Five Year Corporate Strategy
2019 – 2024
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 1 of 36
Contents Page
Index Page No.
1. Executive Summary 3
1.1 A Summary of Ocean Group’s Planning Process 5
2. Our Mission and Golden Threads 6
3. Our Values and Behaviours Framework 7
4. The Organisation we aim to be 8
5. Key Issues Discussed by the Joint Boards and 9 Tenants at Planning Events
6. Key Objectives and Priorities 10
7. Our Operating Environment 17
8. Our Group and Governance Structure 23
9. Our Board Members 24
10. Our Executive Group 29
11. Ocean 2020 31
12. Strategic Approach to Value for Money (VFM) 32
13. Risk and Assurance Framework 34
14. Ocean’s ‘Red Lines’ 37
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 2 of 36
1.0 Executive Summary
This strategy has been developed following planning events held between the joint Boards within the Group, and with the involvement of the Tenants and Residents Panel and its Scrutiny Group.
The corporate strategy has been developed for the Ocean Group of Companies and is therefore ‘inward facing’ in terms of its readership. A separate ‘outward facing’ summary document will be prepared for the Group’s partners and stakeholders.
For the period 2019 – 2024 the Ocean Housing Group’s key priorities are:
• 3,000 new homes • Regeneration of by 2030 Polgrean Place • '1,098' new • All stock energy homes by 2024 efficient; decent, safe & compliant
Ocean Stock 3000! Investment
Tenant People Involvement
• IIP Platinum by • To be an 2024 exemplar for • To be a modern, tenant and dynamic and resident flexible workplace involvement
The planning events considered the new Social Housing Green Paper, the strategies and plans of key partners and other agencies, the funding requirements to deliver our plans, and the stresses placed upon our businesses as a result.
The corporate strategy illustrates the Group’s ‘direction of travel’ over the next five years, and has informed the Company Plans of Ocean Housing Limited, and Gilbert and Goode Limited.
The Group has welcomed the Social Housing Green Paper, and since its creation in 2000 has always placed residents at the heart of all it does. The steps taken by the Board to further enhance its levels of tenant involvement and engagement puts the Group in a positive position to make real progress in taking forward the aspirations of the Green Paper in partnership with its tenants and residents.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 3 of 36
Central government’s expectation in terms of new homes remains clear – an increase in supply. The Ocean Group’s ambition is to deliver some 3,000 new homes of all tenures by 2030. This is an ambitious target, adopted in 2017 and one that reflects the new strategic plan of Homes England, which seeks to increase housing supply to 300,000 new homes per year across England, and the housing strategy of Cornwall Council, which aims to deliver its adopted local plan target of 52,500 new homes by 2030. Since 1 April 2017 (the commencement of Ocean 3,000!), 279 new homes of all tenures have been completed by the Group. Since Ocean was created, ‘x’ new homes (all tenures) have been built in Cornwall by the Group.
To address this expectation, and together with other partners, the Ocean Group established the South West Peninsula consortium which bid to become a strategic partner of Homes England, aiming to deliver over 1,100 new homes to 2024 in addition to our collective business plan capacity of 2,700 homes over the same period. Whilst the bid was unsuccessful, Homes England is keen to explore how the consortium can access the resources it needs to deliver more homes through its continuous market engagement (CME) programme.
Negotiations with our lending partners has ensured that any covenant barriers that would prevent an increase in development activity have been addressed. Funding advisers have been engaged to support our approach to the market to secure the funds we need to increase our new homes targets, with peak debt expected to increase up to £250m over the life of the plan.
Investing in the Group’s existing stock has remained a priority, and additional external funding has been secured to enhance energy efficiency measures and at the same time save our tenants and residents money in fuel costs.
In addition, the resources secured to evaluate the potential of regenerating Polgrean Place in St Blazey has seen very positive progress with widespread support from the community to see the project through. A full planning application will be made in the early part of 2019 for this £11m regeneration project.
The Board takes health and safety compliance very seriously, and has taken positive steps to increase focus and investment, with works underway to install a new sprinkler system at Park House in St Austell, Cornwall’s only residential tower block, and a stock wide investment strategy and programme agreed and in place.
The Group’s 2020 programme has delivered on its key milestones, with new IT systems installed and operational, which will enable the new People Strategy to be implemented, itself building upon the significant investment in leadership, management and staff training and development.
The fundamental outcome of this strategy will be that the Ocean Group will increase its influence and commitment to the provision of high quality homes and services throughout Cornwall.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 4 of 36
1.1 A summary of Ocean Group’s Planning Process
Joint Boards Planning Events Joint Boards and Tenants Planning Events January, April, July and October April and October
Draft Corporate Strategy to Group Board
December
Ocean Housing Limited (OHL) Gilbert and Goode Limited Company Plan (G&G) Business Plan
February February
Engagement and Stakeholder
Approval of Final Corporate Strategy and Staff Company Plans
March
Dissemination to staff, stakeholders and Partners
April
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 5 of 36
2.0 Our Mission
Our mission is:
“To be an innovative provider of quality homes and services, with residents and staff at the heart of Ocean, and Ocean at the heart of the Community”.
To achieve this mission, Ocean has established its ‘Five Golden Threads’ as follows:
Have residents at the heart of everything we do.
Maintain strong and effective Governance.
Provide good quality services, right first time.
Provide innovative, energy efficient, good quality homes.
Be an employer of choice.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 6 of 36
3.0 Our Values Our values were developed by the Board and staff from across the Ocean Group, and they drive our culture and service ambitions.
The Board and staff team also developed our Behaviours framework illustrated as follows:
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 7 of 36
4.0 The Organisation We Aim To Be
To be a key partner – for Government, Homes England, Cornwall Council and others, through developing ambitious, but achievable and sustainable investment programmes. Our partners will be able to rely upon our ability to deliver upon our investment priorities, and to be a willing and able partner in supporting their housing and other strategic programmes.
