1. home and garden

BUSINESS PLAN
2012-2017
(Year Three 2014/15 update)
Contents
INTRODUCTION ............................ 3
THE ASSOCIATION ......................... 4
PRODUCTS AND SERVICES........... 11
OPERATING ENVIRONMENT........ 14
STRATEGIC KPIs........................... 19
STRATEGIC RISK MANAGEMENT . 20
CONTINUOUS IMPROVEMENT .... 21
OPERATIONAL INFRASTRUCTURE 22
ASSET MANAGEMENT STRATEGY 26
FINANCIAL STRATEGY ................. 28
Appendix 1 ................................. 31
Appendix 2 ................................. 33
2
Continued our efforts to support our
customers through the impact of welfare
reform
Made a significant investment of £2.8m in our
homes, working towards the Scottish Housing
Quality Standard
Continued focus on and investment in learning
and development for all staff
INTRODUCTION
By the Chief Executive, Jason MacGilp
and Chairperson, Ken Ward
Welcome to year 3 of our 5-year business plan
2012-17.
We have achieved much over the course of the
last year. Here are a few highlights:
This year will follow a similar trend, that of
improvement and change. We face a range of
challenges such as:
The outcome of the referendum on Scottish
independence
The impact of Welfare Reform
Housing Support funding changes
Ageing stock profile
Requirements of the Scottish Housing Quality
Standard (SHQS)
Pension Deficits
The wider economy and uncertainty of
employment prospects and income for our
customers
Requirements of the Energy Efficiency
Standard for Social Housing (EESSH)
Improved overall customer satisfaction to 86%
Moved our head office to new modern open
plan premises in Edinburgh
Continued to develop our ABC (A Better Cairn)
programme in conjunction with Quality
Scotland
Achieved European Framework for Quality
Management (EFQM) Committed to
Excellence (C2E) status
Continued to innovate in our approach to
Customer engagement and involvement
including establishing a Customer Panel and
delivery of a Customers’ Conference and
Mystery Shopping programme
Introduced new business systems to improve
our approach to business planning,
performance management and risk
(Clearview), provision of a modern in-house
repairs service (Epix), and electronic
document management system (Documotive)
Preparation for the first submission of the
Annual Return on the Charter (ARC) in 2015
including participation in a rigorous pilot
process facilitated by Scottish Housing Best
Value Network (SHBVN)
Joined the HouseMark benchmarking service
Developed and approved our new Customer
Excellence Strategy
Undertook process mapping and
improvement on how we deal with vacant
properties
Undertook a review of pensions provision
Continued our preparation for Investors in
People accreditation
Commenced a Leadership Development
Programme for Senior and Operational
Managers
Undertook a review of sheltered and very
sheltered housing provision
Commenced delivery of our first community
project with Cradlehall Primary School
Football Club through the Cairn Community
Fund
We have a range of initiatives and activities
planned to address these challenges, these
include:
Investment in our stock
Continuation of the review of our Sheltered
and Care and Support services
Welfare and benefits advice
Customer engagement
Investment within the communities in which
we work
A focus on continuous improvement
Ken Ward, Chairperson, and
Jason MacGilp, Chief Executive
3
Values
THE ASSOCIATION
Our values underpin everything that we do.
Mission
Customer Focus
“We will provide good quality affordable
homes and services in communities where
people want to live.”
We will focus on outcomes for customers.
The views, welfare and quality of life of our
customers will be at the heart of all we do.
Our mission statement reflects an emphasis
not only on maintaining homes to a high
standard, but on working with and supporting
communities where people want to make
their homes.
Equal Opportunities and Diversity
We will strive to remove and prevent
discrimination of any kind from our activities
and will embrace diversity. Everyone is equal,
everyone is different.
Value for Money
We will strive to achieve greater value for
money in all that we do.
Continuous Improvement
We will strive continuously to improve the
quality of all that we do. We work as a team
to do the right things, and to do them right.
Respect and Understanding
We are committed to working with
customers, partners and staff colleagues with
mutual respect, understanding and trust.
Integrity and Inclusiveness
We are open, honest, trustworthy and
inclusive in all our dealings. We do what we
say we will do.
Customers at Cairn House in Inverness
Innovation
We will try new and better ways of delivering
our services and actively consider new ways
of working and service provision.
4
Key Objectives
Priority Tasks 2012-17
With our values underpinning everything that
we do, we will achieve our mission by
focusing our activity around 4 key corporate
objectives, to:
The priority tasks identified to achieve the key
objectives of the Association are detailed
below:
Deliver Customer Excellence
Deliver Customer Excellence
Sustain Communities
Sustain Business
Achieve Continuous Improvement
We will:
Continue to gain a better understand of
the needs of our customers and act upon
information gathered on satisfaction
levels, needs and demographics
Continue to meet the new Social Housing
Charter standards and best practice
Continue to allocate resources to
customer priorities
Continue to equip our staff with the skills
and resources they need to deliver the
services our customers expect
Exploit technology for the benefit of our
customers
These key objectives were agreed during
2011-12. The priority tasks to achieve these
objectives in the medium term, through
service plans, are detailed in the next section.
We have:
Developed a Customer Excellence
Strategy
Introduced a ‘Cairn Customer Panel’ to
enable our customers to scrutinise our
performance and improve services
The opening ceremony for our new development
at Woodside of Culloden
Sustain Communities
We will:
Continue to provide high quality
affordable homes
Review our Asset Management Strategy
Continue to engage with customers at all
levels within the Association
Share services with other housing
providers where there is a business case
to do so
Commit to providing opportunities for
community employment
Continue to provide money advice
Work towards tackling fuel poverty
Continue to work with local community
groups in order to benefit our customers
and the wider community
Explore mid market development
opportunities
Customers in Coatbridge
5
We have:
Introduced the Cairn Community Fund to
help support local initiatives
Achieve Continuous Improvement
We will:
Achieve Investors in People accreditation
Commit to continued investment in staff
learning and development
Aim for top quartile performance against
our peers
Continue to develop performance
management and benchmarking to
highlight areas for improvement and
success
By the conclusion of this plan period, have
an office structure which supports and
enhances the services we provide to our
customers
Continue to fully utilise the capacity and
capability of our existing Information
Technology (IT) systems
Provide modern information systems that
support effective service delivery
Improve our website
Introduce a comprehensive procurement
management system
Sustain Business
We will:
Secure the long term funding of the
Association, and maintain its financial
viability
Invest in existing stock over the five year
lifetime of this plan
Achieve SHQS compliance by 2015
Continue to pursue opportunities to
deliver other or additional services
Achieve our Key Performance Indicator
(KPI) targets
Remain an independent national housing
association and explore partnerships with
others
Invest in our staff to show our
commitment to them and to ensure they
are fully committed to the Association
Continue to drive efficiencies in operating
costs through procurement, partnerships
and new ways of working
Continue to reduce our management
costs and overheads including office
accommodation
Continue to review operational risk
management and act on plans as a result.
