GREAT PLACES
VALUE FOR MONEY SELF ASSESSMENT 2014
CONTENTS
1.
Summary 1
2.
What VFM means to Great Places 2
3.
Overview 3
4.
A strategic approach to value for money 4
5.
Connecting with staff
6.
Benchmarking 7
7.
Achieving our business objectives 10
8.
How have we done? 20
9.
Our future priorities 21
10.
Conclusion 27
Page
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KEY MESSAGES • A profit with purpose organisation which owns and manages 17,000 properties across Northern England. • Record turnover and surplus in 2013/14 • 600 new affordable homes built last year, which would result 100,000 new homes if the sector as a whole could match our rate. • 1,000 customers registered for self service through the website • Over £1million put back into tenants pockets through broad ranging financial inclusion activities • Over 170 people helped into employment and training • To maintain our corporate priority, we have subsidised Supported Housing by £1m and this has a significant impact for our 1,500 supported customers. Of those who said they had a support need of maximising their income, 97% have been successful. 98% have participated in their chosen learning and 98% are managing their health better. • Despite the increasing incidence of affordable rent nearly 80% of our customers still think their rent represents good value for money
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Summary This self assessment document has been written in a way which tells the Great Places story of 2013/14. It assesses: A) How we are performing and how we compare, setting out the absolute and comparative costs of delivering specific services; B) Our strategic approach to value for money, including what we are doing to further embed it and how we achieve our business objectives through right things, right way, right reason; C) Some VFM successes from 2013/14 and our priorities for 2014/15, in order to evidence the VFM gains that have been made and how these have and will be realised over time; D) An explanation of our approach to how we manage our assets, how we understand our stock and how it works best for us in terms of achieving our priorities and objectives; E) A final conclusion which highlights the targets we have set moving forward and how our performance-management arrangements will focus the organisation on delivering improved value for money.
What VFM means to Great Places “Great Places understands value for money to mean optimising value from our spend and assets; it’s about value and it’s about money.” Definition from the Great Places VFM Strategy. There are many ways that Registered Providers can seek to demonstrate VFM and this report identifies several ways in which Great Places believes it performs well. There is one simple output where we feel our performance stands us out from the crowd – delivery of new homes. Over the past 5 years, Great Places has consistently built new affordable homes at the rate of 600 per annum. If the housing association sector as a whole (2.7M homes) could match this rate, then the sector could build 100,000 new homes per annum. This would hugely exceed the 36,000 built in 2012/13. It would hugely exceed the sector’s plans for the next 2 years (128,000 per the HCA 2013 Global Accounts). It would even significantly outperform the NHF ambition of 80,000 new homes per annum. So, in terms of what Great Places manages to achieve from its asset base, we must consider ourselves to be Matthew Harrison, delivering good value Great Places’ new for money. chief executive
Great Places has two overarching goals, agreed by Board and Directors, which both have an emphasis on improving VFM: Providing Excellent Customer Service and Being Financially Strong. These priorities, around maximising our social value and our financial capacity, both have explicit VFM dimensions to them, and are about value to a range of stakeholders, including tenants, local authority partners, government and wider communities. We have set ourselves targets for improvement, and, while in many ways 2013/14 was a difficult and challenging year, at year end we have again exceeded many of our expectations, while acknowledging where we need to get better. It is fair to say that 2013/14 was a demanding and unique year for Great Places; a year which saw a new Chief Executive, a new Chair and several new Board members; which saw our HCA Governance rating downgraded to G2; and in which issues within our in-house repairs team resulted in deterioration around a number of key performance indicators, and particularly those around customer satisfaction. Despite these tribulations, our focus through 2013/14 has remained on delivering core objectives, on achieving VFM gains and becoming a more economic, efficient and effective business, on openness and transparency, and on reacting swiftly and appropriately to challenges we have faced. By the start of the calendar year 2014, there were definite signs of sustainable recovery and evidence that we were emerging again as a vibrant and productive organisation. By the end of July 2014, overall customer satisfaction was back at 86%, from a low of 83%, and back to around median for our comparator group, our repairs satisfaction at 88% had moved up by 4.5% and our cumulative call
handling satisfaction was at 96% from 91%. All this improvement is over a period of 6 months and we are confident that the performance will improve further over the remainder of the year. We have addressed problems by identifying them early, by taking tough decisions and by implementing robust action plans. By using this approach, we are able to highlight a number of positive things that have also taken place at Great Places during 2013/14: • In 2013/14 the Group exceeded 17,000 properties owned or managed, alongside improving the stock profile, and with a portfolio that is increasingly in full ownership • Record surplus of £9.3m representing a 28% increase on the surplus 12 months earlier • Record turnover of £85m showing a steady increase over a number of years and a 240% increase in the past 10 years • Excellent staff survey results. Based largely on a staff satisfaction survey, we are currently the 12th best large workplace in the UK under the international Great Place to Work Scheme, with 86% of our staff telling us that ‘I’m proud to tell others I work here’ • Our Development programme on track to deliver 1291 affordable homes by March 2015 • Additional £17m grant funding secured for a further 922 homes by March 2017 • Arrears better than budget and our second best year-end figures ever despite welfare reform • Retained bond sold on excellent terms • Financial inclusion work that has delivered £1m+ in savings for customers in the year • Strong procurement performance resulting in over £1.5m of savings in the past 18 months • The retention of a number of supported
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housing contracts under competitive circumstances • In respect of Plumlife Sales, performance was consistently producing over £1m of additional sales receipts • 15 people helped into employment, 43 into apprenticeships, and 113 into training • Establishment of “Customer Services Voice” to monitor all aspects of performance and to provide “critical friend” to the Executive team, plus introduction of enhanced Scrutiny Panel • We retained our V1 status in 2013/14 and successfully regained our G1 status in May 2014.
A decade of growth
Overview For Great Places, VFM is incorporated into all decision making and we realize that we can’t deliver our visions and values without delivering VFM. It’s about what we value and it’s about what we spend. We seek low costs, high performance and high levels of customer satisfaction. The table (below right) shows some important measures and trends: Great Places has achieved steady growth of turnover, surplus and properties, while continuing to be innovative and seeking ongoing improvements to customer satisfaction. During 2013/14 the Group exceeded for the first time 17,000 properties owned or managed, a significant milestone. This graph (right) demonstrates the scale of growth achieved over the past decade, from
VFM highlights
2013/14
2012/13
2011/12
2010/11
2009/10
Financial VFM indicators Operating cost (excluding cost of sales) per home
£3,268
£3,129
£3,371
£3,461
£2,729
Management cost per home
£881
£820
£810
£881
£728
Planned and routine maintenance cost per home
£598
£607
£651
£610
£690
£80
£74
£75
£58
£79
Rent void loss per home Housing management VFM indicators Current rent arrears
3.6%
3.5%
4.1%
4.4%
5.3%
34 days
25 days
27 days
23 days
32 days
Resident satisfaction – overall
83.5%
88.2%
86.9%
81.6%
78.0%
Resident satisfaction – repairs
82.9%
92.2%
92.1%
74.2%
67.0%
Relet times – general needs properties
Key Points: q Our operating costs have increased broadly in line with inflation but we spent less in 2013/14 than we did in 2011/12. q The key driver for increased management costs is extra financial inclusion staff introduced to limit the impact of welfare reform q Having brought our repairs service in-house we have benefitted from expected savings in maintenance costs due
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Turnover £M (right scale)
Properties (left scale)
to better managerial control and not having to pay VAT q Levels of satisfaction have been impacted by service delivery issues with our in-house repairs service. A robust action plan is now making a difference and rolling satisfaction figures for the first quarter of 2014/15 are 85% for overall satisfaction and 88% for repairs satisfaction.
