NCHA Value for Money Self Assessment 2017 CONTENTS. 5 SECTION TWO Our approach to assessing and delivering VFM

Transcription

1

2

3 CONTENTS PAGE 4 SECTION ONE Introduction 5 SECTION TWO Our approach to assessing and delivering VFM 8 SECTION THREE Delivering value for money through more homes 13 SECTION FOUR Delivering value for money through great services 17 SECTION FIVE Delivering value for money through better lives 21 SECTION SIX Added social value and return on investment 23 SECTION SEVEN Looking forward: lessons learned and our plans to improve

4 SECTION ONE Introduction The Nottingham Community Housing Association group of companies is an independent housing and care organisation working across the 6 counties of the East Midlands in 31 local authority areas. STRATEGIC REPORT OF THE BOARD (continued) We have been providing housing and care for over 40 years and currently manage over 9,000 homes as well as providing care and support services to the most vulnerable in our communities. We currently employ in excess of 1,100 staff, have a turnover of over 82m, reserves of over 82m and an asset base of over 500m. Over the next 5 years turnover is expected to grow to almost 100m, reserves to over 100m and our asset base to almost 700m. In achieving this we will increase local employment and be able to provide great services to families in just short of 10,000 homes. Subject to the challenges in the care and support market we also aim to increase the numbers of vulnerable people who receive our services across the communities within which we operate. NCHA is proud of its legacy and reputation as a quality provider of Care and Support services and are committed to continuing to develop these services where it is possible to guarantee quality at the price offered from Local Authorities. We are committed to providing great services to all of our stakeholders and partners and aim to consistently achieve satisfaction ratings amongst our tenants, leaseholders and service users of more than 90%, 87.5% and more than 95% respectively. We recognise that external factors may affect results but we will strive to achieve these high levels of satisfaction. In delivering our corporate objectives we will have improved the lives of our customers. Our group of companies is wholly owned or controlled by Nottingham Community Housing Association Ltd, a traditional, independent, charitable social landlord registered under the Co-operative and Community Benefit Societies Act Subsidiary companies enable the Group to deliver all forms of housing and care and through our commercial subsidiary Lets Select Ltd, to undertake profitable activity, which assists the work of the group. We are committed to using this financial strength to add social value by, amongst other things, creating training and long term employment opportunities in the communities within which we work. Our key priority is to protect our viability (V1) and maintain our governance (G1) Homes and Communities Agency (HCA) regulatory ratings. Our mission is to provide high quality, low cost housing, services and support for more people in need. We concentrate on people not places and cover housing, care and community in our work. In addition, we have a commercial purpose, which we deliver via our subsidiary Lets Select Limited, which is to carry out business as a general commercial company to make profits to gift aid to NCHA. 4

5 SECTION TWO Our approach to assessing and delivering value for money The Board directs NCHA s delivery of effective and efficient working practices, ensuring value for money for its customers in accordance with NCHA s Procurement and Value for Money Strategy. Within this strategy specific efficiency targets are set and the successful delivery measured each year within reports to Board. These reports detail financial and non-financial gains including added social value. The non-financial and added social value gains have been recognised through the improvements in customer satisfaction. These are detailed in later sections of this self assessment. In financial terms, tangible gains of over 1m have been made each year for a number of years. These have contributed towards increased surpluses for the Group. A summary of the targeted and realised financial gains are detailed below: Planned and Realised Gains Planned Realised /14 1,464 1, /15 1,247 1, / /17 1,123 1,006 1,431 1,772 Planned & Realised Gains 2013 to ,840 6, /18 Planned Gains 671 The table above shows that over the 4 years the gains realised exceed the planned gains in most years and exceed the planned gains across the overall period. The following two tables provide breakdowns of the gains realised in 2016/2017. The first shows nearly 1m of gains identified and incorporated into the budget. The second shows the additional gains identified in the period. Gains Incorporated Into 2016/2017 Budget Review of PST Business Streams Actual Savings 306,980 DMS surplus, works delivered at less than Schedule of rates price under Tendered Framework agreement 412,000 Grounds Maintenance Procurement Care And Support Consultancy Net increased income from external sources by IHT Team Disabled Facilities Grants Managing Recruitment Process & Timing Care And Support White Goods Procurement Efficiencies Fleet Cars Sure Developments 25,000 70, ,000 10,000 7,332 5,000 9,350 5,800 5

