Business-Plan

BUSINESS PLAN





26th November 2008









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CONTENTS







Introduction to the Business Plan 3



Issues addressed throughout the Plan 8



Current Membership 10



Scope of Consortium Programme 13



Plans for Growth 19



Consortium Structure & Resources 23



Accounting Structures & Arrangement 31



Works Procurement 33



Procurement of Consultants 37



Efficiency Gains 39



The Case for Developing the Consortium 48



Plan for implementing the consortium 52



Knowledge Sharing 58



Implementation Grant 61







Annexes:



Annex A – Eligible expenditure and grant application 62









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1 INTRODUCTION





1.1 Background

In October 2005, a group of around 18 Housing Associations and Local

Authorities, centred around the old Avon County area, got together to discuss

how they may address the efficiency agenda by adopting a sub-regional

approach to major repair and property maintenance procurement.

The main focus at that time was the Government‟s „Efficiency Challenge Fund‟

and the opportunity to obtain grant funding, through its „National Change

Agents‟, for the setting up of a formal procurement consortium.

It was recognised early on in the process however, that an arrangement

requiring all organisations to formally sign up to a rigid consortium structure

was unlikely to be workable – as in reality, most companies would be both

unwilling and in some cases, unable, to adopt a single unified approach to all

procurement requirements. Reasons included:-

 different strategic priorities;

 differences in business plan tensions;

 different service standards;

 existing contractual commitments;

The emphasis of the group therefore shifted to the formation of a collaborative

partnership that encouraged all member organisations to work together as

social housing providers to develop a framework of procurement options that

provided members with the opportunity to increase mutual cost and service

quality benefits as a result of increased economies of scale. The concept was

based on the premise that member organisations would tend to be drawn

towards successful, high value service level agreements that offered more

cost-effective and efficient solutions than current arrangements. This in turn

would then strengthen further the „buying power‟ of the „larger client‟, enabling

participating members to more readily realise the increasing mutual benefit of

lower costs and/or improved service levels



1.2 Overview of Membership

Westworks is a collaborative consortium of the following 8 key social housing

providers representing some 18 separate organisations:

 Bristol City Council

 Somer Housing Group

 Aster Group

 Sovereign Housing Group

 North Somerset Housing

 Merlin Housing Trust

 Arcadia Housing Group

 Solon Housing Association Ltd



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The total membership represents a total housing stock of just over 95,000

homes spread over an area that includes Gloucestershire, Somerset, Wiltshire

and Dorset; herein referred to as the Wessex region. However, the majority of

stock is focused around the old Avon County, now made up of the following

unitary authorities: Bristol City Council, Bath & North East Somerset, North

Somerset & South Gloucestershire.



1.3 Vision & Objectives

Vision



Westworks has a clear Vision:



“Working collaboratively to drive efficiencies and deliver high quality

affordable services that provide our customers with wider choice.”



Objectives

The above Vision is supported by a number of key objectives:

 Encourage investment and efficiencies in procurement within the

Wessex Region

 Contribute to the economic health of the Wessex Region and the

sustainability of communities

 Continue to deliver high quality, good value and efficient procurement

solutions to our residents and other stakeholders

 Work in collaboration to provide a broad range of services and products

to the benefit of all partners and their residents

 Stakeholder involvement in specification of standard design, installation

and quality improvement techniques and solutions

 Working with our partner contractors to manage the supply chain to

deliver lower costs and other value gains

 Implementation of a performance management framework against which

performance is monitored and which ultimately affects how much work a

supplier receives.

 To promote high quality training of a locally resourced, diverse

workforce, wherever possible.



Objectives will be delivered by:

 Establishing a Consortium Agreement to provide a robust governance

structure and means to manage the membership of the group

 Creating supply and contracting frameworks for use by individual RSLs

 Developing common design specifications through a series of project

teams made up of Westworks member‟s staff, residents and supply

chain partners. We will continually review and explore standard design

specification, service standards, quality and installation to achieve

efficiency through bulk procurement

 Working within the membership to agree smoothed workflows to support

framework contracts

 Recognising local geographical considerations when selecting

contractors

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 Working jointly with agencies to deliver quality training more effectively

and efficiently across the partners

 An agreed performance management framework to monitor the

performance of all suppliers (including materials suppliers and sub

contractors) and work with suppliers to deliver improvements in the

delivery of products to the customer



What This Means for Westworks Members:

 Opportunity to secure substantial savings and efficiencies and to

harness the buying power of 95,000+ unit of RSLs

 Shared practice and development of product and design specification

 Residents of RSL‟s able to get involved in design, specification and

delivery of products in a co-ordinated way

 Targeted investment to enable lower costs and market influence

 Sustainable communities and re-investment of gains into RSL stock

 Adjustment of member RSL‟s operations to optimise the efficiency gains

achieved by the procurement consortium as a whole

 Commitment of capital through-put to the procurement consortium

 Honour commitments made to consortium frameworks and maximise

engagement

 Commit skilled staff resources to engage in the agreement of common

design specifications for a range of product groups

 Commit senior staff to the Westworks Members Meetings at which

decisions will be taken on common design specifications and choice of

suppliers

 Commit senior managers to the Westworks Board at which strategic

decisions on the direction of the consortium will be made.

 Buy-in to be provided from the Chief Executives and Senior

Management of each member organisation.



1.4 Strategy for Achieving Efficiency Gains

Structure

The consortium has built a rigorous operational model and governance

structure on the basis of the activities that will be required to deliver the

chosen procurement model. This model is in turn designed to deliver on the

stated vision & objectives of the consortium.



Westworks has already demonstrated a successful base for collaboration,

which has been established through the meetings of the last 3 years and there

are numerous examples of beneficial joint procurement. Thus, Westworks will

start from an already efficient and sound basis. Bringing the volume of all the

members to this vehicle will be key to drawing out future benefits and

efficiencies.



The structure of Westworks is designed to allow flexibility, for members to

participate in procurement opportunities when appropriate and where they

best fit their own organisational structures, in order that maximum efficiencies

can be gained for each member organisation.



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Westworks believes that some of the new methods and styles of management

that will be required to fully deliver all of the benefits described in this business

plan are not yet in place. As a result Westworks is planning to work jointly in

developing capacity and delivering mechanisms for efficiency savings within

our membership and with our suppliers, residents and other partners.



Section 10 of this Plan sets out in detail, projected efficiency gains. These will

be reviewed annually.



Non Cashable Gains

Westworks has also examined routes to the delivery of non-cashable benefits.

At present, the consortium sees a number of key routes to the delivery of non-

cashable benefits:



 More efficient working and procedures, removal of duplication

 Added value services

 Sustainability of local communities through employment opportunities

 Opportunity for the engagement a broader spectrum of residents

 Ecologically sound specifications and more comprehensive approach to

fuel poverty

 Just in time and Total Quality Management (TQM) principles

 Planned and targeted strategic investment

 Sharing of best practice and knowledge, together with maximising

opportunities for collaborative working and sharing of resources

 Management and influence of the market and supply chain to obtain

better value for money



1.5 Outline Process for Preparing the Business Plan

Our approach to preparing a robust business plan has been to use the vision

and objectives as the starting point and to link all critical activities back to

those principles:



There are three Main Questions we have sought to address:



1. What / who are we and what are we trying to achieve?



A. Westworks is a collaborative consortium of 8 key social housing

providers representing some 18 separate organisations and just over

95,000 homes, who are working collaboratively to drive efficiencies and

high quality affordable services which provides our customers with

wider choice.



2. How will we achieve this?

A. Through joint procurement and collaborative working.



3. How will we be governed?

A. Through a Consortium Agreement and associated appendices





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A number of working groups and engagement styles have been used to

provide and validate the strategic direction of Westworks.

Strategic direction has been provided by a Business Plan Steering Group

 Tim Bruce, Bristol City Council

 Joanne Richards, Somer Housing Group (Accountable Body)

 Mark Jarrett, Sovereign Housing Group

 Nick James, Aster Group

 Ruth Berry, Solon Housing Association



Technical knowledge and content has also been provided by representation

from the following members

 John Thompson, Bristol City Council

 Angela Carr, Somer Community Housing Trust

 Mike Rowe, Michael OHalloran, Arcadia Housing Group

 Kyndon Paddon, Knightstone Housing Association Ltd

 Martin Munt & Steve Drew, North Somerset Housing

 Martin Daymond & Mark Haines , Merlin Housing Trust



We have been using the monthly meetings as a key vehicle for engagement

 We have engaged with other Consortia, the NCA, Trowers Hamlin,

Valueworks, Savills and National Benchmarking clubs

 We have used Away Days/ workshops to build detail and capture

insight from the member RSLs

 To understand the views of members on Governance and to gain

consensus









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2 ISSUES ADDRESSED THROUGHOUT THE PLAN





2.1 Compliance with NCA Housing Guidance

In preparing this business plan, the following NCA documents have been used

as guidance and have been complied with throughout:-

 NCA Housing Guidance: Bidding Guidance for support from the

Efficiency Challenge Fund (August 2007)

 NCA Housing Guidance: Consortium Governance Structures (August

2006)

 NCA Housing Guidance: Implementation Grant – Capability Products

(August 2006)

 NCA Housing Guidance: Content Requirements for Consortia Business

Plans submitted in respect of the Efficiency Challenge Fund (August

2005)

 NCA Housing Guidance: Preparation of a Consortium Business Plan

(August 2006)



2.2 Commitment by Senior Management

Westworks has been demonstrating the ongoing commitment of its members

to the initiative since its inception, almost 3 years ago. Formal meetings have

been held monthly throughout this period and all attendees have been senior

property and procurement managers. During that time, collaborative dialogue

has progressively flourished and a number of joint procurement initiatives

have been developed to the mutual benefit of the participating partners.



