VALUE FOR MONEY (VFM) STATEMENT SUMMARY 2015/16

Transcription

1 VALUE FOR MONEY (VFM) STATEMENT SUMMARY 2015/16

2 Approach Our approach to Value for Money (VFM) SUCCESS IN VFM Success in VFM and efficiency is the same as success in achieving our strategic objectives. These objectives help staff, board and customer groups achieve our business goals on a daily, weekly, monthly and annual basis: Deliver great value Provide places where people want to live Driven by board, delivered by everyone VFM can be defined as the optimal use of resources to achieve the intended outcomes. The Westward Board drives VFM via our VFM Strategy; it is embedded within our culture via our strategic objective to deliver great value and our core value to be smart and lean. VFM assurance Our approach Everyone is responsible for VFM; our board, staff, customers and partners use VFM principles to: make the best use of resources and create new resources get the balance right between performance, satisfaction and cost get the balance right between investing in new homes, existing and new services, and social investment We have processes in place that provide assurance that VFM is embedded, managed and monitored throughout the organisation from our customers to the board. We are compliant with the social housing regulator, Homes and Communities Agency s (HCA), Value for Money regulatory standard. More detailed evidence is contained in our full VFM self-assessment on our website at Expand our range of homes and services Be a good employer 2

3 Financial strength and viability Investing our surpluses in the future Westward is a charity and does not pay dividends to shareholders. Some housing associations spend all their income each year and have no reserves. Our board prefers a financial model that generates a surplus each year which is used the following year to: ensure our long-term financial viability build new homes It has been another successful year for Westward with an above-forecast surplus of 6.3m, due to: staff work to control costs and collect income good performance on voids and bad debts repay loans reduce the amount of loan funding required Help to Buy South West surplus being higher than budgeted low interest rates on our loans How was each 1 of rent spent? 2015 figures in brackets Loan Interest 20p (2015: 29p) Involvement 1p (2015: 2p) 1 ONE POUND Housing 19p (2015: 22p) Income in millions Rental Home Disposal of Property Grant New Loans Repairs 22p (2015: 25p) Improvements 38p (2015: 29p) Turnover Key financial performance indicator Expenditure in millions New Homes Existing Stock Other fixed assets Interest paid = 41.6m 2015 = 38.5m

4 STRATEGIC OBJECTIVE 1 Strategic Objective 1: Deliver great value The following sections of our VFM statement summary show how we have achieved VFM within each of our strategic objectives. A traffic light is shown against each area and/or VFM ambitions Income management We aim to ensure that rent payment arrears are low and that families are getting the welfare benefits they are entitled to. Our two financial inclusion officers have helped 629 households in financial difficulty by increasing their incomes by a total of over 100, households in financial difficulty helped by raising their incomes Cashflow and liquidity We have strong Treasury Management Strategy. 66.6% of our loans are at a fixed rate. New homes are mainly paid for by a combination of savings and grant Financial principles Our strong and focussed financial principles include that all services are to break even unless there is a transparent and clear reason agreed by board. VFM ambition: Achieve targets on rent arrears, bad debt and voids 1.3% 1.9% 20 DAYS net rent arrears (target under 2%) general needs and older people net rent arrears (target under 1.8%) supported housing to re-let properties (target 20 days) Although former tenant arrears are rising, it is at a significantly reduced rate due to only 19 evictions compared with 28 the previous year and some property disposal or change of use. Performance Indicator Former tenant arrears , ,607 4

5 STRATEGIC OBJECTIVE 1 VFM ambition: Become one legal entity Tarka, Westcountry and Westward amalgamated in June 2016, creating year-on-year direct savings plus efficiency savings from operating as one organisation since k VFM ambition: Assess whether board papers can be provided electronically Software available and implementation project in 2016/17 business plan Central services We invest in back office teams so they can properly support the frontline teams. IT costs have risen due to the introduction of mobile working and a better telephone system. Central costs rose due to one-off costs of amalgamation and employment resolution. 3,000 estimated savings a year plus reduction in paper and printing Service area (Housemark benchmark) Cost per user How we did (1-4 scale) Cost per user How we did (1-4 scale) Premises (per office user) 3, ,850 2 IT and communication (per IT user) 3, ,151 2 Finance (per employee) 2, ,720 3 Central (per employee) 7, ,

