both internally (culture and developing the Thirteen way) and externally (group restructure, a clearer customer offer and profile raising). Focusing activity on one brand, rather than a collection of brands within a group, provides a clear identity to communicate and more resilience in the brand to prepare for future changes and challenges in our operating environment. We want to be the best landlord in Tees Valley. To get there, we need to understand and focus on our core business and purpose: our 33,600 homes, the people who live in them, and to make sure properties are well built, let and maintained in the best way possible. Consultation on the Group s strategic direction commenced with all Boards at a Board Development event in February 2016, when they: Agreed the principle of having one landlord; Agreed that the Group s key operating focus should be Tees Valley and that activity carried out elsewhere should be on a commercial basis to reinvest in Tees Valley; and Were keen to ensure that arrangements are in place with tenants, local authorities and other partners/agencies, to retain, and build upon, existing local connections and knowledge. What we are - A landlord of scale and social purpose developer Moving our focus from neighbourhood/housing association approach to more accurately reflect our purpose as a large-scale landlord and development business. 13

14 We can demonstrate we are the people to do business with in Tees Valley: we have a strong track record; an understanding of local markets and do not operate a one size fits all approach to supplying housing. This will help us reposition ourselves with existing and potential business partners and opportunities. Where we are - Ambitious for Tees Valley Our scale and presence in the Tees Valley gives us the platform to make a positive impact on the sub region and the potential to leverage in more. We can position ourselves as a natural partner within the Tees Valley Combined Authority, an organisation that creates effective partnerships that deliver, that we are focused on our purpose. This will help develop our offer to the Tees Valley, to local and central government, regional investors and local public and private sectors,that they cannot afford not to do business with Thirteen: a landlord of scale, a business that responds to changing market needs and with the capacity and ability to build for all categories of home buyers. One Landlord During the lifetime of this strategic plan, therefore, the Group s governance structure will be reviewed to ensure it is structured and resourced as efficiently as possible and help enhance the delivery of streamlined and value for money services for all our customers and communities. There are a number of benefits associated with implementing a revised Group structure, including: the ability to release and make best use of funding capacity, maximising resources and services across the Group, limiting the need for recharges between companies and ensuring we are collaborative ready for any future opportunities. Having five separate Partner Companies within the Group by nature increases bureaucracy and duplication, and is not an effective use of money and resources. The HCA is increasingly keen to see that groups operate streamlined, less complicated and less risky structures to drive efficiencies and value for money, and enable more effective risk management. Savings can easily be realised by reducing the number of boards and board directors across the Group, though by far the greatest benefit of collapsing the structure will be the ability to release capacity across the Group. We currently have four RPs with four sets of assets and four sets of loan covenants, with capacity in one and not the others. If we move away from the current structure, we would save on borrowing costs and release capacity by consolidating the assets into one RP, and could potentially unlock at least 3m to do more across the Group. 14

15 All staff are now on Thirteen terms and conditions and services are operated across the Group by Thirteen staff on behalf of the Partner Companies. Care and Support services will become an integral element of the landlord company, ensuring the delivery of streamlined and cohesive services for our more vulnerable customers. The proposed governance structure would, therefore reflect the organisational structure and one team culture of Thirteen. Our Core Business We have scoped out and reviewed all services and activities delivered across the Group against our requirements as a registered provider, to understand what we must do as a landlord, what we need to do to keep us safe and legal and what support services are required to support the business. This gave rise to the four R s in our strategic objectives renting, repairing, re-letting and renewing our assets. In defining the above, it was possible to clearly define the non-core activity (or those services and activities we deliver for social purpose). Whilst the terminology of core and non-core was adopted and has driven a cultural change in the way we do things, it has also been perceived as being negative; giving rise to confusion as to whether non-core activity is as important as core. For this reason, the terminology of core or non-core has been replaced with core business or purely for social purpose. In delivering our strategic objectives, we will use business intelligence to gain a better understanding of the impacts of all social purpose activity and ensure that future resource investment has maximum effect. Where an activity is demonstrating no significant impact on core business or is not meeting its intended aims, we can confidently switch off the investment and realign resources more effectively. 15

16 Transforming Thirteen In order to ensure the delivery of the Building a Stronger Business (BSB) strategic objectives we need a strategic framework that is clear, realistic, risk aware and prioritised. Transformational Strategies To transform the way we think and operate as an organisation, we will rationalise and consolidate our existing strategies under four cross-cutting, interlinked and interdependent strategic themes: Property (Product physical) Customer offer (Place, service product) People (Employees, organisational development, culture) Commercialisation (Growth, value, price) Underpinning these transformational strategies will be a supporting infrastructure, including governance, assurance and ICT frameworks. Transformational Projects We have developed a master plan to support the delivery of our strategic objectives and ensure we achieve the efficiencies required to offset the loss of 55m rental income. The BSB master plan includes transformational projects required to future-proof Thirteen (as shown below) as well as operational projects to ensure a continued focus on the delivery and performance management of the four R s. Restructure of Group Review customer service offer (includes self-service) Review asset management phase 2 Repairs (R&M review) Rent and income review Accommodation and empty property Pay and reward framework (Commercial) (Customer offer) (Property) (Property, customer, commercial) (Customer, commercial) (Property, customer) (People) The plan is owned and driven by Heads of Service, with a Group Director championing each transformational project. A programme board, chaired by the Group Director of Business Development, has been established to review and monitor delivery of the plan. Recognising that this plan currently focuses on actions required in 2016/17, work is ongoing to develop a transformational plan to ensure there is clarity of vision, purpose and direction for the Group for the next four years and to create a more robust approach to strategic planning and reporting. 16

17 Financial Plans Financial plans for each Partner and the consolidated Group plans have been approved by the Treasury and Investment Committee and Boards. These plans support the Strategy for the Group and reflect the values of the organisation and transformational projects to be undertaken. Further information on the Group financial plans can be requested by ing 17

18 The Geographical Profile of Thirteen Group 2016 as referred to in Section 1 Erimus Housing Housing Hartlepool Tees Valley Housing Tristar Homes Local Authority Rental Other Rental Other Rental Other Rental Other Stock Stock Stock Stock Babergh 1 County Durham Darlington Gateshead Hambleton Hartlepool Middlesbrough Newcastle upon Tyne North Tyneside 12 Northumberland 1 Redcar and Cleveland Richmondshire 52 Scarborough Stockton-on-Tees Sunderland York Totals Total rented stock Total other stock 1642 TOTAL STOCK

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