Weaver Vale Housing Trust. Value for Money Self - Assessment 2017

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1 Weaver Vale Housing Trust Value for Money Self - Assessment 2017

2 Executive Summary This Executive Summary gives an overview of the information presented in this report. It highlights the good performance and successes in the year and also sets out the Trusts targets for the next year and areas where we need to improve. Much more detail on these figures and performance is included in the rest of the document. Key Financial and Performance Highlights from 2017 The adjusted operating margin (a key financial measure) was 27%, an increase on the 13% in 2016; Our Overall Social Housing Cost was 3.19k, an improvement from the 3.87k in 2016; Overall customer satisfaction was 90% which was down from the 92% in However, it remains top quartile performance; Rent Arrears were 2.51% (2.86% in 2016) and continues a 4 year trend of reduction; Void rent loss of 0.82% was better than the 0.95% in This is the second year of improved performance; 98% of our property stock has a positive Net Present Value, the same as in 2016; We generated 2.1m of income gains for customers (who are struggling to pay their rent); A 3 year contract to provide employment advice in Cheshire West was won (the project is called New Leaf). It resulted in 79k income as well as helping more customers to get a job; The Trust Implemented the Just Reward scheme to reward customers who keep to the terms of their tenancy; 7 new homes developed and there were another 14 on site at year end; To improve our performance we implemented a number of new IT systems for Electronic Document management, Keystone for stock condition surveys and Infosuite to provide data to improve productivity reporting for our Property Services Team. Where we need to improve - targets for 2018 and beyond The Trust wants to build more homes and our target for 2018 is 35 new homes; In 2018 we want to reduce operating costs by a minimum of 300k; our costs need to reduce to meet the financial restraints from the rent reduction and more savings will be required over the following 2 years; 2018 will be the second year of our Big Change project. This project requires mobile working to be extended to the whole workforce to improve productivity for our Property Services Team; From 2019 onwards mobile working will be extended throughout the Trust to improve productivity for many of the Trust s teams; 2018 will see the completion of the review of stock condition data which will provide improved data to inform our asset management strategy.

3 1. Introduction Value for Money Self-Assessment This is the Value for Money (VFM) Self-Assessment for Weaver Vale Housing Trust (The Trust) for the year ending on 31 st March The assessment is published by the Trust s Board with the objective to be accountable and transparent in our approach to VFM. Our approach to VFM Our VFM strategy s aim is to constantly make the most efficient use of our resources (financial, assets and staff) to deliver our vision. If our performance needs to improve this report will say what we are going to do. Aim of this Self Assessment The aim of this report is to be accountable and transparent with stakeholders and to allow them to understand:- How our resources are allocated to support our Vision; The strategic decisions the Board has made around VFM; How we performed against the targets we set in the 2016 VFM Self Assessment; An assessment of our financial and operational performance in 2017; The return on assets and the future plans for our assets; Our strategic and operational approach to VFM and Our targets for Stakeholders Our key stakeholders are our customers, staff, CW&C Council, HCA, DWP, Santander plus other partners and funders. Benchmarking and Trends In our reviews of performance in 2017 the data provided is shown with comparisons against previous years and benchmarked (where possible) against similar organisations to allow our performance to be judged in context. Source of the Data Much of the data provided is independently verified as it s from STAR, Housemark or our own audited financial statements. See appendix A for more details and a glossary of terms. Sector Scorecard The Trust is taking part in the Sector Scorecard pilot which is an initiative to develop a set of common metrics for the housing association sector. All the indicators that are being used in the pilot are included in this self assessment and are marked with the # sign.