To be a major provider of new homes – through the delivery of social and affordable rent, shared ownership, and open market sale housing programmes with some 3,000 new homes of all tenures to be delivered by 2030. Wealth created through open market sales is gift aided to Ocean Housing by Gilbert and Goode and used to cross subsidise and increase the supply of affordable housing.
To invest in our existing housing stock – augmented through the creation of wealth (sale of assets and external funding) to enhance the energy efficiency, performance and resident enjoyment of our existing stock through a planned programme of improvement over the life of this plan and beyond.
To be excellent service providers – through providing the highest levels of service to our tenants and residents; by involving and engaging them in all that we do; by focusing upon tenant and resident choices in addition to fulfilling our statutory obligations; and by preparing our tenants, residents and our business for the continuing roll out of welfare reforms.
To be strong and efficient business managers – through continuing to evolve our governance standards, and retaining a sharp focus upon risk, value for money, financial management and business efficiency, ensuring that our G1/V2 regulatory assessment is protected.
To value and respect our Stakeholders – through open, honest and business-like relationships with our lenders; financial advisors; auditors; and other business partners, ensuring that they continue to see the Ocean Group as ‘good to do business with’ and to be a safe and positive organisation in which to invest their time and resources.
To be an integral part of the Cornwall business community – through recognising our role in providing jobs, growth and business opportunities; and by aligning our strategies with those of key partners, in order to maximise the value of collaboration to Ocean’s tenants, residents and the wider community.
To be an excellent employer – through the ongoing investment in and development of our staff teams, and being recognised as an employer of choice in Cornwall.
To deliver innovation and quality in all that we do – through providing homes and services that we can all be proud of, never compromising on quality, and driving ourselves to continuously improve.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 8 of 36
5.0 Key Issues Discussed by the Joint Boards and Tenants at Planning Events
At the April 2018 Planning Event the following were the key discussion areas:
A review of and renewed commitment to Ocean’s ‘Golden Threads’ Progress against the 2018 – 24 Corporate Strategy, Financial Plans, Value for Money (VFM) and Peer Group Comparisons against the new Sector Efficiency Scorecard Stress testing of the financial plans, consideration of key operational priorities under such stresses, and mitigation strategies The vision for Ocean’s service offer for tenants post 2020 A review of the economy delivered by Donna Kehoe, the Bank of England’s agent in the South West
In October, the Joint Boards considered:
The Group’s strategic funding options, presented by the Group’s funding advisors (Aquila Treasury Services) The potential for a HE Strategic Partnership bid as part of the South West Peninsula consortium The potential for collaboration with Cornwall Council and its direct housing delivery programme The potential for partnership with EcoBos at the West Carclaze Garden Village site via G&G (contracting opportunities) and OHL (affordable housing delivery) The potential for partnership with Cornwall Care for community based supported housing projects The potential to deliver extra care accommodation The potential for partnership with health and social care services with other housing providers as parties to the Cornwall Health and Housing Memorandum of Understanding The financial implications of these opportunities and stress testing against the business plan A presentation by our legal partners (Trowers and Hamlins) which described the legal basis upon which collaboration and partnership could be delivered
This was followed by a Joint Boards and Tenants Planning event which focussed upon the Social Housing Green Paper, the key elements being:
Ensuring homes are safe and decent Complaints resolution Empowering residents and strengthening the regulator Tackling stigma attached to social housing Expanding the supply of affordable housing and supporting home ownership
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 9 of 36
6.0 KEY OBJECTIVES AND PRIORITIES
Key objectives to be achieved, proposed or developed over the coming year connected to the ‘Golden Threads’ include the following:
‘Have Residents at the Heart of Everything we do’
i. Develop a strategy to make the Ocean Group an exemplar for tenant and resident engagement within the life of this plan.
ii. Develop a new complaints policy and procedure in partnership with the Tenants and Residents Panel ahead of any directive post the Social Housing Green Paper consultation period.
iii. Maintain high levels of Board member engagement with Tenant and Resident Groups through joint planning events and meetings between senior Board members and staff with the Tenants and Residents Panel, Scrutiny Panel and Shareholders who are tenants.
iv. Refresh service standard statements and develop a timetable for in depth review with the Tenants and Residents Panel and Scrutiny Panel.
Why is this important?
This Golden Thread was established at the very start of the Ocean Group at stock transfer in the year 2000.
It has shaped the Ocean Group and its evolution since 2000 to date, and its relevance is stronger than ever.
The relationship between Ocean and its tenants is very strong, with commitment between the Boards, tenants and staff to work together to make Ocean a leader in its field.
This relationship is designed to ensure that Ocean focusses upon providing homes and services that tenants really want, and ensures that the commercial activities of G&G always deliver financial benefits for Ocean and its tenants which result in more homes being built, and additional capital investment in the housing stock taking place.
What are we going to do, and by when?
The following schedule of activity will be used to monitor the delivery of the plan with timescales being defined as follows:
Quarter (Q)1 2019/20 – being the period ending 30 June 2019 Q2 2019/20 – being the period ending 30 September 2019 Q3 2019/20 – being the period ending 31 December 2019 Q4 2019/20 – being the period ending 31 March 2020 2020/21 – being the period commencing 1 April 2020 The activities relate to the strategic themes identified.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 10 of 36
The Board of OHGL will own and monitor the delivery of this plan.
The Executive Group collectively will ensure delivery of the plan, but a lead officer(s) will be nominated to lead an area of delivery as appropriate.
The Executive Group consists of:
Group Chief Executive (GCE) Group Director of Resources (GDOR) Managing Director, Ocean Housing Limited (MDOHL) Managing Director, Gilbert and Goode Limited (MDG&G)
i. The strategy will be developed in partnership with Tenants with a view to being presented at the October Joint Boards and Tenants planning event. The strategy will contain ‘what great will look like’ and the year on year steps we will need to take to achieve the outcomes we want.
MDOHL – Q3 2019/20
ii. The new complaints policy will be developed in partnership with tenants with a draft being presented to the Board of OHL no later than May 2019.
GCE MDOHL – Q2 2019/20 iii. The Board meeting calendar will provide for the levels of engagement required.
