2015-2016 Value for Money Statement
Contents Introduction The Ongo structure Why providing Value for Money is important Our strategic approach to Value for Money Addressing our changing environment
page 3 page 3 page 4 - 5 page 6 - 7 page 8
Our Value for Money savings and efficiences How we are using the savings we make Understanding our assets Our balance sheet and income statement Managing our assets Delivering new homes Our workforce
page 9 page 10 - 11 page 12 page 13 page 14 - 19 page 20 - 21 page 22
Tracking our costs Benchmarking against our peers Maintenance Major work and cyclical maintenance Empty Homes management Housing Management Neighbourhood services Overheads
page 23 page 24 - 25 page 26 - 27 page 28 - 29 page 30 - 31 page 32 - 35 page 36 page 37
Delivering our services Our annual operational plan
page 38 page 38 - 39
The Ongo Journey to Work Investing in technology Growing our business Being financially strong
page 40 - 41 page 42 - 43 page 44 - 45 page 46
A final word from our Chair
page 47
Introduction Here at Ongo our purpose is to provide people with quality homes in safe communities, and support them to live well. However, it is our vision to go beyond that by creating and sustaining truly vibrant communities, where children grow up with opportunities and aspiration, where there is diversity and respect and, above all else, there is a collective sense of pride in our homes and neighbourhoods. In 2015 our operating environment changed. Cuts in our rental income, changes in welfare policies and confirmation of the end of grant funding for social rent homes had significant impact on our short and long term strategy. Like many housing providers, we had to rethink our plans, identify where savings would be made and reaffirm our priorities. In 2016/17 we published a new four-year Corporate Plan setting out our ambitions against this new operating environment. One thing we remain steadfast about is our resolve to invest in creating and sustaining truly vibrant communities. This is our third Value for Money Statement. It sets out the progress we have already made to mitigate the anticipated rent loss, realise cash savings, improve efficiency and maximise what we earn from our assets to allow us to work towards delivering our vision. It also looks forward as we embark on delivering our new four-year plan.
The Ongo structure Ongo is a group of companies with social housing at its heart. Ongo Homes is the housing association and was known as North Lincolnshire Homes until a name change in January 2016. The commercial arm of Ongo includes Ongo Roofing, trading as Ashbridge Roofing, a local roofing company acquired in November 2014. The purpose of Ongo Commercial is to generate profit to reinvest into homes and communities. Our Communities subsidiary includes our recruitment agency, Crosby Employment and Crosby Brokerage, and our community-based projects, which all contribute to achieving our vision of truly vibrant communities.
03
Why providing Value for Money is so important Put simply, Value for Money means getting the biggest benefit we can from every investment we make. That investment doesn’t have to be money – it could be our time too. We know we are giving good value when are costs are lowered and our customer satisfaction remains high. However, low costs don’t necessarily guarantee value which is why we will make investment decisions that bring long-term benefits for our customers and our business. A good example is our ongoing investment in technology. We know that by replacing
04
time-consuming, traditional processes with speedy online solutions we can cut the time it takes to get a job done. The initial investment might be great, but even greater are the long-term benefits we can achieve by making the right investment decisions today. Understanding our assets, knowing our customers and keeping a track of our local and national operating environment are critical, and central, to every business decision and service improvement we make. In our last Value for Money Statement we made a number of pledges to increase efficiency and reduce costs. Here’s what we have done.
What we said we would do
Progress so far
Retendering contracts for waste management, gas servicing and legal services
We retendered our gas servicing and legal services contracts. The tender for waste management is being advertised in 2016/17
Continue to improve our risk management based on the latest techniques
Significantly improved our risk management processes, updated our risk profiles and increased training/knowledge of all Board members and senior managers
Asset Management Strategy review
This was deferred, pending approval of a new four-year Corporate Plan. It is now being progressed
Disinvest and demolition of flats on Albert Marson Court in Scunthorpe
All properties have been emptied, tenants re-homed. Awaiting legal agreements for one commercial business to vacate and then demolition will go ahead
Prioritisation of investment on future environmental programme
We have used our Sustainability Index to identify areas and develop our ongoing environmental programme
Focus for landlord-plus activities on Westcliff and Caistor Road
Projects launched in both Westcliff, Scunthorpe and Caistor Road, Barton-upon-Humber
We hope to have a Net Present Value calculation for each of our properties
We carry out individual property NPV calculations as part of our decision making process on future investments
Build, convert or acquire 314 units by 2018
A new four-year Corporate Plan has replaced this target with a new development plan for the next ten years
Rely less on external support and use internal resources
In our maintenance team alone, we have reduced contractor costs by £522k to £379k
Deliver all development agreed with the HCA and plan other developments
New build programme is on track, with 48 homes completed in 2015/16
A solar PV scheme for 2,500 homes
In total, we have installed, or are in the process of installing, 1,300. We amended our target to reflect significant reduction in the Government’s feed-in tariff
Community regeneration: modernise Barnes, Tomlinson and Lockwood Avenues, in Scunthorpe
Full environmental remodelling and refurbishment is now completed in all three areas
Control demand for repairs
We have reduced the number of responsive repairs from 34,627 in 2014/15 to 30,788 in 2015/16
Review provision of maintenance materials Reduce spend on empty homes
Following a comprehensive review, we closed our in-house stores facility and outsourced it to local merchants, making a ‘cost to serve’ saving of £273k in 2015/16 Spend, against our budget, has reduced and is below target. This isn’t reflected in our HouseMark data because that also includes a proportion of management and overhead costs
Address repairs-related high demand properties and tenants
As part of our 2016/17 Operational Plan, we are launching a project to target our Top 100 high-demand customers
Anticipate £7k income from Scunthorpe Hospital and Lindsey Lodge maintenance.
We achieved almost £15k from these contracts - double our target and expectations
Roll out more flexible working for our teams to reduce out of hours calls and increase availability of staff at the busiest times
As part of our 2016/17 Operational Plan we have a project to review the provision of our out of hours services
Developing a tenancy sustainability strategy
We launched a pilot Tenancy Sustainability Project in 2015/16 and it is in our 2016/17 Operational Plan to target the top 10 areas with a 10% plus turnover rate
Use HomeCheck officers to introduce stock condition surveys
The HomeCheck Team was disbanded as a direct result of efficiency savings required in anticipation of 1% rent reduction
Address increase in terminations through additional housing management support and streamline empty home management processes
We’ve reduced terminations from 1,257 in 2014/15 to 1,066 in 2015/16 and better integrated the Empty Homes and Lettings Team so they have shared key performance indicators Overhead costs have increased marginally but much of this is down to an increase in dilapidation costs for our head office, in anticipation of a relocation to a more cost and energy efficient office in 2017/18
Expect a reduction in overhead costs year on year Offer 48 volunteers work placement opportunities
We exceeded this by placing 75 volunteers
You will see our new pledges highlighted in bold throughout this statement.
