Reports to Follow.
FWilliamson noted some questions had been covered already by member questions.
· The report outlined the contract performance update and some areas where performance showed a downward trajectory. FWilliamson highlighted they were in the 8th year of a 10-year key contract. Day to day repairs, adaptations, void work, and component repairs were covered.
· Monitoring was carried out monthly with a suite of key performance indicators reviewed. Performance in January 2022 saw an on-going decline especially in non-urgent repairs.
· Prior to the pandemic, Osborne completed non-urgent repairs in 11 days, just below the median benchmark.
· Since the pandemic Osborne’s performance showed an increase of 6.5 days for non-urgent repairs, against a social housing provider’s national average 2-day increase. They had to understand the contributing factors and what Osborne were doing to get back on target.
· Regards the work undertaken, Table 2 provided January’s performance against targets linked to performance related pay.
· 6 out of 18 indicators below target included satisfaction with repairs, in target repairs, right first time, and Empty Homes Category 2, 3, and 4 targets.
· Macroeconomic conditions created problems with Osborne attracting and retaining suitably skilled operatives.
· External market conditions were looked at alongside Osborne’s analysis of charging structure within National Housing Federation charging of rates. Some costs within the rates currently charged were between 14-30% higher than the rates Osborne charged.
· With respect to actions and governance to oversee actions, the Housing Working Group was attended by members of SLT, with colleagues from Procurement, Legal, and Finance. This was to provide a focused resource to undertake appropriate interventions against performance levels experience. Ernst & Young undertook an audit, the results of which will be presented to SLT at the next Housing Working Group. A number of staff worked at Osborne’s offices to understand how they scheduled the backlog of repairs and if they had sufficient resource available for this work.
· The Council corresponded directly with the Managing Director of Osborne Property Services and the Account Director to discuss contractual remedies that could be invoked should performance not improve.
· Osborne had developed an Improvement Plan in Appendix A to address the backlog, the communication with residents, and make demonstrable improvements in current targets.
· There was an additional resource starting in February and March and 3 additional subcontractors to assist with the voids backlog. They worked through a target operating model to reduce the voids backlog to weekly turnover.
· Strategy Improvement and Engagement Team were trying to understand the impact on the customer, by undertaking analysis of complaints and separating key areas of themes. Stage 1 complaints was 22 complaints. Areas of concern included time taken to complete outstanding repairs, and poor communication ranging from no contact to advise of delays to missed appointments and no communication. A Customer Journey Working Group with representatives from the Council and Osborne to understand how to improve the customer experience understood the majority of tenants just wanted repairs done as soon as possible. There was still a demand for good communication in cases of unavoidable cancellations or postponements.
· Osborne continued to work on social value to provide support to residents who needed assistance drafting CVs and wider community initiatives.
· They met with the Corporate Housing Working Group and another letter would go back to Osborne to meet deadlines. Next steps included a report presented to Cabinet in June to ensure these improvement measures had brought them under target and a reduction in aids and adaptations cases and a reduction in void turnaround time.
Cllr Mahmood thanked FWilliamson for the informative report. Cllr Mahmood noted December’s 3 complaints within 23 working days. Cllr Mahmood regarded resource and asked if there was anything else they could do except wait and see. FWilliamson confirmed they were working closely with Osborne’s team to identify the Council’s historical suppliers who could provide additional support on a temporary basis. Contractors currently wanted guarantees of pipeline but some smaller suppliers had been contacted. Cllr Mahmood warned against going with a big contractor and limiting their other options in the future. FWilliamson confirmed they were considering learnings. Monitoring and data collection were key to transparency regards the information exchange when working with external service providers. This would be addressed in the Procurement Strategy.
Cllr Adeleke asked whether other services were experiencing the same problems. FWilliamson explained Osborne had a limited number of contracts with one in Slough, whom they had contacted. FWilliamson concluded Slough had issues with various areas of the contract with responsive repairs being a particular challenge. Some tenants had been reluctant to log repairs because of the pandemic. Jason Grace, Group Manager for Property and Place, had researched other authorities and their contractual relationships with other contractors. Findings showed pressures throughout the whole of the sector. With 2 years’ remaining, there were risks of attempting to continue to work with Osborne. They could remove the final year due to failure to perform, which would mean re-procurement of contract. Osborne were making good progress on clearing backlog on aids and adaptations.
Cllr Johnson noted Section 3, estimates of workforce and the increasing cost of materials. He suggested this be addressed by enforcing the contract but asked if this would be a continual problem with increasing prices and contract KPIs unable to be met. FWilliamson commented it was a Catch-22 because the rates Osborne’s supply chain were requesting were higher than in the chain mechanism. They wanted improved performance but at current rates, and Osborne were holding current rates at their risk, with the challenge of supplying at an increased rate with the same compensation. This would erode their current margin but they had to exhaust all possible endeavours for Osborne to improve before they looked to more contractual sanctions. They were seeing an increase in prices in works they were currently tendering. The report to Cabinet in June should look at what extent Osborne were able to make inroads into performance improvement and look at an adjustment of the rates to reflect current market conditions.
Cllr Imarni wanted the Committee to understand the number of cancelled repairs in addition to delays, which put tenants back at the bottom of the queue. FWilliamson noted Osborne were asked to send a Cancelled Jobs Report weekly. There were further questions in respect of categorisation of cancellations. Some were cancelled by the tenant, some by the contractor, and an opaque category, which FWilliamson had requested further detail on. One concern was that jobs were being cancelled and re-raised as a new job as they were getting closer to the expected completion date to improve figures.
Cllr Imarni understood Nationwide were only one of 3 total asset management organisations. She asked about bringing everything back in-house. FWilliamson confirmed there were in-house and out-house models, including management contracting where the Council acted as a client, joint venture or wholly owned company. These would be explored as part of the Procurement Strategy along with investigation of current market conditions. Responsive repairs were high volume lower value work meaning inefficiencies were unlikely to result in a reasonable margin for contractors. Planned Works Programmes were more straightforward. Tier 1 contractors delivered total solutions but it was unclear if the market could sustain these now or in 2 years’ time.