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EXCECUTIVE SUMMARY 4
THE KEY ASSET MANAGEMENT CHALLENGES 8
OPERATING CONTEXT 12
GHA’S STRATEGIC OBJECTIVES AND PRIORITIES FOR ASSET MANAGEMENT 16
FINANCIAL AND NON-FINANCIAL APPRAISAL 24
ORGANISING TO DELIVER THE STRATEGY 26
RISK MANAGEMENT 27
ACTION PLAN 31
Successful asset management is fundamental to the delivery of the Business Plan.
The Asset Management Strategy is informed by three-year demand reviews led by GCC and Communities
Scotland and three-year investment plans agreed between LHOs and GHA. The key elements are:
• Investment in improving the physical quality of houses, to meet the promises made to tenants,
and in achieving the Scottish Housing Quality Standard
• Demolition and new-build programmes
• Regeneration of failing neighbourhoods.
We are investing substantial sums of money in improving homes, inside and out. This essential upgrading
and repair work is intended to protect and sustain our assets for the future and to break the historic cycle
of investment followed by decline. Housing needs will change over the years and we appreciate that while
we must do all we can to preserve the fabric of our buildings, we cannot dictate what people want in their
homes; that will be for our successors to determine with tenants at the appropriate time.
GHA will take a strategic approach to asset management to make best use of ﬁnite resources to meet our
housing priorities and objectives.
• Identiﬁes and minimises risk
• Identiﬁes problems and develops solutions
• Avoids surprises
• Ensures informed decision-making
• Delivers a progressively stronger base for the Business Plan.
Extracted from the GHA Business Plan 2007/08.
As the ﬁrst Asset Management Strategy produced by GHA, this report considers the decision making process
about future housing stock and the best ways to support community regeneration. It also outlines an
inclusive framework for determining housing need and demand.
The asset management aims were ﬁrst identiﬁed in the GHA Business Plan 2005/06 and continue to inform
the objectives and strategies that are discussed throughout this report. The principal objectives include:
• Delivering a strategic approach to re-structuring GHA’s stock portfolio
• Ensuring GHA’s activities and investment deliver “better homes”
• Use assets and resources to build stronger communities
• Deliver tenant and community control
• Build asset value.
Given that many of the issues raised being multifaceted and long-term, GHA recognises the importance of
working in partnership with key stakeholders.
Some of the fundamental challenges asset management must tackle concern the stock portfolio including
the variety of properties, the amount of investment required to improve general standards and matching
housing need with available stock.
The Asset Management Strategy highlights the need to efﬁciently reduce the stock base and how to manage
and maintain the stock to ensure long-term sustainability. The intricacies and scale of this requires working
with both local housing organisations (LHOs) and tenants to ensure the best outcomes are achieved. Not
only must the approach taken be ﬂexible enough to incorporate the wide range of priority issues, it must
also consider and reﬂect the external legislative, contractual and regulatory constraints within which GHA
The strategy develops GHA’s current approaches to planning already in place. It gives a single strategic
framework which will help to deliver successful, mixed tenure neighbourhoods, assess the impact of GHA’s
assets on Second Stage Transfer and determine how well the assets meet GHA’s corporate objectives.
The operating context is affected by statutory and regulatory frameworks as well as comprehensive
legislation. The Transfer Agreement between Glasgow City Council (GCC) and GHA regulates the terms
on which the stock was transferred and has several constraints in place about how GHA can utilise its
assets. Funding streams from the Scottish Executive are conditional and have considerable impact on asset
management. The loan agreement with the funding consortium governs GHA’s access to borrowing and
contains several conditions that affect the management of property assets.
The decline in demand for social rented housing is of particular importance. This strategy outlines the
objectives of the 2005 Demand Review and predictions for housing demand for GHA stock. The next review
is to be commissioned in 2007, for publication in 2008, in light of which GHA will review its business plan
Successful community ownership requires robust asset management and this strategy document provides a
foundation on which GHA will exercise effective stewardship of the properties while it owns the stock.
The key objectives will chieﬂy be met through close working partnerships and various planning
processes including future demolition programmes, new-build programmes, local-level delivery and
policy development. It is clear that improvements in energy efﬁciency, environmental sustainability and
modernising the services will all play an important role in delivering “better homes”.
This report also emphasises the importance of community regeneration and discusses the role the
Community Planning Partnership has in facilitating deliberation between stakeholders. GHA is a staunch
supporter of local level involvement and also supports ways to implement tenant empowerment, equality
The target outcomes and priority actions for each of the ﬁve strategic objectives are set out in the action plan
for the implementation of this strategy. Signiﬁcant changes will take place over the year ahead; therefore the
Asset Management Strategy and Action Plan will be reviewed by September 2008.
It is clear that ﬁnancial benchmarking and development of a strategic asset appraisal tool will help GHA to
fully understand its ﬁnancial investments. A non-ﬁnancial appraisal of investment projects, based on the GHA
Design Guide and introduced in March 2006, will continue to be developed.
In order to deliver the strategic objectives for asset management, internally GHA will give priority to:
• Governance and corporate responsibilities
• Developing GHA’s strategic planning framework
• Establishing an asset management system
• Monitoring and evaluation.
These priorities should allow for a consistent approach across the board and help to review and guide the
way asset management moves forward.
A comprehensive risk strategy is also outlined in the strategy and the main risks featured include the
uncertainty around demand, Second Stage transfer, achieving assumed Right-to-buy receipts and the
long-term sustainability of assets and the investment programme. However, the corporate risk register is
monitored by the Audit Committee and executive management on a six-monthly basis
The underlying theme of working partnerships runs throughout this report and effective communication is
vital to maintain channels of discussion between LHOs, GCC, Communities Scotland, tenants, lenders and
many others. Informed awareness and building trust are core communication objectives and set out to
develop the credibility of the organisation and gain support amongst key stakeholders.
A draft Asset Management Strategy was issued for consultation in June 2006 and this revised edition has
been amended to reﬂect the feedback obtained as well as organisational developments since the draft was
GHA has entered an important phase in its development and this strategy shows that delivering quality
services, improving neighbourhoods and investing in progress are all important components of meeting the
asset management aim.
The term ‘asset management’ is used to deﬁne the process of acquiring, holding and disposing of land
and property assets. These assets should be managed to support GHA in delivering its overall business
objectives, including the delivery of community ownership. GHA’s asset management aims, ﬁrst identiﬁed in
its 2005/06 Business Plan and which continue to inform this strategy are:
“to deliver a housing investment and new-build development programme that will turn GHA’s housing
portfolio into one that, in ten years time, is part of a new sustainable housing system in Glasgow within
which GHA’s stock is:
• Of a quality, type and location to meet the needs of a wide range of current and future customers,
including those with particular needs
• Environmentally sustainable and energy efﬁcient
• Capable of being managed and maintained economically in the long-term
• Integrated into successful neighbourhoods which promote strong communities and enhance community
• Creating places that generate civic pride.”
To achieve these aims, the Asset Management Strategy (AMS) must extend beyond property investment and
maintenance to encompass other areas of policy and practice that impact on the sustainability of the stock.
To deliver these aims, GHA has identiﬁed the following principal asset management objectives:
• Develop a strategic approach to re-structuring GHA’s stock portfolio
• Gear GHA’s activities and investment to deliver “better homes”
• Use assets and resources to build stronger communities
• Deliver tenant and community control
• Build asset value.
The strategy identiﬁes:
• The key asset management challenges and how the strategy enhances the existing planning processes
• The context in which asset management takes place including the relationship with community
• GHA’s strategic objectives and priorities for asset management
• How risk management is being addressed and plans for improved techniques to appraise investment
projects and programmes
• Arrangements for delivering the strategy
• Communication and consultation.
The AMS outlines a comprehensive and robust framework for assessing housing need and demand, making
decisions about the future of the stock, and implementing community regeneration. This is the ﬁrst such
strategy produced by GHA and many of the issues raised are complex and long-term in their impact. GHA
recognises the importance of continuing to develop the strategy in consultation with key stakeholders and to
reﬂect changes in the operating environment.
THE KEY ASSET MANAGEMENT CHALLENGES
The stock portfolio
On 7 March 2003, approximately 80,000 units of housing and associated assets transferred from the
ownership of Glasgow City Council (GCC) to GHA. By April 2006, through demolitions and Right-to-buy (RTB)
sales, GHA had a portfolio of just over 74,000 houses, land, shops, ofﬁces and lock-ups. While the housing
stock is hugely varied, it is heavily dominated by smaller units and ﬂatted properties. Only one ﬁfth of the
stock is “own door” properties and cottage ﬂats. City-wide, there is a signiﬁcant mismatch between identiﬁed
housing need and demand and the size, type and location of available housing.