05
Our strategic approach to Value for Money Our overall aim is to achieve top quartile customer satisfaction, when we compare ourselves against other housing providers, but at a below average cost. There are a couple of exceptions to this rule, we have already mentioned IT where we expect and accept that we will be making long-term investments which will drive up our costs, often above our peers. We also accept above average costs for our housing management services where we need to invest extra in helping people in deprived communities.
06
It is also our aim to increase the number of homes and tenures for future generations, be financially strong and well governed and better target our resources to deliver what our customers need. We will achieve this by continuing to generate efficiencies and getting the most value out of our assets. Delivering Value for Money isn’t an add-on or standalone activity within our new four year plan – it is integral to it.
Our Value for Money Strategy is due for revision to reflect our new Corporate Plan. However, its current principle is to continuously improve by: • Maximising our return and protecting and understanding our assets.
• Understanding and embedding value for money.
• Considering value for money in everything we do and setting targets to achieve it. • Understanding what customers want and delivering objectives that meet this. • Being transparent and inclusive • Having effective governance and value for money structures. There is one main focus to us seeking value and generating efficiencies, and that is to create more opportunities to invest in the things that make vibrant communities – things like jobs and training schemes, projects to tackle loneliness and positive activities for young people.
Since then, our boards have significantly enhanced their skills and experience, with training for existing members and the appointment of new members. We have introduced a board skills matrix to determine future personal development plans, improved communications with a monthly e-bulletin and allocated portfolios for board members. We have also enhanced our risk management framework and carefully consider and manage risks, and opportunities, as we consider entering new markets. In April 2016, the Homes and Communities Agency carried out an in-depth assessment into our governance and financial arrangements. We have subsequently learned that the measures we have put in place, and the investment in our boards’ development, has given sufficient assurances for our governance rating to return to G1. We have also begun consultation with tenants to convert Ongo Homes from a registered charity, regulated by the Charities Commission, to a Community Benefit Society with charitable status. This change will allow us control over the disposal of assets without the need to seek Charities Commission approval.
Our boards challenge their members and the Executive Team to ensure we are getting the biggest return from our resources to deliver our social purpose. Each year we set targets and measure the value we have achieved. We check performance through a Balanced Scorecard, which is monitored by our Board and Executive Teams. Good governance is integral to our performance as an effective, efficient and financially strong organisation, which we need to be if we are to deliver our ambitious development and community investment plans and make a real, lasting difference to people’s lives. In 2015 we achieved a V1 rating from the Homes and Communities Agency for our financial viability. However, at the same time, our rating for governance was downgraded from G1 to G2 as the HCA sought additional assurance that our Ongo Homes Board was able to exercise sufficient control over the business within the context of a group structure, with an unregulated parent company, Ongo Partnership Ltd.
07
Addressing our changing environment The Chancellor’s 2015 Budget announcement of a four-year 1% reduction in social housing rents presented the sector with its greatest challenge in recent years.
We have carried out a comprehensive service review of our Income Management service to identify where performance can be improved and efficiencies gained.
To respond to this, we have adapted our 30-year rolling business plan to meet the predicted £190m deficit without negatively impacting on our core business or providing less-than-satisfactory customer services.
We have also strengthened our partnership with the local Credit Union and our Financial Inclusion Team continues to provide one to one support for people facing hardship, helping them access the benefits and financial help they are entitled to.
Across all services, we consulted with our staff and collectively identified potential short, medium and long term cash savings, of which over £3million has been incorporated into 2016/2017 budgets.
Outcomes from Financial Inclusion Team 2015/16
We also held cost reduction workshops with Community Voice, our tenant group, to identify from our customers how we could control demand for our services, where we could reduce waste and where tenants could self-serve.
Number of tenants supported:
As part of this cost-saving exercise, we took the decision to disband our HomeCheck Team, resulting in a formal compulsory redundancy process for five staff members. They were successfully redeployed within the organisation, avoiding severance costs.
Number of Universal Credit claimants
A voluntary redundancy campaign also resulted in 20 posts being withdrawn from our total workforce, with redundancy costs of £591,581, including pension strain costs.
% of tenants in full or partial Housing Benefit
These costs will be recovered in 1.3 years, at which time we will begin to realise annual salary savings of £451,307. For another year we have continued to respond to welfare reforms, engaging with tenants most at risk of increasing arrears and putting in place early interventions to help them sustain their tenancy. We offer a broad range of payment options and have run communications campaigns, supporting customers to make informed choices.
08
2,808
Cash value of additional benefits claimed
£927,515 67
Total arrears for Universal Credit claimants
£38,913 61.5%
(Source: Balanced Scorecard 2015/16)
We continuously monitor the external environment for future changes, most notably further benefit changes and the extension of Right to Buy, analysing the potential impact on our tenants and business and mapping risks through our risk management process. A bi-annual Housing Market report is presented to our Board, identifying trends in our local private rent market, plus current and forecasted housing need.
Our Value for Money savings and efficiencies in 2015/16 Although seeking better value for money is integral to every business decision we make and service improvement we implement, we also set an annual target for savings which all our teams contribute to achieving. The 2015 Budget announcement of a rent reduction from 2016 meant we had to consider significant savings to minimise the impact that this fall in revenue would have on essential tenant services.
In addition, we renegotiated, or retendered, 25 contracts which resulted in an annual saving of £121,912. Beyond the savings already identified and budgeted for in 2016/17, we have set ourselves a further stretch target to save another £500k in 2016/17.
In total, annualised savings of £3,356,523 were identified in 2015/16 and have been budgeted for in 2016/17. Of these, more than £2m were realised in 2015/16. Fifty-four of the savings we identified are recurring, which means we will realise that efficiency year on year.
09
10
How we are using the savings we make First and foremost, the savings we make help us build resilience into our business plan, in response to the current revenue loss caused by the rent reduction and in anticipation of further political, economic and policy changes which may impact on housing. Beyond that, our profit is for a purpose and used to deliver our new Corporate Plan, which sets out our strategic priorities from now until 2020 and was approved by our board in 2016.
These are to: Provide excellent value for money services and homes
Use excess resources to build new homes
We will do this by aiming for top quartile customer satisfaction and below average costs when compared to similar housing organisations, investing in homes and new technology, and continuing to put customers at the heart of the business by ensuring they are informed, involved and empowered.
We will do this by using profits from the sale of new-build homes to subsidise the building of 1,250 social homes in 10 years.
Offer life chances and improve sustainable tenancies
Grow the group with complementary activities
We will do this by supporting tenants in managing their finances and reducing the impact of welfare reforms, investing in training and employment, supporting independent living and exploring opportunities to meet specialist and older people’s housing needs.
We will do this by seeking out new partners and bidding for external contracts, specifically around mental health support, offender rehabilitation, support for people with learning difficulties, substance abuse, domestic violence and older peoples’ support.
