CIH Conference 4 April 2014 Rethinking assets and rethinking strategies Ann Santry September 2012
Outline • Who we are • The challenge • Starting point for our review • The research and review process • Conclusions Creating homes, shaping communities, changing lives Creating homes, shaping communities, changing lives
Who we are September 2012
25 years of Sovereign • 1989 – 7k homes Newbury District Council • 1999 – 3.5k homes developed but 70+ LAs • 2000 – First Strategic Plan • 2005 – Group structure + Twynham HA • 2007 – Vale HA • 2009 – Kingfisher / HVHS • 2011 – One Sovereign • 2014 – 37k homes Creating homes, shaping communities, changing lives
Overarching strategy • Phase 1 – Growth – to improve efficiency and create savings for: • Investment into better services • Investment into new homes • Investment in expertise and to attract talent • Phase 2 – Simplification • Stock rationalisation – buy, sell and swap • One Sovereign Creating homes, shaping communities, changing lives
Current housing stock profile Creating homes, shaping communities, changing lives
Looking back before looking forward… September 2012
Emergence of social housing: timeline Creating homes, shaping communities, changing lives
Subsidised housing requires subsidy Creating homes, shaping communities, changing lives
Views about income management have evolved Screening HB takes the residents strain Creating homes, shaping communities, changing lives
Complex balancing act Creating homes, shaping communities, changing lives
The Challenge Meet housing need in a way that is sustainable for: • The individual • The community • The organisation Creating homes, shaping communities, changing lives
Strategy 2014 Who, what, where & how… September 2012
Old Approach • Five year strategies with annual review • Environmental scanning • PEST / SWOT • Stakeholder involvement • Business plan modelling • Options = Agreed plan Creating homes, shaping communities, changing lives
New Approach Aim to: - Develop our evidence base - Develop shared insight - Exploit diversity and engage widely Approach: - A wide variety of projects - Sponsors across Sovereign - Results shared and recognised Creating homes, shaping communities, changing lives Creating homes, shaping communities, changing lives
Components • Research and data – Six months • Big ideas • PEST /SWOT • Business plan – Stress testing • Stakeholder interviews • Scenario planning – Based on ‘experts’ views Creating homes, shaping communities, changing lives
Housing markets Creating homes, shaping communities, changing lives
A changing market 3,981 • Since 1991: 4,236 4,507 4,140 2,133 – Number of homes up 1,767 1% a year – 76% of housing 14,838 14,693 13,397 growth in PRS – PRS now bigger than social sector for the 1991 2001 2011 first time since 1961 combined social Private renting and tied Source: CLG Table 104 Owner occupied (Dwelling stock by tenure (thousands)) Creating homes, shaping communities, changing lives
• By 2022: – Owner occupation will have continued to shrink – Private rent could become the dominant tenure for families in London, and – The dominant rented 1991 2001 2011 2022? tenure outside London combined social for families Private renting and tied Owner occupied Creating homes, shaping communities, changing lives
So who are our customers? Creating homes, shaping communities, changing lives
So who are our customers? Creating homes, shaping communities, changing lives
Residents’ needs and aspirations Creating homes, shaping communities, changing lives
Residents’ needs and aspirations Berkshire Devon Dorset Hants Oxon W of E Gender Female Female Female Female Female Female 39 Age 33 36 37 36 31 2 adults 2 adults 2 adults 2 adults 2 adults 2 adults Household and 2 and 2 and 2 and 2 and 2 and 2 Make-up children children children children children children HB? Yes Yes Yes No No Yes Employed Yes Yes Yes Yes Yes Yes Household? Income £20k - £30k £10 - £20k About £20k £20k - £30k £30k - £40k £20k - £30k Creating homes, shaping communities, changing lives
Affordability Aim: A common understanding of what housing • choices are affordable to our current and future residents across our different areas . The key metric we decided to benchmark across • our areas is a household’s ‘living income’. Living income = Total net income 1 - Net housing cost 2 1. Net earnings + tax credits + child benefit 2. Total housing cost – housing benefit Creating homes, shaping communities, changing lives
The data models We designed two models: 1. A typical household in low paid work = lower quartile earnings + benefits. Allows comparison of similar low income households. 2. A household on a median income = CACI overall household income data. This model gives a feel for an average household in an area . Creating homes, shaping communities, changing lives
Affordability by geography Living income for a couple with two children, on low paid work, in a general needs rented home Creating homes, shaping communities, changing lives
Affordability by geography Living income for a couple with two children, on a median income, in a general needs rented home Creating homes, shaping communities, changing lives
Potential impact of the Benefit Cap (currently £26k) Creating homes, shaping communities, changing lives
Potential impact of the Benefit Cap (potentially £20k) Creating homes, shaping communities, changing lives
Social value This project aimed to evaluate social value, incorporating the following principles: • Widen definition of value into non-financial terms • Discuss and articulate the different aspects of value associated with different tenures • Attempt to sort and score these values without, at this stage, deeming one element to be more important than the other Value for the household Value for Society Value for Sovereign Wellbeing Finances Economy Exchequer Assets Income Creating homes, shaping communities, changing lives
Summary Matrix Creating homes, shaping communities, changing lives
Scenarios: Testing our ambitions • What will shape our future? • Can we describe the world as it could be? • In these possible future scenarios, would our strategy: • Meet the needs of our current and future residents? • Be deliverable? Creating homes, shaping communities, changing lives
Conclusions • The world is Rusty!! • Time to think, test and plan • Need to redefine our relationships • Real partnership working • Greater efficiency to enable choices • Affordability and WBR – key risk • Ultimately a more independent future Creating homes, shaping communities, changing lives
Thank you September 2012
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