6 Sales Service Fee Income IHT 1,000 REVO Kaizen 900 Care And Support Driving Tests 1,890 Additional income for Dialectical Behaviour Therapy (DBT) training for Care And Support 9,500 Total Gains Incorporated Into The Budget = 975,752 Additional 2016/2017 in year gains identified Saving on employee benefits Reduced bad debts ILOP (sheltered) void loss Savings Identified 4, ,000 20,000 Lean Recharges review 1,000 less letters 1,500 Tenant Involvement structure review (less meetings) / Lean admin review 1,000 Implementation of Total Mobile for Scheme Managers has led to greater work efficiencies and removed the need to increase staff despite an increase in Health and Safety activities and properties with communal areas. 30,000 Controlled expenditure and improved, efficient practices in projects 415,978 Reduced bad debts - General Needs 86,999 Reduced void costs - General Needs 70,078 External work and fees to external clients using existing resources 54,000 Total Additional Gains Identified In ,855 Total Gains = 1,771,607 As in previous years further gains have been identified and incorporated into the budget for the new financial year. It is anticipated that over the course of the year, further efficiencies will be identified. This expectation is in line with the experience of previous years. Gains Incorporated Into 2017/2018 Budget Planned Savings Rationalisation of Care and Support phone lines 12,800 PSTs: Extra income without extra expenditure because increased use of tablets has reduced travel time and made more staff time available to take on extra work 7,000 Procurement of all flooring 5,000 Shared ownership re-sales service fee income 16,320 Net increased income from external sources by IHT Team 120,000 Reduced void loss due to Lean efficiencies and void property sales 46,000 Saving in treasury costs arising from the Lean review of sales processes 30,000 6

7 Reduced bad debts due to Lean efficiencies 1,000 Heating team reduction in 3* gas costs from 120 to 100 per property using Lean reviews of planning and appointment processes 130,000 Use of framework procurement of vans for DMS - savings on previous supplier 75,000 Reduction in responsive repairs as per Board 100,000 Reduction in relet plus as per Board 100,000 Utilities brokerage 8,000 Mechanical and electrical anticipated savings 7,000 Lean Recharges review 1,000 less letters 5,000 Tenant Involvement structure review (less meetings) / Lean admin review 3,000 Re-tendering of window cleaning and cleaning contracts 5,000 Total Gains Incorporated Into The Budget = 671,120 NCHA also undertakes pre-project and post-project assessments on major capital investment decisions, recognising through its business planning and budgeting process the opportunity cost of these investment projects to ensure returns both social and financial have been optimised. NCHA manages and monitors the delivery and measurement of value for money across the Group through its Procurement and Value For Money Champions Group, which is made up of senior officers, managers and staff from across NCHA. For the Group value for money is not simply about reducing costs but achieving a balance between costs and quality, with a particular focus on customer needs. The drive is to maximise the use of the Group s assets to deliver social, environmental and financial returns. The opportunities for efficiency come through economies of scale, financial strength, rationalisation, simplification and regulation. Good is not good enough: at NCHA we are driven to improve already good services into great services to help provide better lives for our customers. 7

8 SECTION THREE Delivering value for money through more homes NCHA Value for Money Self Assessment 2017 One of the fundamental parts of the NCHA Group vision has remained consistent for many years: the delivery of more homes. We have maintained a development programme of, on average, in excess of 250 units each year in recent years. From 2016 onwards we have set ourselves a more challenging target programme of 300 homes each year, i.e1,500 more homes planned for the next 5 years. This reflects a development programme of in excess of 3.0% of our existing housing stock each year. We have identified that we can achieve development growth whilst maintaining the Group s viability. As funding from other sources has reduced over the past 5 years from over 50% to below 20% the Association has compensated for this with its own resources. We are investing our cash surpluses from operations. We are also investing proceeds from the disposal of unwanted properties, which is part of our asset management strategy (see below). Overall our own investment is supporting over 50% of the cost of the development programme. This is a substantial increase from the less than 20% share that was contributed five years ago. To achieve this the Association has reduced costs and increased profits, delivering improved value for money, to enable over 14m of its own resources to be invested in new homes in The Association s investment of its own funds in the provision of more homes over the past five years was over 90m. This provides a return on investment in cash terms, based on the investment from the public purse of nearly 220m of SHG, of over 8% per annum. The Association plans to invest 130m of its own funds, including proceeds from property sales, into the provision of 1,500 new affordable homes in the next 5 years. This provides a return on investment in cash terms, on the investment from the public purse of on average over 220m of SHG, of nearly 8% per annum. Asset management A key part of the Group s Asset Management Strategy is to recognise deterioration in the return from individual properties and informed by our Reinvestment Appraisal Model (RAM). This looks at both financial and added social value. Using the RAM we identify properties for sale. For every property we sell we currently deliver 1.8 new homes. This ratio is expected to rise to 3.6 new homes for each property we sell, depending on the implementation of the Voluntary Right to Buy initiative and the level of SHG and other subsidy (the latter two continues to fall). The Group s plans for More Homes over the next 5 years are very reliant on sales of existing housing properties, as well as properties for outright sale from year 2 of the plan through Lets Select Limited. We monitor on a month by month basis the Property Sales market and any downturn in volumes or prices will result in a review of our development plans. The purpose of the following two tables is to demonstrate to what extent NCHA has and then can finance its on-going development programme though its own resources. Development is funded through a mix of loan, grant and our own resources. Loan facilities are in place to be available to draw and a refinancing exercise is currently underway for part of the loan portfolio for the medium term. These tables show grant is a decreasing part of funding development. They also show that we are able to fund an increasing proportion of our programme from our resources meaning the drawing of existing facilities and the arrangement of new facilities can be used later than would have otherwise been the case. This means increasing the use of our own resources means loans can be used to fund more homes at a later date than would have otherwise been the case. 8