11
Understanding our assets In March 2016, we owned and managed 9,720 homes, having sold 43 properties through Right to Buy or Acquire schemes and built 48 new homes during 2015/16.
Accommodation owned & managed General needs
9,030
Intermediate rent
6
Affordable rent
196
Supported housing
8
Housing for older people
480
Total Stock
9,720
Accommodation meeting Decent Homes Standard
9,720
Total number of lettings
1,198
Total number of sales
43
Total stock built/acquired
48
Annually, we conduct a desktop valuation of our housing stock to understand the Existing Use Value for Social Housing (EUV-SH). This is independently conducted by real estate specialists JLL for our funders Barclays Bank plc. The valuation of our homes rose from ÂŁ215m in March 2015 to ÂŁ219.5m in March 2016. Every five years, we conduct a full valuation based on property inspections. The next full inspection is scheduled for 2016/2017.
(Source: National Register of Social Housing 2015/16)
Number of units*
EUV-SH
9,419
204,390,000
Social rented properties (uncharged)
40
1,840,000
Affordable rented properties (charged)
93
3,080,000
Affordable rented properties (uncharged)
121
6,990,000
Properties proposed for demolition
47
0
Commercial interests
53
1,000,000*
1,690
2,200,000*
TOTAL
219,500,00
Charged properties Social rented properties (charged)
Garages and sheds
(Source: JLL Valuation Advisory Report for Barclays Band plc March 2016) ( * Market Value)
12
Our balance sheet and income statement In 2015/16 our operating margin rose from 25% to 28.7% realising a net operating surplus of £13.1m. This is based on the statutory accounts for Ongo Homes. Despite the challenging operating environment of 2015/16, our turnover for Ongo Homes still grew by 3.4%.
*It is important to note that adjustments have been made to 2014/15 figures to allow for the change to FRS 102 accounting standards in 2015/16. For this reason, we are only able to show comparable data for two years. This also means that benchmark data becomes invalid as HouseMark will not restate numbers from previous years. In 2015/16 our revenue reserves increased by £21.5m to £57m. This increase in reserves for the year includes a pensions gain of £10.5, with £11m surplus.
This represented an 18.4% return on net assets, excluding any pensions gain or liability. This compares to a 19.5% return in 2014/15. This decrease in return on assets is more than accounted for by the increase in cash held. Ongo Homes has a £102m facility with Barclays Bank plc and at the end of 2015/16 had drawn down loans to the value of £71m. With existing value of the housing stock at £219.5m, this equates to an asset cover ratio of 309%. In essence, this means for every £1 of borrowing, we have £3.09 worth of assets. In 2014/15 the asset cover ratio was 303%, excluding the pension deficit. Our long term liabilities continue to be borrowings and pension. During 2015/16 we have seen a significant gain on the pensions valuation which has reduced our long-term liabilities.
3.4% 2015/16 Operating margin
28.7% 2015/16 25.0% 2014/15
3.5% 2014/15
Growth in turnover
Gearing
37.9% 2015/16 38.6% 2014/15
(Source: Ongo Homes Statutory Accounts)
13
Managing our assets Understanding our asset base and taking positive action to maximise the income from our assets is integral to our efficiency, and our future investment decisions. A review of our Asset Management Strategy is now due after it was deferred until the 2016/20 Corporate Plan was approved by board members. We have further developed the Sustainability Index we started using in 2013. Through the index, we overlay the financial performance of assets, such as potential rental income or void loss, with information on their non-financial performance, such as market demand and customer satisfaction. This helps us make decisions on which streets and estates to invest in, and which we might want to dispose of.
Prior to any investment, or decision to dispose, we calculate the net present value (NPV) of properties. Disposal is considered when there is a negative NPV or a property is unable to be energy efficient. Using our Sustainability Index we have identified 43 of a total of 798 streets which could be considered to be under performing – this is 5% of all the streets under our management. A working group of staff from across different departments has assessed those streets which scored poorly to better understand why they are not performing. They report to our Regeneration and Sustainability Forum which determines what action will be taken.
54%
Excellent performance No. of Streets 430
29%
Above average performance No. of Streets 231
12%
Average performance No. of Streets 94
(Source: Ongo Sustainability Index)
14
5%
Poor performance No. of Streets 43
We also calculate the financial return we receive from each of our individual properties. This is calculated by taking any costs incurred by a property, such as repairs, void or arrears, from the potential rental income that property could make. We display the return as a percentage of potential income. For example, if the potential income from a home is £5,000 per year, but it costs us £2,500 a year through repairs, arrears or void costs, that property has a 50% return. Any property with a less than 50% return is highlighted for closer scrutiny by our Regeneration and Sustainability Forum. This simple, internal, calculation helps flag up our high-cost properties and determine if action should be taken.
Return rate
Number of properties
% of all properties
Less than 0%
336
3.5%
Between 0 and 20%
164
1.7%
Between 20 and 50%
493
5.1%
Between 50 and 80%
1,556
16.1%
Greater than 80%
7,120
73.6%
9,669
100%
(income as a %, minus repair, void arrears costs)
Total In our previous Value for Money Statement, we identified, through our Sustainability Index, three areas for investment – Albert Marson Court and the Westcliff Estate in Scunthorpe, and Caistor Road Estate in Barton-upon-Humber. Significant progress has been made to develop all three of these estates. We have also carried out a review of our six sites which contain commercial properties to establish their sustainability. This has resulted in the decision to dispose of one site through sale – Priory Lane, in Scunthorpe. The future of the remaining sites will be considered in 2016/17.
and component database, plus report on Decent Homes investments, sustainability of stock, cost forecasting, asbestos management, health and safety, SAP ratings and energy efficiency and stock condition. This system, once procured, will also assist with project management, document management and the delivery of cyclical and compliance programmes. We have planned for this system to be implemented from April 2017.
As part of our continual improvement in our approach to asset management, we are considering acquiring a new Asset Management System in 2016/17 to replace our current processes. This investment will significantly improve our ability to maintain a comprehensive stock asset
15
CASE STUDY: Breathing new life into Westcliff Scunthorpe’s Westcliff estate is pretty well-known as having its problems – not least for featuring in Channel 4’s Skint programme in 2013. But it has great strengths too. Residents have a real sense of identity and resolve and community spirit is alive and well. In fact, despite some negative media portrayals, Westcliff has all the ingredients of a successful estate - with the right investment. Following extensive consultation with residents and partnerships, work started in 2015/16 on Ongo’s biggest regeneration programme to date. The £9m scheme, of which Ongo is the largest investor with a £6.4m contribution from existing reserves, includes 41 new homes, one large and five small retail units, a community hub and play area. Some demolition work took place in 2015/16 by North Lincolnshire Council and development begins in 2016/17. The scheme is due for completion in March 2018. This investment, which has also attracted funding by Homes and Communities Agency, Humber Local Enterprise Partnership and North Lincolnshire Council, will regenerate a run down area with a poor reputation into a vibrant one, with modern homes and local services to improve local wellbeing and tenancy sustainability.
