Agenda Item No. 9
The Vale of Glamorgan Council
Scrutiny Committee (Housing and Public Protection): 17th July 2013
Report of the Director of Resources
Housing Improvement Programme - Progress Update
Purpose of the Report
1. To provide the Committee with an update on recent progress of the Housing Improvement Programme to meet the Welsh Housing Quality Standard (WHQS) that is currently being undertaken on the Council's housing stock.
1. That Members note the contents of the report including interventions being adopted to further improve the performance of contractors and the Council’s contract management staff in delivering a high level of customer care to tenants whose homes are undergoing improvement works.
Reason for the Recommendation
1. To allow the Committee to adequately monitor performance of contractors and the Council's staff in delivering the Housing Improvement Programme.
2. The delivery of the Housing Improvement Programme is a significant refurbishment programme across the Vale. The objective is that all 3,946 Council homes will be upgraded to WHQS by April 2017.
3. Cabinet at its meeting of 18th April 2012 (Minute No. C1716) resolved that four external contractors be awarded contracts to undertake the Housing Improvement Programme 2012 - 2017. The appointed contractors being:
- Contract A (Western Vale and Rural Areas): Lovell Partnerships Ltd.
- Contract B (Dyfan and Gibbonsdown wards): Ian Williams Ltd.
- Contract C (Remaining wards in Barry): Apollo Property Services Ltd.
- Contract D (Penarth, Dinas Powys and environs): SMK Building & Maintenance Ltd.
4. Cabinet further resolved that the Council's Building Services Division would be allocated some work packages of the programmed works (subject to meeting price and quality standards). These include sheltered housing accommodation across the Vale and refurbishment of void properties to WHQS when they become vacant (voids offered to external contractor if property is in close proximity of their current site operations).
5. Contract works formally commenced in September 2012.
6. On 13th of March 2013, a report on the operational performance of the Housing Improvement Programme was presented to the Committee by the Interim Operational Manager for Asset Management. During that meeting, Members raised concerns with the performance of the contractors delivering the programmed works
7. On 17th April 2013, the five contractors (including Building Services Division) together with officers from Housing and Property Section (managing agents for the contracts) attended the Committee meeting to provide Members with the opportunity to ask questions on performance related issues. Members voiced particular concerns regarding the overall time taken to complete properties and the poor levels of customer care tenants were experiencing in certain areas as a consequence of poor communication and site management. Contractors at that time, particularly those that had been underperforming, gave a commitment to ensure performance was improved.
8. On 22nd May 2013, Members were appraised by the Head of Housing & Building Services and the Operational Manager (Property) of arrangements to bring about improvements in contractor performance. Committee requested that a further update report be presented for consideration at its meeting in July 2013 to allow Members to adequately monitor performance of contractors.
Relevant Issues and Options
9. Members will be aware that the Council had previously agreed that a â€œwhole-houseâ€ approach for these works would be adopted across the Vale. This entails completion of four core work elements (i.e. upgrading kitchen, bathroom, heating system/boiler and electrical installation where necessary) all being undertaken in one visit as opposed to a series of individual work packages via multiple visits over a longer timescale. This decision was made in consultation with tenant representatives.
10. In moving towards the "whole-house" approach, officers were mindful of the significant disruption that was likely to be experienced in occupied properties and the fact that there was little opportunity to decant tenants. To mitigate this, contractors are required to complete all of the standard internal works within 15 working days. Whilst it has always been acknowledged that this is an extremely challenging target, it was considered appropriate in order to help minimise inconvenience to tenants.
11. As previously reported to the Committee, the extent of works being undertaken in properties in order to fully comply with WHQS is significantly more than had originally been envisaged. These additional works include, but are not limited to, the following:
- Structural steelwork
- Asbestos removal
- Extensive plastering and ensuing drying out period
- Presence of black mortar
- Disabled adaptations (e.g. provision of level access showers)
- Altering positions of meters (requires tenant request to utility provider).
12. Budget costs included in the Housing Business Plan are those quoted by Savills at the time they undertook an initial survey of a sample of the Council's housing stock (i.e. £4,000 per kitchen, £2,500 per bathroom, £2,500 per rewire and £3,000 per heating system).