In order to determine Westworks‟ true potential in terms of efficiency savings,

Savills were jointly commissioned by all members in May 2006 to formally

assess the value, volume and current cost of each members‟ key current

spend and investment priorities. All findings were incorporated into a detailed

report which included identifying potential areas of benefit, comparing it

against the national position, and putting forward options in terms of how

Westworks‟ members might realise these benefits. This was published in

November 2006 and formal reports were submitted to senior management

teams. In these reports support was obtained to prepare an integrated

business plan that could:-

 more strategically promote the alignment of activities where this was

mutually agreeable between the participating organisations

 avoid conflicts of interest and peaks in workload or demand on

suppliers and contractors where this was possible, and

 support the realisation of each organisation‟s individual plans of action.



Senior property and procurement managers attended an Away Day in March

2007 and a procurement workshop in April 2007. This resulted in

commitments being made to submit a joint Feasibility Study to the NCA and to



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formally progress to the development of a formal collective Business Plan.

This was reinforced by each participating organisation obtaining written

commitments from their Chief Executive Officers or Managing Directors.



A steering group was established to assist in the development of the business

plan proposal, each member of which were also provided with appointed links

to Westworks members not represented on the steering group. This business

plan has therefore taken on board the input received and has sought to co-

ordinate all of the various inter-organisational and departmental works and

property-related procurement issues into a coherent, integrated management

strategy that will provide effective support to each members‟ joint aims and

objectives.



2.3 Sustainability

Sustainability is about using our limited resources in a way that creates a

better quality of life, not only for our existing residents, but for those in the

future. This requires Westworks to have due regard to the environmental,

economic and social impact of everything it does.

This business plan therefore looks to maximise the efficiencies that can be

gained through the improved integration and effective management of the

members‟ construction and property-related supply chains, design solutions,

technical requirements, internal processes and support services. Primary

considerations shall include:-

 reducing average annual business plan (whole life) costs

 improving service levels

 reducing residents‟ costs

 resident participation and support

 minimising negative environmental impacts

 supporting local economic growth









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3 CURRENT MEMBERSHIP OF WESTWORKS



The table below lists the social landlords who are currently members of Westworks, together with their relationship to housing

groups (if relevant) and the member‟s representatives for consortium purposes.



Member Address Member of Contact Contact Address Contact Tel Nr. Contact Email

Name Group Name

Knightstone Station Road, Arcadia Mike Rowe Station Road, 0117 9848199 Mike.rowe@knightstone.co.uk

Community Worle, Housing Worle,

Homes Ltd Weston-super-Mare, Group Kyndon Weston-super-Mare, 01934 524373 Kyndon.paddon@knightstone.co.uk

BS22 6AP Paddon BS22 6AP

01934 524310 Michael.ohalloran@arcadiahousing.co.uk

Michael

OHalloran

Knightstone Station Road, Arcadia As above As above As above As above

Housing Worle, Housing

Association Weston-super-Mare, Group

Ltd BS22 6AP

Mendip Kilver Court, Aster Group Nick James Aster Group Ltd, 01380 735581 nick.james@aster.org.uk

Housing Ltd Kilver Street, Ltd Sarsen Court,

Shepton Mallet, Horton Avenue,

Somerset, BA4 5NF Cannings Hill,

Devizes, Wiltshire,

SN10 2AZ

Ridgeway Sarsen Court, Aster Group As above As above As above As above

Community Horton Avenue, Ltd

Housing Cannings Hill,

Association Devizes, Wiltshire,

Ltd SN10 2AZ

Sarsen As above Aster Group As above As above As above As above

Housing Ltd

Association

Ltd









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Member Address Member of Contact Contact Address Contact Tel Nr. Contact Email

Name Group Name

Testway Testway House, Aster Group As above As above As above As above

Housing Ltd Greenwich Way, Ltd

Andover, Hampshire,

SP10 4BF



Aster Property Sarsen Court, Aster Group As above As above As above As above

Management Horton Avenue, Ltd

Ltd Cannings Hill,

Devizes, Wiltshire,

SN10 2AZ

Bristol City The Council House, n/a Tim Bruce St Annes House, 0117 352 5157 Tim.bruce@bristol.gov.uk

Council College Green, St Annes Road,

Bristol, BS1 5TR John St Annes, 0117 352 5565 John.thompson@bristol.gov.uk

Thompson Bristol, BS4 4AB

Merlin Riverside Court, n/a Martin Gloucester Road 01454 821135 martin.daymond@merlinhs.co.uk

Housing Bowling Hill, Daymond Almondsbury

Society Chipping Sodbury, Bristol

BS37 6JX. BS32 4AG



North 40 Martingale Way, n/a Martin 40 Martingale Way, 01275 398160 Martin.munt@nshousing.org.uk

Somerset Portishead, Munt Portishead,

Housing Ltd BS20 7AW BS20 7AW

Solon South 1 Newfoundland n/a Ruth Berry 1 Newfoundland 01179 167753 Ruth_berry@solonswha.co.uk

West Housing Court, Court,

Ltd St Paul Street, Mike St Paul Street, Mike_rothwell@solonswha.co.uk

Bristol, Rothwell Bristol,

BS2 8AN BS2 8AN

Somer The Maltings, Somer Joanne The Maltings, 01225 366012 Joanne_richards@somer.org.uk

Community River Place, Housing Richards River Place,

Housing Trust Lower Bristol Road, Group Ltd Lower Bristol Road,

Bath, Angela Bath, 01225 366078 Angela_carr@somer.org.uk

BA2 1EP Carr BA2 1EP









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Member Address Member of Contact Contact Address Contact Tel Nr. Contact Email

Name Group Name

SHAPE The Maltings, Somer As above As above As above As above

Housing River Place, Housing

Association Lower Bristol Road, Group Ltd

Bath,

BA2 1EP

Lantern The Maltings, Somer As above As above As above As above

Homes Ltd River Place, Housing

Lower Bristol Road, Group Ltd

Bath,

BA2 1EP

Redland Holly House, Somer As above As above As above As above

Housing Corbet Close, Housing

Association Lawrence Weston, Group Ltd

Ltd Bristol, BS11 0TA

Sovereign Berkshire House, Sovereign Mark Woodlands, 01635 275137 mark.jarrett@sovereign.org.uk

Housing 17-24 Bartholomew Housing Jarrett 90 Bartholomew St,

Association St, Group Ltd Newbury,

Ltd Newbury Berks

Berks, RG14 5EE

RG14 5LL

Twynham 2nd floor, Sovereign As above As above As above As above

Housing Dolphin House, Housing

Association Wick Lane, Group Ltd

Ltd Christchurch,

Dorset,

BH23 1HX

Vale Housing The Old Maltings, Sovereign As above As above As above As above

Association Vineyard, Housing

Ltd Abingdon, Group Ltd

Oxon,

OX14 3UG









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4 SCOPE OF CONSORTIUM PROGRAMME





4.1 - HOUSING STOCK TO BE UPGRADED TO DECENT HOMES STANDARD







% % Potential

Name of Social Stock Meeting Approximate uncommitted volume

Typical work programmes

Landlord Numbers Decent expenditure on capital works, £K through

Homes consortium

2007/08 2008/09 2009/10 2010/11

DH internal - kitchens, bathrooms,

Arcadia 7,814 87.90% £0 £0 £0 £0 0%

windows

DH Internal – kitchens, bathrooms,

Aster Group 14,533 78.00% £0 £213 £6,306 £5,550 40%

heating, wiring

Bristol City Council 28,417 86.80% £0 £0 £0 £0 0% DH - doors, windows

Merlin Housing Society 7,885 80.00% £0 £0 £0 £0 0% DH Internals – kitchens

DH - kitchens, bathroom, wiring,

North Somerset Homes 6,051 68.00% £0 £0 £1,202 £1,202 80%

heating, windows

DH - kitchens, bathrooms, heating,

Solon HA 867 88.00% £0 £0 £0 £0 0%

windows

Somer Housing Group 10,254 82.00% £0 £2,605 £1,759 £6,635 26% DH Internal - kitchens, heating

Sovereign Housing 19,805 96.30% £0 £0 £7,634 £7,361 25% DH - kitchens, bathroom, windows

Total for Westworks

95, 626* £0 £2,836 £19,312 £22,029

Members





* denotes figures excluding leasehold and shared ownership properties.





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4.2 GEORAPHICAL DISTRIBUTION OF STOCK









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4.3 OTHER OPPORTUNITIES FOR EFFICIENCY GAINS



4.3.1 Current Arrangements

Westworks has already successfully progressed a number of collaborative

procurement initiatives, and in doing so have specifically identified a range of

anticipated or potential efficiency gains in the following areas:-



Kitchens

 7 Westworks members are now using Rixonway as their primary supplier for

kitchen units, yielding:-

 a total estimated annual saving of up to £333K;

 improved service levels;

 added value services such as a shared website providing access to

all agreement documentation;

 internal administration savings, e.g. Somer Community Housing

Trust has utilised this opportunity to align the supplier of kitchen units

for the in-house Voids Team and the third party Contractor.

 Other member organisations are currently reviewing their involvement

opportunities.



