value for money self assessment...value for money self assessment (1st april 2016 – 31st march...

Value for Money Self Assessment(1st April 2016 – 31st March 2017)

1.1 VfM is a clear priority for ForViva (“the Group”) that underpins everything we do. The Group, which comprises of the registered providers of City West Housing Trust and Villages (Villages Housing Association and Villages Community Housing Association), strongly believes that to deliver the vision of ‘improved lives’ involves making better use of our resources to improve services and maximise outcomes across communities. This means VfM must be a guiding principle in our pursuit to deliver our corporate priorities.

1.2 We believe passionately that we can meet and respond to this challenge, deliver more homes and improve the quality of our business and service delivery at the same time. We are even continuously exploring options for how we fund our business, so that we can maximise our investment potential and fund our Business Plan growth and ambitions.

1.3 Across the majority of our business we’re confident in the direction we’re heading, the outcomes achieved this year and plans for the future. However, we also know there are other areas where we need to improve.

1.4 ForViva appreciates delivering VfM requires an approach whereby it is fully integrated in both the delivery of all of our activities and the mind-set of customers and staff. Whilst we have not identified a specific efficiency action plan during 2016-17 as the organisation had been through a significant amount of change from the harmonisation of ForViva and the staff restructures as a direct approach to the rent reduction, we remain an organisation that continues to grow and diversify and we have prudently assumed no cash efficiencies in our business plan. Our approach to VfM however continues to be prominent in the organisation and has been considered alongside our approach to projects and specifically around those that have the most significant community impact via the Community Impact Strategy and Impact Hub.

1. What Value for Money (VfM) means to ForViva

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2.1 This Self Assessment outlines:

• The Group’s overall approach to VfM as well as our framework;

• How the Group has challenged service delivery on VfM, in particular looking for alternative models to be investigated and a focus on demonstrable outcomes;

• How our costs compare to others, both nationally and within our peer group;

• Progress on our journey on delivering the five year vision of ‘improved lives’ as well as our VfM priority objectives of:

- Reducing the overall management cost per unit to below £1,000;

- Maximising the return on assets;

- Maximising the social, economic and environmental return on investment;

- Increasing turnover and maintaining the operating margin;

• VfM achievements in 2016-7;

• How the additional resources generated from the VfM savings are re-invested.

2.2 The Group has taken the approach of considering both delivery against our VfM priority objectives as well as our corporate objectives as a way of evidencing delivery of VfM and compliance with the standard.

2.3 In addition to this document there is a version of the VfM Self Assessment within our financial accounts. The Community Impact Accounts are available on our website.

2. Introduction

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3. Requirement for a VfM Self-Assessment

4. Overview of ForViva

3.1 The Homes and Community Agency (HCA) has outlined what it expects registered providers (RPs) to deliver in relation to VfM in its “VfM Standard”. In summary those expectations are that RPs shall:

• Have a robust approach to making decisions on the use of resources to deliver objectives;

• Have effective performance management and scrutiny functions which are effective in driving VfM;

• Understand the returns from their assets;

• Understand the costs and outcomes of delivering services and how those costs compare to other RPs;

• Identify which VfM savings have been made and will be made.

3.2 This Self Assessment explains how the Group meets the HCA’s expectations. A detailed review of this compliance with the HCA expectations can be found in section 8.1. However, the Group recognises that VfM requires a continuous improvement approach and our action plan going forward can be found in section 9.1.

3.3 The Board believes that it complies with all the requirements of the VfM standard and the actions outlined in this Self Assessment will show the actions it has taken and will take in order to continue to comply.

4.1 ForViva is a Community Benefit Society that as of 31st March 2017 owned/managed 17,666 homes across the North West of England: 1,783 located in Knowsley (Stockbridge Village), 14,915 in Salford, 909 in Oldham (Fitton Hill), 36 in Preston and

23 in St Helens. Since 2015 we have managed additional changes to the Group structure to strengthen our ability to diversify or offer to best support our customers.

Our Structure

ForViva Group

Villages Housing

Association

City West Housing Trust

ForViva Villages CHA

Community Benefit Society. Registered number 24123R.

Exempt Charity.

Community Benefit Society. Registered number 30483R.

Community Benefit Society. Registered number 28874R. Exempt Charity.

Community Benefit Society. Registered number 7006.

Non Charity.

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5.1 In 2014 the City West Board engaged in a number of discussions to consider the future growth of the organisation, potential changes in structure and governance arrangements that would be required to support this growth.

5.2 Part of the conversation included the proposal to establish a group structure, in line with similar models in the sector, which would enable City West Housing Trust to realise its wider aims to support the future sustainability of its social assets. Following discussion it was agreed the Trust would look to create an ‘enabling’ group structure to accommodate an even balance between operational oversight and high level strategy.

5.3 One of Villages’ Housing core objectives over the years prior to 2014 had been to find a like minded partner to further realise their ambitions to work in partnership to create an environment for communities to flourish. Moving to a group structure with ForViva provided a great opportunity to deliver on this ambition.

5.4 The key benefits associated with the creation of the Group included the ability to plan for the demands of the current economic climate, welfare reforms and ongoing cuts to public funding. A group structure would also enable the profits generated within the structure to help fill the funding gaps left by the cuts and allow the Group to continue to invest in social housing and other community activities.

5.5 It was also noted that the Group approach would put the organisation in a good position to consider future growth opportunities, and for partnerships and joint ventures to be entered into and set up more easily. A group structure would also open up greater opportunities for social good, improving people’s lives and their well-being, generating funds to invest in social enterprises which would provide important services and employment and training opportunities for the local community.

5. Why ForViva was established

5.6 The creation of the ForViva Group was considered an important moment to take stock and to consider how the Group could build on the previous success of all partners and how the Group should develop and move forward as an organisation.

5.7 Following the initial launch of the Group we have seen continued diversification, which has included the acquisition and creation of commercial entities in the Group.

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6.1 Our strategic approach has been developed and driven by the Board and our customers and owned by the Leadership Team and all ForViva staff. The approach is regularly reviewed, challenged and refined to ensure it responds to the ever changing environment. In response to the external challenges and the need to implement the changes relating to the new group structure, a new VfM Strategy has been approved by the Board. Our key aim is to create financial and operational capacity to grow and sustain the business so that the Group can deliver its business objectives. This will be achieved by working towards the following priority objectives in both the delivery of our core services and our partnership working:

• Reduce the overall management cost per property;

• Maximise the return on assets;

• Maximise the social, economic and environmental return on investment;

• I ncrease turnover and maintain operating margin.

6.2 How VfM links with corporate objectives

6.2.1 The corporate vision for the Group is one of ‘improved lives’, which is underpinned by five corporate priorities:

Community Impact “Creating resourceful communities is at the heart of everything we do. Together we will enable communities to contribute towards vibrant and safe neighbourhoods, improve their health, education and employment prospects.”

Viability“Our ambitious plans are built on strong foundations. We are a robust organisation with the financial capacity to deliver. We have strong leaders and resilient governance with solid processes in place to aid growth and allow flexibility to maximise commercial opportunities.”