When the stock was acquired from GCC, it had been starved of investment for many years; the need to
address this being the key driver in GCC’s promotion of the stock transfer to GHA. GHA is now four years
into a ten-year investment and demolition programme, and plans to provide 3,000 new-build homes for rent,
with a further 3,000 provided by other registered social landlords (RSLs). These new-build properties will be
used as reprovisioning for tenants affected by demolition of GHA properties.
A Housing Futures Assessment process underpins GHA’s approach to asset management. Through this
process, stock is categorised into:
• Core stock which is considered to have a long-term future
• Stock to be demolished.
Transitionally, a signiﬁcant portion of the housing stock is identiﬁed as having an uncertain future and is to
be appraised before a decision on its future is made. GHA’s approach to stock appraisal involves working
closely with local housing organisations (LHOs), tenants and other key stakeholders. To deliver the aims and
objectives set out in this strategy this appraisal must increasingly involve consideration of the long-term
costs and beneﬁts associated with each group of properties.
To inform identiﬁcation of stock in need of appraisal, GHA operates a city-wide stock classiﬁcation process.
This is undertaken in partnership with the LHOs managing the stock and is informed by an analysis of
historic performance of the stock and current demand.
By 1 April 2006, 49,000 units had been identiﬁed as core stock considered safe for investment. GHA’s
investment programme is targeted on this stock to deliver the transfer commitment for all GHA’s sustainable
properties to be warm, dry and modernised over the ﬁrst ten years from transfer. While this investment
programme proceeds, planning for the future of the remaining stock and the demolition and new-build
programmes is also being undertaken.
A number of areas have been identiﬁed where some form of master planning or options appraisal study is
required to properly inform long-term decisions. At 1 April 2006, approximately 10,000 units were included
in deﬁned regeneration areas and 8,300 units were in smaller groups of stock requiring appraisal. A further
6,600 properties were included in GHA’s three-year demolition programme.
Based on demand projections prepared by Glasgow University before the stock transfer, GHA is currently
planning an overall demolition programme of approximately 19,000. This reduces GHA’s stock base in line
with projections of long-term decline in demand for the city’s social rented housing. However there are
signiﬁcant uncertainties about these demand projections and GHA’s demolition programme may change.
Around half of the planned demolitions have been identiﬁed. It is anticipated that the remainder still to be
identiﬁed will be low demand tenement and multi-storey stock, much of it within regeneration areas.
Many critical decisions will be needed in the years ahead, particularly in relation to under-performing non-
core stock to determine:
• Which stock is sustainable and can be retained
• Which stock will not be retained and whether it should be demolished or disposed of for alternative use
• Where replacement new-build should occur.
For non-core stock with an anticipated life of more than three years a programme of holding investment,
limited to essential elements, is already underway. This programme is being reviewed with LHOs to
determine how best to maintain the momentum of long-term change while delivering sustainable housing
conditions for tenants living in stock with an uncertain future. This is a signiﬁcant issue for tenants living
in stock that will remain occupied for the medium-term only to be demolished as part of a regeneration
strategy. Detailed consultation with these tenants is required.
The pattern of housing tenure is changing, with a majority of households in the city now in the private sector.
However, much of GHA’s stock is concentrated in areas in which social renting is the dominant tenure.
Increasingly, areas of dominant social renting are also areas of concentrated deprivation, with upwards of
80 per cent of GHA stock in the most deprived sectors in the city. There is evidence that a high level of
deprivation places stock at risk from falling demand. Achieving more mixed and mixed tenure communities
may be one of the means of addressing this issue.
GHA’s ﬁrst Asset Management Position Statement, published in 2006, provides full details of the stock,
classiﬁcation, demand and customer base and non-housing assets. The GHA Investment Plan 2007-10
details GHA’s capital programme. Both publications are produced annually.
GHA has a private and public funding package in place and ﬁrm plans to deliver its improvement, demolition
and new-build programmes. However these programmes are being undertaken in a complex and changing
environment, where community ownership is a key factor. It is therefore essential for GHA to have a robust
and widely accepted strategy in place to support regular review and guide future decision-making.
The priority issues
In summary, the priority asset management issues facing GHA are:
• The signiﬁcant planned reduction in the stock base, how and when the relevant stock should be
identiﬁed and how the reduction can best be achieved
• How to deal with or turn around poorly performing stock, the amount of which outstrips the current
planned level of demolition
• Tailoring the portfolio and stock investment to meet or exceed the Scottish Housing Quality Standard
(SHQS), the changing demand picture and a changing customer base and higher customer expectations
• The planned programme of new-build housing and how this opportunity is best used to meet GHA’s
asset management aims
• How to then manage and maintain the stock to ensure long-term sustainability
• The scope for facilitating mixed tenure development where appropriate to enhance long-term
In addressing these issues, the complexities and challenges that are unique to the GHA initiative need to be
taken into account. These include:
• The scale and complexity of the GHA stock portfolio and the post-transfer timescale for investment
• The commitment to deliver community ownership subject to tenant ballot, a fair deal for tenants, no
impact on GHA’s repairs and investment programme and ﬁnancial neutrality to GHA
• The need to allocate available resources, taking into account that LHOs are developing increasingly
radical and ambitious plans for their communities with a push to drive up improvement standards
• The need to balance the aims and objectives in the Asset Management Strategy with the aspirations of
the LHOs and tenants to deliver the best outcomes for all parties
• The need to manage and mitigate risk directly relevant to asset management.
The approach to asset management must be sufﬁciently ﬂexible to take account of these issues as well as
the wide-ranging external legislative, contractual and regulatory constraints within which GHA operates.
The current approach
The strategy builds on and develops the planning processes and programmes already in place to support
asset management, which are listed below.
Identifying what stock GHA needs
• projecting demand for GHA’s stock
• assessing the stock identiﬁed for appraisal through the Housing Futures Assessment process
• working with LHOs to ﬁnalise the classiﬁcation of the stock into core stock or stock for disposal or
• working with LHOs, GCC as the strategic housing authority, and other RSLs to plan the new-build re-
Managing the stock
Developing, with LHOs, arrangements for:
• radically improving housing services
• meeting a range of community care needs and for houses in multiple occupation and furnished lets.
Improving and maintaining the stock
• assessing the condition of the stock and planning for delivery of the SHQS, as a minimum, by 2015
• working with LHOs to upgrade the core stock and provide holding investment for non-core stock with a
lifespan of more than three years
• implementing cyclical maintenance and responsive repairs
• assessing the requirement for converting layout or use of properties and for adaptations.
Dealing with surplus stock
• assessing how to deal with surplus stock through demolition or disposal
• implementing the demolition programme.
Delivering community regeneration
• developing and implementing the Neighbourhood Renewal Strategy
• participating in Community Planning structures
• working with LHOs, tenants and strategic partners to develop and implement plans for GHA stock at
• delivering GHA’s new-build programme
• improving design quality in accordance with GHA’s Design Guide.
• developing and delivering long-term procurement for capital works
• procuring revenue maintenance from March 2008 onwards.
Effective management of non-housing assets
• reviewing the portfolio of shops, ofﬁces, garages and lock-ups, community facilities and other non-
residential property assets.
The distinctive contribution of the Asset Management Strategy
The development of an AMS adds to these existing planning processes and programmes and makes a
distinctive contribution by highlighting the links between analysis of housing need and demand, the inherited
and future investment programmes and the need to take account of wider community regeneration and
The strategy gives GHA a single strategic framework, implementation of which will inform:
• The costs and beneﬁts of owning speciﬁc pieces of land and groups of stock
• An assessment of how well the assets meet GHA’s corporate objectives
• The difﬁcult decisions about when and where to invest in the existing stock, demolish unviable stock and
develop the new-build programme
• How best GHA can contribute to the development of successful, mixed tenure neighbourhoods
• The impact of GHA’s assets on the delivery of Second Stage Transfer (SST).
The transfer of GCC’s housing stock to GHA was progressed in the context of a Framework Agreement
between GCC and the Scottish Executive. The Statutory Consultation Notices issued to tenants before
the ballot provided guarantees and commitments on rents, investment levels and timescales, repairs and
maintenance, delivery of housing services through the network of LHOs, tenant participation and control, and
Statutory and regulatory framework
As an RSL, GHA must comply with and is affected by wide ranging legislation, for example:
• The Housing (Scotland) Act 2001, which includes requirements in relation to the statutory provisions for
the disposal of assets, assistance to the local authority to address homelessness, and to consult with
tenants about standards of service and any proposals for service delivery which affect them
• The SHQS, the national target for warm, dry and decent homes, which requires to be met by 2015
• The Housing (Scotland) 2006 Act which gives local authorities powers to designate Housing Renewal
Areas and the Scottish Executive powers to direct RSLs, including GHA, to delegate functions to LHOs
• The Charity and Trustees Investment Act (Scotland) 2005 which governs charitable organisations
and impacts on GHA’s ability to reclaim VAT on much of the investment programme expenditure via a
Development Agreement between GHA and GCC with the agreement of HM Revenue and Customs.
