Value For Money Self Assessment 2014/15

Transcription

1 Value For Money Self Assessment 2014/15

2 CONTENTS SECTION PAGE 1. Last year at Viridian 3 2. Governance and Scrutiny 5 3. Progress made in 2013/ Viridian customers Performance and costs for 2014/ Resource management and the return on assets Other VfM gains Looking to the future and areas for improvement 36 2

3 Last Year at Viridian Our strategic approach to Value for Money (VfM) Our focus is simple to help residents improve their lives. Viridian is committed to delivering VfM across every part of the business. We believe it is about more than just saving money; it is about making sure we get the most from our resources, looking for creative ways of becoming more efficient and generating new value from our assets. By achieving this, we know we are providing the best possible services in an open and transparent manner. It also means we can continue to develop innovative additional services targeted at customers with specific needs. Our current Corporate Strategy sets out our plans as an organisation for the years 2012 to Within this Strategy, our commitment to increase financial efficiency has made VfM an integral part of the way we do things. To carry this forward, we wrote our Value for Money Strategy and agreed an implementation plan, outlining what VfM means to us, by addressing each of the eight themes of our Corporate Strategy. Our Strategies continue to underpin and drive our approach to VfM through 2014/15 and beyond. Of particular note this year has been our void performance, where we have achieved a 2 million improvement in rent loss across the business and reduced the average void cost by 320 per property. In addition to this we have achieved an improved net surplus of 24.7 million (compared with 16.9 million in 2013/14), regained our G1 governance rating, helped vulnerable customers cope with the challenging financial environment and agreed a large programme of projects focussed on improving our services. Over the next three years these projects will enable us to become a more effective housing provider whilst continuing to increase the number of homes we can deliver. 3

4 The planned partnership with asra Housing Group During 2014/15, we were focussed on preparing for the planned partnership with the asra Housing Group, with a significant amount of time and resources dedicated to taking this forward. A key aim of the partnership was to achieve efficiencies and economies of scale that would put us in a stronger financial position to continue developing innovative services to our diverse customer base. In February 2015, the partnership was indefinitely postponed and in May 2015, the Board confirmed Viridian would no longer be pursuing the partnership, due to governance issues raised by the Homes and Communities Agency. While this presented significant challenges, the Board was clear - although unsuccessful, we would build on the progress and learning made whilst preparing for partnership. We have made significant decisions about our future direction, agreed challenging goals and made substantial improvements to the way we work in order to deliver our current Corporate Strategy and VfM Strategy. With the cessation of the partnership, Viridian continues to recruit to vacant roles throughout the business. VfM is a dominant theme as we make a number of appointments (including those at very senior levels) over the coming months to ensure this is reinforced within our corporate culture throughout the business. This VfM statement therefore sets out how we deliver VfM, our achievements over the past year and the key ways we plan to improve our performance in the future, as we move forward as an independent organisation. 4

5 Governance and Scrutiny How we deliver VfM The Board has ultimate accountability for VfM in the business and it is becoming much better embedded within the teams and our resident scrutiny work. The Board approved the Corporate Strategy and our VfM Strategy. All decisions submitted for its consideration must demonstrate a clear VfM impact for the business and ultimately our customers. The Board approves the Viridian annual budget. Ultimately, this forms the basis for expenditure control and income maximisation. The budget is a collaborative effort, built by all managers across the organisation. There is a high level of scrutiny of the budget with challenge provided by our Finance Team, Executive Team and the Board. Viridian has improved its in-year forecasting and any departures from the agreed budget must have formal approval. Alongside this there is regular monitoring and review of management accounts. Reporting to the Board are four committees, each providing more in depth scrutiny in terms of spend and VfM. All committees are chaired by a Board member, which ensures continuity between the work of the Board and the individual committees. The following chart shows how all of Viridian s Boards, committees and teams work together to ensure seamless VfM delivery. Viridian Board Governance & Remuneration Committee Treasury Committee Growth and Investment Committee Risk & Audit Committee Executive Team Operating Board Resident Scrutiny Board Governance & Remuneration Committee The Governance & Remuneration Committee ensures robust governance across Viridian and compliance with regulatory requirements and good practice. It oversees the remuneration, recruitment and performance of the Board, the committees and the Executive Team. It takes a strategic overview of people-related issues, including Equality and Diversity, so that Viridian fulfils its responsibilities as an employer and maximises the potential of our staff to support our customers. 5

6 Treasury Committee The Treasury Committee oversees Viridian s Treasury Management Policy and Strategy. The Board delegates authority to the Treasury Committee to make suitable recommendations and authorise related lending documentation. Viridian is funded by a mix of surplus generated, grants received and borrowing (loans). We presently have loans of nearly 400 million, on which we make regular interest payments. With interest payable of over 11 million in 2014/15, it is essential we know the amount of these payments and when they will occur, as failing to meet a payment can be very serious. Some of the loans are at fixed interest rates and so interest costs are predictable; some are variable and interest due is less predictable. The Bank of England has been suggesting interest rates must rise soon, which will increase Viridian s interest costs. Fortunately, we can manage the interest charge by entering into separate and complex contracts with banks, known as interest rate swaps, which can make the interest charge more predictable. Unfortunately, these contracts can be expensive, and just as interest rates can change, so can the cost of these contracts. Our approach is therefore to monitor the amount of borrowing we have that is subject to changing interest rates, and ensure the risk and consequences of a rise in interest rates is acceptable at all times. We also monitor the cost of fixing the interest rate through the selective use of the contracts described. In January 2015 we invested 1.7 million in cancelling some existing contracts, and taking out new ones on more favourable terms. We recognised this was a large investment and one that warranted due consideration. We concluded the cost should be balanced against the reduced impact of rising interest rates, and made a decision to proceed. We timed the purchase to maximise Value for Money; if we had entered into the same contracts six months earlier, the cost would have been double. Growth & Investment Committee The Growth & Investment Committee provides a strategic overview of activity relating to the management of Viridian s assets. It assesses financial viability, consistency with strategic objectives and return on investment performance of Commercial Operations (hostels, student accommodation, key worker and market rent properties). The Committee considers asset management, new business & development and health & safety activities relating to these areas. The Board has delegated financial approval to the Growth & Investment Committee subject to certain limits: 50 million for individual new development schemes and bids, stock transfer / property purchases and up to 5 million for other individual contracts. Risk & Audit Committee The Risk & Audit Committee delivers strategic overview for activities relating to risk, financial reporting, internal and external audit and assurance matters for Viridian. It ensures risk management processes are regularly reviewed and aligned to the Corporate Strategy. The Risk & Audit Committee reviews the top 10 strategic risks at each meeting, considers appropriate risk mitigation and amends if necessary. The Board undertook an exercise at its August 2015 away day to review and confirm its risk appetite across all key business areas. This will further inform the work of the Committee. 6