PVC-u Windows

 6 Westworks members have recently started to use Anglian Commercial as

their primary supplier for pvc-u window units, yielding:-

 a total estimated annual saving of up to £410K to participating

members;

 improved service levels;

 added value services such as a shared website providing access to

all agreement documentation.

 economy of scale benefits for smaller individual volumes, e.g. Somer

Housing Group members could not have achieved such competitive

pricing without the volumes of Sovereign Housing Group.

 Other member organisations are currently reviewing their involvement

opportunities.



Digital Changeover

 5 Westworks members are establishing an agreement with a selected supplier

to provide their digital TV aerial installation service, in readiness for digital

changeover, yielding:-









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 an estimated project saving to member organisations of

approximately £390K;

 work-smoothing efficiencies achieved via collaborative, geographical

lots;

 consortium wide standardised Customer Satisfaction Questionnaires,

Code of Conduct and payment terms;

 larger Contract value attracting a more significant community re-

investment target (agreed KPI of 3 Apprenticeships within the region

of works);

 procurement process efficiencies through the utilisation of existing

national framework agreements.

 Other member organisations are currently reviewing their involvement

opportunities.



Pitched-Roofing

 Bristol City Council‟s existing contractual arrangements have been made

accessible to Westworks members, and Somer Community Housing Trust have

utilised this to deliver the remaining Transfer Promises target, yielding:

 assurances of delivery against restrictive timescales;

 value-for-money for Somer Community Housing Trust against a

relatively small programme as a result of BCC‟s Partnering

Arrangements.

 Savings have yet to be estimated



External Doors

 9 Westworks members have been involved in the selection of Homesafe

Lindman as the preferred partner for the supply and installation of external door

and frame sets. It is anticipated that this new arrangement will deliver:-

 savings of up to 17.5% to participating members, and significantly

more from a whole life cost perspective;

 substantially improved guarantees/warranties on key elements of

ironmongery

 improved service levels;

 added value services such as a shared website providing access to

all agreement documentation.



Project Management

 The Business Plan has been prepared by Westworks members, which has

eliminated the requirement for employing a consultant. As well as the cash and









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time efficiency benefits, this has resulted in a very specific and “considered”

document being prepared and better “ownership” of its content by members.



These existing initiatives are clearly demonstrating the potential for efficiency gains

within Westworks. Further opportunities for additional development and savings

have also been identified are currently being progressed.



It is recognised within the partnership that member organisations operate under

different structures and all have individual Business Plans, different targets and

existing contractual arrangements. Existing and future Westworks‟ arrangements

will seek to accommodate this, offering secure contractual arrangements to

members for whom it is appropriate to enter into particular contracts, but being

flexible enough to accommodate individual demands.



4.3.2 Links with other consortia

A number of Westworks members are also members of the Sovereign

Development Consortium and are involved in materials procurement for elements

such as kitchens and windows. Robust procurement processes have led to

achieving competitive materials costs and securing the best quality product to help

reduce life cycle costings. This has a positive effect on members‟ Business Plans.

There is also the non-cashable benefit of the strength of being a larger client

through collaboration. These arrangements can be extended to other Westworks

members to maximise benefits. Within Westworks there are members who are part

of other Development Consortiums and these are being actively encouraged to

become members of Westworks.



4.3.3 Services

At present service contracts, such as gas servicing, fire alarm servicing and

grounds maintenance are being procured independently. However, new

framework contracts are being structured so as to incorporate Westworks

members‟ future requirements.



Efficiencies can be gained through reduced duplication of contract administration,

both in procurement and management. Additionally, it can be anticipated that the

economies of scale will result in more competitive prices being achieved.



Members are also investigating joint consultant appointments. Many consultants

charge on a fixed hourly rate, so it is unlikely to reduce rates, but achieves savings

through shared appointments. However, this does have the benefit of reducing

involvement and repetition for the tendering and selection process. It will also

ensure that members‟ consultants understand the structure and potential benefits

of Westworks so they can assist with maximising the wider benefits for their

clients.







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4.3.4 One-off contracts

Member organisations are currently collaborating to procure a contract for digital

television installations, to ensure stock compliance for the switchover. It is

expected that this will achieve financial economies and will be open to all

Westworks members. Further non-capital works contracts could be procured in the

same way as and when opportunities arise.



Efficiencies can be gained through reduced duplication of contract administration,

both in procurement and management. Additionally, it can be anticipated that the

economies of scale will result in more competitive prices being achieved.





4.3.5 Cyclical

The Geographical Distribution of Stock map (4.2) clearly identifies geographical

distribution overlaps, which occur down to street level. Member organisations are

in many cases using the same contractor, so this provides an ideal opportunity for

aligning cyclical programmes in order to improve programme and contractor

management. This will also reduce unit costs and delivery timescales, and should

in turn, lead to increased customer satisfaction.



Further efficiencies can be gained through reduced duplication of contract

administration, both in procurement and management. Additionally, it can be

anticipated that the economies of scale will result in more competitive prices being

achieved.





4.3.6 Responsive repairs

Due to geographical overlaps, there is also scope for improving responsive repairs

delivery. Contractors and in-house DLOs could utilise materials supply

agreements existing in the particular area of operation improving purchasing power

with suppliers. Where common contractors are being used, daily efficiencies can

be gained by more co-ordinated operative route mapping.



In the longer term the response repair activities in a particular geographical area

could be jointly contracted and this would bring benefits especially where a number

of members own stock but individually have low numbers.



Efficiencies can be gained through reduced duplication of contract administration,

both in procurement and management. Additionally, it can be anticipated that the

economies of scale will result in more competitive prices being achieved.









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5 PLANS FOR GROWTH





5.1 Strategy for Growth of Consortium / Potential Members

A foundation to the formation of Westworks, and the active participation of

its members, has been the recognition that increased scale and

collaborative engagement can provide real opportunities for operational

efficiencies and more cost effective product procurement and improved

service levels as potential service providers compete for the potential extra

buying power of the „larger client‟.



Existing Westworks members therefore equally recognise that all of the

identified benefits can be reinforced through Consortium growth; provided

that new members operate to a similar ethos, have compatible business

plan objectives and openly embrace collaborative working. However, the

advantages of „growth‟ can also be achieved through engagement with

other like-minded organisations.



In acknowledgement of this, Westworks have identified 3 key strategies to

promote its plans for growth:-



Strategy 1 – Promoting the Westworks Identity

Opportunities to raise and promote the profile of Westworks‟ shall include:-

 developing a high quality and informative Westworks website;

 clarifying the area in which we operate - ie Wessex;

 through our members, providing a clear and consistent message

as to who Westworks are, what we do, and what we can do for

others;

 welcoming enquiries and providing presentations when

appropriate;

 producing and distributing End of Year Reports;

 sharing information such as the Collaborative Procurement

Registers;

 using service provider partners as advocates;

 Developing shared websites with service provider partners.









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Strategy 2 – Maximising the Potential of Existing Members and

Partners

The purchasing power of the existing membership base could be increased

yet further by:-

 encouraging each organisation to secure the active engagement of all

departments that can contribute to client growth (ie. Asset Management,

Maintenance & Development etc);

 linking up with other collaborative organisations where practicable to do

so (eg. Sovereign Development Consortium, Homes West, New Futures,

Advantage South-West, Fusion 21 and other NCA Consortia);

 increasing engagement and alignment over time amongst the existing

membership;

 utilising existing established working links with organisations who are

already aware of Westworks. By sharing best practice and reporting the

efficiencies achieved, the following organisations have been identified as

potential future members:-

 SOHA  United Housing

 John Grimes  Sedgemoor HA

 Wyedean  Elim HA

 Teigne (Devon)  Tamar (Devon)

 WRHA  Bournemouth HS for the

Elderly

 Ability

 Brunel Care

 Bristol Community Housing

Group  Severn Vale

 Cottsway HA  West Wilts HS









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Strategy 3 – Regional Consolidation

There are key organisations within the Wessex Region we would wish to

target as potential members as it will enable the existing membership to

achieve better value from its service providing partners if they have a more

consolidated stock profile in terms of regional distribution. The following

organisations have been identified as potential future members that could

support this objective:-

 Taunton Deane Council  Housing 21

 Sedgemoor Council  Bristol Churches

 West Wilts Council  Cotswold

 Swindon Council  South West Housing Society

 Bournemouth Borough  Plymouth City Council

Council  Raglan HA

 Stroud District Council



5.2 New Members – Joining Procedure



Upon receiving an expression of interest to join Westworks, a prospective

new member shall receive the Westworks Application Pack, which shall

comprise of:-

 a covering letter;

 a copy of the Consortium Agreement;

 indicative costings regarding the joining fee and annual membership

fee;

 a copy of the Collaborative Procurement Registers;

 a copy of the most recent Annual Report;

 an invitation to attend a future meeting.



It will be a requirement that all new members sign the Consortium

Agreement; committing to the objectives, rights and obligations contained

therein. They shall also be required to submit the joining fee and annual

membership fee as approved by the Consortium Board.



The joining of a new member shall be subject to the approval of the

Consortium Board; though this authority may be delegated to the

Westworks Management Team.



In the event of any objections, the final decision rests with the Board.





21

5.3 Supporting Activities to Date

Have included:-

 agreement to a logo which is being used on all official publications;

 the procurement of the following two website addresses:-

www.westworks.org and www.westworks.co.uk

 the development of a map that demonstrates the Westworks‟ stock

profile;

 the development of a standardised Westworks presentation to

support all members in delivering a consistent message to all

organisations;

 a Westworks road-show is being developed to promote the

efficiencies and objectives of the Westworks Consortium;

 an „End of Year‟ report which identified the successes and „lessons

learnt‟ for the last year.









