Value for Money Self Assessment

Transcription

1 Value for Money Self Assessment

2 VALUE FOR MONEY SELF ASSESSMENT Contents Page Number 1. Introduction and Approach Progress against our Corporate Plan objectives Making the best use of our Assets Our Performance and Costs The Future our Value for Money approach

3 VALUE FOR MONEY SELF ASSESSMENT Introduction and Approach Gloucester City Homes (GCH) is a community benefit society which means that any surplus we make from any commercial activities or savings is directly invested back into the organisation to maintain core services and provide more affordable homes in line with our strategic aims and social objectives. This is our first self-assessment required as part of the Homes and Communities Value for Money standard as a new registered provider. We were previously an arm s length management organisation (ALMO), established in December 2005 to achieve the decent homes programme. As an ALMO we invested nearly 65 million, making over 19,000 significant improvements. As a result, every home now meets the Government s standard. In 2010, we were assessed as a 3 star excellent organisation with excellent prospects for improvement. Between 2005 and 2015, we delivered efficiency and cash savings of around 15.5 million through a combination of continuous improvement linked to, challenging our services and through robust procurement. Between 2010 and 2015, following an extensive options appraisal, the City Council and GCH embarked on a stock transfer programme which received 89% tenant support for transfer in Their decision was taken on the basis that GCH would invest 270 million into maintaining the existing stock and delivering new homes. We became a registered provider on the 15 th March 2015 and have committed to deliver the 8 tenant promises agreed in the offer document. The offer forms part of the contractual requirements outlined in the transfer agreement which includes delivering 100 new affordable rented properties in our first 4 years as a new provider. We are however now providing a mixture of different new homes products, following a revision of our Development Strategy in December 2015, to reflect changes in national policy and safeguard our aspirations to become a strong developer to meet housing need. We are funded by the Royal Bank of Scotland and have a loan facility of 70 million over 10 years which facilitated the purchase of the stock for m from the Council last year. As at the 31 st March 2016, we own and manage an average 4,456 rented homes including 10 sheltered housing schemes, 4 semi-sheltered schemes,. These provide a total of 473 homes, representing almost 11% of our total provision. We also manage 321 leasehold properties; own 25 commercial units and 21 homeless units. The management of our assets is critical to our long term success and we make intelligent investment decisions that provide long term sustainability and homes which meet demand. Around 1,600 of our units are non-traditional built between the late 1940 s and the 1970 s. Our revised Asset Management Strategy allows us to make further choices on future investment through an in-depth stock condition survey completed in The challenge of the last 12 months following the Government s rent reduction announcement has meant that we have had to curtail our aspirational investment in these homes to ensure that the Business Plan remains viable. But we are committed to ensuring these homes meet Government standards and that we fulfill our health and safety requirements. 2

4 In October 2015, the Board made a clear statement in its cost reduction plan that Our aim will be to deliver core housing services which represent value for money; whilst developing business growth so that GCH remains strong, resourceful and creative. In February 2016, we were subject to an in-depth assessment by our regulator, the Homes and Communities Agency, which resulted in us being awarded a G1/V2 rating demonstrating that we provide effective scrutiny and challenge and strong performance outcomes with and understanding of our costs. The Board was commended by the HCA for their vigorous and forensic approach to rent reduction last autumn. Our VFM Approach The Board and executive has a clear value for money vision to challenge and transform our operations. By creating income streams through a commercial agenda and driving efficiency through strong ICT investment to support channel shift and customer self-service, in order to reduce our costs and overheads. Our Corporate Plan and Value for Money Strategy agreed in October 2014 has 5 clear objectives: 1. Scrutinising and challenging our services 2. Buying or providing services which drive down cost and improve quality 3. Collecting rents and service charges effectively and efficiently to pay for housing services 4. Managing our assets effectively 5. Creating efficient and accessible services through new Information and Communications Technology How we will achieve this As a new provider in a different operating environment, and mindful of our changing objectives to deliver more housing, the Board and leadership have identified a roadmap to transform our approach to service delivery. Over the next 5 years, we intend to drive a step change in our operational efficiency through a number of key objectives including; Introducing a transformational culture shift linked to cost reduction and efficiency to support new homes development and maintaining core services. Realigning our strategic aims including a revised mission, vision and values and a review of our key performance indicators and service standards. Significant investment in technology between 2016 and 2017 (c 1M) to support channel shift and self-service to create operational efficiency, which will in the medium term reduce operational costs by c 160K a year from year 5 of our Financial Business Plan. Using our benchmarking data, delivering a number of planned service reviews using the lean model to reduce service delivery costs and creating operational efficiency to generate income to support new house building Introducing new products including shared ownership, market sales and rent to buy and extending our operations within a logical and accessible geographic area comprising the whole of Gloucestershire. Developing a regeneration programme in partnership with key stakeholders including the local authority, Government and funders. Introducing new commercial streams for repairs and maintenance; extending our landlord health and safety services to the private sector; expanding management services and facilities management for others and providing independent living solutions to owner occupiers and others. The objective is to use additional income surpluses to support new development or protect services valued 3

