Crosby Housing Association Value for Money Self-assessment 2014
1. Introduction Value for Money (VFM) is a key element of Crosby Housing Association’s business plan. This statement provides assurance to the Board that the Association meets the regulatory requirements and that the business plan objectives are being achieved.
2. Business Purpose and Objectives The aim of Crosby Housing Association is to provide good quality affordable accommodation for people who have an identified housing need and to work in partnership with our customers and others for the benefit of communities and neighbourhoods. We operate proudly as a values-based organisation with a set of defined values under the headings of:
Tangible Tolerant Practical Permanent
Under our value of Practical we make the statement: “We are always innovating and looking for new ways to do a lot with a little, rather than just throwing money at any issues or needs”. Our current ongoing business plan has 3 Strategic Themes:
Making Best Use of Assets Supporting Tenants A Strong Viable Organisation
A 4th Strategic Theme overarches all of the above:
Demonstrating Value for Money
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3. VFM through business planning and delivery The business planning process of the organisation involves Board, staff, tenants and other stakeholders in a series of scheduled meetings and opportunities for input, involvement and feedback. Business plans for 2013/14 included defined work-streams to progress delivery under the strategic themes. Asset Develop and deliver - Asset management systems for Management programme planning, financial forecasting and performance monitoring Income Maximise rent and service income and collection and Management build up cash reserves Systems & Implement improvements to our systems and ensure Processes staff take ownership of key business systems and in particular SASSHA and SAGE. Customer Deliver strong communication links with customers Focus providing support and encouraging involvement Good Lead CHA through the changes facing the organisation Governance and remain financially robust with tenants that are satisfied with our service Strong Improved financial performance and greater expertise Organisation from board and staff of high performing organisation Community Continue to be recognised as an effective community based Housing association Effective Build effective connections that demonstrate support partnerships for tenants and the wider community and at the same time build the reputation of the Association New Respond to new initiatives as they arise. Take forward initiatives only where a business case supports investment of resources provides benefits to CHA Regular, scheduled reports to Board report on progress and performance against plans, targets and KPIs. Performance is benchmarked against other small housing associations in the North West and nationally against Housemark statistics, where available. Many of the tables that follow in this statement are provided by these benchmarking collaborations.
4. Strategic Business Themes Strategic Theme - Demonstrating Value for Money At the annual Business Planning day in January 2014, Board, staff and tenants agreed that “Demonstrating Value for Money� would be re-assigned from being an individual business theme to an over-arching objective of the other 3 Strategic Business Themes. The purpose was to promote and embed VFM as an objective of all business activities within the organisation. 2
Strategic Theme - Making Best Use of Assets Properties Property assets have grown over 45 years from a single unit to the current level of 410 units.
General Needs Supported Total
1 bed 149 61 210
2 bed 98 98
3 bed 81 81
4+ bed 21 21
Total 349 61 410
A Board-led Asset Management Project Group is in place. It will explore stock investment needs, the use of existing stock and the potential of new opportunities. The organisation has developed an action plan through the Board Project Group to review current stock usage against existing and potential tenant needs and the additional factors of maintenance costs and effective use of assets and resources. The project group will progress to consider opportunities for growth, testing circumstances, conditions and the risks and benefits of possible outcomes. Stock Condition A full stock condition survey was completed in 2005. This was updated through surveys to complete the Decent Homes Standard in 2009/10. During 2013/14 a further survey was undertaken to support the planning of the ongoing programme of planned maintenance. In 2013/14 all homes continued to meet the Decent Homes Standard. Operating Costs Enhancements to operational procedures and increased control over resources, data management and reporting have delivered improved operational costs. Weekly Operating Cost per unit Family HA Crosby Arcon ECBHA Ashton Pioneer Median WMHA Arawak Walton Warrington Pierhead SPBM
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2011/12 52.20 70.31 58.18 64.00 57.55 57.55 58.66 52.26 50.88
2012/13 46.10 64.69 58.66 55.05 57.44 55.40 58.64 55.74 53.00
74.66
74.34
2013/14 47.09 48.31 56.00 56.90 58.74 58.74 59.34 60.98 63.15 67.02 74.49