6 STRATEGIC OBJECTIVE 2 Strategic Objective 2: Provide places where people want to live VFM ambition: Delivery of board's asset stock priorities for 2015/16 A variety of commercial and domestic properties were too expensive to maintain or not fit for purpose. Schemes and individual buildings, have been identified and sold on the open market, refurbished and re-let or had their use changed. Our housing service costs 2015/16 Estate services 170 Housing management 476 Repairs 1,069 Improvements & maintenance 2,251 How do our homes measure up? Our 7,500 homes are our main asset, but more importantly they are our customers homes and we need to ensure they meet the Westward Standard. Board consider the asset management programme each year and if a home is too expensive to maintain, their options are: selling when it becomes vacant and reinvest in new homes or better services redeveloping the property changing the use to something more suitable Investing in homes 1.5m extra was invested to achieve the Westward Standard improvements. In we made improvements to 1,400 homes. 6

7 STRATEGIC OBJECTIVE 2 Green energy We commissioned an independent report to identify carbon and energy efficiency targets: VFM ambition: Identify carbon reduction target and deliver against target Target of 2.9 tonnes of CO2 per property, per year by 2019/20 VFM ambition: Identify energy cost per property reduction target and deliver against target Target of 607 per property, per year by 2019/20 In 2015 photovoltaic solar panels were installed at our Newton Abbot office; they will generate 19,000 of income over 20 years. They will pay for themselves in 6.4 years Per year they will save over 47 tonnes of CO 2 To mitigate customers' fuel poverty and address the need to reduce the carbon footprint of our homes; since April 2011 we have spent 4m WESTWARD FUNDS m = 15.8m EXTERNAL FUNDS Delivered 898 enhancements such as air source heat pumps, insulation and solar panels. Improvements Programme Kitchens Bathrooms Heating Roofs/chimneys External painting External repairs* Doors Windows Completed

8 STRATEGIC OBJECTIVE 2 Repairs Our main repairs contractors are our own Westward Property Services (WPS) and Spectrum. We include our own Westward Property Services costs, but other social landlords do not when benchmarking. This means we can appear more expensive. Performance indicator No. of repair jobs completed WPS (North Area) 5,120 (previous year: 6,975) Average job cost 128 (previous year: 126) Average cost per property Average no. jobs per property Spectrum (West & South Areas) 13,935 (previous year: 12,310) 128 (previous year: 146) Managing our estates Our Housemark comparison group for successfully resolving anti-social behaviour (ASB) ranks us 23 out of 73 housing associations (we were 12 out of 38 in 2015). 421 new ASB cases 2015/16 (364 in 2014/15) 448 closed, resolved ASB cases 2015/16 (348 in 2014/15) 5 closed, unresolved ASB cases 2015/16 (12 in 2014/15) Managing empty properties The quicker we turn around an empty property, the quicker a family has a home and rental income is received. How we measure up in benchmarking group of similar landlords Rent loss due to empty properties as a % of rent due Average cost of a void repair Average re-let time in days (standard re-lets) No. of tenancies terminated as a % of properties managed Result How we did (1-4 scale) 0.61% 2 1, % 2 8

9 STRATEGIC OBJECTIVE 2 VFM ambition: Achieve actions from customer reviews and mystery shops Recommendations from Mystery Shopper housing services and income services reviews adopted Recommendations from Scrutiny Group service charge consultation review adopted Social enterprise Jigsaw social enterprise which helps clients move towards independence and work through furniture restoration, moved to new premises that provided better VFM as a deficit of 86k hit the business plan. Support services 75% of our support clients are Westward residents We provide 24 services ranging from homelessness prevention, mental health accommodation and young parents support. 2m Support service turnover (2.7m in 2015) We work in partnership to provide excellent quality and value services e.g. a Homeless Hospital Discharge Service based at Torbay Hospital will help prevent emergency presentations at the local authority s housing department and enable the more efficient use of NHS hospital beds by reducing delayed discharges. Customer involvement and community investment Customer involvement was costing 1,000 a year per involved customer. Working at a more local level and taking advantage of free and low-cost training has reduced the budget by 25,000. The co-regulation customer scrutiny group will focus on ensuring decision-making is influenced by customer views and that expected results are monitored, it will be known as the 'Customer Senate.' Customer investment action plan The plan has 4 priority areas: employment, skills and training poverty and inclusion community resilience and environment health and wellbeing 9