22

6 CONSORTIUM STRUCTURE AN RESOURCES



6.1 Legal Structure

Following consultation with other procurement consortia and Trowers

Hamlin, Westworks members agreed to structure the consortium as a

Consortium by Agreement.



The main reasons for adopting this approach are:

 due to the diversity of member‟s requirements flexible arrangements

are needed;

 members will participate in projects relevant to their individual

requirements and the workload and risks associated with individual

projects will be borne by the participating members rather than the

whole membership;

 at this point of time, the members do not want to create a separate

legal entity incurring ongoing costs and adding complexity to the

arrangements. However, as the consortium develops this issue will

be kept under review.



6.2 Management Structure

The Management structure of Westworks is simplistic to assist with clear

lines of communication and to avoid unnecessary bureaucracy. The

organogram on the following page shows this structure:









23

Westworks Board









Accountable Body









Management Team









Project Team Project Team Project Team





Westworks Board



A Westworks Board comprising of representatives of the member

organisations will provide governance and strategic direction.



The initial board members will comprise of:





1. Arcadia Housing Group - including Knightstone Housing Association

Ltd, Knightstone Community Homes Ltd – represented by the

Director of Supported Housing and Asset Management;

2. Aster Group Ltd – including Mendip Housing Ltd, Ridgeway

Community Housing Association Ltd, Sarsen Housing Association

Ltd, Testway Housing Ltd, Aster Property Management Ltd –

represented by the Group Resources Director;

3. Bristol City Council - (Neighbourhoods Division) - represented by the

Strategic Director Landlord Services ;

4. Merlin Housing Society - No elected representative

5. North Somerset Homes Ltd – represented by the Director of Assets;









24

6. Solon South West Housing Ltd – represented by the Customer

Services Director;

7. Somer Housing Group Ltd – including Somer Community Housing

Trust, Bath Self-help Housing Association Ltd, Lantern Homes Ltd

and Redland Housing Association Ltd – represented by the Group

Director of Finance;

8. Sovereign Housing Group Ltd – including Sovereign Housing

Association Ltd, Twynham Housing Association Ltd and Vale

Housing Association Ltd – represented by the Director of Sovereign

Development Consortium.



The Board Chair will be elected from the Board members at the first Board

meeting, which will take place in March 2009.



The Board will be responsible for:

 determining the ongoing Board structure, the roles of its members

and the election of its officers;

 to ensure the fair and reasonable application of the Consortium

Agreement including the performance of Westworks members in their

respective obligations;

 to agree the strategic objectives for Westworks, approve an annual

action plan and provide direction to a Westworks Management Team:

 to monitor the progress of Westworks and objectives to ensure the

implementation of agreed Efficiency Measures and to

recommend/agree action where necessary to further stimulate such

progress;

 to consider new opportunities for implementing the agreed Efficiency

Measures;

 to resolve queries or complaints by, or disputes between any

Westworks members;

 to promote the Consortium to prospective new Westworks members;

 to approve new Westworks Members, and the retiring of existing

members;

 approve expenditure against the annual budget (an authority that

may be delegated to the Westworks Management Team);





25

 to hold an Annual General Meeting, to include:-

 approving an annual Consortium Budget;

 approving joining and annual membership fees (funding shares);

 approval of accounts;

 to receive and approve an End of Year report;

 to select, appoint and instruct Accredited Consultants, where

appropriate and agreed by the Westworks members.





Accountable Body



The Accountable Body role will be performed by one of the Westworks

members, as described in Section 7 of this Business Plan. For matters

affecting Westworks‟ finances, this will be controlled and managed by the

owning member‟s management structure and processes. However, it will be

answerable to the Westworks Board and will provide regular reports to the

Westworks Management Team.





Westworks Management Team



The Consortium Management Team, comprising of representatives from the

member organisations, reports to the Westworks Board. The current

representatives are:



1. Arcadia Housing Group – represented by the Asset Planning and

Performance Manager / Head of Procurement;



2. Aster Group Ltd –– represented by the Group Procurement Manager;



3. Bristol City Council - (Neighbourhoods Division) - represented by the

Renewal & Investment Manager / Partnering Co-ordinator;



4. Merlin Housing Society - represented by the Works Manager;



5. North Somerset Homes Ltd - represented by the Major Works

Manager;



6. Solon South West Housing Ltd – represented by the Managing

Surveyor;







26

7. Somer Housing Group Ltd – represented by the Head of Strategic

Procurement;



8. Sovereign Housing Group Ltd – represented by the Head of Strategic

Procurement.





The Management Team Chair was originally due to rotate between member

organisations on a three monthly basis. However this is currently under

review and the future fulfilment of this role will be a subject for the first

Board meeting to discuss. It is possible that the Westworks Coordinator,

appointed from an external body will be asked to perform this role.





The responsibilities of the Management Team include:





 to deliver individual projects and the overall plan and programme

 to implement the strategic objectives of the Consortium;

 develop an annual action plan for Board approval and implement;

 to monitor the progress of the Consortium Programme and

objectives, reporting to the Board, to ensure the implementation of

agreed Efficiency Measures and to recommend action where

necessary to further stimulate such progress;

 to identify new collaborative procurement opportunities;

 create, manage and provide leadership for individual Project Teams;



 liaising with the Accountable Body;



 to promote the Consortium to prospective new Consortium

Members;

 to recommend to the Board new Consortium Members, and the

retiring of existing members;

 creation of an annual Consortium Budget;

 to create an annual End of Year report;

 to select, appoint and instruct Accredited Consultants, where

appropriate and agreed by the Consortium Members;







27

Project Teams



Individual Project Teams will be created as procurement opportunities arise.

They will comprise of employees and residents of the member organisations

participating in the project and will be formulated to ensure that the correct

skill sets are present within the project team. If required, the skill sets will be

complemented by the use of appropriate consultants. Each Project Team

will be overseen by at least one of the participating member‟s representative

from the Westworks Management Team taking the lead role for the project.



The Project Teams responsibilities include:

 design and implementation of the procurement activity;

 specification design;

 tendering process and supplier selection (and recommendation to

their own organisations);

 contract creation and agreement;

 contract management and performance;

 contract delivery.





6.3 Relation to members

With the exception of Westworks accounting (undertaken by the

Accountable Body function), the roles and responsibilities of the Consortium

will be shared amongst the membership of Westworks, as agreed by the

member organisations. As previously mentioned, individual Project Teams

will be created to deliver individual procurement activities.



Interfaces and lines of communication are shown on the diagram on the

following page:









28

Member

Westworks Westworks organisation

Board Board Senior

Representative Management

Team









Westworks Westworks Member

Management Management organisation

Team (WMT) Team Management

Representative Team









Member

Project Teams Project Team organisation

Representative Delivery Team









The Management Team is at the hub of the interface and communication

channels, having the ultimate responsibility for project and efficiency

delivery. The representatives on the various Westworks teams (including

the Board) are then responsible for interfacing and communicating with the

relevant areas within their own organisation.





6.4 Resourcing the consortium

Appointments to key roles within the consortium will largely be

recommended by the Management Team and approved by the Board.



Due to the management structure of Westworks and the formation of

Project Teams for individual activities, any additional skills required will be

identified at the time of project initiation and these can be resourced from





29

the participating member organisations (or even non-participating member

organisations if required). The advantage of this structure is that members,

especially smaller members, can benefit from skills that may not necessarily

be in place within their own organisation but could be in larger

organisations. As previously mentioned, skill sets will be complemented by

the use of appropriate consultants on a project-by-project basis.



The appointment of the Westworks Coordinator from an external body is to

assist with the co-ordination of the Management Team, as well as

supporting the Project Teams to ensure progress and delivery within agreed

timeframes.





6.5 Geographical locations

The representatives on the Management Team are located in widely

dispersed locations (from North Somerset to Newbury) but the impact of this

is minimal to the successful operation of Westworks.



Westworks already makes use of the various forms of communication

media (email etc) and our regular monthly Management Team meetings

take place at Redland Housing Association‟s offices, which is located just

off the M4 / M5 interchange and is within an hour of all representatives.

Other meetings take place dependant upon participating members and in

the future the use of video conferencing will be utilised to minimise the

travel impact.



The Westworks website will also act a central point for members to obtain

information on procurement opportunities as well as a means to obtain

examples of best practice, policies and procedures. The website will also be

used to act as a platform to recruit new membership by clearly

demonstrating the benefits and efficiencies of collaborative procurement.









30

7. ACCOUNTING STRUCTURES & ARRANGEMENTS



7.1 Accountable Body

Somer Community Housing Trust (SCHT) was appointed, with unanimous

support from the other Westworks members, to act as the Accountable

Body and will therefore be responsible for the receipt and management of

any grant funds made available to Westworks.





7.2 Accounting Structures

All grant funds received will be subject to the same accounting structures

that currently operate within SCHT and will operate on the SUN System,

which will be administered by Somer Housing Group, of which SCHT is a

member organisation.



Westworks will be assigned a unique cost centre within SCHT‟s existing

accounting processes, which will clearly detail the transactions regarding

costs, income and re-charges.





