Cornwall Housing Limited

Agenda No: 4
Report to: / Finance Committee
Part 1
Date: / 18 November2013
Title: / Housemark Report
Author: / Jeanette Beavors / Role: / Director of Finance
Contact: /
Recommendations:
  1. Finance Committee are requested tonote the Housemark Report results as outlined within this report.

  1. Executive Summary:
  2. This report will summarise the results from the Housemark Benchmarking exercise 2012/13, along with all of the caveats that should be placed on the information.

1.2The report will also provide a comparison against the last submissions by Carrick Housing (2008/09 and 2009/10), and give an indication of where Cornwall Housing would be ranked against their peers at that point in time along with a summary of the current position.

1.3The comparisons will provide a ranking position: rank out of 22 for 2009/10 and rank out of 14 for 2012/13. The position will also be analysed in terms of quartile position for both 2009/10 and 2012/13. These positions will then be used to determine the direction of travel on the indicators.

1.4The report will also demonstrate how this information will be utilised internally to develop understanding of costs and subsequently inform the Service Review timetable.

  1. Background and Cornwall Housing Objectives:
  2. Finance Committee will be aware that CHL submitted a benchmarking return to Housemark for 2012/13.

2.2Finance Committee will also recall that although the decision was taken to submit the return, there were several caveats placed on the quality of the return.

2.3These caveats can be summarised as

  • ERP limitations resulting in budgets and actual expenditures not always being aligned to the correct areas which could mean actual costs are not reflected accurately
  • Use of 2 legacy management systems resulting in information not always being recorded consistently across the whole of the company
  • Compilation of performance information based on legacy systems in certain areas resulting in inconsistencies in calculation and reporting of performance indicators
  • Lack of trading accounts and differences in previous assumptions around charge out rates for internal DLO operations potentially resulting in costs not being reflected accurately
  • Current top slice arrangements for many support services provided by the council potentially resulting in costs being understated in many areas
  • Restructure of the organisation and the inability of ERP to reflect the changes until the full restructure was implemented potentially resulting in costs being allocated to the wrong areas
  • Difficulties in establishing the split between client and contractor roles within the Assets Directorate
  • Significant change programme during the first year of operation potentially resulting in mis-statements of staff time and cost allocations.

2.4Due to the potential inaccuracies and caveats associated with this information CHL are proposing that the results are only used for internal purposes at this stage.

2.5The final report has now been received from Housemark, with the results summarised at Appendix A, and the full report attached at Appendix B.

  1. Decision and Supporting Information (Including Options):
  2. As detailed above, CHL submitted a return for the Annual Housemark Benchmarking in 2012/13, in order to make an initial comparison of costs and performance with other housing providers across the country.

3.2The results are analysed at Appendix A but to summarise, of the 45 indicators measured;

  • Almost half (22) have no comparative data – this is due to the format of the report and the calculation of the indicators changing since 2009/10
  • 19 are demonstrating improvements in terms of direction of travel on ranking
  • 2 are demonstrating declining performance, and
  • 2 are indicating no change

3.3This is a positive result in terms of direction of travel on ranking this demonstrates improving performance. However it should be noted that the number of ALMOs participating in the benchmarking exercise has reduced from 22 in 2009/10 to 14 in 2012/13. therefore these results may be distorted slightly.

3.4As a result a further comparison has been made to demonstrate the quartile position on the indicators, both in 2009/10 and 2012/13 to demonstrate both the current position and the direction of travel since 2009/10.

3.5For information purposes, the nationally recognised quartiles are referred to as

  • Upper Quartile – high performance and / or low cost
  • Middle Upper – above median in terms of performance and cost
  • Middle Lower – below median in terms of performance and cost
  • Lower Quartile – low performance and / or high cost

3.6It should be noted though that average or higher than average costs in certain areas may be perfectly acceptable, or even desirable, where this is consistent with furthering business objectives and can be justified in terms of performance and/or user satisfaction. So, for example, it may be that CHL choose to invest significantly in the housing stock so repairs and maintenance indicators may demonstrate high cost but as long as this is matched with high performance and high customer satisfaction this would be perfectly acceptable.

3.7However, if the indicators are demonstrating high cost but low performance or poor customer satisfaction, this would be a prime target for a Value for Money Service Review, to identify ways of improving performance or reducing costs or both.

3.8The results in terms of quartile performance for CHL are detailed at Appendix A but to summarise, of the 45 indicators;

  • 16 are Upper Quartile
  • 13 Middle Upper
  • 10 Middle Lower
  • 6 Lower Quartile

3.9The lower quartile indicators are

  • Cost per property – responsive repairs (service provision)
  • Costs per property – direct major works (management)
  • % properties with a gas appliance that have a valid landlord gas safety record
  • Current tenant rent arrears net of unpaid HB as a % of rent due
  • Average pay cost per direct Housing Management employee
  • Direct cost per property of Lettings

3.10Work is currently ongoing to ‘drill down’ into these areas in order to understand the reasons for the lower quartile performance position and the results will be utilised to inform our efficiency agenda and Service Review plans.

3.11It is anticipated that a proposed Service Review timetable will be produced and submitted to Finance Committee in December.

3.12At this stage, it is proposed that the results of the Housemark benchmarking are not publicised to our external stakeholders, as the information needs to be considered taking into consideration all of the caveats, otherwise the information may be potentially misunderstood.

  1. Financial Implications and Budget:
  2. There are no direct financial implications arising from this report, although it is anticipated that the Housemark results will inform future VFM reviews which should generate financial savings.
  1. Other Resourcing Implications:
  2. There are no direct resourcing implications arising from this report, although again it is anticipated that the Housemark results will inform future VFM reviews which should generate productivity gains.
  1. Legal Implications:
  2. There are no legal requirements arising from these proposals.
  1. Equality Impact Assessment:

7.1There are no EIA implications.

  1. Significant Risks:
  2. Due to the level of caveats associated with the Housemark submission, it is proposed that the results are ring fenced for internal use only at this stage.

8.2The publication of the results to external stakeholders could result in mis-interpretation of the results and potential reputational damage.

  1. Consultation carried out including staff, SMT, Directors, specialist advice and the community:
  2. Consultation has been carried out with DLT, and senior managers within CHL.

Approval and Clearance of Report

Report cleared by: Jeanette BeavorsDate:7November 2013

1