16
17
18
CASE STUDY: Tackling a local estate In our 2014/15 Value for Money Statement we said how our Sustainability Index had flagged up Caistor Road estate in Barton-upon-Humber as an area which required some intensive support to tackle poverty, crime and low aspirations in order to sustain tenancies and reduce arrears. In October 2015, following detailed public consultation, we took a new approach to the problems and appointed a dedicated Estate Manager to be based full-time on the estate at a local centre, owned by Ongo. As part of a two-year pilot scheme, our plan has four aims: to reduce tenancy turnover; cut rent arrears; lower crime and hand the local centre back to the community to run itself. In 2015/16 we invested ÂŁ65k in the project to fund the full time post, plus community activities and the refurbishment of the community centre. The budget for 2016/17 is ÂŁ75k. Activities include Lone Parent events, Talent Match sessions, Youth Club and Employment and Training workshops. Although too early to see the return on this investment, early reports suggest that in the first six months of the project, six of the 13 streets on the estate have improved on their position in our Sustainability Index. One has unfortunately worsened. Multi-agency action is being taken against particular problem households.
19
20
Delivering new homes In 2015/16 we completed the build of 48 new homes, and started on the site of a further 30, as part of the Homes and Communities Agency’s Affordable Homes Programmes. We have the funding in place and are on target to complete the building of 113 new homes by 2018. It is a key ambition in our 2016/20 Corporate Plan to continue development on an even greater scale. With no additional Government funding anticipated to build social housing, we plan to use the profits from sales of new-build homes to subsidise the development of 1,250 social homes over the next ten years. Year on year, we drive efficiencies and continue to deliver developments at costs significantly lower than most other developing organisations, regionally and nationally. We attribute this to our ‘buy local’ strategy. By working with local contractors we have kept costs lower than most but have the added advantage of reinvesting back into our area, creating jobs and contributing to the local economy – all part of our greater vision.
The table shows the average regional work costs, per square metre, of grant-funded schemes, reported by the Homes and Communities Agency.
2011 - 2015
Area of development Ongo Homes
2015 - 2018
+/+/Average +/+/Average 2011/15 cost of NE/YH National cost of NE/YH National 2015/18 works average average works average average difference £974
-£214
-£339
£1,158
-£247
-£318
£184
North East/Y&H
£1,188
-£125
£1,405
-£71
£217
Midlands
£1,288
-£25
£1,437
-£39
£149
North West
£1,207
-£106
£1,372
-£104
£165
East/South East
£1,457
+£144
£1,604
+£128
£147
South/South West
£1,367
+£54
£1,492
+£16
£125
England
£1,313
£1,476
£163
(Source: HCA Development Costs)
21
Our workforce Our workforce is an asset just as our homes are. It is our biggest cost too. Maximising on the skills and experience of our employees is a big part of us getting the most out of this valuable asset.
list for not-for-profit organisations in 2015/16. By taking part every two years in a Best Companies staff engagement survey, we can understand how effective our staff engagement activities are and where we can improve.
That is why we see a close connection between Value for Money, staff engagement and investment in training and development.
Having strong staff engagement has led to reduced sickness absence levels, plus an increase in internal promotions, all indicators that we are achieving value for money from the investment we make in our employees. Voluntary staff turnover has increased but it must be remembered that we offered voluntary redundancy in direct response to the predicted reduction in revenue from 2016. This one-off action will unnaturally skew the figures.
We carry out annual salary benchmarking through remuneration specialists, Inbucon. This provides us with external assurance that our employees are rewarded fairly for the work they do, and the skills they bring. We are an Investors in People Gold organisation and featured 23rd in the Sunday Times Top 100
Human Resource performance data
Average days lost to staff sickness Turnover of staff - voluntary Number of internal promotions (Source: HouseMark)
22
2015/16
2014/15
2013/14
Top Quartile
7.3
10.8
8.4
7.3
16.0%
9.0%
5.9%
12.9%
14
11
No data
Not recorded
Tracking our costs The 2015 Global Accounts provide a financial overview of the whole social housing sector. The accounts, published by the Homes and Communities Agency, are based on analysis of the regulatory financial returns of 332 housing associations, which own or manage at least 1,000 homes. It is important to note, the latest Global Accounts are taken from 2014/15. We have used our 2014/15 Ongo Homes Statutory Accounts to compare performance. The 2014/15 accounts used for comparison were calculated using the UK GAAP standards of that time. From this, we can see that our main, ongoing, costs for management and maintenance are well below average, although total costs are not yet below average, due to high major repair costs. This is to be expected as we were still carrying out significant environmental works and completing capital improvement programmes in 2014/15, from the time when our homes were owned by the local council.
Global Accounts 2014/15 cost data (ÂŁK) Total cost per unit
Management cost per unit
Service charge cost per unit
Maintenance Major repairs Other social cost cost housing costs per unit per unit per unit
Ongo Homes
3.84
0.62
0.05
0.87
1.61
0.68
Upper quartile
4.30
1.27
0.61
1.18
1.13
0.41
Median
3.55
0.95
0.36
0.98
0.80
0.20
Lower quartile
3.19
0.70
0.23
0.81
0.53
0.08
(Source: HCA 2015 Global Accounts)
23
Benchmarking against our peers Understanding our costs is essential for ongoing business efficiency but benchmarking our costs, and performance, against similar organisations helps us identify how we are positioned against other suppliers, and how we might gain insight into where further efficiencies can be gained. We subscribe to business intelligence company HouseMark to provide us with performance benchmarking. This means we can compare our costs and performance with 239 other social housing providers across the country. We choose comparator groups relevant to the service we want to benchmark, for example we choose more local landlords when looking at our lettings service. This ensures we use the information intelligently and can select landlords with similar operating environments. For our Value for Money statement we have chosen our fellow Placeshapers peer group, this is a network of over 100 organisations who share our principle of being a locally focused, values-driven housing association which puts customers at the centre of the business and gives them real influence.
24
To ensure we still use similar sized providers we have selected those with between 5,000 and 15,000 homes, including our close neighbour Shoreline Housing Partnership. Our benchmarking report was run on 20 July 2016. In the next section, you will see breakdowns of cost and performance for Maintenance Services, Major Works, Empty Homes and Lettings Services, Housing Management and Central Services. We are pleased to see improvements in our performance in several areas. We are mindful, however, that some peers may not have inputted their data at the time we produce our Value for Money Statement and so their figures are calculated on last year’s data plus inflation. We always re-run our benchmarking exercise in October to see if the position has changed and help us set appropriate, and competitive, budgets for the following year.