Develop a Business Continuity strategy
Pursue organic growth through
development and partnerships
Undertake a comprehensive rent review
Continue to evaluate the impacts of the
Welfare Reform Act and establish plans to
mitigate the changes on our business and
customers
We have:
Implemented the ‘A Better Cairn Action
Team’ programme to improve internal
communication, staff engagement and
quality services
Achieved ‘Committed to Excellence’
accreditation from Quality Scotland
Reviewed our structure to ensure we
were best placed to meet our future
challenges and seize opportunities
Reviewed our governance arrangements
to ensure they are fit for purpose and
meet the Scottish Housing Regulator’s
requirements
Implemented our IT strategy
We have:
Critically evaluated the cost of our Care
Homes, Very Sheltered and Sheltered
services and assessed options for their
future
These priority tasks are linked to the key
objectives and are used to build Service Plans.
These monitor the performance and
measurement of the tasks undertaken by
teams, senior management and the Board as
appropriate. The main areas of focus for this
year can be found within the Strategic Goals
section of this document.
6
STRATEGIC GOALS
In this section you will find an overview of our
strategic goals. These are our main areas of
focus for 2014/15.
Customer Excellence
To have implemented a contact centre
solution and improved our approach to how
we collect, store and report on information
about our customers. To have implemented a
system of proactive and regular customer
satisfaction surveys which will ensure that
action is taken and individual feedback is
provided to customers.
Performance and Regulation
To have continued the review of our Care and
Support services, including our care homes.
To have reviewed our approach to
performance reporting and made progress
towards top quartile performance in all ARC
indicators, including 100% SHQS compliance
by 31st March 2015. To have achieved
budgeted performance in 2014/15 and
interest cover covenant compliance of 120%.
Knowing our properties
To have developed a comprehensive asset
management strategy and considered the
establishment of a property standard that
exceeds minimum regulatory requirements
and meets the aspirations of our customers.
Active in the Community
To have developed our approach to accessing
external funding and initiated new
business/social enterprise projects in
communities in which we operate.
A Better Cairn
To have improved communication and
engagement levels with our staff and invested
in their development. To have increased our
self awareness and become more outcomes
focussed. To have validated our efforts
around continuous improvement and
employee engagement by achieving the Best
Companies One to Watch Status. To have
reviewed our approach to people
performance management.
Growth and Partnerships
To have continued to look at opportunities for
growth through partnership working with
other organisations.
7
Organisational Structure
We are a registered Charity and an Industrial
and Provident Society and are governed by a
voluntary Board.
The following diagram provides an outline of
our main governance and management
structures within Cairn Housing Association.
Cairn Homes and
Services Ltd
Customer
Panel
Board
Audit and
Compliance
Remuneration
Committee
Board Structure
Chief Executive
Director of
Finance and
Investment
Director of
Customer Services
Executive Team Structure
Organisational Diagram
Formal control of our Association rests with
the Board. The Board currently has 13
members. The members are drawn from a
cross section of the community, including our
customers or those with specific business
expertise.
8
Director of Business
Services
Delivering on our mission is not quite so
simple, but our dedicated staff team strive on
a daily basis to ensure we deliver a quality and
professional service which provides excellence
and value for money to our customers.
Past Present & Future
Our Association was formed as an
independent Scottish organisation in 1990.
Prior to this it had been the Scottish arm of
the Royal British Legion Housing Association,
with the primary purpose of housing and care
of former armed forces personnel in sheltered
housing. In 1992 we changed our name to
Cairn Housing Association and expanded our
range of affordable housing.
Over the last ten years, we have focussed on
developing new properties throughout
Scotland, working with local authorities and
other partners to meet housing needs.
As we move forward with this plan, we are refocussing our energy and finances to improve
the housing stock we have. We will however
continue to explore opportunities for new
build development.
In 1996, after a tenant ballot, we acquired 850
properties from Scottish Homes in the
Highlands. Since then, through a variety of
means including transfers of engagements,
stock transfers and our new build
development programme, the stock has
grown from 916 homes in 1990, to 2,351 in
2002, to a current holding of almost 3,500. In
addition to rented homes, we also offer
shared ownership and shared equity products
as well as a range of specific accommodation
and care solutions for special needs groups.
The bulk of our current operational activity is
focussed on landlord services and housing
support. We currently find ourselves under
increasing financial pressures relating to our
housing support provision, as funding for this
is constrained. We are however committed to
provide quality services, and as such we will
only continue to deliver services where we
can guarantee quality will be maintained, as
judged by our customers.
We employ 244 staff and have an annual
rental income of £11.6m with total income of
£14.2m.
We believe the future holds a number of
challenges, as well as opportunities.
Continuous improvement and innovation are
vital to our future success. Cairn is in a strong
position to rise to these challenges and intend
to continue to provide homes and services in
all our areas of operation.
We are a registered housing association with
charitable status. Our rules are based on the
Scottish Federation of Housing Associations
(SFHA) Model Rules (Scotland) 2013, and we
are registered under the Industrial and
Provident Societies Act 1965.
As a not-for-profit housing association, we are
registered with and monitored by The Scottish
Housing Regulator and manage our housing
through principal offices in Edinburgh,
Inverness, Glasgow, Coatbridge, Thurso and
Wick.
