Lampton 360 Group ReportQuarter Three

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Purpose of reportThe purpose of this report is to update the cabinet on the performance ofthe Lampton 360 group; Recycle 360, Property 360 and FacilitiesMaintenance 360 for the end of quarter three. As this is the first of thistype of report it incorporates activities that occurred in earlier quarters.

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ContentsLampton 360OverviewBoard of DirectorsExecutive SummaryEmployment and TrainingGovernance

Recycle 360OverviewReport

Property 360OverviewReport

Facilities Maintenance 360OverviewReport

Conclusion

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WelcomeI am pleased to highlight, the considerable progress made in terms of establishing and growing Lampton 360 andits subsidiary companies, moving the group forward in its ability to deliver services to the London Borough ofHounslow.

This growth is underpinned by a strong commitment to good governance, with the group’s activities being subjectto review by Price Waterhouse Cooper, the Council’s auditors and the Overview and Scrutiny Committee thisquarter.

This report sets out the activities of each subsidiary company, along with client feedback where appropriate. Inaddition, the board reports, that underpin this report are available upon request.

Brendon Walsh Group Interim Group Managing Director

Background to the Lampton 360 Group

Lampton 360 stands for integrity, reliability and customer service. Our focus is to ensure we do the best jobpossible whilst maintaining positive engagement with all of our customers, employees and the general public.Our aim is to be seen and recognised as a positive influence in people’s lives.

We can only achieve this by engendering a culture of openness, honesty and transparency which in turn helpsour people to become great at what they do. We need to act with conviction and ensure we deliver upon ourcommitments. We need to live up to the standards that are set and expected of us. We want to be fantastic towork for and with.

We are an organisation which is ‘of the Council’ but different, combining commercial expertise with a commitmentto public service. It is a company wholly owned by the council, with all surpluses made returning to the council.

We will seek out business opportunities with clients who share our values and where our activities are in line withthe policies and values of our sole shareholder the London Borough of Hounslow

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Board of DirectorsLampton 360 is led by a strong board of Directors:

Howard WoollastonNon-executive Chairman of the board of Lampton 360 Ltd, Howard has over 40 years experience in the propertyindustry and is a member of Royal Institution of Chartered Surveyors.

Antony MiddletonAntony is a non-executive Director with considerable facilities maintenance experience in both the public andprivate sector, including Croydon Council. Antony sits as non-executive Director of Lampton 360 ltd, and iscurrently engaged in the transfer of DLO2 into FM360. Antony is Chief Operating Officer with Coast to Capital.

Howard EllardHoward has over 30 years experience as a regulator and waste management professional. Howard sits as anon-executive Director of Lampton 360 ltd with oversight particularly in the waste services provided by Lampton360.

Brendon WalshInterim group Managing Director and Executive Director Regeneration, Economic Development andEnvironment. Brendon is the day-to-day lead for the group.

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Executive SummaryLampton 360 is becoming an increasingly recognised brand. We are delighted to report another exciting quarterfor the Group. As this is our first formal quarter report, we have also covered developments since the inceptionof the group.

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Recycle 360Recycle 360 is led by Interim Managing Director Dave Ward and Interim Head of Operations Dan Smyth.Recycle 360 was established to provide high quality recycling and waste collection services for its customerscost effectively and efficiently and started operating on the 31 October 2016.

In October 2016, Recycle 360 took on the waste and recycling contract. At inception, the recycle shed wasn’tavailable to us, Recycle 360 worked with the council to find alternative solutions.

The hand over from Suez was not comprehensive. While their local management appeared helpful in the weeksleading up to the handover there was no contact on the day, and a large set of keys and fobs for variousproperties was not made available to R360.

All schedules provided were unfortunately either partly or wholly incorrect, leaving the R360 leadership team inan embarrassing position on day one, with the crew questioning all the information being provided and R360 hadto trust the good will and knowledge of the workforce to get the job done. Additionally the schedules inputted toBartec were incorrect, having been based on the information from Suez.

It is unfortunate that we were not able to secure more useful information in advance of change, at which pointSuez appear to have deleted and shredded everything they held.

Positive feedback has come from both our customers and staff that transferred to us from the previous providerSuez. Further improvements will be delivered by the service in early 2017, with the introduction of alternatefortnightly collections and recycling boxes for all low-rise homes in the borough.

Recycle 360 is delivering services in a way that will help reduce the carbon impact of the company’s businessactivities, through investing in modern, fuel efficient fleet.

