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Stock Condition Surveys

2 Stock Condition Surveys Purpose of the Stock Condition Survey Obtaining accurate and robust stock condition/investment information on the stock is an essential part of an options appraisal. You need to consider if you could populate. It is critical that you prepare your in house team by involving them in the process from the outset. The identification of expenditure required to meet the aspirational requirements of the tenants and/or expenditure required to ensure sustainability in the assets/properties. or partly populate. This needs to be reflected in the business plan. a potential survey from existing in house data so that it can be validated at the time of the survey. in some cases. is it robust for the purpose you now require it. All Local Authority properties are ageing and. how recently was it done. Consideration should be given to what is good and bad about any existing system and what would be your ideal in terms of information. You also need to think about how you are going to keep any information up to date and how you could include this requirement in any contracts. . The identification of expenditure required to meet the obligations of the Council which may. inevitably. Before you start on a survey of the stock it is important to consider what information you already have in house. Do you have staff with detailed knowledge of the stock? Do you have an existing survey. can it be updated or validated? Do you need a completely new survey? It is important to identify the gaps in your current information. Investment in the stock is the single largest area of expenditure in any business plan and hence accurate information is crucial. Their role in considering the logistics of the data collection and data maintenance will be invaluable. The primary purpose of the stock condition survey is as follows: To identify the minimum level of expenditure required to bring all properties up to the decent homes standard by 2010 (including the Housing Health and Safety Rating System) and then to maintain them at that standard for the duration of the business plan. expenditure will increase in the future. asset management plan and capital strategy. go beyond decency. The assessment of investment requirements must be over the period of the whole business plan rather than simply a short term view.

With the above in mind it might be useful to run figures through both the BCM and STM to test how well existing data can be used. namely undertaking the survey in-house or employing one of the specialist firms of surveyors who undertake this type of work. When considering the options careful consideration should be given to price against quality. the information coming from an independent consultant will be helpful. It should therefore be borne in mind that if an in-house survey is undertaken and a decision is made to proceed along the stock transfer route. Consideration may need to be given to the employment of a specialist to assist in the management of the process where necessary. The issues to be considered with these alternative approaches are as follows: In-House Survey There is no reason why a survey should not be undertaken in-house but all Local Authorities need to be fully aware of the following issues: There are significant resources required to undertake a stock condition survey and this should not be under estimated. It may be therefore worthwhile considering the relative costs of validating existing information vis-a-vis commissioning an independent survey at an early stage. It is essential that the Local Authority has robust investment information and flexibility is built into the option appraisal process to enable the Local Authority to proceed along any of the alternative options. An independent survey will have to be commissioned or in-house survey validated to a standard acceptable to funders. In the event of a decision to proceed along the ALMO route. This may assist in showing up how authorities should deal with each archetype for each option. Local authorities should have regard to the ODPM Building Costs Model for more information on what is required. This information will be scrutinised in great detail if an ALMO bid is made. In the event that a Local Authority decides to proceed along the LSVT route. the lowest price option may not necessarily be the best value for money in the long term. In these circumstances. etc. how the BCM will steer the authority into considering other resources. a further survey may need to be undertaken in the future. . it is crucial that robust decency information is made available. it is essential that the in-house information is validated or to a standard capable of being validated should the need arise. It will also help authorities be aware of what is involved in making applications for each of the different options. what the LSVT valuation is likely to be. The ODPM Cost Generation Model for LSVT will give further information on the level and format required for an LSVT application.3 Who should undertake the survey? There are two options open to the Council. an in-house unvalidated stock survey will not be acceptable for the purposes of the funders/new RSL’s. At the least. Undertaking these surveys is a specialist area and Local Authorities considering embarking on the surveys themselves need to be sure that they have the expertise in-house.

where a decision is made to outsource this work great care should be taken in the engagement of external consultants and the following should be borne in mind. an assessment of decency is crucial. . In addition. etc. The survey is only part of the process. It is important that you are comparing like for like on referencing. will be on a database that can be used to analyse the survey results and produce the outputs required. Ideally the database should be compatible with the local authority’s existing one.4 If the authority decides to pursue a PFI scheme ODPM does not necessarily expect a completed survey for the area/estate covered by the proposed scheme. they will have developed the expertise to undertake the work and they will be able to provide an independent view on the condition of the stock. In particular. authorities are expected to outline the main works that they anticipate would need to be carried out based on their best available information. systems are compatible. If the decision is taken to appoint consultants it is essential that the local authority retains ownership and management of the project. It is therefore absolutely essential that the firm engaged to undertake the work has the necessary knowledge and credentials. Employment of Specialist Consultants The employment of specialist consultants to undertake the stock condition survey has obvious advantages. Development of internal reliable processes. what kind of survey was it. For example. However. However. Taking up references with other Local Authorities is a crucial part of the procurement process. ODPM will expect a survey to be jointly commissioned with short listed bidders to inform contract negotiation. was it to inform an option appraisal or specific to an LSVT proposal? Care needs to be taken to ensure that the correct legal appointment is made and that the surveying firm is committed to providing any necessary warranties to meet the various options that may be considered. It is therefore essential that authorities present as robust a picture as possible about the condition of their stock. albeit an important part. They are likely to be able to undertake the survey far quicker since they will have resources dedicated to the task. should the authority be successful in moving to a PFI procurement. they will be able to provide all the necessary warranties in the event that either an ALMO or a stock transfer is chosen as the preferred option. Indeed. All Local Authorities must ensure that the data from the survey. If the Local Authority decides to retain its housing stock there will still be a need to have information in a format that can be updated for Business Planning purposes. databases and trained staff is essential for the ongoing provision of reliable data. A named in-house team or individual should be tasked with ensuring that staff receive training. Many Local Authorities have been disappointed with some of the stock condition surveys that have been undertaken. when it is provided.

