The London Borough of Hackney Council

Case study

“Continuous development”

“Better visibility”

“Easier to project manage”

“Quick appraisals”

Simon Theobald – Head of Finance

Hackney’s housing strategy 2017-22 outlines how Hackney Borough Council intends to
realise the vision of delivering the homes Hackney needs. The Borough Council has
integrated SDS software into the delivery of the strategy. This case study outlines the
housing strategy for 2017-22, and how SDS helps that strategy to become reality.


Homes are being built using a model that cross subsidies outright sales to fund affordable
housing. The aim is to deliver 2,000 homes by 2022 with the scope of the overall project to
build over 9000 homes. These will be high quality affordable homes for tenants and will help
to shape the communities they are in. Hackney uses SDS ProVal and Sequel at different
points throughout the development of a scheme.

Getting to grips with ProVal LS

ProVal is used as a fundamental part of the appraisal / design phase. It allows the Finance
and Development teams to manage all the changes that happen during that phase. Before
ProVal everything would have been recorded in multiple spreadsheets. The spreadsheets
showed all potential variables that impacted the scheme, and updating these spreadsheets
for each project and consolidating them was extremely time consuming. It would often take
two or three weeks before knowing the outcome of the changes. In addition, with such a
complex system there was also the risk of human error.

With the introduction of ProVal, almost overnight there was an instant understanding of the
financial impact of any changes. Typical changes would include; design, tenure, number of
floors, additional costs, and change in sales values. Visibility into the financial impact these
have within a single scheme, or across schemes, means is easily modelled in an SDS
appraisal. From the base appraisal, various scenarios are created in ProVal, which enables
the Council to select a development which optimizes the management of cost and risk. Due
to build costs increasing and sales values dropping, these figures need to be managed on a
day to day basis. ProVal has drastically improved the development decision making
process, enabling Hackney to be more agile, adapting to the changing environment.
Ultimately, delivering affordable housing schemes with better value for money.

Implementation

Initially, ProVal was implemented primarily for the regeneration team, who were tasked to
look at the redevelopment of Hackney’s housing stock. Subsequently then, an infield
programme of house building housing supply programme has been introduced. The use of
ProVal has been shared with other departments, increasing overall employee skill and
understanding of the development process at Hackney Borough Council.

“We have expanded the number of departments who use ProVal as Strategic property
services who manage the Hackney commercial and community portfolio work with the
development team to do appraisals. These appraisals were often done by consultants who
would have to re-appraise a scheme to identify the impact of change, this was costly and
time consuming. Now the finance and regeneration team work together to run 8/9 different
appraisal options to understand all the factors and their impacts.”

“The huge strategic plans for delivery are a result of the information, knowledge and
understanding of development that has been brought to the team via ProVal. If we were still
using spreadsheets I’m not sure we would ever have that insight. We may still have delivered, but it would have been at an unknown cost, in the sense that we would never
know how much better value we could have achieved. With ProVal we’ve continued to
deliver with measurable value, we’re delivering 2,000 units by 2022, and that’s the measure
of our success.”

To gain board development approval, a gateway process is used throughout all the stages.
ProVal is used to first complete a very simple appraisal to look at the finances, site capacity
to work out what’s deliverable on the site and potential tenure mix options, property sizes,
and other facilities for the community or commercial spaces within the development. If viable
these are brought into the programme for approval which is the baseline financial position.

This is then developed to a detailed design and planning permission is submitted. During the
wait for planning permission approval, there are often more cost changes that are identified
and monitored until it goes to tender. When the tenders come back they are compared and
how well the scheme has moved through the design development is reviewed to consider
finally cost to build from the contractor.

Sequel

Sequel is used to project manage the build phase, replicating the finance system monitoring
and controlling budgets and spend in line with authorised payments.

With Sequel, it is easier for project managers to manage their costs as the finance systems
are complicated to understand and set up specifically for regeneration. Costs are replicated
from the finance system to allow project managers to understand costs within the context of
their scheme and manage their budget spend. This includes awarding a contract for an
architect or a consultant.

At the end of the development process Sequel is used to keep a record of all the properties
built, who shared ownership properties were sold to, the percentage equity and rent
amounts. Workflows are a key area of Sequel which Hackney have used extensively to
monitor finances and save time producing reports.

Success

“From a finance perspective, our success has been the ability to double the number of
projects we support without increasing staff resources. This is because the project managers
now have more accountability, and understand the appraisal part of their role is as important
as what they do in design development. Previously, they would ask something, then they’d
go away and look at it on a spreadsheet, come up with an answer, then something else
would change, and so on….. it was resource intensive from a financial appraisal and control
perspective.”

Hackney have also noticed the increased confidence in governance, through deeper
knowledge, and the ability to respond appropriately to issues such as; change in sales
prices, increase build costs, design changes and tenure mixes. This enables better support
for the project managers in delivering the scheme. From a finance perspective, it saves time
and resources whilst continuing to deliver an appraisal. The development departments
success is the delivery of a scheme in line with the approved appraisal so that there are no
shocks.

“ProVal and Sequel are great products and we looked at a number of different options before
we chose SDS, the key selling point was that the software is intuitive. One of my favourite
lines from our Director of Finance is ‘can someone show me the instruction manual for
facebook?’, so with ProVal particularly, those 2-3 days we took setting up the system with no
instruction handbook meant we don’t need it. It’s obvious what you need to do to build the
appraisal. We required minimal guidance to get the template. Once you’ve created
templates, all of the appraisal changes are intuitive. The real selling point to us of ProVal
was that it was obvious what you needed to do to get the answer you wanted out of the
system.”

Feedback

ProVal has given Hackney better visibility and improved the quality of schemes due to the
vastly improved information now available which supports better decision making. This has
enabled the implementation of more structured governance and gateways to approval
processes.

“When we set up ProVal, the team spent 2 / 3 days inputting all the parameters which
seemed quite resource intensive at the time but now we can see the benefit of that. It would
take me about 5 minutes but even for a new project manager joining the team, it would take
them no more than 10 minutes to appraise a scheme, because all the parameters are in
there. This speed has helped us exponentially.”

All involved now have an understanding of the costs being approved, the risks and what
other options were considered. This shared knowledge, financial understanding and
performance across the team is giving the project managers and Regeneration Teams
responsibility and ownership of finance. This is an evolution from a corporate control
environment, where the Finance department sign off everything. This has enabled Hackney
to measure spend against the appraisal being delivered to the objectives and accountability.

“One of the perks of SDS Software is the continuous development of the products, and the
new bits you find while expanding your capabilities. For example, recently we were doing
some work, looking through the other tabs and we found in (tab I) we could view individual
unit financial performance, this is a new bit of information for us which we use particularly for
GLA bids referring to changing tenures based on the net present value of an outright sale /
shared ownership or shared rent so you know the cost of change.”

Hackney

Category: Local Authority

Bought ProVal: February 2016

Number of users: 30

Bought Sequel: February 2016

Number of users: 41

See how ProVal can help you

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