Model approach

As well as being a landlord, RCT Homes' rules commit the organisation to supporting the economic regeneration and development of the communities it serves - working with other organisations to develop local skills training and to generate jobs through the procurement of local labour. A year on from the transfer of Rhondda Cynon Taff council's housing stock of more than 10,000 properties, RCT Homes' approach to procurement and the intimate involvement of tenants in decision-making has been hailed as a model way to integrate the private sector in regeneration programmes that have previously been predominantly public sector territory.{mosimage}

A leading Welsh politician has used the example of RCT Homes to call on organisations involved in regeneration to ‘think afresh’ and a recent editorial in the politically-influential Western Mail encouraged others to ‘pick up the mutual model’ and expand its principles to other policy areas.

On top of rental income, RCT Homes will receive £219 million over 30 years from the Welsh Assembly Government and it has also been free to raise finances from the private sector - borrowing £113 million from Lloyds TSB Corporate Markets.

In order to meet the Welsh Housing Quality Standard (WHQS), RCT Homes will invest £170 million in its first five years of operations - but it is the way that RCT Homes has decided how and where that investment will be channelled that has drawn attention. Under the Rules of the community mutual, tenants take an active role in decision-making.
Five tenants sit on the RCT Homes board and tenants played a key role in the awarding of multi-million pound contracts to carry out refurbishment work in their homes.

RCT Homes Chief Executive Andrew Lycett said: “We held a special workshop involving dozens of RCT Homes' tenants and staff to decide on the criteria for awarding contracts. It was agreed that we wouldn't simply choose the cheapest contract - factors such as the standard of workmanship, how
the contractors conduct themselves and their relationship with tenants would play just as big a role in deciding who was appointed. Most importantly, tenants wanted contractors to spell out the social inclusion benefits - the creation of new local jobs and training opportunities - that would be delivered.

“We divided the contracts into six so that local businesses could compete for the work against competition from national companies. We then co-opted tenants onto groups to evaluate the bids submitted by contractors.”

RCT Homes' tenants were given special training and made up a third of those conducting site inspections, interviewing prospective contractors and marking the bids. In total, RCT Homes' tenants spent more than 150 days evaluating the bids.

The successful contractors were led by social housing specialists Connaught plc and Bullock Construction and included family-run heating contractor Bouchard & Jones, which is based in the former mining community of Treherbert, Colin Laver Heating of Pontypridd and Solar Windows from the village of Bedwas in the neighbouring Rhymney valley. RCT Homes insisted that the contractors use locally-based suppliers that had been recruited in a parallel process.

Lycett adds: “The journey hasn't been easy. Our staff and tenants have had to learn as we go along and it has been a completely new experience for our contractors and suppliers as well. But the rewards promise to be fantastic.”

By the time the WHQS work began in September 2008, RCT Homes was able to announce that its contractors would create 59 new local jobs and training opportunities with dozens more being created by the local suppliers. Together with more than 50 new staff taken on directly by RCT Homes, it represents a total of more than 160 new jobs created in one of the UK's most economically depressed areas in the teeth of a recession.

Tenant involvement extends to the delivery of WHQS work on the ground. All tenant liaison officers are employed by RCT Homes, rather than the contractor. Lycett explains:
“The TLOs are there to make sure that tenants retain control over work taking place in their homes, just as a private home owner would. It means the contractors have to be able to adapt to different circumstances house-by-house. It may sound as if this would make life more difficult for the contractors but, in practice, it has meant fewer surprises
for tenant and contractor alike, fewer last minute problems and fewer delays.”

RCT Homes is a non-profit-making organisation and its business model is underpinned by public sector funding but it remains determined to try new ways to engage private sector businesses in its regeneration work. In recent weeks, it has unveiled plans to join forces with the public sector-funded Heads of the Valleys Initiative and British Gas to develop the largest domestic combined heat and power project in Europe and to establish the area as a centre of excellence for the installation and maintenance of domestic low carbon technology.

“It is a model approach,” said Welsh Assembly deputy regeneration minister Leighton Andrews. “I call it 'wraparound regeneration'. RCT Homes is maximizing opportunities and delivering real results.”