Homes“High quality, well maintained, sustainable homes are the basis for thriving communities. We will continue to provide quality housing for all markets mindful of our social principles. The homes we develop and maintain are guided by our community impact and growth aims.”

Growth with Purpose “We want to do more. We will seize opportunities that increase our viability as an organisation which will in turn enable us to contribute towards sustainable communities. We will work collaboratively with partners on new opportunities and also welcome those with a common purpose to the Group.”

Service Excellence “We do things well but always aim higher. We will work innovatively and in partnership with communities and stakeholders to consistently deliver outstanding, multichannel, value for money services.”

Our “cross-cutting” strategies underpin the delivery of our priorities. These are: Equality and Diversity, People, VfM, ICT and Communications. Driven by our values, they are central to achieving our vision.

6.2.2 VfM is reflected in all the corporate themes mentioned above. The Group recognises that to deliver on its corporate priorities it must create financial capacity to grow and sustain the business so that it can deliver its business objectives. By maximising value, delivering business effectiveness and VfM gains the Group can invest in homes, communities and customers to improve their well-being and life chances. The Group will achieve this by specifically reducing costs and maximising return on assets and this is outlined in the VfM Strategy.

6. Our strategic approach to VfM

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6.3.1 Our in-house VfM Assessments were introduced in 2016 as part of our revised VfM framework. Business service leads are required to evidence their achievements and how they deliver VfM considering all available performance, cost and quality information. Leads are also asked to evidence that they have considered and assessed alternative models of service delivery. ‘Cost’ and ‘Quality’ assessments are undertaken to provide an overall

VfM Score, a VfM aim (e.g. reduce, costs, maintain quality) and identified delivery of subsequent actions for the next 12 months. The Assessments are signed off by operational managers and the Senior Management Team (SMT). The VfM Service Excellence Group will monitor delivery of actions.

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VfM Strategy

Team Action Plans

Business Plan

Budget & Service Plans

VfM Assessments

Individual/Appraisal Objectives

Corporate Priorities

6.3 How VfM links in with our business planning

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GovernanceBoard & Committees

Vision & ValuesBoard & Executive Champions

Regulator’s expectations

Management Accounting and zero based budgets

VfM Dashboards

Stress Testing

VfM Assessments

VfM Management Controls

Business Plan Targets

Service Excellence

Group

VfM Strategy

and Action Plan

VfM Register

General Management Controls

Independent Assessment

Senior and Executive

Management

Procurement

Performance Management Framework (inc KPIs)

Customer Scrutiny

Peer Comparison

HCA Dataset

External Audit

HouseMark

Internal Audit

The Regulator

Raising the profile of VfM

Policies and

Procedures

6.4.1 VfM is challenged, monitored and evaluated at all levels of the organisation resulting in a high level of assurance and a clear corporate focus on the subject. This begins with effective governance and leadership from the Board with support from the SLT. VfM is embedded through a variety of

effective tools and methods, which when combined deliver a robust, holistic and effective approach to VfM. The tools the Group use to manage VfM are outlined in the following diagram:

6.4 How our structures and practices ensure the Group delivers VfM

Service Planning

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7. VfM achievements in 2016/17

7.1 Using our corporate priorities, this section presents a series of case studies that show how we are delivering VfM within the Group.

Priority 1: Community Impact

Vulnerability & Safeguarding Initiative ForViva’s approach to people with support needs and safeguarding is one of our key priorities. Over 65% of customers have been identified as such. A Vulnerability Gas Officer was appointed to enhance the gas service to these customers by providing support and assistance during various works including installations, service and maintenance and breakdowns. Guidance is also offered on operation of the heating controls and referrals are made in line with our affordable warmth strategy to ensure that homes are efficient and cost effective for customers. In line with recognising support needs our contractors have been trained to identify and report where necessary any safeguarding concerns during visits. This has led to higher satisfaction with the service.

Community Safety Saving of £9,670 on budget set as a result of implementing a more robust approach to managing complaints of noise and ASB.

Benefit CapWe have a dedicated officer reviewing the benefit cap cases and working closely with the affected customers. We currently have 88 customers affected by the benefit cap, which was implemented in two stages in November and December 2016, across the Group. This has reduced from the initial 122 households which were identified by the DWP, as we were able to identify exemptions and errors which meant that many customers shouldn’t have been affected by the cap in the first instance. With the average housing benefit loss being £40 per week and this analysis taking place 26 weeks after implementation, we have saved a potential rental loss of £35,360 rather than if we hadn’t identified these errors.

At the time the new cap was implemented, this group of customers owed total arrears of £25,388 which was an average of £288 per customer. They now owe £42,218 which is an average increase of £191 per customer. The average weekly housing benefit loss per customer is £40 and there has been 26 weeks since the implementation of the new cap and the date of the last housing benefit payment. Therefore, the potential arrears risk could have been an average of £1,040 per customer. The arrears have increased by £16,830 but could have been £91,520 without officer intervention; therefore, we have saved £74,690.

The officer spends one quarter of their time reviewing the cases and is on a salary of £25,000 (£6,250 pro rata).

Taking the initial saving of £35,360 together with the £74,690 and then deducting the £6,250 officers’ salary provides a saving of £103,800.

Priority 2: Viability

One off savings through negotiation and tendering• £450,000 worth of one-off savings through

negotiation and re-negotiations, price mitigation and competitive tendering (examples include £104,000 savings on original budget for Heating Installations and £15,000 savings on purchasing agency fees);

• £68,000 worth of savings - £48,000 cash and £20,000 time and resources – through revising content of staff conference as well as reducing corporate events and literature;

• £243,000 savings from the harmonisation of Finance (£168,000) and Human Resources (£75,000) teams (City West and Villages) into one Group Function;

• £6,000 income per year through Health and Safety consultancy service to external providers;

• £9,000 savings through internal Health and Safety Team providing Fire Inspection services to the Group, eliminating the need to use consultants;

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• Arrears £98,000 lower than last year;

• Efficiency built in to budgets will be met and an additional £105,000 saving has been achieved;

• Supported over 880 customers to move onto Universal Credit (UC) and with our support package, the collection rate in 2016-17 is 98.2%, rising to 102.9% for just those claimants with UC already in payment at the start of the year;

• £10,000 efficiency achieved by improving capacity of existing housing management system to enable financial support case management. No requirement to purchase additional systems or licenses;

• £252,000 additional income from Older Persons Service charge on our sheltered properties – this supports the delivery of the housing related support delivered by on site staff and the out of hours provision;

• Enforcement of customer responsibility and client approval process has led to efficiencies of around £300,000 which has been transferred to cyclical programmes;

• Through supporting customer training and revising processes such as service standards and performance indicator reviews has led to £5,000 worth of efficiencies.

