Value-for-money (VFM) statement

Value-for-money (VFM) statement Why VFM? This Statement sets out to the Accord Group’s stakeholders and customers how we ensure we deliver services which are high quality and which ensure value-for-money. The Statement combines the many threads of our VFM work which is embedded in the day to day work of our organisation and sets out what our stakeholders, including the regulator, should expect from us.

“Value-for-money is fundamental to our ‘social business’ approach. It ensures we achieve value for our customers.”

Barrie Blower MBE, Accord Group Chair

The Accord Group has a diverse heritage, further fostered and built by each of its organisations, all of whom were established as charitable, not for profit associations providing homes and services for those most in need in society. We are proud that we still have that vision and we have seen our services develop over time as needs have varied. We are able to build homes and provide services through a combination of public funding, private finance and have always worked hard to ensure that every pound is spent in an efficient way to maximise the return on that investment. We have therefore always ensured that best value is a prerequisite throughout all that we do; delivering housing management services, building new homes, providing care and supported by efficient back-office services. We have a long-standing and proven commitment to delivering VFM for our customers, stakeholders and the tax-payer and this is fundamental to how we manage our business.

We monitor, challenge and review how we achieve value in all that we do and we use a framework of six key principles to enable us to do this: 1. We have a robust approach to strategic decisions and VFM 2. We have embedded governance and reporting 3. We meet the regulator’s requirements 4. We have rigorous performance and cost management 5. We maximise the return on our assets 6. We provide added social and environmental value.

To be a strong diverse Group which makes the most of our individual and combined strengths to deliver positive outcomes, improving life chances for our customers and the wider communities which we serve.

VALUES

1. Strategic decisions and VFM The Group-wide vision provides customers, stakeholders and staff with a clear understanding of what is important to the Accord Group and the approach to delivering value is a fundamental part of that vision.

We show how we achieve on our VFM targets in a way that is clear and open. Our Business Plan sets out the strategic objectives and how we will achieve these.

They are: 1. Meeting need 2. Great housing and services 3. Good to great.

We produce an Annual Report and Financial Statements which shows how we are managing our performance and finances. Our customers produce a report on what we have done throughout the past 12 months and our corporate plans take the strategic objectives to the departmental level so colleagues are clear about what they need to achieve. An electronic copy of Accord’s VFM self-assessment statement can be found on the VFM area of the Group website at accordgroup.org.uk/VFM

COMMUNITIES

COMMITMENT

We work with communities where people want to live

We put our customers and our people at the heart of everything we do

INNOVATIVE We are optimistic, passionate and forward-thinking and we deliver better value every day

CORPORATE OBJECTIVES

1. MEETING NEED

2. GREAT HOUSING/ SERVICES

3. GOOD TO GREAT

DELIVERY AND ACTIONS

CUSTOMER REVOLUTION

PERFORMANCE

VALUEFOR-MONEY

2. Embedded governance and reporting This VFM approach is firmly embedded across the Group, and visibly so. All levels of governance have a role to play.

Group Board assurance Group Board Strategic decision–making and setting the vision and key objectives is led and directed by the Group Board of Management. VFM is a key strand within this. The Board receive regular reports on VFM achievements, for example recently in using our new in-house construction team to save around 20 per cent on new housing developments.

Resources and Audit Committee and local Boards Budgetary control and reporting is scrutinised by the Resources and Audit Committee and the locality Boards review performance and financial viability.

Executive Board The operational delivery is overseen by the Executive Board which also ensures that all strategies and policy documents clearly demonstrate how they support VFM approaches to the specific service area.

Directors Group and senior managers Senior management are responsible for ensuring that the strategic objectives are cascaded to front-line staff and that the VFM approach is ingrained throughout all we do.

Colleagues are empowered to challenge spend at all levels and for many years, the Accord Group has encouraged and enabled staff to make suggestions about improved and more efficient ways of working or procuring. The current internal ‘Make It Count’ campaign has seen a cross-departmental task group support over 200 actions across all parts of the business which reinforces the long-standing approach to securing value.

The annual self-assessment and Statement enable the Group to show how we have protected our assets and ensured return on the investment in them over the previous 12 months. This Statement is externally validated by the Group’s auditors, Grant Thornton (GT) and sits alongside the regular internal audit reviews of services which includes the VFM approach to delivery. GT has reviewed the statement content against its own interpretation of the VFM regulatory standard and highlighted where compliance was considered to be good and recommendations highlighting where further disclosure may be required to enhance the quality and transparency of reporting.