5 by our tenants. Managing our assets effectively, ensuring they are viable, deliver a positive yield over the business planning period with an improving net present value and with high levels of demand. We systematically review and manage our assets intelligently and procure effectively to ensure we secure the best investment costs and productivity through well managed neighbourhood programmes. We are moving away from our stated mission of excellent services recognising the need to balance quality with cost. Our current mission is To work with our residents to provide excellent services and decent homes in successful communities This is underpinned by 4 core values; Pride, Quality, Innovation and Integrity, the latter states that we will publish clear service standards and ensure that Every Penny Counts which forms part of our efficiency agenda and provides the basis for continuous improvement. Performance Management & Benchmarking Strategy & Policy Asset Management Commercial Development Every Penny Counts Service Reviews Scrutiny and Challenge Project Management Collaborative Partnerships How we monitor and measure progress Our progress is monitored in two ways: Firstly, through our Board where there is robust scrutiny and challenge of all Strategy; Policy, Performance and financial controls to support our VFM objectives. In we have achieved efficiencies and savings in excess of 1M which are detailed in Section 4.3 below. In addition, as a result of rent reduction, the Board took a granular approach, approving 4

6 reductions in expenditure to facilitate the 3 million annual cut in rental income. This decision also returned the valuation of the stock back to it c 20M valuation from the minus 9M valuation resulting from rent reduction. Secondly, our Tenant Panel has a specific focus on consumer standards challenging service delivery and standards, driving improvements and ensuring tenants receive quality, competitively priced services. The Panel has undertaken a number of service reviews linked to the value for money agenda and was recognised by TPAS last year as regional finalist for tenant scrutiny. 2. Progress against our Corporate Plan objectives Our Corporate Plan incorporates the 5 objectives contained within the Value for Money Strategy The Board monitors progress against our Corporate Plan objectives on a quarterly basis as part of our performance management framework. The following table outlines progress against our value for money objectives over the last year: What we have achieved and when Outcomes Value for Money : Objective 1 Scrutinising and Challenging our services Identified cost reduction and efficiency measures to mitigate the impact of rent reduction scheme in October 2015 Secured a G1/V2 following an in-depth assessment by the Homes and Communities Agency in February 2016 Maintained top quartile performance in the majority of our KPI s in March 2016 Received high level of landlord satisfaction through an independent STAR survey in July 2015 Secured external accreditations including Customer Service Excellence & Investors in People Gold in March 2016 Secured BSI: ISO 9001:2008 in March 2016 Conducted benchmarking review through Housemark resulting in 5 year programme of service reviews approved in March 2016 Monitored all performance and service delivery outcomes through the Board and Tenant Scrutiny Panel. All performance and service outcomes are publicised in a range of leaflets and via our website. Quarterly review with final year-end report in May 2016 Completed a fundamental review with TPAS of tenant scrutiny structure to support coregulation completed in January 2016 Achieved 3M annual rent reduction to support viable business plan and protecting development. A rating which demonstrates confidence to our funders and key stakeholders Assurance that resources are effectively deployed and well managed Assurance that resources are effectively deployed and well managed Assurance that there is strong leadership, provision of effective and valued services, staff resources are effectively motivated, deployed and well managed as an employer of choice. Assurance which demonstrates confidence our funders and key stakeholders that effective systems and controls are in place We are self-aware of our costs / performance in comparison with our peers, enabling effective prioritisation of service reviews We are self-aware of our costs / performance in comparison with our peers, enabling effective prioritisation of service reviews Stronger consumer led Governance which supports the transition to a more commercially focused Board whilst realigning resources to maximise rental income. Value for Money : Objective 2 Buying or providing services which drive down cost and improve quality All partners and contractors now deliver services at CPI as directed by the Board in The Business Plan remains viable through protected increase in costs October