In addition, GHA is subject to regulations and inspection by Communities Scotland against comprehensive
Performance Standards. Of particular relevance to GHA’s asset management are resource management
(GS1), risk management (GS4.4), and stock management (AS2.2). These are detailed in Appendix 1.
The Transfer Agreement between GHA and GCC governs the terms on which the stock transferred to GHA.
In addition to the requirements to deliver on a range of commitments to tenants, the agreement places
constraints on how GHA can utilise its assets. These include:
• The Disposals Clawback Agreement, which restricts GHA’s ability to beneﬁt from the disposal of land or
properties, subject to Scottish ministers’ discretion
• The Land Protocol, which sets out provisions for GHA and GCC to resolve the treatment of GHA-owned
land surplus to its re-provisioning needs
• The Regeneration Scheme Agreement, which requires: GHA to pass back vacant sites created from
speciﬁc demolitions approved by GCC pre-transfer into council ownership; regulates the hand-back
process and apportionment of costs; requires GCC to provide 200 new build units at no cost to GHA (or
an agreed ﬁnancial sum) as a contribution to GHA’s business plan
• Service level agreements and inherited contracts mainly relating to maintenance of GHA properties and
adjacent land including un-adopted roads and footpaths used to access GHA stock
• provision of accommodation to homeless applicants and of temporary furnished ﬂats
• the RTB Sharing Agreement, which governs the distribution of receipts from RTB sales between GHA
The Scottish Executive’s various funding streams to GHA also have conditions attached that have a bearing
on asset management. For instance:
• £20.6m towards the cost of GHA installing central heating systems to deliver the Scottish Executive’s
“Warm Deal” programme
• £114m towards the cost of demolitions, including repurchase of properties bought under RTB and
payment of Home Loss and Disturbance
• £113m towards the cost of GHA’s new-build programme.
The availability of these grants together with the terms of the Disposals Clawback and other agreements
inﬂuence GHA’s management of its property assets and the ﬁnancial implications for the association of
pursuing other strategies.
The Loan Facilities Agreement between GHA and its funding consortium, which governs GHA’s access to
borrowing, contains several conditions that affect the management of property assets. These include the
requirement for the consortium to have a ﬁxed charge over all GHA’s properties, a three-yearly stock re-
valuation and stock condition survey update. These conditions are set out in more detail in Appendix 2.
GCC Local Housing Strategy and Housing Investment Strategy
GCC’s aims and objectives as the strategic housing authority for the city are set out in the Local Housing
Strategy (2003–08). After the stock transfer, GCC took over responsibility from Communities Scotland for
disbursing the city’s housing Development Funding budget, primarily used to fund new-build housing by
RSLs and other housing providers. GCC’s Investment Strategy identiﬁes the four key issues that guide how
and where GCC will direct its housing investment funding:
• Neighbourhood renewal - addressing neighbourhood decline and building attractive places for people to
• Balancing supply and demand – improving the supply of affordable public and private housing in the city
• Raising housing quality – tackling the problems of poor quality housing
• Responding to changing housing needs – providing appropriate housing to match people’s changing
needs and the needs of homeless people.
The Investment Strategy also identiﬁes a range of priorities for each issue. Many of GCC’s housing
investment funding priorities inﬂuence the way GHA manages its property assets. The priorities of particular
signiﬁcance are set out in Appendix 3.
The Local Housing Forums, now established in each of the Community Planning Partnership areas across
the city, will be involved in updating Area Development Frameworks (ADFs), which provide a local dimension
to the city-wide Local Housing Strategy. ADFs identify sites viewed by GCC as appropriate for housing and
provide the local context for submissions by RSLs and other developers seeking housing investment funding.
The council’s relevant Area Committee will formally approve ADFs.
GHA’s investment plans and demolition assumptions are developed in the context of regular demand reviews
commissioned by GCC and Communities Scotland. The ﬁrst three-year Review of Demand for Social Rented
Housing reported in January 2005 was used as a baseline the Scottish Executive projection of households to
The objectives of the 2005 Demand Review were:
• To produce a robust estimate of demand in the social rented sector for 2012 and 2016
• To improve understanding of demand trends and inﬂuences on demand within the sector
• To examine the impact of affordability and quality on movement between the social rented sector and
The review covered both GHA and other RSLs. The speciﬁc projections for GHA stock indicate a ‘most likely’
demand projection of 51,000 units by 2016; this projection is 5,000 units lower than GHA’s current business
plan stock assumption for that date. However, the broad range of the projections in the table below also
illustrates the degree of uncertainty in the longer-term with GHA’s 2016 stock assumptions, ranging from an
under-provision of 5,000 units to over-provision of 22,000 units. The next review is to be commissioned in
2007 for publication in 2008, in light of which GHA will review its business plan assumption.
In addition to work undertaken through the triennial demand reviews, GHA undertakes its own assessment
of housing demand at city-wide and local levels. Much of this is focused on the nature of demand expressed
directly through the Waiting List, for applicants to be housed by GHA, and the Transfer List of existing
GHA tenants applying to move to another GHA property. Through analysis of these applications, GHA has
identiﬁed eleven ‘GHA Housing Market Areas’ deﬁned by the area preferences expressed by applicants.
Comparison of GHA stock assumptions with Demand Review
Projection 2012 2016
Demand Review – range projected for GHA
stock 49,000 – 64,000 34,000 - 61,000
Demand Review – mid-point projection for
GHA 2005/06 Business Plan estimate of
Variation between GHA business plan
+ 5,000 + 5,000
estimate and Demand Review mid-point
The average rent for GHA properties in the 2006/07 Business Plan is £54 per week, among the highest for
any RSL or local authority in Scotland. At the point of transfer, GHA gave guarantees to tenants designed to
reduce the differential between GHA rent levels and those charged by other RSLs. The guarantees limit rent
increases for all tenants to no more than the rate of inﬂation until March 2008 and for transferring tenants to
no more than 1% above inﬂation for the period from March 2008 until March 2012. GHA will implement the
rent guarantees in full.
The structure of rents operated by GCC and inherited by GHA at transfer has not been subject to
comprehensive review for over 20 years. The variations between individual rents do not reﬂect tenants’
perceptions of value and all tenants meet the cost of many services, not just those in receipt of the service.
GHA has therefore embarked on a full review of its policy for rent setting and services charges. This will
impact on the valuation of groupings of stock and on the city-wide valuation of GHA’s assets.
GHA is committed to the delivery of community ownership. During 2006, we participated with the Scottish
Executive, GCC and other key stakeholders in a Joint Team on SSTs. This team reported to the Minister for
Communities and the GHA Board as well as the Ministerial Progress Group (MPG) in December 2006.
The then minister conﬁrmed to the Board that the Joint Team Report and the valuations completed for
Community Ownership Intentions demonstrated the substantial ﬁnancial challenges associated with SST.
The Minister acknowledged the Board’s obligations to ensure ﬁnancial neutrality on GHA, and ensure there
is no detrimental impact on the level of investment and services that tenants receive. In turn GHA’s Board
noted that in addition to these prevailing conditions for any transfer, any dealings undertaken on community
ownership should be fair for all tenants.
The minister stressed the need for early progress on those transfers which had a realistic prospect of
succeeding, but indicated that a substantial re-structuring of the LHO network would need to be explored in
order to create a new affordable structure of fewer sustainable organisations for the delivery of SST.
Asset management is a long-term activity and subject to successful community ownership, GHA sees itself
as a transitional body. The Asset Management Strategy provides a basis on which, for however long it owns
the stock, GHA exercises effective stewardship of the properties. This means that risks to the viability of
successor landlords may be reduced; by removing as much as possible of the stock with an uncertain future,
addressing issues of potential future low demand and investing in stock with a sustainable future.
As part of the valuation process for SST, GHA disaggregates its business plan across the LHO network to
reﬂect as closely as possible the income and expenditure within the plan for each group of properties. In this
way, as adjustments are made to the stock base, as investment is undertaken, and as GHA’s service planning
develops, the valuations placed on GHA’s properties will reﬂect the decisions made in implementing this and
other GHA strategies.