GCE – Q1 2019/20 iv. Service standards will be refreshed as a starting point, and a plan developed to ensure all service standards are in place, and the information requirements of tenants agreed and provided for.
MDOHL – Q3 2019/20
‘Maintain Strong and Effective Governance’
i. Enhance arrangements for Board planning, training and development.
ii. Ensure delivery of the Value for Money Strategy, and continue to focus upon business performance through the sector efficiency scorecard. iii. Through the Treasury Management Strategy, secure sufficient funds to meet business and development obligations; managing interest rate exposure; and inflationary factors to protect the business plan. iv. Continue to apply a rigorous risk management strategy to ensure investment and business decisions are thoroughly assessed and stress tested. v. Ensure that our strategies are aligned to those of key partners including Cornwall Council, the Cornwall and Isles of Scilly Local Enterprise Partnership, and Health and Social Care organisations through the ‘Shaping our Futures’ partnership.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 11 of 36
vi. Complete and report upon a stakeholder survey.
Why is this important?
Strong governance is essential to maintain the Group’s G1/V2 regulatory assessment and to ensure ongoing financial viability.
Board Members and Executives conduct regular and rigorous stress testing across the Group, and this will be further enhanced to evidence Board control over its risk management strategy.
The funds needed to deliver the Group’s growth ambitions are significant, and preparations need to commence this financial year in anticipation of market turbulence post Brexit.
As partnerships develop and expand, Boards will need to be assured that the Group’s Corporate Strategy and those of potential partners are aligned in order to evidence the Group will be making a positive difference, and financial benefit from any arrangements entered into.
What are we going to do and by when?
i. The Group Board needs to consider the training and development needs of its Boards as a result of the individual and collective Board appraisals, and create sufficient allocation of time and resources to deliver the training and development plan.
GCE – Q1 2019/20
ii. The Board has instructed the GDOR to commence arrangements to secure the finances the Group will need to deliver its growth ambitions. The GDOR will be reporting back to Group Board and the Board of OHL on timelines and tasks. The initial programme report will be no later than June 2019.
GDOR – Q1 2019/20
iii. Arrangements will be made to undertake a stakeholder survey in order to understand our baseline ‘standing’ with key partners, with the Business Improvement Team undertaking an audit of partner strategies and plans.
GCE/MDOHL/MDG&G/GDOR – Q1 2019/20 for the Stakeholder Survey and Q3 2019/20 for the audit of partner strategies and plans.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 12 of 36
‘Provide Good Quality Services, Right First Time’
i. Support tenants and residents through the challenges posed by the roll out of Universal Credit, and apply effective risk management strategies to protect Ocean’s income stream, ensuring key performance measures are in place for all landlord services.
ii. Develop, through the Business Improvement Team, a programme of system improvements that will evidence enhanced performance and value for money.
iii. Continue to implement and evolve the 2020 (QL/Sun) and ‘Coins’ system improvements to enhance services to tenants, residents and other customers, and increase access to effective systems for staff.
Why is this important?
Tenants have told us that they want Ocean to deliver high quality services and be seen as leader in the housing sector.
The Board has approved the creation of a Business Improvement Team which needs to support staff to continuously review and improve services and systems, based upon reliable data and technology to drive and monitor such improvements.
The Information Technology (IT) element of the 2020 programme was never intended to be a ‘task and finish’ exercise. However, it is business critical that the improvement and technological evolution go hand in hand.
Both the QL/Sun and Coins systems offer the potential to transform business efficiency and cannot be isolated from business improvement activities.
What are we going to do and by when? i The Business Improvement Team will establish a data and knowledge hub to support business improvement activities becoming the central resource for performance data and information.
GDOR – Q3 2019/20 ii. Executive Group will align business improvement activities with the delivery of this Corporate Strategy to ensure a Group wide work programme is in place.
GCE/ GDOR/ MDOHL/ MDG&G – Q1 2019/20 iii OHL and G&G will provide for the continued evolution of QL/Sun and Coins to support business improvement and efficiency.
MDOHL/ MDG&G/ GDOR – Q4 2019/20
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 13 of 36
‘Provide Innovative, Energy Efficient, Good Quality Homes’
i. Implement an accelerated energy efficiency programme of External Wall Insulation and Heating System Replacement, to ensure all stock achieves a minimum ‘C’ rated Energy Performance Certificate (EPC) by 2030. ii. Introduce a new Health and Safety Compliance Assurance System for Management and Board monitoring. iii. Secure planning consent and commence the Polgrean Place Regeneration proposal securing ongoing engagement with the community. iv. Deliver the new homes programme (all tenures) and secure enhanced levels of grant and funding via Homes England, Cornwall Council and the South West Peninsula consortium. v. Deliver wealth generation targets. vi. Establish new partnerships with the Health, Social Care, Care and Voluntary Sectors to enhance opportunities for new accommodation solutions. vii. Establish a new pipeline of new S106 opportunities with private sector partners.
Why is this important?
Boards and tenants want to see investment in new and existing homes so that no-one is left behind.
Boards and tenants want to ensure that homes are warm and economical to heat, and are compliant with health and safety standards at all times.
The community, Boards and tenants are excited about the regeneration opportunity at Polgrean Place. Business plan provision has been made, it must be progressed.
There is an expectation that more new homes will be delivered. The consortium bid, although unsuccessful, has opened an opportunity for higher grant rates to deliver social and affordable rented homes and shared ownership. G&G need to deliver gift aid targets to achieve the increased rate of provision, and its integrated development team needs to secure the land and opportunities OHL and G&G need.
S106 opportunities need to be planned and provided for. Board require all of G&G’s s106s to be able to be acquired by OHL. Executive Group need to deliver on this requirement.
Partners rely upon the housing sector to deliver solutions that will benefit the wider community and at the same time be good for business for the Group. This will involve exploring collaboration opportunities with public service providers such as Cornwall council, the National Health Service, Devon and Cornwall Police and the Fire and Rescue Service for example.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 14 of 36
What are we going to do and by when?
i. The Energy Company Obligation (ECO) resources secured to augment the energy efficiency programme of OHL need to be deployed to deliver the Board’s agreed programme, and a detailed analysis of the additional resources that may be required over the course of this strategy and beyond, to replace inefficient night storage heating systems presented to the Board of OHL.