7 Secured 66.4k of additional social value funding through procurement between April 2015 and March 2016 Compliance with the Social Value Act 2012 and supporting the community we work in by increasing local job opportunities and supporting the local economy Completed options review of our repairs services in January 2016 to drive down costs by bringing service in house by April Other services including grounds maintenance are being reviewed that have the potential to secure savings Engage 90 local employees either directly or through contractual arrangements Reduce costs in 2017/18 and create a commercial income stream from 2021 Generate c 1.79M direct income into the City s economy Value for Money : Objective 3 Collecting rents and service charges effectively and efficiently to pay for housing services We remain top quartile on collection of current year rents and collected 67k of former The Business Plan remains viable tenant s arrears in the financial year. Continued to monitor the impacts of welfare reform with a proactive approach quarterly Mitigate risks to our income streams and support tenants to manage review their personal budgets effectively Conducted a review of services charges to ensure that the cost of service delivery is Maximise potential income streams recovered effectively - annually Planned the introduction of new systems that will enable us to support tenants in financial Mitigate risks to our income streams and support tenants to manage distress and gather customer insight information to support tenancy sustainment and their personal budgets effectively ultimately maximise income collection March 2016 Collaborated with the CAB and Gloucester Law Centre to support financial inclusion including welfare benefits advice throughout the financial year Value for Money : Objective 4 Managing our Assets effectively 100% of our homes meet the Decent Homes Standard and our properties are all home safe throughout the financial year Completed a stock condition survey on 50% of our houses and 100% of all flats in February 2016 Identified an Asset Management Viability Model in March 2016 Mitigate risks to our income streams and support tenants to manage their personal budgets effectively resulting in 0.7million of increased benefits Compliance to legislative requirements Use asset intelligence to make informed future investment decisions 119 dwellings will undergo a detailed options review in to determine future investment Planning permission on 5 sites granted and development started in August 2015 Delivery of 33 new homes will be delivered by October 2016 Value for Money : Objective 5 Creating efficient and accessible services through new Information and Communications Technology The entire infrastructure, platform and security is now managed by an external partner Provided a resilient platform and additional security to facilitate mobile from April 2015 working with solid Business Continuity Phase 2 of the ICT Strategy commenced from April 2015 Procured a new website partner in November 2015 to deliver a new platform for web services which is Android and Smart Phone enabled to support self service 6 Support channel shift, agile working & self-service options to improve customer access and reduce operational costs Support self-service options to improve customer access and reduce operational costs

8 3. Making the best use of our Assets Our Staff Resources We provide a supportive environment where staff feel valued, are given opportunities to meet their aspirations and develop their skills; allowing them to be creative and innovative, taking ownership and pride in the delivery of our services. Our highly competent employees have been independently accredited including Customer Service Excellence; Investors in People where we retained the Gold standard in early 2016 and we are a current Sunday Times Top 100 non-profit making organisation. We continue to review our skills and capacity requirements through a controlled approach to anticipate future resources requirements linked to national or local policies; and to meet any future strategic aims. Asset Management and New Homes Development Gloucester City is a regional centre with a high demand for affordable housing. There is limited supply with most stock successfully let through the choice based lettings system, however, there are some pockets of lower demand within our stock and these units are being reviewed and pro-actively managed as part of the options appraisal process. Our housing stock represents our highest value asset and its on-going repair and maintenance our largest liability. We own and manage around 4,456 rented homes. There are 321 leasehold properties in our 368 blocks. We own 25 commercial units and 21 homeless units. There is one high-rise block and a large proportion of non-traditionally constructed units totalling1,626 homes. 48% of our stock is flats; 38% is houses and 14% bungalows. The majority of our stock was built between 1945 and 1964 and makes up 48% of our homes; 22% of our homes were built between1965 to % was built after 1981 and the last council home was built in1991. There has been no new development between 1991 and 2015 until we became a registered provider and started our new homes programme as outlined below. Active asset management ensures we intelligently invest in stock that is performing well. All of our homes meet the decent homes standard, all of our homes meet Landlord Health and safety requirements and all of our assets remain financially viable in conjunction with the 30 year business plan. However, we are targeting those assets that require higher expenditure over a 30 year term to identify if a more in depth options appraisal is required to inform future investment decisions. We have set a net present value of 25K return on all of our assets over the life of our 30 Business Plan, which has identified that just 23 units are flagged as red on the NPV financial summary and currently subject to an options appraisal. The following table outlines our NPV summary and the performance of our stock: 7

9 Net Present Value Summary Combined RAG status RAG Count NPV RAG cost per unit 1-3 4, ,697,805 40, ,697,201 22, ,543 23,284 All 4, ,930,548 40,101 We have undertaken a number of stock condition surveys since GCH formed as ALMO in The surveys have supported our investment decisions which initially focussed on meeting the Government decent homes standard, which we achieved in March 2012 and have since maintained. A further survey informed the decision to stock transfer between 2010 and The most recent large scale survey was undertaken in 2015 gathering stock condition data on 50% of our houses and 100% of all blocks of flats and forms the basis of a new Asset Management Strategy and is fully costed within our 30 year Financial Business Plan. Our original investment programme was to deliver 32.4 million to our non-traditional stock as part of an aspirational programme linked to the preservation of the external fabric, which in turn would improve energy efficiency. Following rent reduction, we have revised the programme downwards to deliver essential works only. Our original 30 year spend profile was million and is now million. This results in an average investment at 56k per unit over 30 years, which is well within and at the lower end of an expected benchmark range. An investment of 46 million is required within the first 5 years of the plan. The reduction in investment will not improve fuel related costs for residents and potentially will increase repairs and cyclical maintenance costs in our budget profile. We can however, through our asset viability modelling tool, identify increased opportunities through disposal, regeneration and new development using additional potential headroom in the financial business plan. As part of our drive to increase value for money in delivering our investment programmes, we intend to take a range of actions including: Reducing our VAT costs by returning our repairs service to a DLO from April 2017, which will also provide the opportunity to provide capacity to deliver future planned works as well as create operational efficiencies. Increasing commerciality of our repairs and maintenance service by delivering for the private sector from 2020 onwards. Procuring services by combining a range of planned improvement works into single contracts to avoid pepper potting and delivering services through smarter contract management. Undertaking a review of key performance indicators and service standards to ensure a greater emphasis on cost reduction. For example, increasing the provision of decorating vouchers to reduce our painting costs with the intention is to reduce the average void costs from 1,380 in 2015/16 to no more than 1,000, excluding planned component renewals. Moving to a preferred materials specification which will be completed by March 2017, to provide greater certainty over costs and quality of materials used by the DLO. It will also provide improvements in recycling facilities to reduce costs and facilitate the move to an in-house grounds maintenance provision from April Moving to a 5 year decent homes programme to create greater efficiencies by systematically working through neighbourhood areas 8