Going forward, Recycle 360 aims to develop a commercial waste business that is successful in generatingrevenue growth whilst meeting customer needs and encouraging and supporting its customers in reducingresidual waste generation.

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Property 360Property 360 is a property company that has been established to create two bespoke business streams led byProperty 360’s Managing Director Barbara Richardson and Head of Land & Acquisition Pankaj Vara.

Lampton DevelopmentA property developer established to redevelop surplus local authority land, with residential and mixed useprojects. Phase I of the programme has identified 11 sites, up to 844 units, approved by Cabinet in April 2016,that deliver much needed affordable housing (24% social rent, 16% intermediate), which will be sold to alocally based Registered Provider with 100% nominations to the Council, 40% private sale, sold into the localhousing market, and 20% private rent, which will be sold to our Investment company.

To deliver this, Lampton Development 360 signed its first Joint Venture on 03 February 2017 with WilmottPartnership Homes for the design and build of Nantly House. This scheme was presented to the CentralHounslow Area Forum on the 19th January 2017, and subsequently will go to the planning committee on the09 March 2017.

Lampton InvestmentA property investor established to acquire up to 175 second-hand properties for use in a property purchasescheme, with rents set at 90% of market rents. This will enable LBH housing team to discharge some of theirhousing obligations into permanent, good quality housing. Lampton Investment will also seek to acquire up to273 new build properties, under a private rented scheme.

In November 2016 Lampton Investment 360 let its first acquired property to a local Feltham family. A furtherten properties are now moving through the purchase process, of which four fall within the affordabilityguidelines recently issued by the council’s lettings team.

This delivers a bold new and ambitious approach by a London Borough to improve the level of housing supply,and to address the level of affordable homes needed across the borough.

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Facilities Maintenance 360Facilities Maintenance (FM360) has been led by interim Managing Director Paul Ryder, who is with us until theend of March 2017. Recruitment for this role is likely to commence at the end of March 2017. We would like toplace on record our thanks to Paul and wish him well for the future.

The primary objective of FM360 is to meet both the current and future aspirations of the London Borough ofHounslow in maintaining its housing stock and generating operational surpluses by extending the service toothers, such as Housing Associations. FM360 is designed to improve service delivery of any technicalservices transferred to it by the Council. The business aims to deliver services in a more robust commercialmanner increasing the ‘Value for Money’ position and then to win contracts against Private SectorCompetition.

The 26 April 2016 report (CAS 498) to Cabinet by Director of Housing presents works valued at £43 million in2016/17. The transfer was underpinned by results from tenant and leaseholder surveys showing that 44% ofrespondents support the transfer to Lampton 360, 35% are neutral, 14% did not know, and 6% opposed.

The transfer was approved at the February 2017 meeting. The original intention was to start mobilisation ofthe service in August 2016. However the due diligence process, did not get underway until December 2016.This process has identified development areas in relation to finances, IT and health and safety, all of which willneed to be resolved prior to the anticipated transfer. The FM360 team are now heavily focused on workingwith the Council’s Housing Team to move on with mobilisation.

FM360 has been awarded work reviewing the libraries portfolio and is also supporting the Council in anadvisory capacity around its FM activities on both existing and the new civic centre development.

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Employment and Training OverviewInvestment in our TeamLampton 360 group currently employs 178 people and with the proposed transfer of DLO2, this will increase to308. Lampton 360 takes the investment in its team very seriously. The following methods have been employedto ensure that our workforce represents the best possible face of the business

London Living WageFrom the inception of the service, Lampton 360 has been committed to applying the London Living Wage to ourstaff. This commitment has lead to improved terms for Recycle 360 staff, drivers and supervisors and is, webelieve a clear demonstration of our organisation's commitment to the values of our shareholder, the LondonBorough of Hounslow.

Training and developmentThe group offers a range of training opportunities for its staff. This includes (where appropriate) driver training forrecycle loaders so that they can apply for future vacancies, English language training, regular health and safetyupdate training and toolbox training sessions. During the period we have also undertaken a team buildingexercise for managers and supervisors, which was facilitated by a team of trainers from a company called‘culture builders’.

“Recruit from within”Lampton 360 operates a “recruit from within” policy. In order to enable this development, the fruits of this policyhave already been seen through the successful promotion of Adam Dubielski, from loader to supervisor atRecycle 360 and Kelly Conway who joined Property 360 as a trainee Business Development Manager, from aPA within the London Borough of Hounslow.