GHA’S STRATEGIC OBJECTIVES AND PRIORITIES FOR ASSET MANAGEMENT
GHA business plan
GHA’s annual business plan provides the long-term strategic framework for the organisation, demonstrates
how it is approaching the transformation of its stock and identiﬁes the funding arrangements to deliver this.
In 2005/06, GHA undertook a fundamental review of its business plan with the resulting strategic focus on:
• Delivery of promised improvements to GHA’s core stock over an initial ten years to allow maintenance of
the stock for a 20-year period thereafter
• The faster planned disaggregation of GHA, through SST
• An increase of 5,000 units to GHA’s demolition programme over ten years
• An emphasis on neighbourhood standards and management, with a new Neighbourhood Quality
Improvement Fund, additional resources for the Neighbour Relations team and implementation of the
• A new Housing Quality Improvement Fund to improve investment standards
• Key service priorities including welfare beneﬁt support, the Furnished Let Service, neighbourhood
renewal and housing support services for vulnerable tenants
• Supporting staff through continuous change
• Supporting the emerging RSLs in the LHO network to deliver quality management and community
empowerment and control.
The 2006/07 Business Plan built on this approach, emphasised an accelerated investment programme,
sustained community regeneration and improved services. It conﬁrmed the commitments to strengthening
the capability and capacity of LHOs and a planned pathway to community ownership, while detailing the
major challenges presented by SST and the impact of these on the timescale for its delivery.
Asset management aims and target outcomes
GHA’s 2005/06 Business Plan deﬁned the aim of the Asset Management Strategy as being:
“to deliver a housing investment and new-build development programme that will turn GHA’s housing
portfolio into one that, in ten years time, is part of a new sustainable housing system in Glasgow within
which GHA’s stock is:
• Of a quality, type and location to meet the needs of a wide range of current and future customers,
including those with particular needs
• Environmentally sustainable and energy efﬁcient
• Capable of being managed and maintained economically in the long-term
• Integrated into successful neighbourhoods which promote strong communities and enhance community
• Creating places that generate civic pride.”
GHA will achieve these aims by:
• Working closely with tenants, LHOs and other stakeholders
• Investing in the right stock
• Facing difﬁcult decisions about stock and neighbourhoods
• Implementing cyclical maintenance and refurbishment
• Keeping the strategy sufﬁciently ﬂexible to accommodate community ownership plans.
Asset management strategic objectives
In setting out how GHA will manage its assets to support its aims this strategy:
• Reﬂects the operating context outlined on page 14
• Consolidates the existing approach rather than representing a fundamental shift in strategy
• Builds on GHA's experience of the stock in the period since the transfer
• Feeds into the delivery of community ownership.
The ﬁve strategic objectives detailed below form the basis of the strategy.
Objective 1: Develop a strategic approach to restructuring GHA’s stock
Working with strategic partners to identify and respond to changing demand
GHA will continue to work with GCC, Communities Scotland, LHOs and other RSLs to better understand the
housing market in the city.
Actions will include:
• Further research into demand at local level and the link between demand and housing quality
• Examining the causes of the high level of tenancy failure in certain areas, particularly among tenants
who were previously homeless
• Use of local tenant satisfaction surveys and social surveys connected to the investment programme to
understand the needs of current and future tenants
• Research targeted at groups with particular needs, such as black and ethnic minority groups, disabled
• Ongoing review of provision for temporary accommodation for asylum seekers in the light of
government decisions and legislative changes.
Consideration of disposals and alternative uses for surplus stock
To date, decisions about the future of GHA stock have been either retention for improvement or demolition.
In the longer-term, for certain groups of properties, there is a need to consider other options for surplus
stock, which may be sustainable and have potential for alternative use. The ﬂexibility to consider such
options may be particularly important for the smaller bodies taking stock from GHA through SST.
Disposal or transfer to an alternative use could beneﬁt the local community and support regeneration
objectives. Potentially, it could yield cost savings, minimise resource waste, facilitate low cost home
ownership and minimise disruption to tenants and the wider community.
For example, disposal might be the preferred option for vacant tenements that are surplus to identiﬁed local
need for social housing, but are attached to occupied GHA stock and located in an area where there is a
demand for other tenures. This could also assist in the process of creating more sustainable mixed income
In general, disposals other than SSTs would be of vacant property. For any tenanted stock, the provisions of
the 2001 Act regarding tenant consultation would apply.
Any proposals for disposal would require full consultation with GCC, the LHO, local tenants and other key
stakeholders. It is recognised that GHA must address the relevant conditions of the GCC / GHA Transfer
Agreement and other constraints, including statutory consents for disposal.
Assessment and planning of future demolition programme
GHA has introduced new processes for clearance and demolitions, including ﬁnancial appraisal, improved re-
housing planning and resident consultation processes, and effective linkage to new-build re-provisioning. The
environmental treatment of land being retained by GHA post-demolition must also be taken into account.
Provision for particular needs
GHA will work with LHOs and other stakeholders to identify the need for both temporary and permanent
accommodation, including the potential for adapting mainstream accommodation, to meet particular needs.
GHA’s new-build properties will meet barrier-free standards, be accessible to all and capable of future
Planning will take in to account the need for housing with support for a range of client groups and for the
particular housing needs of the city’s increasing proportion of households among the black and minority
Planning for delivery at a local level
The recently introduced three-year investment plans allow GHA and the LHOs to plan a rolling programme of
activities. In future these plans will be increasingly linked to the planning processes of other stakeholders, in
particular the Area Development Frameworks produced by the local housing forums.
Decisions about which stock to retain or demolish, and where to build and for which client groups should be
taken in the context of robust neighbourhood strategies and analysis of local demand. In many areas there
will be a mix of tenures and landlords, sometimes with signiﬁcant tenure change planned. Working effectively
in such areas requires joint strategies or at least regard for the wider context when considering:
• Whether and on what basis GHA should retain and invest in this stock
• For what end use the stock is to be retained
• The alternatives to retention and investment in the stock
• The impact on GHA’s tenants of the alternative approaches
• The impact on GHA’s Business Plan and its asset base
• Development of sustainable proposals for SST.
For GHA, an important target outcome of any neighbourhood strategy will be to deliver a sustainable stock
base and growth in the value of its housing assets. Achieving this at local level is the key to developing a
housing system across the city that has the ﬂexibility to cope with changing needs. Neighbourhood strategies
may emerge from a number of routes including:
• The development plans being prepared for the transformational regeneration areas
• Preparation of local strategies by LHOs
• The work of Community Planning Partnerships and Local Housing Forums.
As the neighbourhood strategies emerge, GHA will work with LHOs, tenants and other stakeholders to
develop detailed implementation plans that will feed into investment and service delivery and inform
proposals for SST.
Planning and Delivery of GHA’s new-build programme
GHA plans to provide 3,000 new-build units as re-provisioning for the clearance programme, 200 of which
will be developed by GCC. Subject to resolution of funding issues, GHA will develop the remaining 2,800 in
line with its New-Build Strategy. This sets out the planning assumptions, allocated by GHA Housing Market
Areas, for delivery of the ﬁrst 2,000 units over a ﬁve-year period. The 800 units not included in the current
planning assumptions will be allocated as the programme develops.
The Housing Futures Assessment and related ﬁnancial appraisal processes will be used by GHA and LHOs to
identify properties where demolition and some replacement new-build housing offers better long-term value
than retention and refurbishment.
As land availability is critical to delivery of the new-build programme, the 2005/06 Business Plan provided
for a Land Acquisition Fund of £9 million over three years.
All new-build will comply with GHA’s Design Guide and current guidance on good practice including Housing
for People with Varying Needs and the sustainable development principles outlined in ‘Choosing Our Future’,
Scotland’s Sustainable Development Strategy, published by the Scottish Executive.
Procurement of the new-build properties is being progressed to achieve GHA’s requirements for programme
delivery, cost and quality. Early new-build properties have been procured through traditional procurement
and the PPC 2000 Partnership model. Delivery of the new-build programme is one of the most signiﬁcant
ﬁnancial challenges facing GHA. It is clear that GHA will need to ﬁnd additional resources to deliver the
complete new-build programme. This is being discussed with Communities Scotland.
Asset management policy development
GHA is developing a comprehensive suite of policies and procedures to support delivery of the asset
management objectives and priorities. Policies are already in place covering access to GHA properties,
repairs and maintenance, procurement and clearance of tenants for demolition and disposal.
Existing policies are subject to review on a regular basis and additional policies, covering such issues as
GHA’s role in developing alternative tenures, will be developed as the strategy is implemented.