10 rather than the previous pepper potting approach. Splitting our investment programmes between external (7 years) and internal (5 years) to ensure greater efficiency through a systematic approach to planned programme of works. Undertaking a full options appraisal of our garage sites with a view to identifying future development opportunities. 65% of our garage sites are void. We regularly assess viability and re-investment priorities through a Stock Viability Model that takes account of a range of factors including demand and projected costs. The intention is to ensure that all of our assets are viable and deliver a positive yield over the business planning period with an improving net present value yield and with high levels of demand. This appraisal process results in individual properties being allocated a red, amber or green re-investment status and an assessment of cost is made with direct reference to the Asset Management Database and associated reports. Demand has been assessed with reference to housing management perception informed by void turnover rates and associated performance indicators. Our Viability Model has already flagged 119 dwellings (2.7% of our stock) as red and which will be assessed in to determine our approach to their future investment; regeneration or disposal. The trade-off is the investment in our existing stock or subsiding new homes development. The following table outlines the performance of our stock against our viability model: Viability Model Summary Sheet Combined RAG status RAG Count RAG Cost RAG cost per unit 1-3 3, ,309,783 51, ,326,206 63, ,463,318 71,120 All 4, ,099,307 54,112 Managing our Land and Estates: Ahead of stock transfer we conducted a review of the land transferring to us which has already secured 5 sites for development with full planning approval. We wish to acquire more land to enable us to secure future delivery of homes and possible regeneration opportunities. In we conducted an independent review of our land to identify if the current grounds maintenance service provided by an external contractor, represented value for money. This has identified that there is a potential to secure savings and enhance the quality of this service area. This review will be completed in with a view to providing alternative arrangements from April

11 New Homes Development Our aim is to deliver 100 new homes in the first four years as a new Housing Association. Our Development Strategy sets out our agenda in terms of acquisitions, cross - subsidisation and tenure approach. Planning permission was obtained on all of our current development sites and we will deliver 33 new homes across 5 sites by October 2016 which equates to 33% of the 100 new homes. Phase Bazeley Road Painswick Road St Peters Road Birch Avenue Kemble Road 3 Bungalows / 3 Houses all let May Shared Ownership, 2 bed Bungalows all sold June bed flats, 2 and 3 bed houses - all let July bed bungalows and 1 x 4 bed house (all Shared Ownership) Sept/Oct bed bungalows, 2 and 3 bed houses (all Shared Ownership) Aug 2016 Following a strong tender process, we engaged a local development contractor, Aqua Construction. Our first six affordable rented properties at Bazeley Road in Matson were completed and occupied on 5 th May Our first four Shared Ownership properties were completed at Painswick Road in Matson in April 2016 with units reserved at completion. This scheme was delivered in budget and two local young people have been employed on 2 year Apprentices in Carpentry and Bricklaying as a result of this contract. Both attend Gloucester College and are making good progress. New Affordable Homes - Bazeley Road, Matson New Shared Ownership Homes - Painswick Road, Matson Phase St James Close Winsley Road Amberley Road Badminton Road Potential affordable rented homes (subject to bid) Phase 3 and shared ownership consisting of 1 and 2 bed bungalows 6 flats (3x2 bed; 3x1 bed) 2 houses (1x2 bed ; 1x4 bed) 3 houses (3x2 bed houses rented) 3 Bungalows (3x1 bed bungalows) 63 units 46 units Mixture of Shared and Affordable units Future development plans Shared Ownership / Market Sales 140 new homes 10