7 Resident Scrutiny and VfM Viridian recognises that residents are in a unique position to guide us in improving services. Supporting residents to become involved and give their views is crucial to our success. Resident Scrutiny Board The Resident Scrutiny Board is an independent group of residents who co-ordinate service reviews on any aspect of Viridian business. It reports to the Operating Board, although it can engage directly with the Board if they feel appropriate action is not being taken in response to its service reviews. Outcomes of these are reported to the Board. The Resident Scrutiny Board is assisted by our Resident Auditors and Resident Service Inspectors, and during 2014/15 completed three reviews as follows: Service area reviewed Resident awareness of, access to, and understanding of Viridian s complaint procedure Success of repairs to General Needs properties in London The support of residents through the implementation of Universal Credit Examples of Resident Scrutiny Board recommendations Develop a consistent approach for logging and recording complaints Improve systems to ensure logged information can feed into performance management and service improvements Operatives should have more flexibility in obtaining materials when out and not be restricted to one supplier Customer Service Advisors need to ask the right questions when logging a repair so the operative knows what parts/materials are needed in advance Use Twitter and include information on rent statements to give updates on Universal Credit and how Viridian can help/support residents Train all Housing Officers on the changes being made, as some residents may feel more comfortable talking to them as their day to day contact Impact on VfM Quality information will be available to influence how services and processes can be improved Knowing what materials are needed before the appointment and easier access to materials will lead to more repairs being completed on the first visit Making up to date information more accessible and timely will support residents in preparing for the changes, while reducing the costs of distributing paper documents. We have already trained nearly 150 staff Training and Support We continue to offer bespoke, regional training to our involved residents. Delivering this training in-house represents excellent VfM. For example, Equality and Diversity training delivered during 2014/15 to our involved residents cost a total of 145 (including all travel and refreshments). Similar training delivered by an external provider would have cost over 1,300, giving an 89% saving and meaning more training can be offered. The involved residents are supported by Viridian s Governance team, which delivers a cohesive approach to achieving our common goal of improving services for residents. Despite more service reviews being completed and training delivered, by working smarter, making better use of meetings and providing all support in-house, the cost to Viridian of supporting involved residents reduced from 11,787 in 2013/14 to 1,658 in 2014/15 - a saving of 86%. 7

8 Progress made in 2013/14 In last year s VfM self-assessment, we established there were three key areas in the business we wanted to improve. 1. Benchmarking A key area for improvement identified in our last VfM statement was to understand how we compare with other social housing providers, particularly around costs and operational performance. We have now joined HouseMark, the leading provider of integrated data and analysis services to the social housing sector and have begun realigning our performance and cost measures so we can obtain robust comparisons. We are now able to directly compare ourselves to other similar organisations on measures such as satisfaction reporting, arrears and voids. Although we have some properties in the Midlands and West Sussex, the concentration of our stock is in London. For benchmarking purposes, we have compared performance of our General Needs services with members of the G15, a group of London s 15 largest Housing Associations. Only 12 of these housing providers share their data through HouseMark. Viridian has a varied portfolio, but our General Needs properties make up the bulk of our business. In the future, we want to be able to find a way of benchmarking our performance in commercial properties. 8

9 We are about to embark on a time apportionment analysis, which will give us a clear understanding of our costs. This will be complete by the end of March We are developing a robust suite of Key Performance Indicators to support the new Corporate Strategy. These will be aligned to HouseMark definitions so we can accurately compare our financial and operational performance with other housing providers. We can then be certain we are delivering the best possible service to our residents at the best possible cost. 2. Customer Satisfaction In our last VfM self assessment we found that we were reasonably placed amongst our peers in terms of customer satisfaction. Nevertheless, our aim is to be top quartile and to achieve this we are focused on improving customer satisfaction levels. We have investigated the best way of measuring customer satisfaction. One of the main issues was the gap between resident interaction and the satisfaction survey. We will address this by obtaining real time opinions, collected from the customer when they receive the service. We are also looking at gathering customer insight from additional sources such as Mystery Shopping and customer panels. We are now on track to deliver the implementation of this across the business in the coming year. 3. Reduce the costs of our responsive repairs service in line with our targets In , Savills completed a benchmarking exercise on our behalf and advised us our repairs service was expensive and would need to reduce to 402 per unit to achieve upper quartile performance. In response, we committed to reduce our costs over the next three years. Since our last VfM self assessment our costs increased due to the introduction of operational changes to achieve our longer term efficiency aspirations. Additionally, a number of temporary arrangements were necessary to support our existing IT system. The replacement of this system was delayed due to our intended partnership and has now been rescheduled to commence in Our mantra is to repair less and invest more. To support this we have introduced a new strategic asset management dashboard that enables us to look at the way we are managing our homes in greater detail. Currently on average we carry out 2.9 repairs to each of our homes per year. We have also identified that some of our homes have had over 15 visits in the past year. These additional visits have been due to one or more of the following factors, our inability to complete right first time, or gain access, the need for modernisation or customer neglect. We now ensure all of our homes that have had more than 15 repairs a year receive a stock condition survey with an associated action plan. These plans, along with improved linkages to our major works programmes, will ensure we meet our objective of achieving a 65% planned investment to a 35% reactive maintenance spend ratio by 2017/18. In the coming year we will invest a further 300,000 to increase the number and competency of our Direct Labour Organisation (DLO) supervisors, along with improvements to our back office team, by increasing resources and improving IT systems and processes. These changes will enable us to ensure we manage our customers repair requests and appointment requirements more efficiently, improve communications and support our technicians. We will also implement new bespoke training programmes for each of our technicians to improve efficiency. Collectively, the above improvements will enable us to recoup our initial investment and achieve the required level of efficiency savings needed to achieve our upper quartile costs and satisfaction targets within three years. Looking forward Later in our assessment we have identified the further actions we will be taking to ensure we continue to deliver these improvements in 2015/16. We have also included how we are initially planning to tackle the recent Budget announcements that will make delivering our business as usual activities more challenging. 9

