Sustainable business

Summary

By implementing sustainable business practices, Housing NSW will be able to provide a more efficient and effective service to people in housing need. Sustainable business means not only introducing cost saving measures but to focus on how Housing NSW conducts its day-to-day operations. We will seek to achieve efficiencies in areas, such as staff training, streamlined business processes, and managing the standard and maintenance of properties. Maintenance and the renewal of stock through the Long-term Asset Plan incorporates sustainable and appropriate housing for the whole housing portfolio.

Highlights

• Commonwealth State Housing Agreement provided $421.92 million for Housing Policy and Assistance Program
• Launch of new Housing NSW online skills development tools, as part of the Building Our Future: People, Work and Skills Framework
• 17 pilot locations to trial Maintenance Reform Program, involving 26,400 properties and 14 multi-trade maintenance contractors
• 6000 properties had major maintenance done under the Accelerated Improvement Program
• Under the Fire Safety Program, approximately 10,000 properties were upgraded for a cost of $47 million, with a total cost to date of $190 million
• First 16 solar photovoltaic systems installed on homes in October 2007 as part of the Blacktown Solar City project
• NSW Parliament passed the Housing Amendment (Tenant Fraud) Act 2008 and Tenant Fraud Unit established

Key performance indicators 2007/08

Top of page

Commonwealth State Housing Agreement

The current Commonwealth State Housing Agreement (CSHA) is a five-year agreement (from 2003/04 to 2007/08), signed by all states and territories and the Commonwealth Government, as well as separate bilateral agreements between each state (or territory) government and the Commonwealth. The multilateral CSHA between the Commonwealth and states and territories sets objectives and funding levels for national housing assistance. The NSW Bilateral Agreement sets out housing assistance policy objectives and strategies, key performance indicators and milestones for NSW that are reported annually in the CSHA Outcomes Report.

In 2007/08, the CSHA provided $421.92 million (comprising $301.246 million as Commonwealth funding and $120.676 million as State funding) for housing assistance delivered by Housing NSW and the community housing sector.

Under the Agreement, Housing NSW will:

• provide responses to homeless people or those at risk of homelessness, Aboriginal people and people with support needs
• reduce barriers to employment
• build partnerships with private, non-government and other government organisations
• strengthen local communities and
• address the viability and capacity of housing providers.

A new National Affordable Housing Agreement (NAHA) is being negotiated through the Council of Australian Governments. The NAHA will replace programs funded by the CSHA and the Supported Accommodation Assistance Program (SAAP) and encompass funding for new housing related initiatives. The current CSHA was extended to 31 December 2008 with the new Agreement to commence on 1 January 2009.

Providing Quality Human Resource Management

Our greatest resource is our staff and by continuing to develop our staff we are planning for a sustainable future. As a sustainable business, Housing NSW needs to have effective strategies in place not only to develop our staff but to plan for future workforce changes.

Workforce Planning

The first Strategic Workforce Plan for Housing NSW for 2008–2012 identified six workforce goals which connect people strategies to our Corporate Plan outcomes. These focus on recruitment, retention, development and deployment of staff. The new People Work and Skills Framework and the Building Leaders Together Program are integral to the plan.

The plan will be updated annually to ensure that it continues to align to the Corporate Plan. We will be encouraging staff to take ownership of the plan and will ensure that the strategies are reflected in Divisional business plans. The focus in 2008/09 will be to strengthen workforce forecasting and planning capability for business users.

People, Work and Skills Framework

The framework describes the knowledge, skills and behaviours needed to effectively perform all jobs in Housing NSW. Along with information about job families and accountabilities, the Building Our Future: People, Work and Skills Framework includes a capability development guide, a career guide and updated performance management tools. The Framework provides better direction for the development of staff. It will help staff to address skills gaps, and will underpin other future people management strategies and initiatives.

A review of Framework usage will be undertaken in 2008/09. In 2008/09, we will be encouraging staff to use the Framework more extensively and will strengthen its use in recruitment, job design and performance management. Housing NSW is one of the few NSW government agencies with a capability framework, and has been invited to participate in the NSW Public Sector Capability Framework Reference Group.

An integrated approach to skills and career development for staff

In May 2008, Housing NSW launched its new online skills development tools as part of the Building Our Future: People, Work and Skills Framework. The Framework identifies each job within the larger picture of job families, and provides descriptions of possible career paths and skills required to progress to the next stage.

It enables staff to:

• look at the types of work done in Housing NSW and what is expected for all jobs
• understand what they need to do the best job possible
• develop professionally on their own and in partnership with their manager
• access careers information
• drive their career and provides staff with the tools to do it
• access the right mix of skills and expertise to meet corporate objectives.