4 2. Our Vision Our Vision Everything we do is driven by our Vision and this dictates the way our resources (financial, staff and assets) are used. Our Vision is Transforming Neighbourhoods, Homes and Services to Improve the Quality of Life for our Customers. Our Corporate Plan and Vision look to mitigate external factors that will impact on the quality of life for our customers (E.G. continuing welfare reforms and the direct payment of Universal Credit to customers). Strategies Our Vision is translated into strategies which both sustain our service delivery and drive changes and improvements to achieve the Vision. Strategy Description VFM and Quality To constantly make the most efficient, effective and economic use of our resources to deliver the strategies. Asset To maintain and innovate to improve the desirability and value of our homes Management* and neighbourhoods. New Homes * To replace all stock sold or demolished through the term of the corporate plan to provide an increase in the number of properties the Trust manages. Self Reliance To provide an appropriate balance between the number of self-reliant customers and those unable to look after themselves. To support those communities who are moving to self-reliance. Tenure* To offer a range of tenure options. Rent Collection To protect our income stream. Employer of To make the Trust a great place to work for current and future employees. Choice Customer To make sure our customer s voices are heard and have the opportunity to Communication influence our decisions through a range of communication methods. Customers into To increase the number of our customers in paid employment to enable Work them to pay their rent. * New Strategies introduced in 2016 to respond to legislative changes. Vision - What we want to Achieve Each of our strategies has challenging Strategic Achievement Measures (SAMs) set for 2020: To operate within business plan requirements; 91% of customers are satisfied with overall service; An additional 1m savings or income; 90% of stock has a positive Net Present Value; 88% to 90% of customers satisfied with the repairs service; 65% of customers are eligible for the Trust s Reward Scheme; No more than 3% current rent arrears; To build or buy 200 homes for rent or shared ownership.

5 3. Board s Strategic Decisions The Board s strategic decisions are the most important ones made in respect of VFM as they decide how resources are used, whether they are financial, assets or staff. The following is a summary of the Board s key existing strategic decisions (in no order of priority): Strategic Decisions Independent and local governance and control of the Trust Maintain existing borrowing margins from our lender, Santander Only to own property assets within a one hours drive of Gadbrook Park. To maintain the property stock in line with the stock condition survey Approved a Property Procurement Sub-Strategy with a balance between using our own skilled trades staff and external contractors Maintaining a high cash balance to provide a buffer to mitigate the risk of the direct payment of Universal Credit to our customers To invest in services for our vulnerable customers To maintain customer satisfaction levels Impact and Opportunity Cost The Trust is an independent organisation and as such the Board believes this status allows the Trust to maximise resources and to provide services focused on our customer needs and the neighbourhoods they live in. The margin is very low and provides competitive finance. However, by maintaining existing facilities this restricts further borrowing, which would increase the margin. Enables significant economies of scale for managing and maintaining property. The opportunity cost is that it may limit opportunities for growth. The Board is committed to maintaining our property stock to the highest standards. Property maintenance is the Trust s largest area of expenditure and the stock condition survey is being updated to provide assurance on the future levels of planned expenditure. Provides a framework to enable a balance between ensuring economic maintenance costs and services that meet customer requirements. Using our own work force provides social value from local labour and supplies, boosting the local economy. The direct payment of Universal Credit to customers, rather than directly to the Trust will cause short term cash flow issues as customers adjust to the change in payment. The Trust s cash balance is kept high to allow for these adverse fluctuations, meaning cash can t be invested for other strategic priorities. The Trust s Support and Wellbeing services provide support for our most vulnerable customers. These services help these customers to maintain their tenancy (reducing the Trust s cost of void expenditure) and to improve their quality of life. The opportunity cost is that this money will not be available for other activities. The impacts of the rent reduction led to the decision to maintain existing high customer satisfaction levels rather than looking to exceed them. The Trust will be reducing its services in some areas and our transformation of services, in order to reduce costs, could reduce satisfaction.