Grounds Maintenance service

Following bringing the service in house on 1st April 2016 with the aims of making long term efficiencies, the 2016-17 year end spend for the grounds maintenance come in at £11,000 under budget, which works out at an underspend of around 0.86%. The budget set for 17-18 aims to achieve further efficiencies through increased productivity to City West and its customers. Plans are in place to align the service across the Group to increase control and make further efficiencies for both the Group and customers.

RentSense2014-15 saw the introduction of ‘RentSense’ as a way of better protecting our income. This was an intelligence-led decision based on the experience of our Direct Payment Pilot City West carried out in 2013-14. The pilot identified City West needed to free up resources in order to provide specialist support to customers affected by welfare reform or moving onto Universal Credit. To provide this within existing budget levels required an increase in efficiency. The Mobysoft product provides high quality analysis of payment trends and rent accounts to focus on accounts that require intervention. We continue to utilise this product which shows a significant reduction in caseload (by removing cases which would have been checked routinely under the old system but did not require intervention) maintaining additional capacity within the team equivalent to four full time equivalent staff members.

Rising rent levels and the ongoing impacts of welfare reform from 2012 onwards have meant that, although current tenant arrears owed expressed as percentage of the rent debit have remained stable, in cash terms arrears have been increasing by an average of £108,000 a year. During 2016-17 using RentSense, the arrears across the Group owed have fallen by £98,000, a significant improvement which compares favourably with the licence costs of the software (around £50,000).

Priority 3: Homes

‘One Appliance Initiative’ ForViva has invested £190m over the last five years in redeveloping and maintaining assets. This includes installation to date of over 10,200 Sedbuk A rated high efficiency condensing combi heating systems with energy efficient controls. The Group also continue to remove open flued appliance (gas fires).

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This initiative helps to increase the ‘first time fix rate’ where the service provider is carrying van stock for the ‘one appliance’ reducing the time customers are without the use of the appliance. Additionally this contributes to the overall green strategy in reducing unnecessary journeys by the service provider. Furthermore with the removal of open flued gas appliances (fires) this increases the safety of properties and also contributes to our green strategy.

Villages Responsive repairsServices were fully aligned in 16-17 to create a consistent approach across the Group including the enforcement of customer responsibility repairs and the client approval process. This saw the cost on average of a responsive repair reduce from £106.12 in 15-16 to £98.62 in 16-17.

The alignment of the voids letting and service standards saw the overall void spend reduce from £740,235 in 15-16 to £450,503 in 16-17.

Introduction of Legal OfficerThe introduction of this post in June 2015 has, to date, saved the business approximately £303,000 in external fees.

Priority 4: Growth with Purpose

New businessForWorks has continued to attract new business and secured contracts to deliver services for Manchester City Council, Symphony Housing Group, Rochdale Boroughwide Housing, Ribble Valley Homes and Empower Housing.

Priority 5: Service Excellence

100% Compliance City West’s gas service has consistently achieved 100% Landlords Gas Safety Record for over six years to ensure the safety of customers and protection of assets. Villages has achieved these for over a year. This has been achieved effectively by working in partnership with colleagues, contractors and internal Gas Access Officer and running various innovative initiatives. City West also won a national award for its compliance strategy and approach.

Rent Statement All customers now have the ability to view their rent account balance online and in line with the Group’s digital approach there has been a reduction in the number of printed statements sent to customers. The Group continue to send regular statements to those who request it and to those who are in arrears, but the resulting savings in printing and postage costs are £25,700 a year.

Service Centre During 16-17, 6,730 transactions were completed on the automated rent payment line for Villages and City West with an average cost per call during 16-17 of £2.22. This created a saving of £13,527.30. This increase coincides with a reduction in footfall and face to face transactions in various offices which will also bring further savings. There was £11,000 worth of savings through re-engineering service provision in offices and service centre.

The savings identified above and

operational surpluses allowed the Group to

spend over £16.17m to deliver 327 units and

reinvest £17.45m in existing stock.

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7.2 How does our operating costs and performance compare to others

7.2.1 To drive VfM and continuous improvement the Group review and challenge service delivery and operations in terms of cost, performance and satisfaction. Data from both HCA Global Accounts and HouseMark is used to assess how the Group

compare with social housing providers. In June 2016 the HCA introduced a benchmark cost per unit (CPU) measure and our comparative data is shown in tables over the following pages:

7.2.2 The Group recognise that our management costs continue to be above the sector’s median CPU. However, looking at figures from our accounts for 2016-17 and projected figures for 2017-18 the Group expect management costs to reduce in line with our VfM intentions (table 6).

7.2.3 Our maintenance costs at £1,119 per home are higher than the sector’s; however, have reduced, showing actions taken in 2016-17 to reduce our costs, have been effective. Due to the nature and condition of our stock which is predominantly inter war or built in the 1950s, average repair costs tend to be fairly high. In addition the Group have a lot of low rise and high rise blocks with significant communal costs associated with lifts, CCTV, boosted water and communal heating equivalent

to £32 per property per annum. The Group also developed and implemented new policies and standards over the latter part of 2015-16 to ensure work which is the tenant’s responsibility is carried out by tenants as well as address damage and neglect with recharges. The Group expect maintenance costs to continue to reduce (see table 6).

7.2.4 The cost of major repairs (i.e. revenue repairs and capitalised costs) is high compared to the sector’s; however, have reduced as a result of being able to reduce budget following completion of extensive work. We expect our major repairs costs to continue to reduce (see table 6).

Table 5: HCA CPU data per organisation (2015-16 period)

1 Taken from consolidated dataset. 2 Taken from entity dataset.Source: HCA 2016 Global Accounts (covers period 2015/16). Group member data is mean average.

Group member name

Avg of Man cost

Avg of Service costs

Avg of Main cost

Avg of Major Rep cost

Avg of Other SH costs

Avg of Headline costs

Social housing units managed

City West £1,280 £170 £1,060 £1,740 £80 £4,340 14,824

Villages £930 £250 £1,430 £1,360 £330 £4,300 2,546

ForViva £1,251 £188 £1,119 £1,675 £111 £4,344 17,550

HCA CPU Mean1 £1,103 £529 £1,000 £880 £520 £3,960 -

HCA CPU Median2 £1,020 £360 £970 £810 £210 £3,750 -

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7.2.5 Our 2016-17 accounts and projected 2017-18 figures show positive trends in terms of costs with reductions in main areas of major repairs, maintenance and management costs. Headline unit costs are also projected to fall below the HCA mean and that point and is in line with HCA projection of a reduction of by 4.3% between 2016 and 2020 to £3,800 per unit in nominal terms.

7.2.6 The comparable costs per unit for the ten peer organisations to the Group are shown in the table on the following page. The organisations were chosen as they are a similar size, and/or have a similar operational make up (i.e. ‘groups’) and customer base.