Managers are able to use the Framework to conduct performance reviews, devise work plans, develop position descriptions and help grow a productive team.

Project Management Framework – Change Management Toolkit

The change component of the Project Management Framework for business projects was developed in the second half of 2007/08. The change management toolkit will enable staff to manage the people aspects of projects, including how people are affected by changes to systems, policies, processes, structures and roles. It includes fact sheets and templates to guide project and change managers through the different stages of change. The change toolkit will be launched in September 2008.

Top of page

Improving Asset Management

As the largest landlord in NSW, Housing NSW has a portfolio of some 130,000 properties to maintain. We are reassessing our asset base and continuing to identify ways of efficiently maintaining existing properties, disposing of excess properties, and managing contractors.

Asset Management Framework

Housing NSW has developed a Long-term Asset Plan to renew and realign the portfolio to meet the needs of existing and future tenants. The Asset Framework outlines the tools, rules and processes to implement the Long-term Asset Plan.

In 2007/08, we finalised all the local asset management plans and conducted reviews of the plans to enable ideas to be shared across the organisation. Other activities over the past year included:

• updating the Long-term Asset Plan to include community housing stock
• developing the Integrated Social Housing Planning approach to integrate community housing into
  the asset planning process
• developing a set of use codes to identify the future use for any property working on an asset planning and approval framework for individual projects
• identifying the business processes to integrate asset planning into the wider activities of Housing NSW.

In the coming year, we will be evaluating the rules, tools and processes for asset planning, and developing design requirements.

Maintenance Reform Program

Established in 2004, the Maintenance Reform Program (now called New Maintenance Contracts) was a new planned approach to maintenance. This involved moving away from the reactive approach to a planned maintenance model, which aimed to reduce annual maintenance costs and bring all assets to a benchmark condition.

In 2007/08, Housing NSW tested 17 pilot locations across the state to prepare for the tender in early 2008. This involved 26,400 properties and all 14 of the current multitrade maintenance contractors. A preventive maintenance program, called the Asset Dwelling Service, was undertaken on all these properties, with inspections and minor repairs for smoke alarms, hot water services, and electrical systems. This program will reduce the higher cost of urgent maintenance while ensuring the safety of the occupants of each property with regular maintenance. In addition, we have undertaken planned improvements on over 9000 properties, replacing or repairing kitchen cupboards, floor coverings, bathroom tiling, internal and external painting, and fencing. Following the success of the pilots, these initiatives have been included in the new contract model.

Tenders for new maintenance services

In February 2008, Housing NSW called for competitive tenders for the new maintenance services. The tenders closed in May following a positive response from the building industry. We will be awarding the new contracts in August 2008.

To deal with the new contracts, we have established new roles and responsibilities for staff to manage, assess and analyse the maintenance services and to monitor improvements by contractors through the contract performance management framework.

In 2008/09, Housing NSW will:

• implement the new contract model in October 2008 for five-year contracts
• refer all urgent and responsive maintenance requests to the Housing Contact Centre from October 2008
• deliver and manage the maintenance services through the asset teams on behalf of the client service teams and area in each division
• regularly conduct contractor performance reviews
• review programs of work on a monthly basis and amend the programs at six-monthly intervals and
• conduct regular customer satisfaction surveys.

High-level Maintenance through Accelerated Improvement Program

The Accelerated Improvement Program provides a planned maintenance strategy to remove the maintenance liability of Housing NSW assets. Approximately 6000 properties have had major maintenance undertaken through this program in the past year. This type of maintenance will occur under the new maintenance contract once it begins in October 2008.

Property Assessment Survey

Housing NSW uses property assessment surveys to identify maintenance issues and ensure all dwellings have the basic provision standards. Contractors commenced surveying in the Property Assessment Survey 2 in late March 2008 and will continue until November 2008. Following the survey, we will develop a plan for maintenance work and prioritise the work based on need.
The program will:

• deliver a planned maintenance program, which means that homes will remain in good condition from year to year
• improve client satisfaction
• reduce urgent (responsive) maintenance requests and
• improve management of tenant damage.

Top of page

Call Backs for Maintenance Review

Housing NSW measures the performance of current maintenance contractors in delivering responsive maintenance services to tenants. In December 2006, we introduced the call back program for tenants who had placed a repair request with the Housing Contact Centre.

Since the introduction of the program, contractors have been measured at 92 percent compliance for all responsive categories, with urgent work at 99 percent. Eighty-five percent of contractors completed the required work within the timeframe.

