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Accurate financial appraisal of your scheme is vital to ensure best outcome whilst meeting local housing needs.

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Viability by tenure, dwelling and scheme. NPV and long-term cashflow displayed instantly.

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Assess land values and gross profit with minimal information.

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Achieving best value is essential for your organisation. You must demonstrate continuous improvement and show how you compare with your peers.

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Measure performance with online scheme reports. Annual written report indicates progress against a variety of Key Performance Indicators.

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Social Housing landlords in today’s market must understand the economic value of their properties.

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Analyse your entire portfolio to see which units are most valuable and which need to be considered for a change of tenure or sale.

Blog

Local Authorities: Getting the right housing delivery team in place

If you’re a Local Authority that has decided you want to start doing housing delivery for yourself, you’re going to need the right delivery team in place.  You may have existing staff with related skills, but if you haven’t directly delivered any housing for a few years, it’s highly likely that those in-house staff will struggle to get up to speed confidently and competently without a lot of support. Your current internal procedures and financial regulations will also probably need overhauling to suit the activity and give your team a clear fit-for-purpose structure within which to work.

Different Local Authorities decide to develop houses for various reasons.  For some it’s to increase the supply of all housing or only affordable housing, for others it’s to diversify housing stock, or it could be for income generation.  Your reasons will be tailored to your local circumstances, and you should get an approved strategy in place to articulate those. Your intentions and purpose will influence the most suitable methods for delivery.

One option would be to use the expertise of a partner organisation, which could be a nearby Local Authority that’s already delivering, or more likely a partner Registered Provider with a suitable track record to act as your Development Agent.  If you take this route, it’s recommended that you have an empowered and experienced member of staff on your team who can coordinate the client function. They would act as the interface with your Development Agent and administer a Development Agency Agreement that sets out the scope of the service, standards, fees, etc.  

The benefits of Development Agency are that you don’t need to retain an expensive team and the ongoing costs associated with it.  You get direct access to experienced staff with all the right tools already in place to support you in your aims. The downsides are that it’s harder to build internal capacity if that’s your longer-term aim.  It may also be difficult in some geographical areas to find a Registered Provider willing to allocate some of their resources to generating housing that won’t belong to them. If you have your land and can share the new housing generated with them in suitable numbers, then that may well prove sufficient incentive.

LA development delivery teamIf you aim to have an in-house team and deliver directly in your own right, you should be comfortable that you’ll be creating sufficient numbers of new homes to make this worthwhile.  The costs, or an appropriate portion of the costs, of such staff, can be capitalised to the schemes they are delivering. This means that you don’t need to allow for a drain on revenue funding if your team are fully employed in delivery.  Of course, the new homes they create will generate revenue too. Setting your financial parameters and using an appropriate scheme financial appraisal tool will allow you to calculate economic impact over the development period and after the homes go into long-term management.

It may well make sense for you to share a specialist team between yourself and neighbouring partner authorities to share costs and create more favourable economies of scale.

Getting the right staff in place will quite likely be a challenge for all sorts of reasons.  Assuming you don’t have current experience in housing delivery, there’s no shame in accepting you won’t necessarily know what kind of people with what kind of skills you need.  

Perhaps you have a contract with an employment agency you could call upon.  Be aware though, that if you don’t know what you need, they will need to be a pretty specialist agency to correctly interpret your requirements and find you the right type of people.  Getting the recruitment right is crucial to your organisation’s success, so investing in some consultancy assistance here is highly advisable.

There are a limited number of people out there with the right skills, and the sector, in general, hasn’t been good over the years at training people in this specialism.  Having transferable skills is great, but this is a niche activity with added layers of specialist compliance. If you get things wrong, there can be some heavy prices to pay with the risk of reputational, financial and regulatory damage.  

You may also come across salary and benefit package issues.  Development staff are well remunerated for their skill set, and within a Registered Provider, these roles will usually come out pretty high up the salary rankings.  More often than not, they’ll also get a car allowance. You’ll need to find out what the current going rates are in your area and work out how you will be competitive as a potential employer.  Local authorities have a much better pension scheme on offer, so that’s worth emphasising. A good pension scheme is worth having. You might also offer flexible and home-based working opportunities, paid professional memberships, generous holiday allowances, training and CPD opportunities and so on.