6 4. Performance against Targets In last years VFM Self Assessment a series of targets were set out. This section looks at how we performed against those targets. Annual Strategic Achievement Measures (SAMs) for 2017 Many of these targets are covered in other parts of this report but for completeness they have been included here. Target Comment Comply with lenders covenants Achieved Adjusted operating surplus of 23% Achieved 27% 91% overall customer satisfaction Not achieved 90% Deliver savings plan for 2016/17 & 2017/18 Between 80% and 85% satisfaction in 80% of neighbourhoods * 90% customer satisfaction with the design and quality of their home 88%-90% customer satisfaction with the repairs and maintenance service Either land bank with the capacity for 40 homes or secure a development(s) that will result in the building of 40 homes More than 50% of customers eligible for Reward Scheme 70% of our customers do not receive our support service Build 4 shared ownership homes for sale 1,400K of income gains for customers Current arrears to be 3.5%; income collection to be 100% Best Company 2 Star status 90% with keeping customers informed and >72% listening to views 85 people to be helped to be ready for work and 45 people placed into work For those households involved; 50% to have improved rent payments Achieved Not achieved as these levels of satisfaction were only achieved in 66% of neighbourhoods Not achieved 89% Achieved 88% Achieved - land and developments have been secured to provide 50 new homes. Achieved 58% Achieved 84% Achieved 4 are being built Achieved 2,025k Both achieved; arrears 2.51% and 100% cash collected. Achieved 88% with keeping customers informed (not achieved) and 87% listening to views (achieved) Both achieved with 87 and 51 respectively Achieved 69% * Note: collecting sufficient data for the individual neighborhoods is proving to be difficult and resulting in fluctuations in this result. The Trust is working to review the way this indicator is measured.

7 Other Targets Target To implement a Rewards scheme (called Just Rewards) for our customers Asset Management Project To implement an Electronic Document Management system Implement the voids plus IT system Re-Implement I-Housing IT Module To improve efficiency of our HR system To update our stock condition survey software and to review the data within that system Performance Management (Productivity) Phase1 To increase the number of individual properties let with Nil Void Rent Loss. Uimprove Review & Refresh Review and Re-implement QL for Income Management EPayables / EDRM Implementation Garages Project Investigating partnership with other housing associations To generate additional income to support customer focused activity. Comment Achieved Achieved Implemented CIH to calculate NPV for our stock Completed the system has been implemented Completed the new system is in and working Not done. Looking at other possible IT solutions Lots of work done on this including using cloud technology. Continuing to make improvements. New software bought and implemented. Process to update the data will be completed in 2018 DRS/Infosuite implemented; productivity reporting in place; Trading Account revised. Completed Completed Ongoing. The system will be reimplemented in Project on going and will be completed in 2018 Completed On going completed first full year of ASB service for Peaks & Plains. The Trust was successful in its bid for New Leaf funding (to provide employment opportunities). Income of 79k in 2017.

8 5. Financial Performance in 2017 This section of the report focuses on our financial performance in 2017 at a strategic level and also provides detail of our operating costs and overheads. This includes an overview of our performance against previous years and a benchmark comparison with similar housing associations, using Housemark data. Key Financial Ratios These ratios show an improvement on previous years and reflect a healthy financial position for the Trust. In 2016 the operating margin (and adjusted margin) was adversely impacted by redundancy costs as the Trust took the difficult decision to reduce its staffing complement to prepare for the 1% reduction in rents and the ending of supported people funding. WVHT Position in Housemark Quartile Key Financial Ratios Operating margin, adjusted for capitalised repairs 19% 13% 27% N/A N/A N/A # Operating Margin 31% 28% 32% Q1 Q2 Q1 # EBITDA (adjusted for capitalised repairs) Interest Cover 221% 188% 333% Q2 Q3 Q1 # Operating Margin (Social Housing Lettings) 34% 31% 36% NA NA NA EBITDA Earnings before interest, tax, depreciation and amortisation. Valuation and Return There has been a valuation undertaken in 2017 which resulted in an increase in the valuation of our property stock. The asset cover continues to improve as the loan reduces. Valuation & Return Value of properties owned (existing use) 195m 195m 198m Asset Cover Ratio (110% lenders criteria) 232% 237% 246% Treasury Management The debt per home and our gearing continues to fall as annual repayments are made against our loan with Santander. The average interest rate continues to fall to reflect the lower current borrowing costs. WVHT Position in Housemark Quartile Treasury Average debt per home owned 13.3k 13.1k 12.0k Q3 Q2 Q2 Average Interest rates paid 4.8% 4.2% 4.1% NA NA NA # Gearing 91% 78% 75% NA NA NA

