Case Study: The Berry Housing Trust.
Part of the service The Almshouse Association offers its member charities is to help support them with grants or loans if they do not have sufficient funds to carry out necessary works to their almshouses.
In 2023 Q4, the Association received a loan request from The Berry Housing Trust, and we were pleased to be able to agree a loan of £25,000 towards the purchase and installation of photo voltaic panels.
The Berry Housing Trust (BHT) was founded in 1912 by the descendants of Ada Berry, a long-time resident of the villages of Fairstead and Stansted in Kent.
Over the past century and more, the Trust has been entirely managed by volunteers and hence has no management or administration costs have been incurred.
The cottages have been continuously occupied and the Trust continues to receive requests for accommodation. Some early residents were bereaved relatives of those who fell during World War 1 and twenty years later, similarly.
More information can be found at www.stanstedhistory.org.
Like many other almshouse managers, the trustees of the BHT were faced with the difficult equation of old buildings needing improved energy efficiency – lots of options; but what to do and in what order? And where was the money to come from?
Background
The Trust runs four almshouses; two were built in 1911 and two in 1926. They are semi-detached bungalows with solid walls and floors, compact, with four rooms and electricity is used for all heating and hot water. Total annual consumption is about 27,000 kWh bringing electricity bills above £2,000 per property. They are not listed buildings but are situated in a Conservation Area.
They are all occupied by older residents who are able to look after themselves. Residents are responsible for sourcing their energy supplier and for paying the bills. The recent energy cost rises linked to events in Ukraine presented a financial problem for residents and created an unwelcome feeling of uncertainty and apprehension.
From reading the press and expert advice material there seemed to be a range of options to help with residents’ bills that included solar panels, external insulation and ground or air source heat pumps. But how to narrow down the options and decide what to do?
A complicating factor was the original century-old clay roof tiles were well past their life expectancy. There were also other maintenance needs that had to be considered.
Considering finance
The Trust had financial assets but these were far below sufficient to do everything on the ‘wish list’ whilst still maintaining a reserve for future contingencies.
Following the resignation of a former trustee, a governance review was conducted and it was decided to strengthen the Board by appointing additional trustees with experience in project management, fundraising and social housing. These new trustees then formed a subcommittee to research the options and market. Although not Chair of the subcommittee, the Chair of the trustees joined the subcommittee in order to provide an historical and contextual input, an arrangement which worked well.
Early on, the subcommittee decided that the roofs coverings were in such poor condition that they needed to be replaced to ensure the bungalows would remain leak free well into the coming years. A good roof surface was also a pre requisite for installing solar panels.
Indicative prices were obtained that showed new roof coverings would cost about £45,000 for all four properties. Solar PV panels similarly about a further £45,000. Solar panels were expected to return bigger cost savings for residents (potentially up to 40%) than external insulation. The trustees agreed a recommendation to allocate £45,000 from reserves to the re-roofing/solar panel project provided that external matched funding of the same amount could be obtained.
There followed intensive activity to identify potential funding organisations and submit grant applications. In parallel, a specification for re-roofing was prepared, issued and quotes obtained. The trustees were not able to agree a contract award until they had confidence external funds could be raised. At this time cost inflation was widespread and quoted prices remained stable only for short periods.
The project team assumed many grant applications would be declined, and predicted success in about one-fifth of applications. In the event the trustees succeeded in better than a quarter of submissions and were delighted when the local Parish Council, recognising the great value to the community over the past century of the BHT, pledged £20,000. A sum, the trustees hoped, might encourage confidence in the BHT among other fund-making programmes and charities.
Raising funds
From the Charities Commission central register, the trustees compiled a long list of grant making bodies whose charitable aims/objects seemed to match with their priorities and circumstances.
Over the ensuing months some 22 applications were filed, including Garfield Weston Charitable Trust, Kent Community Foundation, the Mercers Company, the Rank Foundation, Stansted Parish Council, Tonbridge and Malling Borough Council, W G Edwards Charitable Trust. This can be wearying work but it is vital to persist.
As a general rule, every application had to be drafted afresh. (Any assumption that a block of text might be ‘cut and pasted’ into successive applications is misplaced.)
The criteria for eligibility at each organisation vary from all others, sometimes obviously, occasionally the differences are subtle, so drafting anew is essential. As a rule of thumb, the trustees allowed about 10 to 12 hours on average. A few documents could be reused, such as their annual accounts, the background of the BHT and their business plan for the coming few years.
Reaching a decision
The trustees contacted several homeowners and some businesses in the area that had installed solar PV systems.
A priority for the trustees was the reliability and quality of installation that existing owners could report. Generally, their responses were positive, or very positive and the trustees proceeded with setting out their requirements so that contractors might submit prices for the work.