Customer and stakeholder involvement We involve customers in all areas of our work and use their feedback to find innovative ways to deliver more for less. Our Customer Scrutiny Panels and ‘armchair auditors’ regularly review our policies and services and test how effectively these work.

The Group’s customers produce an annual report which reflects on key areas of service delivery including repairs and maintenance, customer service and VFM. The Accord Group includes co-operative and mutual organisations within its structure. There is much research and evidence to show that housing co-ops deliver real VFM as tenants are in control of how their rent is spent.

Redditch Housing Co-operative and the co-ops that bchs supports further prove this.

Organisational approach To drive further improvements in service delivery, each key service area is challenged on a rolling six-monthly basis by a Performance and Strategy Review Board and actions are monitored. Internal Audit reviews highlight areas of good practice and recommendations are shared.

Furthermore, the Accord Group’s internal processes including the Project Approval Panel for large or higher risk projects scrutinise and test whether the initiative or development achieves and demonstrates value. The Asset Management Strategy is being further developed in 2014 and will see further strides being made in improving and enhancing existing assets to protect that investment further.

Accord is a member of several benchmarking clubs and uses information to compare and measure performance and value against other organisations. Housemark data is used along with informal networks and data is analysed by Accord’s Performance and Quality team with areas of good practice shared. Accord is a key member of the PlaceShapers group of housing organisations and uses this forum to compare and measure performance in a range of areas.

Embedded VFM

Accord Group Board

Resources and Audit Committee and local boards

Executive Board

Customer panels and scrutiny committees

Directors Group

Strategies, policies and procedures

Colleagues

Project Approval Panel, internal audit, Performance and strategy review boards

3. Meeting the regulator’s requirements The current HCA regulatory standard outlines its expectations for providers to demonstrate VFM services are being delivered, and moreover VFM is embedded in the culture of the organisation. Accord continues to be an organisation strongly committed to providing VFM and in light of on-going economic pressures, this commitment becomes increasingly important. Accord is also committed to demonstrate to its stakeholders that it is able to manage its finances and resources diligently, whilst continuing to provide excellent services to its customers. The Group’s achievements have been benchmarked against the requirements of the standard, as demonstrated below:

“Registered providers shall”

How Accord delivers against these requirements

“Have a robust approach to making

u Budget assumptions reports provide the Executive and those charged with governance on the appropriate investment of finite resources. The budget assumptions report also makes reference to the Group’s strategic objectives

decisions on the use of resources to deliver the provider’s objectives, including an understanding of the trade-offs and opportunity costs of its decisions.”

u The Project Approval Panel process is the Group’s internal mechanism for approving major new projects. This documentation which supports this process allows the panel to consider the opportunity cost of these projects u The Caldmoreaccord locality has understood the efficiencies and enhanced service which could be achieved through expanding the scale of the In House Maintenance team. This has already achieved identified efficiencies, particularly VAT savings.

“Understand the return on its assets, and have a strategy for optimising the future returns on assets – including rigorous appraisal of all potential options for improving VFM including the potential benefits in alternative delivery models - measured against the organisation’s purpose and objectives.”

u Social return on investment models have been developed and have reported outputs in both Ashram and Fry. These models have been formally recognised/accredited. u A thorough review of care and support assets has been undertaken. The quality of the buildings has been considered in the context of the financial performance of the services run from the building and the ongoing cost of maintenance. This information has been used to determine those assets which do not provide an appropriate return on investment. u Colleagues in asset management also continue to undertake cyclical stock conditions surveys to understand whether expected returns on investment are being achieved and whether preventative actions need to be taken to address future potential problems. Responsive repairs by property have also been reviewed to ascertain where return on assets could be further improved. u For every new housing development undertaken a detailed financial appraisal is undertaken. The financial appraisal contains the payback period highlighting the return on investment over time. It also informs the Project Approval Panel decision and the Board decision. This process is followed up by a post completion financial review to ensure that projected development costs have been achieved and the original financial viability is still valid. u STAR satisfaction survey carried out October 2013 to gauge satisfaction levels of customers in a number of areas to gain an understanding of the investments made. u Detailed annual benchmarking exercises are undertaken to understand Accord’s performance in the context of its peers. Particular focus is paid to metrics which help us to understand our return on assets relative to those of peer organisations.