12 4. Our Performance and costs 4.1 Key Performance Indicators We have a strong performance management framework converting strategic priorities into operational delivery. We report service and performance outcomes through our website, our tenant s magazine and annual report to keep our tenants and key stakeholders up to date. These are monitored quarterly through a formal report to Board and Tenant Panel. What have we achieved over the last 3 years? Homes and Safety % emergency repairs completed on time % urgent repairs completed on time % routine repairs completed on time % of tenants who think repairs service is excellent or good Re-let times for empty homes (days) % of homes with a valid gas safety certificate Days taken to install a major medical adaptation 2015/16 Target 2015/ / /14 100% 100% 96.03% 100% 99.5% 99.5% 94.8% 99.3% 99% 98.8% 92.5% 99% 95% 99.3% 98.8% 96.8% % 100% 100% 100% GCH has strong performance on repairs and maintenance. We intend to return the service to an in-house provision from April 2017 to secure savings linked to VAT and also create further operational and commercial savings and opportunities from 2017 onwards. 11 Customer Service % of calls to the customer services team answered in target % of complaints answered within target % of tenants who think that overall the customer service is excellent or good % of customers satisfied with the ASB service % of tenancies ending within 6 months of start date 2015/16 Target 2015/ / /14 95% 96.4% 97.5% 97.3% 100% 100% 97.4% 100% 95% 100% 100% 100% 95% 100% 100% 100% 2% 0.4% 1.2% 1.6% Performance continues to be strong however our future plans will include a drive to greater efficiency through channel shift and self-service. We expect traditional performance areas to dip temporarily as we seek to reduce costs by improving access through different service offers.

13 Rent Collection % of current rent arrears against rent debit Former Tenant Arrears collected % of tenants evicted for rent arrears Rent collected from current and former tenants as a % of rent due including arrears b/fwd. Evictions due to rent arrears as a % of all tenancies 2015/16 Target 2015/ / / % 1.61% 1.16% 1.31% 60K 67K 66K 56K 0.19% 0.16% 0.10% 0.07% 98.28% 98% 99.6% 99.15% 0.18% 0.10% 0.10% 0.02% Managing the impact of welfare reform and particularly Universal Credit is a key strategic priority to manage and protect rental income. We are managing the impacts and have reviewed our resources both in terms of direct rent collection and also financial inclusion / welfare benefits advice. We have been prudent in increasing our bad debt provision within our financial Business Plan and the Board monitors the impact of welfare reform through a monthly report. Satisfaction 2015/16 Survey Target 2015/ /14 % satisfied with overall quality of their home 77% 78% 77% % satisfied with their neighbourhoods as a 75% 78% 74% place to live % satisfied with value for money of the rent 73% 75% 76% % satisfied with ease of access to GCH services 81% 84% 78% % satisfied with the way GCH deals with repairs and maintenance 73% 76% 70% % satisfied that GCH keeps them informed 85% 86% 83% % satisfied with the overall service provided 83% 84% 85% Our independent bi-annual survey results are relatively strong but we want to do better. For example, some performance weakness relates to the type of homes we provide and can only be improved through longer term regeneration. We intend to move to more responsive surveys aligned to the star survey so that we can review our results more accurately and more timely from mid We have begun to review our full suite of Key Performance Indicators (KPI s) in 2016 to ensure they provide appropriate assurance on our new organisational risks and priorities, along with our different stakeholder interests. Our new Tenant Panel will provide further scrutiny on consumer driven performance whilst also supporting Board to scrutinise our performance on areas that could impact our economic performance, financial risks and regulatory requirements. 12

14 4.2 Our performance against others We benchmark our salaries and benefits on a rolling 2 year cycle, last reviewed in October We also use benchmarking data as a driver to investigate and improve our service cost position when comparison with our peers. The annual results feed our 5 year service review priorities. The benchmarking results have told us that there are six cost areas which feature either in middle lower quartile or lower quartile. All of these form part of our review timetable for services areas over the next 5 years. In identifying the priorities, we have been mindful of key business decisions already taken which will provide desired outcomes regardless of those reviews. For example; we have already taken action from April 2016 to reduce and redirect our resident involvement costs to support financial inclusion as part of our welfare reform strategy, a project to return to an in-house repairs and maintenance service from April 2017 is underway and a fundamental review of grounds maintenance to drive costs down from April 2018 will commence from April Our Anti-Social behaviour service is valued by our tenants and we receive the highest number of reported ASB issues in our peer group. This service is delivered in partnership on a multi-agency basis and provides services for all tenures affected by ASB across the City. The intention is for partners to review the service with a report to Board in October Our first service review will focus on Human Resources and then Tenancy Management. The scope of the service reviews will also encompass tenant satisfaction. It is our intention to move towards more responsive surveys such as STAR T on a quarterly basis. The rationale behind this is that we currently see a marked difference between the results of the biannual survey and those who provide feedback at the point of delivery. The following table shows our performance against our Housing Association peers linking both cost and quality for : Benchmarking Key Source HouseMark: All National Housing Associations Stock Size 4,500 to 5,500 UQ Upper Quartile CPP = Cost Per Property MU Middle Upper Quartile GN = General Needs ML Middle Lower Quartile HfOP = Housing for Older People LQ Lower Quartile Void = Empty home Median all of the peer group have reported the same number and the Group is shown below: Acis Group Boston Mayflower Broadacres Housing Association Four Housing Herefordshire Housing Peaks and Plains Housing Trust Phoenix Community Housing Raven Housing Trust Saffron Housing Trust Saxon Weald Severnside Housing Spire Homes (LG) Trent and Dove Housing Wandle Housing Association Watford Community Housing Trust Wellingborough Homes Westward Housing Group Wulvern Housing Wyre Forest Community Housing Yorkshire Coast Homes 13