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Employment and Training OverviewStaff Morale (Recycle 360)Transferring staff in from a previous service provider can be difficult task. Whilst not without its difficulties, wewere very pleased to receive feedback from the union representatives highlighting an improved morale within theworkforce since the service transferred to Recycle 360. We are confident that the continued investment in theteam through training and development will see this continue.

Staff Transfers (FM 360)Engagement continued internally with London Borough of Hounslow HR team over our preparations aroundmobilisation. We continue to await confirmation of the Admitted Body Status for the existing pension schemefrom the Authority. The DLO TUPE is now under review.

Board TrainingTwo training sessions for the board of directors have been facilitated by John Langford, who is a highly regardedtrainer in this field. The sessions aim to encourage the board to work cohesively and play to each other’sstrengths.

Union RecognitionUnion recognition has been achieved for the Lampton 360 group of companies.

Management Team DevelopmentThe core management team and the supervisors were asked toattend a “culture builders” workshop (photo insert) to engender thesense of one management team supplying a consistent approachacross the team.

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Governance OverviewGovernanceLampton 360 considers governance as key to a successful business. The governance function is led byBusiness Manager, James Barrett, working in conjunction with the Council’s Head of Governance PeterLarge, the internal auditors PWC and the Overview and Scrutiny Committee.

AuditThe group has been audited by Mazars in September 2015, RSM in June 2016 and again in February2017.

Feedback from RSM:

“The business plans are comprehensive and include evidence that:• Significant work has been undertaken to develop sound business plans• Recent work on financial forecasts has demonstrated more detailed thought about the

medium term• Viability of the proposals and the capacity to deliver services from October 2016 onward.• Assumptions made in the calculations have been stated clearly.”

Overview and ScrutinyThe Group Managing Director and Business Managing Directors have had one meeting with CouncillorJohn Chatt Chair of the Overview and Scrutiny Committee. A further meeting is planned for March 2017and the intention is to share all development plans with this committee before moving forward to secureagreement from the Council as Shareholder.

ReportingLampton 360 and its subsidiaries report to its Board of Directors on a monthly basis.

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Recycle 360 ReportService TransferThe service transferred on 31 October 2016. The operational details were planned and ready for executionfrom day one, with the necessary health and safety work in place, including support training for staff as partof their induction. Implementation of the transfer was not without its challenges:

StaffAt a very late stage in the transfer, a number of key staff decided to accept positions with Suez including theContracts Manager and the Assistant Contract Manager. Despite the contract going live only nine days later,Recycle 360 was able to recruit an interim Operations Manager (Dan Smyth) to ensure the smooth running ofthe service, working in conjunction with Dave Ward interim Managing Director and Emma Tilbrook MobilisationManager. In addition, members of the London Borough of Hounslow commissioning team have been secondedfor a period in six months to assist with the planned service transfer.

AccessThere were several difficulties in relation to access to properties due to the previous contract providers Suezfailing to handover keys to certain locked compounds, preventing the Recycle 360 team from taking wasteaway.

ITManual procedures were used at the outset of the service due to limited IT facilities. The service continues towork with the ICT team to implement state of the art systems, such asin-cab technology, which will drive efficiency.

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Recycle 360 ReportService Transfer continuedInductionA comprehensive induction was undertaken to ensure that all operatives were aware of the required standards.This induction included basic manual handling training, introduction to Lampton 360 group policies and vehiclefamiliarisation sessions. This awareness building continues through tool box training sessions which are heldweekly.

In addition all staff attended were issued with their PPE, which included, enhanced protection gloves (cut level5), an expanded selection of boots and more practical workwear, made of modern moisture-wicking fabrics.Staff were given an opportunity to participate in the selection of kit and as a result they are happy with theirequipment, which helped to boost morale.

Health & SafetyRecycle 360 takes its health and safety responsibility very seriously. Company health and safety requirementswere in place from the date of launch, these included a full and comprehensive suite of risk assessments, routerisk assessments and safe systems of work.

In summary the contract start-up was a success. As the planned service changes came in to place fromJanuary to March 2017 a settled service was delivered with the continuing aim of improving the schedulingefficiency, productivity levels and increasing the recycling performance unfolded.

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Recycle 360 Report

Operational updateThe service, has begun to settle into a state of ‘business as usual’ but with more attention to detail than theprevious incumbent. That has not resulted in complacency, supervisors are continually updating staff using‘toolbox talks’ on operational, health and safety and quality issues.

