Value for Money Strategy 1.0
INTRODUCTION
1.1
Wulvern Housing is passionate about providing a range of excellent services that assist in the delivery of sustainable communities. Our organisational purpose is: ‘To provide affordable homes against demand that are well maintained and we help customers to pay and stay’
1.2
Wulvern strives to deliver what matters to our customers in the most cost effective way. We believe that by improving our services in response to customer demands, we will make a significant contribution to the sustainability of the communities in which we operate. Our goal is to achieve the best Value for Money for customers and this strategy sets out the approach and plan for achieving that ambition.
2.0
VALUE FOR MONEY AND THE DRIVERS FOR WULVERN
2.1
Value for Money (VfM) is defined as the optimal relationship between Economy, Efficiency and Effectiveness, the 3 Es, where: •
Economy is achieving the best price for what goes into providing a service
•
Efficiency is doing something well and eliminating waste to deliver the best service for the cost
•
Effectiveness is achieving our objectives and improving customer satisfaction with the outcomes
In its simplest terms, VfM is getting the best outcomes possible using the available resources. 2.2
Wulvern has adopted a Lean Systems Thinking to continuous improvement and a central to this is the principle that customers set the nominal value. This underpins Wulvern’s key priority of delivering what matters to customers. This, together with the following regulatory pressures, create the need for a structured and managed approach to VfM: •
The Audit Commissions Key Line Of Enquiry (KLOEs)
•
The TSA’s new regulatory framework and standards
•
The outcome of the 2009 Short Notice Inspection and Action Plan
Further details explaining how we need to respond to these regulatory requirements are set out in Appendix 1. 1
Value for Money Strategy 3.0
Wulvern’s Approach to VfM Wulvern’s approach to its VfM Strategy can be considered in ‘6 Boxes’
3.1
Governance
Performance
& Culture
Management
Customer Focus
Financial
& Involvement
Management
Procurement
Investment
Governance & Culture This is about embedding VfM into the culture of the Association and developing a means of monitoring and assessing its effectiveness. The philosophy that Wulvern embraces with regard to VfM is about leadership, ownership and accountability, specifically •
Establishing service values and cultural norms and promoting these to staff and tenants
•
Setting a direction of travel including focus on priorities and targets
•
Considering cost and performance ‘in the round’ in order to make judgements about value for money and inform decision making
•
Quality assurance reporting / cross checks to ensure that services do not deteriorate as a result of pursuing efficiencies, therefore avoiding simple cost-cutting
•
Challenging and scrutinising given courses of action to establish whether all options have been considered and there is a compelling underpinning business case
•
Ensuring that gains are redirected into areas prioritised by tenants
2
Value for Money Strategy 3.2
Performance Management Performance Management using the new KPI Framework and Housemark benchmarking comparisons is one of the most important ways in which we can understand how well we are performing and thereby delivering VfM. We need to
3.3
•
Set ambitious and realistic targets and keep comprehensive records of achievement
•
Provide clear accountability for performance and develop reporting structures so that the service and staff may be held to account by tenants
•
Regularly scrutinise performance and take timely corrective action
•
Set clear service and improvement actions plans aligned to our Corporate Priorities to deliver our 3 year Corporate Plans
•
Use benchmarking and collaborative working with other social housing providers to assess the capacity to improve and set appropriate targets
•
Scour the sector and beyond for best practice
•
Understand and monitor performance from the socio-economic equality and recycling perspectives
Customer Focus and Involvement VfM is about getting the right balance between cost and quality and is at the heart of what is important to customers. At the core of Lean Systems Thinking is the principle that customers set the nominal value. Wulvern has finite resources to provide services and so customers have an interest in ensuring that these are deployed to best effect. Providing VfM in services should free resources and investment to target areas of greatest importance to our customers. VfM must be at the heart of customer involvement and customers should •
Contribute to setting out service priorities
•
Help shape the specification of services
•
Make informed choices between costs service options within available resources
•
Contribute to the development of performance and success measure
•
Monitor performance including benchmarking data to assist in making VfM judgements
•
Propose where re-invested efficiency gains should be directed
3
Value for Money Strategy 3.4
Financial Management Wulvern conducts its business within financial constraints and we must ensure that we operate on a sound financial footing in both the short and medium term whilst improving priority services for our customers. For effective use of resources and delivery of VfM we must •
Understand our costs so there is clarity of cost drivers and cost behaviours for our services with a transparent relationship between cost and quality
•
Set budgets to allocate resources to corporate priorities and achievement of departmental objectives
•
Manage expenditure through effective budgetary control with budget holders having clear accountability around budget lines and commitment to spend
•
Ensure that business decisions are underpinned by a sound business case supported by a robust cost / benefit analysis
By operating in this way we exercise discipline and competence around the use of resources which is critical to VfM. 3.5
Procurement We recognise that through effective procurement there is the potential to achieve significant efficiencies. We are committed to the adoption of innovative procurement methods including the use of partnering, consortium purchasing and the development of e-procurement processes. An approved Procurement Strategy is in place which incorporates principles aimed at achieving VfM •
Procurement is a customer benefit, not purely cost driven
•
Customers are involved either through specific focus groups or via the Tenant Scrutiny Panel and will be included from the scoping of the project to final evaluation
•
Procurement takes account of what is cost effective as a whole considered over the short and long term
•