9 Where we spent our money Before looking at comparisons and benchmarks this next graph looks at where we spent our money in percentage terms: The main points to note from this chart are: An increase in spend on development as the Trust builds more homes. In 2016 the Trust unfortunately had to make some redundancies and this cost is reflected in the high level of staffing costs for that year. Also in 2016 the Trust brought forward expenditure on Solar panels so there was always going to be a reduction in this item in The amount of expenditure in 2017 has fallen as a result of the cost savings required to respond to the 1% reduction in rents. # Social Housing Costs Our regulator, the HCA, has published information on the Social Housing Costs of all housing associations (HA): Social Housing Costs - all figures are costs per unit (CPU) and are in k Total Social housing cost Manag ement Service Charge Mainte nance Major Repairs Other Social housing costs 2017 WVHT WVHT WVHT Comparisons with others 2016 LSVT Average for those over 12 years old 2015 Median of all HA s Note: the total Social Housing costs are the other 5 columns added together.

10 Points to note from the table: The 2017 costs have reduced due to the savings made to respond to the 1% reduction in rents. In 2017 the other social housing costs have been re-assessed and this figure is the cost of the Trust s supporting services (Support and Wellbeing, Money Matters and customers into Work). The Trust s 2016 Social housing cost of 3.87 is above the average because of the increase in Management (caused by redundancy costs) and the increase in Major Repairs (caused by the investment in Solar Panels). In all years the amount spent on Maintenance cost has been in the Upper Quartile caused by the amount of cyclical maintenance expenditure. The asset project will review the amounts to be spent in this area in future years. Operating Costs - assessment of major types of expenditure In 2017 all our Operating costs reduced: Housing Management by 6% as a result of the savings made; Planned Maintenance by 32% due to lower levels of spend (2016 included spend on solar panels) and Responsive and Voids by 4% from lower expenditure on responsive repairs. WVHT Position in Housemark Quartile Operating Costs Per Home Owned per Year Housing Management Q4 Q4 Q4 Planned/Cyclical Maint 1,434 1,632 1,096 Q3 Q4 Q2 Responsive/Void Maint Q2 Q2 Q2 Overheads Overheads as a percentage of costs has increased because of the increases identified in the next table. WVHT Position in Housemark Quartile Overheads As a percentage of Costs 31% 32% 34% Q3 Q3 Q3 # As a percentage of Adjusted Turnover 12% 12% 12% Q3 Q3 Q3 Overheads Cost Per Employee Despite the increased cost per employee the Trust s quartile position remains unchanged, improved in the case of IT. WVHT Position in Housemark Quartile Overhead Cost per Employee per Year IT 4,804 5,322 5,490 Q2 Q2 M Finance 2,074 2,169 2,385 Q1 Q2 Q2 Central Overheads 7,457 6,960 8,075 Q2 Q2 Q2

11 6. Operational Performance and Customer Satisfaction for 2017 This section focuses on key areas of our operational performance, the ones that are most important to the running of the business and the main customer satisfaction indicators; together they give a balanced view of performance. The section starts off with some contextual information on the number of properties the Trust manages and those sold. Properties owned and managed The Trust also owns a portfolio of garages, shops and has various land holdings. The numbers fall mainly due to the sale of homes, see next graph. Properties Sold through RTB and RTA The number sales have risen since 2013 when the maximum amount of discount, available through the RTB, was increased. On average customers receive a 53% discount when they buy their home through the RTB.

