Our vision of creating places where people are proud to live and work is the basis for all we do. Value for money (VfM) is about being effective in how we plan, manage and operate our business against an increasingly difficult economic and financial environment to ensure we make the best use of our resources to provide quality homes.
Tous, value for money means using our resources efficiently to deliver quality services to customers, at an affordable cost. We aim to maximise the potential of our Group structure with shared and efficient services that provide value for money and support our aims of making the best use of our income, reduce our costs and improve our services.
Value for money is an integral part of our culture. It is driven by the Group board who reviews the efficiency of our work and ensures that we comply with regulatory requirements. Value for money is embraced by all staff and we encourage them to be innovative and find more efficient ways of providing a better service.
Value for money outcomes and achievements are reported within the annual self-assessment report in accordance with our regulator the Homes and Communities Agency’s (HCA) requirements.
Value for money contributes directly to our four key aims:
- Providing excellent service – delivering excellence to our customers
- Integrity – being honest in our dealings and keeping our promises
- Valuing people – respectful, understanding, right first time and involving customers
- Delivering creative solutions – innovation, meeting needs and maximising our impact in local communities.
For more details, please see our business strategy
Key to our business effectiveness is understanding the business case of what we should get for our money before we spend it, what we got when evaluating and determining success to enable us to fully understand on assessing our VfM when comparing money spent on stock and operations (inputs)with value (outputs and outcomes.) Inputs are primarily measured in cash.Outputs and outcomes (social value) can be measured using:
- social and economic benefits to individuals and communities
- the quality of service and the consumer benefits to customers
- environmental benefits
- financial benefits – a return (surplus) for reinvestment; knock on benefits to other local services and taxpayer
WM Housing’s approach is to maximise the potential of our Group structure, with shared and efficient services that provide value for money and support our aims. Our federal structure continues to focus on our local associations that are in touch with local communities, supported by governance structures that deliver control, accountability and direct engagement with customers.
Value for money is central to the Group’s work. The further we make our money go, the more we can invest in improving customer’s, building new homes and developing services.
We have an asset base of more than 30,000 homes and 3,000 garages valued at more than £1.1bn. Our turnover in 2015/16 was £151.9m. In 2015/16, our operating expenditure on social housing lettings was £109m. Annually across the Group, we invest over £50m in stock maintenance, repair and improvement.
|Every £1 spent analysis||2015/16||2014/15|
|Purchase and improvement of housing properties||0.41||0.39|
We intend to continue to grow as a housing group by building new homes, offering new services and encouraging other registered housing providers to join us. We believe that our federal structure is ideal for other registered housing providers. Our structure means our members can benefit from efficiency through economies of scale whilst maintaining local accountability to their customers.
During 2015/16, we built 309 new homes.
Expenditure on Social Housing Lettings
% of costs
% of costs
% of costs
% of costs
|Service charge or support costs||12.6||13||13.3||12||15||14|
All surpluses are re-invested in the improvement of our homes and to subsidise the development of new affordable homes.
To help us to understand our costs such as planned and routine maintenance, empty properties, housing and estate management in more detail we compare them against other similar organisations within the Midlands (the M6 Group). This analysis also includes cost comparisons for overheads,employees and premises. The outcomes are reported to boards and scrutiny panels and we use the information to improve efficiency.
To help us to understand how successful we are, what we should get for our money before we spend it and what we actually got when we review it, we compare the money we spend on our stock and operations (cash) with the value (outcomes.) We calculate outcomes by using:
- Social and economic benefits to individuals and communities;
- The quality of service and the benefits to customers;
- Financial benefits – such as a return on reinvestment and the knock-on benefits to local services and taxpayers.
We want to achieve value for money in all that we do; therefore we have integrated our approach across the Group –
- Assets – we are continually improving our understanding of the performance of our assets to ensure they are appropriately maintained and deliver good value for money whilst mitigating the risks.
- Customers – we want to ensure that our customers are continually receiving value for money for their rent and service charges. We involve our customers in our decision making on service improvements.
- Decision making – all decisions that commit to significant growth in expenditure are approved by the relevant board and are supported, as appropriate, by cost benefit appraisal.
- Financial – Our budgets and business plans include efficiency targets and service improvements.
- Governance – The parent board takes overall responsibility for agreeing budgets and establishing financial limits for the Group and its members and review the efficiency and effectiveness of our work.
- Performance – we continuously review our performance and customer satisfaction with service delivery and benchmark our performance including achieving value for money with our peers.
- Staff – we continue to invest in our staff and have recently completed a major change programme in our approach to service delivery which has seen our customer services centralised in a new service centre and a changed emphasis to encourage greater online transactions and increased local presence for front-line staff.
Effective performance management and scrutiny arrangements help to drive VfM. Our scrutiny panels’ scrutinise our services and work with our Boards and staff to further improve services. The panels are independent and will review areas of service and then report their findings directly to the local Boards, who will consider their recommendations and,where appropriate, agree an action plan to improve services and the VfM that they represent.