Table 6: ForViva 2016-17 and 2017-18 figures – from internal accounts

2014/15 2015/16 2016/17 2017/18 Change 14/15 – 15/16)

Trend (14/15 – 17/18)

Avg of Man cost £1,144 £1,251 £959 £1,040 £107 -£104

Avg of Service costs £164 £188 £235 £182 £24 £18

Avg of Main cost £1,170 £1,119 £839 £882 -£51 -£288

Avg of Major Rep cost £2,236 £1,675 £954 £720 -£561 -£1,516

Avg of Other SH costs £156 £111 £263 £188 -£45 £32

Avg of Headline costs £4,870 £4,344 £3,250 £3,012 -£526 -£1,858

HCA Headline Mean £3,950 £3,960 £3,850 £3,775 - -

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Table 7: 2016 HCA Global Accounts comparison – ForViva

RP Name Man CPU Svc Chg CPU

Main CPU

Major Rep CPU

Other CPU

Headline CPU

Units managed

Riverside £1,035 £1,248 £1,072 £765 £911 £5,031 51,090

ForViva £1,251 £188 £1,119 £1,675 £111 £4,344 17,550

Your Housing £1,624 £503 £861 £432 £449 £3,870 32,472

Symphony £941 £338 £1,318 £784 £170 £3,550 35,474

Together Housing £1,142 £211 £882 £924 £348 £3,507 35,353

Plus Dane £1,077 £239 £966 £869 £311 £3,462 12,890

One Vision £938 £274 £1,026 £1,084 £119 £3,440 12,351

Wythenshawe Community

£741 £398 £967 £900 £295 £3,300 13,501

Torus62 £1,103 £108 £832 £844 £405 £3,292 21,707

New Charter £1,115 £271 £719 £854 £288 £3,247 20,026

Great Places £944 £252 £635 £856 £376 £3,063 16,996

Average1 for the peer group £1,083 £366 £945 £908 £344 £3,646 -

Average1 for the sector £1,103 £529 £998 £876 £520 £3,959 -

Average2 for the sector £1,020 £358 £967 £807 £212 £3,569 -

1 Mean average taken from consolidated data set. 2 Median average take from entity dataset. Source: HCA 2016 Global Accounts

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Table 8: 2016 HCA Global Accounts comparison – ForViva exc major repairs

1 Mean average taken from consolidated dataset. 2 Median average taken from entity dataset. Source: HCA 2016 Global Accounts

7.2.7 If the Group exclude major repairs costs the average total cost per unit reduces from £4,344 to £2,669 as shown in the following table:

RP Name Man CPU Svv Chg CPU

Main CPU

Other CPU

Headline CPU

Units managed

Riverside £1,035 £1,248 £1,072 £911 £4,266 51,090

Your Housing £1,624 £503 £861 £449 £3,437 32,472

Symphony £941 £338 £1,318 £170 £2,767 35,474

ForViva £1,251 £188 £1,119 £111 £2,669 17,550

Plus Dane £1,077 £239 £966 £311 £2,593 12,890

Together Housing £1,142 £211 £882 £348 £2,583 35,353

Torus62 £1,103 £108 £832 £405 £2,448 21,707

Wythenshawe Community £741 £398 £967 £295 £2,401 13,501

New Charter £1,115 £271 £719 £288 £2,393 20,026

One Vision £938 £274 £1,026 £119 £2,357 12,351

Great Places £944 £252 £635 £376 £2,207 16,996

Average1 for the peer group £1,083 £366 £945 £344 £2,738

Average1 for the sector £1,036 £529 £998 £520 £3,084

Average2 for the sector £1,020 £358 £967 £212 £2,560

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Table 9: 2016 HCA Global Accounts comparison – City West

7.2.8 The comparable costs per unit for City West and Villages against the respective ten peer organisations are shown in the tables below. The organisations were chosen as they are a similar size, and/or have a similar operational make up and customer base:


Main CPU

Major Rep CPU

Other CPU

Headline CPU

Units managed

First Choice £1,040 £240 £830 £2,260 £110 £4,490 11,664

City West £1,280 £170 £1,060 £1,740 £80 £4,340 14,824

Rochdale Boroughwide

£1,230 £320 £850 £1,590 £140 £4,140 13,477

Golden Gates £1,430 £80 £910 £1,010 £700 £4,120 8,563

Bolton at Home £1,420 £240 £1,200 £900 £320 £4,070 17,924

Calico £1,140 £300 £910 £1,210 £120 £3,680 4,631

Wirral Partnership £1,420 £60 £1,010 £890 £190 £3,560 12,503

South Liverpool £1,410 £120 £1,010 £790 £210 £3,550 3,742

Liverpool Mutual Homes

£1,180 £200 £880 £1,220 £40 £3,530 15,189

Wakefield and District £1,040 £170 £570 £1,140 £310 £3,230 31,302

Helena Partnerships £990 £130 £780 £810 £210 £2,920 13,143

Average1 for the peer group £1,235 £185 £910 £1,233 £221 £3,785

Average1 for the sector £1,103 £529 £998 £876 £520 £3,959


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Table 10: 2016 HCA Global Accounts comparison – Villages


Main CPU

Major Rep CPU

Other CPU

Headline CPU

Units managed

Joseph Rowntree £1,440 £440 £990 £1,050 £4,250 £8,160 2,107

Gateway Housing £1,150 £720 £1,760 £2,360 £1,110 £7,110 2,767

Villages Housing £930 £250 £1,430 £1,360 £330 £4,300 2,546

Warrington Housing £680 £390 £710 £1,320 £1,030 £4,130 1,287

Equity Housing £1,350 £710 £690 £860 £490 £4,100 3,383

Trident Housing £910 £1,280 £920 £530 £220 £3,860 3,172

Impact Housing £1,850 £290 £1,200 £390 £0 £3,740 2,761

South Liverpool Homes

£1,410 £120 £1,010 £790 £210 £3,550 3,742

Cheshire Peaks & Plains

£680 £280 £1,320 £1,000 £150 £3,440 5,020

‘Johnnie’ Johnson Housing

£1,120 £1,060 £760 £40 £320 £3,300 4,949

Arcon Housing £1,000 £170 £870 £980 £110 £3,130 1,207

Average1 for the peer group £1,138 £519 £1,060 £971 £747 £4,438



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7.2.9 It is also important to consider quality of services in determining whether it delivers VfM. Tables 11-13 identify a number of the organisation’s key performance indicators that are reported monthly or quarterly and show the Group compares well with our peers on these measures. They also include the indicators for the Sector Scorecard pilot which the Group has signed up to. The tables display the Group has been able to maintain good levels of performance despite reductions in management costs.

7.2.10 For the Sector Scorecard (table 11) results show a generally positive trend performance, particularly on financial indicators. The Group await further findings and analysis from the pilot to determine quartile positions and areas for improvement.

7.2.11 For City West (table 12) the key service areas of rents, repairs and voids achieved very positive results. Number of days lost due to sickness is low compared to others and income collection is managed well. There are improvements to be made on satisfaction which are hoped to be realised in 2017-18.

7.2.12 For Villages (table 13) the key service areas of rent collection, repairs and voids achieved very positive results. Number of days lost due to sickness is low compared to others. There are improvements to be made on arrears and re-let times which are hoped to be realised in 2016-17.