Objective 2: Gear our activities and investment programmes to deliver “better homes”
Improving housing and neighbourhood quality
GHA is addressing the poor quality of its stock to help transform the lives of tenants and ensure that the
physical assets are adapted to meet current and future needs. The investment strategy will ensure that all
properties with a long-term future meet or exceed the SHQS by the 2015 deadline.
At a more detailed level, GHA has established technical standards setting out performance requirements
and general speciﬁcations for materials and components. The Design Guide, which was produced following
extensive consultation, sets out the strategic aims and aspirations for the investment programme, and
provides a proper context for design work. It includes comprehensive procedures and standards for all
projects – new-build, refurbishment, landscaping, regeneration and neighbourhood improvements.
There is an increasing need for more sophisticated assessment, in collaboration with the LHOs, to develop
tailored and imaginative solutions for improving the core stock within current resource parameters. This will
include consideration of level of demand and suitability of property for adaptation to meet particular housing
needs. Compared to the provision in place at the point of transfer, GHA is currently making additional
resources available for this service. Given the unpredictability of demand for property adaptations, GHA has
highlighted the need to address this issue to ensure that, post-SST, GHA’s successor bodies can continue to
respond to the need for adaptations on a consistent basis.
In relation to property maintenance, GHA is focusing on establishing full local cyclical maintenance
programmes working with LHOs on programme development and delivery. These programmes are essential
to protect the capital programme investment and maintain the quality of homes and the environment for
GHA’s contract with City Building (Glasgow) LLP for the delivery of repairs and maintenance is due to end
in 2008. Future arrangements are subject to competitive procurement and advertising through the Ofﬁcial
Journal of the European Union. Initial meetings have already taken place with a variety of stakeholders to
consider the type of services GHA will require and the shape of potential service arrangements.
Improving energy efﬁciency
GHA recognises the impact fuel poverty has on the quality of life and health of individuals and communities,
particularly those who are more vulnerable, and therefore aims to increase energy efﬁciency in its homes
and reduce fuel poverty.
GHA has a dedicated energy team. The “Wrap Around Warmth” initiative aims to produce warm dry homes
that are affordable to heat. It focuses on the impact of physical improvement, energy efﬁciency and energy
The investment programme for existing properties includes over cladding, double-glazing and modern
central heating systems to ensure that homes are warmer and more energy efﬁcient.
Delivering environmental sustainability
GHA has identiﬁed environmentally sustainable, high quality design as an over-arching principle for its
capital investment programme. GHA believes that consideration of environmental impact is intrinsic to every
stage in the development of a project, whether new-build or refurbishment. To this end, GHA will manage its
assets and the capital and revenue stock investment in accordance with the objectives and priorities set out
in its Sustainability Strategy.
Modernised Housing Service
Implementation of GHA’s recent Housing Services Review is providing tenants with:
• Safer and more secure homes
• Improved customer service
• An enhanced 24-hour concierge service for all multi-storey ﬂats (MSFs)
• Improved estates and neighbourhood management
• Additional cleaning for all MSF properties
• A hot spot Neighbour Relations team to identify and target hot spot areas of serious antisocial
Upgrading of our integrated housing management system has included the introduction of web-based
iWorld housing management system to support front line services and provide a platform for modernised
housing services. From April 2007, this will be complemented by the introduction of the Integrated Asset
Management System (IAMS), providing GHA’s core Property Asset Register. Signiﬁcant initiatives such as
improvements to the standard at which properties are let, choice based letting and the introduction of
mobile technology are all part of our drive to improve efﬁciency and tenancy sustainment.
With the introduction of IAMS, the impact of the changes to GHA’s service delivery on the performance of
GHA’s assets, and on both the asset values of speciﬁc properties and the total value of GHA’s assets, can be
more effectively monitored.
Objective 3: Use our assets and resources to build stronger communities
Improving neighbourhood quality
We will work with others to ensure tenants’ neighbourhoods are attractive, well-maintained and desirable
places to live. GHA is supporting the Clean Glasgow campaign to tackle environmental blight and improve
the attractiveness of the city. Through the Community Planning Partnership, we are working with others to
improve neighbourhood management, improve co-ordination of services, minimise duplication and provide
high quality environments that meet the aspirations of our tenants.
GHA’s Neighbourhood Quality Improvement Fund (NQIF) is a positive response to feedback from tenants
expressing dissatisfaction with the quality of open space within their neighbourhood. These resources target
physical revitalisation of neighbourhoods to improve environmental and recreational standards. Four pilots
started in 2006/07 and the lessons from these will inform the expansion of the programme in 2007/08.
Delivering comprehensive community regeneration, and developing GHA’s role in the city’s Community
GHA is working with LHOs, tenants, residents and other key stakeholders in taking forward the regeneration
of some of the city’s most deprived neighbourhoods. The Community Planning Partnership led by GCC is
critical in delivering this ambition by providing a mechanism for stakeholders to discuss and agree the vision
for a regenerated city, respective roles, mutual priorities and co-ordinated programmes. GCC is also leading
discussions on the implementation of public service reform to more effectively co-ordinate and align the
activities of the public sector agencies.
GHA strongly supports the development of a more co-ordinated approach and the targeting of extra funding
towards the most deprived communities. Most GHA stock is located in such areas and GHA recognises that
regeneration will only be achieved through the key partners working together.
GHA’s commitment to community regeneration is underlined by funding a Neighbourhood Renewal Strategy
to resource a diverse range of activities to complement improvements to the housing stock and service.
These include ﬁnancial inclusion, jobs and training, community learning and development, promoting energy
efﬁciency, tackling fuel poverty and employing nine welfare beneﬁt advisers.
GHA strongly supports the rolling out of community planning structures at local level and the establishment
of local housing forums. These offer LHOs the opportunity to progressively become local regeneration
champions, not only focusing on their communities in the short-term but also building in long-term
community control and capacity.
Addressing tenure imbalance through mixed tenure development
In many parts of the city, where the concentration of social rented housing is associated with high levels of
deprivation, tenure diversiﬁcation could contribute to the successful delivery of GHA’s Asset Management
Strategy and sustainable area regeneration. There are many tenure diversiﬁcation and low cost home
ownership options that warrant examination; with GHA and its successor LHOs as facilitators, direct providers
or joint venture partners as appropriate.
There may be circumstances where low cost home ownership within the stock portfolio will help deliver
GHA’s asset management aims and wider regeneration objectives. Tenure forms that provide choice to
households wishing to remain in their local area, but to move into home ownership may play a valuable role
in community retention and neighbourhood regeneration, while enabling available resources to go further.
In other circumstances, participation in the Mortgage to Rent scheme may be appropriate, for example to
consolidate GHA ownership in order to facilitate demolition processes.
GHA will commission a review of home ownership options for GHA including the potential constraints, taking
account of the relevant policy, funding, legal, regulatory and contractual issues, including the relationship
with delivery of SST.
A speciﬁc requirement of this Asset Management Strategy is that local plans for investment and
management should examine and address tenure imbalance to improve the prospects for strong and
sustainable communities. This will be carried out in the context of the Area Development Frameworks.
An effective GHA contribution to community care and diversity
GHA’s Housing and Community Care Strategy was developed jointly with GCC, NHS Greater Glasgow and
Clyde and other stakeholders. It sets out the contribution GHA will make to meet community care needs in
the city and complements the association’s Equality and Diversity Strategy.
The strategy provides a framework for GHA to assess the needs of community care groups and to jointly
commission research on identiﬁed gaps. The next step will be to assist LHOs to develop local housing and
community care strategies in collaboration with Community Planning and Community Health and Social
While GHA’s New-Build Strategy will assist in re-housing tenants from properties to be demolished, there
is a recognised shortfall in many parts of the city in provision for a range of groups with particular housing
needs. GHA will co-ordinate its activities with those of other providers to address these needs through the
various new-build funding streams.
Investment in existing stock will signiﬁcantly improve housing quality for many tenants with community
care needs. However, incorporating provision for people with disabilities presents particular challenges given
the high proportion of tenement ﬂats and MSFs that cannot meet barrier free and wheelchair accessible
In relation to diversity, GCC’s Local Housing Strategy identiﬁes four key objectives to improve equality of
access to housing. These are targeted to ensure availability of housing based on assessed need, equal
access, improved allocations procedures, and to address discrimination. The strategy highlights the lack
of suitable housing and facilities for black and minority ethnic households, and the need for appropriate
delivery of services and adequate monitoring.
Through its Equality and Diversity Strategy, GHA is committed to working with GCC and representative
bodies to respond positively to the priorities and objectives to ensure equality of access to housing.