15 HouseMark Benchmarking results : Business Activity Cost KPI GCH Result Quality KPI GCH Result Corporate Health Average number of staff days lost to Sickness 9.56 days ML % of staff turnover 9.3% UQ Corporate Health This row is intentionally blank BLANK % of complaints resolved during first contact 94.7% UQ Corporate Health This row is intentionally blank BLANK % of calls answered by the customer services team within 15 seconds Housing Management Housing Management Housing Management Housing Management Cost per property to collect rent and manage rent arrears Cost per property of resident involvement activities Cost per property of managing antisocial behaviour cases Cost per property of tenancy management UQ LQ LQ LQ Housing Management % of tenancy turnover 7.11% UQ Housing Management Cost per property to re-let homes UQ Housing Management % of rent loss on empty properties 0.70% MU Responsive Repairs & Voids Responsive Repairs & Voids Responsive Repairs & Voids Responsive Repairs & Voids Major Works & Cyclical Maintenance Cost per property of responsive repairs and empty home re-let works MU Average cost of a repair MU Average cost of a void repair UQ Average number of repairs per property Cost per property of major works and cyclical maintenance service 3.47 MU LQ 97.5% UQ Current tenant arrears as a % of rent due 1.17% UQ % of tenants satisfied that their views are taken into account 61.80% LQ % of antisocial behaviour cases resolved successfully 100% UQ % of overall tenant satisfaction 80.40% LQ % of tenants satisfied with their home 75.4% LQ % of tenants satisfied that their rent provides value for money 69.40% LQ Average time in days to re-let a home (standard re-let) UQ Average number of calendar days to complete a repair LQ % of repairs that are completed at the first visit 92.43% MU % of tenants satisfied with repairs (own post repair work survey) 98.80% UQ % of tenants satisfied with repairs service 70.40% LQ % of properties that have a valid gas safety certificate 100% Median 14

16 Major Works & Cyclical Maintenance Estate Services % of total costs for major works and cyclical maintenance Cost per property of delivering estate services 73.09% UQ ML % of homes that are non decent dwellings 0% UQ % of tenants satisfied with their neighbourhood as a place to live 72.10% LQ Service Review Timetable : The timetable below is based on the HouseMark results for , but will be reviewed as we receive more up to date information through future benchmarking. Service Area 2016 / / / / / 2021 Tenancy Services Human Resources Finance Customer Services Inc. complaints ICT and Business Support Repairs Responsive and Voids Major Works and Cyclical Inc. Estate Services Anti-Social Behaviour Income Management Resident Involvement and Inclusion Communications 4.3 Our financial performance We have a complete set of financial controls in place which are monitored monthly through the Board s Resources Committee supported by a robust risk and treasury management framework which is reviewed quarterly by the Audit Committee. Board has received eight reports on Treasury Management between October 2014 and January We continue to assess financial risk and stress test the business plan on a regular basis to ensure viability of the organisation based on scenario planning. Our performance for the financial year (as a new registered provider) means that we have a new financial operating base, making a comparison with the previous year s ALMO financial results inappropriate. There are significant differences between an ALMO and Housing Association financing, with previously some costs being absorbed into the Housing Revenue Account of the City Council, client services being removed and contractual service level agreements ended. 15

17 We have also restructured the organisation following independent benchmarking to re-align resources to meet our new operating environment which has included strengthening the Treasury Management and Development areas of the business. This was approved by the Board in October Our successes in include Secured a G1 /V2 rating from the regulator which placed an emphasis on value for money Revised the existing 30 year financial Business Plan which absorbed the required Government rent reduction for the next 4 years submitting an updated financial return to the regulator in October This resulted in the Board and Leadership team identifying savings of c 3 million per annum with our funders, RBS approving the new 30 year financial Business Plan Conformed to all of our financial covenants and our operating margins with the Board choosing to operate at -5% of our cash flow covenant whereas RBS allow us to operate at +5% building in capacity to absorb any unforeseen risks that may occur. Delivered a new pension offer for future employees to create certainty and achieving savings of 48.8K in year 1 Delivered Benefits and Savings in excess of 1 million Understanding our cost variants alongside the sector In June 2016, the HCA published their Headline Social Housing Costs derived from the 2015 Global Accounts data through a detailed regression analysis. The regulator has written to all housing providers including GCH outlining that the sector must have a comprehensive and strategic approach to value for money. They have provided clarity about how they intend to regulate against the value for money standard, setting out an expectation to all providers that they must be fully transparent in understanding its costs and be able to explain differences in operating efficiency within the self-assessment. As a continually improving organisation which has been at the forefront of excellence, we welcome this opportunity to rise to the challenge, with a greater intensity of focus on efficiency whilst ensuring that we do not undermine our investment in new and existing homes and services to our tenants. 16