Most tenants who had been surveyed stated they were satisfied with the responsive maintenance delivery.

A risk management strategy has been developed to analyse the contractors’ compliance with timeframes.

Property Upgrading and Planned Maintenance

Housing NSW has a program to improve properties to meet acceptable standards and condition. These systematic planned maintenance programs include repairing or replacing components of properties, such as kitchens, bathrooms, floor coverings, painting and fencing. During 2007/08, Housing NSW completed work on over 55,000 properties under the planned maintenance and upgrading regime. We undertook improvements to high-rise buildings, including repairs to drainage, windows and roofs. Approximately $200 million was spent on planned works and upgrading in 2007/08.

During 2007/08, we planned maintenance work programs to support the new contract model for 2008/09. This will enable us to bundle work for maintenance contractors to submit tenders and, therefore, improve services and obtain better value for money. Clients will be advised of scheduled maintenance works for their properties.

In the future, we:

• expect planned maintenance activities to be approximately 70 to 80 percent of repairs once the new maintenance model is introduced in October 2008
• will establish forward programs of work for the next five years and complete property assessment surveys in late 2008
• will award new maintenance contracts in August 2008 and
• clear the backlog of maintenance over the next seven years.

Fire Safety Program  

At the completion of the third year of the Fire Safety Program, Housing NSW has undertaken firesafety improvements to 52,000 buildings and units or 64 percent of the program. During 2007/08, approximately 10,000 properties were upgraded for $54.72 million at a total cost to date of $190 million.

Under the program, we are installing sprinkler systems in multi-unit buildings and improvements to common areas, including stair hallways. We also introduced new paint technologies to reach fire-safety standards. Fire-safety upgrading reduces the spread of fire to other units and protects the safety of neighbouring residents.

We have also introduced new quality procedures to protect the fire-safety upgrade works. All future maintenance contractors will be trained on the fire-safety manuals to ensure maintenance does not damage the installed protection.

Responsive Maintenance

Housing NSW completes urgent health and safety repairs within a four-hour timeframe, and responds to other immediate repairs to property components, such as stoves, hot water systems and heaters, within the next working day. This responsive maintenance work accounts for approximately 60 percent of all work orders and take place within 24 hours. Once the new maintenance contract begins, these interventions will be incorporated into the planned maintenance model.

Designing Out Maintenance

The Designing Out Maintenance initiative was announced in January 2007. Resitech will test ideas for improving new housing at six pilot projects in North Parramatta, Kingsgrove, Armidale, Crestwood (Queanbeyan), Lidcombe and Chester Hill. We will be trialling a suite of building materials to make savings in long-term maintenance and energy and water usage, and increase accessibility. In the long term, we expect to save on maintenance costs by using the Designing Out Maintenance specifications for new developments.

During 2007/08, we had commenced construction of the projects at Kingsgrove and North Parramatta and put the Queanbeyan project out to tender at the end of June. However, the Armidale project is no longer considered viable because of site costs imposed by the local council. We commenced the process for applying for rezoning for the Lidcombe and Chester Hill projects with the local councils.

In the future, we plan to incorporate the Designing Out Maintenance methods on all new construction projects and refurbishments to achieve greater sustainability and waste reduction.

Top of page

Solar Hot-water Heaters

As part of the jointly-funded Blacktown Solar City Project, the Consortium will install solar photovoltaic and solar hot-water systems to 100 public housing dwellings, and solar photovoltaic systems to 40 social housing apartment blocks in the Blacktown Council area by mid 2009.
Over the past year:

• the first 16 solar photovoltaic systems were installed on dwellings in the Blacktown area in October 2007
• Housing NSW also installed solar hot-water heaters on 112 residential properties in the Campbelltown area.

Housing NSW will survey households in the Campbelltown area in 2008/09 to evaluate the trial. An additional 73 solar photovoltaic systems and 100 solar hot-water systems will be installed on public housing dwellings and 40 solar photovoltaic systems on social housing apartment blocks in the Blacktown Council area. We will develop a policy for replacing approximately 60,000 existing electric hot-water heating systems with gas, heat pump or solar hot-water systems.

Solar panels benefit social housing tenants

The installation of solar photovoltaic and solar hot-water systems to public housing homes in the Blacktown area has had a positive impact on tenants as well as for Housing NSW. The feedback we have received so far indicates that households are saving $60 to $80 on their quarterly energy bills. Another side benefit for tenants is that they now have greater financial security as they have more disposable income for other expenses.