Our mission is simple: “To provide good
quality affordable homes and services in
communities where people want to live.”
9
Lenders
Stakeholders
As a charitable “not-for-profit” organisation,
we are reliant on money received from
Lenders to support both the building of new
homes and the refurbishment of existing
stock. Communicating with this group of
stakeholders and providing them with
relevant, accurate and timely information is
vital.
We are a national housing and support
provider.
Customers
There are various names for our customers,
“Tenants”, “Residents”, “Service Users” being
just some of them. Whatever term is used,
our focus is on delivering the best possible
services and developing meaningful
relationships between ourselves and our
customers.
Partners
We work with a number of partners on a
variety of initiatives. These relationships are
vital to us and allow us to learn from others
whilst increasing the volume of our collective
voice.
This is the group of stakeholders for which we
exist. These are the people that we build
homes for and deliver services to. Our
customers are the basis of our Association
and as such are the most important
stakeholder group.
Scottish Government
As a publicly funded body, we provide services
on behalf of the public sector in Scotland. As
such, the Scottish Government have a vested
interest in our activities. It is important that
we provide Government with any requested
information in a timely fashion. It is also
important that we seek to influence the
Government on housing policy and related
issues such as health and social care for the
benefit of all our stakeholders.
Staff
Our staff team are vital to all that we do as an
organisation. We are only as good as those
who deliver services on our behalf. It is vital
that we provide appropriate incentives,
support and rewards to our staff in return for
high levels of performance and high levels of
professional behaviour. We will focus on
improved communications with all groups of
staff.
Suppliers
We work with a number of suppliers,
contractors and developers throughout
Scotland, and have developed a good
relationship with all our suppliers.
Local Authorities
We work in 24 local authorities across
Scotland. The customers we serve are also
customers of the local authority therefore the
local authority group have significant interest
and influence on our work. We will maintain
and develop our existing good relationships
with local authorities and strive to develop
and build new relationships.
Regulation
As we receive public money, it is only right
that we are subject to scrutiny by public
bodies to ensure we are delivering value for
money and that we are operating effectively
and efficiently.
Providing this group of stakeholders with
accurate and timely information and evidence
is essential.
We have a partnership agreement with Jewson for
Cairn HomeWorks
10
PRODUCTS AND
SERVICES
Sheltered Housing
Sheltered housing is provided to rent for
people aged 60 or over or those
demonstrating a particular need, living
independently in their homes, who would
benefit from a housing support service. One
of our strategic goals for 2013/2014 was to
consult with stakeholders on the
redesignation of 15 sheltered housing
locations to retirement housing. This is well
underway and will continue during 2014/15.
We provide a range of housing and services.
General Needs
General needs housing is provided for single
people, couples and families to rent in a wide
range of developments throughout Scotland.
Very Sheltered Housing
Very sheltered housing is provided to rent for
older people who are less independent and
who benefit from housing support for
personal care needs. This service was
reviewed during 2013/14 and a decision was
taken, in consultation with residents, the City
of Edinburgh Council, local councillors,
politicians and other partners, to transfer the
service to a new provider. The transfer is
anticipated to take place in mid 2014.
Milton of Leys, Inverness
Shared Equity and Shared
Ownership
Shared equity and shared ownership are
Government initiatives which assist people to
become homeowners by building properties
that are regarded as affordable. In addition
there is an advantage to the householder of
owning a percentage of the equity of the
home.
A tenant at Falconer Court in Inverness
Amenity and Retirement
Housing
Amenity and Retirement housing is provided
for people aged 50 or over living
independently in their homes.
11
Care Homes
Care and Repair
Care homes are registered with The Care
Inspectorate and provide a warm and homely
environment for very frail older people. Highly
experienced and qualified staff provide full
personal care and support to ensure a high
quality of life for residents in their later years.
These care homes will be subject to review in
2014.
The Care and Repair team in the Highlands is
responsible for providing a technical and
administrative service to assist older and
disabled people in private sector
accommodation to remain living in their
homes in comfort and safety and to assist
other sections of the community with
property improvements.
Cairn HomeWorks
Customer Involvement
Cairn HomeWorks launched in July 2012, to
provide an in-house repairs and maintenance
service in the Highlands.
Customer involvement is afforded a high
priority within our Association. Supported by
our dedicated Communications and
Engagement Team, we employ a variety of
means to increase and enhance our customer
participation. At the centre of our approach is
our innovative Customer Panel that provides a
new level of engagement and customer
scrutiny. Mystery Shopping, Satisfaction
surveys, Registered Tenant Organisations,
Customers’ Forums, working groups and our
Annual Tenant Conference are all ways in
which we seek our customers’ views so we
can continue to improve our services.
This ambitious change to how we deliver
maintenance services in the North is a great
opportunity to deliver the service that meets
our customers’ expectations.
Members of the Customer Panel interviewing Rory
Gaffney, Director of Business Services, as part of
their scrutiny project into complaints
Our HomeWorks service has proven to be
extremely popular with customers
12
Supported Housing and
Special Lets
Welfare Benefits Advice
Ensuring our customers have appropriate
advice on benefit entitlement and, where
necessary, assistance with applying for
benefits is a key role for our dedicated
Welfare Benefits Advisor.
We act as landlord to voluntary agencies,
where properties are let to meet specific
needs through supported housing, leases or
special lets. These types of accommodation
cater for a range of people with special needs
including autism, mental health issues and
physical disabilities. We also provide
accommodation for women at risk of
domestic violence and provide crisis centres
and associated outreach services.
Provision of Back Office
Functions
We already provide IT hosting services to
other Housing Associations. Over the course
of this business plan we will look to develop
our provision of Back Office functions further.
Housing in East Lothian
Flora MacDonald House
Flora MacDonald House provides
accommodation and housing support for
single homeless women aged over 16 living in
the Highlands. The staff team provide a range
of housing advice and general support to
service users in a safe and secure
environment. In particular work is undertaken
to ensure residents have the skills and
confidence to manage an independent
tenancy when they move on.