18 GCH Unit Cost Data Contextual Information Entity Gloucester City Homes Closing Social Housing Units Managed Headline Social Housing Cost CPU ( ) Management CPU ( ) Service Charge CPU ( ) Maintenance CPU ( ) Major Repairs CPU ( ) Other Social Housing Costs CPU ( ) % Supported Housing % Housing for Older People 4,456 3,103 1, % 10.6% Upper 4,300 1, ,180 1, % 15% Quartile Median 3, % 8% Lower Quartile 3, % 4% It is recognised that the amount of supported housing activity and differences in regional wages account for some of the variables across the sector. We have used the average stock number as the divider in accordance with the HCA regression analysis. The costs for GCH are for the financial year against the HCA regression analysis which is for Our financial year for covered 54 weeks because of stock transfer and have therefore been pro-rated downwards We are below median quartile and just below lower quartile on the headline social housing cost for registered providers We are reviewing our service charge levels in The number of units for older people is above median quartile which means that we will have higher costs in this area because of the more intensive housing management requirements 17

19 How our tenants was spent in 2015/16 In 2015/16 we charged the second lowest average weekly rent in Gloucestershire at The highest rent charged by a provider was and the lowest was per week. As can be seen, 63 pence in each is spent on tenants repairs, home investment and new homes development. Home Improvements & Repairs 53p How your GCH was spent in Business Support & Offices 13p Bank Interest 3p Depreciation 4p Leadership & Governance 3p Housing Services 11p Building New Homes 10p Sheltered Accomodation 3p We anticipate a greater proportion of our expenditure will be allocated to new homes development with lower costs on business support and office accommodation, with a lowering of cost on housing services as we move to self-service options for tenants Adding value to the business through surpluses Our Business Development Strategy generated a surplus of 186,256, with additional overall grant funding of 400,056. The Strategy outlined a range of opportunities linked to business growth, increasing company turnover and developing our assets by building new homes, managing more homes and expanding services provided to private companies and individuals. In we made an overall surplus of 77K on our commercial activities to support our charitable objectives. Our new Commercial Development Strategy focuses on the development of commercial activities whilst balancing this with our ethical values. Our motivation for 18

20 commercialisation is the generation of surpluses with the trade-off being the development of more affordable housing to meet local need in the absence of grant funding. Driving Efficiency In we began our transition from an Arm s Length Organisation (ALMO) into an independent Housing Association and we focussed on implementing the right structures and frameworks for transformational change, but we have also been able to make significant savings and efficiencies in our first year operating as a Registered Provider. As an ALMO we secured overall efficiency savings and inward investment of 15.5 million between 2005 and In our first year as a new Housing Association, GCH has delivered the savings, efficiencies and inward investment listed below: Project / Initiative Benefit / Savings in Monthly income collection company blitz days 133K income generated Key partnerships to support tenants 720K annual total benefit gained for tenants. 287 successful outcomes for Tenants Communal Area utilities contract changes (gas and electric) Tenant magazine reduction in production from four times a year to twice yearly providing reduction in design and artwork and printing costs 28K saving on previous contract prices 6.8K saving on costs spent in Change in format of annual report through increased use of website 4.5K saving on costs spent in In house printing and increase in digital communications 4K saving on costs spent in Social Value obtained via procurement 66.4K Introduced a new Pension Scheme for new starters 48.8K in year 1 ( ) 19

21 Social Value that we create in our communities We recognise that all of our investments have the potential to create social value through economic growth, greater efficiency or improved personal well-being. We define Social Value in terms of the: Creation of jobs, apprenticeships and traineeships Creation of learning development and training opportunities Creation of additional community value through in particular, larger service providers learning academies, charitable foundations, access to training, provision of mentoring and support, digital access and recycling IT equipment to local community organisations as examples Creation of local economic growth through the supply chain Delivery of environmental improvements Opportunity for small and medium size local enterprises to work with us, where this is feasible and practical Financial Inclusion: Our work with partners including the Gloucester Law Centre and the CAB has ensured that we have secured a further 720,000 of additional weekly benefit and lump sum / backdated awards. The total amount of benefits gained in the three years that the Law Centre and Gloucester City Homes have been working in partnership is 1,882,353. Health and wellbeing: Working with our partner, RSM Limited, we have been able to assess the impact of elements of our work linked to our decent homes (safe, warm and well programme), together with our approach to adapting homes to support independent living and reducing trips and falls. As a result, GCH has identified savings to the NHS and Local Authority care hones as a social return on investment in excess of 3.2 million annually. Training and Apprenticeships and local employment: 3 trainees have completed their placements and have been successful in finding employment with us in We are currently providing a further 4 traineeships across our frontline services. Through our partnerships, we are currently providing 4, 2 year apprenticeships. Our work with Aqua construction for example has provided two local young people with apprenticeships in Carpentry and Bricklaying. We also provide a rolling programme of short term work placements for tenants wishing to get back into work. We have also provided 2 seasonal work placements for long term unemployed tenants with our Estate Services team. Creating local employment and supporting the local economy: Boosting the local employment market is a key objective we provide contracts to partners employing around 90 local employees, with an average salary of 19,932 (2013 data), this generates c 1.79M direct income into the City s economy. Additional community value: We have secured external funding through our partners of 66,400 which has been re-directed to achieve social value in our communities. As a result, we have created Homelink in direct response to meeting tenant s needs in terms of provision of low cost furniture, purchased the Digital Log book to support out Financial Inclusion work, supported the development of community facilities in our neighbourhoods and provided 4 apprenticeships with our maintenance and development partnerships. 20