In conclusion, we can say that a Solar City package:

• reduces tenant stress about energy bills
• increases the sustainability of tenant households
• reduces greenhouse gas emissions
• improves self-esteem and community engagement as social housing is recognised as a leader in sustainability
• strengthens community adaptation capacity to meet climate change impacts and
• reduces spending on energy infrastructure.

Fire Prevention in Community Housing/Insurance Celebrations

In 2008, the Community Housing Insurance Scheme celebrated its 10th anniversary. This scheme helps community housing providers to access flexible insurance products that are cost effective and meet the NSW Government’s requirements that Housing NSW’s assets are managed in an appropriate manner. The insurance products include:

• householders’ insurance for all properties owned by the NSW Land and Housing Corporation
• $20 million of public liability insurance for each community housing provider and
• business insurances for community housing providers.

The success of the scheme is that:

• Housing NSW can be confident that the community housing sector has adequate insurance cover
• the premiums are lower than for individual cover and
• the Office of Community Housing is able to monitor areas of concern and develop responses. One such concern was the increasing number of fires.

Over the past year, the Office of Community Housing delivered firesafety initiatives to be rolled out for winter 2008. Community housing providers will deliver information about fire prevention and safe escape planning for the home to their tenants. An Arson Prevention Best Practice Project will seek proposals for a demonstration project or projects in the community housing sector.

During 2007/08, we reviewed all insurance arrangements and determined that the Community Housing Insurance Scheme was effective in terms of products, cost and delivery and we will continue it for another year in its current form. There will be an increase in premiums for 2008/09 as a result of the growth in fire losses in 2006/07 and 2007/08.

Property Disposal Assessment Panel

Housing NSW sells properties when they do not meet the needs of clients or are not economical to maintain or are in a location no longer suitable for clients. Other reasons include the need to sometimes break down the concentration of public housing in a particular area or because a tenant wishes to buy the rented property. The Property Assessment Disposal Panel ensures that proposals to sell specific properties are consistent with the long-term asset planning strategies of Housing NSW. The Panel comprises the Director-General and other senior Housing NSW Executives. It reviews all proposals to sell assets and analyses trends and issues. Independent valuations are used to set prices for property sales.

Top of page

Information Systems

By using technology effectively, Housing NSW will meet its objectives of delivering a costefficient and sustainable business.

Project Meridian

Project Meridian is a new housing management information system to manage clients, assets, housing services, and applications for housing assistance. Over the past year, Housing NSW has worked to schedule for a 2010 go-live date. Since work began in September 2007, we have:

• completed strategies, methodologies and plans
• implemented a number of communication initiatives
• completed a test strategy and developed test scenarios
• acquired and installed the development and quality assurance hardware
• configured a number of modules and
• completed and signed off business requirements documents.

Independent audits are being conducted. We are reviewing the risk plan regularly through the Risk Management and Audit Committee.

In 2008/09, we will continue to ready Project Meridian to go live in April 2010.

Electronic Records and Document Management

The Electronic Records and Document Management program started in 2006 to upgrade our existing recordkeeping practices and systems. The program will enable us to meet our business objectives by:

• introducing best-practice recordkeeping systems
• improving how staff retrieve key business information
• ensuring we meet legislative recordkeeping responsibilities and
• having a single system for record management.

In 2007/08, we completed Phases 1 and 2, with TRIM now installed as the records management system for all Housing NSW files. In addition, we:

• implemented new policies, guidelines and procedures for staff and
• have a single system for correspondence tracking.

During the year, we started work on Phase 3, which will be concluded in February 2009, to:

• introduce electronic data management for client files and item tracking
• investigate the feasibility of migrating Legal Services Branch files from Worldox to TRIM and
• initiate the progressive introduction of electronic data management to other records across the rest of Housing NSW.

Risk Management and Procurement

Effective risk management increases Housing NSW’s ability to meet corporate objectives. It focuses on forward planning and ensures informed decisions are made about resource use and service delivery. Specialist staff with expertise in risk assessment are able to provide the Executive with up-to-date information to make management decisions for Housing NSW’s future.

Governance

The Executive Team is the primary, strategic, decision-making forum for leadership of Housing NSW under the direction of the Director-General. Our governance arrangements are regularly reviewed to ensure that robust management and decision-making processes are in place. A Code of Governance Practices, which was endorsed by the Executive in July 2005, was updated in February 2008. It provides a charter for each significant committee and clarifies the reporting and review responsibilities.

In March 2008, the Executive Team participated in an educational seminar presented by the Independent Commission Against Corruption on ‘Ethical Leadership in the Public Service’.