Maggie, our Benefits Advisor, leading a workshop
at our customers’ conference
Money Advice Service
A specialist money advice service is provided
by the Flora MacDonald House team to our
customers living in the Highland region. The
team assist customers with debt
management, income maximisation, specialist
welfare rights advice and setting up a new
tenancy.
13
Demand
OPERATING
ENVIRONMENT
In the vast majority of cases, there is
significant demand for our homes and
services, particularly in the wake of the
economic recession and reductions in public
finances.
Customer Profile
We are committed to getting to know our
customers better so that we can tailor our
services to the needs of the people who rent
homes from us.
However, some of our accommodation, for
older people in particular, is no longer
attracting adequate levels of interest from
prospective customers because of its lack of
contemporary facilities and/or location.
These high risk properties have been
identified within the context of both our Asset
Management and Care and Support
strategies, and during the life of this plan,
decisions will be taken as to how we deal with
them.
This process of getting to know our customers
better involves improved data collection and
production of reports that show patterns of
characteristics based on age, household
compositions, income levels, employment and
disability status. We already know a great
deal about our customers but we aim to build
on this knowledge as a means of improving
our services.
In light of the UK welfare reform agenda,
demand profiles will be kept under regular
review.
Below we highlight some general
characteristics about our existing customers:
Around 49% of customers are over 60
years of age
Around 80% of customers live alone or
with one other person
Around 49% of customers are dependent
on housing benefit to pay all or some of
their rent
Around 23% of customers are in receipt of
support and/or care
Wester Inshes,Inverness
14
New Services and Homes
Welfare Reforms
There are significant challenges to the future
public funding of new homes and services by
housing associations across Scotland. We will
continue to explore new development
opportunities in selected parts of the country.
We will explore opportunities to provide mid
market homes.
The Welfare Reform Act has been described
as the biggest change to the welfare state for
people of working age since 1945.
We recognise that many of our customers
receive a range of benefits and tax credits and
may be affected by the changes. Of particular
concern to us are the:
We will devote a significant proportion of our
financial resources to funding our major stock
investment programme during the period of
this business plan, and will assess our capacity
to provide funded services on a continuous
basis. Our housing re-let standard will be
reviewed to ensure we continue to provide
homes of the highest quality.
Changes to the number of bedrooms a
household is entitled to claim for through
Housing Benefit
Direct payment of Housing Benefit to
customers
We recognise that these changes have the
potential to impact on our income through
greater levels of rent arrears and void loss. In
preparation for these changes we:
Our focus in the plan period will be on
creating efficiencies in our service delivery to
create more capacity to improve the quality of
what we do whilst exploring opportunities to
develop new working practices and services
where appropriate. We will always remain
alert to opportunities and/or need to develop
new services or products recognising the
uncertain climate in which we work and the
constant need to adapt our business practices
and plans to meet the changing housing and
care needs of society and local communities.
Shared services and other partnership
arrangements will be part of that approach.
Undertook work to assess the numbers of
customers who may be affected by the
various changes
Communicated the changes to staff and
customers
Set aside money in our training budget to
ensure staff are able to advise customers
Identified a range of policies and
procedures which require review given
the changes
Assessed the potential financial impact of
the changes on our business
Appointed a specialist Benefits Advisor to
provide advice and information to
customers and staff
Our work continues in this area so we are able
to support our customers through the
changes and minimise the impact the changes
will have on our business.
15
Keeping our rents affordable forms part of our
mission statement. Our affordability mitigates
some of the risks associated with current
welfare reform issues, as well as giving us an
opportunity to realign our rents to generate
additional revenue in future years. In 2014/15
we are increasing rents by 2.9%.
Benchmarking
We are members of two specialist
benchmarking groups focussing on housing
management issues.
A report is presented annually to the Board in
order that trends can be identified and
adverse material variances addressed. Use is
also made of the Scottish Housing Regulator’s
published statistics to enable comparison with
the overall Scottish housing association
sector. Particular attention is paid to this data
at the time of considering future rental policy
to ensure that we are within reasonable
sector parameters.
Our stock has grown in a number of ways over
the years, including stock transfer, traditional
HAG assisted new build homes, and transfers
of engagements. This has led to a degree of
variation in rent levels for similar homes
throughout the portfolio. In order to address
this we started a comprehensive rent review
process during 2013/14. The outcomes of this
review will be implemented during 2014/15.
During 2013/14 we became members of the
HouseMark benchmarking service. This is in
addition to our membership of the Scottish
Housing Best Value Network. Benchmarking
services enable us to maximise value for
money across all aspects of the business and
compliment our approach to continuous
improvement in performance.
Fort Augustus
Residents at Madelvic Square, Edinburgh
16
Shown below are the results of our Strengths, Weaknesses, Opportunities and Threats analysis
(SWOT) and Political, Economic, socio-cultural and Technological (PEST) analysis. These represent an
examination of the environment in which we operate – external and internal.
Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis
Strengths
Opportunities
National dimension – 38 staffed locations
in 24 local authority areas
Effective governing body and governance
framework
Awareness of priority issues and plans to
tackle them
Experienced staff team
Current financial robustness
Major producer of new homes with track
record
Capacity to address variety of diverse
client groups
Successful partnership working record
Focused tenant/customer involvement
and participation
Current and future investment in IT
Corporate appetite for change and
improvement
More collaborative working with partners
Increase in housing demand
Tenant Participation
Corporate appetite for change and
improvement
Organisational scale to accommodate
structural change to facilitate better
working practices
Improve service delivery through better
use of existing IT facilities
Service Plans
Threats
National dimension – 38 staffed locations
in 24 local authority areas
Rising interest rates and borrowing costs
Pension Liability
Low demand properties
Reduced capacity to increase income from
rents
Severely restricted public finance for
capital and revenue functions, particularly
special needs groups
Marginalisation of national HAs both in
stock management and new homes
provision, and HA sector rationalisation
Increasing regulatory requirements and
associated costs
Loan debt repayment capability
Viability of sheltered housing and care
services
Welfare Reform Act
Fuel poverty
Changes to funding stage 3 adaptations
Weaknesses
Overhead costs
Reliance on subsidy for new home
production
Capacity to invest annually in existing
stock
Differential in performance in North and
South areas
Inconsistent performance management
culture
17
Political/Legal, Economic, Socio-Cultural and Technological (PEST)
Analysis
Political/legal
Change in Westminster and Holyrood
administrations
2014 referendum on Scottish
independence
Change to housing legislation
Change to housing benefit system
Change to government investment
strategy, development programme
priorities or subside rates
Change to Planning Reform
Scottish Housing Quality Standard (SHQS)
National Rent Policy
Equality and diversity agenda
Environmental stewardship
Sustainability
Value for money
Changes to the Regulatory Framework
Socio-cultural
Demographic change
Migration
Peoples’ expectations
Equality and Diversity
Consumerism
Rural services
Crime and antisocial behaviour
Training and education
Technological
Energy efficiency requirements
Dependency on computer systems
Building standards
Partnering
Shared services
E-government
Accessibility of information for diverse
groups
Systems development and complexity
Economic
Need to fund pension costs
Interest rate fluctuations
Inflation/deflation
Unemployment levels
Competition for funding – Housing
Association Grants (HAG) and private
finance.