Christmas and New Year collection services operated well, with a few isolated issues caused by emails notreaching the team, which has now been addressed.

Recycle 360 continue to employ up to 19 vehicles daily to complete the recycling collections. It quickly becameapparent that Suez operated with an under-resourced fleet and it was therefore necessary to purchaseadditional vehicles. The Council has approved funding for 4 more Romaquip vehicles to ensure that there issufficient capacity available to provide for routine servicing and repair cover.

Eunomia, having concluded the optimisation of the recycling rounds are now applying themselves to theresidual waste service in readiness for the implementation of Alternate Weekly Collections at a date still to bedetermined but likely to be before the peak summer holiday season.

The Bartec in-cab technology system was implemented on 15 December 2016 as planned. There remain someservice elements without a fully functional Bartec system namely, Tidy Town and the bin delivery service. Weanticipate that these parts of The service will be included by Summer 2017.

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Recycle 360 ReportOperational update continuedRecycle 360 considers it’s working relationship with its client as key to providing a successful service. In orderto ensure this happened the following methods were put into play:

Role of Commissioning ClientsCommissioning clients have been directly engaged by Recycle 360 for the first six months of the service toensure a smooth transfer.

CommunicationRegular meetings, twice daily for the first two weeks, have been put into place to ensure that there are nosurprises either on the client or the service providers side, during the transfer. Now the service is in place,these meetings are conducted on a monthly basis. In addition, these client meetings are underpinned byquarterly service level agreement meetings between the Business Manager of the Lampton 360 group andContracts Manager for the London Borough of Hounslow.

ReportingCurrently R360 does not have a reporting specification that has been agreed with the client and we aretherefore not in a position to measure the service standards that are important to the client. It is proposed thatregular detailed monthly statistics are provided to the client by R360, which will be developed once the clientspecification has been agreed. Available data is limited due to the Bartec system only recently having beenimplemented.

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Recycle 360 ReportReporting continuedA sample of available data from Bartec is set out below. As this chart demonstrates, daily information isprovided to the Client Contract Manager highlighting container requests. A full complement of reports will bemade available to the shareholder in the next quarter report.

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Recycle 360 ReportReporting continuedA further sample of available data from Bartec is set out below. As this chart demonstrates daily information isprovided to the Client Contract Manager highlighting missed bins. A full complement of reports will be madeavailable to the shareholder in the next quarter report.

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Recycle 360 ReportThe Next StepsDevelopment plan over the next 18-24 months:

Current ServiceOur main focus will be further enhancement of our service through improving the fleet, training for employees,and streamlining the system, where possible.

Commercial WasteCommercial waste, is an area that Recycle 360 is very keen to explore. Recycle 360 is currently exploring thepossibility of being involved in a new Special Purpose Vehicle that has been established to sell commercialwaste and recycling contracts in the Hounslow area. The company established between London Borough ofHounslow and London Business Waste and Recycling and is known as Hounslow Business Waste. Recycle360 sees our advantage in being involved in this venture as being able, with a reduced risk, to enter thecommercial waste market with a portfolio of established contracts at a future date.

Depot DevelopmentDevelopment of Southall Lane Depot is underway and is due to be completed for October 2017, however itmay go beyond that date. This development has proved to be a difficult project because the Health and SafetyExecutive introduced new rules on the length of this type of building has to contain a fire.

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Property 360 ReportLampton InvestmentsProperty Purchase SchemeProperty 360 is moving forward with viewings of properties and offers. We currently have one property inownership and tenanted, and nine properties moving into contract. All properties will have rents set at 90% ofmarket rent, or lower where possible. There have been some issues with nominations from the Council’sLetting Team, mainly in relation to their views on affordability, and the supply of working families that canaccommodate our properties.

Property 360 purchased it’s first property 115 Hatchend Road, Feltham in September 2016. This is an ex localauthority 2 bed maisonette, with garden, which has been successfully let to a family previously in bed andbreakfast. Following on from our first purchase, we are now in the process of completing purchases on afurther ten properties.

Selection of our Managing AgentsLetting agents are required to look after our properties under both our Property Purchase Scheme, and also ourPrivate Rented Scheme. We have undertaken a vigorous process of research and selection of a local lettingagents considering over ten agents, then interviewing three companies that offered value for money anddemonstrated good quality service provision. Rolfe East have now been appointed as our managing agent.Rolfe East have a local office in Isleworth, and several offices across West London.

