Selffinancing for TMOs What difference does it make

Self-financing for TMOs What difference does it make?

It’s amazing what you can discover when you do some digging

Q 1: What’s all the fuss about?

Traditional TMO funding

Q 2: What are your residents looking for from tenant management?

A: • A nicer, safer, more-desirable place to live … with a strong sense of community • Not what the Council is offering – but better!

What the Council offers to TMOs

What the Council offers to TMOs • • The same services Delivered in the same way By the same people With the TMO taking the credit for how well it’s done…. or not!

Q 3: How do we break free and give residents what they want?

How our self-financing works

Q 4: How can I make this happen?

Making it work (1): Know what you’ve got • Detailed stock condition survey – knowing every block, building and land – what needs doing – when it needs doing

Making it work (2): Making the numbers work • Detailed 30 year financial projection – Costing every service and piece of work – What and when spending is required

Making it work (3): Planning for the future – 30 year major works and improvement plans for the whole estates

Is this only for the bold?

All TMOs need to keep a close eye on services • Do you know what you are paying for? • How much?

Have you got a grip on contracts?

The JMB Story • The Horseshoe pub: Life on Mars ends. JMB self financing begins

Why do it? • This is the next stage in the JMB’s development – ‘growing up’ • No longer an annual argument with Southwark about allowances and funding • Ability to plan major repairs and improvement programmes • More control over services and contract management • Leaseholders can plan their major work payments

Making it easier and manageable for the TMO • We commissioned a housing finance expert- Graham Moody • Did the stock condition survey ourselves/ validated by Ridge consultants • £ 25, 000 paid to consultants/ most work done by JMB Manager/ Finance Manager & Major Works Manager

What is really needed to make it work? • Resident support (canvas of residents): Financial not a legal change. Council tenants are still council tenants. The JMB is still a TMO. • Highly capable & well respected board • Excellent financial and major works management (six years of very hard work) • Political support • Key officers: need a champion at chief officer level (Martin Green) & someone who can package the proposal for the Council and CLG (Lee Page)

Partnership and goodwill have made it happen • Neither Southwark nor the JMB negotiated too hard • This year (2013) we are buying £ 1. 3 m of services from Southwark • This year and on - for optional services we need to more rigorously evaluate value for money & negotiate service level agreements

Up there in the Government’s mind • CLG like this model: route for other TMOs? • Southwark Housing Commission say it’s the future • Within the modular management agreement tweaked • Greater financial control, at a fraction of the price of a stock transfer • Partnership with, rather than divorce from Southwark Council- much less contentious than a stock transfer

So to make it work • Get in the driving seat • Build your alliances • Focus on your services • Get a grip on contracts

The result – a marriage, . . aiming to be long & happy

And finally… what do the underlying figures say? Stock for Rent Self financing Valuation £m Subsidy Capital Financing Requirement £m Self financing Indicative Debt per Settlement Borrowing Dwelling £ Payment £m Limit £m** Hackney 22, 707 106. 9 887. 4 -780. 5 106. 9 4, 706 Westminster 12, 307 308. 0 257. 1 50. 9 308. 0 25, 025 Southwark 39, 337 500. 9 775. 1 -274. 1 500. 9 12, 735 Wandsworth 17, 202 489. 0 106. 4 382. 6 489. 0 28, 426 Islington 25, 927 442. 1 859. 6 -417. 5 442. 1 17, 053