10 STRATEGIC OBJECTIVE 2 Customer service The number of complaints resolved at stage one was 95% (previous year: 96%); this benefits customers and reduces the amount of time staff are spending dealing with complaints. VFM ambition: Deliver the customer service project Set up WISE project ready for launch in June Completed and further project in 2016/17 Institute for Customer Service training pilot, action plan and report Work continues in 2016/17 as Customer Relationship Project During 2015/16 a team of frontline staff developed a customer incentive scheme to recognise and encourage positive behaviours. They identified VFM opportunities such: 100,000 lost from missed servicing appointments 250,000 cost of dealing with tenancy breaches 3,000 customers owing 500 or more in rent We launched the Get Wise initiative to reward customers paying rent on time and via direct debit, keeping gas servicing appointments and with no anti-social behaviour. The cost of this scheme is funded by the savings identified plus 61,000 from the customer involvement budget. VFM ambition: Pilot customer survey process using independent agency Pilot of 100 surveys a month on completed responsive repairs 94% happy with quality of the repair 83% confirmed repair was completed at first attempt As the pilot survey was successful we will continue with repairs surveys and carry out further independent customer insight research to measure more VFM opportunities. 10

11 STRATEGIC OBJECTIVE 3 Strategic Objective 3: Expand our range of homes and services A new home not only helps the individual or family that is housed; every affordable home built creates three jobs in the local area. Every 1 of public investment is matched with 6 of Westward s own resources. There has been a significant increase in build costs locally due to increases in the cost of materials and labour shortages. However, our build costs stay competitive. We minimise costs by: using 200k profit from Horizon Homes and Help to Buy agency building homes within easy reach of our services using our in-house procurement expert and a shortlist of contractors for best quality and cost robustly managing and monitoring contractors Making the most of it: working with local people to ensure we are building the right homes in the right place letting new homes at social, affordable or intermediate rent levels keeping service charges as low as possible working with applicants for low cost home ownership to ensure they can afford their new home and maximise the income to us 1,222 Westward s average build cost per metre 2 1,492 South and South West region s average build cost per metre 2 1,548 Partnership South West consortium s average build cost per metre 2 25,000 saved per year by being in Partnership South West building homes with affordable running costs ensuring homes generate enough income to cover costs over the life of the property ensuring we can use new homes as security for loans 11

12 STRATEGIC OBJECTIVE 3 VFM ambition: Deliver HCA affordable homes programme investment 84m homes completed at a cost of 8.4m (including external subsidy of 884k) 168 homes anticipated to be built in 2016/17 We always check on customer satisfaction with the quality of a new home. This year we had a drop in performance as five households expressed dissatisfaction with their new home. We have investigated the reasons and will consider the feedback in future developments. How we measure up in benchmarking group of similar landlords Result How we did (1-4 scale) Result How we did (1-4 scale) % of residents satisfied with quality of new home Standard units developed as % of current stock

13 STRATEGIC OBJECTIVE 3 Westward Property Service (WPS) Our direct labour organisation increased its turnover and delivered a surplus, although below target. During 2016/17 we will continue to review bringing services in-house to become more efficient and save VAT, and seek new partnerships (such as the existing gas servicing partnership). Turnover 2014/15 (actual) 4,228k 2015/16 (target) 6,184k 2015/16 (actual) 8,179k VFM ambition: Deliver first phase of handovers on open market scheme at Follaton Surplus 69k 163k 113k First handovers at a 60 home joint venture Horizon Homes Our company, Horizon Homes, builds houses to sell on the open market and then any profit is used to help build affordable homes or deliver improved services. The target is to make 3.4m profit by 2023, which could build 38 affordable Westward homes. 13