Stability of private lenders
Availability and stability of private
contractors
Rising costs
Fuel poverty
Access to mortgage finance
Flexibility of labour market
Poverty and deprivation
Diversification
18
STRATEGIC KPIs
Performance – the management and improvement of - is a core area of focus for us. We have
performance indicators and targets in place at various different levels within the organisation. The
KPIs listed here are our strategic KPIs. The targets outlined in this section reflect our commitment to
continuous improvement and our longer term aim to achieve top quartile performance against our
peers.
Key Performance Indicator
Target
Emergency (24 hours) response repairs completed to
target
Non emergency (routine & urgent) response repairs
completed to target
Percentage of appointments kept
99%
First time fix
92%
Overall customer satisfaction (all services)
90%
Percentages of complaints responded to within target
timescales
Planned Maintenance spend vs. budget profile
100%
Scottish Housing Quality Standard compliance
100%
Properties with gas safety certificates
100%
Interest cover
120%
Staff absence
3.25%
Rent loss due to voids as a percentage of debit
1.5%
Total arrears as percentage of debit (current)
3.68%
98%
99%
100%
Average turnaround times of new lets*
25 days
Hours of training per staff member
14 hours
Staff satisfaction with training
70%
Number of ABC Improvement Team Actions
implemented
Overall staff engagement (Best Companies Survey)
19
24
‘One to watch’ status
STRATEGIC RISK
MANAGEMENT
We will be proactive in working to contain and
limit the risks to which our organisation is
exposed.
As we work towards achieving our corporate
objectives for the life of this plan, each
activity we undertake will bring its own
particular area of risk. We will regularly
identify and appraise risks, taking a prudent
approach to managing them.
In our management of risk we:
Recognise that risk responsibility rests
with the Board
Comply with all statutory, regulatory and
good practice requirements
Adopt structures which delegate authority
to the appropriate level for risk
management of various activities
Adopt, implement and regularly review
key policies
Support Board members and staff with
risk training
Employ a programme of internal audit to
assist in risk identification
Obtain verification from external auditors
of the statements of internal control
To enable risk management reporting,
identified risks need to be assessed and
evaluated in terms of the likelihood or
probability of the risk occurring and the
impact that such an occurrence would have.
We have developed a Strategic Risk Register
which identifies the risks to our business plan
and the achievement of our strategic goals.
This includes the actions that we are and will
take to mitigate these risks. The Strategic Risk
Register is reviewed on a regular basis by our
Audit and Compliance Committee and Board.
20
To help us focus on the task in hand we have
created our ‘A Better Cairn’ programme or
ABC for short. ABC is all about how we
improve our organisation, both now and in
the future. This is centred on the use of selfassessment to identify and drive
improvement action planning, with the use of
external validation to bring independent
challenge to the process.
CONTINUOUS
IMPROVEMENT
As an organisation we are committed to the
principles and practice of continuous
improvement. We have, are, and will continue
to strive for improvements in all that we do.
This includes:
During 2013 we undertook a self-assessment
and validation process under the EFQM
framework, carried out by Quality Scotland.
This resulted in our achievement of
Committed to Excellence status.
Improvements in the products and
services that we supply our customers, as
well as how we supply these
Improving the way in which we
communicate with our customers, staff
and other key stakeholders
Improving our internal processes and
systems to realise greater and greater
efficiencies and productive working
practices that create more value for our
customers and a richer working
environment for our staff
2013 also saw us take the development of our
ABC programme to the next level with the
introduction of ABC Action Teams. These
teams are made up of staff from across the
organisation that come together to focus on
the delivery of change that will help us to
achieve sustained performance improvement.
Dalneigh, Inverness
21
of the actions that underpin these
components will enable us to improve IT
integration, improve business information and
processes, extend access to our information
and services and ensure that we only invest in
IT where there is a business benefit.
OPERATIONAL
INFRASTRUCTURE
As a national housing association we have
adopted the principle of delivering products
and services as locally as possible. With a
presence in 24 local authority areas in
Scotland, there are inevitable constraints. We
are however, committed to this concept and
to investigating and implementing better
ways in which we can deliver our products
and services locally. This may involve a
rationalisation of offices over the life of this
plan, with a greater emphasis on mobile staff,
shared services and better use of mobile IT.
Corporate
Objectives
i
un
s
t ie
s
e
tiv tem
ec ys
Eff on S
a ti
or m
Inf
Su
n
ai
st
s
Bu
ble e
na
tai ctur
s
Su astru
r
Inf
m
om
D
C
Ac
hi
e
Im ve
pr C
ov on
e
m tinu
en ou
t
s
s
es
in
in
There are presently 6 offices in Edinburgh,
Coatbridge, Glasgow, Inverness, Wick and
Thurso to deliver our services. We recognise
that operating from 3 offices within the
central belt, represents a significant overhead
cost burden which we will reduce through a
process of rationalisation.
IT
Strategy
ng
rki
Wo s
nt
e
icie ractic
P
Premises
ed
ss
cu
Fo
r
me
E ff
sto
Cu
a
st
Su
el
iv
Ex e r
ce Cu
lle sto
nc m
e e
r
IT Enabler
Key IT Components
Additionally, some of the offices are no longer
deemed to be fit for purpose by reason of
access and facilities.