Repairs and Maintenance Repairs and maintenance of properties are managed internally within the organisation with delivery by a pool of approved suppliers and contractors. Properties are maintained to protect the value of our assets and to meet the needs of tenants. Investments in property maintenance aim to include upgrades to improve energy efficiencies for tenants. During 2013/14 maintenance has included 20 upgrades to existing heating systems; 14 replacement heating systems with grade A standard boilers; 8 improved loft insulations; 15 dry-lining of properties to improve weather-proofing and thermal efficiency; 38 full window replacements with grade A, double glazed, UPVC units. Maintenance procurement has raised product standards, increasing supplier guarantees and leverage of best prices e.g. through CHANW collaborative deals with suppliers. This aims to deliver reductions in the number of routine repairs over time. Average Weekly Cost per dwelling of responsive repairs People First WMHA SPBM Family HA Median Warrington Crosby Arawak Walton ECBHA Forum Pierhead
2012/13 10.53 11.34 11.22 13.06 12.34 15.24 16.34 14.88 7.80
Percentage of residents satisfied with the most recent repair (when surveyed in accordance with the organisation's own survey format) ECBHA WMHA Crosby People First Warrington Median Ashton Pioneer PNW SPBM Arawak Walton HouseMark Pierhead
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2013/14 10.51 11.26 11.36 11.42 11.42 12.64 13.15 16.99 24.45 4.60 5.40
2013/14 100.00 100.00 99.15 99.00 98.70 98.70 98.48 96.00 96.00 95.00 94.93 94.00
Rents In 2013-14 we took the opportunity to maximise returns on our assets and applied the rent flexibility tolerance as provided for in guidelines set out by the regulator. These guidelines provide flexibility to charge rents up to a maximum limit; prior to 2013 CHA had always charged below the maximum. For 2013/14, Board took the decision to increase rents to maximise rental income. The decision to increase rents to this extent was taken to protect the viability of the Association while keeping rents favourably comparable with other social housing associations and local private rents. The increase was in line with rent guidelines and reflects the charge of ÂŁ2 catch-up, where applicable, and the charge of full target rent for new lettings.
Average GN weekly gross rent SPBM People First ECBHA WMHA Family HA Median Ashton Pioneer Arawak Walton Crosby
2012/13 95.41 92.90 77.55 80.35 80.39 80.05 84.05 84.48 76.44
2013/14 97.22 95.57 79.81 82.70 82.97 82.70 87.12 87.84 80.96
Increase 1.90% 2.87% 2.91% 2.92% 3.21% 3.31% 3.65% 3.98% 5.91%
Rent arrears were managed within the performance target of 2% of total rents receivable during 2013/14.
Rent arrears net of housing benefit GN only Ashton Pioneer Crosby SPBM WMHA Median Family HA ECBHA
2013/14 1.50 1.60 1.84 2.59 2.59 2.78 3.70
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Voids and Re-lettings The target to maintain rent loss from voids to within 2% of gross rental income was met throughout 2013/14 but the target of 18 days as the average void turnaround time was never achieved. Actions in place for 2014/15 include a review of Void Management and Lettability Standard policy and procedures. Percentage of rent lost through dwellings being vacant - GN only ECBHA Ashton Pioneer People First Crosby SPBM Warrington Median HouseMark Arawak Walton Family HA WMHA Arcon Pierhead
Average re-let time (calendar days) - GN only PNW Ashton Pioneer Arcon Crosby Family HA SPBM Median HouseMark People First Arawak Walton ECBHA WMHA Pierhead
2013/14 Q1 0.03 0.58
2013/14 Q2 0.19 0.40
2013/14 Q3 0.16 0.35
1.14 0.60 0.62 0.71 0.92
0.85 0.64 0.11 0.63 0.94
0.57 0.57 0.59 0.58 0.80
1.37 0.80 3.30
1.56 0.85 3.20
1.35 0.88 3.00
2013/14 Q1 1.00 11.60 12.60 22.30
2013/14 Q2 0.00 11.70 13.00 21.40
2013/14 Q3 1.00 10.88 14.80 19.40
21.00 22.30 23.45
20.55 20.10 23.05
22.05 20.20 23.00
52.00 29.30 32.00 81.00
33.00 18.80 36.00 84.00
31.00 21.00 22.00 78.00
2013/14 Q4 0.30 0.42 0.49 0.51 0.51 0.54 0.54 0.71 0.74 0.81 1.16 1.29 3.00
2013/14 Q4 1.00 11.35 15.60 20.10 20.28 22.75 23.14 23.75 26.00 28.00 29.00 32.00 76.00
Investments Each of the past 2 years has seen the organisation start to return a surplus at higher levels than previously. This has increased liquidity and cash-holdings at the bank. Though bank return rates have remained low (<1%) now for several years, the increase in cash reserves has created a need for deposit facilities to maximise interest returns and safeguard cash holdings of ÂŁ0.5M+. Arrangement of additional deposit facilities are planned for 2014/15. Loan Management With interest rates remaining low and historical terms beneficial, current loans have been retained and maintained. In 2013-14 Board added to performance management a quarterly report on the maintenance of our loan covenants. 6