A strategic approach to value for money under 6,000 units in 2004 (which itself was almost double the 3,200 units in 2002), to 17,000 by March 2014. Turnover has grown from £25M to nearly £90M during the same period. While the pace of growth may have slowed a little, the Group continues to add around 600 more properties every year. At the same time, selective asset management disposals have improved the stock profile, while either release or acquisition of properties previously only managed means the portfolio is increasingly in full ownership.
Seeking to make the best use of the Group’s resources is not new for Great Places and the steady improvement in financial performance and quality of service delivery over recent years is prime evidence of success in this regard. Improving VFM is viewed as a sign of good governance in action, as a means of achieving corporate objectives and as a key determinant of business effectiveness. Over the past year, the Group has adopted a more strategic and structured approach to ensuring that VFM is embedded throughout the organisation, including: • Clearly defining VFM in the context of the Group’s purpose and objectives and communicating this strategic approach in a wide range of ways, including roadshows, articles in the staff magazine, announcements on the intranet and specific blogs from the Chief Executive and Directors • Explaining how strategic decisions have been driven by, and have impacted on, VFM, ensuring that there is an understanding of the relationship between quality, cost, the needs of customers and the objectives of the organisation • Regular reporting of strategic achievement measures, such as operating margin, customer satisfaction, SAP rating, environmental impact to give an understanding of costs and outcomes including
financial indicators, performance against target and trend analysis • Explaining the return on assets measured in terms of financial performance, customer satisfaction and environmental impact • Ensuring our performance management framework helps to deliver assurance and drives out waste, including key aspirational stretch targets against identified critical success factors • Identifying successes and opportunities including a register of the top ten areas for savings and regular reporting of procurement activity • Adding VFM implications to our report template, so that all papers to the Executive Team, Committees and Board have an assessment of cost, quality and meeting customer need • Ensuring that factors generating social value are maximised and measured including apprenticeships, financial inclusion and debt advice. We use these range of methods and messages to ensure that VFM is much more than a one-dimensional ‘on a page’ strategy, but that it permeates everything we do. And we are doing more!
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Connecting with staff While we work to ensure that value for money is always central to decision-making at Great Places, right from Board level down to each and every staff member, we have been keen to ensure this is consistent and embedded across the whole organisation. In April 2014 Great Places held a broad VFM Workshop for managers and directors at which we shared benchmarking data, talked through our strategic approach, and captured good, and not so good, practices against our corporate priorities and objectives. In addition, we also commissioned HouseMark to carry out value for money workshops with frontline staff and engaged more than 40 people in a number of sessions across different departments and regions. During those workshops, each staff member was able to identify a variety of initiatives that evidenced Great Places’ commitment to VFM and where we could get better. Some of the key messages from these workshops included: • Flexible working has helped reduce travel costs and improved working patterns. As a simple example, members of our central Performance team, responsible for carrying out daily satisfaction surveys, stagger their start and finish times each day, working up to 7pm, to vary survey phone calls and to try to ensure a spread of responses aligned to our tenant profile. This flexibility means we can show a strong correlation between customers surveyed and overall customer base in terms of age, ethnicity, geography and length of tenancy. This provides greater trust in the feedback and
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helps us to make informed decisions • Web-conferencing facilities have also helped to reduce travel costs. In 2012, Great Places staff saved £7,200, over 18,000 miles and over 4.5 tonnes of CO2 by web-conferencing instead of travelling to meetings • A handyman scheme has improved satisfaction for residents in supported housing schemes, as has the recycling of goods and furniture between different schemes. Satisfaction with overall services at our supported housing schemes is currently around 96%, representing top quartile performance across the sector • Re-use of show home furniture has reduced costs and also benefited residents who are gifted the items at the end of their use • Energy efficiency training for both staff and residents, solar panels introduced to reduce fuel poverty and carbon emissions, use of a fuel switch website to generate savings for residents and a reduction in energy use in schemes by shifting away from 24-hour constant heating • Procurement guidance and central team aids continued focus on the need for efficiencies • Changing caretaker vehicles to those with cages, which has enabled easier clearing of bulk rubbish, less reliance on external contractors, better looking environment and greater customer satisfaction. While acknowledging that some of these examples are not particularly influential in terms of the ‘big picture’ they are broad and varied and clearly illustrative of how front-line staff think and feel about improving value for money within Great Places.
Additionally, to continue to raise the profile of the importance to the organisation of improving, and embedding, value for money we are doing more to publicise the savings we have made (as identified in the ‘How have we done?’ section on page 14). We are convinced that making an effort, both in terms of time and resource, to embed value for money across the organisation is yielding improvements, as shown in both the Quality Street and Make Their Day initiatives, which are detailed later, and that a ‘drip-drip’ approach to communication, while keeping the message simple, relevant and accessible, is working. We even have a VFM Chicken which we use regularly to actualise and personalise the connection between the drive for improved value for money at Great Places and considerations when purchasing a chicken; that price, product and principles are equally at play, and that we all undertake VFM decisions in our personal lives, and should be doing so at work too. Further work with HouseMark is planned, further workshops are envisaged and a framework is being developed where issues raised can be progressed, either by incorporation into team and departmental action plans or by inclusion into our overarching VFM action plan.
We have done more to build VFM considerations into our approach to project management; particularly as a key element of the business case, into our service review methodology, into our performance-reporting mechanisms and as a fundamental part of any report that requires a decision. Our monthly Balanced Scorecard is framed around monitoring progress against our corporate objectives and contains a mix of measures around costs, quality and customer satisfaction. In addition, during 2013/14 we have reviewed both our performance-management and continuous-improvement strategies, and both now have a much more explicit reference to improving VFM. Equally, it is more unequivocal in our corporate risk register with a specific risk on maintaining and improving VFM. A stated and specific key Great Places priority for 2014, and an element in our Executive annual plan, is to further embed VFM in everything we do, and incorporate business efficiency into all of our processes. We will do this reporting regularly to Board, by running further workshops and by raising the profile of two key on-going initiatives: 1. Quality Street is our high-profile intranetbased database which all staff can access and through which they are encouraged to highlight cost savings and other VFM initiatives. In 2013/14, a total of 35 separate initiatives were logged on the database. 2. Make Their Day is an annual awards scheme we run, linked to Quality Street, which has the stated objectives to generate improvements, encourage a can-do philosophy and promote a
Number of Make Their Day applications
•
• •
•
positive attitude to improvement among everybody who works for Great Places. It’s about stressing that improving VFM is everybody’s responsibility and that: Working smarter is part of everybody’s day job. If you see something that could be improved, get on and do it and then tell us about the difference it has made Whatever you do, ‘you can make a difference’ and improve performance and reputation We are an organisation which encourages a workplace where people feel confident about being innovative and finding new ways of resolving issues In line with our culture statement, we come to work to make things happen, make a difference and make people’s lives better. We do things to ‘Make the Day’ of our customers.