7.3 Accounting Arrangements

The members of Westworks have agreed to apportion any costs not

covered by grant funding on a proportional basis dependent upon volume of

stock. The initial figures were validated by the 2007 Regulatory and

Statistical Returns Survey and will be subject to annual reviews to

accommodate any variance in stock profiles.



The current volumes are as detailed below:

Percentage

Member Stock Volume

%

Arcadia Housing Group 7814 8

Aster Group 14533 15

Bristol City Council 28417 30

Merlin Housing Society 7885 8

North Somerset Homes 6051 6

Solon Housing Association 867 1

Somer Community Housing Trust 10254 11

Sovereign Housing Group 19805 21

Total 95626 100









31

7.4 Accounting Processes

The procurement of any goods or services, which generates a cost for

Westworks, will be mutually agreed by all members. Any objections to the

proposed procurement will be duly recorded. However, the goods or

services will not be procured until all members contributing to the financing

are in full agreement.



Any invoices received for the provision of goods or services to Westworks

will, along with any relevant associated documents, be issued to the

National Change Agent and to all members for information.



Members will be invoiced for their percentage share of any costs by SCHT

prior to payment of invoices, not covered by the combined annual

membership fees.



As a charitable organisation SCHT cannot recover the full VAT element,

therefore any re-charges will be inclusive of VAT and the member

organisations shall individually reclaim their allowed VAT element.



To verify that the processes are truly transparent SCHT will provide a

quarterly statement of account to all members detailing the recent

transactions. In addition, SCHT have notified their appointed External

Auditors of the new practice and will undertake a review within the next 12

months.









32

8 WORKS PROCUREMENT



8.1 Procurement Strategy

Westworks members have a desire to work together to achieve better value

through the potential extra buying power of a „larger client‟. All members can

point to evidence that increased scale can secure more cost effective,

efficient product procurement, reduced costs and improved service levels.



However, there is also a practical recognition that organisations are often

reluctant to sign up to a rigid consortium structure that does not enable

them to weigh up the options and to choose the solution that is right for

them. Therefore the structure of the consortium is designed to allow

flexibility to its members.



As other procurement consortiums have found, the benefits of being a

member are often limited in the early stages. Reasons include:-



 the practicality of existing contractual arrangements needing to run

their course;

 the length of time necessary to process larger procurement

arrangements;

 aligning interests and standards between member organisations;

 gap closure of variations in procurement policies and procedures.





Experience has shown though that the combined value of a consortium‟s

volumes provides procuring members with an extremely attractive incentive

to potential service providers, even where the full value of that initial

commitment is uncertain; thereby securing substantial value that often

exceeds that of the core commitment. Therefore to enable Westworks as a

consortium to access the market sooner, and therefore deliver benefits at

the earliest opportunity, it has been decided that Westworks will adopt a

two-tier strategy.



Initially those members who are already engaged in high value procurement

activities are making those agreements „Westworks inclusive‟. This enables

other Westworks members to take advantage of new improved service level

agreements, that offer better value (through lower costs and/or improved

service levels) than their current arrangements, as and when they are able

and ready. Adopting this strategic approach allows time for individual

members to negate the limiting reasons mentioned above, whilst not

restricting other members whose timescales are less.







33

As closer working relationships are forged over time, more organisations will

engage in the early stages of procurement processes, aligning product

specifications and service performance criteria to allow the aggregation of

volumes and therefore increase the initial base of committed spend to

potential service providers. Thus over a period of time, an increasing

number of the contracts let will include more Westworks members from the

earliest stages of the procurement process.



There is ample evidence to indicate that as organisations have joined

together is procuring from selected service providers, the next round of

OJEU Notices and tenders will incorporate this larger client base; having

established a history of working together with the service providing partner

to an agreed set of product standards and service performance levels.



Initially Westworks is concentrating on the procurement of elements

associated with major works and maintenance requirements but in the

future will expand its approach to include other areas of procurement

activity (e.g. waste management).



The Collaborative Procurement Registers, which are already in place, form

a core reference point when organisations are looking to identify:-

 existing arrangements already in place

 procurement initiatives that other members are interested in

collaborating.



8.2 Procurement Model

In all cases the same basic process model will be used:





1. Assessment of the requirement

2. Analysis of the current position including potential market review

3. Options identified and assessed

4. Agreement of the “going to market” methodology

5. Tender activity

6. Service provider selection

7. Contract award

8. Contract and performance management









34

Inherent to this process is the adoption of whole-life costing and value for

money principles

.

The use of framework agreements via OJEU is the preferred model of

engagement, but each procurement proposal will be assessed on its

individual merits.

The members of Westworks are diverse in their own organisational

structures and some have existing DLOs within those organisations and, as

a result, arrangements entered into by Westworks need to allow for both

“supply and fit” and “supply only”. It is therefore essential that Westworks is

influential in selecting the supply chain partners and, depending upon the

requirements of the members, either a main contractor is engaged or

materials and labour would be procured separately. Each individual

procurement activity will be assessed in this regard during stage 3 of the

process model above.





8.3 Procurement Practice

Whilst collaborative engagement forms an integral part to the procurement

process, most projects will have a lead organisation. However, to maximise

the engagement and success of an individual procurement project, the lead

organisation will tend to:-

 determine which other members are interested in the same area of

procurement;

 engage with the other members at the earliest possible stage;

 create a Project Team and/or Selection Panel including

representatives of other members;

 agree shared product specifications and service performance criteria

with those members;

 work together collaboratively in all decision making throughout the

process;



The Project Team, headed by the lead organisation, will normally take

responsibility for co-ordinating the overall arrangement with the selected

service provider; and this would include:-

 addressing larger problems or issues elevated through a dispute-

resolution process;

 agreeing price increases;

 performance reviews;







35

 working with the service provider to promote continuous

improvement in the product and/or service.



Each individual member however is responsible for administering their

element of the arrangement at a local level, in terms of service delivery,

administration, payments and liabilities etc.



Arrangements with selected service providers shall encourage the use of

dedicated „account‟ managers wherever possible in order to assist with the

management and co-ordination of the overall service being provided to

Westworks members.

Due to the flexibility required within Westworks, the most suitable contract

form (e.g. JCT, NEC) will be selected for each procurement activity and in

accordance with the participating members Standing Orders.









36

9. PROCUREMENT OF CONSULTANTS





9.1 Developing the Consortium

Westworks will only use the services of consultants where the specific

required skill sets and resources are not available within the member

organisations. Use of consultants will be focussed on specific deliverables

and value for money will be ensured through the effective transfer of skills

from the consultant to the consortium members.



It is intended that the majority of the resources required to develop and

deliver processes and activities will be provided by Westworks members.

However, certain specialist advice may be required in the following areas:



 Planning and strategic management

 Supply chain procurement

 Auditing

 Specialist legal services

 Westworks Co-ordinator





9.2 Procurement of Westworks Co-ordinator

It is the intention of Westworks to appoint a designated Co-ordinator who

will be required to facilitate the administrational aspect of consortium

working such as arranging meetings, chairing meetings, minute taking and

ensuring actions are met within agreed timeframes.



The Westworks Co-ordinator will be appointed on a consultancy basis and

will therefore not be employed by any individual Westworks member. The

procurement of this post will mirror the procurement of Consultant Services

process.





9.3 Procurement of Consultant Services

The method of procurement will be determined by the standing orders and

financial regulation requirements of members, and will thus comply with the

procurement process and financial requirements of the most restrictive

organisation.



A working group will be formed to complete the procurement process.

There will be a collaborative assessment of any bids and all decisions will

be ratified by all members before being approved.







37

9.4 Skills Development

When consultants are employed, value for money will be increased by

transferring skills from consultant to consortium members. The consultant

will bring expertise and objectivity, which will support the local knowledge

and existing skills to team members.



To ensure that the programmes will be sustainable, the transfer of skills and

creation of the right level of ownership through joint team working is critical.

Through this, Westworks will achieve the following benefits:



 develop the relevant knowledge and capabilities inside the project

team

 transfer of knowledge and skills from the consultant to the client

 optimal solutions will be created which can be implemented

 sense of urgency and determination to drive the change

 rapid results



Beyond consultants involvement the procurement consortium will be left

with:



 enthusiastic champions ready to spread knowledge and skills through

the consortium

 new solutions already embedded in key personnel

 best working practices to be spread through the consortium









38

10 EFFICIENCY GAINS



10.1 Cash Savings

Westworks, with the guidance of the NCA, has assessed spend over the

next ten years spend of the using the process as follows:



 analysing the current projected expenditure for each member and

grouping these into three main categories (major works, repairs and

maintenance, other works);



 calculating the uncommitted projected expenditure (based upon

current contractual commitments);



 using baseline cost and target figures resulting from the Westworks

Options Appraisal Report commissioned from Savills and used in the

Westworks Feasibility Study submission.





Initial expenditure analysis



The expenditure analysis showed that:



 over the next ten years the combined membership of Westworks

would be spending over £1,166M on the categories analysed (see

figure 10.a below);



 of the total spend £519M is currently uncommitted;



 78% of the uncommitted spend is in years 5 to 10 (see figure 10.b

below);



 66% of this uncommitted spend was attributable to the major works

group (see figure 10.c below).





As a result of these findings, the analysis therefore concentrated on the

major works group.