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Table 11: 2015-16 and 2016-17 Sector Scorecard submission – ForViva

Indicator 2015/16 2016/17 Direction of travel

Operating margin – overall 29% 20%

Operating margin (social housing lettings)

23% 33%

EBITDA (Earnings Before Interest Tax and Amortisation Major Repairs Included)

9% 195%

Units developed (absolute – split by tenure)

104 198

Units developed (as a percentage of units owned)

0.01% 1.1%

Gearing 36% 35%

Customers satisfied with the service provided by their social housing provider

Not Applicable – refer to tables 12-13

£s invested for every £ generated – in new housing supply

Not available

£s invested for every £ generated – in communities

Not available

Return on capital employed 6% 5%

Occupancy 99.6% 99.7%

Ratio of responsive repairs to planned maintenance spend

0.22 0.46

Headline social housing cost per unit £4,344 £3,245

Rent collected 100.14% 99.60%

Overheads as a percentage of adjusted turnover

Not available

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Benchmarks

TopUpper

MedianLower

MedianBottom

No benchmarking available

Table 12: 2015/16 HouseMark comparisons – City West1

1 2015/16 are the latest results available via HouseMark. 2 City West: Peer group is LSVT 7500+ (HouseMark 2015/16 results). 3 Note change in NROSH+ category means sample changes from 2015/16 to 2016/17. 4 ForViva figure – not reported individually.

IndicatorDirection of travel from 2015/16

2015/16 2016/17Median for peer group2

Quartile Position

Percentage of repairs appointments made and kept

98.88% 98.75% 96.76%Upper Median

Rent collected as a % of rent due 99.3% 99.59% 99.7%Lower Median

Current tenant arrears as a percentage of rent debit

3.47% 3.57% 2.8%Lower Median

Former tenant arrears as a percentage of the rent roll

1.32% 1.30% 1.37%Upper Median

Rent loss due to empty properties (voids) as a percentage of rent due

1.45% 0.56% 1.0%Upper Median

Percentage of properties with a valid CP12 certification

- 100% 100% 100% Top

Average SAP 2009 rating 73.37 74.05 71.13 Top

Satisfaction with the way their ASB complaint was dealt with3 73% 77.11% 82.05%

Lower Median

Average no. of days to re-let a property

14.73 days 15.60 days 24 Top

Percentage of properties vacant/void

1.19% 0.50% 1.18%Upper Median

Tenancy turnover 8.49% 7.61% 8.51%Upper Median

Average number of working days lost due to sickness4 N/A 6.61 days 5.7 days 8.5 days Top

Overall satisfaction with services provided by the landlord

N/A 83.84% N/A 89% Bottom

Satisfaction with their neighbourhood as a place to live

N/A 87.11% N/A 87.8%Lower Median

Satisfaction with the way City West deals with repairs and maintenance

N/A 83.76% N/A 83.8%Lower Median

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Table 13: 2015/16 HouseMark comparisons – Villages1

1 2015/16 are the latest results available via HouseMark.2 Villages: Peer group is LSVT Northern 2500-7500 (HouseMark 2015/16 results).

IndicatorDirection of travel from 2015/16

2015/16 2016/17Median for peer group2

Quartile Position

Percentage of repairs appointments made and kept

98.24% 98.09% 98.24%Lower Median

Rent collected as a percentage of rent charged

99.48% 99.69% 99.5%Upper Median

Current tenant arrears as a percentage of rent debit

5.45% 6.77% 3% Bottom

Former tenant arrears as a percentage of the rent roll

5.28% 4.91% 1.64% Bottom

Rent loss due to empty properties as a percentage of rent due

1.08% 1.09% 0.86%Lower Median

Percentage of properties with a valid CP12 (Gas Servicing) certification

- 100% 100% 100% Top

Average SAP 2009 rating 69.7 70.1 69.8Upper Median

Average no. of days to re-let a property

31.99 26.8 22.1Lower Median

Percentage of properties vacant 1.18% 0.78% 0.6%Lower Median

Tenancy turnover 9.3% 8.72% 8.74%Upper Median

Average number of working days lost due to sickness

N/A 3.95 days 5.7 days 8.6 days Top

Percentage of customers satisfied with the overall repairs service

N/A 98.18% N/A

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7.3 Return on assets

7.3.1 The Group continued the use of the Group Asset Management Strategy in 2016/17 which was recently reviewed and introduced during 2015-16 to reflect the reduced rental income from the Group’s assets, putting a greater emphasis on growth and commerciality as well as through intelligence and targeted interventions, maximising the value and return from our stock.

7.3.2 The Strategy underpins and compliments the Business Plan, and associated strategies and policies and shows how to take the business forward to meet future housing need and priorities and challenges from the wider environment. It sets out priorities, for the maintenance and improvement of our stock and neighbourhoods, whilst meeting the needs and expectations of customers and using intelligence to make strategic decisions. The Strategy has been co-designed with customers to ensure everything the Group does meets need and is delivered with customers through the comprehensive engagement structures that are in place.

7.3.3 The Group understands and is able to maximise the return on the assets through our live Net Present Value (NPV) Assessment module on Promaster which holds all stock data. Promaster has a direct interface with the planned maintenance management software and is updated with income and expenditure information from the housing management system and finance systems. The Group can fully understand how its assets are performing at individual property, grouping or neighbourhood level and determine the key elements that are affecting this performance including technical issues, investment, estate sustainability factors, customer behaviour, desirability or ASB.

This, in turn, then allows us to make informed and evidence based asset management decisions that inform our investment programme and management of the stock and in turn increase the return by taking actions such as:

• Deferring investment in assets;• Community interventions to improve

sustainability;• Decommissioning assets where not viable;• Acquiring new assets;• Targeting investment to improve the

NPV’s of stock; • Converting assets to other tenures;• Addressing customer behaviour;• Undertaking new development to support

existing stock; • Selling properties when these become void.

7.3.4 Lower asset return due to high maintenance costs associated with customer behaviour has also driven a range of initiatives to maximise return such as “Protecting Our Assets” where more active tenancy management has reduced both repair (£117 per job in 2015-16 to £116 in 2016-17) and void costs (£2.62m in 2015-16 to £2.18m in 2016-17) and increased neighbourhood sustainability. We have continued to manage tenancies robustly to ensure that customers meet their tenancy obligations including applying recharges where necessary in order to keep the properties in a good state of repair, which in turn reduces void and repair costs and improves the strength of NPVs. The Group has also targeted investment and the actively targeted management interventions within key neighbourhoods to reduce stock turnover, save costs and improve asset performance and in the past year the Group has seen tenant turnover reduce from 8% to less than 7%.