When we started in 2008 we received 25 applications which had increased to 73 last year. Our new Board members, who are largely from a commercial background, are instrumental in driving improved VFM across the organisation and, as part of the skillset for recruitment, and in line with their training matrix self assessment,
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have acknowledged strengths in delivering efficiencies/VFM, in business performance management, in financial management, and particularly in procurement and contract management. Board members receive a Balanced Scorecard of key performance against corporate priorities every month, plus a Scorecard, and detailed management accounts, at every Board meeting. In addition, every report Board members receive highlights the value for money implications of their decision-making options. VFM was a key theme at the Board away day we held in May 2014, alongside which we discussed how business efficiency links into vision, values and corporate objectives, and we continue to have VFM as a session within our corporate induction day every month, at which new starters to Great Places are asked to think about ‘what if it were your own money’ and, in an effort to keep things relaxed and non-technical, have a group discussion on all the different VFM considerations to selecting a holiday.
Benchmarking As well as monitoring our absolute costs and performance, and how these change over time, we also understand the importance of the comparative costs of delivering specific services. We are contributors to the full suite of HouseMark benchmarking clubs and our monthly Balanced Scorecard report shows comparative graphs for a range of indicators of costs and performance, using both national and north west comparator groups. These are then used as key drivers for strategic decision-making and for ensuring that our assets are performing well, that we are delivering high quality cost effective services and that we focus on what matters most when we seek improvement. The extract (see page 8) is from our most recent HouseMark Core Benchmarking report, 2012/13, comparing the performance of Great Places with 22 similar RPs for a range of cost and quality indicators. The summary contains 15 key performance indicators, 5 related to cost information and 10 around quality of service delivery and customer satisfaction. Of these 15 measures, Great Places is at the median for 2, above the median for 9 (60%), and is in the upper quartile (the top 25%) for 6 (40%). Only four indicators are not upper or middleupper quartile and of these we improved during 2013/14 for tenants satisfied with their neighbourhood as a place to live, and we maintained our level of performance for tenant arrears in a year when we were expecting large increases due to welfare reform. We dipped slightly for number of days to complete a repair
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Efficiency Summary for Great Places Housing Group Cost KPI Quartile Business Activity
Overheads Major Works and Cyclical Maintenance
Cost KPI
Great Places Housing Group (2012/2013)
Quality KPI Quartile Quality KPI
Overhead costs as % adjusted turnover
Overhead costs as % direct revenue costs
Total CPP of Major Works & Cyclical Maintenance
Percentage of tenants satisfied with overall quality of home (GN & HfOP)
Great Places Housing Group (2012/2013)
Percentage of dwellings failing to meet the Decent Homes Standard Responsive Repairs and Void Works
Percentage of tenants satisfied with the repairs and maintenance service (GN & HfOP)
Total CPP of Responsive Repairs and Void Works
Average number of calendar days taken to complete repairs Average time in days to re-let empty properties Housing Management
Percentage of tenants satisfied with overall services provided (GN & HfOP)
Total CPP of Housing Management
Total number of tenancies terminated during the year as a percentage of properties managed (GN & HfOP) Current tenant rent arrears net of unpaid HB as % of rent due Estate Services
Upper Quartile
Total CPP of Estate Services
Middle Upper
Median
Percentage of tenants satisfied with their neighbourhood as a place to live (GN &HfOP)
Middle Lower
Lower Quartile
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repairs service and our response is detailed elsewhere in this assessment. We acknowledge that our costs of delivering income management is above average, but we have introduced new posts to offset the impact of welfare reform and we are close to completing an in-depth review which has looked fundamentally at how we approach this service and how we can do things better. Raising the profile of the Benchmarking dashboard and discussing key messages at different groups and meetings helps to improve awareness and promotes a group-wide culture of VFM, where people question how they perform and everything they spend. We will be carrying out similar exercises once again when we receive our 2013/14 Core Benchmarking data in the autumn.
continued from p7
*This is a snapshot of our performance for 2012/13 based on a peer group of 18 housing providers in the north west with more than 10,000 properties, as determined by HouseMark.
and for satisfaction with the quality of home, but these are related to service delivery issues with our in-house repairs team. We are delivering a robust improvement plan, and we are already seeing signs of recovery. As an organisation, we also utilise HouseMark’s benchmarking dashboard which pulls together cost and performance data over key service areas and plots comparative positions on a 4-quadrant matrix ranging from poor performance and high cost through to good performance and low cost. We have made a point this year of taking a benchmarking ‘roadshow’ around our different
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departments and regions to share key messages for particular teams and functions, and to use this important information as a can opener to focus on areas for improvement for 2014/15. We have provided a similar presentation to Board members and our tenant group, Customer Services Voice. This has been a very successful undertaking, consistent with our message that ‘improving VFM is everybody’s responsibility.’ As shown above, the majority of our services are providing good performance. We are within, or close to, the ‘Good Performance, Low Cost’ quadrant in HouseMark’s Core Benchmarking VFM data. However it is a key tool for improvement and for ensuring that decisions are contextualised and evidence-based. We recognize that our performance is below average for our in-house
In addition, we are also members of a ‘back office’ benchmarking club (BoB) that has been run by Baker Tilly for the last 4 years. Over 60 RPs nationally participate in the programme which identifies and compares costs of back office functions such as HR, ICT, finance, procurement, governance, performance management etc,
together with a number of costs areas felt relevant to the analysis such as cleaning, office costs, utilities etc. From an initial result of being third quartile, Great Places has worked hard to reduce back office costs and is now firmly established in the top quartile of performers when costs are adjusted for scale (measured in terms of both number of properties and £s turnover). As well as the formal review work carried out, informal data sharing and cost comparison between members has helped identify VFM efficiencies in areas such as rent collection (Allpay), insurance and training costs. As well as HouseMark and BOB, we are also key contributors to a local benchmarking club, called TIPTOP at which ourselves and another half a dozen ‘good fit’ organisations meet to compare performance every quarter over a range of key indicators. The figures are just the start of the process; we discuss what we can get from them, we dig beneath them and we seek to learn from each other. Meetings are focused on a particular theme and specialists are invited from that function/area to discuss different approaches. We investigate what we each do differently, what separates the top performers from the others, and what good practice can be shared more widely. Recent themes included arrears, complaints, voids and relets, and our response to welfare reform. TIPTOP is much more than a ‘talking shop’ benchmarking club in that it can act as a lever for change, the good practice shared can act as a catalyst for change, and the peer pressure around the table can act as a driver for change. In the past year, we used information from TIPTOP to improve our complaints process and to feed into our current review of Income Management.
