Agenda item

4.1       Consideration was given to a report by the LHC Group Director which provided Members with an overview of the organisation's performance.

4.2       The Joint Committee was informed that, as anticipated at the December 2018 meeting, LHC had not achieved its income and turnover targets for 2018-19. Reasons given included the slow pace of new house building, increased competition, and challenges faced from the Carillion Group collapse and Grenfell Tower fire. However, the Group Director noted that growth had been sustained for the seventh year in succession. Optimism for further growth was based on the business’s ability to respond to client needs, including a shift to Modern Methods of Construction and the leveraging of technical expertise.

4.3       Client feedback showed a satisfaction rate of 91%. Ratings for appointed companies was also high at 85% but below the 90% target. To gain a better understanding of this, a project team had been set up to develop a clear set of Key Performance Indicators (KPI).

4.4       Costs continued to be managed well, which had resulted in a growth in net surplus.

4.5       In terms of dignity and respect amongst LHC staff, 3 complaints had been received in the past year; and it was confirmed that LHC was working with the London Borough of Hillingdon's HR department to reduce this to 0. A key goal in this regard was to encourage communication within the organisation.

4.6       84% of staff had received some form of training, though efforts were being made to reach the target of 100%.

4.7       The SPA operation in Scotland continued to contribute over half of LHC's income, though this share was likely to decrease over the next 5 years, as investment continued in other UK regions.

4.8       Sustained growth was expected through development of regional teams, including the forthcoming launch of the South West Procurement Alliance (SWPA), a partnership with the Northern Housing Consortium to create a new joint brand - Consortium Procurement Construction (CPC), and the strengthening of teams in London, the South East and Central regions. In Wales, activities continued to be based around the Wellbeing of Future generations agenda.

4.9       An event was recently held in Manchester focussed on promoting ‘Modern Methods Of Construction’, helping to build homes of a higher quality.

4.10    The Group Director outlined that 7 frameworks had launched in the past year, with 7 further frameworks out to tender or at the research stage.

4.11    Praise was given to the IT team who for their continuous development of cloud-based infrastructure.

4.12    Staff performance and happiness was good. With support from LB Hillingdon, the technical, procurement and marketing teams had been restructured, resulting in 6 redundancies and the creation of 6 new posts. 14 new staff were expected to be employed over the next 12 months, to aid regional operations.

4.13    Regarding Community Benefit Funds, agreements were in place with 4 benefit agencies to administer £370,000 for community use. Payments to LHC constituent members would be through Locality, and further information on all funds would be presented to the Joint-Committee at the meeting in November 2019.

4.14    It was highlighted that LHC continued to conduct industry engagement through workshops and events with industry bodies such as New London Architecture (NLA), the Construction Leadership Council (CLC) and Constructing Excellence (CE).

4.15    The Risk Register was considered, with one minor change since the previous meeting highlighted; the risk associated with the consequence of the government rent cap had been slightly downgraded.

4.16    A description of LHC's operations and membership was delivered to members as set out in the report.

4.17    Committee Member's asked sought clarity on why staff training levels were not at 100%. In response, it was explained that some staff were comfortable with their current position and thus were not willing to undertake further training. In addition, training on new frameworks and the induction programme for the new staff was not being recorded as formal training. The Group Director stated that actions were being undertaken to ensure all training was being accurately recorded.

4.18    The Joint Committee requested clarification of the role of the new KPI project team. In response, it was confirmed that there was no standard set of KPIs, as currently each individual project received bespoke KPIs based on client need. The project team would be developing a set of standardised KPIs to apply to all projects.

4.19    In response to a request made at the previous meeting, Cllr Corthorne raised concerns that, in order to act as an advocate for the LHC to recruit new members, he needed to be clearer about the benefits available to local authorities when becoming LHC Constituent Members.

 4.20   Members highlighted the opportunities for local authorities and others to engage with LHC and avail themselves of its technical expertise. It was noted that from the initial 3 members in the SPA, there were now 92 members. Similarly, the WPA was gaining new member organisations regularly. An emphasis was placed on encouraging collaboration between Housing Associations and Local Authorities.

4.21    The Joint Committee was informed of a conference taking place in July 2019, which focussed on engaging local authorities., particularly the London Boroughs. It was recommended that the Director forward a message to procurement staff and relevant Councillors within local authorities inviting them to the conference.

4.22    The Joint-Committee asked how LHC’s services were being positioned, in what was a crowded marketplace. It was highlighted that, in the current economic climate, price was a key consideration for many. The Group Director advised that while LHC’s services were priced competitively, LHC positioned itself as a high quality procurement option, leveraging its experience and technical expertise, which could be seen in LHC’s fire safety framework (which was particularly relevant following the Grenfell fire.)

4.23    Members of the Joint Committee suggested that an emphasis should be placed on the social value and sustainability of the company’s work, together with whole life forecasts for return on investment. Officers highlighted that in Scotland, data was being compiled to set out the added value seen within projects, including over £400k in match funding. Officers agreed that such matters could be built into future KPIs, and that further information could be brought the next meeting of the Joint Committee. Suggestions were shared for the standardised KPIs, and included KPIs relating to reliability, quality, and enhancement to communities.

RESOLVED: That the information contained in the Group Director’s report be noted.