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Average NPV ForViva (Dwellings only)

City West: Little Hulton & Worsley

City West: Eccles

City West: Swinton

City West: Irlam & Cadishead

Villages: Stockbridge Village

Villages: Fitton Hill

£0 £5,000 £15,000 £25,000 £35,000

£28,500

£25,300

£27,600

£30,700

£32,500

£31,500

£27,100

£31,000

Villages: Stockbridge Village High Rise

Villages Community Housing Association

7.3.5 Through our thorough analysis of asset performance, the Group has a clear understanding of how the housing stock currently performs. The Group also analyses the future market and how demographic and social change plus government policy will affect this to again support the future investment strategy in terms of what investment to deliver in which homes at what time and to inform the development of new homes in the most appropriate locations and the best tenure types for the needs of existing and future customers.

7.3.6 Our NPV analysis of the stock has allowed us to make some difficult but necessary decisions regarding redundant and obsolete stock, which have a negative return and low demand. We have converted stock to different uses and tenure types where these have low NPVs. Examples of schemes which have been decommissioned include bedsit

sheltered schemes, flats above shops and large and costly six bedroomed properties. Following decommissioning, the Trust is reusing these sites to redevelop high demand homes to meet the needs of customers and provide a strong return now and into the future.

* VCHA: Villages Community Housing Association is 179 properties primarily supported housing, in both Stockbridge Village and St Helens.

City West: Average NPV – transferred stock

£30,887City West: Average NPV – new build stock

£64,845Villages: Average NPV – transferred stock

£31,894

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7.3.7 The Group has benefitted from delivery of a highly successful investment strategy within the Group that has significantly reduced future investment liabilities and enabled us to reallocate £42m of Business Plan funding (following a validation exercise by Savills) to new development and investing in community activities. Examples of how the Group achieved these efficiencies included fitting high quality materials and components with extensive life spans and warranties, and progressing an “invest to save” approach including upgrading/rewiring all properties to extend the life of electrical systems to 40 years, upgrading all windows across the stock, aggregating works together to save on access costs and preliminaries and reinvesting savings in accelerating the programme, all of which reduced down future investment liabilities and costs. The way we have and continue to package and procure works to benefit from market conditions also continues to achieve significant value for money savings.

7.3.8 Now that the major areas of Group expenditure such as high rise blocks, sheltered and non-traditional properties has been completed, the main emphasis of the programme going forward will be component replacement. Consequently by collecting and analysing detailed stock information this allows us to maximise the use of resources through maintaining decency whilst only replacing components when these come to the end of their economic lifetime. This intelligence led use of resources will maintain the quality and value of our existing assets whilst also supporting the delivery of new build properties.

7.3.9 In addition, through maximising asset performance, this increases the cost in use value of the stock which in turn gives us headroom to borrow funding against the value of the stock. Consequently, through allocating available resources within the existing Business Plan and maximising our headroom to agree further funding, the Group continues to have a 1,300 unit development programme in place to meet the significant and growing housing need.

7.3.10 This allows us to increase operating unit cost efficiency, replace stock lost through Right To Buy/Right To Acquire with new high quality, energy efficient, low maintenance and high demand stock and also deliver properties to meet current and predicated demand such as Extra Care.

7.3.11 As grant support for new affordable rent homes will continue to reduce, the Group are always looking at innovative ways to meet this need through our development and investment activities. Consequently the Group will look to maximise existing return through both good asset management but also changing the tenure and use of available stock. Consequently the Group has converted some obsolete commercial properties and some social properties with declining NPVs to PRS, with the additional income ring-fenced to supporting the delivery of new affordable properties.

7.3.12 With new developments and our programme as a whole, this has to be structured in a manner to ensure that there are a range of tenures that provide cross subsidy and therefore allow us to keep developing Affordable properties. Consequently the composition of our programme includes: Affordable Rent, Shared Ownership, Outright Sale, Extra Care and Private Rented Sector. Where we develop new homes and acquire 106 properties, which we will manage, we do this in a structured way to support and sustain our existing stock and keep management and maintenance costs low in order to reduce average operating costs across the whole Group.

7.3.13 The non-Affordable products being delivered by the Group are being undertaken solely to make strong returns to allow us to deliver much needed Affordable properties and investment and the communities in which the Group operates.

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Return on assets in practice (Delivery of Group Asset Management Strategy):

The Group continue to make best use of physical resources by rationalising stock, investing, disposing or ‘sweating our assets’ (by generating revenue for an interim period through short term tenancies while a long term decision has been made). Examples include:

Asset management strategy Detail

Development on existing land to improve value

Delivered over 389 new properties on our existing land which has improved the sustainability of the local area but also strengthens the Business Plan, with each new property having an average existing use value of over £70,000.

Scheme closure Four inefficient, unpopular and obsolete elderly schemes have been closed. Through NPV analysis the combined negative effect on the 30 Business Plan from these four schemes was over £4.6m.

Redevelopment on existing sites

Redeveloped one site with over 180 properties and have completed a new high quality and high demand Extra Care scheme of 56 units on an existing site in Walkden which was completed and occupied in January 2017. The scheme cost £7.5m and the Group received £2.5m grant contribution towards this. This 56 unit development represents a significant facility for our customers in need and pays back within 35 years.

Redeveloping obsolete stock Have decommissioned, cleared and are redeveloping three sites which contained obsolete elderly bedsits. The new schemes will deliver 54 new high quality homes that supports and sustains the existing stock in the area, will address future housing needs and puts additional lending capacity into the Business Plan.

Maximising asset performance

Through active asset management, reducing void costs and associated turnover, over the past four years the return per property has increased by £170 (equating in total to £3m per annum).

Continued targeted investment

Programmes to maintain decency in terms of property condition but also maintain the stock through a seven year cyclical programme and improve the appearance and sustainability of estates through targeted environmental investment works to address local issues and needs.

Reuse of existing assets Conversion of five obsolete and empty commercial shop units to PRS apartments near Salford Royal Hospital. These high demand properties were immediately let and provide an excellent return on investment.

Open market sale or rent Conversion of 97 high rise properties, that were affected by the spare room subsidy (with declining NPVs) to market rent. A lease agreement has been put in place, with the additional income (circa £140,000 additional rent per annum) being ring-fenced for new affordable housing development.

The Development Committee and Board approved the acquisition of 99 PRS new build properties in Ordsall, which were acquired in February 2017.

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7.4 Future plans on return on assets (2017-18 and beyond)

7.4.1 A revised asset management strategy is being developed for the Group which aims to drive improved value for money, increase the return on assets, closer align asset management and neighbourhood management activities and interventions and introduce a more intelligence led approach to investment, with this being tailored to address areas where NPVs can be improved. All of these actions will help to drive improved NPV values, increase the stock valuation and increase the Groups lending capacity for the development of further homes.

7.5 Stock valuation

7.5.1 Our funders require an annual stock valuation exercise to be undertaken. In addition, Savills carry out a more detailed stock valuation exercise every three years, the last one being in March 2015. This is then updated every year, with the last exercise completed on 31st March 2017, with the results informing our approach to our assets each year. All information is validated and supplemented with on-site visits by RICS valuation surveyors employed by Savills. The latest model run on the City West housing stock at 31st March 2017 was for the purposes of refinancing and values it at £240.14m, with an average Existing Use Value per unit of £22,252.