13. Property Section has carried out an analysis of the current cost per property. This equates to £9,250 (including the additional works). This in fact is a lower cost than Savills original estimates. The Vale’s approach to procurement has resulted in tendered schedules of rates that outperform those of the original business plan. Property Section can therefore confirm that, at present, the additional work is not negatively impacting on business plan profiling. The downside for the additional works is that tenants are disrupted for a lot longer than was originally envisaged.
14. It is estimated that approximately 95% of the properties worked in to date have required works over and above upgrading the four core work elements previously referred to. The requirement to undertake what are often substantial additional works inevitably affects planned timescales. This has resulted in the length of time required to complete operations in a property regularly exceeding the originally planned 15 working days.
15. The scope of the works now required has resulted in contractors having to re-assess their planned resources and work programmes. It is felt that this was a contributory factor to the particularly poor performance from 3 of the 5 contractors during the first 6 months of the programme (i.e. Apollo, Lovell and Ian Williams). The two exceptions to this were Building Services Division (limited additional work required in sheltered accommodation) and SMK whose initial allocation of properties was relatively straightforward. However, as indicated later in this report, SMK have recently encountered a large proportion of properties requiring significant additional works. This has had an adverse effect on their achieving completion within required timescales.
16. The 15 working day target was widely publicised to tenants via newsletters, etc at the outset of the improvement programme. It is considered that failure to meet tenant's expectations in this respect has been the main cause of discontent. This dissatisfaction appears to have been exacerbated by generally poor communication between contractors/Council officers and tenants during the early months of the contracts. It is apparent that affected tenants were not suitably advised that works would take longer than anticipated. This inevitably led to justifiable tenant frustrations and resultant complaints.
17. It is inevitable that there will be a degree of disruption/inconvenience caused when undertaking works of this extent and nature in occupied properties. However, it is obviously the responsibility of all contractors and the Council's supervisory officers to ensure that this is kept to the minimum possible.
18. May's Committee was advised of plans to introduce a number of interventions to tackle the issues that have been highlighted by tenant and Member feedback. A number of these have subsequently been implemented with others planned or being investigated. Examples of some of these are included below.
Examples of interventions
19. Communication is considered key to the success of this project. All contractors have endeavoured to improve their communication with tenants. e.g.
- Contractors have increased the regularity of visits or phone calls to advise tenants of the planned works or enforced changes to the work plan. These are often made on a daily basis.
- Some contractors have increased the number of Resident Liaison Officers (RLO) they are employing thus permitting more direct contact with tenants.
- Apollo have been trialling their own satisfaction survey partway through the works in order to ascertain if tenants are of the opinion that communication is not of the standard it should be. This has been successful in providing early indications of any properties where communication or service is considered to be below par.
- Ian Williams have been holding monthly resident surgeries.
- Toolbox talks are taking place to educate operatives including sub-contractors. During these, the importance of tenant care including good communication, respecting resident's property and leaving their homes in an appropriate condition are all emphasised.
20. Efforts are being made to manage tenant's expectations of the work timescales by:
- Advising at initial survey stage that experience to date indicates that average work timescales are exceeding the 15 days that they had previously been advised of. Consideration is also being given to relating this to all tenants via a future newsletter.
- Initial survey now including an assessment of extension of time to be awarded in connection with works over and above the standard (this was previously done as the work progressed). Extension of times are raised by the Council's Housing Improvement Supervisor (HIS) at this time and the extended construction period communicated directly to the tenant thereby making them aware of likely timescale at least 6 weeks prior to work commencing.
- Advising tenant of changes to initial timescales should unforeseen additional works necessitating an extension of time be identified when working in a property.
21. Lovell are currently investigating the potential for providing respite facilities for tenants to use during the day while works are being undertaken in their properties. This may take the form of temporary accommodation or, should it be possible, utilising areas of community centres or suchlike. This will be trialled and if successful will be considered in the other contract areas.
22. Improved liaison with Councillors to address any concerns about how works are being delivered. SMK are now contacting local ward Members to offer the opportunity to meet on site and explain and illustrate the works programme. One Councillor is due to meet with SMK and attend the 6 week pre-start survey in order to gain knowledge of work processes. All contractors have offered to meet with local Members should they wish to do so.