Priority 10Priority 10 is an initiative that we have established for Lampton Investment tenants, to help and assist themwith improving their job prospects. Property 360 will be referring tenants to this scheme, through the Council’sSkills and Employment Team where it is felt that this could assist and improve their job prospects and improvetheir suitability for better paid employment. The tenant for our first occupied property has now signed up for thisinitiative.

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Property 360 ReportProperty Purchase SchemeThe table below gives an indication of the volume of properties that are being reviewed, assessed, andfinancially modelled. In order to make this process more efficient, a proposal has also been made to theLampton 360 board of directors to move towards bulk purchase of new build property. To assist withaffordability of this, it is proposed that this bulk purchase will come from property built by the development armof the business. Work will continue in the purchasing of second-hand property stock.

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Property 360 ReportLampton Development 360Development ProgrammePhase 1 of the Property 360 development program is a commitment to deliver 844 identified new-build homesand 697 unidentified properties. The due diligence has been undertaken on the first 11 sites, which wereidentified and approved in the report to Cabinet in April 2016.

At the request of the council, we have added 4 new sites to our build programme, bringing our identified newbuild number up from 844 units to 1,266. This means that in order to target 1500 new build homes over thenext 5-6 years we only need to identify an additional 234 units. However, it should be noted that the planningteam have highlighted that at least 50% of our sites, will be extremely challenging through the planning processand may not succeed to a full consent. There is an ongoing dialogue with the council’s property team,identifying redundant sites, such as community buildings and these will be substituted for any sites that fallaway because of difficulties with gaining planning consent.

The next development sites are likely to be the Royal Naval Association and the joined sites Acton Lodge andTwo Bridges. These sites are to be combined under a joint planning application, with Two Bridges offering100% affordable homes for extra care and Acton Lodge being 100% private housing.

JV Development PartnerFollowing the selection of our JV Partner, we are very pleased to have signed the JVpartner agreement on 02 February (see insert photo) our selected partners WilmottPartnership Homes, whom we are working with on our first scheme Nantly House due tocomplete by March 2019.

Establishment of the LLPLampton Development 360 LLP has been set up and registered at Companies House.We are now in the process of formalising the Partnership Agreement. The LLP has beenestablished primarily to be tax efficient, which will provide significant savings for ourshareholder, the London Borough of Hounslow.

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Property 360 ReportLampton Development 360Nantly House, Lampton Road, Hounslow.Nantly House is our first development under our planned redevelopment of 11 Council owned sites. Thescheme which includes 1, 2 and 3 bedroom flats and a commercial unit will be a mix of affordable home andprivate sales homes in central Hounslow. The design team were appointed in June 2016, with the submissionof the planning application is expected to be completed around March 2017. The site is being built inconjunction with our joint venture partners Willmott Partnership Homes.

Shown below is the outline of the scheme.

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Property 360 ReportStrategic Reporting Lampton Group 360March – December 2016

No. Task Description Link to KeyObjectives Action Item Target

Due Date Progress to date Status

Lampton Group

1 Strategic 5 Establish terms of reference for Lampton 360 Ltd Board Mar-16 Completed

2 Strategic 5 Establish terms of reference for Property 360 Board Mar-16 Completed

4 Strategic 5 Set up all subsidary companies at Companies House Jul-16

Lampton 360 Ltd (Reg No - 8468401)Lampton Investment 360 Ltd (Reg No - 10362770)

Lampton Recycle 360 Ltd (Reg No -10347934)Lampton FM 360 Ltd (Reg No - 10432434)

Laampton Development 360 LLP - Underway

5 Strategic 5 Set up bank accounts for each subsiduary Sep-16

Lampton 360 Ltd - EstablishedLampton Investment 360 Ltd - Established

Lampton Recycle 360 Ltd - Established

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Property 360 ReportStrategic Reporting Lampton Development 360March 2016 – December 2016No. Task

DescriptionLink to KeyObjectives Action Item

TargetDueDate

Progress to date Status

Lampton Development

1 Strategic 1,2,3 Finalise Business Plan for Property 360 along with 5 year income andexpenditure balance sheet. (Input needed from finance team).

July2016

CabinetGroup overhead cost need to be applied.