MDOHL – Q4 2019/20
ii. The health and safety compliance system will be presented to Boards by the end of the current financial year, and will need to be updated on an ongoing basis to offer the assurance tenants, our companies and the Boards require.
MDOHL/ MDG&G/ GDOR – Q1 – Q4 2019/20
iii. The New Homes strategy will be updated to incorporate revised delivery numbers for all tenures over the life of this plan; a new strategy for the appraisal and acquisition of land; the range of partnership opportunities and where they ‘fit’ with the strategy; a new s106 pipeline including the delivery of G&G s106s and the West Carclaze Garden Village; and to identify the grant resources to deliver the strategy in light of the HE bid outcome. Monitoring arrangements between the Boards and the Project Approval Group will also need to be refreshed.
MDG&G/ MDOHL – Q1 2019/20 with monitoring throughout 2019/20
iv. The wealth generation targets will be identified as part of the financial analysis and agreed at the final adoption of the strategy.
GDOR/ MDOHL/ MDG&G – Q4 2018/19 and through to Q4 2019/20
v. Continue to evidence the evolution of collaborative partnerships with Cornwall Council, the National Health Service and other public service providers for the benefit of Ocean’s tenants, residents and the wider community.
GCE – Q1-Q4 2019/20
‘Be an Employer of Choice’
i. Embed the newly established Behaviours Framework within appraisal and incentive schemes.
ii. Implement the new People Strategy.
iii. Evaluate and evidence our wider economic and employment contribution to the Cornwall economy based upon our investment programme and support of local supply chains.
iv. Develop proposals to enhance ‘smart’ working practices across the Group.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 15 of 36
v. Continue to invest in and support the Ocean Group’s apprenticeship programme.
Why is this important?
The Group needs a talented and motivated staff resource to deliver its ambitious targets.
The new People Strategy sets out how our people planning and investment will dovetail with our growth plans.
The continued evolution of the Group’s business culture to facilitate flexible and modern working practices needs to be developed in line with the overarching 2020 programme strategy.
The Group needs to attract and retain the best people, and have in place plans to develop its own talent at a time of low unemployment and key skills shortages.
What are we going to do and by when? i Develop an implementation plan to deliver the Board’s adopted People Strategy and to achieve the step changes we need.
GDOR – Q1 2019/20 ii Create and publish a new data model to evidence the difference the Group makes to the economy and communities of Cornwall, and of the added value employment within the Group brings. This will completed by the Business Improvement Team.
GDOR – Q4 2019/20 iii Bring forward proposals to implement smart working practices in line with the roll out of QL/Sun and Coins upgrades/ modules within and outside of the office environment.
GDOR/ MDOHL/ MDG&G – Q4 2019/20
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 16 of 36
7.0 Our Operating Environment
Headline Facts – Cornwall
Population – 561,349 (source: ONS)
The population of Cornwall is predicted to increase by 18% over the next 25 years (source: Cornwall Council Health and Wellbeing Board Strategy)
Unemployment – 3.3% (source: Cornwall Council Economic Monitoring Update – September 2018)
Average house price - £228,000 (source: Cornwall Council Economic Monitoring Update – September 2018)
Average earnings - £18,876 (source: Cornwall Council Economic Monitoring Update – September 2018)
House price to earnings ratio – 12 : 1
The Cornwall Local Plan has a target of 52,500 new homes by 2030 (source: Cornwall Local Plan)
18,600 people registered on the housing waiting list for affordable accommodation (source: Cornwall Housing – Home Choice)
25% of the population will be over 65 years of age by 2020 (source: Cornwall Council Health and Wellbeing Board Strategy)
20,000 children are living in poverty (source: Cornwall Council Health and Wellbeing Board Strategy)
25% of households are in fuel poverty (source: Cornwall Council Health and Wellbeing Board Strategy)
Bed Blocking costs to the National Health Service (NHS) £820m per year (source: Shaping our Future – Cornwall and Isles of Scilly Health and Social Care Plan)
5% of people in Cornwall report long term mental health problems (source: Shaping our Future – Cornwall and Isles of Scilly Health and Social Care Plan)
Cornwall Council want to deliver 3,500 extra care units by 2025 as an alternative to residential care homes (source: Cornwall Council, specification for partners for Extra Care delivery)
An evaluation of the Ocean Housing Group’s current position
The Ocean Housing Group consists of three companies bound by a common social purpose, which is to ensure the provision of quality homes for rent and shared ownership for local people in Cornwall.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 17 of 36
Ocean Housing Group Limited (OHGL) is the group parent and is responsible for group governance, viability and group strategy.
Ocean Housing Limited (OHL) is a charitable subsidiary of OHGL and its primary focus is to provide an excellent landlord service, and ensure the delivery of a supply of new affordable homes for rent and shared ownership.
Gilbert and Goode Limited (G&G) is a commercial subsidiary of OHGL and its primary focus is to be a profitable and sustainable commercial business, and to contribute to the charitable aims of the group through the generation of wealth and profit (transferred to Ocean Housing in the form of gift aid).
The structure of the group is unique to others in the group’s area of operation, in that G&G not only builds new homes for OHL, but it builds homes for open market sale, and is a commercial contractor.
OHGL is the only Cornish based company on the government’s Delivery Partner Panel 3 (DPP3) framework, which enables it to bid for public sector land, and contracts.
OHL is the most efficient landlord in Cornwall based upon management cost per unit (source: Regulator of Social Housing [RSH] Sector Scorecard results 2017/18) at £1,787 per unit against a sector average of £3,530 per unit, and has ‘punched above its weight’ in the number of new homes (all tenures) delivered against its base housing stock (source: RSH Sector Scorecard results 2017/18), with new homes delivered at a level of 3.3% of base stock against a sector average of 1.0%. Projections over the next 5 years indicate an average new home delivery rate above 3% per year.