it is important that the survey design clearly recognises the standards to be adopted for component replacements. This information needs to be detailed and the survey must be able to produce the necessary outputs to inform such a bid (refer to ODPM Building Costs Model for more details). In the event that a decision is made to undertake an in-house survey and the necessary skills are not available in house. Much of this information revolves around the need to bring the properties up to the output specification standard. the properties can be made decent in a retention scenario and. managing and using housing stock information' (DETR. In a retention scenario.5 The Survey Design Much has been written on how stock condition surveys should be designed. Whilst this information would not be available at the beginning of an option appraisal process. There is very specific information required in the event of a PFI. generally involved smaller pockets of properties/estates and it is important that the survey can produce the outputs that are accurate down to this level. the production of very robust information on decency is crucial since this information would form the whole basis of an ALMO bid. Focusing on the material cost items in order to modernise the properties and to make them decent is the key to the success of the exercise. In addition. etc. August 2000). Information on the age of components as well as the state of repair will be important so that potentially non-decent homes can be identified as well as currently non-decent homes. together with accurate forecasting of when critical components are likely to fail after 2010. many Local Authorities may be financially constrained and the ability to prioritise works where it is most needed will be particularly important. up until now. a transfer is likely to attempt to address the aspirations of the tenants and these need to be understood and clearly costed within the survey. It is essential that at the option appraisal stage sufficient information is collected to allow authorities to properly assess the suitability of each option or indeed a mix of options. In the case of an ALMO. and particular reference should be made to 'Collecting. PFI projects have. The Sampling Process It is important to ensure that the results of the survey can be analysed to produce all the outputs required. firstly. both in the short and long term. Where an option for extra investment is not chosen a higher sample survey is likely to be required. This again will necessitate a higher sample. The main lesson learnt from surveys that have been unsuccessful is that far too much detail has been collected and very often much of this information is never used or updated. The likely effect of changes in the management and maintenance allowances should be considered especially where these may reduce in real terms. secondly. The survey must clearly report that. . Hence it is important that information can be disaggregated. it is important to fully understand the implications on the investment programme. Most importantly. what other works could be completed in addition to decency. A stock transfer is likely to involve an investment programme that goes beyond both the Council’s current obligations and also decency. The following are some of the issues that need to be considered: In the event that the stock is to be retained. a specialist can be employed to assist with the survey design/set up stages.

these blocks are potentially significant liabilities in the long term in terms of repair work to the structure and also replacement of the central electrical and mechanical plant. It is important that the short and long term liability of these properties are fully understood and costed within the business plan/option appraisal. Often this work can be carried out as a supplementary part of the stock condition survey. The most problematic types of non-traditional properties are the PRC (Pre Fabricated Reinforced Concrete Properties) which are designated defective and are unlikely to have a long term life without significant structural works undertaken. It may need to be higher than the sample size for the traditional stock. High Rise Properties Some Local Authorities will have properties of high rise construction. Building Costs The stock condition survey will identify programmes of work required to meet the various standards set out by the Local Authorities. a minimum 10% sample will be required and often. Many of the issues raised in the nontraditional properties section will also be relevant to high rise properties. In the event that this information is not already available within the Local Authority. the type of properties and the variation within them. These programmes need to be costed and this costing is generally undertaken by means of applying a schedule of rates. for example lifts. It is important to note that often these works do not address decent homes issues. a sample of nearer 20% / 25% will be appropriate. As with the non-traditional properties. Benchmarking in your area can also be useful. If good information is not available already. The sample size for this piece of work will be dependent on how many types you have and what the issues are. There are a whole host of different types of these properties and the issues associated with them vary accordingly. consideration should be given to the engagement of specialist engineers to assess the condition and long term life. the opportune time to undertake this work is as part of the stock condition survey process. It may be appropriate to seek specialist advice in this area because the levels of costs adopted can have a significant impact on the option appraisal process. Usually Local Authorities have detailed records of works they have undertaken to non traditional properties in the recent past. However. Non-Traditional Properties Many Local Authorities will have within their stock properties constructed using non-traditional methods. consideration should be given to commissioning surveys so that the liability of these blocks is fully understood. It is important that the unit rates adopted reflect the local market and what can be achieved by adopting the Egan principles of partnering and the contemporary procurement methodologies. .6 It is inappropriate in this guidance note to state what sample should be required because clearly this will vary depending on the size of stock. Again. It is important to note that if an ALMO is considered several expensive components. we would suggest that in general. do not relate to the decent homes criteria.

Costs of work that must be undertaken to the block. but cannot be re-charged will have to be met from other sources. so that all S125 notices in response to RTB applications may reflect costs of future works. The General Environment In some cases work required to the general environment surrounding the properties is as important as the work to the properties themselves. it is essential that those costs attributable to the leasehold units are easily identifiable.g. improved fencing. Whilst this “environmental” work may not contribute to “decency” it may be essential in the context of “sustainability”. costs that cannot be recovered will affect the valuation. off-road car parking etc. It is essential that all necessary work is reflected within the business plan and the opportunity should be taken as part of the stock condition survey exercise to identify the need for this work e. . Once estimates of future works are available as part of the SCS. additional external lighting for security. scope for recovery will be limited. ALMO funds are exclusively for tenanted units. then this information should be given to the Right to Buy team. and in the case of an LSVT.7 Costs Relating to Leaseholder Units and the Scope for Re-charging As more Options Appraisals are now needed on stock that has a higher proportion of leasehold in flatted blocks. Without this information. and existing leases checked to establish how much of this work can be re-charged to the leaseholders.