Sustainable
Technical
Infrastructure
By 2017 we will have an office structure which
supports and enhances the services we
provide to our customers.
Improved
Customer
Access
Information Technology (IT)
Sustainable
Business
Infrastructure
IT Strategy
Flexible and
Proactive
Reporting
We have developed an IT Strategy to describe
how we intend to use technology over the
next few years to promote innovation and
efficiency, drive service improvement and
maximise the potential to deliver quality
services to our customers.
Integrated
Information
Systems
IT Enabled
Processes
The IT Strategy has taken our corporate
objectives and determined a number of coordinated IT components that collectively
form key enablers of our Business Plan (see
diagram across the page).The implementation
22
Mobile &
Other Modes
of Working
In order to achieve this strategy, and support
a programmed approach to business change,
a number of broad high level actions have
been identified. These will be delivered
through an annual action plan, which will be
implemented through the Service Planning
process.
These six areas of work will be progressed via
the following actions:
Review our staff structure to ensure we
are serving our customers as efficiently
and as effectively as possible
Monitor our staff efficiency against our
peer group and Key Performance
Indicators (KPIs)
Undertake a staff engagement survey and
monitor performance against KPIs for the
life of the Business Plan
Review our Absence Management policy,
procedures and monitoring systems and
support managers to achieve a sustained
reduction in employee absences
Review our current reward systems and
assess the introduction of an element of
performance related pay
Develop our existing employee
information systems to provide excellent
management information and
employment related KPIs
Create a framework for training and
development based on attitudes, skills
and knowledge relevant to the role in
question
Continue the roll out of vocational
training to meet Scottish Social Services
Registration requirements
Continue to roll out e-learning solutions
to meet diverse training needs
Review our complaints handling
procedures to ensure they meet statutory
requirements and support organisational
learning
Revise the Health and Safety Manual and
ensure all risk assessments and fire risk
assessments are up to date
Introduce Health and Wellbeing initiatives
Progress towards Investors in People
accreditation
Review work life balance policies to
ensure equality of application
Carry out procurement exercises to
achieve greater efficiency in:
o Recruitment advertising
o Employment Law Service
o Stationery
o Recruitment of Temporary
Staff
People
A knowledgeable, engaged and well trained
staff team underpins the provision of
excellent services to our customers. We
recognise the value of all of our staff and are
committed to achieving a culture of staff
engagement, innovation and empowerment.
During the life of this Business Plan we will
develop and implement a people strategy to:
Ensure our staff are providing an excellent
service as efficiently as possible, by
providing them with the right tools to do
their job and monitoring customer
satisfaction
Attract professional and high performing
staff to match the needs of our service
Retain and support staff at all levels
within the Association
Seek continuous improvement through
structured learning and development
Promote and maintain the health, safety
and well being of all our staff
Promote equality of opportunity in our
employment
Staff took part in a cycle from Edinburgh to
Inverness, in partnership with Jewson, to raise
money for Barnardos.
23
Customer Service Excellence
As an organisation we are always striving to
provide the best service to our customers. We
are committed to the pursuit of service
excellence and will develop our approach to
this over the life of this plan.
We will positively embrace the new Scottish
Housing Regulator’s Social Housing Charter
requirements and provide annual updates to
our customers on how we are performing
against these National Charter Standards.
Cairn staff raised more than £5,000 for Maggie’s
Centre, a cancer charity in Edinburgh.
In 2013 the Board approved our first
Customer Excellence Strategy. This contains a
detailed and ambitious action plan that we
look forward to delivering on over the coming
years.
We achieved Committed to Excellence status by
the EFQM
24
Customer Involvement
The development of customer involvement
within our Association will continue to be a
strategic priority. Continually developing and
expanding opportunities for participation with
our customers is fundamental in relation to
improving the quality of our housing services.
Our key aim is to ensure that we are putting
our customers first and we have placed a high
emphasis on working together with our
customers to ensure their views are heard
and acted upon.
Over the life of this Business Plan, we will:
Review our Tenant Participation Strategy
and Action Plan
Continue to support our new Cairn
Customer Panel to scrutinise performance
and provide recommendations for
improvements
Continue to develop our Mystery
Shopping team to provide feedback on
customer services
Support Registered Tenant Organisations
to build their capacity for effective
involvement, and we will encourage and
support individual customers to form
Registered Tenant Organisations
Continue to promote membership of the
Register of Interested Customers to
ensure this group is representative of the
tenant body
Continue to support Customer Focus
Groups to discuss and address specific
issues of shared interest
Maintain a Calendar of Consultations and
Events
Provide clear information on our services,
and performance in tenant participation,
to all stakeholders
Ensure that individual customers and
tenant groups are given opportunities to
influence key decisions
Work to remove all barriers to tenant
participation and we will develop
methods of engaging with hard to reach
groups and individuals
Our customers’ conference for the north of
Scotland, September 2013
25
ASSET MANAGEMENT
STRATEGY
Context
One of our objectives for 2014/15 is to revise
our Asset Management Strategy.
A considerable amount of work has been
undertaken to improve our stock data and
management systems. We now have more
accurate stock condition information, which
covers a 30 year period. The primary focus in
the AMS is on the life of this plan. Planning
investment in our housing stock based on
good investment principles, including:-
We currently own and manage over 3500
properties throughout Scotland. In addition to
operating over a wide geographic area, the
stock types and client groups we cater for are
varied.
Our stock also varies in age and condition and
with changing needs and aspirations of
customers, it is important to ensure that we
continue to provide good quality affordable
homes and services in communities where
people want to live.
Value for money
Property option appraisals where;
The investment needed seems
excessive
Future demand is causing concern
There are other issues with current
stock
Engagement with key stakeholders to
inform investment decisions.
In order to meet our objectives, our Asset
Management Strategy (AMS) has evolved
from a framework for making investment
decisions into a more comprehensive
document providing a clearer understanding
of our stock characteristics:
Its condition
Its popularity with existing and potential
client groups
The popularity of particular geographic
locations
The AMS document is a “living document”
which helps to influence our strategic and
corporate objectives.