39

Total spend / annum



160

Millions







140



120 Sovereign

Somer

100 Solon

NS Housing

80

Merlin

60 Bristol CC

Aster

40 Arcadia



20



0

2008/9 2009/10 2010/11 2011/12 2012 to 17

annual

average



Fig 10.a







Total uncommitted spend / annum



80

Millions









70



60 Sovereign

Somer

50 Solon

NS Housing

40

Merlin

30 Bristol CC

Aster

20 Arcadia



10



0

2008/9 2009/10 2010/11 2011/12 2012 to 17

annual

average



Fig 10.b







40

Percentage of uncommitted spend (2008 to 2017)









Other

7%

R&M

27%







Major Works

66%









Fig 10.c





Major works expenditure



Over the next ten years Westworks members will be spending £580M on

major works of which £343M is uncommitted and therefore could potentially

be spent through collaborative procurement activities through Westworks

(see figure 10.d below). Further analysis of this group showed that two main

work types, kitchens and heating, contributed to 47% of the total

uncommitted expenditure (see figures 10.e and 10.f below).



By understanding uncommitted projected expenditure and volumes and

comparing the current costs against the target figures provided by Savills, at

the same time taking into account the timing of Westworks procurement

activity, potential cashable savings of £17M have been identified. These are

detailed on an annual basis in figure 10.g below.









41

Major Works uncommitted / annum



50

Millions







45

40

Sovereign

35 Somer

30 Solon

NS Housing

25

Merlin

20 Bristol CC

15 Aster

Arcadia

10



5

0

2008/9 2009/10 2010/11 2011/12 2012 to 17

annual

average





Fig 10.d





Major Works - uncommited spend



12

Millions









Kitchens

10 Bathrooms

Heating

8 Boilers

Electric

6 Pre-painting

External Decs

4 uPVC windows

Timber windows

2 Doors

Roofing

0

2008/9 2009/10 2010/11 2011/12 2012 to

2017

annual

average



Fig 10.e





42

Roofing

6%

Doors

2%

Timber windows

1%

uPVC windows Kitchens

6% 22%

External Decs

12%



Pre-painting Bathrooms

5% 7%



Electric Heating

8% 25%

Boilers

6%



Major Works uncommitted spend profile





Fig 10.f







Fig 10.g Potential cashable savings – major works



2008/9 2009/10 2010/11 2011/12 2012 to 2017 Total

total

Kitchens £0 £16,427 £14,381 £430,755 £6,917,448 £7,379,010

Bathrooms £0 £13,229 £49,176 £196,035 £928,108 £1,186,548

Heating £0 £51,415 £130,017 £565,434 £3,223,717 £3,970,584

Boilers £0 £54,712 £74,070 £237,833 £1,307,329 £1,673,943

Electric £0 £0 £18,341 £349,000 £1,289,543 £1,656,883

uPVC windows £0 £22,903 £20,089 £73,182 £1,121,119 £1,237,293

Timber windows £0 £0 £0 £0 £72,519 £72,519



Totals £0 £158,687 £306,073 £1,852,238 £14,859,784 £17,176,781









43

It should be recognised that some of the identified savings above are

already being realised through current procurement initiatives. With these

including kitchens and PVCu windows, it is not unreasonable to assume

that similar savings can be achieved by other members joining these

existing programmes.



In addition to the work types shown in figure 10.g above, Westworks is

nearing completion of the procurement activity for external doors (which will

provide yet further cashable and value for money benefits) and will also be

reviewing collaborative activities for decorating and roofing.



Repairs and maintenance expenditure



The opportunity for cashable gains for response maintenance services is

limited - primarily due to the in-house provision of the service (through

DLOs), or existing long term contracts. However, there are opportunities for

some members, so it is planned that Westworks will be reviewing this group

also. For information, Figure 10.h provides the uncommitted spend for

information.





Repairs & Maintenance uncommitted spend / annum



20

Millions









18



16

Sovereign

14 Somer

12 Solon

NS Housing

10

Merlin

8 Bristol CC

6 Aster

Arcadia

4



2



0

2008/9 2009/10 2010/11 2011/12 2012 to 17

annual

average



Fig 10.h









44

Section 8 of this Business Plan outlines how we would go about realising

these savings. As stated therein, the adoption of whole-life costing, value for

money principles and continuous improvement are core to the procurement

process methodology.





10.2 Non-cashable gains

Some of the non-cashable benefits are identified in section 11.1. These will

be achieved through a number of methods.



The Westworks Management Team representatives are able to encourage

members to work together and promote a co-ordinated approach to

business improvement benefits and skills development across member

organisations; sharing best practice and knowledge. An example of this was

an Asset Management Forum, recently organised through Westworks, and

attended by 12 member organisations.



Westworks views stages 1 to 4 of the Procurement Model (see section 8.2)

as absolutely critical to not only delivering cashable gains but also product

improvement potential, as well as environmental and economic

sustainability opportunities. As a result, great emphasis is placed upon the

procurement design and approach by project teams; with resident

involvement at the earliest stage of a procurement activity. This can be

demonstrated by the recently awarded contract for Digital TV Aerials (in

preparation for digital changeover) which has resulted in the selected

contractor working by geographical areas on homes owned by multiple

social landlords within those areas. After the initial start-up phase the

contract will be delivered by teams comprising of labour that will be

recruited from the area of the works, and trained by the contractor.









45

10.3 Measuring gains

Gains, both cashable and non-cashable, will be measured and recorded for

each member participating in a project. This will be the responsibility of the

Project Team. The combined gains for each project will then be recorded

using the following table:



Efficiency Gains - cashable Work Type Achievement

and non-cashable / project 2009 / 10 2010 / 11 2011 / 12 2012 / 13









The 2004 / 05 baseline data will be established as follows:-

 the available baseline data from within Savills‟ Options Appraisal

Report;

 where not available from within the Option Appraisal Report, current

baseline data will be established;

 both sets of baseline data figures will then be worked back to a 2004

/ 05 using standard indices.



Benchmarking, appropriate to each project, will be performed at stage 2 of

the procurement model (see section 8.2). Benchmarks will be drawn from

other consortia and / or relevant private sector businesses.



10.4 Recording and reporting gains

The main target areas for efficiency gains, together with projected values

and realisation dates are shown in figure 10.g above.



Baseline figures for some of the work types of major works have been

identified as part of Savill‟s Options Appraisal Report. Where these are not

available (either by work type or member), they will be identified as stated in

section 10.3.









46

10.5 Programme or related capital works

Having analysed the uncommitted projected expenditure, the planned

programme of procurement activity for major works is projected as follows:



Work Type Project commencement Contract placement

Kitchens Q1 2009 / 10 2010 / 11

Bathrooms Q4 2008 / 9 2009 / 10

Heating Commenced (PQQ 2009 / 10

issued)

Boilers With above 2009 / 10

Electric Q4 2008 / 9 2010 / 11

Pre-painting Q3 2009 / 10 2011 / 12

External Decs Q3 2009 / 10 2011 / 12

uPVC windows Q3 2010 / 11 2012 / 13

Timber windows Q3 2010 / 11 2012 / 13

Doors Commenced (at final 2008 / 9

selection stage)

Roofing Q4 2009 10 2009 / 10





The reporting milestones for each of the above projects would be as follows:



 project team creation

 issue of PQQ or ITT (whichever is the earliest)

 tender receipt

 contract award

 contract implementation



These reporting milestones will be used for all Westworks collaborative

procurement activities.





10.6 Management commitment

The Westworks Management Team is committed to the development of the

consortium and this has been demonstrated through the activities already

performed collaboratively by Westworks members and, by the senior

management of member organisations, through the signing of the

Consortium Agreement.



This Business Plan clearly states the consortiums intentions and the

commitment to these are demonstrated by the fact that this Business Plan

has been created by the members of Westworks themselves, rather then

through consultants.





47

11 THE CASE FOR DEVELOPING THE CONSORTIUM



11.1 Business case for the consortium

The quantified efficiency gains over the 10-year period 2008/9 – 2016/17

have been presented in Section 10 (figure 10.g). Quantified implementation

and operational costs over the same period are detailed in Section 14, and

this includes the cost of employing a Westworks Co-ordinator which will be a

role paid for initially by the Implementation Grant but, in the longer term, by

the annual membership fees.

The table below outlines the financial case for the development and

implementation of the consortium.



Westworks implementation - cost vs benefit

2008/9 2009/10 2010/11 2011/12 2012 to 2017

total



Efficiency gains



Kitchens £0 £16,427 £14,381 £430,755 £6,917,448

Bathrooms £0 £13,229 £49,176 £196,035 £928,108

Heating £0 £51,415 £130,017 £565,434 £3,223,717

Boilers £0 £54,712 £74,070 £237,833 £1,307,329

Electric £0 £0 £18,341 £349,000 £1,289,543

uPVC windows £0 £22,903 £20,089 £73,182 £1,121,119

Timber windows £0 £0 £0 £0 £72,519



Total efficiencies £0 £158,687 £306,073 £1,852,238 £14,859,784





Implementation costs



Westworks Co-ordinator £50,000

Supply chain improvements £40,000

Website creation £9,400

Skills development £28,000

Governance £1,175



Total implementation costs £9,400 £119,175





Annual nett gain / (loss) (£9,400) £39,512 £306,073 £1,852,238



Culm nett gain / (loss) (£9,400) £30,112 £336,184 £2,188,422 £17,048,206





Notes: Consortium running costs are funded by the annual membership fee

Individual project costs are funded by participating members







48

Whilst the cashable benefit in the first three years is small, the efficiencies

above are based only on the work types shown. Further efficiencies will be

realised from additional work types (as has been done with Digital TV

Aerials). Notwithstanding this, looking at the longer term there is a compelling

financial argument for the NCA to support the establishment of the

Westworks procurement consortium.