23. A number of contractors have changed to using a directly employed workforce as opposed to teams of sub-contractors. It is felt that dedicated teams of directly employed labour are more likely to take ownership of, and pride in, their work. It also affords the contractor a higher degree of control over their operatives. Apollo commenced their contract using sub-contractors before trialling two separate work streams (one sub-contracted and the other directly employed). This identified that the directly employed operatives outperformed the sub-contractors in achieving required timescales, etc. Apollo has recently launched a third work stream, all three of whom are directly employed.
24. While Lovell continues to employ a sub-contracted workforce, they have recently replaced their major sub-contractor due to their poor performance which was considered to be one of the main reasons for the relatively high level of tenant dissatisfaction being experienced on their contract.
25. Apollo and Lovell identified the fact that resources were being deflected from the planned programme to make good snags/defects was contributing to their not achieving completion within required timescales. Both are now employing dedicated snagging teams to undertake this task.
26. All contractors have formulated improvement action plans identifying issues that need to be addressed in order to improve service delivery together with corrective actions to resolve these issues.
27. There is increased information sharing between contractors. Most contractors have liaised with each other to discuss different working methods and lessons learned. The more successful processes or initiatives are likely to be taken up by other contractors.
28. Taking a more proactive approach in order to avoid increased tenant inconvenience: Apollo has recently encountered a number of properties requiring extensive remedial works which, despite additional manpower, has adversely affected their planned programme. They have therefore voluntarily stopped opening up further properties for a limited period in order to avoid properties getting into delay and the resultant inconvenience to tenants. This period will be used as a catch up period, for staff training and forward planning.
29. Building Services Division have implemented a number of changes including formation of a dedicated voids team, appointment of a Housing Tenant Liaison Officer and assigned process owners resulting in improved communication.
30. Property Section has also instigated a number of initiatives that are intended to result in a more robust contract management regime, including:
- Deploying a further member of Property Section’s staff onto the WHQS team solely to carry out validation surveys. This, together with the temporary appointment of an additional Housing Improvement Supervisor (HIS) with responsibility for sheltered accommodation, has afforded the HIS for each contract area more time to deal with tenants concerns, site issues, undertake quality inspections, etc.
- To supplement meetings held between Council supervisory officers and contractor staff working on the contracts at site level, a series of separate meetings between Property Section managers and contractor’s senior staff are held every two weeks. These meetings provide a forum for both parties to discuss high level issues affecting the contract and formulate any necessary corrective actions.
31. It is considered that all contractors, particularly those whose performance has previously been cause for concern, have made significant strides in attempting to address the underlying causes of tenant dissatisfaction and other issues.
32. The interventions implemented to date would appear to be taking effect with this being reflected in improvements seen in a number of Key Performance Indicators (KPIs).
33. Data to inform the KPIs for the 1st Quarter of 2013/14 (i.e. 1st April 2013 to 30th June 2013) was being collated at the time of drafting this report. It is intended that final versions will be distributed to Members prior to the Committee meeting.
34. The initial draft of KPI 4 (Percentage of properties completed on time) and KPI 7 (Voids - Percentage of properties completed on time) are included in Appendix A. Members are advised that there may be some amendments to the currently reported figures when these are finalised.
35. Members are directed to the fact that KPI 4 indicates a trend of continuous improvement through April, May and June by Apollo, Lovell and Ian Williams. Of particular note is the improvement by Lovell who have turned around 0% (0 out of 12 properties) completed on time in April to 100% (12 out of 12) in June.
36. In isolation, the returns for Ian Williams and Lovell in April and May are not considered impressive. It should be noted, however, that this was a period during which both were endeavouring to reduce their backlog of historical properties while at the same time implementing interventions which included changing their workforce and adopting new processes.
37. Exceptions to the trend of continuous improvement are:
- Building Services Division who had exceptional returns of 100% on time in April and May before dropping to 90% in June. This results in only 1 of 25 properties not being completed on time in the 3 month period. A contributory factor in achieving such high scores may be the limited additional work required in sheltered accommodation.
- SMK who, as stated earlier in this report, have recently encountered a large proportion of properties requiring significant additional works. This has had an adverse effect on their planned programme and achieving completions within required timescales. They are, however, anticipating being back on programme in the near future.