22 In addition our community improvement budget managed and driven by our tenants has delivered 14 large community improvements for Over the last 3 years we have delivered 68 community improvements through a total budget of 105K. Our own SHINE Learning Academy provides a focus on employability skills development, basic IT skills and money management. The academy has benefitted from 30 reconditioned laptops provided to community groups from our IT partner, Exponential E to support digital hubs in Matson and Podsmead, which have high levels of deprivation. 5. The Future our Value for Money approach GCH is on a transformational journey. We are excited by the opportunity to review our entire operations to further support our social values and meet the Government s agenda of delivering more new homes. We are moving away from our stated mission of excellent services recognising the need to balance quality with cost. As a result a new Mission and Vision will be presented to the Board in September 2016, also refocusing the interpretation of our four core values: pride, quality, integrity and innovation. In October 2015, the Board made a clear statement about cost reduction aligned to our Value for Money Strategy. The statement was as a direct result of rent reduction and signals a clear intent in terms of cost reduction and greater efficiency. To drive this, the Board has identified significant investment in ICT to enable a complete self-service approach for tenants, resulting in a fundamental channel shift from the traditional methods of accessing services. At the same time, this investment will transform our mobile working approach, allowing us to review our future office needs starting in Q An investment in ICT of almost 1million was approved by Board in June 2016 and will be funded in the medium term by a reduction in staffing levels anticipated to take effect in two stages saving around 160K per year from A major part of the investment will facilitate the return of repairs and maintenance services to GCH as part of an efficiency drive, anticipated to make savings of 300K in VAT from April It is also intended to generate operational efficiencies by streamlining our approach and in the medium term will allow us to create commercial opportunities to sell our services to the private sector from April Our Business Development Strategy ended in March 2016 and generated a surplus of 186K. It is superseded by a new Commercial Development Strategy which was approved by the Board in July 2016 with the intention of supporting commercial growth over the next 5 years in four key areas; facilities management, management services, new homes development and independent living. This may result in GCH delivering offers through a subsidiary company to create additional incomes to support our charitable objectives. 21

23 Our newly appointed Business Improvement Manager has a clear remit to drive value for money. She has identified a 5 year programme of lean service reviews aligned to the HouseMark benchmarking data outcomes reported in We have also appointed a new Customer Insight & Communications Manager and a Head of ICT to drive operational efficiency through prioritising customer insight and aligning service offers to meet organisational and tenant priorities with a clear focus on digital access. In the autumn of 2016 we also intend to review the delivery of front line services to reduce operational costs in housing management and independent living services. We are also very aware of the effects of welfare reform and particularly the potential impacts of Universal Credit on our tenants with the implications on our Business Plan. At the end of March 2016, we have seen rent arrears increase on the first 40 tenants moving onto the new system. Our Board has received two strategic plans on managing welfare reform and continues to take a vigorous approach through monthly monitoring of progress and risks. We have put in place a new financial inclusion team moving the emphasis from resident involvement to supporting tenants into employment. Our partnership with the CAB, linked to supporting tenancy sustainability together with the Law centre providing direct welfare benefits advice resulted in 720K of additional benefit support to our tenants, and this will continue in These amounts may reduce going forward as a result of the cap on backdating benefit. We have plans to introduce greater customer insight by using the Housing Partners software in the autumn 2016 and we have introduced the Digital Log Book to enable tenants share their information with our partners to support better budgeting and financial planning. Partnership working is key to our success. We will continue to drive costs down through strong and smart procurement which will add value through social returns and further cost reduction. This approach has already generated substantial savings through our decent homes programme. Our new Asset Management Strategy was agreed in July 2016, signalling the introduction of new contracts to commence from April 2017 which will focus on 5-7 year neighbourhood approaches rather than pepper potting. In October 2015, we became a development partner of the Joint Core Strategy supporting the LA s of Gloucester, Cheltenham and Tewkesbury to build 30,000 new homes by Phase 1 of our new Homes Strategy will be completed by October 2016, delivering a mixture of 33 new affordable rented or shared ownership units. In December 2015, Board approved a revised Development Strategy which creates the opportunity to deliver new homes across the County with a range of different products including outright market sales; shared ownership and rent to buy as examples. Our Value for Money Strategy aligns to our Corporate Plan. It ensures on-going compliance with our legal and regulatory requirements and focuses on reducing costs and creating efficiencies to support new homes delivery where possible. We have outlined our future outcomes below: 22