12 Rent Arrears Once again our performance on rent arrears continues to improve and our arrears are the lowest ever. We know that performance can be even better and in 2018 our IT processes have been significantly changed to improve efficiency. WVHT Position in Housemark Quartile Rent Arrears Current Arrears 3.4% 2.86% 2.51% Q3 Q3 Q2 # Rent Collected 99.8% 99.9% 101.1% Q2 Q2 Q1 Evictions 0.59% 0.28% 0.20% Q4 Q2 Q1 Asset Management The amount of maintenance expenditure in 2015 and 2016 was increased as the Trust spent on energy efficiency works and providing solar panels; without this spends the 2017 figure has reduced. This has also meant that the ratio of responsive repairs to planned maintenance increases our aim is to get this ratio as high as possible because planned work is more cost effective than responsive work. Asset Management Total of Maintenance /Property Investment 12.4m 12.3m 9m # Ratio of Responsive Repairs to Planned Maintenance spend 48% 38% 58% # Return on Capital Employed 9.7% 8.9% 9.8% Decent Homes (target 100%) 100% 100% 100% Void Property Management This is an area where the Trust has reviewed its processes to improve performance. Void rent loss continues to improve but the time it takes us to relet properties still needs to be better. Our tenancy turn over rate remains low and occupancy rate high, both of which reflect the general stability of the stock. WVHT Position in Housemark Quartile Void Property Management Void Rent Loss 1.28% 0.95% 0.82% Q3 M Q2 Average Relet time( in days) Q4 Q3 Q4 Tenancy Turnover % 6.17% Q1 Q2 Q1 # Occupancy 99.4% 99.2% 99.5% NA NA NA Property Maintenance Performance Gas servicing is an essential activity where the safety of our customers is of the utmost importance; at the end of 2017 there were no outstanding gas services for our social housing properties, however, 5 commercial properties were outstanding a gas certificate. These properties now have an up to date certificate. WVHT Position in Housemark Quartile Property Maintenance Gas Certificate in Place 100% 100% 100% M Q1 Q1 Average number of repairs Q2 Q3 Q2 Property Repairs Average Cost Q2 Q2 Q2

13 Development Capacity and Supply The Trust has a modest development programme funded by grants from the HCA saw the completion of 6 flats in Leftwich. The Board has made a decision to increase the number of homes developed in future years. Development # New Homes developed # New Homes developed as a percentage of homes owned 0.3% 0.1% 0.1% # invested for every generated from operations in new housing supply Staffing Staff turnover decreased in 2017 (the 2016 was high due to redundancies). The average number of days sick has increased slightly during the last year; although it still remains relatively low. The Trust s Best Companies score fell slightly, enough to take the Trust down to 2 STARS; we still remained in the Sunday Times top 100 hundred companies coming in at number 14. WVHT Position in Housemark Quartile Staffing Turnover of Staff 14.1% 17.3% 9.6% Q3 Q2 Q1 Average number of sick days Q4 Q1 Q2 Best Companies Score 2 Star 3 Star 2 Star NA NA NA Continuous Improvement The Trust s aim is to continually improve the way services are delivered and to improve the effectiveness of those services. The following are examples of the range of improvements that have been made in 2017 (the savings made ongoing year after year). Estimated Description Annual Saving k 106 Merging of Property Services Team and changes in processes 84 Drainage contract brought in house 46 Review and changes made to Money Matters processes to allow an increase in the number of customers helped 24 Reduced vehicle fleet size by 11 vehicles 34 Tendering of mobile telephone contract 17 Review and changing of staff terms and conditions 10 New Leaf funding contribution to fixed overheads 10 Procurement through Northern Housing Consortium 5 Electronic logging and processing of staff expenses 5 Greenbank Hub customers taking over some management responsibilities and costs

14 Customer Satisfaction The STAR survey is carried out by an external company, so it is an independent assessment of customer satisfaction. We survey approximately 300 customers every 4 months which enables us to produce a rolling 12 month average on customer satisfaction levels. WVHT Position in Housemark Quartile STAR Survey Data # Overall Satisfaction 91% 92% 90% Q2 Q1 Q3 Customers who rate their rent as VFM 81% 84% 84% Q4 Q3 Q4 Customers satisfied with the Design and Quality of their home 91% 88% 89% Q1 M M Customers satisfied with the repairs & maintenance service 87% 90% 88% Q1 Q1 Q2 Customer s satisfaction with their neighbourhood 89% 93% 87% Q2 Q2 Q3 Net promotor Score * 47% 61% 49% Q1 Q1 Q1 *is based on the response to the question how likely are you recommend the Trust to a friend. The score is arrived at by taking the number of promoters (people who answered the question positively) and subtracting those who answered negatively.