Housing Associations we benchmark against
Accord Group
Pennine Housing 2000
Alliance Homes
Phoenix Community Housing
Aragon Housing Association
Raven Housing Trust
Bron Afon Community Housing
Regenda Group (The)
Chevin Housing Association
Rochdale Boroughwide Housing
CHP
Saffron Housing Trust
Coast and Country Housing
Saxon Weald
Community Gateway Association
Sentinel Housing Association
Cross Keys Homes
Severnside Housing
Derwentside Homes
Shoreline Housing Partnership
Freebridge Community Housing
Soha Housing
Golding Homes
Southway Housing Trust
Greenfields Community Housing
Trafford Housing Trust
Halton Housing Trust
Trent and Dove Housing
Havebury Housing Partnership
Twin Valley Homes
Isos Housing
Wandles Housing Association
Livin
Wythenshawe Community Group
Magenta Living
25
The charts below are colour coded to indicate which quartile our performance falls into.
This is top quartile
This is third quartile
It means our performance is in the top 25% when compared to our peers
It means our performance is below that of 50% of our peers
This is second quartile
This is bottom quartile
It means our performance is above average, in the top 50% but doesn’t make the top 25%
It means we are in the bottom 25% of our peers when it comes to comparing our performance
Maintenance We have maintained high customer satisfaction for our maintenance service, and have seen significant reductions in costs, bringing us in line with second quartile performance.
For example, in 2014/15 we carried out a procurement exercise to determine the best value way of operating a stores service for our Maintenance Team.
Against a budget of £3.656k we spent £3.584k - a saving of 2%.
Previously we operated an in-house stores facility, costing £472k to serve our Maintenance Team in 2014/15. This figure excludes the costs of the materials.
Whilst we haven’t set annual targets, it is our target to achieve a direct cost per property of £325 by 2020. We achieved that this year, and now need to maintain or improve the position in future years.
In 2015/16 we closed down our in-house facility and outsourced the service to a local merchants, reducing year on year ‘costs to serve’ from £472k to £199k in 2015/16 – a saving of £273k.
This is as a direct result of our Maintenance Cost Reduction Strategy, which is starting to have an impact on costs. In fact, the number of responsive repairs, which is a key driver for costs, has reduced from 34,627 in 2014/15 to 30,788 in 2015/16.
Costs are forecast to reduce further, with ‘costs to serve’ budgeted at £163k in 2016/17. By paying a set fee for the service we are able to control our costs.
Responsive Repairs performance and cost data
Satisfaction with the repairs service Direct cost per property service provision
26
2015/16
2014/15
2013/14
95%
94%
96%
£318.98
£413.41
£411.80
Benchmark Target nearly 95.03% there! £375.25
We are now looking to go to the local market to develop a small contractors list in 2016/17 to attract more local partnerships, keeping money within our local economy and supporting our vision to increase local employment. Beyond 2016 we are looking to increase our potential to earn additional revenue by delivering external contracts for property maintenance services. We have already started, with a contract to deliver work for Scunthorpe General Hospital. In 2015/16 this generated additional revenue of ÂŁ11k. We also delivered a contract for local charity Lindsey Lodge Hospice, generating ÂŁ4.6k in income but also supporting a social cause. We plan to increase our intelligence on service users, by using our Sustainability Index and repairs data, to target our top 100 high-demand customers. The aim is to reduce calls for service by better understanding the cause of the demand and providing alternative solutions to offset repairs costs, such as increased housing management support or improved education. We also believe we can increase efficiency and provide a more customer-focused maintenance service by reviewing our operating hours to better meet customer needs and reduce the higher-cost out-of-hours emergency service we offer. Work started on this review in 2016 and we are working in close consultation with the maintenance teams, customers and trade unions.
27
Major work and cyclical maintenance Our direct costs, per property, for major investment work have fallen significantly and places us in the top quartile compared to peers. This is to be expected because we have now completed our massive home improvement programme and our homes, and their components, are in excellent condition. Against a budget of £6.3m we spend £4.6m – a saving of 27%.
Major Works performance and cost data
Satisfaction with the overall quality of your home Percentage of properties failing the decent homes standard Direct cost per property of major works
2015/16
2014/15
2013/14
Benchmark Target
94.0%
91.0%
91.9%
88.7%
0%
0%
0%
0%
£728
£1,513
£1,866
£1,060
Our cyclical maintenance costs have increased slightly but still place us in the top quartile and a lot lower than many of our peers.
Cyclical Maintenance performance and data
% of homes with valid gas certificates Direct cost per property (Service & Management Combined)
We completed a lot of work in 2015/16 to replace high maintenance features with low maintenance alternatives, such as external wall coverings and uPVC windows and doors. In 2015/16 we also carried out a large amount of compliance work, such as asbestos inspections and removals, fire checks and improvements and electrical testing. This work helps us better control the costs of cyclical maintenance in the future.
28
2015/16
2014/15
2013/14
Benchmark Target
100%
100%
100%
100%
£109
£104
£93
£236
Of course, our Sustainability Index helps inform our decisions for future major investment work, and in 2015/16 we identified the Market Hill estate in Scunthorpe as one which would benefit from investment to improve its future viability. The estate contains three high-rise buildings, and a further ten blocks of low rise flats and maisonettes, providing 316 homes.
We will complete a £3.5m programme to replace the windows, lifts and heating systems. We will also remodel and refurbish the entrances and ground floors to offer a more modern place to live. By switching to an individually metered heating system, we anticipate cost savings of up to 30% on tenants’ heating bills. This equates to potential savings of £100k a year in fuel costs, plus a £30k a year saving in ongoing maintenance costs. Working with partners to improve energy efficiency and sustainability is part of our long-term approach to be a cost-effective, socially aware and environmentally-friendly landlord. We have been able to generate income and attract external funding towards achieving this. As part of an Energy Efficiency in Deprived Communities scheme, run by ERDF, we received £130k in 2015/16 to fund an external wall insulation programme.
In 2015/16 we also installed solar PV to more than 700 homes with plans to complete a further 200, bringing the total number of our homes benefiting from solar energy over the years to 1,300. This will generate surplus income of up to £30k a year for us and a community fund against which we can bid for cash up to a similar amount. In addition, we have independently installed solar panels onto a further 277 properties, generating an additional £100k for our business. Quality is an essential value for our business and in 2015/16 we retained our British Standard OHSAS 18001 accreditation at the highest five star level. This recognises the quality of our occupational health and safety management systems. We also completed an audit for ISO14001 accreditation which we successfully achieved, with a five star rating.
We also claimed back cash through the Renewable Heat Incentive – a Government scheme set up to encourage the uptake of renewable heat technologies. This amounts to almost £20k per year, over seven years, ending in 2023. We actively seek opportunities to try new technologies, particularly when there is a cost benefit for our tenants and an environmental benefit too. We have been awarded £250k from National Energy Action to install three new heating systems into 30 of our homes as part of a programme to test new innovations.