9 Research by the National Housing Federation (NHF) demonstrates that each new home built in the East Midlands adds 83,000 (as at February 2016) to the local economy, delivering 1.9 jobs. Based on these statistics the Group s development programme provides around 570 jobs each year and adds nearly 25m to the local economy each year, based on an average programme of 300 units. Over the next 5 years this has the potential to result in 570 permanent jobs, adding nearly 125m to the local economy, based on an average of 300 units a year. 9

10 Through our commercial subsidiary Lets Select Ltd we have built 116 new homes and currently have an ongoing programme, developing additional homes for sale on the open market. Our development and design teams manage delivery of the Group s programme and those of other organisations. The Group s programme has been for more than 250 units a year on average for the past five years. We achieve greater efficiency by utilising their expertise to assist other organisations to develop more homes. The development and design teams are currently working with six organisations, effectively sharing services, with a programme to deliver an average of 150 more new homes for each of the next three years for them having helped some of those organisations deliver on average 100 homes per year for each of the past five years. A key element prior to the Group s investment decisions is a detailed financial evaluation calculating Net Present Value for individual investment schemes and the programme as a whole. In addition each scheme is considered by the operational teams to confirm that the scheme will meet the social need the investment is proposed for. On an annual basis we consider post-project appraisals on the programme as a whole and for individual schemes. We look in detail at how successfully we have delivered both financial value and added social value. As a result of the post-project reviews we are able to evidence that the programmes deliver substantial positive financial value and the individual schemes demonstrate the specific added social value planned and are consistently delivered within the original appraisal budgets. At a global level the Group considers the return on assets by reference to public funds invested in the form of SHG, not just to fund more homes as detailed above, but also in relation to annual surpluses. The Group includes targets in relation to surpluses for quarterly Board monitoring. The current year s surplus demonstrates for NCHA a return of 3.2%. Our current plans for the next five years include the aim to achieve a return of 2.9% each year. Using the HCA s Global Financial Accounts to track NCHA financial performance The Association is a charitable not-for-profit organisation generating surpluses to reinvest in its existing housing stock and in the provision of more homes as detailed above. We manage and monitor certain key financial indicators carefully to ensure we continue to improve our viability. We measure our financial performance against the HCA s Global Financial Accounts. This report demonstrates that the Association is financially sound but with higher loans and gearing levels than the majority of other registered providers. 10

11 The Association has been tracking its financial performance using the Global Financial Accounts since Most of the indicators demonstrate that the Association is just below the median amongst the 50% least profitable, most highly geared traditional registered providers for both profitability and gearing. The HCA has publishes information extracted from the Global Financial Accounts and quantified a Headline Social Housing Cost Per Unit. The median indicator is projected as 3,627 based on the projected 2017 accounts ( 3,570 based on the projected 2016 accounts). This will be updated when the HCA publishes the 2017 accounts. NCHA s cost is 4,903 per unit for 2017 (2016 5,349) showing a significant improvement. The report also identifies the significant additional costs related to the provision of Care and Support. Excluding support costs HCA cpu is 3,139 per unit which is a significant improvement on 2016 ( 3,484). When the HCA publishes the 2017 results it is expected that this improvement will mean that the Association will still be able to demonstrate that it is below the median cost for the sector but has the potential to implement significantly greater efficiencies to achieve the lower quartile costs. Whilst we have maintained our investment in more homes throughout that period, our profitability has increased both in real terms and relative to our peers. At the same time, our interest costs have fallen, and fallen relative to our peers. This clearly demonstrates the successful delivery of our Procurement and Value for Money Strategy over that period. We use Global Financial Accounts information to ensure we optimise our returns from our investment in housing property. The graph below demonstrates how our gearing over the last five years has increased slightly as we maintain our investment in the development of housing properties but has improved marginally in relation to our peers (based on projected figures for our peers) as we have utilised the increased surpluses to invest in more homes and therefore limit the loan finance required, in a period that grant and other capital subsidy has reduced. The surpluses for the sector have been growing steadily and this graph assumes that continues for 2017 for the global accounts, whilst the Association s surpluses have fallen slightly over the period. The gearing figures referred to in the table below reflect the definitions worked to in the global accounts. In the report of the board we refer to gearing as defined by our own covenants which differ markedly from the definition set out below. The definition used in the below is closer to Loans As A Proportion of Housing Property Cost shown in the Five Year Profile below. NCHA s commercial subsidiary, Lets Select Limited, was set up to generate surpluses to gift aid back to NCHA to assist it to deliver more homes in the face of falling grants. In 2017 it generated returns of 11% ( %). Since its creation the company has additionally provided gift aid to the Association and is 11