Social Return on Investment The organisation considers itself to have evidence that we are an independent, local housing association that ‘punches above its weight’. Our assets and resources are all maintained within a relatively small area of approximately 3 square miles of South Sefton. Our direct investments are focussed into the communities in which our tenants, their neighbours and our employees live. There are wider returns from our investments than those measured by financial reporting and performance indicators. We provide local employment within the community. 15 out of our 20 staff live within 3 miles of our office and charity shop. Our staff support local shops, business and community activities beyond their roles within the organisation. Our staff are drivers, leaders and active participants in community-based activities – as key partners with the Local Authority, Waterloo Town Team, SWACA, Sefton Food Bank, Seaforth and Waterloo Christmas celebrations. The organisation hosts the CHART team of 4 staff within its company structure, delivering accommodation assistance and support for people across Sefton who have a severe and enduring mental illness. Our Charity Shop provides practical benefits of low-cost goods for family and household needs as well as a social hub and an ear within the community. Many of the Association’s contractors are local traders who can prove that they deliver good-quality services, at reasonable cost and in accordance with our company values. The organisation stands as an established, values-based business within the community and is welcomed as a reputable partner for other businesses and organisations. Working Collaboratively The organisation works with other parties to identify opportunities for best value training and development. The Community Housing Association North West (CHANW) Group has been a strong leader of joint training initiatives since its launch in 2006. As a member of CHANW, we have been involved and benefited from the delivery of training and development activities including an annual conference programme for Board Members, tenants and staff, usually at an average cost of £50 per person. The sector response to procuring benchmarking services is largely through Housemark. This service is not affordable to most of the associations in the CHANW group. Through the collaboration of CHANW members, the group was able to jointly commission benchmarking services through Acuity, formerly Skills and Projects. The service provides comparison performance data across a regional peer group and, affiliated to Housemark, Acuity also brings some of the wider data collected nationally from the larger housing associations into the comparisons. 7
Strategic Theme - Supporting Tenants Welfare Reform During the year there was a strong focus on the impact on our tenants of the Government’s Welfare Reform initiatives, notably the under-occupation charge or “Bedroom Tax”, implemented in April 2013. Preparations had been made during the previous 12-18 months to identify who potentially would be affected and changes required within the organisation to support tenants and safeguard against any adverse business risks and their potential impact. Initially, 55 of our tenants (out of a total of 410), were identified as “at-risk” from the implementation of the Bedroom Tax. All of these tenants were contacted personally and offered an assessment and guidance according to their individual circumstances. Encouragement and assistance were given to 9 tenants to apply for Discretionary Housing Payments from the local authority; and later to 12 tenants for the Bedroom Tax loop-hole payments. Increased budget provision for bad debts from rent arrears of £20,000 (actual = £8,197) was set for 2013/14 (from £6,600 for 2012/13). A change to our Lettings and Allocations Policy was made to give priority to current, at-risk tenants to down-size to smaller accommodation. 6 tenants transferred internally to a new home within the Association (3 externally). Support was given for tenants to make a film highlighting the personal effects of Welfare Reform; the film was shown to Board, at the AGM and other meetings inside and outside of the organisation. Universal Credit 67% of rent due to us is currently received as Housing Benefit by regular, single, direct payments into our bank account from the local authority. Under Universal Credit proposals, many tenants will receive their own Housing Benefit payments, monthly in arrears, to then make personal, individual payments of their full rent due to us. The business impact of UC is likely to result in higher rent arrears and increased resources and costs for rent collection. To offer increased choice to tenants and to provide every-day payment methods, preparations were made in 2013/14 to implement AllPay from 1 st April 2014. This will enable new rent payment facilities via Direct Debit, bank/credit card, online, telephone and at local shops.
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Tenant Involvement Tenants are invited and encouraged to be involved in the planning, operational and evaluation activities of the organisation. Tenants are actively involved in:
Board meetings – 2 tenants are members of our Board Planning and review meetings with Board and staff e.g. Annual Planning Day, Annual Open Meeting Regular meetings specifically for tenants e.g. Tenants’ Advisory Panel and Tenants’ Scrutiny Panel An Annual Tenants’ Conference with other housing associations across the North West Feedback on operational repairs and services through satisfaction forms General feedback through our Complaints/Compliments/Comments procedure Input to our independently administered Tenant Survey Involvement as volunteers, supporters and customers of our Charity Shop and community events Input and feedback through our tenants’ newsletter Two-way communications through our website
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Strategic Theme - A Strong Viable Organisation From 2012/13 the Board set a priority business objectives to strengthen our financial position, increase annual surplus and increase cash reserves. Figures demonstrate that this objective is being delivered.