Now let’s be frank … amongst many Registered Provider employees, Local Authorities seem to have a reputation as a less attractive place to work.  You may be up against this reputation, deserved or not! So, you would benefit from selling yourselves as the great, dynamic, groundbreaking, worthwhile organisations that you aspire to be!  

Many development staff went into the sector because giving something back to the community motivated them, and they enjoy being part of creating something tangible.  A lot of them have been through several major restructures and mergers, which can, of course, be very unsettling.  They may have started their careers delivering bespoke schemes on a small scale, but now find themselves churning out large numbers of S.106 affordable housing requirement units where they have limited input and not much room for imagination.  Perhaps they started in the sector working for a fairly small housing association with a few hundred or a few thousand homes and now find themselves working in a very corporate environment with tens of thousands of units. Their work drivers are likely to be very different in that larger organisation, where ‘big finance’ has a major influence on development activity.

LA delivery teamContrast this with working for a Local Authority.  You’re going to be delivering homes within set geography, so the chance to know your area and the people you serve  … and potentially a lot less travelling! The proportion of S.106 affordable housing numbers in your portfolio may be a lot lower, and by contrast, your work could well be a lot more varied and creative.  The money you’re spending on new homes is less likely to be coming from bond finance, so the ‘big finance’ drivers that now prevail in Registered Providers fall away, which could mean a less bland workload.  You can deliver schemes purely because they’re what is needed in a locality, rather than because they’re needed to feed the machine. It might be easier to balance a programme of schemes with some money-spinners that cross-subsidise some less financially attractive proposals.  An attractive selling point as an employer could be all the reasons why Local Authorities are the new Housing Associations!

If you’re still struggling to recruit the right people, never be tempted to settle for the not-quite-right people, or the downright wrong people, just because they’re the only ones that applied.  Recruit for relevant experience, proven track record and attitude. If they don’t tick those three boxes, then they’re not going to get you where you want to be regarding delivery. It would be much better to get in interims and specialist consultants with experience at a strategic level until you can find the right people.  Those same interims or consultants will probably be able to help you find the right people. They should also be able to up-skill a handpicked selection of your in-house staff with transferable skills and an interest in your development aspirations.

Now a note on where to advertise roles.  Most development specialists are actively seeking a change of job are most likely to go to Inside Housing as their first port of call – on their website and in the weekly magazine.  LinkedIn and social media are also ideal places to post job adverts and ask people to share. Use any liaison or partnership meetings with Registered Providers and Local Enterprise Partnerships to let people know you’re recruiting. Wherever you advertise for staff, ensure the benefits of working with you and your organisation are clear.

If you’ve come across people that know what they’re talking about, informally invite them to apply, or ask them if they know of anybody who could be suitable.

When putting together an interview panel, you need at least one person involved who knows housing delivery inside out.  This is a specialist field, and it would be effortless to ask the wrong questions, not recognise the subtleties of a right answer, or be unable to uncover just how much experience someone has through probing.  You need to find out how your candidates are likely to fare working within a new team where some of the rules are not yet written. Depending on your development strategy, there could be a need for razor-sharp negotiating skills, the ability to broker flexible yet regulatory-compliant solutions, or a call for out of the ordinary due diligence.  Risk management will be critical, especially as development is capital-intensive.

Once you have one or two experienced people in place, you may want to consider growing your talent pool in this area.  New entrants to housing delivery in the social sector have been limited for some years, and there appears to be a decreasing number of people to choose from.  Running an in-house bespoke course is an option, or a mentoring programme using experienced professionals. This presents an excellent opportunity to grow an area of expertise that could be marketable to other authorities who aren’t as far ahead as you.

By the time you’ve got your team in place, you’ll want to retain them.  Regular reviews of progress in a lively culture which values continuous improvement make for an attractive place to work. As is getting new homes delivered at the same time as minimising the bureaucracy of decision making.

 

Author Fiona Astin;


by anonymous
Last updated on 22 May 2018 03.00 p.m.

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