In addition to the above, by working collaboratively along with agreed

suppliers and partners Westworks can be expected to deliver the following

non-cashable benefits:





1. Business improvement



 Sharing of best practice and knowledge, together with maximising

opportunities for collaborative working and sharing of resources;

 More efficient working and procedures, together with the avoidance

of and/or removal of duplication;

 Management and influence of the market and supply chain;

 Increasing programme and specification alignment to smooth

programmes and achieve consistent supply chain opportunities;

 Opportunity to get residents involved in developing and improving the

design and delivery of maintenance and other services;

 Better quality products and specifications designed and developed by

residents;

 Access to added value services from our service providing partners.





2. Qualify the workforce



 Sustainable communities through local employment opportunities;

 Additional collaborative training opportunities between members and

partners.







3. Sustainability Issues



 Ecologically sound specifications and a more comprehensive

approach to fuel poverty;





49

 Minimising the impact on the environment by reduced number of

contracts and contractors working within both the local and regional

base;

 Minimising travel distances for contractors and suppliers;

 Developing a framework for improved collaboration with local

employers, contractors and suppliers.





On the basis of the strong financial arguments presented in this document

and the significant non-cashable benefits described above, which align well

with the group‟s vision & objectives, members are convinced that the case for

establishing Westworks is compelling and that it will lead to valuable

outcomes.



11.2 Management of the Business Plan

It is proposed that the Westworks Co-ordinator will support the Consortium by

undertaking the following tasks;

 managing the delivery of the Westworks Business Plan, ensure

compliance with the Consortium Agreement, and coordinate all

membership issues;

 assisting in the preparation of a supporting Action Plan;

 acting as a point of contact for all Westworks data, including the

management of the Collaborative Procurement Register;

 developing and implementing efficiency measurement processes and

reporting, including criteria design and definition, at Westworks and

member level;

 chairing and facilitating the monthly Westworks Meetings;

 providing support and data to the Westworks Board members and

meetings;

 seeking to bring about greater alignment of programmes and

specifications to enable joint procurement opportunities to be

maximised;

 working with members to bring together procurement opportunities;

 co-ordinating procurement Project Groups with the lead member;

 developing and implementing new, standardised Westworks

operating procedures and continuous improvement systems.

 attending National Procurement Meetings, chaired by the NCA;

 managing the Westworks Website;





50

 producing Quarterly Efficiency Statements and seeking to draw off

Efficiency Grant funding;

 assisting in the preparation of End of Year reports.

 internally and externally, promoting the profile and successes of

Westworks, including the production of regular newsletters and

leaflets about Westworks;

 carrying out assessments of any organisation seeking to join

Westworks, to determine how the Westworks Business Plan will be

affected, and to produce recommendations to the Group on new

membership requests.



11.3 Sustainability of the Group

Sustainability has been considered in two contexts:





1. Environmental and Social Sustainability:



 minimising waste and environmental impact through the specification

or construction process;

 by undertaking activities which produce long-term lasting benefits,

such as skills training and the creation of local employment

opportunities;

 by ensuring that services and property improvements support

sustainable tenancies and encourage our residents to want to remain

in their homes for the longer term because they meet their needs and

aspirations, and contribute to a positive quality of life.



2. Sustainability of Westworks itself:



 by optimising the use of Westworks members existing resources

through operational efficiency;

 by being flexible and responsive to change;

 by maximising efficiency gains so that, in the long-term, Westworks‟

need for subsidy or external support in terms of both human and

financial resources, will no longer be required;

 by ensuring that Westworks is a successful, viable, and stable entity;

 by reducing the average annual cost of each member‟s Business

Plans.







51

12 PLAN FOR IMPLEMENTING THE CONSORTIUM



12.1 Programme for Consortium Development

Since its formation three years ago, Westworks has established itself as a

successful consortium. This can be demonstrated by the successful

implementation of three pilot procurement projects (to date), which are

expected to deliver around £1.1M of efficiencies to the participating

members. However, Westworks members know there are opportunities to

mature further and are keen to deliver their full efficiency potential.



The Consortium Implementation Plan on the following page outlines the

actions that are needed to take Westworks to the next level. Key points

include:-



Westworks website

In addition to being a gateway for collaborative partners and potential new

members, the website will also be a tool for existing members to securely

store and access information and data on Westworks activities and plans.

Utilising the website in this way will provide an effective and efficient

communication tool and avoid the need for the costly alignment of IT

systems.



Westworks Co-ordinator

This is seen by the members as a vital role that will assist the future

development of Westworks. This would be funded from the grant received

as a result of the successful submission of this Business Plan. The role,

which would be filled on a consultancy basis, will carry out the activities

listed in Section 11.2.



Procurement programme

The Westworks membership is varied in its make up and this means that

member organisations are able to offer a wide range of skills to the

collective. However, in the event of any skills gaps on an individual project,

these can be accommodated through the use of consultants; thereby

ensuring that the Project Teams are complete.









52

Consortium implementation plan

2007 2007 2007 2007 2007 2007 2007 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2009 2009

Item Action Depenencies Go/no-go Status 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4

1 Develop Consortium Agreement Complete

2 Obtain Consortium Agreement from members 1  Complete

3 Members sign Consortium Agreement 2 Complete

4 Send Consortium Agreement to NCA 3 Complete

5 Set up Business Plan Steering Group Complete

6 Develop Business Plan 5 Overdue -complete 11/08

7 Obtain Business Plan approval from members 6  Overdue -complete 11/08

8 Submit Business Plan for NCA approval 7 Overdue -complete 11/08

9 NCA Business Plan approval 8 

10 Obtain Westw orks internet domain names Complete

11 Develop Westw orks w ebsite design 10 Complete

12 Obtain w ebsite constuction and hosting proposals / quotes 11 In progress

13 Select w ebsite service provider 12

14 Develop w ebsite 13

15 Westw orks w ebsite go-live 14

16 Develop job description for the Westw orks co-ordinator

17 Tender activity for Westw orks co-ordinator 9 & 16

18 Appoint Westw orks co-ordinator 17 

19 Westw orks co-ordinator in place 18

20 Procurement pilot - Kitchens supply Complete

21 Procurement pilot - Window s supply / supply & fit Complete

22 Procurement pilot - Digital Changeover Complete

23 Procurement pilot - External Doors supply / supply & fit In progress

24 Ag ree Forma t f or S ta nda rd Component S pec if ic a tion

25 Dev elop S ta nda rd Perf orma nc e S pec s f or Ma in Components

26 Dev elop Ag reed Contra c t Doc uments / princ iples In progress

27 Develop Benchmarking / ongoing data collection processes

28 Develop feedback procedures

29 Develop detailed procurement programme from Business Plan 7

30 Commence procurement programme 29

31 Decide upon criteria for potential new members Complete

32 Develop new member recruitment tools in place 31 In Progress

33 New member recruitment tools in place 32

34 Commence new member recruitment 33









53

New member recruitment

It is recognised that not all members of Westworks will have the same

procurement requirements and therefore, in order to maximise the

opportunities for all members, it is desirable to have a large and active

membership. Westworks is therefore committed to expanding the

membership within the Wessex operational area in order to secure the

greater opportunities and benefits a larger, combined „client‟ can provide.



Reportable milestones

In addition to standard reporting requirements of the NCA, Westworks

would also expect to report on the following key milestones:-

 go-live of the Westworks Website;

 initiation of tender activity for the recruitment of the Westworks Co-

ordinator;

 commencement of work by the Westworks Co-ordinator;

 commencement of the Procurement Programme;

 commencement of the first procurement project;

 award of the first procurement project.





12.2 Change Management

There are a number of identified areas where it has been recognised that

member organisations will need to consider changes to their management

structures and processes in order to maximise their opportunities through

Westworks.



Standing Orders

Each member organisation has already reviewed its own Standing Orders in

order to determine whether they contain any barriers to collaborative

working. These are now being addressed by the individual organisations.

Two member organisations have already altered their Standing Orders to

actively permit and support collaborative procurement.



Culture

For any form of change to be successful organisations must possess a

culture of honesty, trust and a willingness to embrace new ideas. This not

only applies to changes in process, but also the larger concept of

collaborative working. This is assisted by the robust support and

commitment of top level management and the appointment of a Westworks





54

Management Team representative from each member organisation to

promote this new way of working and to communicate the benefits to both

staff and residents.



Processes

It is recognised that variations in organisational processes can be a barrier

to collaboration and engagement. There is therefore a requirement of

member organisations to take proactive action in order to resolve such

issues. This can be either by individual organisations considering

modifications to their existing processes or, if possible, adopting a

procurement initiative that is able to accommodate the variations required.



To ensure the smooth execution of a procurement activity each Project

Team will, upon its initiation, carry out a process appraisal to identify the

likely impact of the initial proposals on each member organisations‟ internal

policies and procedures. Westworks‟ experience to date through pilot

procurement projects is that this has been a very effective way of

addressing these issues and promoting engagement.



Specifications

Westworks is intending to work proactively to align specifications, or agree

specification guidelines, prior to the commencement of each procurement

project.



All member organisations face similar challenges and have similar

requirements and therefore each Project Team will take shared

responsibility to develop a final specification that meets the requirements of

all members. This will also include the service standards required. To

ensure a successful procurement project, and to enable the agreement of

all participating members, specifications will tend to be output-based rather

than process or product based.