Objective 4: Deliver tenant and community control
Developing the LHO network
GHA’s stock is managed through the network of LHOs with the responsibilities of each party clearly speciﬁed
within the Remodelled Management Agreement. The capacity of the LHOs and the devolution of central
functions to a local level will be extended further in 2007 through the establishment of Local Shared
An LHO Chairs Forum has been established to improve communication between LHOs and GHA, providing
one means for effective dialogue on a range of strategic issues and policy and service development.
Developing and implementing arrangements for tenant empowerment, equality and diversity
GHA’s Tenant Participation Strategy and Policy for 2005/07 sets out key action points, priorities and
arrangements for communication and consultation with tenants.
Intrinsically linked to this is GHA’s Equality and Diversity Strategy, which places an emphasis on consultation
and community engagement with the aim of achieving continuous improvement in policies, services,
employment practices and governance to promote equality and recognise diversity.
GHA will work to empower and promote participation in decision-making about the future of its assets.
In particular, it will support disadvantaged and difﬁcult to reach groups, including disabled people and
members of black and minority ethnic communities, to enable them to participate fully. Decisions on the
future use of GHA’s assets should reﬂect the needs of members of these groups at the earliest possible stage
in the planning processes.
Delivery of community ownership
GHA is committed to community ownership. The Asset Management Strategy and systems must support
and facilitate SST to sustainable LHOs where this is possible. This will be achieved through:
• Addressing the demand risk that attaches to the stock identiﬁed as requiring appraisal
• Resolving the future life of existing GHA properties and effectively utilising the new build reprovisioning
provided through GHA’s new-build programme or by other RSLs funded by GCC
• The provision of full and accurate disaggregated stock, income and cost data to underpin stock valuation
• Managing the changes that will occur in the volume and composition of its progressively diminishing
In addition, each SST will depend on a ballot of tenants, must represent a fair deal for all GHA tenants, have
no impact on GHA’s investment and repair programme and be ﬁnancially neutral to GHA. Given the ﬁnancial
challenges facing SST it is difﬁcult to forecast accurately which stock is likely to transfer by when and at what
stage of improvement. The Asset Management Strategy and systems must cope with this uncertainty.
Objective 5: Build asset value
Re-structuring rents and service charges following the rent guarantee
Rental income is a crucial factor in deﬁning the value of GHA’s assets. Rents are currently set on factors
such as amenity and stock condition that are out of date. The variation between individual rents often fails to
reﬂect tenants’ perception of value and many tenants contribute to the cost of services they do not receive.
A Rent Restructuring Project has been established to review the rents in consultation with tenants, LHOs and
other stakeholders. This project is a critical component of GHA’s long-term approach to asset management.
Whichever approach is used to restructure its rents, GHA recognises the need to charge rents and service
charges that more closely match the costs of management and maintenance. This is intended to produce
a rent structure that is fairer and more transparent. It should also help GHA build the asset value needed to
support delivery for tenants in the longer-term and to pass to others through the SST process.
It is likely that changes to the rent structure will be phased in gradually. The phasing of adjustments must
recognise the rent guarantee to tenants at the point of transfer and balance the need to make GHA’s rents
more affordable and comparable with the rents of other landlords against the requirement to maintain the
income needed to deliver the business plan.
Introducing new ﬁnancial and non-ﬁnancial appraisal techniques
To make best use of resources, GHA and the LHOs need to fully assess the costs and beneﬁts associated with
alternative options in dealing with the stock.
In order to improve understanding of the ﬁnancial performance of properties and the impact of investment
on the asset base, GHA has undertaken a strategic asset appraisal. This will underpin a fuller ﬁnancial
assessment and ﬁnancial modelling of options for the non-core stock, including stock designated as major
regeneration projects. By this means, ﬁnancial appraisal will be extended to all stock groupings to enable
appraisal, monitoring and modelling of the long-term value of all GHA stock on a consistent basis.
Similarly, whilst non-ﬁnancial factors are considered as part of the Housing Futures Assessment, there is a
need to develop the process and criteria further. These must be applied consistently and incorporated into
an appraisal that embraces both ﬁnancial and non-ﬁnancial factors and applies an appropriate weighting to
GHA will consult LHOs and other stakeholders on the development of the ﬁnancial and non-ﬁnancial
appraisal techniques, criteria and weighting. The proposed approach is outlined on page 26.
Developing our approaches to managing GHA’s non-housing assets
In relation to land holdings, GHA has begun working with GCC on the processing of sites emerging from the
demolition programme that are not covered by the Regeneration Scheme Agreement. For sites within their
area, LHOs will be engaged with other key stakeholders to review the potential future use of these sites for
social housing or for implementation of the Land Protocol. Work will also continue with GCC and others to
identify and obtain the land bank needed for GHA’s new-build programme.
GHA will work with LHOs and other key stakeholders to review its shops, community facilities and lock-ups;
to consider options for ownership and management of these properties, taking account of:
• The costs and beneﬁts associated with the assets
• The potential demand for access to capital investment resources not currently provided for in GHA’s
• The views of key stakeholders
• GHA’s governance, regulatory and contractual arrangements
• The impact of the assets on delivery of community ownership through SST.
Outcomes, priorities and timescales
The target outcomes and priority actions for each of the ﬁve strategic objectives will be developed into an
action plan for the implementation of this strategy. This will be ﬁnalised when the strategy is approved and
updated annually thereafter.
FINANCIAL AND NON-FINANCIAL APPRAISAL
There are a number of ﬁnancial evaluation techniques used regularly by housing associations. Given the
nature, scale and duration of its programme GHA has identiﬁed the Net Present Value (NPV) method as the
most relevant for assessing its investments, including re-investment in existing stock.
The NPV technique proﬁles income and expenditure over the long-term, and then discounts the cashﬂows
to arrive at a present day value. The NPV takes account of the time value of money, that is the costs and
beneﬁts in earlier years are given more weight than those in later years.
When comparing options, the proﬁle of costs and beneﬁts for each project will vary over time. Discounting to
present values allows the different options to be compared on a consistent basis.
The “Green Book” published by the Treasury recommends a discount rate of 3.5% in real terms; that is
excluding the projected rate of inﬂation.
Separately the Green Book identiﬁes that, for private individuals, the time value of money can be measured
by the real cost of borrowed funds. This is the basis of the real discount rate commonly used in housing
association investment appraisals. For GHA, this would equate to 3.305%, which is the difference between
GHA’s average cost of borrowing of 6.305% and the inﬂation rate of 3% in the business plan. This is
therefore the rate GHA would use in appraising most projects.
Where the project is being valued over a time period longer than 30 years, or where the project is particularly
complex, the discount rate may be varied. The reasoning behind any change needs to be explained fully in
the option appraisal report.
The advantage of the NPV over other techniques, notably the Internal Rate of Return, is that the NPV
produces meaningful outcomes even when the investment has a negative value – that is when the long-term
revenue which comes primarily from rent does not cover the capital, management and maintenance costs of
GHA will improve its ﬁnancial understanding of its investments through a variety of means:
• The briefs for Development Plans for GHA’s major regeneration projects already require the preparation
of a 30-year discounted cashﬂow for all viable options identiﬁed. Project summaries will include details
of capital costs so these can be compared to the cost of other social rented projects in the city. For new-
build properties, this will provide important benchmarking for the cost of GHA investments
• Where possible the NPV will produce costs per housing unit and bedspace to allow a more standardised
comparison of projects producing different unit sizes
• GHA approached the market looking for a partner to develop a strategic asset appraisal tool. This has
now been developed with Savills Property Surveyors and produces concurrent NPV summaries of all
GHA properties, divided into over 700 localised stock groupings, reﬂecting the current pattern of income
and costs, with the capacity to model changes to these.
Using the information from these appraisals, GHA will work with LHOs and other stakeholders to review the
future life of its properties, with the long-term value of each group and options for their future prepared on a
The ﬁnancial appraisal will be signiﬁcant in discussions with LHOs about the best use of the investment
resources available and will play a part in decision making about the investment programme.
Non-ﬁnancial, or quality, appraisal
The Asset Management Strategy and investment are designed to achieve key beneﬁts for tenants and the
wider community. In considering the allocation of resources between projects it is therefore necessary to take
account of the extent to which the proposed expenditure helps deliver these wider objectives, that is, what is
the quality of the asset produced by the investment, as well as the ﬁnancial costs and beneﬁts.