OHL has a Social Housing operating margin of 44% against a sector average of 33.6% (source: RSH Sector Scorecard results 2017/18) which highlights the business efficiency of the company even in the face of year on year rent cuts.
OHL currently has 4,655 properties in management, which equates to 13.3% of the affordable housing stock in Cornwall.
OHL has a stock investment strategy funded from its 40 year business plan, with a regeneration scheme currently under review at Polgrean Place which could see an investment of c£11m in the area. OHL is also investing in the energy efficiency of its stock to address fuel poverty and property energy ratings, and is enhancing health and safety compliance beyond that required by regulation or statute, including a new sprinkler system at Park House, Cornwall’s only residential tower block.
An evaluation of the sector and marketplace in which we operate
Central government has increased its housing supply targets and expectations, and expects to increase housing supply to 300,000 new homes per year in England by the mid 2020’s. Government has reinstated rent certainty (CPI + 1%) from 2020 onwards, although a minus 1% per annum regime will remain until then, and has increased its investment in new home provision.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 18 of 36
The former Homes and Communities Agency (HCA) has been split into Homes England (HE) which is focussed upon increasing housing supply, and the Regulator of Social Housing (RSH) which will continue to focus upon strong governance and risk management arrangements within the (Registered Provider – RP) housing sector. There is an expectation therefore that RP’s will increase their own performance in respect of new home delivery.
Cornwall Council (CC) has adopted its local plan, which targets 52,500 new homes to be built by 2030. It is actively working with the Ministry of Housing, Communities and Local Government (MHCLG) to secure additional devolved funding to invest in land acquisition and infrastructure in order to unblock new housing sites.
CC is also directly investing in new home provision with a target of 1,000 new market rented sector, affordable rent and open market sales homes over the same 5 year period and is establishing a wholly owned company to develop and manage the homes provided. CC invests its funds in the Registered Provider (RP = housing association) sector too, with its own grant rate (for own build affordable homes) increasing from £20,000 per unit to £40,000 per unit from 2019/20. It also has section 106 (s106) planning arrangements in place which seeks a percentage of affordable homes on new housing sites with developer subsidy reducing the unit cost to RP purchasers. The Council is also a member of the South West Peninsula consortium and has acquired a significant land bank.
The open market sale position in Cornwall remains strong and consistent, with average house prices being £228,000 (Source: Economic Monitoring Update – September 2018). G&G is a strong Small to Medium Sized Enterprise (SME) in Cornwall but there is competition from larger national house builders and other SME’s for new build land opportunities.
G&G has been selected as CC’s housing delivery framework partner for projects under £2m, with three projects allocated to date with a value of c£3m, and is contracting for other RPs in Cornwall.
G&G is planning for growth but will need to focus upon its forward work plan for affordable housing development; open market sales; and commercial contracting work in order to deliver the growth and gift aid targets required of it. Control of and access to land is the key risk to deliver growth targets and the new homes strategy review will address the company’s land acquisition strategy.
Cornwall house sales data from the period October 2017 – September 2018 is as follows (new and existing – source: Plumplot):
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 19 of 36
Property price range Market share Sales volumes under £50k 0.1% 8
£50k-£100k 4.6% 439
£100k-£150k 14.9% 1,400
£150k-£200k 23.7% 2,300
£200k-£250k 18.4% 1,800
£250k-£300k 13.2% 1,300
£300k-£400k 13.6% 1,300
£400k-£500k 5.5% 523
£500k-£750k 4.4% 425
£750k-£1M 1.1% 103 over £1M 0.6% 59
There were 862 new build sales of this total of 9,300 sales, equating to 9%.
The price range and volume of new home sales in Cornwall between the period October 2017 to September 2018 is as follows (source: Plumplot):
Property price range Market share Sales volumes under £50k 0.1% 1
£50k-£100k 4.8% 41
£100k-£150k 11.4% 98
£150k-£200k 22.7% 196
£200k-£250k 21.8% 188
£250k-£300k 21% 181
£300k-£400k 11.6% 100
£400k-£500k 4.5% 39
£500k-£750k 2.1% 18
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 20 of 36
G&G sold 60 shared ownership properties on behalf of OHL and 35 open market sale properties in this period, a market share of 11% (or 4% excluding shared ownership).
G&G has also entered into a Joint Venture (JV) to deliver 160 homes for rent and sale in Hayle, with OHL taking 48 homes at the scheme under a s106 obligation.
There is also competition from other housing associations for new sites. LiveWest has a land partnership with CC and Galliford Try which delivers a regular supply of s106 homes in Cornwall. LiveWest was created by the merger of DCH and Knightstone and is now the South West’s largest landlord with 35,439 homes in management.
LiveWest together with Sovereign Housing have been allocated Strategic Partner status by HE with grant funding of c£111.5m which includes provision for new homes in Cornwall. LiveWest has approached OHL to become sub- partners in this programme.
Coastline Housing currently manage 4,447 homes in Cornwall and received a large grant allocation from the (then) HCA in 2016/17 with a plan to deliver 316 new affordable homes in 2017/18. Their focus is upon own build (in order to spend their grant funding, but have recently re-entered the s106 market place).
Westward Housing Group operate in Devon, Dorset and Cornwall and have 1,057 homes in Cornwall and 7,046 in total. They are interested in own build (attracted by CC’s grant offering) and s106 opportunities.
Cornwall Housing is CC’s ‘Arm’s Length Management Organisation’ (ALMO) for its housing stock. It manages 10,384 CC homes and is part of the Corserv group of companies.
Cornwall Rural Housing Association has a small development programme and manages 330 homes in Cornwall.