4 Strategic 2, 6 Expression of Interest for JV Partner May-16 Completed

12 Strategic 1, 2, 3 JV partner Selection Stage 1 Jul-16 Process started.Completed

13 Strategic 1, 2, 3, 5 Business Plan with P&L for Cabinet Jun-16Business Plan presented to May Board. Approved. Tenuresplit needs consultation.Completed, needs some refining

17 Strategic 2, 5Start negotiation for loan for development finance for overall programme,but most importantly for Nantly House. Jun-16

Awaiting terms from finance - need Capita to be jointlyappointed.

18 Strategic 1, 2, 3 JV Partner Selection Stage 2 Jul-16 Completed

19 Strategic 2, 3, 5 Ongoing negotiations for funding Dec-16Needs to appoint treasury management consultants forProperty 360.And Solicitors to negotiate & review agreements

22 Strategic 1, 3 JV Partner Selection Stage 3 Oct-16 Process started. ITT evaluation ends December 2016

23 Strategic 2, 5 Ongoing negotiations for funding Aug-16 Input required from finance, waiting terms for funding

25 Strategic 2, 3 Negoitation of JV Contracts Dec-16 Contracts Drafted

30 Strategic 2, 5 Funding confirmed and agreed Dec-16 Not started / Waiting input from finance

31 Strategic 1, 2 JV Contracts negotiated, for sign off by Lampton Board & Cabinet inDecember

Dec-16 Report circulated

32 Strategic 2, 5 Funding agreed and confirmed for sign off by Lampton Board inNovember

Nov-16 Not started

33 Strategic 1, 2, 3 Identify a pipeline of projects for Property 360 in order to build up itsdesired development target of 300 properties per annum.

Dec-16 Identified initial 844 units - Phase 1 (complete).Start researching Phase 2

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Property 360 ReportStrategic Reporting Lampton Investment 360March 2016 – December 2016

No. Task Description Link to KeyObjectives Action Item Target

Due Date Progress to date Status

3 Lampton Investment

1 Strategic 1, 2, 3Finalise Business Plan for Property 360 along with 5 yearincome and expenditure balance sheet. Input needed fromfinance team.

March 2016Board

Completed

2 Strategic 2, 6Complete report for recommendation for funding for PRS tocover Direct Lets for Housing Team. Lampton Board Report- Feb 2016. Cabinet April 2016

Apr-16 Completed

5 Strategic 2, 5 Start Negotiations for loan agreement for Property PurchaseScheme

Jul-16 Need loan terms from Finance, assumptions made inbusiness plan.

6 Strategic 1, 5 Agree hurdle rates and outputs for Proval default forappraisals

Jul-16 Draft presented to Board Jan and May 2016 & Agreed in JulyCabinet.

18 Strategic 4, 5, 6 Set up website for tenants (including Branding) Sep-16 Not yet started

22 Strategic 1, 2, 5 Appraisals default set for Property Purchase Scheme Aug-16 Once parameters, hurdle rates and finance agreed.Approved in Business Plan by Cabinet 16th July 2016

26 Strategic 2, 5 Secure funding before we can purchase properties Jun-16 Awaiting terms from Finance team

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Facilities Maintenance 360 ReportService TransferOn 07 February 2017, Cabinet approved the entering of a 5-year Service Delivery Agreement between theCouncil and Lampton Facilities Maintenance 360 Ltd for the delivery of the Housing Planned Maintenance andCapital Works and Services.

The 26 April 2016 report (CAS 498) to cabinet by Director of Housing presented works valued at £43 million in2016/17. The transfer was approved at the February 2017 meeting.

FM360 were given access to detailed information on systems and finances within the DLO on 08 December2016 and we are continuing to undertake due diligence in readiness for transfer. This work has identified thefollowing challenges which are being worked on with the Council’s Housing Team:• Financial packs are limited in the level of key detail specifically around work volumes quality data information

and work specifications.• Remodelling of the existing financial accounting, to obtain a clear understanding of the tangible historic data

and market best practice benchmarking information, utilised to establish the works programme. This willallow accurate costing to be undertaken going forward.

• A Business Delivery Plan has been issued and accepted by the Housing Management Team and is nowbeing used as the basis for mobilisation.

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Facilities Maintenance 360 ReportService Transfer continuedMultidisciplinary Contract (MDC) workIt was originally intended that the MDC work was to transfer to FM360. It has subsequently been decided that thiselement of work will not transfer in April. Further urgent work, including positive legal advice on Section 20 rulingshas been undertaken and it is hoped that this will be resolved quickly to allow this work to transfer soon.

ServitorThere remains considerable development needs for the Servitor computer system. Currently the system does notmeet the business needs and will not support the business in giving real-time costs or be capable of supportingthe foundations for effective business management and future growth. This will be critical to FM360’s ability toquote for additional work.