GHA is developing its approach to non-ﬁnancial appraisal of investment projects, based on the GHA Design
Guide, approved in March 2006. The Design Guide is the essential reference for all those involved in the
design, speciﬁcation and delivery of GHA’s investment programme and provides a ﬁrm foundation for
the assessment of project quality. The guide applies to all projects, new build, refurbishment, landscape,
regeneration and neighbourhood improvements. It sets out the association’s aspirations for investing in its
housing stock as being:
• The creation of successful places, where people want to stay to create sustainable communities for the
• Seamless integrated tenures, in which social renting co-exists with other tenures, with houses of the
quality, type and location that meet the needs of a wide range of current and future customers
• Sustainable, good quality design, a forward-thinking approach to design that encapsulates the principles
of environmental sustainability and efﬁciency
• Effective, Affordable Tenant Choice, capturing the best from the private sector to create affordable
housing and effective tenure choice.
These aspirations are translated into a series of Design Quality Indicators, covering topics including:
• the urban context
• community and connectivity
• roads and open space hierarchies
• buildings and landscape.
At each stage, the project will be assessed against these indicators, and other indicators included on a
Relative weightings need to be agreed for the non-ﬁnancial measures used in the appraisal and between the
ﬁnancial and non-ﬁnancial measures. These will be subject to consultation with key stakeholders including
ORGANISING TO DELIVER THE STRATEGY
In order to deliver the strategic objectives for asset management, the following four priorities have been
Governance and corporate responsibilities
The role of GHA’s Board is to ensure that, in meeting its strategic plans and commitments, the association
remains ﬁnancially viable with continuing demand for the stock generating sufﬁcient rental income to meet
In discharging this role, the Board will evaluate strategic aspects of asset management and asset
management practice, ensure there is proper consultation with tenants, LHOs, GCC and other stakeholders,
and then take decisions to ensure that property assets are managed effectively. Some of this work is
delegated to the various committees of the Board and arrangements are in place to ensure the work of
committees is co-ordinated.
Recognising the importance of pro-active asset planning and management, a dedicated Asset Strategy team
has been established within the Investment and Regeneration division. The responsibilities of this team will
include the development of policies, procedures and systems to deliver the Asset Management Strategy.
During 2007, the plans for “Transforming the Network – Creating Shared Services” will be fully implemented.
Local Shared Services are central to GHA’s strategy to extend tenant participation and control by devolving
support services to the front line. The seven Shared Service centres being established across the city and
the GHA service development team will each work with groups of LHOs to deliver services in a more locally,
The Local Shared Services will have key responsibilities in relation to asset management, including delivery
of the investment programme and supporting LHOs in developing neighbourhood strategies. GHA Corporate
will support them in meeting these responsibilities.
Developing GHA’s strategic planning framework
As already indicated, the Asset Management Strategy gives GHA a single strategic framework within which to
take investment and related decisions. However the extent to which the strategy is governed and inﬂuenced
by external factors cannot be over-emphasised.
The key components of the stock transfer proposal put to tenants at ballot and the related funding and
contractual arrangements have been key drivers for GHA’s business plan.
The asset management and other GHA strategic plans must in turn reﬂect the business plan and the
parameters that have guided its development. At operational level, GHA’s various policies, plans and
programmes will be developed and implemented to deliver the asset management and other GHA strategies.
Establishing an asset management system
GHA is introducing IAMS, which will be brought into operation from April 2007 onwards. This will provide
the means to maintain, access, validate, and model full information about the property portfolio to inform
management and investment decisions. Implementation of the system will make detailed and accurate
information more accessible to LHOs, and to Local Shared Services. It will assist them in investment planning
and in developing proposals for SST.
Development of IAMS follows on from the implementation of the new iWorld Integrated Housing
Management System. Following a review of the relationship between the systems, it has been agreed that
IAMS will contain GHA’s core asset register.
Monitoring and evaluation
A systematic and consistent approach to evaluation is required to ensure the best outcomes are achieved
from the allocation of resources This will focus on the delivery of business plan targets and objectives,
statement of intent targets, key performance indicators and tenant satisfaction. As part of this process, an
Asset Management Position Statement is now produced annually.
GHA risk strategy
GHA applies a comprehensive risk management framework. This includes consideration of speciﬁc risks
associated with strategies. The main risks identiﬁed that are relevant to the Asset Management Strategy are:
• Investment programme delivery, priorities and customer service
• The uncertainty associated with the second stage transfer programme
• Achieving assumed Right to Buy receipts
• Achieving cost savings and business performance targets
• Ensuring long-term sustainability of GHA’s assets
• Investment programme costs over the longer-term
• Procuring quality neighbourhood management
• Availability of information to support development of the strategy.
The corporate risk report will be submitted to the GHA Board in March 2007. This will be supported
by divisional operational risk registers, to be maintained and updated on a regular basis by Executive
Management. The Audit Committee monitors the corporate risk register on a six-monthly basis.
The asset management risks listed above will be incorporated in the relevant operational risk registers.
Legislative and political change
Signiﬁcant pieces of legislation impacting on the management of GHA’s assets have been identiﬁed and
allocated to an ofﬁcer who has responsibility for ensuring compliance.
The Board and Chief Executive maintain close relationships and meet regularly with GCC, the Scottish
Executive, and local elected members from each level of government.
GHA has agreed with its funders to implement a programme of regular stock condition surveys. A
refreshment exercise of the survey carried out in 1999 was completed in 2005. A further update of the
survey is due by March 2008.
Specialist components, e.g. lifts and other mechanical and electrical installations, mainly in MSF and desk
access properties are included in ﬁxed term contracts covering inspection and maintenance.
Declining or changing demand
GHA works closely with GCC, Communities Scotland and other RSLs to monitor and project the level and
nature of demand for social rented housing in the city. It has been agreed that city wide Demand Reviews,
commissioned by GCC and Communities Scotland, will be conducted every three years. The next review
is to be commissioned in 2007 and published in 2008. GHA also carries out its own assessment of the
operational performance and demand for its stock.
Many of the properties being used for the asylum seekers contract are in GHA’s regeneration areas or in
stock for future review. GHA is aware of the need to ensure that long-term investment is not made based on
short-term demand and must balance the needs of the asylum seekers and the settled community.
Declining stock performance
Much of the responsibility for management of GHA’s stock rests with the LHO network. The contracts
between GHA and the LHOs specify Key Performance Indicators (KPIs) affecting the ﬁnancial and operational
performance of GHA’s stock.
Regular reports on the performance of the LHO network against KPIs are submitted to GHA’s Operations
Committee, including exception reports on poor performance.
As a major landlord with a widely dispersed and varied stock base, GHA has been able to absorb and
manage the risks associated with some of the challenges it inherited.
For LHOs to prepare viable transfer proposals and sustainable business plans, it is essential that risk and
uncertainty be reduced, particularly in relation to:
• Removing as much as possible of the stock with an uncertain future
• Addressing issues of potential future low demand
• Investing in stock with a sustainable future and likely long-term demand
• Appropriate allocation of resources to meet investment risks.
The Asset Management Strategy provides a single strategic and comprehensive framework for taking
decisions that minimise and mitigate these risks, thereby promoting sustainable successor organisations.
Successful management of GHA’s assets requires effective communication with a wide range of stakeholders:
tenants, LHOs, GCC, Communities Scotland, lenders and many others. GHA’s Asset Management Strategy is
supported by the following core communication objectives:
• Developing informed awareness and support among stakeholders for the future of social housing in
Glasgow as envisaged in GHA’s business plan
• Building trust and managing expectations of GHA among all stakeholder groups and thereby develop
and sustain the credibility of the organisation and its people.
GHA now publishes an annual Asset Management Position Statement giving key updates on its asset base
and how it has changed over the previous year, summary information on stock utilisation and charges,
changes in the customer base and in the housing market, and developments in GHA’s approach to managing
and maintaining its assets. The ﬁrst Position Statement, which gives the position at 1 April 2006, was
published in October that year.
Following the successful implementation of a three-year investment planning process with LHOs, GHA also
publishes an annual Investment Plan. This provides signiﬁcantly more detail on GHA’s plans for investing
in its stock in the next ﬁnancial year and outlines plans for investment in each of the two following ﬁnancial
The draft AMS was issued for consultation in June 2006 and Glasgow University organised workshop
discussions with representatives from key stakeholders. Responses were received from a number of LHOs,
registered tenants organisations, GCC and other stakeholders. Details are provided in Appendix 4.
All respondents welcomed the development of the AMS. Points highlighted included:
• The strategy was seen as critically dependent on GHA having good quality information about its assets
and the demand for those assets
• That an extension of the options used by GHA in dealing with vacant properties raised signiﬁcant issues
and need to accord with the Transfer Agreement
• That further work needed to be done to address the question of which “products” GHA needs to meet
the aspirations in the future, and which might go beyond bringing properties up to the SHQS
• That demand risk was the key issue
• The inter-relationship between asset management and SST needed to be clear.
GCC welcomed the broad deﬁnition of asset management, agreed with the objectives identiﬁed and
highlighted the need for more detail on how these would be developed.