“Registered providers shall”

How Accord delivers against these requirements

“Have performance management and

u KPI data is reported to the Executive, Group Board and local Boards.

scrutiny functions which are effective

u Performance and Strategy scrutiny meetings are held twice annually for each core service within the Group. These forums challenge senior management and the leadership on aspects of their performance.

at driving and delivering improved VFM performance.”

u Performance interventions have been employed to help improve performance within certain parts of the Group. Performance and Quality colleagues embedding themselves in a team or function to work collaboratively with the team to drive performance improvement. u Financial performance management information is presented to each meeting of the Executive and Directors Group, local Board, the Group Board and the Group Resources and Audit Committee. Colleagues are held to account by those charged with governance regarding financial performance. u Discreet financial performance reports are also prepared, for example the care and support financial viability report. These reports are used to manage financial performance to ensure that expectations are being achieved and VFM delivered/demonstrated. u Board reporting and monthly performance summaries show progress on performance from previous year, quarter and month, showing clear directions of travel. u The Performance and Quality team conduct Quarterly audits with teams and where risks are identified P&Q interventions take place, which focus on specific areas to identify where improvements are to be made. Examples include Gas servicing,arrears and void management interventions.

“Understand the costs and outcomes of

u Active benchmarking is undertaken across the Group:

delivering specific services and which

l

underlying factors influence these costs

l

Care and support benchmark care standards against national data to ensure above average compliance is achieved

l

Central services use benchmarking clubs to assess the efficiency of these services and also to measure the comparative corporate performance.

l

Best practice is shared at formal and informal benchmarking clubs (e.g.

Placeshapers)

and how they do so.”

Housemark is used to benchmark performance of core housing services

u Lean reviews have been successfully employed by the Group to drive performance improvement on process based areas of core business u Regeneration colleagues have insourced construction services which delivered significant savings of c15 per cent on its first project.

Accord’s Board approved VFM Strategy has been developed around meeting the requirements of the regulatory code and ensuring VFM becomes embedded in every aspect of the Group’s operations. The Strategy consists of four strategic themes which are each aligned to regulatory requirements.

VFM strategic objective

Alignment to regulatory requirements

To understand and manage our costs : In order for us to be an effective organisation which provides a VFM service, it is important that we fully understand our costs. In addition, it is equally important that these costs are managed in a responsible way to ensure that the Group’s resources are used in the most effective manner and therefore provide a return on investment. We will also continue to give consideration to the opportunity cost at a strategic level by considering what we commit financial resources to, and what the available alternatives are.

Through understanding and managing our resources and making decisions on how best to invest these resources we are able to demonstrate to our Board, our stakeholders and the regulator that we “Have a robust approach to making decisions on the use of resources to deliver objectives, including an understanding of the trade-offs and opportunity costs.”

To understand return on assets: Understanding our return on assets is necessary to ensuring that the regulator’s expectations are being met and to ensuring we demonstrate a VFM approach to core business. Measuring, assessing, understanding and improving return on assets demonstrates that we are an effective organisation, moreover an organisation which provides VFM services to our customers, communities and wider stakeholders.

The regulator has defined that providers are required to “Understand the return on its assets, and have a strategy for optimising the future returns on assets.” Through market engagement and assessment, benchmarking and performance management we will understand and report our return on assets. Therefore, by delivering against this strategic objective and reporting our performance, we will satisfy the necessary expectations and further demonstrate our commitment to continuous improvement.

To become a better buyer: The Accord Group generates and commits substantial financial resource in the delivery of its core objectives and core services. Where these resources are committed to external organisations which support us in delivering excellent services we will ensure that our approach to procurement is robust and that maximum value and returns from the investment are achieved.

With a thorough, robust and strategic approach to procurement in place, we are able to demonstrate we “Have a robust approach to making decisions on the use of resources to deliver the provider’s objectives, including an understanding of the trade-offs and opportunity costs of its decisions.” Through strategic procurement we ensure the Group’s resources are utilised in a way which delivers against the strategic objectives, and which also maximises the return on the financial commitment made.

To increase accountability and transparency in reporting VFM: It is important that evidence based VFM performance management information should be presented to the Board on a regular basis. This information will provide the Board with assurance that Accord is an organisation which is committed to delivering VFM services and also that we are able to achieve a series of VFM targets/objectives.

By increasing accountability and transparency in reporting VFM, we are able demonstrate “performance management and scrutiny functions which are effective at driving and delivering improved VFM performance.” By reporting VFM information to the Board, we are also able to demonstrate we are an organisation which is held to account by its board on delivering against our commitment to VFM.

The VFM strategy is supported by an action plan. Progress against the action plan is reported to the Group Resources and Audit Committee and Group Board as part of the VFM annual report. Furthermore, each department/function within the Group has a department action plan - progress against these plans is also provided in the VFM Annual report to the Board.