12 working on delivering the Group s development for sale programme. It has also invested in Access Training Limited with a view to generating further returns which can then be gift aided to the Association. Another group company, Nottingham Community (Second) Housing Association also generates surpluses which are gift aided back the Association. The Group s forward-looking financial targets, as detailed in the Corporate Plan, incorporate growing reserves and viable levels of gearing. 12

13 SECTION FOUR Delivering value for money through great services It is critical for the Group in assessing effective delivery of Value for Money that both cost and quality are measured and that the corporate drivers for specific outcomes detailed in our Corporate Plan are fully understood. Housemark benchmarking To enable the Association to undertake this evaluation we have been members of the Housemark Benchmarking club for eleven years. Throughout that period we have consistently benchmarked ourselves against Registered Providers in the North and Midlands; currently 41 organisations are part of this group. To ensure we can demonstrate quality as part of our evidence for the delivery of great services we rely on survey data which demonstrates that we are top quartile or very close to top quartile in our customers opinion in relation to their satisfaction with those services. The Group publishes its Key Performance Indicators each year in its corporate plan showing past, current and targeted performance. Housemark provides 9 indicators similar to our KPIs and these are replicated below demonstrating our actual performance and how we compare to our peers. Our objective is to be top quartile when measured against all KPIs and the table below evidences those areas that we aim to improve further. Housemark North and Midlands Club Benchmark Comparison 2012/13 to 2016/17 13 Projected Indicator Indicator Indicator Indicator Indicator Overall Satisfaction 91% Q1 90% Q2 90% Q2 91% Q1 91% Q1 Anti Social Behaviour - Satisfaction with Case Handling 78% Q4 79% Q4 85% Q3 89% Q3 89% Q3 Satisfaction With Repairs & Maintenance 87% Q1 83% Q2 83% Q2 85% Q3 85% Q3 Total Housing Management Cost per property 518 Q2 542 Q2 574 Median 579 Q3 579 Q3 Overheads as a percentage of Turnover 10.3% Q1 10.2% Q1 10.2% Q1 10.2% Q1 10.2% Q1 Relet Time - Weeks 3.7 Q3 2.9 Q Q Q Q1 Void Rent Loss 0.70% Q2 0.79% Q2 0.86% Q2 0.51% Q1 0.51% Q1 Total Rent Arrears 4.90% Q2 3.44% Q1 3.36% Q1 3.37% Q1 3.07% Q1 Proportion of Gas Services completed Q Q Q4 100% Q1 100% Q1 Progress has been made in all areas in Top quartile performance being achieved in six areas (2015 two areas). In the other three areas performance also improved in 2016 with the two third quartile

14 satisfaction items making progress on the 2015 results and the increase Housing Management cpu in cash terms is actually a gain in real terms and reflects service priorities. Projected figures are shown for 2017 ahead of the checking, submission and validation process in the summer. It is anticipated that the progress made in 2016 will be built upon. The following two tables show the progress made between 2014/2015 and 2015/2016 compared to our peers. They show the positive direction of travel with indicators moving towards the bottom right good performance quadrant. The following table shows that on the total cost of rent accounting and collection per unit there have been cost increases in 2016 which reflects investment in the Income Management Team. It also shows that the total cost of Anti-Social Behaviour remains below that in 2013 and