Health and SafetyFurther work is required to document the approach to health and safety and it is considered necessary to recruit afull time H&S manager into the DLO with the clear focus of underpinning and improving all associated H&Sactivities.

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Facilities Maintenance 360 ReportService Transfer continuedFinancials

Since obtaining a greater level of detail around the 2016/17 budget, it has become clear that the DLO as awhole, has expended a much higher level of cost than anticipated. Latest projections from the LBH HousingFinance Team point to this overspend potentially reaching £3.6m by year end.

The following is highlighted as action areas:• Need for more tangible financial monitoring and reporting information to be undertaken.• Budgets need to be assigned to key budget holders for various parts of the programme.• Servitor requires significant development, such as uploading new material cost data.• Job cost monitoring reports should be produced from Servitor.

The service agreement between the Council and FM360 is being developed to allow billing for actual costsuntil such time as more sophisticated financial and IT systems are in place.

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Facilities Maintenance 360 ReportMobilisationPreparations for transfer remain ongoing, including:

Client MeetingsThe FM360 mobilisation team continue to meet with various members of the DLO and Housing ManagementTeam in order to seek a clearer understanding of some of the immediate challenges that will need attention asthe service moves across into the FM360 operation.

Access to DataParticular attention is being placed upon increasing levels of visibility and understanding around existingfinance & budget structures, ICT systems, staffing levels & structures, and health & safety related items.

Business Delivery PlanWork continues on agreeing and implementing the business delivery plan, anticipated Housing ManagementTeam Service Agreement and associated addendums. The service agreement is now under the care of theDirector of Housing to present to cabinet for approval.

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Facilities Maintenance 360 ReportMobilisation report

ITEM Task Description POSITIONINGDATE

REQUIRED RAG

SLAs ICT SLATo cover the supply and maintenance of hardware and front/back office software. Support for projects

including system upgrades and incident reporting ICT service desk response times. Group SLA in place. Need to develop FM360 specifics Jan - June 2017 Amber

Finance SLA For accountancy services and Agresso payment facilities. Group SLA in place. Need to develop FM360 specifics Jan - June 2017 Amber

HR SLA I-Hounslow, staff training and advice. Also access to employee counselling service. Group SLA in place. Completed Jan - June 2017 Green

Procurement (Contractsadvice) SLA To set out contract monitoring arrangements Inc. supply chain Group SLA in place. Need to develop FM360 specifics Jan - June 2017 Amber

Legal Services SLA For legal advice on Property related cases (disrepair etc.) Will use group arrangment Jan - June 2017 Green

Communications/Web anddesign team SLA

For items for website, staff communications, Hounslow Matters, Intranet & Web services. Also for weband ad hoc design and printing services. Group SLA to be developed. Transfer requirements in place. Jan - June 2017 Amber

Facilities Management SLA To set out support for office equipment, moves and ordering of equipment (including stationery). No SLA exists at present Jan - June 2017 High

Mobilisation plan priorities

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Facilities Maintenance 360 ReportMobilisation report continued

ITEM Task Description POSITIONINGDATE

REQUIRED RAG

Finance &Commercial

Financial managementarrangements

Details required on financial management arrangements once the service transfers (client requirements).Also requires decision on short term arrangements to cover any 'lag' and fixed costs against outstanding

works.

BP has initial draft and meeting to be diarised with LD, PR, CH& MW to run through detail.

Jan 2017 (Go-live)

High

Payment processes Validate current sub-contractor/supplier payment processSame payment process used. Linked to 1.10 (Agresso

processes). Adopt custom and practice but Agresso structureand cost codes to be formalised.

Jan 2017 (Go-live)

Amber

Budget (FM360) Need to clarify standing and controls around existing budgetsMichael current working with Programme Managers on WIP,programme delivery (number of works) and invoicing to set

these out.

Jan 2017 (Go-live)

Amber

Budget costs at point oftransfer

Decision with LBH and Finance on percentage or point in time overheads and on-costs for WIP will be.Some works completed and billed for one month into business may incur 3 month overheads/Op costs.

Decision with LBH and Finance on percentage or point in timeoverheads and on-costs for WIP will be. Some works

completed and billed for one month into business may incur 3month overheads/Op costs.