Analyses of stock surveys previously
undertaken and information provided by
customers and staff, have provided a clearer
understanding of the works and associated
finances required for us to bring existing
properties to our own standards, which will
exceed the requirements of the Scottish
Housing Quality Standard (SHQS).
Fort Street, Motherwell
26
Asset Management Strategy
Actions
Scottish Housing Quality
Standard
The key actions to emerge from the AMS are
to:
The Scottish Government set social housing
landlords a target of achieving Scottish
Housing Quality Standard (SHQS) compliance
in all of their stock, by 2015. This standard
specifies certain requirements and we are
comfortable that the updated stock data
information has captured our requirements,
and that we can undertake the necessary
works to achieve the standard by the end of
March 2015.
Meet our own standards, the Scottish
Housing Quality Standard and the
aspirations of our customers
Continue to look at growth opportunities
through new build development
Continue to review underperforming
assets to determine whether future
levels of investment represent sound
decisions
Review the geographic spread of our
stock locations, to determine whether or
not we are best placed to provide the
level of service expected by customers,
efficiently.
Review the suitability of sheltered
accommodation assets for their intended
purposes, when revenue support grants
are reducing.
To review the suitability of care and
support assets for their intended purpose
and resource implications, resulting from
a more stringent/ demanding regulatory
requirement and fluid funding climate in
revenue terms.
Improve the methods of delivery of
development and asset management
services making use of new technology.
Continue to evaluate the external
environment and evolving markets, to
identify opportunities to grow or provide
alternative services and products.
We are on target to meet 80% compliance by
end of March 2014 and 100% compliance by
March 2015.
Munlochy, in the Black Isle
27
FINANCIAL STRATEGY
Current Position
Objectives
A critical element of sound business planning
is the assurance that the organisation remains
in good financial health to enable it to achieve
the key objectives previously highlighted in
this plan.
The key financial objectives underpinning the
thirty year projections are to:
Secure the long term financial viability of
the Association
Ensure funding is available to secure the
investment of up to £18m required to
maintain and enhance our existing stock
Seek overhead efficiencies
Ensure that all individual activities
undertaken by the Association at least
break even, and that any short term
deficits are explicit and transparent to
both the Executive Group and the Board
Deliver best value for our customers
Sustain the Association’s financial
reputation
Ensure compliance with loan covenant
requirements from all our lenders
We have a 30 year corporate financial plan
covering the period from 2014/15 to 2043/44.
The underlying financial forecasts are broken
into a detailed annual budget, five year
projections, and thirty year financial
projections. Each set of projections includes
an income and expenditure account, balance
sheet and cash flows. An extract of the thirty
year projections which incorporate both the
annual budget and five year projections are
included in appendix 1 to this business plan.
Financial planning within our Association is a
dynamic process, with sensitivity analyses
undertaken during the plan preparation and
reviewed regularly. This financial plan shows
how we will meet the costs of achieving our
key objectives and it details the associated
income and expenditure assumptions over the
next thirty years.
The financial projections are consistent with
the requirements of the Scottish Housing
Regulator and our lenders, The Royal Bank of
Scotland, Santander Bank and the
Dunfermline Building Society.
Staff at a renaming ceremony for regenerated
homes in Wick
28
Financial Assumptions
Scenario Planning
Our financial projections are based on the
following base assumptions over the life of
the plan:
It is important that we can respond to any
changes in the assumptions detailed above.
Sensitivity analyses and stress tests on the
financial projections have shown how the
financial position would handle material
changes to the income and expenditure
assumptions. The following sensitivities were
considered.
Inflation or Consumer Prices Index (CPI)
runs at 2%pa
There will be an investment in planned
maintenance of up to £17.5m in the first
five years of the plan
Scenario 1: Rent increases
reduced by 0.5% per annum
Millions
Investment in Existing Stock
Scenario 2: LIBOR increased by 1%
per annum
£4
£3
Scenario 3: Voids increase by 2%
per annum
£2
£1
Scenario 4: Inflation 1% higher
than Business Plan per annum
£0
The results of these sensitivities are included
as appendix 2 to the plan, and are measured
against the base projections as well as the
covenants set by the lenders. The sensitivities
illustrate that we would be able to meet our
loan obligations whilst accommodating these
challenges.
Annual rent increases are based on CPI
plus 1% until 2023 and CPI thereafter
Bank Interest rates increasing to 4.5% by
1st April 2019 and remaining at that level
Pension costs incorporate past service
deficit costs, as well as ongoing defined
contribution and auto enrolment costs
Welfare reforms have been incorporated
within our anticipated arrears figures
We will develop our land bank holding
over the next five years and recommence
a low level development activity
A full set of financial forecasts has been
produced for each of these scenarios, and is
available on request.
If more challenging scenarios arose we would
review our spend profile to ensure that
banking covenant compliance was
maintained. The process of covenant review
and cash flow monitoring is undertaken on a
monthly basis and reported to our Board
quarterly.
We believe that these assumptions are
prudent and are designed to protect the
Association from external fluctuations.
29
Private Finance
Cairn Homes and Services Ltd
Private finance from the Association’s lenders,
The Royal Bank of Scotland, Santander Bank
and the Dunfermline Building Society is used
to fund our business plan. Current funding
facilities of £48 million exist and we will
continue to draw from these sources as we
progress with our enhanced investment
programme. We have capped our borrowing
levels at £50 million.
Cairn Homes and Services Ltd was established
in 2007 to provide a vehicle to augment our
provision of new homes by engaging in
housing for sale, market rent and mid market
rent opportunities to cross subsidise our
social rent provision. It also gives access to
land that otherwise might be too expensive
for social rent provision alone. Given our
charitable status, a non charitable vehicle is
required to carry out such activities, namely
Cairn Homes and Services Ltd.
Our borrowing is financed on both fixed and
variable interest terms; 56% of the current
debt is on fixed interest rate terms at present.
We will continue to explore opportunities to
use this vehicle for potential business
development opportunities in the future.