15 Analysis of Management Costs Projected Indicator Indicator Indicator Indicator Indicator Rent Accounting & Collection Q Q Q Q Q3 Total CPP ASB Q Q Q Q Q2 Added value to the communities in which we operate Many of the services we provide for our customers result in savings to other organisations that would otherwise have to respond to the needs of members of the public who are NCHA customers: Anti-social behaviour savings for the police Care and Support - savings to the NHS and local authorities In undertaking regular gas servicing of all of our properties we reduce the risk of fires and explosions reducing the costs of the fire service. Improving performance through staff training We use the HACT calculations to quantify social value. 1,032 staff undertook general work related training = 1,617,144 HACT social value Cost of providing all training activities including management and administration costs and qualification programmes = 393 per person We provided 3,881 places for staff on our in-house training programme at an average cost of 38 per place. Courses included leadership and management training and a range of specialist health and social care courses to provide leaders, managers and staff with the skills and knowledge to meet the specific and changing needs of our tenants and service users. Staff completed over 3,200 e-learning courses through our partnership with the Housing e Academy/Virtual College at an average cost of 4.65 per course. E-learning provides an accessible alternative for staff with busy workloads and who work outside of office-hours. It reduces travel time and time away from the workplace and widens access to learning for staff who work at locations that are some distance from our training premises. 68 staff started an apprenticeship = 160,004 HACT social value 33 started another qualification = 37,092 HACT social value 193 staff were undertaking a qualification programme provided through the Association, including 101 staff who were signed up during the year. Providing qualifications for staff helps to improve skills levels, contributes to the retention of staff and builds organisational capacity. Staff also benefit from acquiring a work-based qualification which enhances their skills, knowledge and employability and career prospects. Delivering value for money benchmarked or measured outside the sector Our Care and Support team competes in the open market and has maintained the current level of business for the past five years at close to or above 23m each year. The team are successful only because they deliver consistent high quality services at low cost which enables them to compete for and win new business. Customer satisfaction statistics run steadily at above 97%. There are particular financial challenges in this sector at the moment, but the budget is set to break even in the current year. Care and Support continues to streamline costs and to identify income streams that will enable the business to ensure even better value for money and to deliver a top quality service to vulnerable people. Other teams across the Group evidence the delivery of value for money by competing for and winning new business for design, development, management and maintenance services. The quality of these services is evidenced by the successful continuation of these services in the open market. 15

16 The external prices agreed for work in the open market informs our internal pricing, particularly in Maintenance and Design and Development. This demonstrates the competitive pricing of these internal services. Incorporated into our Corporate Plan are key performance indicators looking forward over the next five years which will require continual improvement in both the costs and quality of our services and will ensure we continue to deliver improved value for money as we deliver better lives to our customers. Understanding our costs A critical part of the Group s approach to ensuring we deliver value for money is being clear on the costs of the various functions within the Group. One element of this is the data we provide and the comparisons we make annually through Housemark but we rely mainly on detailed business centre based budgets and monthly management accounting data, which ensure we fully understand our own costs and in particular the costs that relate to the individual income streams and cost areas of our business. This is particularly critical across our Care and Support contracts where we deliver a significant level of added social value whilst ensuring that the income is adequate to meet the costs that we must incur to deliver great services and better lives. 16

17 SECTION FIVE Delivering value for money through better lives NCHA has for many years funded work to provide much needed aids and adaptations to our customers homes thereby delivering value through contributing to better lives. The main areas of these works are outline below: As local authorities have faced greater budget pressures, they have found themselves unable to fund these works at all or in a timely manner, and so we have stepped in to fill the funding gap to ensure our customers get the facilities they need to maintain a decent quality of life within their own homes. We are currently working with local authorities on leveraging funds to share this cost, targeting 0.1m Disabled Facilities Grants each year to match our investment. With an annual budget of over 0.2m per year we have funded almost 1m of adaptations to help our customers live better lives over the last 5 years, with a further 0.5m planned for the next five years. In the year to March 2017 the 0.1m spend funded 125 separate adaptations. The table below details the expenditure and the type of adaptations undertaken on behalf of our customers Spend ( ) 178, , , ,104 69,900 Minor Adaptations Number Major Adaptations Number Number of Tenants helped by Adaptations Note: minor adaptations are works such as grab rails; major adaptations are works such as level access showers. Our technical services team carries out repair checks for tenants with restricted sight, contributing to better lives. We have identified approximately 59 tenants who have restricted sight and we annually survey their homes in order to help identify areas in need of repair, which we then address. The alternative would be to allow these tenants to live in their homes with the defects that they have been unable to identify. We also undertake smoke detector checks and replacements: we carry out annual checks of smoke detectors as part of the gas service, and replace defective smoke detectors or replace old batteries. Whilst we have no statutory obligation to carry out these checks we feel there is sufficient added value to make this beneficial for our customers, the Association, and ultimately the emergency services - adding broader social value. The alternative would be to leave this obligation with the tenant, potentially placing them at a greater fire risk. Our architects have developed an enhanced property specification to a number of our new build schemes including better lighting in the kitchen, turf rather than seeding in the garden, child/pet-proof fencing rather than chain link, curtain battens above windows and lighting to all car parks. All of this will help towards a better quality of life for our customers. Our maintenance division, part of our technical services team, provides instruction on the use of heating systems. We carry out detailed instructions with our tenants on how to use the heating systems in their homes at allocation and as part of the annual service. This helps our tenants to efficiently use their heating 17