10 Viridian customers Our primary stakeholders are our customers. Knowing them and understanding their needs and aspirations is vital to maximising the value we can offer when designing our services. Viridian has a diverse customer base of over 30,000 people living in nearly 16,000 properties. For example, 46% of our customers come from a black or minority ethnic (BME) background; 12% of our residents identify themselves as having a disability and 1.6% have told us they are wheelchair users. Over a fifth (22%) of our households are made up of older people living on their own and a further 11% are single parent families. Many of our other customers are living on low incomes, and we estimate that 44% live on an income of less than 20,000 per annum. Around 14% per cent of our working age customers in General Needs rental accommodation are unemployed for non health related reasons and approximately 1,250 (8%) of our residents are economically inactive due to sickness or disability. Low income and unemployment are a major contributing factor to financial stress. We house around 1,700 customers who would be categorised as having high, or very high, financial stress. 23% of our customers do not have access to the internet at home. It is essential we help and encourage residents to get online, to help deliver our aim of channel shifting 50% of all resident interactions with Viridian to online services In 2014/15 our Social Impact team worked with Students@Home and UCanDoIT two companies who give lessons in residents homes, encouraging digital inclusion. This year we have provided training for 161 residents (including eight with additional support needs) 78.2% said their self-confidence had increased as a result of the training With this increasingly diverse customer base comes the need to have robust processes around data to enhance our customer offer and develop more efficient and agile services. We have commenced a suite of projects starting with a Data Management & Security Project to provide an effective and robust framework for data collection. This will be followed by a Customer Segmentation Project, which will allow us to use diverse data to better understand our customers needs and aspirations. A further project on Electronic Data Management will permit better access to resources and effective collaboration. A new intranet and website provision will enhance electronic access both internally and externally. 10

11 Performance and costs for 2014/15 We monitor a range of cost and performance indicators to help us assess how we have achieved VfM and where we can improve. Growth in Operating Surplus The year to 31 March 2015 was financially strong for Viridian. We ended the year with a group operating surplus of 31.8 million (26.2% operating margin), up 16% from 2013/14 from 27.4 million and a net surplus (after interest and asset sales) of 24.7 million (20.3% net surplus margin). We achieved this increase by saving on major repairs (reinvestment), overheads and interest costs ( 4.1 million), and higher levels of income generated from rents ( 2 million). Net proceeds from selling shared ownership properties ( 1.6 million) and disposal of properties ( 4 million) also contributed. Percentage operating margin Affinity Sutton Operating margin comparison with G15 Peabody East Thames Group Circle Network Housing Group Notting Hill Housing Group Family Mosaic Southern Housing Group Hyde Group (The) A2 Dominion Group G15 Housing Association Operating Margin Top Quartile Viridian AmicusHorizon Catalyst Group The above graph demonstrates that our operating margin is comparable with the G15, but that we are towards the lower end of the scale. We expect to improve our performance over the next three to four years through investment in improved processes and efficiency savings. These improving surplus levels are essential if we are to continue to deliver our ambitious plans to build new homes and improve our existing ones. The changes announced in the Government s Budget Statement in July 2015, in particular the 1% reduction in social housing rent for four years from 1 April 2016, mean it is even more important we maintain our surplus. Maximising our net surplus enables Viridian to maintain headroom against our banking covenants and protects the organisation against risks which could impact on our long term financial plan. This enables the organisation to borrow new funds at lower rates of interest and to continue to develop more new affordable homes. As a result of the improved surplus we have increased the number of homes we had originally planned to develop by 15% (from 400 to 460 homes per year). It also enables investment for improving services and VfM. 11

12 Viridian s VfM focus and financial discipline is demonstrated by the year-on-year growth in our operating surplus per unit. This rose again in 2014/15 to 2,024 per unit; an increase of nearly 16.5%. Operating surplus Group Operating Surplus per unit Vs Resident Satisfaction 100% 95% 90% 85% 80% 75% 70% 65% 60% 55% Satisfaction / / /15 50% Surplus Satisfaction This growth in surplus has been achieved without detriment to the quality of our services demonstrated by our continuing high levels of customer satisfaction. Going forward, our focus is to improve on these levels of satisfaction whilst maintaining a growth in surplus. Where our money comes from and where we spend it Rents 79% Service charge income 7% First tranche shared ownership sales 6% Other income 5% 4% Management fee income 3% 3p 7p 7p 8p 8p 10p 10p 27p AND FROM EVERY 1, WE SPENT Major repairs Service charge expenditure Other corporate costs Property costs and utilities Depreciation Interest Routine maintenance Employees Surplus/not spent: 20p 12

13 Complaints Our two-stage complaint process, where operational teams take ownership to resolve issues at the first point of contact, continues to reduce the number of complaints we receive (in 2013/14 we received 561 formal complaints, in 2014/15 this was reduced by 24% to 429). Unlike others in the sector, we have seen a reduction in the already low number of referrals to the Housing Ombudsman Service this year, from three in 2013/14 to two in 2014/15. Complaints Received Number of referrals to the Housing Ombudsman Satisfaction with handling of complaints was 95% at the end of March 2015, the highest compared with the G15 group of social housing providers. Satisfaction with handling of complaint comparison with G15 Percentage satisfaction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Viridian AmicusHorizon Affinity Sutton A2 Dominion Group Southern Housing Group Peabody Hyde Group (The) Catalyst Group East Thames Group G15 Housing Association Member Satisfaction with handling Top Quartile As a result of our excellent complaint management performance, the Housing Ombudsmen Service has recommended that we share our expertise with other housing providers. We regularly meet with colleagues from other organisations to explain our process, with a view to them replicating it within their own. 13

14 Corporate Key Performance Indicators We measure how Viridian delivers services through a combination of different key performance indicators (KPIs). These range from surveying residents about how satisfied they are with our services, through to measuring contractor and staff performance when dealing with residents requests and managing income. The Board closely monitors these measures, reviewing detailed reports at each meeting. The reports discuss how the service areas are performing. Each month, the Operating Board, consisting of Heads of Service and residents, reviews performance. At each meeting, it focusses on aspects of two service areas and develops action plans resulting from the Resident Scrutiny Board s audits and any service area identified as underperforming. We align our KPIs with our staff objectives to create a Golden Thread though the organisation. As we develop our new Corporate Strategy, we will review what we measure to ensure we have a suite of robust and fully benchmarked performance indicators to ensure its delivery. Our KPIs focus on three central areas of activity: Customer Satisfaction, Rent Collection/Arrears and Service Level Commitments. Customer Satisfaction The Board recognises the importance of customer satisfaction and we are currently investigating a range of options to determine the most sophisticated and cost effective way of understanding our residents experience. This year we surveyed nearly 7,000 residents and asked their views on repairs, the customer service centre, the outcome of complaints, lettings and reinvestment. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Customer satisfaction Percentage satisfaction Repairs Customer Service Centre Complaint outcome Lettings Reinvestment 2012/ / /15 Generally satisfaction across all our services is stable. In last year s VfM self assessment, we said we wanted to reach an average of 90% across all our customer satisfaction criteria. We haven t quite reached that this year. As we develop the new Corporate Strategy, roll out our revised approach and align how we measure customer satisfaction with other providers, we will develop specific satisfaction targets for each service area. Performance benchmarking information is not currently available for satisfaction with Customer Service Centre or Reinvestment. 14