29
Empty homes management One of the investments we have made within our Empty Homes Repairs service is the implementation of scheduling and planning software called DRS Project Planner.
The progress we’ve made in lowering costs and improving performance in managing empty homes is one of our success stories – satisfaction has gone up and costs have come down. The actual spend for the year was £2.197k against a budget of £2.526k – a saving of 13%.
We used to collect empty homes data and allocate work on pieces of paper – a drawn-out and wasteful process. The software automatically triggers inspections and everyone in the Empty Homes team is armed with a tablet enabling them to record data to a central management system, in real time. The system allows full visibility of materials ordered, delivery times, job start and completion dates.
However, the number of empty homes requiring repair fell too – from 1,089 to 1,066 – resulting in a slight increase in the average cost per void repair figure. We have reduced what we spend on external subcontractors, preferring to use our own staff wherever possible. We have achieved this whilst still keeping costs of the internal workforce in line with the previous year despite pressures to meet contractual pay increases, higher pension contributions and changes to the staffing structure.
Greater efficiency brought about by the investment helped reduce contractor costs by around £522k to £379k in 2015/16. We’ve also reduced staff numbers by seven.
The data submitted to HouseMark also includes a number of costs out of the control of the Empty Homes team, such as council tax on empty properties and decoration allowances, which have both increased. It is our aim to achieve a direct cost of £2,164 per property for our Empty Homes Service by 2020.
Empty Homes Repairs performance and cost data
Satisfaction with the quality of new home Average cost of a void repair Average re-let time (calendar days)
30
2015/16
2014/15
2013/14
Benchmark Target
87%
85%
81%
N/A
£2,680
£2,440
£2,476
£2,568
26
28.2
33.46
19.08
Closely linked to our Empty Homes Service is our Lettings Service. Our direct cost per property for lettings service has increased, putting us into the bottom quartile when compared to peers. Our turnover is also in the bottom quartile, although our performance has improved year on year and is within our internal target, which, in 2015/16, was 12%. Our internal 2016/17 target is 10.5%. We are heading in the right direction to achieve our longer term target of 9% turnover by 2020 by using our local intelligence and Sustainability Index to target specific areas which experience high turnover. Our rent loss falls into the third quartile, however, and has exceeded our internal target which was 1.4%. It is important to note, we also benchmark our lettings service against similar associations in the Yorkshire and Humber region, where we are currently rated in the second quartile.
Lettings performance and cost data 2015/16
2014/15
2013/14
Benchmark Target
£46
£39
£40
£38.37
Turnover of tenancies as % of properties
10.9%
12%
13.1%
6.7%
Rent loss due to empty properties
1.07%
1.3%
2.2%
0.5%
Direct cost per property for Lettings
We will continue to work towards our target of being a top quartile performer for low costs and high customer satisfaction. We will carry out a review and restructure of the Allocations Team, which is expected to produce headcount savings of 7%. In April 2015 we launched a one-year pilot Tenant Sustainability Project as part of our drive to reduce rent arrears and turnover and thus reduce the costs attached to empty properties in terms of management and void costs, empty home repairs and re-letting. The project targeted a typically high turnover customer group – tenants under 25 living in onebedroom flats on Scunthorpe’s Westcliff Estate.
Twenty people took part in the project, which involved intensive housing support plus practical assistance, including home furnishings provided by donations through Ongo’s Choose to Reuse Project. In one year, only two of the 20 tenants terminated their tenancy and rent arrears averaged at £74.83 per person compared to £433.65 for those in a similar tenancy but not receiving support. By providing this level of support, we have avoided potential costs associated with income collection, tenancy breaches and terminations. We will now consider the merits of extending this model further.
31
32
Housing Management Our Housing Management Service includes Tenancy Management, Tenancy Enforcement, Income Management, Allocations, Resident Involvement, Neighbourhood Services and a portion of our Customer Centre costs. The cost of running our Housing Management service has reduced in the last year, and we have already put in measures which will see further reductions in future years. Against a budget of £4.228k we made a 14% saving, spending £3.649k. We currently fall into the third quartile when our costs are compared with our peers; however, this is an improvement on the previous year when we were in the bottom quartile. It is our aim to reduce the direct costs of Housing Management to £281 per property by 2020.
Housing Management performance and cost data 2015/16
2014/15
2013/14
Benchmark Target
£295
£313
£285
£281
94.2%
89.4%
90.2%
91.5%
Direct cost per property Housing Management Satisfaction with overall service
Between 2013 and 2015, the direct costs of Housing Management increased to fund additional staff who were recruited to support tenants through welfare reform and conduct an annual property inspection of all our homes. These costs were reviewed in 2015 and, in a drive to reduce them, a restructure of the housing management team was carried out and staff numbers were reduced. Nine posts were deleted from the housing team and, in total, £300k in salary savings and £75k in non salary savings are expected to take effect in 2016/17. Further staff reductions in the Customer Services Team and management restructures in the Customer Engagement and Home Ownership teams have also been implemented, totalling £139k.
In August 2015, we brought our out-of-hours call handing service in-house, using existing resources within our Customer Services Team. Efficiencies were immediately seen. Emergency jobs raised from out-of-hours calls have reduced from 36.5% to 27% and customers receive an improved service by dealing with experienced Ongo staff who have direct access to our databases. Annual efficiency savings are estimated to be worth £148.6k. We have also driven a reduction in leaseholder arrears with an incentive scheme offering a 5% saving for early payment. This resulted in a fall in service charge arrears from £85,290 in 2014/15 to £75,709 in 2015/16.
33
34
In our drive to collect rents, there has been little change in our year on year performance and we recognise this is an area which needs attention – in fact we have already started implementing improvements and efficiencies. Our rent arrears figures can be misleading because we have a high dependency on Housing Benefit payments (over 60%) which are paid four-weekly. At the end of March 2016 we were owed three-week’s benefit arrears, skewing our figures. That said, we exceeded our own internal target which was set at 4%. If we exclude Housing Benefit, our arrears in 2015/16 were 2.0% - below our target of 2.3% - and a reduction of 0.3% on the previous year.
Income Management performance data 2015/16
2014/15
2013/14
Benchmark Target
Current tenant rent arrears as % of debit
3.68%
3.68%
4.19%
2.14%
Former tenant rent arrears as a % of debit
2.2%
2%
2.43%
0.74%
A review of the Income Management Team, which began in October 2015, is expected to be completed in 2016/17. Part of this review is to look at systems and processes for predicting arrears, recovering more former tenants arrears and recharging debt. We plan to implement the new system and restructure, including the reduction of one post, by the end of September 2016. We anticipate the new system will realise further efficiencies by 2020. These targets are included in our Balanced Scorecard. Further efficiencies will come from improving how we measure the impact we have, greater use of technology for customer transactions and a reduction, where we can, in the time spent dealing with minor complaints and neighbourhood issues.