Surplus for Year Budget Target
Total I&E Reserves
Cash at bank/in hand
2011/12 £64,032 £252,152
2012/13 £181,739 £110,600
2013/14 £344,367 £146,793
2011/12 £4,281,372
2012/13 £4,451,435
2013/14 £4,789,684
2011/12 £108,567
2012/13 £323,933
2013/14 £598,562
Staff Resourcing The company resourcing structure is based on permanent staff in core business activities with support for non-core activities from outsourced services. Permanent staff Office Caretaker CHART Charity Shop Total Total Staff Costs
2012/13 10.8 1.0 5.6 2.0 19.4 fte £625,149
2013/14 10.6 1.0 3.6 2.6 17.8 fte 601,814
Outsourced services Property repairs and maintenance are primarily delivered through specialist, independent contractor services from within the Sefton and Merseyside area. IT business software and network services are provided through a small, specialist company (SASSHA) that we have developed a working partnership with over several years. Business feedback and input is provided back to the IT company to improve the products and services that they deliver. We have engaged the services of expert consultants to support our business in the areas of finance (NWHS), health & safety, employment law & personnel services (Citation) and accountability through benchmarking (Acuity). The expertise that we now have our finger tips has helped us to improve our offer to tenants and staff and it has proved essential to us in delivering high quality services and a viable and legitimate business. 10
It is not financially viable for an organisation of our size to acquire this diverse range of expertise in one individual through staff recruitment or to pay professionals ad hoc fees for individual services. The route we have taken delivers all of this and the total cost is less than one senior manager. Board membership During 2013/14, Board membership was 9, 2 of which were also tenants of the Association. Most of Board are longstanding members, providing experience and knowledge of the organisation, wider community and business operating environment. Board members give their time voluntarily and receive no remuneration. Board usually meets monthly, outside of office hours, and members are also involved in Board-led focus groups, business planning, conferences and training activities. Anticipating Board retirements during 2014/15, a recruitment campaign for new Board members was undertaken during 2013/14. As a consequence, 3 new Board members are due to be formally appointed at the 2014 AGM.
Training Activities Training and development requirements for staff and Board members are identified during and outside of formal appraisal reviews. Delivery of training can be expensive and cost v benefit is carefully considered within budget provision. Analysis of the business returns delivered by training activities has been identified (e.g. through IIP accreditation) as an area that the organisation could improve and benefit from. Staff Pension Scheme An attractive pension scheme for staff is recognised by the Board as a valuable part of the benefits package to recruit and retain sufficiently qualified, experienced and capable staff within the sector. Board agreed that for 2013/14, until a further review after the next actuarial valuation of SHPS, that we would continue to offer the current CARE 1/60th option of the scheme to existing and new staff. The organisation would continue to pay all of the existing and new Past Service Deficit costs and contribution increases would be shared proportionately between the organisation and staff. Additionally, Board agreed that the new SHPS option of CARE 1/120th would be available to staff from April 2013 as a lower cost option and in anticipation of providing a default for auto enrolment (from 1st July 2016). IIP Membership In January 2014, the organisation successfully undertook Investor in People reaccreditation as confirmation of our commitment to current and potential staff. Feedback from the IIP Assessor was very positive: â&#x20AC;&#x153;It was obvious from the outset that the strategies in place go beyond the Investors in People Standard. The organisation was able to demonstrate how it has applied Investors in People practices to the achievement of their key priorities.â&#x20AC;? 11
5. Assessment Summary The VFM Standard, as published by the Homes and Communities Agency, requires Crosby Housing Association, as a Registered Provider to:
Have a robust approach to making decisions on the use of resources to deliver our objectives, including an understanding of the trade-offs and opportunity costs of our decisions Understand the return on our assets and have a strategy for optimising the future return on assets – including rigorous appraisal of all potential options for improving VFM including the potential benefit in alternative delivery models – measured against the organisation’s purpose and objectives Have performance management and scrutiny functions which are effective at driving and delivering improved VFM performance Understand the costs and outcomes of delivering specific services and which underlying factors influence these costs and how they do so
To demonstrate how we are meeting the standard, this self-assessment should:
Enable stakeholders to understand the return on assets measured against our objectives Set out the absolute and comparative costs of delivering specific services Evidence the VFM gains that have been made and will be made and how these have and will be realised over time
The Board is of the opinion that Crosby Housing Association has achieved the requirements of the VFM standard and has established VFM as a strategic objective underpinning business activities within the organisation. Progress has been made through 2013/14 to improve operational systems and processes. The groundwork has been done to enable procedures, systems and data to be used to improve management of our assets and resources. Financial and performance figures evidence the improvements that have been made and highlight areas that can be targeted for further improvements. The challenges of our operating environment, especially the implemented and planned changes to Welfare Reform, will continue to make VFM improvements an essential priority within the organisation. We recognise that all our future business plans and activities need to have VFM embedded to enable us to use our assets and resources to achieve our aims.
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