Achieving our business objectives “Right reason, right things, right way,” is our approach to ensuring that customers are at the heart of everything we do (right reasons), that we put our energies into achieving our corporate goals (right things), and that policies and procedures are appropriate, refreshed and followed (right way). Right Reason It is important that consideration of the impact on customers is at the heart of everything we do and that in a changing world we maintain our values, and what is important to our people, both staff and customers, and the homes and communities in which they live. Customers need to feel that their rent represents good value for money. A number of key decisions effectively illustrate our approach in this area: • We recognised that if we wished to continue to ‘do what we do’, to provide a supported housing service, with significantly reduced Supporting People funding, we needed to work differently. As an example, when we bid to retain our support contract in Trafford we remodeled our staffing structure so that with the same budget we were able to employ an additional post to support our residents into training and employment; and a further parttime post to open up the private rented sector to our residents who are ready to move on independently. We have also remodeled the management team across supported housing and reduced costs by reducing the overall number of management posts.
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To maintain our supported contracts we have agreed changes to service delivery with relevant local authorities, have made the decision to withdraw from some services that would not have been cost-effective in the new Supporting People pricing regime, and in some areas we have worked with other support providers to achieve savings together. In Manchester, we have, by revisiting our costs and requirements, and by working more closely alongside other providers, helped the local authority save £3.4m from its Supporting People budget. • We have an objective to continue to develop new, affordable homes, and to continue to do so with a lot less development grant, we need to find ways to reduce costs without an impact of the level of service delivery. There is a much greater emphasis on keeping to budgets and on continuous improvement in how we do things. Under our ‘Project 300’ initiative, the Development team procured 276 new homes through a volume procurement exercise. They took a package of sites to the market and tendered them; this included 8 sites for Great Places and 2 sites for Bolton at Home. Detailed work has been undertaken to assess the efficiencies achieved by adopting this procurement method and the savings total £423,865 across the Great Places sites. These savings were achieved without a detrimental effect on the finished products in these new homes. The savings have been achieved
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through volume discounts agreed at tender, incorporating specification upgrades introduced by Great Places at nil cost and absorbing costs such as additional preliminaries, site staff, etc. The savings have been independently verified by a cost consultant who was able to draw together savings from individual sites, procurement savings from the supply chain and savings from grouped procurement of Architects and Engineers. In addition to financial savings, ‘Project 300’ achieved significant added value. 13 apprenticeships were created including trainee quantity surveyors, plumbers, joiners, painters, bricklayers and a site operative. One of these apprenticeships was undertaken by a Great Places tenant. Further value was added to local communities through the local school visits, site visits for local children, supporting local school breakfast clubs, clearance works to a scout garden, and the preservation of historical artefacts in a local museum following identification on site. Service and process improvements have been integral to Project 300 with continual learning and reflection throughout the process. Many of the benefits identified through the process are expected to the repeated in future programmes, and have already been discussed openly with other members of the Innovation Chain North West, for which Great Places is the lead organisation, in order to support sector learning. Learning has been captured on a programme and project level through our ‘Project Journal’ process.
• We are customer-focused and have a supportive approach, building on our tradition of helping vulnerable people and enhancing life opportunities. As a significant number of our customers, and those most vulnerable economically, are
loan scheme for tenants and to date this has been used to provide £44k worth of affordable credit, saving an estimated £50k in repayments. The offer is a tenant loan of £300 for which they pay back £200 to the Credit Union, and the other £100 is a grant from Great Places. Take up has been fantastic with nearly 200 applications up to the end of the year and while we don’t insist that the loan is used to pay rent, it is our considered response to a survey we carried out in 2013 which indicated that ‘62% of respondents have felt frightened, anxious or depressed about coping due to money worries’. In essence, Great Places is helping its tenants, while further developing our relationship with a key partner, and promoting a much more ethical, and cheaper, means of borrowing money. This is an initiative which is part funded by our Tenant Dividend, so customers themselves are at the heart of this project, and the £50k set aside for loans, as well as the £1m plus put ‘back in tenants’ pockets’ by our financial inclusion team, has definitely contributed positively to Welfare Reform having less of an impact on people’s lives, and our arrears, than it might otherwise have done.
affected by issues of welfare reform, and with the scrapping of the Community Care Grant, we launched a scheme in June 2013 to encourage our tenants to approach Manchester Credit Union for assistance. We have invested £19k into an affordable
largely down to this challenge that we reviewed the service standards themselves and moved from time-based measures to quality-based ones. Tenants told us that they didn’t mind waiting a little longer so long as we did what we said we would, we kept our promises, we got things right first time, and they were satisfied with how they were dealt with. Members of Customer Services Voice also selected value for money prize-winners as part of our Make their Day awards scheme (detailed in the embedding VFM section) and went along to the awards ceremony to hand out the Job Well Done prizes themselves. Customers are central to the development of our Annual Report to Tenants, and a sub-group of the customers has been formed to work on
Tenants continue to be involved in the Great Places VFM decision- making processes. VFM considerations and implications are a key feature of all reports issued to our Customer Services Voice group and a report detailing cost and performance information is submitted to each meeting and challenge invited, particularly around our suite of service standards. It was
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content and presentation, and have been key contributors to this VFM Self Assessment, by giving it a customer-focus and checking for ‘jargon’ and inaccessible language. As a real example of tenants driving VFM they have just decided that they would only like us to issue one document, which meets the requirements of both the Tenant Annual Report and the VFM Self Assessment, recognising the massive overlaps involved, and that they would prefer it to be contained in one of our regular tenant newsletters rather than as a separate publication. Tenants are involved in significant procurement exercises and also sit on a number of strategic groups, including equality and diversity, and complaints, to ensure we remain focused on what matters most and that customers input into our approach in these important areas. Right Things Doing the right things is important to Great Places, ensuring that we have a focus on what matters most, on identifying and mitigating key risks and
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on developing plans and activities to achieve our twin overarching objectives of “excellent customer service” and “being financially strong”. 1. Providing Excellent Customer Service Due to some issues with the implementation of an in-house repairs team from the start of 2013/14, including insufficient technical skills, a move from system generated figures to customer feedback as the key data source, a lack of cultural integration, and difficulties with the resourcing of the repairs call answering team, our performance across a range of customer satisfaction measures deteriorated last year. It certainly struck home how getting repairs wrong can impact massively on other key indicators across the business, such as overall satisfaction and voids and relets. The early warning signs started to materialise in the first Balanced Scorecards of 2013/14 and by August 2013 the Board had requested further detailed information including an external review into delivery of the repairs service. When completed, the review called for a root-and
-branch overhaul to put management and financial controls in place, improve productivity, effectiveness, morale and customer satisfaction. This was quickly addressed by a ‘task and finish’ group, including the Chair of the Board and a member of Audit Committee, who utilising the expertise of an experienced Interim Director, agreed that a recovery plan was the best option. We are now starting to see the benefits of this decisive approach and, by year-end, there were encouraging signs of recovery: • Overall customer satisfaction has improved from its worst position of 79% to 83.5% at year-end (and has subsequently increased to 86% by July 2014, which is back above the median for our comparator group) • For Plumlife leaseholders, overall satisfaction is over 78% which is well above top quartile for this customer group. Satisfaction levels nationally are lower with this accommodation type, and the Plumlife team managers a wide range of tenures and scheme types with different service responsibilities, so this is a pleasing result
• Repairs satisfaction has improved from its worst position of 79% to 83% at year-end (and then to 88% by July 2014, showing significant improvement in a short time-frame and which we expect, as our repairs action plan is delivered, to rise back up towards top quartile) • Satisfaction with our ASB Service has held up all year and, despite working in some very deprived and difficult neighbourhoods, the introduction of specialist staff has helped us achieve 88% for case handling (which is close to top quartile) and 86% handling of the ASB complaint (which is above top quartile) • Satisfaction with our new homes was 92% at the end of 2013/14 and was above the median figure all year. By July 2014 this had risen to almost 99% customer satisfaction, representing top quartile performance.