15 Satisfaction with Repairs We have compared how our residents rate our repairs service with other housing providers in the G15. As part of the KPI alignment programme, we found we hadn t been measuring and reporting in the same way as our peers. Going forward, we will use the HouseMark methodology and make sure we are comparing ourselves equally, so that we have a more reliable measure of how we are performing. Percentage satisfaction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% AmicusHorizon Notting Hill Housing Group Southern Housing Group Satisfaction with repair comparison with G15 Circle Catalyst Group Affinity Sutton A2 Dominion Group Hyde Group (The) Viridian Network Housing Group G15 Housing Association % Satisfaction Top Quartile Peabody East Thames Group Family Mosaic Satisfaction with Complaint Outcome Satisfaction with complaint outcome was slightly lower at the end of 2014/15 than in 2013/14, when satisfaction with outcome was 91.8%, and we finished the year with 91% satisfaction. Only four social housing providers within the G15 report satisfaction with complaint outcome, focusing instead on how they handle complaints. Of those in the G15 who do, 91% satisfaction exceeds the next best performer by over 10%. Percentage satisfaction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Satisfaction with outcome of complaint comparison with G15 Viridian AmicusHorizon Notting Hill Housing Group Peabody East Thames Group G15 Housing Association Member Satisfaction with outcome of complaint Top Quartile 15

16 Rent Collection As with all registered providers, the majority of our income is generated through rent and service charges. We endeavour to collect all rent owed from both current and former tenants. Percentage current arrears 6% 5% 4% 3% 2% 1% 0% Current Arrears (GN) 2012/ / /15 Years At the end of 2014/15, our current tenant rent arrears in our General Needs housing stood at 3.81% (equivalent to 1.8 million) which is slightly better than 2013/2014 despite the impact of welfare reforms. This is the fourth year in a row our arrears have reduced. We have compared our end of year General Needs arrears with other housing providers in the G15. Most of these saw an increase in their current arrears during 2014/15. When we compare our performance with other housing providers, our performance last year was top quartile. Percentage current arrears General Needs current arrears comparison with G15 8% 7% 6% 5% 4% 3% 2% 1% 0% Circle AmicusHorizon Southern Housing Group Viridian East Thames Group A2 Dominion Group Hyde Group (The) Affinity Sutton Network Housing Group G15 Housing Association General needs current arrears comparison with G15 housing providers Family Mosaic Peabody Catalyst Group Notting Hill Housing Group Top Quartile 16

17 Service Level Commitments At Viridian we are committed to providing the best possible service we can. To help residents monitor how we do this, we publish a series of customer service standards. These include answering and returning calls and completing maintenance work within agreed times. In 2014/15, we answered more than 76% of calls to our customer service centre within five rings. We returned more than 90% of calls to residents within our agreed service standard of 24 hours. Emergency repairs did fall slightly this year (by 0.3%). We have since made improvements to the flexibility of our repairs service, ensuring we can get to all emergencies within agreed timescales. Percentage compliance 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Calls answered Compliance with key service standards Calls returned Emergency repairs Routine repairs Service Standards Gas service audits Gas safety compliance 2012/ / /15 Former Tenant Arrears (FTAs) At the end of 2014/15, Viridian s General Needs former tenant arrears were at 1.03%. This puts us just outside the top quartile (top quartile is 1%), when compared with others in the G15. Percentage former tenant arrears 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% East Thames Group General needs former tenant arrears comparison with G15 A2 Dominion Group Hyde Group (The) Catalyst Group Viridian Circle Notting Hill Housing Group Affinity Sutton G15 Housing Association Former Tenant Arrears (General Needs) AmicusHorizon Family Mosaic Southern Housing Group Network Housing Group Top Quartile Peabody 17

18 Our process for collecting FTAs used to involve the services of a contracted agency. We found this to be an expensive process and we were concerned about the returns we were getting. As a result we carried out some peer analysis and found that having an in-house service would be cheaper and provide better results. During the year 2013/14 the former tenant arrears balance increased by over 125,000. At the start of the 2014/15 financial year we recruited an in-house FTA officer and consequently reduced the FTA arrears by over 529,500. We made savings on Debt Recovery tracing and commission fees of over 8,700, in addition to achieving a significantly better collection rate of over 267,000. Housing Management Over the past year our Housing Management services have focussed on improving VfM. Cost per unit in 2014/15 increased slightly on 2013/14 by 6 per unit to Housing managment cost per unit / / /15 The following chart shows how our cost per unit compares with other social housing providers in the G15. Cost per property ( ) Family Mosaic Housing management cost per property comparison with G15 Viridian Affinity Sutton Notting Hill Housing Group East Thames Group Southern Housing Group Peabody Catalyst Group A2 Dominion Group G15 Housing Association Housing management cost per property Hyde Group (The) AmicusHorizon Network Housing Group Top Quartile Circle We are still working to fully understand how other providers measure Housing Management Cost per unit. We will review our approach and ensure it is aligned with other members of the G15 by the end of 2015/16. 18

19 Voids We closely monitor the cost of our void works. Since we started reporting this, we have reduced the average cost of our voids by at the end of 2011/12, the average cost was 2,371 and at the end of 2014/15 it was 1,846. Over the same period, we have increased satisfaction with our lettings service for General Needs properties from 82.5% to 85%. Average void cost Average void repair cost 2011/ / / /15 We have reduced the cost of our voids as much as we can without diminishing the service. The challenge now is to maintain costs whilst continuing to increase quality. Average void cost Notting Hill Housing Group East Thames Group Average void repair comparison with G15 Viridian Network Housing Group A2 Dominion Group Family Mosaic AmicusHorizon Circle Affinity Sutton Peabody Southern Housing Group G15 Housing Association Average void repair cost Top Quartile Hyde Group (The) Catalyst Group When we compare ourselves with other housing providers, our average void repair cost is well within top quartile. We are still working to make sure we calculate void costs in the same way as other housing providers, and will have it aligned before the end of 2015/16. We have also reduced the amount of lost income on empty properties by 2 million. 19

20 0.52% General needs void loss as a percentage of income 0.50% Percentage void loss 0.48% 0.46% 0.44% 0.42% 0.40% 0.38% 2012/ / /15 Year At the end of 2014/15, General Needs void loss as a percentage of rental income was 0.43% compared with 0.49% for 2013/14. Void loss for all of our properties overall was 2.47%, the lowest it has been in over six years. When we compare this with the twelve members of the G15 who share their performance data, Viridian has the best General Needs void loss. 2.0% General needs % void loss comparison with G15 Average void cost 1.5% 1.0% 0.5% 0.0% Viridian AmicusHorizon Family Mosaic Network Housing Group A2 Dominion Group Catalyst Group East Thames Group Peabody Hyde Group (The) G15 Housing Association General needs void loss as a % debit Affinity Sutton Circle Notting Hill Housing Group Top Quartile Southern Housing Group 20