7.6 Development (New Homes)

7.6.1 Note all the information in this section is dealt with as a Group as we have a Group development programme.

7.6.2 The Group spent £22.28m to deliver 327 units in 2016/17. The 327 units comprised of 190 Affordable Rent, 38 Affordable Home Ownership and 99 Private Rented Sector. This has been funded via:

Income from conversions/sales

£2,040,000Funded by grants

£3,450,000Funded by rents/loans

£16,790,0007.6.3 The Group expects to deliver 157 unit completions in 2017-18, comprising of 144 Affordable Rent and 13 Affordable Home Ownership.

7.6.4 The current Group Business Plan assumes a development programme of 1,290 new mixed tenure homes which include:

• Private Rented Scheme;

• Outright Sale;

• Affordable Rent;

• Help to Buy – Shared Ownership;

• Rent to Buy;

• Supported & Older Person’s Rented Accommodation;

• Section 106 funded homes for Shared Ownership and Affordable Rent.

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7.6.5 Future programmes will be funded via Private Finance and Government Funding (Homes & Communities Agency; Local Authority; Department of Health) and Sales and Rental Income.

7.6.6 The rationale for our extensive development programme is to achieve our ‘Growth with Purpose priority’ through delivering new build dwellings which improves the quality of the Groups stock, increases the headroom within the Business Plan, meets a range of housing needs including Local Authority housing demand and Improves Lives. The additional income through development of affordable and market rent homes supports our ambitions of ‘viability’ and delivering financial capacity.

7.7 Progress on maximising the social, economic and environmental return on investment.

7.7.1 This section presents how the Group are maximising the social, economic and environmental return on investment.

Procurement 7.7.2 Our approach continues to help deliver our VfM ambitions by building capacity and savings monies. In 2016-17 it delivered significant savings of £450,000 through the completion of a number of tenders. These included Gas Service, Maintenance & Installations, Purchasing Agents, Villages ECIR’s, Roofing and New Build at Tyne Court.

Examples of savings include:

• Saved £104,000 on Heating Installations (achieved from original budget to Liberty Gas Tender Prices);

• Saved £107,000 on Roofing Installations (achieved from original budget to Forrest Tender Prices);

• Saving of £177,000 on new build tender price for Tyne Court (achieved from original budget to STG tender prices);

• Reduction in purchasing agent fees with Savills has saved £15,000.

7.7.3 Our Procurement Strategy has seven key aims:

• Maximise our key strengths, utilising our purchasing power to obtain best VfM;

• Address our weaknesses, by challenging our present procurement processes and agreements;

• Seek out ways of doing things better;

• Reduce threats to our success by effective risk management;

• Ensure findings from consultation and engagement feed into the procurement process;

• Improve operational procedures and the efficiency of our resources;

• Meet legal requirements.

Area Total expenditure Grants and sales Overall position Units

Greater Manchester £82.7m £25.4m £57.3m 1,068

Merseyside/Fylde £25.2m £4.8m £20.4m 222

Other Acquisition1 £76.6m £0 £76.6m 0

Total £184.5m £30.2m £154.3m 1,290

1 The other acquisitions expenditure is currently uncommitted funding although there are a number of development opportunities across a range of tenures, as part of our growth agenda that are being progressed and which will likely commit a large portion of this funding.

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7.7.4 Our procurement activity balances obtaining VfM at the required quality (fit for purpose), sourcing locally where appropriate within the legislative framework and reducing the amount of low value invoices. The Group are committed to the development of efficient, effective and sustainable procurement whilst maximising the resources and monies available.

7.7.5 Our activity for 2017-18 is to carry on with the successful procurement for all Group members which is expected to deliver significant savings. The Group also have ambitions to grow and diversify our commercial portfolio to bring in additional income.

7.7.6 ForViva will also be participating in the Greater Manchester Housing Providers Social Value Work survey. The purpose of the survey is gather baseline information about the impact housing provider choices through procurement bring for the Greater Manchester economy, its residents, for social organisations, and for the environment.

Community Impact Accounting

7.7.7 The Group delivers activities which contribute towards our vision of improved lives.

7.7.8 The Group evaluates the return on investment and VfM using impact accounting. This is the fourth year we have produced accounts reporting the social value attracted by our activities. We use this intelligence to make decisions on whether to cease, continue or increase investment. This is based on an understanding of the difference the activity has made in the context of how much it cost.

7.7.9 The Group follow recognised accounting methodologies. This ensures we measure the impact of our activities and understand the return on our investment.

7.7.10 Our Community Impact Accounts report the difference made by our activities in one or more of the following business value areas:

7.7.11 The 2016-17 Community Impact Accounts summarise these. Where value can be monetised the Group have included a return on investment ratio to report how much value is delivered by each £1 invested. The use of a ratio means it is not necessary to specify how much investment each partner contributed to the activity since the return is attributed to each £1 invested. The accounts show how these activities improve the quality of life for our customers, limit the impact of our activities on the environment and support local economic growth.

7.7.12 The Group accounting year is 1st April 2016 to 31st March 2017, with some activities running for shorter periods within this timescale. Our 2016-17 Community Impact Accounts comprise of 16 individual accounts. These represent the four overarching aims set out within the Community Impact Strategy. Activities may deliver against more than one aim and are organised under the one they contribute to the most:

SOCIETY ENVIRONMENT ECONOMY

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Community Impact Strategy Objective Account Return on Investment

Health

1. School holiday activities

• Kids Get Cooking and Play Streets Very low cost : Very high return

• Parkour (Free running) Quite low cost : Very high return

• Sportivate1 Quite low cost : Very high return

2. Eat It Fresh2 Very high cost : Quite high return

3. Snack and Chat Very low cost : Very high return

4. Winter Welfare Quite low cost : Quite high return

Education and Employment

5. Fresh Living (Update- Year 2)3 £1 : £3.36 (medium term)

6. School Links (update- Year 2)4 £1 : £1.33 (medium term)

7. Skills for Employment (Previously C2) £1 : £9.91

8. Generation Westwood – employability training £1 : £7.59

9. Don’t Keep It Under Your Hat5 £1 : £3.12

10. The Prince’s Trust £1 : £2.19

11. DigiSmart6 £1 : £6.29

Safe Communities

12. Youth clubs

Quite low cost : Very high return• BAYSE Update (Brookhouse)

• ChillZone (Peel)

Neighbourhoods

13. New developments Quite low cost : Very high return

14. Tenancy Sustainment Service £1 : £3:05

15. Kerbside Appeal £1 : £2.77

16. Staff volunteering and fundraising and ForWorks Community Hours

Not scored

1 Sportivate – Sportivate gives young people the opportunity to discover a sport that they love.2 Eat It Fresh – working with the Salford City Council’s health improvement team and Manchester-based Cracking Good Food to deliver a series of pop-up cooking events.

3 Fresh Living – an employment pathway which offers apprenticeships with housing.4 School links – construction training for school pupils.5 Don’t Keep It Under Your Hat – provides training and grants for self employment. 6 DigiSmart – free training for customers to learn the skills to get online.