Having implemented an in-house repairs service, 2013/14 was a year in which we focused on aligning service delivery within the investment, compliance and responsive teams, refining the supply chain arrangements and improving work scheduling, productivity and performance management systems. The health and safety compliance framework was also reviewed and strengthened. Work is on-going in all these areas, and Board members are central to it, through the auspices of a high-profile Repairs Task and Finish Group, and the challenge and monitoring role of the Audit and Assurance Committee. Our Customer Access Team (CAT) continues to provide an effective, first-point-of-contact service to our customers and 13 people in that team deal with a widening range of queries. During 2013/14, CAT took on increased responsibilities, within existing resources, for things like arrears management and the lettings process, to free up neighbourhood officers time to better support tenants. CAT now handles an average of around 5,000 calls each month, have a ‘lost call’ rate consistently less than 2%, against a national best practice guide for call centres of 3-5%, and have customer satisfaction with the quality of their call Average complaints received per month
handling at over 95%. Additionally, CAT have been working closely to provide help and support for our repairs call handling service who were struggling with some issues in early 2013/14. With this support and guidance, with changes to processes, with greater emphasis on putting customers first, and with the creation of a more performance-driven environment, year-end repairs call handling was down to 2%, and repairs call handling satisfaction was at almost 90%. 2013/14 also saw the introduction of a new approach to complaints management, designed to make the complainants experience as positive as possible with a focus on outcomes, fair resolution and good customer care. The policy distinguishes informal and formal complaints, with the management of each being quite separate and distinct: • Informal “Nip it in the Bud” (NIP) complaints – responding to initial reports of dissatisfaction at a frontline level, with resolution offered within 5 working days.
14
• Formal “Right first Time” complaints – where a NIP complaint cannot be resolved, a formal complaint is allocated to a manager for investigation and resolution within 20 days, focused on enhanced communication with the complainant, and a positive outcome for all parties. Since introducing NIP complaints, we have seen an average of 352 informal reports of dissatisfaction per month. These represent negative feedback and comments, some of which would not have been recorded under the old complaints policy, and some of which would have been logged as Stage 1 complaints previously. They are emphasised as an opportunity to put things right quickly. The number of formal “Right first time” complaints has reduced from 50+ per month in April 2013 to approximately 25 per month by year-end which is
15
a positive trend to see, and particularly pleasing, given the property services dimension already referenced. In addition, some analysis has been undertaken involving time taken, different stages involved and overall resourcing which shows that, as well as the customer service benefits, our new approach to complaints has resulted in a saving of £16k for 9 months of 2013/14, when compared to the cost of the corresponding 9 months in the previous year. The Group remains of the belief that a key factor in delivering great customer service is an engaged workforce. After sustained success in the Sunday Times Best Companies survey, the Group switched to the “Great Place to Work” survey in 2013 and in early 2014 was delighted to be rated as the 12th
“best large workplace in the UK”. As part of the staff survey supporting this accreditation we now know that 90% of our workforce think that ‘this organisation manages its impact upon society responsibly’, that 79% think that ‘management has a clear view of where the organisation is going and how to get there’, and that 86% feel that ‘I’m proud to tell others I work here’. A commitment to have engaged staff, focused on delivering excellent customer service is evidenced by our approach to training. Having rolled out “achieving customer excellence” and “customer service excellence” staff training programmes across the organisation in recent years, a new programme “Striving for Excellence” has been introduced during 2013 for all staff, with an emphasis on softer people skills and on putting the customer first and going the extra mile. This is
Group Surplus
about improving service delivery, getting things right first time, and therefore increasing value for money. Additionally, we recognised that there were VFM savings to be made, in the region of £50k, from identifying and then using in-house trainers rather than an external provider, so 8 staff members have been ‘trained to train’ and have gone the extra mile by delivering excellent sessions while sharing their experiences and learning. And to complete the circle, these staff members were rewarded through our Make Their Day scheme. 2. Being Financially Strong in 2013/14 Financially, 2013/14 was a demanding, but ultimately successful, year for Great Places. Record turnover, record surplus and a successful and productive return to the capital markets for additional retained bond funding were the highlights. At the end of 2013/14 Great Places had achieved a record surplus of £9.3m which is £1.1m better than budget and projection, and the business
% Current Arrears
plan shows that figure growing further to well over £10M in 2014/15. Growing the surplus, and hence growing the amount of cash generated from the core business allows a greater proportion of the Group’s development expenditure to be funded without reliance on debt. Having issued £32M of retained bonds at a spread of 104bps and an all-in cost of 4.57%, the Group will continue to seek opportunities to lock in funding at rates better than assumed in the business plan, while keeping the risk profile unchanged. In the HCA’s Global Accounts it states that ‘the effective interest rate decreased to 5.1% in 2013 from 5.2% in 2012’, so our rate is over ½% better than the global average saving us £170k per annum on that deal alone. Our current credit rating continues to evidence our financial strength. Our most recent Moody’s review in November 2013, reflective of their general UK-wide downgrade, shows a new A2 rating, while Fitch have recently re-affirmed Great
Places’ AA-credit rating. These positive ratings give the organisation a strong reputation and help with access to cheaper capital. Our arrears performance in 2013/14 was better than target and was on a par with the previous year; our year-end arrears figure of 3.6% is in spite of almost 1,500 of our customers being affected by the under-occupancy shortfall and an expectation across the sector that arrears would increase significantly. Our financial inclusion team has continued to provide simple, helpful advice and support, and last year was successful in 1,978 tenants receiving financial support. This included assisting 68 downsizes, and in putting £1.06m back in to the pockets of tenants by giving them energy efficiency advice and a range of money saving gadgets, as well as financial advice. The roll out of Universal Credit in the north west of England in summer 2014 will has seen an introduction in 8 local authority areas where we have stock. We expect an increase in arrears as
16
tenants struggle to come to terms with UC as this represents a cultural shift in the way in which people will need to manage their money. Our challenge is to provide support to tenants through the transition while ensuring that we protect our income as missed monthly payments will see arrears escalate at a much faster rate than they do now. We have strengthened our financial inclusion team up to 8 staff, have been attending regular best practice meetings organised by the National Housing Federation, have been networking with those organisations in the UC pilot schemes, and we have a communications plan to raise awareness for tenants and staff about potential implications of other soon-to-beintroduced welfare reforms e.g. a full page article will go in the next edition of our tenant newsletter, My Great Place, and we will continue to drip feed information in each edition. We recognise the importance of effective procurement procedures, and in early 2014, we commissioned Baker Tilly to carry out a health check of our approach which concluded that ‘this represents excellent progress to date.’ “Our overall assessment, from the evidence provided, and endorsed by the interviews was that significant progress had been made in the procurement approach over the last 18-24 months with some very tangible benefits delivered. In our view much has been done to demonstrate the contribution to the VFM agenda that effective procurement can make. “This can be evidenced by the £1.7 m of savings that have been generated through Procurement led initiatives over the last two years. This is more impressive when it is considered that only about