Our Procurement Strategy sets out how we buy goods and services and manage contracts with our suppliers. We have a small group-wide procurement team whose role is to improve procurement processes,share best practice and support the organisation to deliver savings and efficiencies.
VfM is often defined as the relationship between economy, efficiency and effectiveness (known as the 3 E’s) and is illustrated below.
- Economy relates to keeping down the cost of inputs, however cutting costs does not necessarily mean that positive VfM will be achieved.
- Efficiency relates to the transformation of inputs to outputs during a production process; outputs may be expressed in terms of quantity or quality.
- Effectiveness relates to achieving desired outcomes and this can be measured by customer satisfaction.
VfM is achieved when there is an optimum balance between all three – relatively low costs, high productivity and successful outcomes.
The guidelines published by the Department of Communities and Local Government (CLG) define four ways of achieving efficiency which are called the four E’s:
- E1 – Reduce inputs for the same outputs = fewer resources for the same result;
- E2 – Reduce prices for same outputs = pay less for inputs to get same result;
- E3 – Achieve more outputs or improved quality for the same inputs = get better results from the same resources;
- E4 – Achieve proportionally more outputs or improved quality compared with extra resources that are used.
Social value is about using physical and human assets (inputs) to provide homes and services (outputs) that produce social value (outcomes.) We measure social value by:
- Service quality;
- Social and economic benefits;
- Environmental benefits;
- Financial returns.
Successes in 2015/16
- We have achieved decent homes compliance for first time across the entire Group
- Our new investment planning model has been developed and implemented and includes allowance for social factors
- We have successfully invested £31m in last year
- We have completed a full restructure of strategy, performance, communications and governance teams achieving c£250k savings
- All parts of Group achieved or exceeded 2015/16 surpluses
- 309 homes built against business plan target of 200
- Achieved £2.9m of shared ownership sales against business plan target of £1.91m
- We have successfully achieved savings of £955k on our development schemes.
Plans for Improvement 2016/17
- Continue with phase 2 of our Journey to Excellence improvements
- Examine ways to provide our performance information to our customers
- Ensure we continue to achieve savings to meet the one per cent a year rent cut
- Examine funding options for future asset investment
- Prepare a bid for development beyond 2018
- Look at our funding arrangements to secure optimum value for money
- Carry out a detailed review of service charges
- Use our work on sustainable tenancies to optimise our social value
- Increase the opportunities we offer customers and young people to secure training and work with us, our suppliers and wider job market
- Undertake further value for money reviews of our services
The2016/17 revenue savings:
|West Mercia Homes||355|
|WM Housing Group||351|
The savings targets include:
- maximising our income by reducing void turnaround times (£273k) and maximising income generation (£175k)
- savings in staff costs across the group (encompassing housing management, repairs, Group services and a more streamlined Executive and Senior Management team structure) (£612k)
- savings in repair costs, to be achieved by reviewing both the way that repair services are provided across the group, and the target timescales that we offer to our customers (£574k)
We reviewed our rechargeable repair processes recently to ensure that for all repairs which a customer is responsible for that we charge for the cost of the work.
These repairs include:
- if a repair has been caused by neglect, accidental or deliberate damage, vandalism, or poor DIY by you, members of your household or visitors
- if the damage has been cause by a pet
- the cost of putting right any unauthorised alterations to your home
- the cost of repairing damage caused by the police following a lawful raid at your home
- any court costs, injunctions and legal fees incurred by us in relation to rechargeable repairs.
We introduced revised procedures in April 2016 and so far we have reduced the number of repairs raised for this type of work by around 900 and saved approximately £71,000.
Support for older customers in Coventry
In Coventry, a number of our older customers are identified as being unable to access services and equipment to meet their needs, thus jeopardising their independence, well being and their ability to maintain a tenancy.
The older persons floating support service (two full time staff, funded by a city council grant of £77k) have in the last 12 months helped our customers to access more than £400k in benefits and unclaimed private pensions which they were unaware that they were entitled to, and, in addition to that they have accessed the financial equivalent of a further £50k in charitable donations of money and furniture or equipment. This has enabled customers who are over 60 years old to purchase help with cleaning, cooking, aids and adaptations, furniture, white goods, to move home if they cannot maintain their current home, to integrate more into the community and participate in social events, to pay for transport to things which they previously wouldn’t have been able to access.
The funding was due to end in September 2016, however due to the impact and outcomes delivered by the service Coventry City Council have confirmed that they will continue to fund the service until September 2017. At least another 100 customers will be supported during this time, social care and hospital admittance budgets will benefit from the preventative work, and additional income of benefits and private pensions will be brought to the customers and the local economy.
Repairs and maintenance come in-house at Optima
For some of our properties managed by Optima Community Association in Birmingham previously had their repairs, maintenance and empty property works carried out by an external contractor. From April 2016, these services are now provided by our own staff at HomeWorks.
This change has produced a number of benefits including service improvements through consistency of processes and IT systems and has resulted in creating long term secure employment opportunities in Birmingham.
This service improvement will deliver £40k saving in year one and then £80k a year thereafter.