Roofing and PV project funding
A provisional budget was set at £90,000 overall: equal sums of £45,000 for each of the roof and for PV panels.
The Trust’s Extraordinary Repair Fund (ERF) investments totalled £85,000. The trustees needed to retain some £40,000 for future planned works over the next five years in addition to budgeted annual ERF and Cyclical Maintenance Fund (CMF) contributions of about £5,600 per year from income. The pledge of £20,000 from the Parish Council was based on their plan to raise a further £25,000, (to reach half the total project cost). The trustees felt the demonstration of confidence by the Parish Council would encourage other prospective funders.
They anticipated some frustrations – their expectation was for success in about one application in five. A short list of 20 potential funders, and an average grant sought of £5,000 would, together with that from the Parish Council reach £45,000 and meet their target. In the event they achieved success in about a third of those totalling £23,000, so underachieved their target by £2,000.
However, through a carefully designed invitation to tender and astute project management, both projects came in below forecast budget, with the PV element totalling £43,300 and roofing £42,200 despite incurring £3,500 of unforeseen costs in respect of work on chimney stacks and guttering. Thus, the total project was £85,500, about 5% below budget, and inside their fundraising target of 50%.
Re-roofing contract
To determine the ‘Scope of Works’, potential contactors were invited to the site and inspected the roofs.
The brief from trustees was to ensure residents were fully protected from the weather, for at least the next ten years, thereby giving some ‘peace of mind’ to all concerned.
Three contractors were contacted, (having obtained suitable references), and invited to the site. Notes of the observations were used to prepare a specification for the ‘scope of work’.
It was apparent that completely new roof coverings were required; further patching was unviable.
A formal tender enquiry was prepared and sent to all three contractors allowing them time to prepare an offer. The preparation of this enquiry was critically important as it was to be a Contract Document. It included a timescale when the work was to be carried out and a mechanism for providing a ‘fixed price’ despite the extraordinary inflation taking place at that time – particularly for construction materials. It guaranteed the successful contractor would be paid promptly against two weekly applications based on work carried out and materials delivered to site.
The trustees approved the award of the contract for the roof covering from offers received and the recommendation by the leading trustee who was also named in the contract documents as Works Supervisor. The accepted offer was within budget, post-tender negotiations completed and agreement reached on adjustments for inflation, based on an agreed start date and programme of works.
Fortnightly progress reports to the trustees were presented by the Works Supervisor to coincide with payment periods for the contractor. These reports facilitated the prompt payment of the contractor, a critical aspect of the contract. Given the size and nature of the works it was not necessary to have any ‘Retention’ and the final account was agreed immediately on completion. There were some minor extra works priced, agreed and paid in full at each instance.
The works were carried out successfully on time and within budget. Residents remained in occupation throughout.
Supply and installation of PV and storage battery systems
Having replaced all existing roof coverings the contract for these solar arrays followed the same pattern as for the re-tiling.
Having obtained satisfactory references three suppliers/installers were contacted and sent a tender enquiry inviting bids for the work. The enquiry made clear that each cottage required complete and independent systems which fully recognised the distinct individual nature of each property. Each contractor was invited to visit the site and submit their estimate based on their assessment of the scope of the works and that systems offered were to represent the ‘best value for money’ for the Trust. This included the provision of forecast performance guarantees and warranties offered for the selection of the equipment proposed.
All bidders visited the site, inspected the roof and loft spaces where the batteries were to be placed and satisfied themselves the systems could be connected into the existing electrical circuits.
All offered to carry out the works in a suitable timescale, but post-tender negotiations were required to obtain acceptable payment terms. It was during these negotiations that the specifications for particular components were probed and the quality of the arrays determined, including details such as panel guards to prevent birds or vermin nesting below them.
Given the short duration of the contract only three payment milestones were agreed, an initial 10% deposit followed by a payment of 40% on the day the installers started work and materials were delivered to site and a final 50% payment on completion, post-commissioning and handover.
In the event, JPS, the selected contractor proved reliable and considerate toward the residents. The lead engineer carefully briefing each household on the system, the smartphone app and how to monitor the performance of the PV panels. This consideration for elderly residents proved welcome and reassuring.
It will take about a year for the full effectiveness of the PV systems to become apparent, and we will send an update to The Almshouse Association in due course. But in the first full month – March ’24 – a system returned almost 300 kWhrs; a figure likely to rise as sunnier weather arrives.
If you would like to contact any of the Trust’s project team, please do so via The Almshouse Association in the first instance.
Click here to find out how you can help us support almshouse charities build new and renovate older almshouses, ensuring safe, warm and affordable homes in friendly communities are available for people who need them for many years to come .
posted 16 July 2024