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Why asset management should be at the top of your agenda
Over the past 19 years, we have worked with over 100 organisations within the social housing sector, and despite all of the challenges that we have seen over that time. Poor asset management is definitely the most prominent and most severe that we have encountered.
Why? Because, poor asset management can very quickly undermine the performance of an organisation. When this is the case, it often brings with it a whole host of different challenges including regulatory scrutiny. Especially, if Boards and leadership teams do not have the effective oversite and a clear strategy in place for the long term management of its assets.
The introduction of the Value for Money (VfM) Standard in 2018 has provided sector wide clarity on this issue. Highlighting that housing providers must be able to clearly articulate their strategic objectives. In addition to having a Board approved approach to achieving and demonstrating VfM in meeting these objectives.
Ultimately, this requirement can only be met if organisations and their leaders truly understand how they can ensure optimal benefit is derived from its resources and assets.
A sentiment that the Regulator of Social Housing (RSH) has further echoed. Stating that registered providers are expected to “understand the return on assets and have a strategy for optimising the future returns on assets”.
However, what we are now seeing is that the RSH is now focusing its attention on the basis and quality of the decision making made by registered providers. Therefore, it is essential that providers change their approach, and recognise that decision making must be both data led and evidence-based, in order to extract maximum value from their assets based on the optimal balance of financial and non-financial performance criteria. But this can be a challenge and is sometimes easier said than done.
What can organisations use and adopt to help them understand its assets?
Stock Profiling, known also as Asset Performance Evaluation or Stock Grading, is the ideal tool to provide organisations with complete assurance that any future, investment, or de-investment, decisions are evidenced-based, and in line with your strategic objectives - meeting the requirements of the VfM standard.
At Pennington Choices, we have over a decade of experience in stock profiling. During that time we have helped housing providers and local authorities across the UK.
What makes us different is our approach. We use a tailor-made data modelling tool, which will provide you with the unique ability to manage your stock, based on our recommendations on how each asset group should be prioritised. This will take into account the differences of your organisations operating environment, tenant needs and the financial/non-financial criteria relevant to your asset management strategy.
There are countless ways in which a clear asset management strategy can be of benefit to your organisation, including; enabling you to understand the value and limitations of your current property portfolio, allowing you to maximise financial return on your assets through data led decision making and providing you with an understanding of which assets work best in the long term (over 30 years). To learn how to improve, maintain and make efficiencies to your property portfolio, contact us now to find out more and to learn how we can help you.