RCT Homes Controls 10,000 Properties with Asset4000 from Real Asset Management

Wales' largest Housing Association selects Asset4000 to manage a £360m improvement programme at component accounting level

RCT Homes, Wales’ largest social landlord, has selected Asset4000 from Real Asset Management (RAM) to manage its stock of over 10,000 homes. Asset4000 provides the Association with a centralised asset register which ensures the detailed level of component accounting required to track and value its asset base accurately as it undertakes a vast renovation programme of its housing stock over the next 15 years.

In December 2007, RCT Homes became the largest Housing Association in Wales when over 10,000 homes were transferred into its ownership and management from Rhondda Cynon Taf County Borough Council. These properties come with an annual dowry from the Welsh Assembly Government, with the main aim of bringing the condition of the housing up to the new Welsh Housing Quality Standard. This standard, introduced in 2001, sets a minimum level for facilities in social housing in Wales to be met by the 2012 deadline.

The immediate challenge for RCT Homes, a not-for-profit independent housing association, was to ascertain the current state of its asset base and put in place a significant renovation programme in order to meet the required standards. Allister Parkinson, Financial Accountant for RCT Homes, explains, “The main bulk of our fixed assets is made up of the properties themselves. These properties were in a poor state of repair and our immediate focus was on getting them up to scratch.”

Parkinson continues, “A large number of the kitchens and bathrooms were in need of modernisation and most of the boilers in the properties needed replacing. The finance team’s main target was to introduce a system to manage these fixed assets as they were being replaced.”

RCT Homes selected RAM’s Asset4000 package to help manage the replacement and renovation programme, using the system’s detailed functionality to achieve component level accounting in compliance with the new Statement of Recommended Practice (SORP) guidelines. This was two years ahead of the April 2010 deadline for introducing component accounting in the Social Housing sector. Parkinson explains, “Up until now Housing Associations were able to record their properties as one single asset, but under the new rules we are required to split our properties down into the main components such as kitchens, boilers and bathrooms. RAM has been instrumental in helping RCT achieve the level of detail required to become SORP compliant. The parent/child relationship on which the system operates makes it extremely easy for us to link individual components to the main property, which is essential for providing in-depth reporting and dealing efficiently with the disposal of assets.”

Parkinson adds, “Time is critical for RCT Homes and it is important that we do not waste time re-keying assets into a system unnecessarily. The functionality of RAM’s system has enabled us to develop an automated process which can import data from our purchasing system, streamlining our work considerably. This makes a big difference when we install over 50 boilers per month from a single supplier which would otherwise have to be entered manually.”

Parkinson continues, “Undoubtedly, if we had not made the decision to go with RAM, we’d really be struggling by now with the sheer volume of processing involved and, almost inevitably, we’d be making mistakes. Without the system we would have had to employ someone else to take on the extra workload of dealing with 7000 new components every year. The RAM solution has therefore provided a clear return on investment, saving RCT Homes a full-time role of 35 hours a week and the cost of a £37,000 annual salary.”

For RCT Homes, RAM’S Asset4000 is not just about making sense of the asset base as it currently stands, but tracking its growth into the future. Parkinson comments, “The great potential of the RAM system will be seen as we continue to replace and upgrade items in the properties. Asset4000 will allow us to track the increase in the value of our fixed assets as we make improvements to them. It will also help us to keep on the right side of the taxman by tracking whether we have claimed back the VAT on an improvement correctly under the terms of our VAT shelter agreement.”

Parkinson concludes, “Importantly, RAM has also ensured that our internal processes have been future-proofed for upcoming legislation such as SORP and IFRS. The detailed level of component accounting means that we are already performing to the standards expected by such legislation, something that many Housing Associations have yet to address.”

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