18 system. This is better service for our customers and adds broader social value by improving health and potentially through more efficient use of the heating, utilising less gas and electricity. The team provides an accessible repairs service, and we widely publicise the range of approaches that tenants can take to access our repairs service. In addition, we tend to carry out repairs as requested and very rarely revert to emergency responses only. By adequately resourcing our repairs service, we avoid incurring additional costs. Better lives through energy initiatives We carry out a large range of energy initiatives: Photovoltaic panels (PVs): we have installed PVs to six of our office buildings. These PVs are attractive business opportunities with payback between 7 and 10 years. They also help us to reduce our fuel bills, so that we can invest the savings into more homes, great services and better lives. They also help reduce our carbon footprint by the equivalent of approximately 1.5m car miles over the next 20 to 25 years, which equates to six of the maintenance division s vehicles average mileage for 25 years. The income and fuel bill savings over 25 years will enable us to build extra homes. We have also installed PVs to 179 of our homes. These PVs are expected to pay for themselves in 7 to 10 years, and they also help to reduce the fuel bills of our tenants, making their money go further. We provide home energy advice: we have recently completed our 800 th home energy advice visit. These visits have resulted in approximately 40,000 per year worth of combined savings on energy bills for our tenants and a planet-kindly 109 tonnes of carbon saved. We have also secured 386,000 of energy funding to upgrade 75 of our all-electric properties. Energy roadshows: we deliver regular energy roadshows to help tenants to understand how to save energy in their homes. Light bulb replacement programme: we have delivered a large scale light bulb replacement programme to install energy saving light bulbs to save our tenants electricity so that they get lower bills. Better lives through training One unemployed person recruited though the Nottingham Jobs Fund = 14,443 HACT Social Value Thirty people have moved from unemployment to employment through the NCHA/NJF programme over the last five years = 433,290 HACT Social Value Five Nottingham Jobs Fund staff moved into permanent posts with NCHA in 16/17 Three apprentices moved into permanent posts with NCHA in 16/17 For the past five years NCHA has worked with Nottingham City Council s Nottingham Jobs Fund (NJF) which aims to support local people into employment by providing twelve months work in real jobs with training opportunities. For the first time this has been costed in terms of the social value it adds which amounts to nearly half a million pounds. NCHA created 35 opportunities through the NJF programme for people who were unemployed. Twenty two of these staff moved into permanent jobs with NCHA and a further eight obtained jobs with other employers and three still on programme. These staff were struggling to find work prior to their NCHA/NJF placement. However, since obtaining experience in a real job and then a permanent job and training with NCHA, many of them have become high achievers and show great potential for the future. Our investment in Access Training Ltd, in partnership with Futures Housing Group, assists us in the delivery of added social value and better lives by providing access to vocational training, work experience and employment opportunities. For example NCHA tenants have benefitted from digital inclusion training 18

19 provided through Access Training which has helped them to increase their access to information on issues that directly affect their lives such as employment opportunities and energy costs. In buying a share in Access Training we have changed a private, share dividend distributing company into a social enterprise where surpluses are reinvested in the community. Access is delivering training and learning to 717 learners on a range of programmes including: 63 study programme learners 479 apprentice learners 68 school learners 41 adult learners funded through student loans 43 adult learners funded through AEB 18 employer funded 5 ESF Funded Learners range in age from 14 to 60. They have mixed abilities, and many are achieving their qualifications against the odds. Access also delivers employability programmes for adults, including vocational, job search and life skills to help them move into work. In NCHA and Access developed an accredited programme of employability training for people in NCHA s Young Persons Services to improve their employment prospects and help maintain their access to accommodation and benefits. Volunteering for better lives 2016/17 has seen the expansion of our comprehensive and supported volunteering programme, adding social value and contributing to our vision for better lives. Benefits include; added-value within our services, provision of training opportunities and routes to employment for our tenants, residents and service users and a continued strengthening of our connections to the communities we serve. Our volunteers: Over 40 regular volunteers and student placements, working across three counties and volunteering within Care and Support, Service Improvement and Tenant Involvement. Volunteer roles include peer mentors, gardeners, catering assistants, activity session leaders, befrienders and digital helpers. Over half of our current volunteers are our service users, ex-service users, tenants or residents. In the last 6 months of the financial year, our volunteers and student placements have contributed a total of 7,515 hours. Based on national minimum wage, this represents an estimated economic value of 54,108 We have 37 regular volunteers contributing their time. Utilising HACT s Social Value Bank, a value i is attributed to regular volunteering and therefore represents an additional social value of 111,394 One off volunteers: To strengthen our community connections, whilst maximising the added social value, we have extended our work with local employers and organisations such as the Prince s Trust and in the last six months of the financial year, one-off volunteers have provided a further contribution of 2,724 hours. Based on national minimum wage, this represents an estimated economic value of 19,613 Volunteer tenant and resident panel members: In the last 6 months, our 33 volunteer tenant/resident panel members have contributed 198 hours and using HACT s wellbeing approach have generated 262,581 (Based on an average figure of 7,957 for being an active member of a tenants group) Whilst we recognise that this is not a full cost benefit analysis and that there are costs associated with providing quality volunteering opportunities, this is a key component of our wider commitment to social value. 19