38. KPI 7 indicates continuous improvement by Building Services Division through April, May and June. The two external contractors who undertook works in void properties during this period (i.e. Ian Williams and SMK) both achieved a 100% success rate in June.
39. As reported to Committee on 17th April, Property Section has now taken ownership of the complaints handling process (previously most tended to be dealt with by the individual officer receiving the complaint).
40. A more co-ordinated complaints management system has been put in place with a single point of contact being appointed. Complaints are logged centrally before being forwarded to designated contractor and Council staff to be actioned. Procedures regarding set timescales to address issues are set with tenants being contacted on a regular basis to ensure their concerns are being addressed.
41. The number of formal complaints received by Property Section during the past four months are as follows:
- March 2013: Sixteen
- April 2013: Thirteen
- May 2013: Twelve
- June 2013: Three.
42. As can be seen, the number of complaints received has decreased each month with a significant reduction in June. This may be attributable to various interventions implemented by contractors resulting in improved communication with tenants and a more cohesive approach when dealing with day to day problems encountered in properties being refurbished.
43. Whilst aspiring to not receive any complaints, it is considered that the number being received is not inordinate for contracts of this nature. This is particularly so having regard to the complexity/scope of work being undertaken and the fact that this is required to be carried out in occupied properties.
44. Members may consider it worth noting that it is not only negative feedback on contractor performance that is being received. A number of compliments have also been received. There appears to have been a marked increase in such feedback of late. Some examples of recent positive feedback are included in Appendix B.
Review of contract management processes
45. It is recognised that it is not solely the performance of contractors that can adversely affect the delivery of a high level of customer care to tenants. In acknowledging this, Members have previously been advised of Property Section's intention to undertake a review of the contract management processes they are currently employing.
46. The review will include examination of resources being deployed, existing lines of communication, documented procedures, clarity of information being provided to/by relevant parties, etc. The objective of this exercise will be to assess the suitability of current arrangements and identify potential areas of improvement with a view to enhancing overall service delivery.
47. In advance of the review, a number of changes have already been implemented as part of the interventions referred to above. As previously reported to Committee, commencement of the review has been temporarily delayed in order to permit these changes to bed in. The review will then be able to assess the effectiveness of these new processes.
48. It is considered that the person undertaking the review should be completely impartial and not currently engaged on the Housing Improvement Programme. A consultant Project Manager has therefore been engaged on a temporary basis for this purpose. The review is due to commence shortly and it is anticipated that any significant findings will be reported to a future meeting of the Committee.
Resource Implications (Financial and Employment)
49. There are no additional resource requirements associated with this report however reviewing our approach to the Housing Improvement Programme may result in resource implications.
Sustainability and Climate Change Implications
50. There are no implications.
Legal Implications (to Include Human Rights Implications)
51. It is a requirement that the Council meets the Welsh Housing Quality Standard and has advised that Welsh Government that this will be achieved by April 2017.
Crime and Disorder Implications
52. Many of the requirements of the WHQS contribute to the Crime and Disorder agenda. In particular, the requirements of safe and secure dwellings located in safe and attractive environments.
53. Long term empty properties can have an adverse impact on the perception of residents living on our estates and can lead to increased levels of vandalism and crime.
Equal Opportunities Implications (to include Welsh Language issues)
54. Improving our approach to housing refurbishment will benefit all parts of the community for which we serve.
55. Meeting the WHQS and the Housing Improvement Programme contributes to the Council’s corporate priority of making the Vale a safe, health and enjoyable place to live via good quality housing and to achieve a quality environment.
Policy Framework and Budget
56. This report is within the policy framework and budget.
Consultation (including Ward Member Consultation)
57. This report is for the consideration of Scrutiny Committee (Housing and Public Protection) – the Housing Improvement Programme covers all wards.
Cabinet Report (18th April 2012)
Scrutiny Reports - H&PP (13th March, 17th April and 22nd May 2013)
Welsh Housing Quality Standard (Welsh Government) - July 2008
Housing Business Plan
Martyn Lewis (Group Quantity Surveyor - Property Section)
Hayley Selway (Head of Housing and Building Services)
Sian Davies (Director of Resources)