Our Value for Money Approach (VfM)

In April 2018 the Regulator of Social Housing (RSH) introduced a new Value for Money (VfM) Standard and Code of Practice.

The specific requirements of the new Standard require social housing providers to clearly set out their strategic objectives, which are aligned to the purpose of the organisation. Transparency with our performance is also key and must be understood by our boards and stakeholders with targets set accordingly.

In addition to our own performance measures the Standard introduced a set of standard metrics (VfM metrics), which we are required to publish annually, together with our comparable performance against our peers. The new metrics are intended to enhance the consistency, comparability and transparency of VfM reporting in the sector.

We published our first set of VfM metrics in the 2017/18 financial statements along with our targets for 2018/19. The VfM metrics are reported within the Group’s management accounts. An example of our VfM metrics reporting is shown below, along with a table showing how we compare to others.

This updated approach to VfM has been adopted at WM Housing Group, which has been approved by the Board on 25 March 2019. Within our approach we have committed to achieve a set of key activities that take account of the specific expectations of the Standard and code of Practice.

At WM Housing Group we are committed to demonstrate the three principles of VfM; Economy, Efficiency and Effectiveness. We believe that VfM is achieved by balancing these key principles when delivering our business objectives. VfM is not an exercise in cost cutting or limiting resources; it is about ensuring as a business we can create an efficient, effective and economical business.

Economy – we will ensure that the price we pay for services and contracts deliver the best outputs, we therefore procure our services based on quality not just price.

Efficiency – we will maximise our productivity through the outputs (results) we get from our inputs (resources), ensuring we spend money well.

Effectiveness – we will ensure that our spend achieves the desired outcomes and to the standard we expect, demonstrating we spend our money wisely.

Business Strategy

VfM is not a standalone project or reliant on lots of new projects to achieve it, rather it is a fundamental guiding principle that is integrated into all ways of working, and into our strategic planning. Our Business Strategy objectives will be translated into an annually-updated corporate delivery plan which will provide measurable outputs for the Board to track progress against.
Our success measures seek to optimise VfM across all our activities, whilst meeting our purpose as a social housing provider and delivering against our vision of creating places where people are proud to live and work.

In our Business Strategy (2017-21) we have agreed the following three objectives; to be:

  • A growing business
  • A delivery focussed business
  • A sustainable business

Each objective has an accountable executive together with defined key performance measures that are measured and monitored in line with our Performance Management Framework.


Plans for 2019-2020

With a statutory amalgamation on the horizon, a rebranding of the Group being undertaken in conjunction with the amalgamation, a refreshed purpose and values being worked up and a possible increased development program (subject to Board approval), we are working up a revised Business Strategy with a detailed corporate delivery plan sitting underneath it, where the Group’s corporate objectives over the next 3 years will be identified and described. The Board will be able to hold the Executive to account for the delivery of these objectives.

WM Housing adopts a robust decision-making process. All decisions that commit to significant growth in expenditure are approved by the Board and are supported by a cost benefit appraisal.

We operate a clear scheme of delegation within our financial regulations and Group standing orders. Our governance framework sets out the accountabilities and responsibilities for the Board and executive directors and our governance documents are aligned to our Business Strategy, mission and operating principles.

We have a robust schedule for reporting financial decisions to the boards and the Audit and Risk Committee is responsible for in-depth examination of financial performance alongside risk management and internal and external audit findings.

All reports presented to Boards and Committees must set out the financial and VfM implications for each decision and these are supported as appropriate by option appraisals.

Plans for 2019-2020

The Group’s Service Improvement Board will consider business cases for change and the anticipated benefits arising from any project to be delivered will be captured in a benefits realisation register. We will also be looking to improve the transparency of identifying the benefits from any initiative by expanding the VfM section on the Board cover report itself to explicitly include benefits realised. This means that VfM is specifically considered in each decision made by our Board and Committees.

Key activities which are core to our VfM approach and ensure it is embedded across our organisation.

  • Annually benchmark against our peers through range of mechanisms, this is to ensure we understand our relative performance and drivers for costs. We also have stepped targets to improve our performance year on year to reach our Business Strategy aspirations of top quartile position, these will be part of our annual plan which tracks our Business Strategy measures.
  • We have a net present value assessment refreshed on a cyclical basis to understand the return of or stock and identify any that need a full options appraisal. There are also individual appraisals carried out for any schemes requiring regeneration, as well as individual voids to identify the best use of that stock, including whether disposal and reinvestment would represent the best value and use of resources.
  • Through our partnership with other housebuilders and housing associations to unlock the potential of grant sharing and using our various expertise to maximise our development programme and deliver our development strategy/
  • Track our benefit realisation targets including efficiency savings, these are not standalone targets but accounted for in overall performance targets. Improvements identified through the lean projects, although measured separately to understand the impact are incorporated into delivery targets.
  • Maximise our partnership with local authorities to use our assets for community gains including large cost saving for Local Authority on temporary accommodation using our out of management stock. This will save money for the council and generate income, using stock that is ready for regeneration/redevelopment.

To remain transparent with our activities and demonstrate to our Boards and stakeholders how we achieve VfM we will, where possible, publish outcomes and evidence that supports our approach on our website.

We report our latest performance against the VfM metrics in our quarterly management accounts which are reported to Board. The year end metrics, along with the following year’s targets are published in our statutory accounts.


We have used the Sector Scorecard and Global accounts datasets to complete a thorough review of WM’s relative position in the market to understand performance and market influence relative to other social housing providers in the region. This information will then be used to help inform our development Strategy.

Understanding our costs and how we compare to others is a key aspect of our VfM approach and underpins an evidence-based approach to resource allocation, cost reduction and target setting.

We benchmark our costs through the Sector Scorecard to gain the widest possible comparator group.

In order to delve further into our costs and understand component spend and where possible efficiencies could be explored, we have historically participated in an annual cost benchmarking exercise with HouseMark. This involves comparing our detailed costs within a defined peer group of Housing Associations of similar size and type.

Plans for 2019-2020

We will continue to benchmark ourselves against peers of a similar size or with similar activities and services using a variety of different benchmarking groups that the Group is part of. We will also continue to participate in the Sector Scorecard which allows us to compare against a range of metrics and demonstrates our commitment to transparency with our stakeholders and customers.

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