Risk Management

The Risk Management and Audit Committee monitors risk management processes and systems of internal audit and control. The committee met five times this year and provided advice to the Executive. (For more information on the Risk Management and Audit Committee, see Appendix 3, page 75.)

Risk Management Framework Enhancement

Over the past year, Housing NSW has improved its organisational risk management by optimising the insurance program. The key planned initiatives were:

• a greenfields insurance review which ensured the insurance program remained optimal and resulted in insurance procurement savings (see Appendix 18, page 97) and
• progressive integration of an Enterprise Risk Management Framework, based on AS/NZS4360:2004.

For injury management performance, insurance savings and costs, and summary of standard risk management activities, see Appendix 7 page 82 and Appendix 18 page 97.

During 2008/09, we will continue to integrate an Enterprise Risk Management Framework which will include re-evaluation and ongoing regular Executive review of strategic and high-level operational risks.

Business Assurance

Housing NSW’s Business Assurance Unit works to prevent and investigate fraud, corruption and misconduct, and conducts the internal audit program. We have a number of mechanisms for staff, clients and the public to report suspected corruption or misconduct.

During 2007/08, Business Assurance investigated 442 allegations. Eight audits were completed in 2007/08 and their findings presented to the Risk Management and Audit Committee. Three additional audits are being finalised. The internal audit plan was regularly reviewed.

In January 2008, the Independent Commission Against Corruption (ICAC) released a report of an investigation which found that a Housing NSW employee had engaged in corrupt conduct by receiving payments to expedite applications and transfers. The ICAC made 18 recommendations for improvements to corruption prevention strategies, and Housing NSW will implement the recommendations. Over the past year, we revised our Corruption Prevention Framework and a new Framework was approved by the Risk Management and Audit Committee in March 2008.

We provided Code of Conduct and Ethics training, which is mandatory for all staff. An additional training program on managing conflicts of interest was launched in 2007/08 and conducted 23 times. We conducted the NSW Audit Office staff fraud awareness survey online for Housing NSW staff and 1057 staff completed the survey. We scored higher than Government benchmarks in most categories.

In May 2008, registration and investigation of tenant fraud allegations was transferred from Business Assurance to the Tenant Fraud Unit. This was to prepare for tenant fraud initiatives passed by Parliament on 14 April. Business Assurance, however, retains responsibility for investigating allegations made against staff and contractors.

Tenant Fraud Unit

The NSW Parliament passed the Housing Amendment (Tenant Fraud) Act 2008 which came into force on 14 April 2008. Housing NSW now has the power to prevent, detect and prosecute tenant fraud to ensure that affordable housing is only provided to those who are most in need. We aim to significantly reduce the incidence of tenant fraud and its cost to Housing NSW and the community.

During 2007/08, Housing NSW created the Tenant Fraud Unit, which is responsible for investigating and, where necessary, prosecuting complaints of fraud.

The Housing Amendment (Tenant Fraud) Act 2008 introduces several new provisions into the Housing Act 2001, such as:

• imprisonment for tenants obtaining housing by false representations
• the ability to criminally prosecute fraud offences under the Housing Act 2001
• making it an offence if a tenant intentionally fails to report to Housing NSW a change in household circumstances within 28 days
• enabling Housing NSW to access information from Land and Property Information, Roads and Traffic Authority, NSW Maritime and the Office of Fair Trading and
• enabling Housing NSW to recover debt by reducing or cancelling any rental rebate.

An amnesty and comprehensive education campaign will be run from 1 July to 30 September 2008. During this time, tenants and occupants can contact the Housing Contact Centre to have their circumstances reviewed.

Tenants and occupants will not face civil or criminal prosecution during the amnesty period but may have their rents adjusted in the future.

Procurement

Through the Procurement Framework, approved in July 2007, Housing NSW is able to increase the value-for-money of its procurement activities. Over the year, 75 staff were trained in the Procurement Framework, including procurement strategy and tendering. During 2007/08, we finalised the business policies and procedures. Over the next year, we will deliver the final component of the training – the contract performance management module.

Electronic Procurement

By providing electronic procurement facilities, Housing NSW will be able to streamline the process and reduce administration costs. During 2007/08, we defined the business requirements for implementation. The project replaces the manual process so that users have a single point of entry for purchasing. During 2008/09, we will commence implementation within SAP and provide training for relevant staff.

Fleet Review

The Fleet Review Project identified key savings for fleet management. One initiative is to increase how long we hold vehicles, from two years or 40,000 kilometres to three years or 95,000 kilometres. This was implemented in May 2008.

Top of page