35
Neighbourhood services Customer satisfaction with our neighbourhood services remain consistently high – top quartile in fact. Direct costs have come down since the last year too. This is as a direct result of a service review, plus listening to tenants and implementing their recommendations for an improved, but streamlined service.
Neighbourhood Services performance and data
Satisfaction with their neighbourhood Direct cost per property of neighbourhood services
36
2015/16
2014/15
2013/14
Benchmark Target
91.9%
89.1%
90.80%
90%
£123.85
£124.24
£111.55
£127.45
Overheads Our total overhead costs are in the second quartile when compared to our peers. Central services costs have increased , mainly due to a staff dividend which is payable annually to all staff if the company achieves 80% of its operational plan, retains top quartile customer satisfaction and delivers within the annual budget. This deal formed part of a five-year CPI minus 1.5% pay agreement, initially made in 2013, which provides certainty around staffing costs until 2018. A further 1% pay agreement (not linked to CPI) has now been reached which takes us from 2018 to 2020. Our target is to be top quartile for our overhead costs by 2020, with costs being no more than 11.8% of our actual (not adjusted) turnover.
Overheads costs as a % of adjusted turnover 2015/16
2014/15
2013/14
Housemark Target
Premises
1.7%
1.32%
1.52%
1.1%
ICT
2.41%
3.05%
3.51%
2.19%
Finance
1.37%
1.63%
2.08%
1.29%
Central Services
5.43%
4.98%
6.43%
4.42%
Total
10.93%
10.98%
13.55%
9.34%
In 2015/16, plans were drawn up to relocate our head office to a Scunthorpe town centre location, and bring our Customer Centre into the same central location. The move is anticipated early in 2018.
We have increased our premises costs to include dilapidation in anticipation of the move.
37
Delivering our services Our annual operational plan Each year, our executive and senior management teams produce an operational plan in order to deliver our corporate objectives. In 2015/16 our objectives were to do the basics well, improve lives, grow the business and be financially strong. Progress in delivering the plan is measured and monitored monthly, through our Balanced Scorecard. In 2015/16 we delivered 94% of our operational plan. The 2016/17 Operational Plan is now being delivered to work towards achieving the revised objectives set out in our new 2016/20 Corporate Plan.
Doing the basics well
well as routine surveys on specific services, the team carried out telephone surveys in October and February, asking 1,600 customers to rate the overall service they receive from us. We achieved our target of remaining in the top quartile for overall customer satisfaction with more than 94% of tenants stating they were satisfied. In fact, we achieved top quartile in several areas, including customer satisfaction that rent provides good value for money. This was when compared to 94 housing providers who submitted their 2015/16 STAR results to HouseMark.
The 2015/16 results of our customer survey show we have retained high levels of satisfaction for our homes and services. In 2015 we set up our own survey team, providing five apprenticeships for local young people. As
Customer satisfaction survey
Overall satisfaction with the service provided by Ongo Homes Satisfaction with the overall quality of your home Satisfaction that Ongo Homes treat you fairly Satisfaction that your rent provides you value for money Satisfaction with your neighbourhood as a place to live Satisfaction that Ongo Homes has friendly, approachable staff Satisfaction that Ongo Homes listens to, and acts on your views Satisfaction that Ongo Home keeps you informed
38
2015/16
2014/15
2013/14
Housemark Target
94.2%
89.4%
90.2%
90.0%
94.0%
91.0%
91.9%
88.7%
94.2%
90.7%
93.4%
Not recorded
91.8%
88.8%
86.5%
87.6%
91.9%
89.1%
90.8%
88.0%
95.9%
90.8%
95.8%
Not recorded
86.5%
83.1%
87.8%
76.1%
92.1%
89.2%
90.9%
Not recorded
In 2015/16 we retained our accreditation for Customer Service Excellence and will be reapplying for accreditation in 2016/17. This external endorsement recognises not only our commitment to providing great customer service, but helps us understand where we can further improve. One area of customer service that we have made significant improvements in is our complaint handling. Initial complaint handling became part of our Customer Advisors’ role in 2014 and they were empowered to resolve complaints at first contact. A new Complaints Policy was developed in August 2015, reducing our internal complaint handling process from three to two stages. A new tenant-led Complaint Monitoring Group was created to monitor performance. The number of complaints fell by 34.72% in 2015/16, compared to the previous year. Customer satisfaction in complaints handling fell too, by 4.87%, but we continue to improve our service through learning from feedback and training. Reducing complaints is directly linked to improving our services and reducing the time spent by officers in resolving issues. Our Resident Scrutiny Panel, which consists of six trained tenants, carried out two investigations in 2015/16, directly linked to making value for money efficiencies and maintaining high customer care standards. The first was to consider our application for accreditations and measure the value they bring to our business, the second was to scrutinise our grounds maintenance contract. In both, recommendations have been implemented to improve processes and reduce waste and costs.
education and skills, access employment and make a positive impact within their environment. This is all part of our greater vision to create truly vibrant communities. As part of its ongoing commitment to the communities of North Lincolnshire, in 2015/2016 Ongo Homes awarded 1.5% of its revenue, totalling £582,000, towards funding this work. Additional grant funding of £46,000 was secured from Scottish Southern Electricity plc to help fund our Empower Project, working with the probation service to help ex-offenders into employment. We contributed an additional £10,000 to the project. In January 2016, we also secured up to £108,000 for a Talent Match programme – this is the second grant awarded to us for this scheme, the first being for £77,000 in 2015. Talent Match is a project tackling youth unemployment in 21 areas of England, including the Humber. From 2016, Ongo Homes is reaffirming its commitment to Ongo Communities. Our Community Investment Strategy is being reviewed to support the delivery of our new Corporate Plan and will set out how we will make a long-term positive impact on our neighbourhoods and those who choose to live within them. Priority is being given to investment in employment and education and new partnerships are being forged with local schools and the development of a mentoring programme. We are also applying for more than £1.5m of grant funding in 2016/17 to help deliver welfare and debt advice, health and wellbeing support, mentoring for offenders and further training and education.
In 2015/16 we also increased the responsibility of our tenant group Community Voice, delegating authority to approve all operational policies and challenge them in delivering value for money customer services.
Improving lives Ongo has its own community investment subsidiary with the purpose of helping people improve their
39
The Ongo Journey to Work We think as housing associations go we may be unique in that we own our own professional recruitment agency. There is an obvious link between successful, sustainable communities and employment. Through our community investment work we provide people with things like personal coaching to improve their life skills – in fact, everything they need to increase their chances into employment or training. We have also attained a debt licence which opens up additional external funding streams and increases the support we can offer customers. Beyond that, we can actually place people into employment through our recruitment agency. It is an end to end support service with the future potential to bring profit into the group as we grow the recruitment agency business.