20 Other activities delivering better lives The delivery of added social value, a key element to enable the Group to deliver better lives to its customers, is achieved not in big corporate initiatives or through massive financial investments but often through individual members of our staff doing their jobs well and going that bit further. This report incorporates a number of examples of these activities, regularly recognised and appreciated by our customers through feedback. Clearly each time we house someone in housing need, provide care and support to one of our service users or training to help someone improve their chances of employment or better employment we add social value. These elements of our business and the added social and economic value from these activities are reflected in the National Housing Federation model as detailed in this report. 20

21 SECTION SIX Added social value and return on investment The Group targets the delivery of added social value across all of its operating activities, from setting objectives for new investments in more homes and measuring them on completion, through the delivery of great services measured through our satisfaction surveys to ensure we deliver better lives for our customers. Our 5 main income generating areas are General Needs, Shared Ownership and Care and Support within NCHA, and across the Group, Lets Select Ltd and the Almshouses. We consider the return on investment against these areas measured against the net investment in Housing Properties in the table below: Return on Net Property Assets Invested Total General Needs 2.2% 2.0% 2.5% 2.3% 2.5% 11.5% Shared Ownership 1.6% 0.0% 1.1% 1.1% 0.8% 4.6% Care and Support 4.1% 1.4% 7.0% -11.5% -0.7% 0.3% Almshouses 9.7% 4.5% -1.6% 4.1% 4.6% 21.3% LSL 1.1% 2.2% 0.6% 0.9% -1.0% 3.8% The table above demonstrates how over time each of the main cash generating units contribute to the overall viability of the Group. This also helps inform our decision making processes and future operational plans with regard to these business units. Over the last 12 months and over the next 24 months the intention is to address the losses made by our Care and Support business. We recognise the importance of its Care and Support business - 34% of our turnover - achieving a breakeven position financially, over time, which is a critical mechanism for the Group to deliver added social value across the East Midlands. The care business is currently running at a financial loss supported by surpluses in previous years however Board consider the Added Social Value from this part of our business makes it worth supporting through these difficult economic times until it can return to a break even position. We have considered social return on investment (SROI), including one study which highlights a SROI on investment of more than 5 for every 1 spent on adaptations. These returns are from a range of other services including: reduced need for publicly-funded care home provision saving through increased safety and reduced hospitalisation of tenants saving through reduced need for social care provision saving through reduced need for self-funded care home provision substantial well-being benefits to tenants (such as independence, confidence, autonomy, and maintained relationships). Our recognition of these benefits helps inform our decision to continue our investment in the provision of adaptations to our homes. Our investment in adaptations over the last 5 years of 0.9m potentially adds social value of 4.5m. Where the cost of adaptations is shared with local authorities we are facilitating up to twice this value. Whilst we have not invested in a comprehensive study or a comprehensive mechanism for the quantification of SROI it forms a key part of the decision making in our investment appraisal and review processes and the above list is just a selection of areas in which we recognise the delivery of added social value. A large part of our annual efficiency gains come from our maintenance division, where we saved approximately 0.5m of our general needs maintenance budget in 2017 ( m) as a result of procurement savings and other efficiencies. This saving has enabled us to build an extra 10 homes in the pursuit of the more homes element of our vision. 21

22 We recognise the delivery of added social value: 1. Through direct employment within NCHA We have increased the number of people employed from 882 full time equivalent (FTE) posts in to 884 at the end of the year. This is an increase in the year and almost 30% since 2012 when we employed only 685 FTE staff. The Group now provides employment for over 1,100 staff. Throughout we had 13 or more new apprentice or trainee posts within NCHA. 2. Through indirect employment Jobs created through the provision of more homes: in , 286 new homes were built, creating 341 new jobs, based on the NHF model. 3. Through training, learning and experience Tenants and service users attended and participated in even more training and learning events this year (293) provided through NCHA, including 89 people completing Sound as a Pound financial inclusion training and 46 people completing Digital Access training. We also provided seven school work experience placements and 10 placements for students in higher education. 717 learners have received accredited training through Access Training. This included 52 NCHA staff who were enrolled on apprenticeship programmes, tenants, service-users and others in the communities we work with. Accredited programmes improve the potential for employment for those without jobs and the potential for progression, increased earnings and maintaining employment for those already in work. This approach has been demonstrated by the success of people moving into work with NCHA through our Nottingham Jobs Fund programme. 1,032 staff completed work-related training courses, 293 staff were enrolled on qualification programmes and 34 staff completed a qualification. This benefits NCHA in terms of organisational expertise and capacity, as well as staff retention. Staff in turn benefit from having enhanced skills, increasing their career prospects and employability. 4. By addressing anti-social behaviour The team achieved 75% satisfaction against a target of 80%. 5. By meeting the needs of our customers for aids and adaptations We provided 147 adaptations in at a cost to NCHA of 0.1m. 6. By providing over 9,000 homes at a decent standard 7. By providing energy saving and green initiatives These save our customers money and reduce damage to the environment. 8. By providing social care and support to over 1,800 customers 9. By letting over 614 (General Needs) homes each year to people who needed them across the communities in which we operate 22