7.7.13 The Impact Accounts summary is available on our website. Our individual accounts are available on request.

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Specific expectations of the HCAExamples of how we meet these expectations

Registered providers shall:

Have a robust approach to making decisions on the use of resources to deliver the provider’s objectives, including an understanding of the trade-offs and opportunity costs of its decisions

Section 1 identifies how VfM is a clear and important priority for the Group. Sections 5 and 6 evidences how VfM is a central theme in the Group’s corporate strategic themes, objectives and decision making as well as outlining the planning process that is followed to ensure that the resources are available in order to deliver the objectives.

Understand the return on its assets, and have a strategy for optimising the future returns on assets – including rigorous appraisal of all potential options for improving value for money including the potential benefits in alternative delivery models – measured against the organisation’s purpose and objectives

The process of In-house VfM Assessments identifies the operational approach to understanding return on assets and alternatives models of service delivery (see section 6.3).

Section 7.3 (return on assets) details our application of Net Present Values down to a granular level to understand our stock. It also outlines our Asset Management Strategy and how we have successfully utilised various approaches to ensure VfM including:

• Development on existing land to improve value; • Scheme closure; • Redevelopment on existing sites;• Redeveloping obsolete stock; • Maximising asset performance; • Continued targeted investment; • Reuse of existing assets; • Open market sale or rent.

The Board was fully involved in the decision to create a group structure, a decision based on putting the organisation in a good position to consider future growth opportunities, and for partnerships and joint ventures to be entered into and set up more easily. A group structure would also open up greater opportunities for social good, improving people’s lives and their well-being, generating funds to invest in social enterprises which would provide important services and employment and training opportunities for the local community (see section 5).

8. Summary of the requirements of the VfM standard and the actions the Group have taken

8.1 However this self-assessment outlines that the Group want to deliver above and beyond the standard in respect to VfM and the Group continues to look for improvements to our approach. The table below outlines how the Group complies with each specific expectation of the HCA with specific references to sections in this document that evidence our compliance:

30



Have performance management and scrutiny functions which are effective at driving and delivering improved value for money performance

Our assurance map in section 6.4.1 evidences the Group have effective and robust processes and functions in place (including Customer Scrutiny, Performance Management Framework and Procurement). Our practices have ensured £450k of savings through negotiation and re-negotiations, price mitigation and competitive tendering and improvements in performance.

Our Board drives our strategic approach and we have a VfM Board Champion to support this.

Understand the costs and outcomes of delivering specific services and which underlying factors influence these costs and how they do so

The Group uses HouseMark benchmarking data and the HCA Global Accounts data to assess where its costs and performance are in relation to other ‘similar’ social housing providers. The Group and subsidiaries (City West and Villages) unit costs (see section 7.2.1 – 7.2.9) and performance (see section 7.2.9 – 7.2.12) are discussed in detail and variations explained. Our in-house VfM Assessments (section 6.2.1) and Impact Accounting (section 7.7.7 – 7.7.13) further shows how the Group understand costs and outcomes of our services. However the board believes that there are further improvements to make which is reflected in our VfM Strategy and priority objectives to reduce costs and build financial capacity through acquiring additional income (see section 7.3 – 7.6.5).

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Registered providers’ boards shall demonstrate to stakeholders how they are meeting this standard. As part of that process, on an annual basis, they will publish a robust self-assessment which sets out in a way that is transparent and accessible to stakeholders how they are achieving value for money in delivering their purpose and objectives. The assessment shall:

Enable stakeholders to understand the return on assets measured against the organisation’s objectives

This requirement has been fulfilled in the completion of this document and other corporate documents, notably impact accounts and the annual report.

Sections 6-7 show how the Group has used its assets to deliver against its corporate objectives and VfM aims.

Set out the absolute and comparative costs of delivering specific services

The Group and subsidiaries (City West and Villages) unit costs (see section 7.2.1 – 7.2.9) and performance (see section 7.2.9 – 7.2.12) are discussed in detail and variations explained. In order to assess our performance against similar organisations the Group compares:

• Unit costs;• Return on assets;• Operating margin;• Key performance indicators.

The Group has clear ambitions to reduce management costs and create financial capacity to grow and sustain the business so that the Group can deliver its business objectives. The Group will use its VfM Dashboard and HCA Global Accounts to monitor delivery of this.

Evidence the value for money gains that have been and will be made and how these have and will be realised over time

The savings and operational surpluses generated allowed the Group to spend over £16.17m to deliver 327 units and reinvest £17.45m in existing stock. They will also enhance the financial capacity of the organisation, allowing it to fund its ongoing investment programme and its new build initiatives (157 new homes in 2017-18 and 1,428 over the next 30 years).

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9.1 Our key aim is that by 2019, the Group will create financial capacity to grow and sustain the business so that it can deliver our business objectives. To realise these ambitions the Group has some specific intentions at a strategic level which are shown in the following action plan, all of which the Group has made progress on and evidenced in this document:

9. ForViva’s plans for 2017/18 and beyond

Action required How will action be achieved Due date Assigned to Managed by

Reduce management costs per unit to below £1,000

Action achieved through a variety of initiatives including: • Increased income; • Workforce redesigns and a

review of service delivery; • Reduction in management costs

– Pay; • Reduction in management costs

– Non pay;• Asset management savings.

31-Mar-2019

Senior Management Team

Group Director of Corporate Services

Maximise the return on physical and operational assets

• Improved return on assets % and Net Present Values (NPV) from our stock;

Physical• Reduce stock turnover and

void costs; • Development on existing land

to improve value; • Scheme closure; • Redevelopment on existing sites; • Continued targeted investment; • Open market sale or rent.

Operational• Effective procurement; • Challenge of service delivery; • Staff development and training;• Right operational delivery model for

services, efficient service delivery and extracting maximum value from operational asset base (operational).

31-Mar-2019



33

9.2 To support our VfM ambitions and objectives we also have an operational plan which includes all actions identified from completion of the VfM Assessments. For example, Customer Relations have VfM aims in 2017/18 to ‘reduce costs and maintain quality’ which intend to be achieved through delivery of actions that include ‘continued channel shift’ and ‘redefining methods of engagement with customers’. All actions on the plan will be monitored regularly and challenged within the VfM Service Excellence Group.

9.3 Our strategic activity continues to also focus on the full integration of the new Group structure, build on existing achievements as well as respond to external challenges.

Action required How will action be achieved Due date Assigned to Managed by

Maximise the social, economic and environmental return on investment

Achieved by investing in our communities and social fabric to lead to better outcomes (e.g. getting people into employment) and measured through Impact Accounting. For every activity accounted there will be a cost and return on investment score(s) given which results in a total score (cost x return) of either ‘no/very low’, ‘quite low’, ‘quite high’ or ‘very high’.

31-Mar-2019



• Increase turnover

• Maintain operating margin

Maintain healthy operating margin to ensure continued profitability and efficiency.

31-Mar-2019



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