A Q&A with Thirteen Housing Group’s Rob Thompson, head of finance (income), and Emma Parker, senior business partner (income), both of whom are primarily focused on setting service charges and rents.
What problems did you have with service charges?
Emma Parker, senior business partner (income), Thirteen Housing Group: There were a few challenges for us to solve! Around 10,000 residents across our housing portfolio are eligible to pay service charges. Those residents are spread across 1,000 different blocks or schemes, and each of those schemes had a separate schedule set up in Excel. Then within each block or scheme, people pay different service charges, so we could have a variation of, say, five different service charge schedules across five sheets in the spreadsheet.
Those sheets were updated annually by hand for our annual service reviews. We also had a spreadsheet for every scheme to show how we’d collected funds to replace assets in the future. Those financial figures were then added to a master balance sheet, taking three to four weeks per team member, so around 10 weeks in total to update the sheets.
For a small specialist team, managing the data input and ensuring accuracy and attention to detail was so time-consuming. We really needed to automate the processes in order to be more transparent for customers and to break down their charges so we could be sure they were correct.
Didn’t your HMS have service charge modules?
Emma Parker: It seems that many of the housing management systems do have a service charge module, but they can’t deliver the detail broken down into cost centres or at unit or scheme levels. These modules are add-ons so you need to use a particular HMS to get anything from its service charge module.
We wanted a solution that could sit on top of what we already had and integrate with it. So even if we later decided to move away from our current HMS, we would still have a service charge module that would integrate with whatever we then chose as our next HMS.
How did you discover Trace Solutions’ BlueBox?
Rob Thompson, head of finance (income), Thirteen Housing Group: I’d heard from Peabody Housing about Trace Solutions’ BlueBox software, plus I’d seen how Peabody (and prev. Family Mosaic) had been able to break down their information in the service charge booklets given to residents.
I was intrigued by the level of detail it contained and how the system had broken it down in the first place. We wanted a system that could grow with us, but also extend to other areas such as rent setting. BlueBox offered all that, so we added Trace Solutions to our list of vendors in the tender process, and consequently ended up buying BlueBox.
What can you do now that you couldn’t before?
Emma Parker: We currently have 80 per cent of our stock up on the system and working. The rest is being implemented now, although admittedly that’s the stock with greater inherent complexities to deal with. Once they’ve been added to the new solution, we’ll be ready to move to the next phase.
We found that you really do need to understand your data before you begin the project. And don’t underestimate the complexities of service charges; you need input from the wider organisation so that you can be clear about what you want the end result to be.
We chose to set up BlueBox on the basis of three levels: estate, property and unit. Any changes to tenancy and lease data are all automatically updated every day via an interface from our HMS direct into BlueBox.
For the 80 per cent of properties set up so far, we’ve matched these to creditors, expense types and schedules to easily identify which units pay towards, for example, emergency lighting. We chose to load data going back to 2019/20 so that we can pull reports and data at the touch of a button for the last couple of financial years, plus no more manual number crunching!
We can also pull reports for units where we’re unable to charge service charges to see what the costs are and how much we’re unable to recover, so that in future, we can work out what to charge new tenants.
We can also work out the service charge portion of an affordable rent scheme, where everything is included in one payment, so again we can see what’s not being charged out. And everyone can now see what costs comprise each service charge – in other words, how much we’re collecting for each granular service. For example, if somebody asks, ‘give me the door entry charges per scheme’, we can tell them.
Rob Thompson: Best of all, by automating so much, we’re making better use of our resources and letting the technology take the strain in the number crunching. We have to be conscious of value for money and BlueBox means we can grow without needing to expand our existing team significantly.
So many of our processes are now far more efficient, allowing resources to be used much more effectively. And the risk of human error has been considerably reduced.
Rob Thompson: We are currently focused on getting the remaining 20 per cent of complex schemes loaded into the system, at which point we’ll be able to use the reporting suite to its full potential.
We’ll then look at the rent-setting solution, and as leasehold laws become more complex, we’ll be looking to make use of BlueBox’s Section 20 functionality; the more that can be automated, the better!
Rob Thompson is head of finance (income) and Emma Parker is a senior business partner (income) at Thirteen Housing Group.