The advantages and the problems with RBKC taking management in house

This advice was gratefully received from a respected housing activist:

What RBKC was trying to do with the KCTMO resolution 5 and 6 was to become the only shareholder of KCTMO, in order to control it, change the managers and directors, dismiss part of the workforce, train the rest to change KCTMO into an efficient in-house Management department.

Easier said than done. The problem is that by doing so, they could assimilate the same toxic culture that KCTMO represent, within the in house RBKC management department, and let’s not forget that RBKC itself is under criminal investigation, so it could be characterised as corrupt itself. You all know what I am talking about. The simplest of repairs take 6 months, the employees have even been trained how to make use of regulations in order not to provide the repair service, they simply let the repair task remain on their computer for three weeks, after which it automatically gets deleted without the repair having been seen to. Add the kind of corruption that could make painting 6 windows and two doors cost £16,000, which happened in Warwick Road Estate. Change of culture within an organisation is extremely difficult. Many have tried it only to fail.  As some of you might know, I once presided over a change of culture in a small company of thirty employees. These were not corrupt employees, they were hard working honest people. The change of culture had the aim of making the teams within the organisation self-managed instead of managed, and handing in the decision making to the employees as opposed to the managers. The resistance was immense. It took me three years, £300K of investment in training and the introduction of new blood (many of the existing employees just left, they just refused to contribute in making decisions) to bring about that change of culture; it produced amazing results non-the-less. But the point is if it is that difficult in a small company of 30 employees, it would be much more difficult in a huge company, and it would need competent leadership, which RBKC is lacking. So to me , this way of making management in-house by RBKC would be business as usual, and even if they succeed in changing the culture, it will take years.

There is a simpler way to implement a successful RBKC in house management system. Let KCTMO go bust. In that way TUPE ( https://www.gov.uk/transfers-takeovers ) would not apply and the toxic culture could not be transferred. Then RBKC should employ and train smaller teams allocated to a few estates only, depending on size, I would say a team of 5, one surveyor, two property managers and 2 handymen, could manage 350 properties depending on the IT systems and softwares provided to them. These teams have to be completely independent of each other, meaning that they should not share any services, or the danger is that we go back to a huge KCTMO managing all the estates. Then RBKC should have a well-equipped handyman stationed in each estate, one handyman per 150 properties. Each team needs to deal with small to medium size sub-contractors such as electricans, plumbers, roofers, gardeners and so on.  The team might even consider employing electricians and plumbers. 95% of repairs, quantity wise, are done by handymen electricians and plumbers.

Then there is the issue of quality and time targets which the residents and RBKC have to agree.

In the property management teams that I trained and directed, we had the following targets;

• 1-      Upon receipt of a request for repair, depending on the subject of repair, a contractor/handyman would be sent to the property on the same day but not later than the next day. We had already negotiated with the contractors that due to the volume of jobs they were getting, that they would not charge an inspection fee.
• 2-      If the cost of repair was under a certain sum, in our case under £100, the contractor would on the first visit go ahead and see to the item of repair.
• 3-      In any case the repair should not take longer than four days (they were exception to these, for example in cases that we needed to order an item that was not manufactured anymore).
• 4-      Then there was the quality of service. If the contractor mis-diagnosed the cause of repair, they should not charge for the work they have already done. A member of our team was trained to inspect every five jobs that the contractor did to ensure quality.
• 5-      A telephone call was made to the tenant/leaseholder that had requested the repair after the work has been done to make sure they were satisfied.
• 6-      If for some reason repair would take longer than four days, temporary solution would be provided. For example in case of lack of heating, electrical radiators would be provided.

The above are just examples of quality and time targets that each estate has to agree with RBKC.

Then we come to major repairs and improvements. The freeholder is under obligation to serve notice to and consult the tenants about these major repairs, and they have to get three quotations per items of repairs and justify the chosen quotation and the choice of contractor. What happens usually is if the leaseholders are not organised and do not possess the knowledge or do not have a surveyor as their consultant, the freeholder have their way. This is where corruption could occur. They would be charging a percentage of the work as management fee, so the more the cost the higher this management fee. In these cases, the best remedy is to set up a committee including members of the RBKC management team for the estate and the RA(s) to give the opportunity to the residents to directly influence the major repairs and improvements, choice of contractor and so on.

But to do these, the estate’s RA need to be very organised. They need to have been trained in property management, to have engaged the tenants (both leaseholders and council tenants), to consult them regularly so that it could be representing the views of the residents. The RA will need to spend the same amount of time per annum as if they were managing the estate themselves, i:e 75 man hours per annum. But the question is if the RA is this organised, trained in property management and they will have to spend the same amount of time per annum, why would they not take on the management of their estate themselves?

Further more RBKC need to be willing to accept this model of management, have the competence and leadership to train and set up the independent property management teams. They could do that by employing very experienced trainers and property managers, it is actually very simple, but would they have the will to do that?