15 7. Improving the Quality of Life for our Customers The purpose of our Vision is to improve the quality of life for our customers. This part of the report provides information on the added value services the Trust provides and the impact they have on customer s lives, whilst providing business benefits for the Trust. Money Matters Team This team helps our customers to manage the impact of Welfare Reform by maximising their benefits, helping them to budget and giving debt advice. In 2017 we enabled customers to increase their income by 2,447k, of which 40% directly related to income that reduced the arrears of those customers. The benefit of this service for customers is that they are financially better off, for the Trust it means our rent arrears are lower. There were 198 Money Matters Team cases that were completed during 2017; the rent arrears from those cases reduced by 52k (from the date they were referred to the date the case was completed). Work and Enterprise Team Universal Credit is constructed in such a way that it pays to move off out of work benefit and our aim is to help our customers into work and to increase their income. Our team work with customers to help them get skills to be ready for work, and also to help some customers into work. The business driver for this service is those customers in work will be in a better position to pay their rent and in 2016 and 2017, nearly 70% of people we have helped had improved their rent payments.

16 Work and Enterprise Team Customers helped to be ready for Work Customers placed into Work For those households involved, percentage who have improved rent payments NA 68% 69% Support and Well-Being This team works with individual customers who are vulnerable, either due to illness, disability, mental health issues, substance abuse, debt etc. to maintain their tenancies. This team enables our customers to maintain their tenancies and saves the Trust lost income from rent arrears and void costs Support and Well-Being Team Income Gains 167k 297k 256K The Team obtained 256k of income gains in 2017 for individual customers that they supported through grants etc. (this is in addition to gains obtained by the Money Matters Team) Support Workers signpost to many other organisations that can assist with the individuals needs such as mental health teams, alcohol and substance abuse teams and the voluntary sector in order for them to sustain tenancies. Economic Impact of the Trust s day to day s activity All the properties that the Trust owns and manages are located in West Cheshire and in addition 90% of the Trust s staff lives in a Cheshire post code area. The impact on Cheshire, from our operations, is significant and we wanted to estimate how much economic activity is generated and the number of jobs that are supported from our day to day operations. The Trust has used a model that has been constructed on behalf of the National Housing Federation called the Local Economic Impact Calculator to provide the following information. Economic Impact of the Trust s day to day activity in West Cheshire Gross Value Added 13.8m 14.1m 14.0m Employee Income 7.1m 7.2m 7.1m Full time employees supported Whilst data such as this can only estimate economic activity we feel it gives a reflection of our commitment to the local economy and in particular the number of jobs that are supported by our day to day operations.

17 8. Asset Management Asset Management Strategy The aim of this new strategy is to maintain and innovate to improve the desirability and value of our homes and neighbourhoods. We want to protect the value of our physical assets and ensure our customers are satisfied with the product, its environment, and the services provided to maintain and improve it. Our homes, neighbourhoods, and other assets should remain as attractive, modern and flexible as is practical in response to the expectations of both existing and potential customers. To achieve the strategy the Trust will: Be a housing provider of choice, offering a range of products that are attractive to customers with disparate housing needs; Ensure customers who rent are safe and happy in their home, and its environment, and have a low propensity to leave; Be proud of the appearance, quality, and facilities offered by its housing and other assets, including the neighbourhood environment, in the belief that such pride rubs off on our customers in a way that increases both overall attitudes to good citizenship in our areas of operation, and the self-reliance of our customers; Comply with the Government s Decent Homes Standard for its rented housing; Monitor, predict, and respond to changing demand for, and value of, its assets in order to maintain viability; Raise the quality of life of our customers and potential customers; Prepare, consider, and take account of long term viability of each asset when making short term maintenance and investment decisions; Utilise data to explore innovative alternative options for property and neighbourhood investment. Return on our Assets The Trust calculates a net present value (NPV) for all its property stock. The 2017 figures have been updated following a review of the assumptions used in the model the Trust uses to calculate the NPVs. Category Average NPV per home 2016-Number of Homes 2017-Number of Homes Very Good Over 50k Good Between 30k and 49k 5,494 3,277 Satisfactory Between 0k and 29k 385 2,524 Very Poor Negative NPV Our SAM of 90% of the stock having positive NPV by 2020 has been met (98% of stock meets this criteria).