17
30% of the total annual expenditure has been through a full Procurement led sourcing exercise. “In addition, processes and procedures have been established to cover the end to end procurement process, although contract and risk management processes are not well established. “What has already been achieved will provide a good platform to build on as Great Places further develop and improve the approach to procurement.” As a consequence of this review, we are strengthening procurement both in numbers and mandate and are currently recruiting to our enhanced central team who will have greater responsibility across the whole of the Group. We have introduced a new procurement strategy, have established a policy placing this team at the centre of all procurement activity, and have developed a contract and risk management approach for all external expenditure. Our Board will be monitoring our performance in this area much more robustly, with key indicators around amount of cashable savings, % of high risk suppliers with up to date checks, and number of key contacts who have failed to meet their KPI targets. By the end of 2016 we have set ourselves a target that the central procurement team will influence 80% of all spend and that we will save around £2m. This is in addition to reducing the risk of fraud, the risk of using suppliers who do not meet minimum requirements, and improving our strategic approach and maximising our social benefits from procurement e.g. as part of our recent re-procurement of legal services we successfully signed up our solicitors to donating 2% of our spend to social value projects/initiatives, amounting to around £30k, and resulting in a new
apprenticeship position being created. During 2013/14, our procurement team has brought an understanding of European procurement law, good procurement practice and the need for proper contract management to the fore within the organisation. The team has updated policies and procedures including simplified and more accessible intranet-based procurement procedures, implemented an e-procurement system which gives greater control over purchase ordering, supplier usage,
Completions and Start on Sites
Completions
and contract management, through automated processes and electronic approval and there is now a procurement plan in place to identify priority areas for re-procurement in a timely and structured way. The Group will continue the strategy of achieving economies of scale through growth with 790 new handovers in 2014/15 required in order to complete Great Places 2011-15 HCA development allocation. We exceeded target for our development programme in 2013/14, with 576 completions. ‘Sticking to budgets’ is another key driver for maintaining our financial strength and we now have more accurate and timely business intelligence to understand our cost base, and how much specific activities cost the organisation. We achieve this through high quality monthly
Start on Sites
management accounts, by comparing costs and performance and by using benchmarking data as a can-opener. These all contribute to better understanding and improved decision-making. This work helps to make the organisation more compliant, more efficient and financially stronger. Right Way Ensuring that things are being done in the right way is increasingly important in an environment where compliance, risk management and Board assurance are now commonplace terms. We need to be confident that suitable procedures have been developed to deliver key strategies and policies, and that there is good evidence that procedures are being followed in the most effective and efficient
way. Things not done well equate to waste and poor value for money. During 2013/14 Great Places piloted a combined audit and assurance approach, strengthening the link between assurance and key corporate risks, while maintaining a formal internal audit plan of what needs to be reviewed. The approach takes into account current levels of performance and risk management to prioritise the targeting of what matters most, while fully utilising a) internal skills and knowhow, b) the experience and expertise our internal auditors bring from their work across the sector and beyond, and c) external specialists for areas where there are complex technical or reputational issues to consider. Our combined assurance model is focused on ensuring things are being done in the right way and we don’t expend energy, time and effort on the wrong areas and on doing things badly. The Combined Assurance Pilot will be fully evaluated later in the year, but some of the benefits in terms of our business efficiency and effectiveness include: • A “once and for all” approach where we get to the root of any issues – we have identified more fundamental recommendations this year (none under the old approach in 2012/13) as our new
18
approach is about ‘diving deeper’ and making improvements. In some instances, such as with data protection, it has been quite a painful process but it is good for our long-term health and to ensure we are providing VFM by concentrating on the right things and on doing them right. • Joining the dots – preventing duplication - by co-ordinating assurance activity we have a greater oversight and understanding of other initiatives ongoing across the organisation and can tap into these where there is an assurance perspective. We have used this technique to incorporate other work such as the OHSAS 18001 accreditation, self assessment against the CIH E&D Charter, plus internal work including Development audits, Supported QAFs, and quality control measures in Finance. In addition, we utilised our ‘free consultancy’ clause with Zurich Insurance to commission them to carry out work for us in relation to both Risk and Business Continuity. We are ‘joining the dots’ and taking an holistic approach to organisational effectiveness and areas of compliance, and improving value for money by reducing duplication and sharing good practice. • Flexibility in our approach ensuring we can focus on what matters most – inbuilt flexibility allows us to be proactively addressing issues of compliance and wastefulness, to provide quick and ready assurance when particular issues become big news in the sector, and to focus on poor or deteriorating performance swiftly. Issues with our in-house repairs team started to materialise from the April Scorecard and by
19
our August Board meeting we had agreed to commission an external report to get to the heart of what was going wrong. • Non-cashable savings a) Slicker processes – following the data management assurance work, processes
have been implemented for all datasharing requests under the Data Protection Act, and via Subject Access Requests, to be managed centrally, consistently and compliantly. Previously, these requests were dealt with at a local level, and in a very inefficient way. b) Avoiding non-compliance - fines for failure to comply with data protection legislation can be very significant (greater than those imposed by the HSE should an employee die on site) and are very publicly announced which would have a reputational impact. The in-depth review of our approach to data management, and prioritising high priority actions, has significantly minimised the risk. In addition, Safeguarding legislation is very high profile and can have enormous implications on any organisations found to be negligent in their duties. Failure to comply can lead to fines, reputational damage to the organisation, and a jail term for the Chief Executive in extreme cases. We now have additional assurance and comfort that our processes are compliant and represent good practice and that our people are doing the right things. • Direct financial savings - as a consequence of the learning and development audit, we have now trained 8 members of staff to deliver a tailored, group-wide customer service training programme. Had we used external providers we would have been charged £800 per day for this training. Assuming 70 sessions needed to train all staff, this would have amounted to £56,000. By using internal trainers we have saved a substantial proportion of that.