21 Repairs & Maintenance Service In 2014/15, our average maintenance cost per property for our day-to-day repairs was 462. Following the proposed restructure between Maintenance and Reinvestment in 2015/16, we plan to reduce the cost of the service to 433 per unit in 2016 and down further to 428 per unit in 2016/17. We will achieve this through: The benefits obtained from our new strategic asset management system which will enable us to invest more in planned maintenance and to reduce less efficient reactive maintenance expenditure An upskilled and motivated Direct Labour Organisation (DLO) able to complete repairs more efficiently An improved office support team able to respond to our customers needs and communicate these efficiently to our technicians and contractors An improved management team and infrastructure to embed, monitor and drive efficiency A new and innovative IT system with mobile technology and live reporting systems We remain committed to achieve upper quartile benchmark performance in terms of both cost and quality in 2017/18 with an anticipated cost per unit of 402 and customer satisfaction in excess of 90% Day to day repair cost per property 90.0% 87.5% % 82.5% 80.0% 77.5% Satisfaction with repair / / / % Repair cost per property Repairs Our challenge is to reduce this cost whilst simultaneously maintaining the quality and delivery of our service. We will re-tender our three main day-to-day contractor disciplines in 2016 (currently the combined cost of the drainage, pest control and roofing contracts is 540,000). We have also implemented a new management structure within the DLO incorporating lead technical roles to continue to improve both the quality and cost of our services. 21

22 Resource management and the return on assets Financial Planning & Management In Viridian s 2013/14 VfM self assessment, we identified a range of programme costs and recurrent savings that would have resulted from the partnership with the asra Housing Group. In no longer pursuing the partnership, the majority of these savings will not be realised. Nevertheless, we have still worked to achieve VfM in our financial planning and management. At the end of the financial year, Viridian had debt of million and paid 11.1 million in interest, so treasury in general, and the management of interest rates in particular, has a large influence on our financial performance. Our Treasury Policy limits the financial risks we can take to ensure a prudent approach to risk given our charitable nature. We have limited our exposure to increases in interest rates through the use of various financial instruments that fix the interest cost on debt of 207 million (includes Middlesex First properties). Every three months we formally forecast the future debt levels of the company for a thirty year period (see below) to ensure the ongoing investment in new schemes is kept at a healthy but prudent level. We have policies that have been approved by the Treasury Committee that are reviewed annually and which dictate the required level of liquidity that must be held at any time. This also supports us to stay safely within the financial covenants and other terms of our loan agreements. Finally, we test this forecast to ensure we stay within the covenants, even under unexpected economic outcomes such as increases in interest rates and decreases in house prices. Viridian monitors financial performance using an annual cycle. The key elements of this are: Long Term Financial Plan We use a long term financial plan to model and plan our financial position 30 years into the future. We reflect this when considering all long term investment decisions; it allows us to respond quickly to changes in our environment and amend our strategy and structure as necessary. We continually monitor and model the impact of the Welfare Benefits Reform on our income and test the pros and cons of different development 22

23 strategies. We also model the impact of various alternative scenarios to stress test our long term financial plan. We update the long term financial plan at the start of the year to take account of new information such as the results of the previous year and the annual budget. Underlying assumptions are checked and challenged. This facilitates effective and efficient treasury decisions. Budget We introduced an improved process for budget setting during 2014/15. Targets were initially agreed with the Executive Team, following meetings held with budget holders and the final figures were agreed with the Board. Budget holders then delivered a detailed budget in accordance with the set targets. Close working between the Finance Director and relevant operational Directors made the process much more effective. In 2015/16 we have set ourselves a target to achieve a 29.4 million operating surplus (23.6% operating margin) and a net surplus after interest and asset disposals of 22.6 million (18.1% margin). Management Accounts Once the budget has been approved, we measure progress through our monthly management accounts. These are prepared by the Finance Team and sent to all Directors and Heads of Service. Performance is reported monthly to the Executive Team and to each Board meeting. In 2014/15, we set a group annual budget to achieve a net surplus of 12.8 million, which we exceeded by 11.9 million, ending the year with a net surplus of 24.7 million. This was achieved by: Cost savings of 4.1 million on major repairs (reinvestment), overheads and interest costs Higher levels of income generated from: rents collected totalling 2 million net proceeds from selling shared ownership properties equating to 1.6 million disposals of properties at 4 million Forecasting We re-forecast our financial position every three months so we can ensure we achieve our annual targets. The introduction of a formal quarterly forecast in 2013/14 enabled the organisation to forecast more accurately and allowed greater financial manoeuvrability during the year. Further process improvements that identified volatile parts of the business helped us to challenge the forecast numbers. We also developed lessons learnt reports for these areas to identify further improvements. These activities improved our ability to forecast the end of year position. This enables the Executive Team and the Board to make robust strategic decisions. We were last audited in February 2013 on our budgetary control and found to have adequate financial controls in place. The recommendations made in this report were implemented. Transparency Our approach to governance and service delivery is as open as possible. It is important to be transparent to our customers about how we spend our money. Some examples of the information we publish are: Details of all non-payroll payments in excess of 500 (we publish expenditure type, supplier name and amount of payment, and have been doing so since 2012) The total payments to our Board members, Chief Executive and Executive Directors Our internal structure chart, strategy and regulatory information The above is published in transparency. The details of our expenditure are updated every month. We are currently looking at ways in which we can be more transparent with residents. Our project on customer data and segmentation will help us understand the needs of our residents and what matters most to them. By knowing our residents better, we will be able to deliver greater insight in to what we do, and how we are performing. 23

24 Return on our assets We measure the financial return on our assets as a percentage of their cost. We calculate net costs as the original build cost plus any capital improvement works, minus annual write-off. At 31 March 2015 the net cost of our assets was 627 million (March 2014 it was 599 million). The financial return is calculated by the total income (including rents and service charges) minus running costs (including management and maintenance). We generated a surplus, before interest costs, of 37.1 million (March 2014 it was 28.6 million). Percentage return on assets 6% 5% 4% 3% 2% 1% 0% Operational return on assets 2010/ / / / /15 Years Property Value Analysis We use Net Present Value (NPV) as an indicator of the financial return on our investment in our existing properties. The NPV is calculated by measuring the present value of any future cash flows, i.e. the future rental income of any property, less any costs required to manage it. The higher the NPV the better performing the property. In late 2014, we acquired stock profiling software. Combining this with our own automated reporting tools, we can calculate the NPV per property. We use three years worth of management costs, repairs, component replacement and void loss information to calculate the NPV for our individual properties. This has enabled us to monitor the financial performance of the estates, neighbourhoods, regions and tenure types within our property portfolio. When reviewing why a home is producing a poor NPV we look at the current management performance and future investment requirements to understand what we can do differently to improve the performance. Our Options Appraisal Group, consisting of cross departmental managers, considers options for low performing homes, which can include disposal and investment. A property in West Sussex became void and when we looked to see the scale of works required, we found it would cost 25,000 to make the property habitable. The property was valued at between 155,000 and 160,000 and after receiving six bids we eventually sold it for 165,000. After deducting the Net Book Value and the cost of sale, we had a surplus of 101,000 to reinvest into developing new homes. 24