18 The percentage of the Trusts stock that has a negative NPV is 1.53%. This is spread between our sheltered and general needs stock, with just over 1.6% of general needs with a negative NPV and the balance is from our sheltered stock failing to meet this threshold. We will carry out option appraisals on this small amount of general needs stock and the appraisal of the negative NPV sheltered stock already forms part of our on going review of the demand and viability of our portfolio of Independent Living Apartments. Independent Living Apartment (ILA s) At the beginning of 2017 the Trust had 9 ILA s which are flats/bed sits for people aged 55 and over. Built in the 1960/70 s they have a high number of bedsits, for which there can be low demand. During the year an option appraisal was carried out on Oakwood House in Barnton and Board took the difficult decision to close this scheme. It was demolished in 2017 and will be replaced with new homes for rent and sale. The Board will continue to review its services and demand for the remaining 8 ILA s during the year and to decide its future investment strategy for them. Return on Commercial Properties The Trust has 34 commercial shops which are all located within the neighbourhoods where our properties are located. Not only are the shops a community facility and provide jobs they also generate a high return on capital employed: Commercial Shops Turnover on shop management 224k 234k 238k Return on capital employed 83% 87% 85% Investment in Property Maintenance and Improvement The Board decides each year how much to invest in maintaining and improving the property stock; this is heavily influenced by the stock condition survey. The aim is to ensure the stock meets decent home standards, to prevent any deterioration and minimise the need for responsive repairs. Part of the Asset Management project was to replace its stock condition survey software, refresh its stock condition surveys and to review processes and the data held. A new system, Keystone, was procured and implemented during 2017 and the work to up date the data will be completed in Cyclical Maintenance The Trust recognises the value of extending the life of building components beyond the life expectancy in the stock condition survey. This is achieved through a rigorous programme of external repairs and painting (7 year cycle), internal inspection and repair (10 year cycle), electrical testing and follow on repair (moving to a 5 year cycle).

19 Property Location The Board s decision only to own and manage its property within an hour s drive of its headquarters is a key strategic decision which has significant advantages including: Transport costs and travel time is efficient; Organisational priorities are focussed; Customer services can be provided effectively and efficiently without the need for costly satellite offices; Emergency and out of hours services can be managed efficiently; The expenditure and employment has a beneficial impact on the local economy; Stakeholder management and relationships are easier to identify and support;

20 9. SAMs and Targets for 2018 These are the targets for 2018 and which we will report back on in next years self assessment will see the Trust working on projects (see new targets for 2018, below) which will drive efficiencies in future years to ensure that costs are saved and that by 2020 a further 2m of costs are driven out of our business to offset the loss of income from the 1% reduction in rents for 4 years. Annual Strategic Achievement Measures (SAMs) 2018 SAM Strategy Comply with lenders covenants VFM and quality Adjusted operating surplus to be in line with or better than VFM and quality budget 91% overall customer satisfaction VFM and quality 300k savings VFM and quality 80%-85% satisfaction in 90% of neighbourhoods Asset Management 90% customer satisfaction with the design and quality of Asset Management their home 88%-90% customer satisfaction with the repairs and Asset Management maintenance service 35 new properties developed New Homes More than 60% of customers eligible for Reward Scheme Self-Reliance 80% of our customers do not receive our support service Self-Reliance 1% of lettings at sub market rent; 1% at Affordable Rent; 1% Tenure of lettings for shared accommodation 1,400K of income gains for customers Rent Collection Current arrears to be 3%; income collection to be 100% Rent Collection Best Company 2 Star status Employer of Choice 88% with keeping customers informed and >84% listening to views Customer Communications 70 people to be helped to be ready for work and 40 people Customers into Work placed into work For those households where people are helped into work) Customers into Work 50% to have improved rent payments Meet the targets set for the New Leaf (Building Better Customers into Work Opportunities) Project Targets carried over from 2017 Description To update our stock condition survey software and to review the data within that system Big Change (Performance Management Productivity) Comment Software bought and implemented in On target for completion in 2018 Transformational project requires mobile