23 SECTION SEVEN Looking forward: the lessons we ve learned and our plans to improve. NCHA continues to strive to do more and do it better. A key mechanism to enable us to achieve this is our Procurement and Value for Money Strategy. This strategy, which details our approach to the delivery of value for money, is reviewed annually. The coming year s objective is to deliver a number of improvements recommended by an independent consultant, Xantive, who reviewed the Group s procurement approach in This will enable us to achieve greater savings through an improved approach to procurement, whilst improving controls. NCHA has a good knowledge of its assets and liabilities utilising its Reinvestment Appraisal Model to identify the financial and non financial returns on its properties and schemes to inform investment decisions. Over the coming year we will be extending the use of this model to inform the LIFE (Lead, Influence, Follow or Exit) model we use in looking at our asset holdings in particular geographical areas within which our business operates. Having implemented our Asset and Liability Register in 2016 we have two key projects working together to ensure we know our assets and expand the asset and liability register. Both these projects will assist us in the delivery of our current Asset Management Strategy and its future development. A key element to ensure we deliver our five year Corporate Plan, including the improving cost and service standard KPIs, is our improvement planning process. This will be delivered in the coming year, utilising the lean approach across the Group, through detailed Departmental Operational Plans (DOPs), each of which recognises the underlying requirement to deliver value for money including added social value. A stated target of our lean approach is to achieve efficiency gains of up to 0.5m each year over future years. Our Care and Support business faces tremendous pressures resulting in losses in 2015/2016. We will reduce the losses in the short term and achieve break even within the next 3 years. We are using the Housemark Dashboard, detailed above, as one of the key indicators to evidence our successful delivery of Value for Money. We have one indicator, responsive repairs and void works, demonstrating poor performance. Our objective is to have all indicators demonstrating good performance with the majority also demonstrating low cost. NCHA took part in the Sector Scorecard pilot project and intends to give increasing focus to this area. Whilst the results of the pilot are not available at the time of publishing these annual accounts we have already undertaken analysis of our own input. We recognise a large element of this is our substantial Care and Support business and will look to find similar bodies to benchmark with. We are also considering this metric after removing this element. As part of More Homes we will consider Units Developed (As a percentage of units owned) 2.75%, as part of Great Services we will consider Occupancy 98.58% and as part of Better Lives we will consider Percentage of Respondents Very or Fairly Satisfied That Their Rent Provides Value For Money. 91%. Five Year Performance Indicators The trends in the five year profile below demonstrate the consistent strength of the Group over the past five years. The figures for reflect the Group structure in place at that time, ie they do not include Leicester Quaker Housing Association (whose activity is now part of Nottingham Housing Association), Henry Brown s Homes Charity and Warner s Almshouses Charity. Similarly, those figures are from before the adoption of FRS102. The profit related figures in 2016 have been recalculated in line with the adoption of the Charities SORP by the housing based almshouses. The change in SORP usage is sufficiently immaterial that it does not change the stated statistics. All profit measures have been updated to reflect the inclusion of assets disposals in operating surplus. The various profit percentages for the five years to March 2017 are healthy and demonstrate substantial improvement over the period. This reflects the success of NCHA s staff in delivering efficiencies as part of the Procurement and Value for Money Strategy over this period. 23

24 The proportion of emergency, urgent and routine repairs completed on time remains close to 100%. Our investment in planned maintenance and improvements means that the Group's housing property remains 100% Decent Homes compliant. We have an active approach to Asset Management which is positively impacting on the overall quality of our properties. We appraise properties when they become void and sell those in poorer condition that are in low demand areas and replace them with newly built properties. This approach, when delivered alongside a number of maintenance procurement and efficiency gains, has resulted in significant savings in delivering our repairs service. Our market rented properties, all managed through our commercial subsidiary Lets Select Ltd, continue to deliver a contribution to our profits. Whilst the surpluses have reduced as the properties age, the contribution to operating surpluses is 66%, comfortably exceeding the finance costs on the loans secured against these properties. The Statement of Financial Position ratios for loans and Social Housing Grant in relation to our Housing Property costs show the Group maintaining a healthy position in the increasingly challenging environment as the level of capital grants to support the development of new homes continues to fall. The Group is also maintaining a healthy level of both free and designated reserves, which will help ensure the continued maintenance of current properties to a decent standard as well as enabling continued investment in the provision of additional homes for future customers who need them. 24

25