14 STRATEGIC OBJECTIVE 3 Strategic Objective 4: Be a good employer VFM ambition: All staff structures kept under review to meet the changing economic climate and ensure they are efficient and effective HR restructure resulted in recurring salary savings of 35,000 whilst providing a robust strategic HR focus at Executive level Housing restructure reduced 4 area managers to 3 and has resulted in a saving of 24,000 and a more holistic approach to the customer 2015/16 staff turnover 19% (previous year: 26%) Human resource (HR) management We are a major regional employer with 368 people or 292 full-time equivalent This includes three full-time apprentices and one graduate through the CharityWorks scheme. Our annual staff costs are 9m which is 29.8% of operating costs (previous year: 8.3m at 33.3%) Staff pay is market tested with a bonus incentive scheme for WPS based on performance. Sickness absence average rate per employee: 11.3 days (target 8 days). This equates to 3,272 working days lost at a cost of 280,000. Our health and wellbeing agenda will be further developed to help reduce absence. VFM ambition: Implement the People Strategy All actions achieved HR policy review is a rolling programme Our test the temperature annual survey looks at the level of employee engagement, understanding and satisfaction and we were pleased with the improvements: 74% response rate (last year: 60%) 93% agree they clearly know Westward's core purpose (last year: 91%) 95% satisfied with their current role (last year: 76%) 14

15 VFM Our VFM track record VFM savings register We keep a register of savings made through careful buying of goods and services and more effective use of time and resources. Year VFM savings target VFM savings achieved 2015/16 750, ,114 VFM ambition: Achieve actions from lean reviews 2014/15 750, ,913 Track record Board agreed 22 VFM ambitions this year, of which 19 were fully achieved and 3 partially achieved. Some of these are highlighted in this summary. We have a strong history of adapting to change, while providing positive results for existing and future tenants that fit with our business objectives. ¾ lean reviews completed on target The challenge of a four year rent reduction has been tackled initially by making sure we don t increase our overall budget. VFM ambition: Achieve procurement targets, including VFM cashable savings of 750,000 Advantage South West procurements club savings: 450,000 VFM savings: 850,114 69% of lean review performance measure on target 15

16 VFM Our VFM ambitions for VFM ambitions for 2016/17 When Strategic Objective 1: Deliver great value 1. Achieve targets on rent arrears, bad debt and voids March Review benchmarking results and consider appropriate action October Deliver project to review performance indicators and benchmarking March Achieve VFM cashable savings of 750,000 March Deliver project to provide board papers electronically March Deliver Target Operating Model project March 2018 Strategic Objective 2: Provide places where people want to live 7. Deliver community investment action plan (including measuring and monitoring our social value impact) March Extend customer survey process using independent agency March Achieve actions from customer mystery shops March Deliver 20% stock inspection and 100% by 2018/19 March Achieve carbon reduction target of 2.9 tonnes of CO 2 per property per year March Achieve minimum SAP rating (energy efficiency) of 55 per property March Deliver board s asset stock priorities for 2016/17 March Review Asset Management Strategy and introduce asset management software March Deliver and evaluate WISE project March 2017 Strategic Objective 3: Expand our range of homes and services 16. Deliver Westward Property Services 3 year business plan March Deliver final phase of handovers on open market scheme at Follaton March Deliver HCA affordable homes programme investment March 2017 Strategic Objective 4: Be a good employer 19. Keep all staff structures under review to meet changing economic climate and ensure they are efficient and effective March Achieve annual voluntary staff turnover rate of no more than 12% March Achieve annual sickness target of no more than 8 days March

17 PERFORMANCE How do we compare to others VFM ambition: Review benchmarking results and consider appropriate action project to review performance indicators and benchmarking We use the national Housemark benchmarking club to see how well we perform compared to other social landlords and to identify areas for review and improvement. Data is from up to 87 social landlords for One Westward One of our big achievements this year was to complete our amalgamation. Some information shown here still relates to Tarka and Westcountry which were part of our former Group structure. Comparative cost per unit Westcountry Westward Tarka Other housing associations upper median lower Management , Service charge Maintenance 670 1,070 1, Major repairs 640 1,620 1, Other social housing Headline social housing ,030 3,710 4,300 3,550 3,190 17

18 Producing this statement Our Value for Money (VFM) Statement has been developed in consultation with staff, board and our customer Scrutiny Group. We welcome any feedback or queries on our approach to VFM or our general strategy; please contact or Felicity King, Executive Director, on The full VFM statement is on our website: Westward Housing Group Ltd (an exempt charity - Community Benefit Society no. 7350) with Horizon Homes and Help to Buy South West. Westward Housing Group Ltd, Templar House, Collett Way, Newton Abbot TQ12 4PH (registered office); and Tarka House, Clovelly Road Industrial Estate, Bideford EX39