The above, together with the Ocean Group, represents the most active of the RP’s that operate in Cornwall but a full list is as follows (Source: NHF Members Directory):
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 21 of 36
Registered Providers (RP’s) with housing stock in Cornwall as at 31/3/18
RP Total Total in % in Stock Cornwall Cornwall Advance Housing & 2,131 234 11% Support Anchor Trust 22,757 136 0.6% Aster 28,034 324 1.2% Chapter 1 1,408 218 15% Coastline 4,447 4,447 100% Cornwall Housing 10,384 10,384 100% Cornwall Rural 330 330 100% LiveWest 35,439 9,581 27% Habinteg 3,201 98 3% Hanover 13,632 155 1.1% Hastoe 4,841 30 0.6% Housing & Care 21 16,771 56 0.3% Ocean 4,655 4,655 100% Pivotal 239 102 43% Reside 1,264 35 2.8% Sanctuary 70,022 1,595 2.3% Synergy 8,855 18 0.2% Tamar 583 54 9.3% Abbeyfield 1,409 79 5.6% Guiness 61,291 965 1.6% Westward 7,046 1,057 15% Golden Lane Housing 1,678 42 2.5% Plexus UK 1,346 223 16.6% Salvation Army 3,754 26 0.7% Home Group 45,929 141 0.3% Sovereign 51,418 29 0.1% Others (<20 units)* 306,910 88 0.1% Totals 709,774 35,102 4.95%
*includes – Places for People Group; Clarion; Notting Hill Genesis; Orbit; Moat; and a number of small providers.
The demand for affordable housing in Cornwall is high, with 18,600 people on the housing waiting list (source: Home Choice).
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 22 of 36
8.0 Our Group and Governance Structure
The Ocean Housing Group consists of three companies bound together by a common social purpose, illustrated as follows:
Ocean Housing Group Ltd (OHGL)
Ocean Gilbert and Housing Ltd Goode Ltd (OHL) (G&G)
Group Audit, Risk and Assurance Committee Governance and Remuneration Committee
Ocean Housing Group Limited (OHGL) is a company limited by Guarantee and not having share capital, incorporated on 19 December 2003, Registration Number – 5000720. Ocean Housing Group Ltd is a Registered Provider with the Regulator for Social Housing (RSH). OHGL has the RSH registration number L4422.
Ocean Housing Limited (OHL) is a Registered Society under the Co-Operative and Communities Benefit Societies Act 2014, registered with the Financial Conduct Authority (FCA), registration number 30521R. OHL is a Registered Provider with the RSH. OHL has the RSH registration number LH4248.
Gilbert and Goode Limited (G&G) is a company limited by shares, incorporated on 21 April 1972, registration number 1050991. G&G was acquired by the Group in January 2005. There are 100 shares all exclusively owned by the Ocean Housing Group Limited.
In 2016 the Regulator for Social Housing (RSH) completed it’s ‘In Depth Assessment’ (IDA) of the Ocean Group with the outcome being regulatory assessments of G1 for governance and V2 for financial viability, and this has been maintained since the assessment date.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 23 of 36
9.0 Our Board Members
The Group wide governance review has led to a move to skills based Boards, with smaller Board sizes and open recruitment and selection processes to ensure compliance with best governance practice and the National Housing Federation (NHF) Code of Governance, and Excellence in Governance Code.
The governance review produced a new Group Relationship Agreement to refresh and clarify the role and purpose of the Group’s Boards and Committees.
The Rules and Articles of Association of the Group’s companies have been updated to reflect the new Group Relationship Agreement, with membership of the Group’s Boards effective from January 2019 being as follows:
Ocean Housing Group Limited
Debbie Wilshire (Group Chair) Jonathan Adlington Chris Durkin Mike Crabb Andie Smith Mark Gardner (Group Chief Executive) Kevin Pearce (Group Director of Resources)
Ocean Housing Limited
Chris Durkin (Chair) Louise Barnden Karen Littler Chris Grose Chris Spencer Frances Turner (Managing Director, Ocean Housing Limited) Kevin Pearce (Group Director of Resources) Debbie Wilshire (Group Chair – ex officio)
Gilbert and Goode Limited
Jonathan Adlington (Chair) Chris Durkin Simon Hembury Charlie Evans Chris Spencer Mark Gardner (Group Chief Executive) Simon Caklais (Managing Director, Gilbert and Goode Limited) Debbie Wilshire (Group Chair – ex officio)
The full profile list of Board and Committee members is as follows:
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 24 of 36
Debbie Wilshire LLB, MBA – Group Chair, Ocean Housing Group Limited (OHGL), ex officio member Ocean Housing Limited (OHL) and Gilbert and Goode Limited (G&G), and member Governance and Remuneration Committee (GRC)
Debbie has lived and worked in Cornwall for nearly twenty years. After a career in further education, including two decades in senior leadership, Debbie now runs her own company providing training and coaching in leadership and management, nationally and regionally. Debbie's qualifications include a law degree and a masters in business; her experience encompasses strategic leadership, regeneration, organisational management, non-executive directorship and partnership working.
Jonathan Adlington LLB – Chair of Gilbert and Goode Limited (G&G), Board member of OHGL, and Chair of GRC
Retired Senior Partner of Trowers & Hamlins and past member of the Regulator for Social Housing’s (RSH) Regulation Committee. Jonathan has a wealth of knowledge in commercial property and social housing. Acknowledged as being a legal expert and leader in the field of Social Housing.
Louise Barnden MCIH, MA, BA – Board member of OHL and member of Group Audit, Risk and Assurance Committee (GARAC)
Recently retired from a career in social housing spanning 34 years, including positions as Director of the Chartered Institute of Housing Cymru, Chief Executive of three housing associations and 6 years as a freelance housing consultant.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 25 of 36
Chris Durkin MCIOB – Chair OHL, Board member of OHGL, and G&G, and member of GRC
Recently retired Managing Director of Willmott Dixon a large successful national construction company with a wealth of experience in building and development. Currently on the Board of Wilmott Dixon.
Charlie Evans BA, FCA, ICAEW – Board member of G&G and member of GARAC
Recently retired partner at PKF Francis Clark LLP (Chartered Accountants). Was the firm’s Head of Risk Management, and was head of the Not for Profit Sector division.