25 We rank our existing properties NPV based on our average NPV from our new build development programme. This means we can understand how new homes and existing homes compare with each other and the likely financial impact of replacing existing homes with new ones. The average NPV on a new build property if it is Recycled Capital Grant Fund funded is 72,000. Any homes above this NPV band are rated green The average NPV on new Section 106 funded homes is 52,000. We make existing properties with an NPV between 52,001 and 71,999 amber rated. These homes are reviewed every six months and a new NPV is re-calculated to monitor their performance Properties with an NPV lower than 51,999 are rated red. These are the poorest performing properties and we review options on them first. Any management actions agreed with the Options Appraisal Group and the associated impact on NPV is reported back quarterly and a new NPV is re-calculated to show performance improvements The pie chart below shows how our properties are split across the red, amber and green ranks. In 2014/15, we sold six properties which fell below the 51,999 NPV target. Our asset management strategy aims to support our development programme by disposing of poor performing assets. 95% 2% 3% High NPV ( 72k+) Medium NPV ( 52k - 72k) Low NPV (< 52k) Next year we plan to improve our approach to calculating the return on our assets by using our own data based on our customers views of their homes, and experience of their neighbourhood. This will allow us to understand what impacts on the viability of our estates and what Viridian can do to influence these. We will also continue to carry out stock condition surveys on a sample of 20% of our properties. This lets us know where investment is required so we can work with operational colleagues to drive down the cost of services and improve the return on our existing homes. We continue to manage and understand the future returns on our student and keyworker properties. These are extremely important to Viridian. They represent approximately a quarter of our stock and contribute nearly a third to our overall surplus. During 2014/15, we undertook a detailed analysis of these properties and we found for the year the average operating margin was 31.2%. Over the remaining life of the schemes they will deliver a return on capital of 12.4% on keyworker properties and 15.1% on student accommodation. Going forward we will continue to monitor whether these returns are acceptable in the current economic and risk climate. 25

26 Reinvestment Viridian spent million on repairs and maintenance in 2014/15, which is equivalent to 23% of our income. In terms of reinvestment in our properties, the total direct spend for the year was million, of which 6.26 million was spent on capital work and 3.95 million on revenue work (indirect costs were 1.78 million). In 2013/14, we spent million ( 8.42 million on capital, 3.82 million on revenue). The difference in spend was down to 1 million extra on fire alarms and an extra 1 million on components. Component Replacements In 2014/15 we spent 4.5 million on component replacements including kitchens, bathrooms, electrical systems, windows and roofs. This includes a saving of 424,000 (9.1%) on the year s budget. The average cost of our kitchens and bathrooms is significantly lower than the sector average (2013 benchmarking costs 1 ) despite our higher specification standard. Average cost Viridian average kitchen and bathroom cost compared with benchmarked average Kitchens Bathrooms Benchmark Viridian Our component replacements target for the year was 1,199 which we exceeded by 102 components. In addition to the cost savings achieved during the course of the year, we maintained an average customer satisfaction level of 98% for major repairs projects. We use labour only fixed-price contracts to deliver this work and we purchase and deliver materials directly to the site. This way of working allows us to produce accurate cost reports split by labour and materials. This means we can monitor costs as work proceeds, review and take corrective action to maximise efficiency for each of our projects. This enables us to achieve the efficiency savings compared to the sector benchmarks and to analyse and set new individual material and labour targets for each of our components replacement each year. This year we intend to reduce our costs by a further 5% by resetting our labour targets and negotiating improved material rates with our suppliers. 1 Benchmarking group included Thrive Homes, Liverpool Mutual Homes, Wirral Partnership Homes, Cartrefi Conway, Gwynedd Community Housing, First Choice Homes, Bracknell Forest Homes. 26

27 During the course of the year, the Reinvestment team assisted Maintenance by completing 107 repair projects (worth 150,000). These works included larger scale repair jobs (fencing, paving etc.) and follow-on remedial works (replacing leak damaged ceilings, plasterwork etc.). This allowed our maintenance operatives to concentrate on more pressing day-to-day repairs, reducing completion times and increasing the number of repairs fixed first time. This scheme has been extended. Development Programme The Viridian Corporate Strategy sets out our aim to improve the lives of our residents and using our financial strength to do as much good as we can. Building new homes is fundamental to delivering this. We want to develop a range of new housing products including rented affordable homes and intermediate housing for more economically active households who may struggle to find good quality affordable homes on the open market. We will also be developing homes for outright sale to help cross-subsidise delivery of our affordable homes. We still aim to achieve a minimum of 95% customer satisfaction with our new homes, taking into account customers views to help us continually improve our specification. In 2014/15, 94% of our customers were happy with their new property. Although just under target, this does put us in second place when we compare ourselves with those members of the G15 who share this data. Percentage satisfation 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% 78% 76% AmicusHorizon Satisfaction with new build comparison with G15 Viridian Hyde Group (The) Southern Housing Group G15 Housing Association Satisfaction with new build Affinity Sutton East Thames Group Network Housing Group Top Quartile Notting Hill Housing Group We have appointed a Customer Care Officer within the Development team, whose specific role is improve our customer service pre and post completion. 27

28 In 2014/15 Viridian completed the following development activities: invested 45.9 million and completed 298 new homes generated 4.2 million by selling 53 Shared Ownership properties completed 57 stair-casing sales, generating a surplus of 2.9M completed 62 resales In addition, Viridian achieved: 145% of target sales income 100% of programme delivered on time 100% of programme on budget Top quartile management costs (cost of running the Development team is only 2% of the total programme) Future Developments Between 2015 and 2018, we aim to construct 1,175 new affordable homes. Just under two thirds of these homes will be for rent and the rest primarily for shared ownership, with a minimum 15% of our programme delivering homes of three bedrooms or more. We aim to benchmark our costs against competitors and achieve upper quartile for our build costs and oncosts by the end of