How have we done? During 2013/14, some notable VFM successes have included: • Re-procurement of the fixed line telephone contract delivering annual savings of c30%/£60k • Renegotiation of our gas servicing which will generate savings of almost £100k per year • Creation of a framework for legal services which will generate savings in excess of £100k per annum, with fixed and hourly rates for all the legal work across Great Places, with a significant reduction in the number of firms being used and much more robust contract management arrangements • Re-procurement of the Group’s mobile communications services including implementing new technology to reduce the requirement for “dongles” saving around £30k per annum • Continued to fine tune our Treasury management and investment activities to achieve the best possible returns on our surplus cash while still only accepting minimal levels of counterparty risk • Re-tendered the external audit service – not least to meet best practice, but with the welcome side effect of generating cost savings of c£20k per annum • Implementation of a brand new approach to understanding the performance of our property portfolio, taking into account measure of effectiveness and efficiency, allowing a more informed method for identifying the relative sustainability of different neighbourhoods and a more
targeted approach to investment and disinvestment/disposals • Completing a significant stock rationalisation transaction with another provider. Around 80 properties located in the middle of a large estate belonging to another local Registered Provider were transferred in order that the other RP could expand the neighbourhood service already provided across the estate. The mutually beneficial disposal allowed the other RP and the newly transferred customers to benefit from economies of scale, while Great Places realised a sales receipt in excess of existing use value which will be reinvested into other communities where the Group does have scale and influence • Delivering group-wide, tailored refresher training on customer service, using enthusiastic, committed trained staff rather than through external consultancy has saved around £50k • The Group’s “toolbox” employment and training initiative creates opportunities for young people and the long-term unemployed, as well as helping contractors to deliver on their social responsibility requirements. During 2013/14, work carried
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out by our Great Opportunities team resulted in 15 people helped into employment, 43 into apprenticeships, 113 into training, 62 into work experience, 450 given advice/sign posting to help employment prospects, 138 registered and supported via our work clubs, and 153 taken part in community projects. These figures relate to a mixture of our tenants and people living in our communities where we manage stock • The Group’s Financial Inclusion team continued its excellent work – targeting support to people most affected by welfare benefit reform, and putting £1m into the pockets of tenants by helping with things like affordable credit, access to basic bank accounts, affordable warmth and energy tariff options, affordable insurance, financial education and debt advice. As a result, despite welfare reform, rent collection performance is on a par with 12 months ago • Rolling out a programme of carbon literacy training sessions with the aim of reducing the carbon footprint of the Group as a whole and also of the staff as individuals • Invested in a fleet coordinator post that will facilitate cost savings in fleet costs and fuel • Our new digital trainer has recruited champions from the wider staff team to support him in delivering training to more customers. To date, over 1,000 customers have registered for self service through the website and in a recent survey 80% felt confident in using the internet. • We have maintained 100% compliance with the Decent Homes Standard and 70% of our properties are in the green band for energy efficiency.
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Our future priorities As well as our key project around embedding VFM itself, which is designed to help a culture of increased challenge, in 2014/15 Great Places is planning a range of VFM actions including: • Establishing a new VFM working group to accompany the Great Value procurement team already in place which will deliver actions identified in the recent workshops • Revisit our corporate vision, values and objectives with an increased emphasis on business effectiveness and value for money • Reviewing the structure and resourcing of a number of key functions including health and safety and procurement, to ensure these services are delivered in the most effective and efficient manner • Extending our Project 300 volume procurement programme to construct the majority of our upcoming Affordable Homes Guarantees Programme. Called P300e (extension) it comprises of 10 schemes with a total of 274 units, 2 of which are with Halton Housing Trust. Original P300 contractors, Seddon and Southdale, have agreed to tender the schemes using the same pricing basis as the initial P300 which, with rising build prices, is a very effective result • Re-procuring our insurance arrangements with
a targeted 10% real price cost saving • Heating investment re-procurement which will result in at least a 7% saving on a spend of around £1M • Reviewing and then re-procuring the consultancy support for, and the Investment programme itself • Re-procurement in a number of other areas including external decorating, servicing, recruitment and furniture where we expect to realise savings of between 5-10% • Looking for further Treasury Management initiatives that could allow the Group to lock in long term interest cost savings or certainty • Progressing two long standing VAT recovery opportunities that will reduce the irrecoverable VAT on Homebuy Agency fees and choice based lettings charges. This is in the region of a £200k one-off benefit, plus a small on-going annual saving of around £5k • Taking forward a major review and reprocurement of facilities management activities, most notably cleaning of schemes, communal facilities and offices, which will lead to more effective service delivery and a savings target of 10% • Renegotiating service provision at our Keyworker schemes, which will result in savings of around £3k per month • Cube will be the delivery vehicle for low risk diversification, with projects close to launch for outright sale and for market rent. Additionally the Group will investigate opportunities for developing linkages between housing and health, particularly for the elderly • We will shortly be implementing the Group’s upgraded customer relationship management (CRM) system and the
interlinked repairs management system which will both help with more effective, joined up systems and will facilitate more efficient ways of working • The Group has well-advanced plans to improve its customer access arrangements with proposals for updating telephony and customer contact technology later this year. In addition, there are three other priority areas where we will seek significant VFM improvements over the next 12 months:
Repairs In the middle of last year, Great Places identified fundamental problems with the repairs function and called for an external root and branch overhaul to put management and financial controls in place, improve productivity, effectiveness, morale and customer satisfaction. The response started with the appointment of a specialist Interim Director to review the service and make proposals for recovery or a return to a contractor approach. Board established a Task and Finish Group and following recommendations from the Interim Director recommended to the Board that recovery should be the preferred route. Following this a number of actions have taken place: a) A short/medium/long term recovery plan adopted via the Task and Finish Group. b) Short term call handling improvements (missed calls down from 30% in Dec 2013 to 2% in March 2014) c) Restructure approved by Remuneration and Appraisal Committee, shared with staff and now being recruited
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d) Appointment of consultants to look at materials supplies and logistics. During 2014/15, we will seek further efficiencies in the in-house repairs team, particularly in the areas of scheduling, productivity and materials, but we have made a strong solid start to improvement which we are determined to sustain. We recognise that there is still a way to go to repair the Great Places Repairs and Asset Management function, however our robust, comprehensive, compelling future plans have been developed with the intention to create the foundations for a future which delivers great customer service, value for money and the “can do” culture that Great Places staff rightly aspire to deliver.
Social Value During 2014/15 the Group will do more work to understand and put a financial amount against the additional social value work we undertake. This is in relation to additional activities above core landlord functions which we carry out improve the quality of life of our customers, limit the impact of our activities on the environment and support local economic growth. We have started work, using the HACT Wellbeing Value Calculator, to determine the headline wellbeing values per person per year for some of the community investment activity undertaken by Great Places. - The Group’s “toolbox” employment and training initiative creates opportunities for young people and the long term unemployed, as well as helping contractors to deliver on their social responsibility requirements.
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During 2013/14, work carried out by Great Opportunities team has resulted in: • 15 people helped into employment, representing a value of £161,505 • 43 into apprenticeships - £75,121 • 113 into training - £127,012 • 62 people into work experience - £50,034 • 153 have volunteered to take part in community projects – £360,621 These figures relate to national averages, and a deadweight hasn’t yet been applied, but in total amount to over £3/4 million of potential value. - We have also undertaken some preliminary work around our new home development programme. The methodology states that moving into a new home creates £985 of benefit for each tenant/ resident each year. If in the 600 new homes we created last year, we have 1,800 people living in, and benefitting from, our development, then we have created 985 x 1,800 = £1.77m of social value. (We recognize that there are other variables to consider – on one hand there is the cost of the build and the on-going maintenance, while on the other, and set against these, are benefits such as job creation for the build and the assumption that there will be people living in the property for 40 years). We are currently carrying out a cross-cutting social investment review to better understand the input costs of initiatives as well as the economic and social outcomes, with the intention of introducing improved social accounting and a measure of the difference we are making. This will be a big priority through 2014/15 and will help us to evaluate and compare the impact and added value of different community initiatives.