Jan 2017 (Go-live)

Amber

Corporate Overheads Need to clarify standing and controls around existing corporate overheads. Approach in place with RM/NJ. Details to be finalised. Jan 2017 (Go-live)

Green

FM360 (DLO2) Overheads Establish and validate FM360 overhead cost and structure in support of business Approach in place with RM/NJ. Details to be finalised. Jan 2017 (Go-live)

Green

Insurance(s) Ensure Insurance(s) are identified, suitably understood, and in place Insurance being looked into by NJ/RM in readiness for transfer Jan 2017 (Go-live)

Amber

KPI matrix Establish requirements around KPI matrix LBH Housing Team Draft in place. Appendix E of business plan. Agreed Jan 2017 (Go-live)

Green

Client meeting arrangements -Need to establish and

maintain end to end G&Pprocesses within business

A decision on the structure of Board and what sub-board meetings are required to overseeperformance/finance/personnel once FM360 is established. Decision also on where meeting

Agenda/minutes will be published.Client meetings taking place weekly.

Jan 2017 (Go-live) Green

List of contractors Establish contractors and spend costList of contractors including spend to date gathered but

appears incomplete. Need to understand commitments andpotential underspend.

Jan 2017 (Go-live) Amber

Novation of contracts. Establish requirement and timescales for novation of contracts.List of contractors gathered but appears incomplete. JW tocheck if LBH (CH) have these and if they are leading on the

novation.

Jan 2017 (Go-live)

High

Contract statusEstablish what contracts are up for renewal in the near future requiring procurement activities between

Sept 2016 -Jan 2017.Need to check contract end date to add forward plan

procurement activities.Sept - Jan 2017

(Go-live) High

Staff budget cost for DLO2 Establish staff costs following Property Services re-organisation. Document detailing cost breakdown available. Jan 2017 (Go-live)

Amber

Mobilisation plan priorities

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Facilities Maintenance 360 ReportMobilisation report continued

ITEM Task Description POSITIONINGDATE

REQUIRED RAG

Health &Safety

Internal audit actions Assess risk of any outstanding Internal Audits relating to DLO2. JD taken forward. Action plan has been developed and allactions addressed.

Oct-Jan 2017 Green

Landlord/Client repsonsibilitiesLandlord Responsibilities (Legal and Compliance) – determine FM360 support requirements and

responsibilities around legal and compliance activities into HH team i.e. Asbestos, Fire Risk, etc.

Establish current reporting methods on statutory compliancyresponsibilities (Landlord and contractor). To include KPIs,

monitoring arrangements and timescales for remedial actions.Oct-Jan 2017 High

RAM's Validate standing of RAM's within businessComprehensive set of RA to cover all areas of work. Service

Managers have a list of those requiring an update. These havebeen reviewed. Training gaps have been identified.

Oct-Jan 2017 Green

ICT Business Systems -(Servitor/Ohms/ etc.)

Review utilisation and standing of business systems

Systems (Servitor) currently under utilised but have thefunctionality required for DLO2. Review of OHMs/Servitorfunctionality and requirements underway. Development

meeting with CIRCA to identify developments for day 1 andpost transfer

end Oct Amber

Uniforms Establish current uniform allocation and that proposed in FM360Current uniform in place. Uniform proposals signed off and

samples approved. end Oct 2016 Green

TUPE Establish standings and intentions around TUPE for DLO; inc current vacanciesStaff and structures identified for consultation, LBH & FM360 to

jointly lead. end Oct 2016 Green

Mobilisation plan priorities

HumanResources

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ConclusionThe purpose of this report is to update the Cabinet on the performance of the Lampton 360 group; Recycle 360,Property 360 and Facilities Maintenance 360 for the end of quarter three.

As the Cabinet will see it has been a challenging but rewarding quarter for the group, which can be expected ina fledgling group of businesses with such a diverse range of activity.

There has been considerable success for the Recycle 360 business and positive feedback on the serviceprovided. It is rewarding to receive such feedback from local residents, but even more rewarding to hear of theimprovement in staff morale at the Recycle 360 depots, due to improved pay and conditions.

Property 360 has made considerable progress in establishing both its investment and development businesses.The positive impact of the investment group has already seen a local resident be moved from bed andbreakfast accommodation into their own home.

Facilities Maintenance 360 has taken longer than anticipated to transfer over to the group. Collaborative workbetween FM360 and the Council’s Housing Team continues to try and make up for lost time, but we remainconfident that this too can be a success for the Council as Shareholder.

Copies of all business Quarter Three reports can be obtained upon request.

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