Supporting people into training and employment Number of people who accessed intensive employment support...
Number of people engaged in meaningful volunteering...
536
75 2015/16
2015/16
389
74 2014/15
2014/15
Number of apprenticeships created...
40
2015/16
143 2014/15
713 2015/16
51 2014/15
179
Number of work/life skills training sessions...
36 2015/16
Number of people helped into sustainable employment...
545 2014/15
(Source: Balanced Scorecard March 2016)
A lot of the work we do in our communities, and supporting people, doesn’t always pay us back in pounds and pence. But that is not to say it doesn’t bring value. Every person who is helped into work, reduces their reliance on the welfare bill. By helping an exoffender avoid further crime, thousands are saved on police and justice budgets. If we can help an older person stay fit, healthy and involved in community activities, we can help reduce health and social care costs. It’s the good stuff that makes communities succeed. We do measure the value of this work, however, using a model developed by Housing Associations’ Charitable Trust (HACT) which specifically looks at the social impact of housing association activities. We calculate the number of successful outcomes, such as people getting a job or gaining new skills or confidence, against the cost of the project. The example below shows the social impact of our Ongo Journey to Work project.
Social value calculation for Employment Support Activity
Employment Support
Overall budget
£274,234
Overall social impact
£3,019,835
Analysis of benefit Budget: social impact
Net benefit
1:11.01
£2,745,601
This calculation tells us the overall social impact is over £3m and that for every £1 spent on this project, we get back £11.01 in value.
41
Investing in technology We strongly believe that we need to invest in new technology to receive long-term efficiencies, protect our data security and strengthen our resilience for business continuity. In 2015/16, we implemented a new Disaster Recovery System, at a cost of £74k, enabling our business to recover operating systems within one hour. This has reduced our risk dramatically and gives us confidence of being able to continue to operate the business in the instance of a major incident. Wifi has also been installed in 16 sheltered housing schemes at a cost of £10k. This again provides staff with an alternate work location, increasing the agility of our workforce, improving business resilience with the added benefit of free wifi for tenants, helping increase the digital skills of customers.
42
Some of this investment has been offset by significant IT savings, totalling £83k. These include the replacement of a software contract with a new enterprise agreement saving £44k, the removal of legacy equipment and associated maintenance contracts saving £12k and a drive to reduce reliance on paper saving over £6k in print and mailing costs. We also made procurement savings of £7k by changing our telephony supplier. Future projects include the negotiation of a new mobile phone contract, expected to save £30,000 per year plus the introduction of a collaborative communications system to improve efficiencies in call handling, mobile working and internal communications.
Digital engagement and marketing Whilst investing in our internal systems is a priority, we also recognise the opportunity for efficiencies that online transactions offer. We are driven to increase the number of our tenants who are not only online, but willing to engage with us digitally rather than relying on more costly interaction, such as face to face or over the phone. As part of an ongoing marketing campaign, we have directly targeted tenants to promote the benefits of being online, update tenant data and encourage sign up to our web services. In March 2016, we held email contact details for 41.1% of all households – an increase from 34% in March 2015.
Further web improvements are planned for 2016/17 to improve customer experience and increase opportunities for further online engagement, including improved search and navigation facilities and web-chat. Making the shift from traditional marketing to digital marketing also provides greater opportunity to extend our communications to wider audiences, which is essential as we grow our business and extend our customer base. In 2015/16 we were successful in securing a Google AdGrant, available for charitable and social purposes, which provides us with $10,000 worth of targeted online advertising at no cost.
The number of tenants registered for an online Ongo account has significantly increased, from 1,124 (12%) in March 2015 to 4,375 (46%) in March 2016. This significantly increases our opportunity to reach a larger number of tenants digitally and make savings in print and mail costs. Savings of ÂŁ9,000 have already been realised in the reduction of print copies of our tenant magazine.
43
Growing our business We set up our group structure in 2012 to enable us to grow and diversify the services we provide to our communities, plus provide us with the potential to develop separate commercial opportunities, if there was a strong justification to do so. Since then we have brought local recruitment agency Crosby Employment into our group and established Ongo Communities to deliver lots of communitybased projects which contribute to our vision and long-term objectives. In November 2014, we acquired our first commercial business – a local roofing company Ashbridge Roofing, which had a healthy order book and strong reputation. In 2015/16, Ashbridge Roofing yielded a turnover of £2,087,933 against a budget of £1,589,583. Net profit for the year was £155,050. We will continue to pursue new opportunities to grow our group, when it makes business sense to do so, and have plans in place in 2016/17 to consider the creation of additional commercial services. We also plan to grow the group with services which complement what we already do. We will seek out new partners and bid for external contracts, specifically around mental health support, offender rehabilitation, support for people with learning difficulties, substance misuse, domestic violence and older people’s support. Of course, our motivation remains steadfast. The purpose of growing our business is to generate income and provide new community services to improve the lives of our tenants.
44 16
45
Being financially strong In 2015/16 we procured a new internal finance system, at a total investment of £192,722 payable over five years plus a £131,800 implementation fee, with an expected ‘go live’ date of December 2016. This will provide us with a fit for purpose finance system which will accommodate all subsidiaries of the group now and in the future, creating much greater efficiency. As previously stated, we have maintained the highest V1 rating from the Homes and Communities
46
Agency for financial viability and regained G1 for governance. Reassurance of our current financial strength comes from our ability to be able to take £3m of costs out of our business, as we did in 2015/16, and still retain the high level of customer satisfaction, and staff engagement, that we have.
A final word from our Chair - Matthew Spittles Our primary job is to provide quality, low cost, good value, homes to rent to those most in need. There is plenty of evidence that this need is increasing and yet the policy framework for delivering rented homes has become increasingly difficult. The referendum result of June 2016 for Britain to leave the European Union only adds to the uncertainty of future financial and economic policies in what is a challenging operating environment. We have adapted our business plan and invested in our governance structures to ensure that we have in place what we need to deliver our ambitions. We believe this is strong and innovative leadership, an acceptance of change and preparedness for more, a willingness to accept and effectively manage greater risk, a positive internal culture and financial resilience. Achieving value for money will continue to be at the very centre of everything we do and plan for.
47
Let us know what you think We hope you can see that all of us here at Ongo, from our Board members to our staff and Community Voice, are committed to providing the very best homes and services to tenants and that we are always happy to listen and willing to learn. There are loads of ways you can contact us. So if you have an idea, or a grumble, then please get in touch.
www.ongo.co.uk Email: enquiries@ongo.co.uk @ongoUK /OngoHomes Telephone: 01724 279900 Registered address
Meridian House, Normanby Road, Scunthorpe, North Lincolnshire, DN15 8QZ
Customer centre
15-19 Cole Street, Scunthorpe, North Lincolnshire, DN15 6QY