Existing agreements

A number of the existing long-term agreements that members have in place

are for the delivery of works and services by members‟ own in-house

service providers (i.e. DLOs). As not all members have DLOs, agreements

made by Westworks will tend to cover both “supply” and “supply & fit”,

thereby maximising the potential participation of all members. Whilst the

resourcing of work away from a members‟ DLO could have strategic

implications for that organisation, and therefore discourage participation, it

is recognised that changes in “installer” will at least be considered so that

the relative advantages and disadvantages can be appraised. Members will

also have the opportunity to benchmark Westworks‟ installation costs and





55

service standards against existing arrangements; including those of the

existing DLOs.



The other existing long term agreements are with external contractors.

However, these contractual commitments have to be honoured before

consideration can be given to collaborative procurement activities through

Westworks.



Members are currently actively benchmarking their existing arrangements

with each other and this has resulted in some key decisions being made.





12.3 Risk Management

Westworks is in the process of developing a risk register (copy over page).

Each identified risk will have an assigned owner who will be responsible for

taking the necessary action to contain the risk. All risks will be prioritised on

the basis of combined impact and probability.



The Risk Register will be under the control of the Westworks Co-ordinator

and will be reviewed at both the monthly Westworks Management Team

meetings and the Westworks Board meetings. Up until the appointment of

the Westworks Co-ordinator, this responsibility will rest with the Chair of the

Westworks Management Team.









56

Westworks Risk Register

3 = high 3 = high

2 = medium 2 = medium

1 = low 1 = low



Risk Description Impact Probability Priority Containment action Owner Status Date last Date

nr. reviewed Closed

1 A member organisation does not agree with the 3 1 3 Ongoing communication with all Business Open

Business Plan member organisations and referral on Plan Steering

key decisions. Ensure senior Group Chair

management are aware of the

Business Plan.

2 Westworks looses ownership of website domain names 2 1 2 Ensure Westworks domian names N James Open

ownership is renewed

3 Co-ordinator not in place in accordance with planned 3 1 3 Work on job description to be started tba (by Open

timings in accordance with plan and monitored Management

Team)

4 Specifications not agreed 1 1 1 Put in place timetable for agreement tba (by Open

and ensure Project Team in place Management

Team)

4 Contract principles not agreed 1 1 1 Make regular agenda item at Management Open

Management Team meetings Team Chair

5 Procurement programme not commenced on time 3 1 3 Set out expectations with members tba Open

on programme agreement and ensure

adequate resources are available



6 New member tools not in place 2 1 2 Make regular agenda item at Management Open

Management Team meetings Team Chair

7 Member organisations do not participate 3 2 6 Ensure buy-in through the Consortium Management Open

Agreement. Have access to senior Team Chair

management teams.

8 External OJEU challenge received to a Framework 3 1 3 Standard approach to be adopted. Project Leads Open

Agreement. Lead authority to ensure Contract

Notice etc is completed correctly.

Participating partners to check all

documentation to satisfy themelves

that compliance requirements have

been met.

9 Expenditure during the term of an Agreement exceeeds 2 1 2 Lead authority to monitor expenditure Project Leads Open

the range stated in the Contract Notice. levels throughout the duration of the

Agreement to ensure stated range is

not breached.

10 A selected Service Provider fails to perform to the 2 2 4 All Framework Agreements to be Project Leads Open

required standards. closely managed by the Lead

Authority with a view to securing the

required level of service and promoting

an ongoing programme of continuous

improvement. Remedial actions and

exit strategies to be developed as

required.

11 Westworks Management Team changes and the buy-in 2 1 2 Board are to ensure activity is Management Open

is not as great from the new representative maintained and the remaining Team Chair /

members are to encourage active Board

participation

12 Contractors fail to engage with the principles of 3 2 6 Members are to ensure that the Management Open

Westworks and do not assess open frameworks as real marketing of Westworks retains its Team

added opportunity. values and that open frameworks are

demonstrated as true new business

opportunities

13 Local consortium competition reduces the opportunities 2 1 2 Westworks is to actively procure on a Management Open

to Westworks collaborative basis in order to Team Chair /

demonstrate real benefits and attract Board

new members









57

13 COMMUNICATION & KNOWLEDGE SHARING



13.1 Communication & Knowledge Sharing Objectives

Westworks members are committed to the following:-

 Establishing a stable Management Team;

 Providing points of contact for each member organisation;

 Developing a “brand image”;

 Promoting partnering principles with both internal and external

customers;

 Encouraging proactive team-working;

 Involving and consulting all interested parties;

 Demonstrating openness and trust throughout;

 Sharing experiences, knowledge, learning and opportunities;

 Demonstrating ownership of collaborative procurement initiatives;

 Prospering through clear, concise and effective communications;

 Ensuring the timely flow of information;

 Initiating feedback and undertaking regular reviews of service,

product quality and price, to provide a structured programme of

ongoing continuous improvement.



13.2 Communication Mechanisms

Westworks‟ communication and knowledge sharing objectives will be

actively supported by:-

a) Monthly Management Team meetings that shall be attended by

representatives for each member with a view to assessing:-

 business plan priorities;

 alignment possibilities;

 progress on current procurement initiatives;

 proposed procurement initiatives, or potential

opportunities;

 feedback on existing procurement initiatives

 the need for and the progress on procurement activities;

 new information and knowledge that can be shared to

mutual benefit.



b) The maintenance of spreadsheets providing, by work type,:-

 a record of procurement options ready to be considered by

each member;

 a register of „Open Contracts‟ being developed;

 a register of „Open Contracts‟ that are available for

members to join.





58

c) The development of a “branded” website upon which the following

shall be retained and maintained by the Westworks Co-ordinator:-

 information about Westworks;

 documents relating to the governance structure and

business plan;

 agreed procedures;

 meeting minutes;

 procurement status registers;

 service level agreements (and supporting technical and

financial information) for established supply chain partners;

 news;

 KPI and benchmarking data;

 NCA and other key guidance documentation;

 links to member organisations‟ websites;

 links to procurement partners‟ websites.



d) Links to the Westworks website from the members‟ own website and

intranets.



e) Each member communicating all of the above to all relevant

personnel within their own organisations.



f) Linking up and engaging with the NCA and other procurement

consortia, attending consortium meetings and conferences where

appropriate.



g) Westworks members, individually and collectively, seeking to

increase the awareness of Westworks and its activities to others.



13.3 Performance Measurement

 Regular review meetings shall be held with our supply chain partners to

ensure that progress and standards are assessed and enhanced.



 All meetings shall place a particular emphasis on maintaining a

programme of ongoing continuous improvement.



 Meeting agendas may typically cover the following:-

 Matters Arising.

 Issues Addressed - since last meeting.

 Current Issues – and proposed actions/solutions.

 Quality of Products – what defects/maintenance works have been

reported?







59

 Resident Satisfaction – what issues are arising?

What action is needed?

 KPI Data – assessment of data being reported.

 Schedules of Work – Service provider in receipt of up-to-date

forecasts of programmes of work

 Training – all staff appropriately trained

 Action Plan – Review and update.

 Partnering Document – Review and update.





 In respect of KPIs, subject to the specific procurement initiative,

consideration shall be given to regular measuring and reporting on

aspects such as:-

 Quality of Designs - accordance with specification/brief (eg.

Kitchens);

 Supply of Goods - % of deliveries on time in full;

 On-site Quality Control Inspections – Service provider‟s assessment

on installation works.

all with a view to:-

 raising standards for Westworks members;

 benchmarking against other examples within the affordable housing

sector.









60

14 IMPLEMENTATION GRANT





14.1 Basis of application for Implementation Grant

The details of eligible expenditure and the grant application are laid out

within Annex A. The milestone dates quoted are indicative and are

dependant upon Board ratification.





14.2 Balance of Costs

The balance of implementation costs, not covered by grant funding, and

ongoing running costs, which will be minimal, will be met from the

Westworks annual membership fee calculated in accordance with the

process detailed within the Consortium Agreement. Costs associated with

individual projects will be borne by the members participating in that

particular project.









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ANNEX A – ELIGIBLE EXPENDITURE AND GRANT APPLICATION

Expenditure Activity Purpose Milestone Cost (£) Grant

item Application

1. Westworks Appointment of a Co- To provide Appointment Co-ordinator Costs ( April 09 to

Co-ordinator ordinator. services as per March 09 100 days / annum @ March 10

section 11.2 £ 500 / day including

expenses)



£50,000 £ 50,000





2. Supply Appointment of specialist 1) To assist in the March 09 Consultancy Support April to

Chain consultants alignment of - October 09

improvements specifications, commencement 30 days @ £ 800 /

Management of of specification day

framework and / alignment

or collaborative activity £ 24,000

working

agreements with

contractors /

suppliers / sub-

contractors.



2) To assist with March 09 – 20 days @ £ 800 / April to

the generation of commencement day October 09

non-cashable of non-cashable

benefits in the benefits £ 16,000

supply chain (e.g. identification

creation of local

employment

opportunities) £ 40,000





3 Westworks Creation and set-up on To establish a February 2009 £ 9,400 March 09

website the Westworks Website Westworks – go-live date

marketing and

communication

tool for members

and contractors £ 9,400



4 Skills Appointment of specialist To create a skill Appointment - 35 days at £ 800 / April to

development consultants set improvement February to day September

programme for March 2009 09

members‟ staff £28,000

development



£28,000

5.Governance Appointment of auditors To undertake By 2010 £ 1,175 By March

annual external 2010

financial audit

£ 1,175









62