Simon Hembury BA (Hons) – Board member of G&G and member of GARAC
Former Chair of OHL, and Group Audit, Risk and Assurance Committee Chair. Simon is a qualified architect.
Karen Littler – Board member of OHL
Senior Teaching Assistant in a local primary school. Tenant Representative.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 26 of 36
Andie Smith BSc (Hons); Dip.Arch; RIBA – Board member of OHGL and member of GARAC
Recently retired from a senior executive role as Director of Development and New Business for Radian held since 1998. Has led large development programmes including joint ventures and now runs her own consultancy business specialising in interim management.
Mike Crabb – Chair of GARAC, Board member of OHGL and member of GRC
Retired CEO within the banking industry, and a non-executive director at the Charity Bank.
Chris Spencer MA, C.Eng, MICE, MBA – Board member of G&G and OHL
Is semi-retired, and runs his own consultancy business specialising in major capital and asset management projects. Has experience of Public Private Partnerships and the Private Finance Initiative, and has held Managing Director roles with Sir Robert McAlpine Ltd and Balfour Beatty Capital Ltd.
Chris Grose – Board member of OHL
Chris heads up the Housing Advisory Service for Capsticks LLP, providing a range of training and business solutions to help improve housing practice. Chris specialises in ASB, Safeguarding Adults and Children, and general housing management.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 27 of 36
10.0 Our Executive Group
Mark Gardner MA, FCIH – Group Chief Executive (Ocean Housing Group Ltd)
Mark began his housing career in 1983 as a Trainee Housing Manager in local local government and is a Fellow of the Chartered Institute of Housing. In 1993 he was appointed the Chartered Institute of Housing’s Director in Wales and the South West of England. He was appointed Chief Executive of Eastern Valley Housing Association in 1995 and led a merger to create Melin Homes, becoming its first Chief Executive in 2007. Mark joined Ocean as its Group Chief Executive on 1 November 2016.
Frances Turner BA (Hons), MCIH – Managing Director (Ocean Housing Ltd)
Frances graduated from the University of the West of England in 1990 with a degree in Housing Studies. She is a Member of the Chartered Institute of Housing (CIH). Frances has worked in social housing for over 25 years, and at an executive level for over 13 years.
Frances was Chief Housing Officer and Corporate Management Team member for Carrick District Council, Cornwall (2000 – 2004), moving to become Assistant Director of Housing and Regeneration at Plymouth City Council (2005 – 2009).
Frances was appointed Managing Director of Ocean Housing Ltd in 2009.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 28 of 36
Simon Caklais MSc, BSc (Hons) MCIOB – Managing Director (Gilbert and Goode Ltd)
Simon is a Chartered Construction Manager with over 25 years of experience in the Construction Industry, managing major capital investment portfolios, programmes and projects, working for contractor, consultant and client organisations.
He was appointed Managing Director of Gilbert and Goode Ltd in 2007. Simon is a Board member of the Cornwall and Isles of Scilly Local Enterprise Partnership and Chairs its Construction Strategy Steering Group.
Kevin Pearce MAAT, CPFA – Group Director of Resources (Ocean Housing Group Ltd)
Kevin qualified as an accountant in 1990 whilst working with West Wiltshire District Council rising to become the Accounting Business Unit Manager.
Kevin left the Council in 1996 to take up the position of Finance Manager with Selwood Housing Association.
In 1999 Kevin joined Ocean, at the time known as Restormel Housing Trust, as Finance Director. In 2004 the Ocean Group was formed and he became Group Director of Resources.
Kevin is a member of the Management Board of Advantage South West, and Deputy Chair of Directors for the largest Academy School Group in Cornwall.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 29 of 36
11.0 Ocean 2020
Ocean 2020 is the name given to our transformational change programme of business systems, processes and culture.
Ocean has chosen Aareon and Castle (Sun Accounts) to deliver a new integrated technology solution that will enhance, integrate and maximise our business system potential, and create the platform to deliver new flexible and mobile business services in the future. These new systems went ‘live’ in April 2018 and marked a significant milestone in the 2020 project. Gilbert and Goode Limited has also implemented its own IT system – Coins – which went live in October 2018 as part of its 2020 commitment.
The new technologies, business systems, and the processes being developed with it, will support and underpin our organisational culture and service delivery aims.
This significant investment will greatly enhance our levels of efficiency and business performance.
The 2020 ‘People Strand’ of the programme will see enhanced investment in our people, building upon our leadership and management development programmes, in order to maximise staff potential and offer an exciting environment in which careers can be developed, benefitting staff team members, the Ocean Group and our tenants, residents and communities.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 30 of 36
12.0 Strategic Approach to Value for Money (VFM)
Ocean has VFM embedded into its culture and all key strategic documents and policies have this at the core.
Ocean recognises that it provides valuable services to its customers and they have the right to demand that these services are high quality, good value and based on what they want from their landlord or contractor. Ocean recognises that to ensure high customer satisfaction the services provided need to be regularly and critically reviewed.
The Group Board is responsible for ensuring VFM and critical challenge of services. To ensure strong focus, the Board have delegated to Group Audit, Risk and Assurance Committee the role of regular VFM scrutiny and management. This is complemented by a strong tenant focus on VFM through the Scrutiny Panel, who within their terms of reference, have authority to challenge Ocean on how VFM is demonstrated and can call their landlord to account.
All Board discussions are considered with a VFM context and the discipline of such is ensured with a requirement for all reports to have a paragraph dedicated to illustrating the VFM of the report’s recommendations. Board members are directly held to account for VFM at an annual meeting reviewing service performance between Board Members and Tenants and Residents Panel.
The Group is proud of branding itself and its values as ‘One Ocean’ and consistently applies VFM across the whole Group so that all companies and their staff are united in the aim of VFM.
As part of its efficiency programme the target to achieve £3 million of savings by March 2018 has been delivered, and in addition, the wealth creation target of £5.4m is on schedule to be achieved well in advance of its 2020 deadline.