Sweating our assets A key driver of increasing surplus has been a renewed focus on profitability, as higher surplus obviously helps to create financial strength and enhanced cash generation. In addition to the benefits arising from lower interest costs and lower maintenance costs, the Group has several initiatives in place designed to improve our operating margin. This includes actions to divest less profitable business streams (such as some of our key worker stock), ensuring service charges are cost reflective, an asset management-led programme of property disposals, and investing in additional procurement expertise. Great Places has developed a robust set of tools that allows us to understand the value of every property we own. A comprehensive suite of KPIs, informed by extensive asset information, enables
us to report on each property by Open Market Value, Book Value, Existing Use Value and Net Present Value. By taking account of past and future performance factors such as planned investment works, demand, energy performance and stock isolation, we are able to identify with some accuracy those properties which perform well and those which don’t. We have identified pockets of neighbourhoods across all our general needs stock (around 160 neighbourhoods across the 12,000 managed properties) which enable us to see how each is performing across a number of local key indicators such as arrears, voids, relets, turnover, profitability etc. For example, we know that just less than 3% of our stock isn’t seen as profitable in the next 30 years, i.e. it is under the threshold of the net cash receipt from a property taking into account rent,
24
voids and major repairs. In other words, it will not make enough money to pay off the average management and maintenance cost and the interest on the property. These properties are highlighted in our monitoring matrix and are being analysed in terms of their performance across key indicators before deciding whether to divest or not. Thresholds have been applied to this small group of indicators which act as triggers for further investigation into individual properties, buildings or neighbourhoods. Local neighbourhood teams play a key role in helping us to understand the issues at play, particularly the ‘softer’ more anecdotal feedback, and the eventual actions required to deal with poor performance. Local context and partnerships also have a role in our decision-making process and, neighbourhood performance as a whole, as well as strategic or historic performance can influence and shape our eventual course of action. This monitoring of performance across each neighbourhood easily allows us to identify our top performers, but more importantly those where intervention is required. Based on these processes and principles, we understand our stock and make informed VFM decisions based on relative performance. We divest where that is the best option, and invest where we wish to address poor performance in our priority neighbourhoods. We have identified 157 neighbourhoods across our general needs stock and some key messages include: • 48% have a tenancy turnover rate which is above our overall average, with one scheme in particular in our Blackpool region having a turnover rate of over 45%.
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• 18% of our neighbourhoods have an abandonment rate above our current 5.6% average • 46% have arrears greater than our current average, with the two highest being 14% (Fylde Coast area) and 12.5% in the Newton Heath area of Manchester • 39% of our neighbourhoods have an average relet time which is greater than our current average, with worst 5% of neighbourhoods averaging 112 days This information is currently updated biannually and informs a rolling programme of disposals and action plans, as appropriate. In this way we work towards our overarching goals to: 1. Improve the sustainability of the Group’s stockholding; 2. Identify and sell unsustainable and unviable stock; 3. Reinvest the proceeds of sales in the development of efficient and aspirational new homes in sustainable neighbourhoods; 4. Identify our high value stock so we can decide if and when to make high cashgenerative disposal;
During 2013/14 we disposed of almost 150 properties which no longer fitted our desired stock profile, due to a problematic location, issues of poor-performing stock, and/or issues of cost. We have identified an additional 400+ properties on our disposals list, and we will still get individual properties identified at void due to unexpected investment costs. A good example of our strategic approach occurred at year-end when we completed a
significant stock rationalisation transaction with another provider. Around 80 properties located in the middle of a large estate belonging to another local Registered Provider were transferred in order that the other RP could expand the neighbourhood service already provided across the estate. The mutually beneficial disposal allowed the other RP and the newly transferred customers to benefit from economies of scale, while Great Places realised a sales receipt in excess of existing use value
which will be reinvested into other communities where the Group does have scale and influence. We wish to do even more around understanding our return on assets, as measured against the organisation’s objectives and to do this over the next year we will: a) automate the process more, b) make the data more ‘real time’, c) get a better idea of management ‘effort’ for each property and cost it, and d) build in other external factors such as crime, indices of multiple deprivation etc.
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Conclusion Working openly and collaboratively, we have identified a small number of Critical Success Factors (CSF) which Board receive progress against monthly through the Balanced Scorecard. These CSF’s cover most priorities in the corporate plan and the intention is that reporting against them provides an organisational healthcheck and will highlight, at a very strategic level, where the Group is and isn’t performing well. Any exceptions or variances in performance against these critical measures will subsequently be explained in either of the regular Chief Executive or Director of Finance Reports. Following discussion, the number of key indicators, or critical success factors, has been agreed at seven in total, contained in the table below:
For each CSF we have agreed a) a minimum target, b) an aspirational 12 month target and c) a further stretch 24 month target based on top quartile for the housing sector. Within this framework, a few targets have been tweaked to make them more challenging while remaining realistic. Each of these targets has an improvement plan set against them and high profile reporting of performance will ensure we maintain focus on achieving our corporate objectives and providing value for money. There are many ways that Registered Providers can seek to demonstrate VFM and this report identifies several ways in which Great Places believes it performs well.
Year End Position 2013-144
National Top Quartile
National Median
National Lower Quartile
There is one simple output where we feel our performance stands us out from the crowd – delivery of new homes. Over the past 5 years, Great Places has consistently built new affordable homes at the rate of 600 per annum. If the housing association sector as a whole (2.7M homes) could match this rate, then the sector could build 100,000 new homes per annum. This would hugely exceed the 36,000 built in 2012/13. It would hugely exceed the sector’s plans for the next 2 years (128,000 per the HCA 2013 Global Accounts). It would even significantly outperform the NHF ambition of 80,000 new homes per annum. So, in terms of what Great Places manages to achieve from its asset base, we must consider ourselves to be delivering good value for money.
Minimum 12 month Target
12 month Stretch Aspirational Target
24 month Stretch Aspirational Target
Providing Excellent Customer Service Overall Customer Satisfaction
83.5%
90.0%
87.0%
82.0%
85.8%
87.0%
90.0%
£9.3 million
-
-
-
£10.1 million
Arrears including HB
3.6%
2.0%
2.9%
4.3%
Void Loss
1.1%
0.8%
1.1%
1.6%
4.0%
3.4%
3.2%
1.0%
0.9%
0.8%
9.1
7.4
9.2
11.3
9.0
8.0
7.4
HCA target met
-
-
-
HCA target
HCA target
HCA target
82.9%
97.0%
94.0%
88.9%
86.0%
90.0%
94.0%
Becoming Financially Stronger Group Surplus
Engaged Staff Staff Sickness Developing New, Affordable Homes Practical Completions Well Maintained Homes Overall Repairs Satisfaction
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28
GREAT PLACES
VALUE FOR MONEY SELF ASSESSMENT 2014 29