driving profitability in challenging times steve mather neighbourhoods and regeneration director ©...

DRIVING PROFITABILITY IN CHALLENGING TIMES

Steve MatherNeighbourhoods and Regeneration Director

© Places for People Homes Limited 2013

Why is the Neighbourhood Strategy critical to our business ?

• Welfare Reform• Reduced public funding• Challenging housing market / economy • Increasing importance of investor confidence • Drive for efficiency / vfm

• Alignment of functions in terms of delivery

• Need for increased profitability / Return on Investment

• Ability to focus resources and access external funding


Neighbourhood Strategy – Five Key Phases

• Neighbourhood Definition• In year Performance

Monitoring • Annual Assessment and

Benchmarking• Tackling poor performance -

“Neighbourhood Planning” • Making difficult decisions –

“Option Appraisal”


Neighbourhood Definition• 600 + neighbourhoods / 55,000 homes

• All Group owned / managed stock included

• Neighbourhoods vary in size from 20 homes up to 1,000 homes

• Alignment with existing structures is key - scheme codes, data management systems, etc.

• Care and support schemes are included where appropriate.

• Get this right and it works !


In Year Performance • Surplus Per Property (profitability !)

• Key financial and housing management performance data

Turnover

Arrears

Void Loss

Repairs costs

Economic activity rates

• Historic and current performance data

• Dashboard – accessible to all and simple !


Neighbourhood Dashboard


Annual Assessment• KPI’s :

Surplus Per Property Turnover Repairs cost per property Planned maintenance Future investment needs

• Year on Year comparisons (3 years)

• Minimum “surplus” required from each property ( e.g. £2k)

• Regional “League Tables” / Benchmarking at “Assessment Group” level

• Reviewed with local management to agree banding


Banding

GREENPerforming well

retain focusto drive up

performance

AMBERPerforming poorly

but the Group havea long term interest

(Neighbourhood Planning)

REDFuture to be considered

(e.g. disposal, investment, conversions, management

arrangements, etc.)(Option Appraisal)


Amber - Neighbourhood Planning


Neighbourhood Planning

• Develop long term vision• Customer and stakeholder

involvement• Focuses upon the wider

neighbourhood• Framework model• Evidence based • Long term impact measured• Physical, social, economic and

environmental interventions


Red - Option Appraisal• Detailed financial analysis

• Considers all options to test viability (e.g. Rationalisation / Disposal / investment)

• Linked to “Tenure Diversification” strategy

• Linked to “Asset Management” investment strategy

• Linked to “Rationalisation” strategy

• Challenges conventional thinking and assumptions

• Often least worst option• Forces decisions to be made !


What difference have we made in our neighbourhoods…

• Reduced turnover : 19.6% to 9.8% (Padiham, Lancashire)

• Reduced repairs spend : £ 1619 to £ 625 per property = £ 395k (Norfolk Park, Sheffield)

• Reduced re-let times : 45 days to 11 days (Manor, Sheffield)

• Increased surplus per property : £ 2,287 to £ 3,071 = £ 770K (Clayton Brook, Lancashire)

• Improved customer satisfaction : 58% to 92% (Kingsmere, Eastbourne)


How has it changed the way our business operates ?

• Move away from managing by “averages” and dealing with the detail

• Management at the most meaningful level• Staff understand the financial implications of their

decisions and actions• Quality of data and the analysis and reporting has

improved • All staff / functions that impact upon a

neighbourhood now work together • There is nowhere to hide the most challenging

issues !• Good and bad performance is clearly identified • Staff have the data they need and meaningful

performance measures • Significantly improved stakeholder and customer

relationships© Places for People Homes Limited 2013

What difference have we made to our business …

• Significant organisational change : SHU Evaluation

• Improved neighbourhoods : 93% of areas banded “Green” 21 areas moved from “Amber” to

“Green” (11/12-12/13) 2 “Red” areas (both for disposal)

• Increased financial performance : £ 2.4m (11/12 – 12/13) in our most

challenging areas Profitability in all regions improved

by between 4% and 16% (11-12 to 12-13)

Significant overall improvement in financial performance at a company and Group level


Neighbourhoods we are proud of …


driving profitability in challenging times steve mather neighbourhoods and regeneration director ©...

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