The existing loan agreements carry with them
financial covenants, and we closely monitor
these to ensure compliance.
At present this company remains dormant.
Our financial projections show full compliance
with all loan agreements, including the
repayment of capital within the time period of
the borrowings.
30
Appendix 1
Income and Expenditure
Extract of Income and Expenditure Account
from the 30 year financial projections.
2014/15
2015/16
2016/17
2017/18
2018/19
2023/24
2028/29
2033/34
2038/39
2043/44
Rental Income
Service Charges
Other
Total Income
£m
12.2
2.3
1.1
15.6
£m
12.7
1.8
0.4
14.9
£m
13.0
1.9
0.5
15.4
£m
13.4
1.9
0.6
15.9
£m
14.0
2.0
0.5
16.5
£m
16.3
2.3
0.7
19.3
£m
18.5
2.5
0.7
21.7
£m
20.8
2.8
0.8
24.4
£m
23.5
3.1
0.8
27.4
£m
26.4
3.4
1.0
30.8
Operating Costs
Interest Costs
Total Costs
14.0
1.5
15.5
13.3
1.5
14.8
13.6
1.7
15.3
14.0
1.8
15.8
14.1
2.2
16.3
15.8
3.0
18.8
17.1
3.5
20.6
18.8
3.6
22.4
20.7
3.4
24.1
22.7
2.8
25.5
Surplus/(Deficit)
0.1
0.1
0.1
0.1
0.2
0.5
1.1
2.0
3.3
5.3
2016/17
2017/18
2018/19
2023/24
2028/29
2033/34
2038/39
2043/44
Balance Sheet
Extract of Balance Sheet from the 30 year
financial projections.
2014/15
2015/16
£m
62.3
£m
63.6
£m
64.0
£m
64.9
£m
66.0
£m
70.7
£m
76.6
£m
83.1
£m
90.3
£m
96.7
5.4
(4.8)
6.1
(4.8)
3.6
(4.8)
5.7
(4.8)
3.9
(4.9)
3.8
(4.8)
3.7
(4.8)
3.5
(4.8)
6.3
(4.8)
15.4
(4.8)
0.6
1.3
(1.2)
0.9
(1.0)
(1.0)
(1.1)
(1.3)
1.5
10.6
62.9
64.9
62.8
65.8
65.0
69.7
75.5
81.8
91.8
107.3
(42.5)
(44.4)
(42.2)
(45.1)
(44.1)
(46.7)
(48.8)
(47.1)
(44.7)
(36.0)
Net Assets
20.4
20.5
20.6
20.7
20.9
23.0
26.7
34.7
47.1
71.3
Retained Surplus
Surplus for year
20.3
0.1
20.4
0.1
20.5
0.1
20.6
0.1
20.7
0.2
22.5
0.5
25.6
1.1
32.7
2.0
43.8
3.3
66.0
5.3
Net Assets
20.4
20.5
20.6
20.7
20.9
23.0
26.7
34.7
47.1
71.3
Fixed Assets
Current Assets
Current
Liabilities
Total Assets
Loan Balances
31
Cash Flow
Extract of Cash Flow from the 30 year financial projections.
2014/15
2015/16
2016/17
2017/18
2018/19
2023/24
2028/29
2033/34
2038/39
2043/44
£m
1.7
£m
1.8
£m
2.1
£m
2.2
£m
2.6
£m
3.6
£m
4.6
£m
5.6
£m
6.8
£m
8.2
(1.5)
(0.3)
(1.5)
(1.5)
(1.7)
(0.7)
(1.8)
(1.1)
(2.2)
(1.1)
(3.0)
(1.2)
(3.5)
(1.3)
(3.6)
(1.4)
(3.4)
(1.5)
(2.8)
(0.1)
(2.1)
(2.2)
1.9
0.7
(2.1)
(2.4)
2.9
2.2
(1.1)
(1.8)
0.6
0.0
(1.7)
(1.9)
(1.4)
(0.8)
(0.4)
1.5
0.0
5.3
Balance b/f
4.8
2.6
3.3
0.9
3.1
1.0
2.8
1.5
3.5
7.4
Balance c/f
2.6
3.3
0.9
3.1
1.3
1.0
0.9
0.7
5.0
12.7
Cash - Operating
Activities
Interest Paid
Capital
Expenditure &
Financial
Investment
Financing
Inflow/(outflow)
of funds
32
Appendix 2
Scenario Planning
The financial impact of the scenarios outlined
in the Business Plan is highlighted on the
graphs below. All the scenarios have the
effect of decreasing the Net Assets of the
business and reducing the Annual Surpluses of
the business.
The impact of each of the scenarios is graphed
below, indicating the annual reduction in Net
assets, and also the cumulative impact for the
5 years of the Business Plan.
We would mitigate the impact of these
scenarios by reducing costs, or if appropriate
increasing rents.
Rent Increases 1% Lower
£0
2014/15
2015/16
2016/17
2017/18
2018/19
-£200,000
-£400,000
-£600,000
-£800,000
-£1,000,000
Annual Impact
Cumulative Effect
LIBOR 1% Higher
£0
2014/15
2015/16
2016/17
2017/18
-£200,000
-£400,000
-£600,000
-£800,000
-£1,000,000
Annual Impact
Cumulative Effect
33
2018/19
Voids Increased by 2%
£0
-£200,000
-£400,000
-£600,000
-£800,000
-£1,000,000
-£1,200,000
-£1,400,000
-£1,600,000
-£1,800,000
2014/15
2015/16
Annual Impact
2016/17
2017/18
2018/19
Cumulative Effect
Inflation 1% Higher
£0
-£200,000
2014/15
2015/16
2016/17
2017/18
-£400,000
-£600,000
-£800,000
-£1,000,000
-£1,200,000
Annual Impact
Cumulative Effect
34
2018/19
This document is available on CD, in Braille, large print and community languages
from Cairn HA, Citypoint, 65 Haymarket Terrace, Edinburgh EH12 5HD.
Email enquiries@cairnha.com or call 0131 556 4415.
A registered Scottish Charity No SCO16647. The Scottish Housing Regulator Registration No 218. Property Factor Reg No PF00292.