In December 2006, GHA organised an asset management seminar, at which Savills Property Consultants
presented an overview of the approach adopted in preparing the Strategic Asset Appraisal.
The strategy has been amended to reﬂect the feedback and updated to take account of developments in the
period since the draft was issued.
Developing a strategic approach to restructuring GHA’s stock
Aim: to make decisions about the future of the stock to achieve a portfolio of the volume, quality and type of housing to meet the needs
of a wide range of current and future customers including those with particular needs.
Objective Measure of success Target
To assess demand GHA contribution to the 2008 Review of Demand for social rented housing commissioned by GCC and Dec 07
for social rented Communities Scotland delivered
Review of Waiting and Transfer lists completed and the implications for GHA’s stock profile identified Jun 07
Work on demand/supply balance to underpin GHA decision-making completed following the 2008 Mar 08
Identification and classification of the full stock portfolio to receive investment to meet GHA’s transfer Sep 08
To develop Implications for GHA from local housing market studies in Easterhouse and Glasgow North identified Jun 07
the local housing GHA Housing Market Area analysis revised and relationship between identified patterns of demand and Jun 07
market in the city Community Planning framework identified
Methodology for monitoring the long-term impact of choice based letting on demand for GHA properties Dec 07
Review arrangements for provision for temporary accommodation for asylum seekers in light of GHA Mar 08
With GCC and other key stakeholders, assess the impact on short and long-term housing demand of Dec 07
recent in-migration from accession countries to the European Union
To improve Programme of surveys of local tenant satisfaction and housing needs assessment connected to the Mar 08
understanding of investment programme completed
The impact of the demolition programme on the housing opportunities of large families identified and Sep 07
reflected in re-housing strategies
Research on the need for larger family housing and assessment of implications for GHA stock profile Dec 07
and new build strategy completed
Assessment of the rehousing needs of residents, including community care groups, in GHA stock Dec 07
identified for demolition completed
The pattern of tenancy failure examined and implications for GHA and joint work with GCC Mar 08
Homelessness team identified
To plan the re- Training for LHOs to engage effectively with Local Housing Forums and the review of Area Development Mar 08
structuring of Frameworks
LHOs supported to prepare comprehensive investment plans and GHA-wide investment programmes Sep 08
agreed to underpin procurement of constructor capacity to deliver the tenant commitments
Proposals from major regeneration area studies progressed in consultation with key stakeholders and Dec 07
GHA input to implementation plans agreed
Guidance produced for LHOs on the preparation of neighbourhood housing strategies to ensure Sep 07
GHA/LHO activities meet the needs of the local community
Integrated Asset Management System (IAMS) fully operational and in use across GHA and the LHO Sep 07
Assessment of development studies for the Wingets, St Andrews Drive, Temple, West End MSF, Moss Mar 08
Heights, Bishoploch, and Tollcross completed and GHA response agreed
GHA analysis of property investment risk produced for all stock based on updated stock performance Sep 07
and demand data and the outcome of the strategic asset appraisal
Timetable agreed for determining the future life of all GHA stock following publication of 2008 Demand Dec 07
Following consultation, guidance issued on decision-making and management for stock with an Sep 07
uncertain future or to be removed from GHA stock
Options for strategic disposal of stock as an alternative to demolition and for GHA’s input to developing Sep 07
mixed tenure communities assessed in consultation with key stakeholders
GHA’s city-wide stock profile broken down into localised targets for stock retention and demolition in Mar 08
consultation with LHOs, GCC and other stakeholders
Plans to increase the supply of housing to address identified shortfalls in housing for people with Mar 08
particular needs and for wheelchair accessible homes agreed
Asset Management Position Statement published Annual
Rolling three-year Investment Plan published Annual
To develop policies Existing policies which impact on asset management reviewed in light of changes since initial approval, Sep 07
and procedures including the introduction of IAMS and implementation of Local Shared Services
Comprehensive portfolio of asset management policies developed and additional policies and Sep 08
procedures approved as required
Gear our activities and investment programmes to deliver better homes
Aim: To deliver a high quality portfolio that is environmentally sustainable, energy efficient and capable of being managed and
maintained in the longer-term at reasonable cost.
Objective Measure of success Target
To improve housing Stock condition survey updated, impact on outstanding investment need identified, and revised business Dec 07
and neighbourhood plan investment profile prepared
Standard delivery plan for GHA stock to meet the Scottish Housing Quality Standard (SHQS) reviewed Sep 07
Delivery of GHA investment programmes to meet tenant promises and to meet or better the SHQS Annual
Satisfaction with quality of work carried out through GHA investment programme increased to 75% of Mar 08
tenants in properties receiving investment
GHA demolition programme revised in light of the outcome of the 2008 Demand Review and Dec 08
completion of the HFA process
Procurement strategy for repairs and maintenance services for the period post 2008 developed and Jun 07
Cyclical maintenance programmes prepared for all properties Dec 07
Post-investment resident satisfaction surveys completed and recommendations made on any changes Mar 08
to policy, practice and communications
To improve energy Sustainability strategy action plan implemented As per
efficiency and plan
sustainability Sustainability principles and actions incorporated in LHO investment plans and new-build programme Ongoing
Continued delivery of Warm Deal investment for those properties not completed by 31 March 2007 Ongoing
Identified implications for GHA of Communities Scotland Sustainability policy Mar 08
To improve the Agreed recommendations from baseline evaluation of Modernised Housing Services delivered Aug 07
delivery of housing
services Standards at which properties are let improved Dec 07
Choice based letting system implemented Oct 07
Monitoring arrangements in place to track the impact of changes in service delivery on the performance Mar 08
of GHA assets
Review the operation of GHA’s Adaptations Policy Sep 07
Use our assets and resources to build stronger communties
Aim: to deliver a stock portfolio that is integrated into successful neighbourhoods, promoting strong communities, enhancing community
development and creating places that generate civic pride
Objective Measure of success Target
To improve Neighbourhood Quality Improvement Fund (NQIF) projects appraised and programme to improve Dec 07
neighbourhood environmental and recreational standards extended taking account of lessons from the pilots
Deliver locally responsive services through neighbourhood management partnerships Sep 07
with GCC and other stakeholders
Environmental strategy developed and approved following consultation Sep 07
To deliver GHA Action plan for GHA Wider Action Strategy implemented As per
input to plan
community In conjunction with Local Shared Services, build LHO capacity to deliver wider action. Coach 22 LHOs to Mar 08
regeneration develop their own wider action strategy and delivery plan
Delivery mechanism and partnerships for ‘transformational’ regeneration programme/projects Mar 08
developed and agreed
To address tenure Potential for diversification through mixed tenure development, home ownership initiatives and Sep 07
imbalance Mortgage to Rent assessed in consultation with key stakeholders
To make an Action plans for GHA’s Housing and Community Care and Equality and Diversity strategies implemented As per
community care Assistance provided to LHO’s to prepare local Housing and Community Care strategies in collaboration Mar 08
and diversity with Community Planning and Community Health and Social Care Partnerships
Provision for particular needs incorporated into revised GHA New-Build Strategy Oct 07
GHA’s new-build activities co-ordinated with those of other providers to effectively address the shortfall Oct 07
of provision for a range of groups with particular needs
Forward new-build programme planned, coordinated and profiled and New-Build Strategy updated Oct 07
Deliver tenant and community control
Aim: to achieve the fullest possible local influence and control over the ownership and management of the housing stock.
Objective Measure of success Target
To develop the LHO Asset management functions to be devolved to Local Shared Service centres agreed and implemented Sep 07
Support provided to LHOs to engage effectively with Local Housing Forums and in the review of Area Mar 08
To develop tenant Arrangements in place to maximise resident participation, including from community care groups, in the Sep 07
empowerment, asset management decision-making processes affecting the future of the stock
diversity Effective communication with and engagement of tenants, LHOs and other key stakeholders in process Mar 08
for determining the future of GHA properties
Implement key findings of 2006 Tenant Satisfaction Survey and approved action plan As per
LHOs supported to develop an information base on the needs of people from equalities groups in their Sep 07
To promote Action plan for GHA’s Equality and Diversity Strategy implemented As per
diversity and plan
The needs of equality and diversity groups recognised in the preparation of GHA/LHO led Dec 07
neighbourhood strategies, emerging from development studies and other planning processes
To deliver Second LHO community ownership business cases assessed against GHA business plan Aug 07
LHOs provided with full and accurately disaggregated stock, cost, and income data in accordance with Annual
the current business plan
Future life of existing GHA properties resolved in consultation with LHOs and other key stakeholders to Sep 08
inform preparation of SST proposals