Value for Money Self-Assessment

VALUE FOR MONEY SELF-ASSESSMENT

2015

VALUE FOR MONEY

1.OUR OBJECTIVE FOR VfM

The objective of Value for Money (VfM) is to achieve the right balance between economy, efficiency and effectiveness - or, spending well and spending wisely to achieve our objectives. For Cirencester Housing, achieving Value for Money is about making a bigger difference for residents by providing good quality homes in sustainable communities, and providing the best services we possibly can with the resources available. It also involves giving consideration to Social Return on Investment (SROI). We will do this mindful of the legitimate (and sometimes competing) interests of our key stakeholders, residents, local community, local partner organisations, tax payers and funders.

The value we produce is directly related to our social purpose - our mission statement is ‘to provide homes that people want to live in’ and we will achieve this by:-

• building good quality homes to a standard above Building Regulations
• providing and maintaining good quality homes
• improving the physical and social sustainability of our communities
• working with our residents and stakeholders.

We value our reputation both locally and regionally as being an independent organisation setting high standards. This forms the basis of our Strategic Plan 2015-2018which sets out our objectives to ensure that these values are maintained.

2OUR STRATEGIC APPROACH TO VfM and THE USE OF RESOURCES

Our strategic approach is that we recognise that there are benefits in having a modest number of properties which comfortably gives us the opportunity to use a comprehensive and flexible approach in managing our resources. This also creates an organisational culture that allows us to question the process of meeting our objectives, ensuring that a cost-effective, efficient and high quality service is provided. This, in turn, helps to build and maintain homes to meet residents’ and potential residents’ needs. VfM is at the core of both the Strategic Plan and the Business Plan which work in tandem with each other.

Cultivating and promoting a culture whose characteristics are purposeful and practical has ensured that VfM plays an important part in all we do. To ensure a correct balance is maintained, appraisals, reviews or evaluations of systems and functions are carried out not only on major projects but on day to day processes.

Cirencester Housing is aware of the requirement to operate a commercial business, but we recognise that our business is not purely about properties, but about people who live in our properties, and in the surrounding areas. It therefore looks to include residents whenever there is a requirement.

The organisation has in 2015 worked towards VfM objective as set out in 2014 with varied results and has therefore set out the following objectives:-

• to reduce our management costs per unit by increasing our stock over the next three years by 20%
• to develop an integrated Asset Management system to optimise our return on investments

• to be creative in the business management of our resources and to recruit new Board members in order to improve skills and expertise where identifiedtoensure continuity
• continue with the membership of a bench club group allowing us to compare how we perform including VfM.

• provide evidence that our policies on management of repairs, and use of independent local contractors, are still viable
• review policies and procedures on letting of properties to ensure processes are efficient
• reduce administration costs which do not affect our effective service, particularly to reduce duplication of tasks and paper work
• to identify a suitable model to assess viability of our properties and better manage our assets.

3.IMPLEMENTATION OF VfM ON A DAY TO DAY BASIS

The Board is ultimately responsible for determining our approach to VfM and it encourages the Chief Executive and staff to take a pro-active role in achieving our objectives. Together we regularly review:-

• our organisational culture and how it can be changed
• how to assess opportunities for reducing costs
• how to obtain best value from our costs and our assets
• risk assessment
• accountability.

As part of our approach the Vale for Money log is maintained as part of our monitoring process and is updated by staff regularly. Staff are aware that Value for Money must be considered constantly in relation to every process within the organisation. At regular meetings, staff are asked to evaluate their contribution to our VfM objectives.

Over the last two years we have identified 40 VfM improvements which have generated £69,000 for the organisation.

4.PROGRESSIN THE TWELVE MONTHS TO 31 MARCH 2015

As stated above for Cirencester Housing, achieving Value for Money consists of satisfying residents by providing good quality homes in sustainable communities, and providing the best services we possibly can with the resources available.

4. 1 PROJECTS

The following are examples of progress made during the year and how they impact on our VfM strategy.

Following a review of our assets and property stock, we were able to sell a number of under-utilised garages. The benefits which will accrue will be a more attractive environment for the area concerned and the generation of additional funds which we can invest in our development programme.

We value our contractors highly and we know that they have the trust and confidence of our residents. We organised an asbestos-awareness course which was attended by both staff and contractors. We have also paid for one contractor to go on a specialist course to enable us to provide this particular service to our residents.

We introduced a major new computer system for our housing and maintenance functions replacing the existing system which was over 11 years old. This will produce benefits including the possibility of remote connection by our contractors to our system.

During the year, we saw the benefit of CCTV in chosen localities, which has the effect of making the area safer for residents and making them feel more secure.This has also reduced the cost of housing management resources in resolving these problems.

Through consultation with our residents an effort was made to reduce service charge costs of certain communal area by the residents undertaking the cleaning themselves.

A specific exercise was carried out to establish VfM in relation to our objective “to provide homes that people want to live in”. Two voids were re-furbished to a high standard, with longer-term benefits both for us and for our residents. Each void situation is looked at individually and VfM is a determining factor in our approach.

We have joined the National Housing Federation Rural Housing Alliance, with the objective of learning from other associations’ work in areas such as design and sustainability within rural communities.

We have introduced a “secondary” waiting list for applicants which speeds up the process for granting new tenancies.

We participated in several local events which had the effect of raising our local profile and of making the local authority more aware of our presence. This in turn, has had the positive impact of increasing development opportunities for development in the area and of creating relationships with planning departments.

VALUE FOR MONEY AND SOCIAL IMPACT

We completed a development of 11 rural new homes providing quality accommodation for 36 people. This is part of our ongoing development programme, which focuses on housing in rural areas.

In completing this development, we were assisted by grants totalling £192,000 from the HCA, being part of their 2012/15 programme.

• the social impact has resulted in 12 children under ten years supporting the village school
• providing family support for not only elderly residents but also young families
• assisting two families to live and work in the same village thus saving their cost on transport and maintaining employment within the village.

4.2FINANCIAL RETURNS

The following information is included in our Value for Money Statement:

Return on assets

The return on assets is influenced by our decision to focus on development, with the prospect of improving returns in the longer-term. For example, we estimate that with the completion of our current development plans in 2019, the weekly operational cost (excluding finance costs) will drop from currently £80 per unit under management to £75 per unit, and we have a target for the return on assets of 4.0%.

Back office savings

Overall our costs increased in the year to 31 March 2015, a principal factor being increased costs in relation to planned repairs including asbestos and legionella risks. Nevertheless, conscious efforts were made to make savings and we have identified savings in excess of £32,000 in our activities during the year.

Cash flow and treasury management

We generated £183,000 in new cash from our operations and this was utilised for new development. Cash flow is monitored monthly and we ensure that cash is held to obtain the most favourable returns consistent with security.

Residents’ satisfaction levels

A survey shows that residents’ levels of satisfaction for Cirencester Housing (CH) are high, and the table below shows how we compare with the median level of satisfaction for housing associations in our peer group, the South West Benchmarking Group (SWBM). The level of satisfaction for each category is shown below:-

The full Value for Money Self-Assessment can be found at

5.Assurance of Value for Money Self-Assessment

In commercial industry cost effectiveness can be measured by financial figures whereas within the social housing industry value for money is as much about meeting values with resources available that benefit stakeholders. The process has highlighted areas of improvement, although we have no concerns about VFM going forward, we do feel that resources used for proving VFM remain realistic and are in proportion with regulations. The process of self assessment is monitored by the Audit Committee.

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