21 Description EPayables / EDRM Implementation Comment working to be extended to whole workforce in second year of this project to improve the productivity of our Property Services Teams. On going and will be completed in 2018 reducing time and improving efficiencies. New Targets for 2018 Description Customer Asset Project Mobile Working Learning and Development Comment Will lead to a greater understanding of our customers now and in the future. It should lead to changes in service delivery to improve efficiency and effectiveness. 2 year project to implement an organisation wide IT system to improve speed, accuracy and efficiency of working throughout the Trust A project to change and improve the Trust s overall approach to Learning and Development.

22 10. Strategic Approach This section looks at our strategic approach to VFM, responding to the 1% rent reduction and our asset management strategy. VFM and Quality Strategy The aim of our strategy is to constantly make the most efficient use of resources in the delivery of our strategies. How the Board Measures VFM at a Strategic Level The Board uses a series of measures to judge the effectiveness of the strategy. As the current strategy was introduced in 2013, the table includes this year: VFM Strategic Achievement Measures Comply with Santander loan covenants Yes Yes Yes Yes Yes Adjusted Operating Margin to be better than budget Yes Yes Yes No Yes Customers who rate rent as good VFM 83% 80% 79% 84% 84% Customers satisfied with overall services 91% 91% 88% 92% 90% Operate within business plan requirements Yes Yes Yes Yes Yes The target for Adjusted Operating Margin was missed in 2016 because of redundancy costs and accelerating the programme for the installation of solar panels. Operational Approach to VFM and Quality VFM is driven through the Trust from the vision and strategies. Vision Transforming Neighbourhoods, Homes and Services to Improve the Quality of Life for our Customers Strategies Decide where we are going to spend our money Set strategic achievement measures (SAMs) - our targets to measure the sucess of the strategy Corporate Projects To deliver our high level SAMs Project budgets to provide resources Other Projects Trust believes improvement can only be made via projects Focused on improment of services and processes.

23 Projects to Drive VFM We believe that to drive improvements it has to be through the use of projects; from large corporate projects to smaller team ones. We use a project methodology, Uimprove, to ensure that projects are correctly set up, managed, resourced and delivered. Savings Plan In 2015 the Trust s Board approved a 4 year savings plan to reduce our annual operating costs by 4.4m to respond to the loss of income caused by the 1% reduction in rent for 4 years. Going forward 1.8m of savings required are as follows: k k k Projects are being undertaken to improve efficiencies and to take out these costs in a planned way that ensures cost savings whilst maintaining customer satisfaction and staff morale.

24 Appendix A - Notes Financial Years This report refers to the following financial years st April 2014 to 31 st March st April 2015 to 31 st March st April 2016 to 31 st March st April 2017 to 31 st March 2018 Glossary ASB - Anti-Social Behaviour Board the Board of Weaver Vale HT CIH Chartered Institute of Housing CPU Cost per Unit per year CW&C Cheshire West and Chester Council DWP Department of Works and Pension EBITDA - Earnings before interest, tax, depreciation and amortisation EMT - Executive Management Team HA Housing Association HCA - Homes and Communities Agency HB - Housing Benefit ILA s - Independent Living Apartment Schemes LSVT Large Scale Voluntary Transfer NPV Net Present Value RTB - Right to Buy RTA - Right to Acquire SAM - Strategic Achievement Measure STAR - Survey of Tenants and Residents The Trust - Weaver Vale Housing Trust # indicates it is one of the metrics included with the Sector Scorecard pilot Benchmarking Where quartile data is shown, unless otherwise stated, it is from Housemark. The comparator is against LSVT s in Northern England, the numbers in each year group are: comparators comparators comparators Quartiles The Housemark data refers to which quartile the Trust s performance is in, the quartiles represent the following: Q1 - Top 25% Q2 - Top 25% to 50% M - Median Q3 - Bottom 50% to 75% Q4 - Bottom 75% to 100%