Consulting firms supporting Fifty Thousand Homes campaign

24 May 2016 Consultancy.uk

House prices in the capital have gone through the roof and continue to climb, putting a first home out of reach for all but the top earning group in the city. The economic and social costs are considerable, both to those seeking to climb the social ladder as well as businesses seeking to attract much needed talent to the city. In a bid to improve the housing situation, five organisations have teamed up to launch 'Fifty Thousand Homes', a business-led body that seeks to add 50,000 new homes per year in London to 2020.

London has a housing problem: increased urbanisation and economic focus in the capital have seen London’s population increase by approximately one million people over the last 10 years, while in the same period 202,000 new homes were built to accommodate the influx. The supply demand gap, as well as foreign investment from the boom years in Asia, has resulted in a significant increase in the cost of housing in the capital. The average price of a house in London is £513,000, compared to £277,000 across the rest of the UK, prices over the past decade have approximately doubled, while private sector rents have increased by 34%.

The effects of the choice not to meet increased demand with additional supply, has come at a considerable cost to the less affluent members of London's society, as well as the business community. £70,000, more than three times the median wage, is the wage threshold at which the number of Londoners finding it easy to service mortgages and rents begins to outnumber those who find it hard, a house now costs more than 14 times the mean annual salary in the city. As it stands, around £1 billion in economic growth (GVA) is lost due to high housing costs in London per year, which is diverted away from productive use – with a total of £14.5 projected to be lost in the 2006–2020 period.Fifty Thousand Homes

Business leaders from a range of sectors have had enough with the situation, which is not merely pricing a generation out of the housing market and lining the pocket of property holders. 73% of businesses leaders in a recent survey say that the current conditions are hurting economic growth, while two thirds believe it is having a negative effect on access to talent that cannot afford to live in the capital, 70% of Londoners aged 25–39 say the cost of their rent or mortgage makes it difficult to work in London, exuberating the already poor record of social mobility in the UK – something which professional services firms are seeking to stamp out.

Fifty Thousand Homes
In a bid to improve the situation, Fifty Thousand Homes was established. The organisation is business-led and is focused on increasing the London housing stock by at least 50,000 homes a year by the end of the next Mayoralty in 2020, to meet growing demand – the capital is set to grow to 10 million inhabitants by 2020 – and improve the city’s competitiveness. The campaign’s founding partners are London First, CBI London, FSB London, Shelter, and management consultancy FTI Consulting. "Business has a vital part to play in helping London get the housing it needs," comments Baroness Jo Valentine, Chief Executive at London First.

The organisation is supported by signatories from some of the biggest employers in the city, including a range of professional services firms and consultancies such as Arcadis, CBRE, Deloitte, Grant Thornton, Mace, and Royal HaskoningDHV.

As part of its support, Grant Thornton will lead an inquiry into solutions for the current housing problem faced by the capital. The inquiry will consider a number of different ways in which demand for affordable housing in London can be met, including the possibilities of employer-led schemes and a new ‘build to rent’.

Value of economic growth lost every year

Will McWilliams, Partner at Grant Thornton UK, who takes a seat on the London First’s Fifty Thousand Homes campaign advisory board, says the firm is “excited” about the partnership with London First and supporting their Fifty Thousand Homes campaign. McWilliams further states: “London is in the grip of a housing crisis. The chronic shortage of affordable housing in London is affecting everyone: from the business community losing talent to other areas with more affordable housing; to the 283,000 households on London council housing waiting lists; and those families spending 59% of their pay packet on rent, unable to get on the property ladder with the average house price in London now nine times the average annual salary. Together we believe we can convene London's largest employers and key players in the housing market to deliver specific measures that will help increase the supply of housing across the private rented, social and private ownership sectors.”

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Ensuring data quality imperative for smart asset management

25 March 2019 Consultancy.uk

By implementing innovative Asset Performance Management systems, utilities firms can maximise their utilisation of assets and minimise maintenance costs across their portfolio. However, according to Louis Morgan of Smart Grid Forums, without securing quality management systems for the data which smart grids rely upon, companies risk missing out on the benefits of asset performance grids.

Smart asset management presents a major opportunity to professionals across the business spectrum. In this context, a new event hosted in London is looking to help smart-grid asset management professionals meet the needs of a changing energy industry with digital asset management. The first annual Grid Asset Management event is due to take place between the 14-16th of May 2019 at the Millennium Hotel in Knightsbridge, London.

The conference will bring together leaders and experts from across Europe, in order to benchmark their digitalisation roadmaps. In a piece posted on the Smart Grid Forums website ahead of the event, Louis Morgan, a Conference Producer at Smart Grid Forums, has outlined the importance of investing in innovative asset performance technology for utilities firms, which can help ensure long-term stability for assets management in the utility sector in the face of increased complexity  .

Ensuring data quality imperative for smart asset management

Traditionally, the decision to invest in a given asset was made on the basis of an expert’s judgement of the risks posed by its failure, having typically been assessed via a risk matrix or a similar qualitative method. After that, a decision would be taken as to whether it should be replaced. However, according to Morgan, as the pace of change and complexity increases, these methods can no longer provide the required level of certainty. Uncertainty about changes to consumption patterns and load profiles brought on by the energy transition produces a vast number of possible scenarios that investment planners must consider.

As a result, Morgan explained, “utilities are seeking to support their investment decisions with quantitative risk management methods, centralising expertise from across their operations into a consistent, numerical framework that accurately captures the risk posed by all kinds of asset failure to all stakeholders.”

Companies are doing this by turning to ‘smart grid’ utility management, or systems which work to invest in the maintenance and replacement of millions of assets spread across thousands of kilometres of network. However, this is by no means a silver bullet, and in the age of the smart grid, planning ahead is more complex than ever. To ensure the long-term stability of their grids, then, utilities must deploy standardised investment decision-making practises supported by advanced modelling capabilities.

Morgan elaborated that the best way of facing this problem is through the combination of condition, utilisation, reliability and demand data. In that case, risks can be quantified in financial terms and investment budgets can target the assets posing the highest total risk, thus deferring investment in lower risk assets and optimizing the long-term budget. However, decisions informed by these risk models “will only be as good as the data and the assumptions that support them”, meaning utilities must therefore find ways to improve the volume, variety, veracity and velocity of the data they employ in their investment planning models.

“This means digitalizing asset operations, rolling out sensors and implementing systems that integrate data from a range of internal and external sources in real-time,” Morgan expanded. “Utilities must also scour their business for expertise about different assets to ensure that their risk management frameworks accurately capture the true risks posed by asset failures.”

This is in keeping with a trend which goes well beyond utilities. Business leaders of all shapes and sizes are currently having to address how they manage data quality – as poor information being input into any automated system can essentially negate the efficiencies such systems bring to the table. To this end, robust data governance is critical.

Concluding his article, Morgan said, “It is clear that there is a great deal of opportunity for utilities to obtain significant business benefits from improving their investment planning capabilities. More accurate risk management, supported by a reliable data-driven method, will deliver better financial outcomes from investment activity... But to achieve these capabilities, a lot of work must be put in to establish the systems, processes and frameworks which underlie them. Utilities must also make difficult choices about how they quantify risk and the appropriate range of data to feed into their investment planning models.”

This topic will be tackled in-depth at this year’s Grid Asset Management 2019, a conference, exhibition and networking forum aimed solely at smart grid asset management professionals.