29 Other VfM gains Staff Commitment to VfM Viridian s Management Structure Viridian has a management structure designed to enable the flow of information and embed our positive, professional and customer focused culture. There is a clear Golden Thread connecting the management teams with colleagues, which helps ensure the principles of VfM are understood and active across the business. The senior tier consists of the Executive Team which meet regularly to review strategic issues as well as operational and financial performance. On a day-to-day basis the Executive Team take ownership for ensuring VfM is embedded across the business. The Leadership team consists of all the Heads of Services. They provide the link between the Executive Team and day-to-day operations and ensure VfM is delivered to all operational areas. We are currently reviewing all internal management groups to reduce duplication and clarify roles. This is being supported by a review of our performance management framework which will continue to have VfM as a key component. This will streamline decision making, allowing us to be more responsive and enhance accountability. We introduce VfM to new starters as soon as they join Viridian. Our Corporate Induction Programme explains our key VfM principles, particularly those contained within our Corporate Strategy. All new employees must sign Viridian s Code of Conduct. This sets out how they are expected to demonstrate VfM and comply with Viridian s Financial Regulations, budget setting procedures and other relevant policies. 29

30 Procurement and Expenditure Limits We have recently made some changes to the corporate procurement team to strengthen VfM in procurement across the organisation. We have started using category management principles and appointed Procurement Business Partners (PBPs) to work alongside and provide consistency across all Viridian Directorates. Category management is a strategic approach to procurement, which organises resources to focus on specific operational areas. Additionally, members of the corporate procurement team become subject matter experts, with a greater, in-depth knowledge of a related range of products and services. An example of this is the relationship between the PBPs and HR which has enabled a much greater understanding of HR s requirements. In addition, a Meet the Buyer day cut through a lot of unnecessary deliberation on the scope of the specification for new recruitment arrangements. PBPs manage an end-to-end contract process, incorporating market research, price benchmarking, tendering and contract and supplier management. This way, we can identify opportunities to reduce waste, improve efficiency and ensure our contracted providers undertake continuous improvement throughout the life cycle of their contract with us. We reported to the Board in November 2014 on progress against the savings objective outlined in the Procurement Strategy We were able to confirm that the lifetime savings achieved on a number of major contracts were 4.6 million. The largest savings were achieved on the utilities contracts, where prices were fixed to hedge against market price increases. We also achieved significant lifetime savings of 1.2 million on the purchase of photocopiers The savings target for 2015/16 is 500,000. This relatively low figure reflects the need to embed this new way of working and the time required to implement category management across the entire business. During 2015/16 we will be retendering energy contracts (gas and electricity) with further annual savings anticipated of 180,000. We also anticipate making savings through re-tendering the Corporate Travel contract. Focus on Core Business In 2014/15 we made significant progress with our plan to exit from Supported Housing through a mixture of closures and transferring services to specialist providers. In some cases we sold the properties and capital funds were reinvested in new developments. The direct provision of care services is not in our future strategy and in 2014/15 we had intended to transfer our remaining Private Finance Initiative (PFI) Care facility to an alternative provider. At a late stage, negotiations broke down as the proposed transaction would have left Viridian with a significant amount of collateral risk post transfer. It did not make commercial sense for us to transfer the income and control of the contract to another provider while still retaining significant risk. Our longer term strategy includes the transfer of the PFI contract. However, we feel we need to create a period of stability for the service, as such we will not be making any active attempts to transfer the PFI in 2015/16. 30

31 Welfare Benefits Reform Housing Options Welfare Reform is a significant risk both to our residents and us. We have written to all our residents to make them aware of the potential impact Universal Credit may have on their finances. We have a section on our website giving general advice on Welfare Reform and a Financial Inclusion team who provide expert one-toone help for those on benefits (see Financial Inclusion section). We decided early on to visit all residents affected by the under-occupation Housing Benefit deduction (also known as the bedroom tax ). Having created a new role to help support our residents who wish to move, we held a series of Get Moving events. These helped customers publicise and find property exchanges so they can move to more appropriately sized housing. Between the pilot which started in November 2013 and March 2015, 81 moves took place: 43 were overcrowded households, 25 under occupying (21 were affected by the bedroom tax) and 13 others moved due to medical or other reasons. Over 300 customers have received housing options advice. Additionally, the pilot reduced transfer waiting times from four years to four months. We have carried out some analysis and found that arrears for under occupiers helped by the post reduced by over 250 per person. We surveyed the residents we helped move home under this scheme: 100% said they were happier in their new home 87.5% said their new home suited their needs better 87% said they felt less stressed after moving 79% said they were helped to make the best move 62% said they felt healthier in their home Legal Services We have an in house Legal Services team which provides clear VfM on a day-to-day basis. The estimated hourly charge for our in-house team is 35, compared to the majority of external solicitors who charge between 150 and 300 per hour. Accordingly, if external solicitors were instructed in respect of all housing management issues presently dealt with in-house then a legal spend of between 1.5 million and 3 million would be required. By way of an example, we presently have a substantive case which the Legal Services team have spent 232 hours on. The internal charge would be 11,610 whereas external solicitors would have charged in the region of 58,054 plus VAT. The Housing Association Legal Alliance panel (of which Viridian is the founding member) has recently been re-procured. This gives us savings of around 25-30% compared with off-panel solicitors and provides us with savings in terms of free training which, for 2015 alone, has saved us 6,130. Tenancy Fraud During 2014/15, we returned 41 properties to social use as a result of our significant success in combatting tenancy fraud and as a result we have been able to house an additional 234 individuals. Using the sector accepted cost of approximately 130,000 to build a new property; this represents a saving of over 8 million in 2014/15. 31

32 The majority of possessions obtained by the Tenancy Fraud Investigators who work within Legal Services are gained without recourse to litigation. When possession proceedings are necessary, our in-house solicitors conduct the entire case from drafting to Court hearings. We have continued to be successful in obtaining Unlawful Profit Orders (the profit achieved through illegal subletting). We recently received an Order for 20,000. Also, if we are voluntarily given possession of a property that we know has been sublet, we nearly always issue a claim for a monetary judgment for the unlawful profit. We are currently pursuing four such cases. We also pursue any costs orders awarded to us as a result of unlawful occupancy. We steadfastly pursue such costs orders and, for example, one occupant has been ordered to pay us 13,259. Energy Advice Within our Property Services department, we employ an Energy Advisor who provides free energy saving advice to our customers. The Energy Advisor attends customer events, visits customers in their homes and gives tailored energy saving advice. Customers can potentially save on average 130 a year on their fuel bills. In 2014/15 the Energy Advisor helped 124 customers (compared with 78 in 2013/14), saving a potential 16,120 in fuel bills (compared with 10,000 in 2013/14). In addition to working with our customers, our Energy Advisor trains colleagues so they can give energy saving advice to our residents. Before creating this position, we were paying external consultants approximately 1,000 per training session. Now we are able to provide this training in house, we can tailor it specifically to Viridian s needs at no additional cost. In 2014/15, the Energy Advisor trained 27 colleagues. Due to the success of this service, we have recruited two Energy Advisor Apprentices. Last year, we installed external wall insulation in Mrs Scott s home. This led to a 35% reduction in gas consumption over the year and a saving of