Costs of buying activities are minimised where this is consistent with the achievement of VfM
•
Information on what is spent, who spends it and with whom is maintained and this is used routinely to inform decision making
•
Evidence is gathered of what is spent on local economies and diverse communities. 4
Value for Money Strategy Socio-economic equality is an important factor in the procurement decisions. The strategy needs to consider the balance between VfM and local procurement to improve the local economy, using small / local businesses and achieving local equality in dealing with unemployment. 3.6
Investment Investment is important to Wulvern allowing us to do more for less and we need to make strenuous efforts to attract funding into the organisation through a variety of avenues •
Working with local organisations to secure funds to deliver a range of services to Wulvern and our customers
•
Securing HCA funding for development programmes
•
Securing grants for renewable energy and to further the green agenda
•
Working in partnership with local and national programmes such as the Knowledge Transfer Partnership to bring skills and expertise into the Association at lowest cost
It is also important for us to make investment decisions which deliver benefits far in excess of the costs such as funding the CAB post. 4.0
Delivering the VfM Strategy The VfM strategy creates the overall plan and framework as defined in the 6 boxes of the approach. There are already initiatives and other strategies in place that will deliver Wulvern’s VfM agenda, including •
The Short Notice Inspection Action Plan
•
The KPI Framework
•
Interventions and Redesign through Lean Systems Thinking
•
The Procurement Strategy
•
The Equality and Diversity Strategy
•
The QL Housing Management Implementation
•
The Accessibility Review
The VfM strategy provides an approach which brings these together, considers all areas that contribute to VfM to ensure nothing is missed, and provides a holistic view of achievement and performance. Details of the delivery via the SNI Action Plan and other initiatives can be found on the intranet as Appendix 2 to the Strategy. 5
Value for Money Strategy 5.0
Roles and Responsibilities Board members, Wulvern staff, customers and suppliers all have a responsibility for delivery of VfM. We have defined these to achieve a balance between the stakeholders and to embed VfM at all levels.
5.1
The Board The responsibility for setting and overseeing the VfM Strategy ultimately rests with the Board. In addition the Board has responsibility for monitoring and reviewing progress and may be required to approve investment for VfM initiatives.
5.2
The VfM Panel A VfM Panel consisting of a mix of customers and Wulvern staff, and to include one tenant Board Member, will meet quarterly to review progress and approve and prioritise new VfM ideas, particularly where investment for an initiative is needed. The TOR for the Panel can be found on the internet as Appendix 3 to the Strategy.
5.3
Tenant Scrutiny Panel Progress will be reported to the Tenant Scrutiny Panel and they will provide feedback and views on the progress and direction of the Strategy to the Board from a customer perspective.
5.4
Senior Management Team The execution of the Strategy ultimately lies with the Deputy Chief Executive but will be lead operationally by the Head of Finance supported by the Business Performance Analyst. The Executive team are responsible for reviewing VfM achievements and reporting to the Board on a quarterly basis.
5.5
The VfM Champions Each department has a VfM Champion whose main responsibilities are to ensure VfM is embedded in the culture of Wulvern and to promote VfM in day to day operations. Each of them is responsible for reporting local VfM achievements in their areas. The TOR for the Champions can be found on the internet as Appendix 4 to the Strategy.
5.6
Wulvern Staff All staff should be aware of their responsibilities for achieving VfM throughout the business wherever they are, and will be encouraged to support and share initiatives and successes. 6
Value for Money Strategy 6.0
Monitoring and Reviewing Progress Progress and achievements will be shared with Board, Customers, Staff and Suppliers through regular reporting which will include: •
Monthly KPI reports available on the Intranet and Internet
•
Quarterly Value for Money reports to the Tenant Scrutiny Panel and the Board
•
The Annual Report and STATUS Customer Satisfaction Survey
•
Ad Hoc articles in publications such as Homewords
Where required, individual reports will be prepared for the Board and other Stakeholders to support individual initiatives or report on progress outside the regular reporting timetable.
7
Value for Money Strategy Appendix 1: Responding to the Regulatory Requirements 1.0
The TSA and the Audit Commission
1.1
Although the Audit Commission and the Tenant Services Authority are in the process of reviewing the Inspection Regime, it has been agreed to continue using the KLOEs which fit with the TSA National Standards. VfM is one of three cross-cutting KLOEs which are designed to provide inspectors with a framework through which to view and assess services. The KLOE poses some overarching questions to assess the effectiveness and efficiency of services: •
How does the organisation’s cost compare to others?
•
How is value for money managed, including through partnership and procurement and taking the long term view?
We have covered this in the VfM Strategy. 1.2
The Audit Commission has published its ‘Value for All’ Equality and Diversity scheme for 2009-2012 which focuses on the relationship between equality and diversity and value for money. Well designed, efficient, value for money services recognise that while everyone has the same basic needs, if services are to be effective, some people need them to be delivered differently. As part of this it sets out some basic principles: •
Promote linkages between VfM and equality and diversity. Strengthen the notion of quality and access to services when considering cost
•
Include procurement as a way of demonstrating positive links between VfM and equality and diversity
•
Be clear about the criteria for monitoring outcomes
These aspects are recognised within the VfM Strategy. 1.3
The TSA’s new regulatory framework has defined 6 standards that social housing providers must meet. One of these is the Value for Money standard which sets out: •
Required Outcomes - ….registered providers shall have a comprehensive approach to managing their resources to provide cost effective, efficient, quality services and homes to meet tenants’ and potential tenants’ needs - …. registered providers shall set out in an annual report for tenants how they are meeting these obligations and how they intend to meet them in the future 8