Ocean participates in the housing association sector efficiency scorecard and will continue to participate in sector benchmarking to evidence and challenge its VFM performance. The results to date can be seen below with Ocean performing well against its peers nationally.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 31 of 36
RATIO 2016/17 2017/18 PEERS OCEAN PEERS OCEAN Business Wealth Overall Operating Margin* 30.3% 33.3% 28% 32% Social Housing Operating Margin* 31.6% 38% 30% 44% Interest Cover* 228% 225% X 232% 156% X Development Social Units Built* 1.1% 2.4% 1.0% 3.8% Non-Social Units Built* n/a 0.5% 0.1% 0.5% Gearing* 41.6% 67% X 35% 66% X Outcomes Reinvestment* 6.9% 9.8% 5.8% 7.8% Effective Asset Management Return on Capital Employed* 4.0% 6.1% 3.7% 5.4% Dwelling Occupancy 99.5% 99.7% 99.4% 99.5% Responsive Repairs to Planned Work 68% 94% X 61% 88% X Operating Efficiency Social Housing Cost Per Unit* £3,306 £1,966 £3,450 £1,787 Rent Collected 99.7% 99.4% 99.9% 100.3% Overheads to Turnover 12.3% 9.69% 12% 6.8%
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 32 of 36
13.0 Risk and Assurance Framework
13.1 Key Objectives
Strong risk management awareness is essential and integral to the Ocean Group’s business planning and Corporate Strategy. Effective decision making and strong governance shall be based on the principles of a strong risk framework at Ocean.
Ocean’s rigorous application to the management of risk is controlled through a Board Assurance Framework that applies the ‘3 lines of defence’ to managing exposure and incorporates ‘early warning signs’ to aid preventative action. This is the crucial tool by which the Strategy is delivered and assurance provided that risks are effectively controlled.
The Group’s approach to the tolerance of risk exposure is through the adoption of a clear level of risk appetite that is reviewed at least annually by each subsidiary Board. Each Board must ensure its adopted appetite fully supports Company Plan objectives and is aligned to the Group’s Corporate Strategy. In the case of Ocean Housing Ltd, at all times, the Board’s management of risk shall ensure that its social housing assets are safeguarded.
13.2 Managing Risk and Risk Appetite
Ocean recognises that risk is an intrinsic part of business and of day to day life. In running any organisation, risk is inherent in its operation. Risk cannot be prevented, but it can be managed, minimised or mitigated. To remove risk altogether would curtail Ocean’s operations and so, like all businesses, it needs to determine the level of risk it is prepared to accept in delivering its services. This is known as defining its ‘Risk Appetite’.
Each subsidiary shall review its risk appetite and define its position so as to ensure it has a clear understanding of its approach to decision making. Boards define their appetite from the adopted matrix as follows:
1. Averse - Avoidance of risk and uncertainty is a key objective. 2. Minimal - Preference for ultra-safe options that are low risk and only have a potential for limited reward. 3. Cautious - Preference for safe options that have a low degree of risk and may only have limited potential for reward. 4. Open - Willing to consider all potential options and choose the one most likely to result in successful delivery, while also providing an acceptable level of reward and value for money. 5. Hungry - Eager to be innovative and to choose options offering potentially higher business rewards, despite greater inherent risk.
Both Ocean Housing Limited and Gilbert and Goode Limited have assessed themselves after critical reflection, as ‘risk open’.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 33 of 36
13.3 Risk Exposure Levels
All risk at Ocean must be captured and documented. Risks are to be determined into 3 categories as follows:
Strategic – risks that are so significant they could potentially damage the viability and future of the Group Company – risks that are of a level that could, if triggered, have a material impact on the operation of a company within the Group Operational – the risks that occur on a day-to-day basis that cannot be fully removed yet are of an impact that they can just be accepted and managed, or readily controlled.
13.4 Risk Impact Assessment
All risks identified will be subject to an assessment of impact and probability of occurrence. Each risk will also have attached appropriate control mechanisms. The outcome of such is that every risk will be given a score that effectively determines its effect on the business. The scoring process is best illustrated in the table below:
RISK SCORE GRAPH High 10 Risk CONTINGENCY PRIMARY ATTENTION PROVISION NEEDED 8 REQUIRED
IMPACT SCORE 6
4 IRRELEVANT GOOD HOUSEKEEPING 2 REQUIRED
Low 1 3 4 6 2 5 Risk PROBABILITY SCORE
The impact and probability score are multiplied and the higher the score, the higher the risk factor and the need to establish appropriate control mechanisms.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 34 of 36
Ocean has given the following description to each score:
Impact 10 Disastrous 8 Severe 6 Large 4 Moderate 2 Negligible
Probability 6 Highly likely 5 Likely 4 Fairly likely 3 Unlikely 2 Very unlikely 1 Extremely unlikely
13.5 Embedding the Management of Risk and Assurance
All Boards and Group Audit, Risk and Assurance Committee will have Risk as a standing item on every agenda and shall ensure they fully appreciate the contents of the Risk and Assurance Framework.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 35 of 36
14.0 Ocean’s Red Lines
To support our continued drive for improved governance and to ensure our financial integrity and viability Ocean’s Red Lines have been developed and supported by the Group’s Boards. The Red Lines will have high visibility at Board and Audit, Risk and Assurance Committee meetings with a view to tracking, monitoring and taking timely action to protect the financial strength, viability and sustainability of the Group and its subsidiaries.
The Red Lines are reviewed annually in line with the business planning process, for the coming year they are:
1. Minimum Interest Cover of 120% - existing covenants Santander 110%, M&G 105%. 2. Minimum Asset Cover of 115% - existing covenants Santander 105%, M&G 105%. 3. Maximum debt per unit for Ocean Housing of £45,000 4. Minimum Operating Margin of 30% for Ocean Housing. 5. Maximum level of Gilbert and Goode works in progress (WIP) on open market sales of £15 million. 6. Maximum level of debt in Gilbert and Goode of £10 million. 7. Minimum Gilbert and Goode pre-tax profit margin of >0%.
Corporate Strategy 2019 – 2024 for the Ocean Housing Group Limited Page 36 of 36