33 Social Impact We see social impact as giving people access to the opportunities and resources to help them do more for themselves and change their lives in positive ways. We have invested in an in-house Social Impact team targeting issues around employment, financial inclusion and tenancy sustainment. HACT (Housing Associations Charitable Trust) Evaluation We have adopted the HACT approach to evaluating the social impact of our projects. An impact valuation statement gives a view of social impact related to a specific activity or programme of activities. It is difficult to measure everything that may influence people s lives and this method seeks to give a financial value as a simple indicator of the effect these activities have had. The following table shows examples of some of our social returns (based on the HACT Wellbeing Measures): Project HACT Definition Expenditure to deliver ( ) Social Impact ( ) Budget: Impact Ratio Regular Volunteering Volunteers at least once per month for two months 31, , Volunteer training General Training for Job / Vocational Training 36, , Digital Inclusion Employment Programme (not part of volunteer programme) Employment (FT) Early Tenancy Service Regular access to the internet General Training for Job / Vocational Training Moving from unemployment to full time employment Financial Comfort / Debt Free / Access to Internet / Able to insure Home / Relief from being heavily burdened with debt 112, , ,540 72, , , ,000 49, Resident Associations Active in tenants group 5,784 78, Healthy Eating Member of Social Group / Regular Volunteering 3,175 40, Total 272, , Using these ratios we have calculated for every pound spent on community initiatives during 2014/15, we generated 3.70 in social value. This is significantly better than in 2013/14, where our social impact generated 2.12 for every pound spent. Employment In September 2014, we appointed an employment support officer, who has developed partnerships with other providers. In the year, they have achieved the following: Helped 15 residents into employment Improved skills by providing training to 62 residents Organised one apprenticeship with an external company 33

34 Volunteering Volunteering is an important part of our social impact offer; it increases a person s confidence so they can play a role in the wider community or help them into training or employment opportunities. By the end of 2014/15, we had registered 460 volunteers. Of these 128 were new registrations who had not volunteered before. In total we provided 159 volunteer placements in the period. Financial Inclusion We have a dedicated Financial Inclusion team who advise customers about income maximisation, housing benefits, welfare benefits and energy cost savings. The Financial Inclusion team aims to help customers manage their finances better, reduce rent arrears, and ideally avoid getting into arrears in the first place. The team achieve this by helping customers to: understand and adapt to the welfare benefit reforms maximise their income increasing the total amount of money coming into the home claim the appropriate benefits access independent and free debt advice services save on utility bills This has a direct positive financial impact on residents and enables them to successfully manage their finances, ensuring they remain independent and are socially included. The Financial Inclusion team worked with 1,795 customers in 2014/15. Customers had an increase of 331,000 in personal benefits, contributing to their improved financial and well being. We would only evict a resident as an absolute last resort, when all other attempts to resolve a resident s inability to pay their rent have been exhausted. At Viridian, we work very hard to make sure our residents stay in their homes, and over the last five years we have dramatically reduced the number of residents we evict. On average, it costs housing providers 7,000 to evict a resident. So by helping people receive their full benefit entitlement, we not only help people keep their homes, but we reduce spend on court costs and associated void loss. Up until 2011, we would evict approximately 50 people per year. Since then, we have brought this number down and in 2014/15, we evicted seven people at a cost of 49,000. We can think of this in terms of saving over 300,000. For 2014/15, this created an estimated total impact of financial inclusion intervention, including the impact on the reduction of eviction levels and the resulting costs, of 632,000. The Financial Inclusion Team represents outstanding VfM. The service costs 310,000 per year to run. Considering the increased income for residents and potential savings for Viridian, the spend: return ratio of this team is 310,000: 632,000 or 1:2. 34

35 Supporting residents via the training, education, employment and emergency fund We recognise that supporting individual customers to improve their employment opportunities and ability to maintain their tenancy can be further enhanced through small grants. This can solve practical issues such as purchasing course books or an interview outfit through to larger items like payment of course fees. In the year we provided funding for the following: 40 successful applications to assist with emergencies = 18,571 5 successful applications to assist with work related training = 1,920 8 successful applications to assist with furthering education = 3,184 Total amount awarded = 23,747 Aids and Adaptations We deliver our Aids and Adaptations service through a mixture of labour-only sub-contractors and external contractors. We use specialist teams to work on less common adaptations such as stair lifts or ceiling track hoists. We set an annual budget of 300,000. In 2014/15 we spent 318,000 and benefited from approximately 46,000 in Disabled Facilities Grant from local authorities; an increase on 2013/14, when we claimed 30,000. Collectively we helped 295 people and provided a range of facilities from grab rails to level access showers and stair lifts. Over 99% of our customers who received works said they were satisfied with the quality of adaptations provided. Mr Perryman s Occupational Therapist (OT) requested we reconfigure his bathroom and create a wet room to allow him to shower with ease. We worked closely with Mr Perryman and his daughter, as well as his OT, to design the wet room to allow him to use it comfortably and offer him some independence in his daily routine. Once the work was complete, we were able to reclaim half of the 5,200 cost from the Local Authority s Disabled Facilities Grant. 35

36 Looking to the future We have made some significant VfM gains in 2014/15. We acknowledge there is room for improvement and there will be additional financial challenges as a result of the proposed rent reductions, revised minimum wage and reductions in benefit levels. VfM has become more than a regulatory and best practice endeavour. It is now a fundamental requirement for future success, particularly for organisations that wish to continue to grow and develop new homes. The recent Budget announcements will make delivering our business as usual activities more challenging. This will put additional pressure on Viridian and on our customers, particularly those who are older, vulnerable or on limited incomes. Whilst there is a risk these challlenges could distract us from our journey of improvement, it has reinvigorated our commitment to finding more innovative ways to deliver effective, well resourced, high quality services for those in need. Our current Corporate Strategy is coming to an end in 2016 and we are developing a new one to take us to It will take into consideration our current position as an independent organisation, and the Chancellor s recent Budget announcements that will impact organisations operating in the social housing sector. As part of the new Corporate Strategy we are developing a Change Roadmap for Viridian. This will build on our previous Target Operating Model (TOM) work and our preparation for partnership (Altogether Better Programme). This roadmap will prioritise actions around mitigating risk, addressing operational inefficiency and improving customer experience. It will develop a fully costed business case, which will detail the costs of the Change Programme and the recurrent annual benefits (both financial and non-financial) that will accrue. We have designed a three-year programme of business improvement projects to support this. These include implementing a geographic based area model of service delivery, revising and enhancing our IT infrastructure, significantly broadening our online access for customers and developing a robust approach to outsourcing. VfM is a key component of the assessment of each project within the programme. 36