As at 31 March 2014, 233 individual VFM actions were included in the departmental action plans – 223 (96%) of actions were implemented. This highlights the commitment to a fully embedded Group-wide approach to delivering VFM. Looking ahead, the 2014-15 Accord Group budget has built in VFM efficiencies totalling £5.5m. Furthermore, the partnership between Accord and Heantun will generate annual efficiencies of £176,000 per annum from 2014/15.

VFM is branded as ‘Make it Count’ within Accord Group. The campaign is supported by a working group which meets monthly to co-ordinate VFM activities in the Group.

The intention of the Make it Count campaign is to: u Educate and inform colleagues of the three key principles of VFM (effectiveness, efficiency and economy) u Help colleagues to identify what these really mean u How colleagues can make these principles real and apply them to their everyday jobs/roles u How colleagues can share good ideas and good practices whether they be new or existing.

4. Performance and cost management Accord has benchmarked its performance on a number of key areas of performance. The benchmarking cohort of 20 registered providers has been selected to reflect the scope and nature of Accord’s work, particularly the commitment to care services and community based initiatives. The findings of the benchmarking process are outlined below.

Operational indicators

Corporate indicators

Performance 2014 2013 against the performance performance cohort of 20

Benchmarked indicator

What does this measure?

Social housing lettings operating margin

The percentage of income from lettings converted to operating surpluses

6

31%

29%

Social housing lettings total operating costs per home

The total cost of managing each social housing home for one year.

14

£3,430

£3,416

Void losses per home

The total amount of void income forsaken in the year averaged across all homes in management.

17

£115

£106

Total Asset management spend per home in management

The average investment in each home in management per year.

5

£1,292

£1,172

Bad debts per home

The total amount of bad debts written off in the year averaged across all homes in management.

2

£58

[£1]

Return on assets: Turnover (all activities)

The return on assets expressed as total turnover as a percentage of total assets less grant

9

22.6%

21.4%

Return on Assets: Operating Surplus (All activities)

The return on assets expressed as total operating surplus as a percentage of total assets less grant

14

3.6%

3.6%

Income earned per Executive Officer

The value of income generated averaged across the number of Executive Officers

11

£11.2 m

£10.1 m

Executive costs as a percentage of total staff costs

The percentage of total costs of the Executive as a percentage of total staff costs.

1

2.4%

2.5%

Average interest rate

The average cost of debt being interest paid as a percentage of total debt held

7

3.8%

4.2%

2012 Direction performance of travel

Key influencing factors

2014 - looking ahead

Housing management policies, budget performance, rent policy, market wage, inflation, service reorganisation.

Improving performance confirms management continues to improve cost-efficiency and maximising income generated. Further efficiencies have been built in the 2014/15 operational housing management budgets.

£77

Welfare reform, housing management policy, contractor performance, social mobility, customer economic pressures, demand.

Management continues to monitor voids closely with improved performance expected in 2015.

Processes have been reviewed to support this improvement.

£1,295

Contractor performance, cyclical investment need, customer aspirations, compliance with standards, demand, service reorganisation.

Increased effectiveness in asset management procurement identifies financial efficiency.

Again this will continue to be the focus of asset management colleagues in 2014.

Welfare reform, housing management policy, social mobility/abandonment, customer economic pressures, demand.

Arrears and debt recovered identify a positive position for 2013. 2014 saw performance decrease. Management scrutiny over this PI will increase in 2015.

26%

£3,408

*

* £37

16.1% Income generation/welfare reform/public sector spending, economic influences.

3.2%

Additional income and activity from Direct Health joining the Accord Group resulted in favourable trends on these corporate measures. Looking ahead in 2014 and beyond, and in light of the importance of demonstrating VFM, management will continue to focus on further improvements to corporate performance indicators and measures

£5.8 m

Income generation/welfare reform/public sector spending, management performance/cost control.

4.0%

Income generation/welfare reform/public sector spending, management performance/cost control, wage inflation.

By identifying that Executive costs continue to represent a very small percentage of overall staffing costs management continues to demonstrate VFM.

4.0%

Interest rates, economic market performance, Treasury Management Strategy.

New debt drawn attracts a slightly higher overall rate than historic debt which is reflective of the market.

*See overleaf for further information

Source: 2012 and 2013 financial statement data

Targeted performance improvement Included in the table above are two indicators which show deterioration in performance. Specific actions being taken by management to address this position and drive performance improvement are outlined below: u Void losses per home: An End-to-end systems and lean review of lettings process undertaken. Resource has been redeployed for focussed improvement on lettings. Increase data analysis has been undertaken to better understand termination reasons – this information has been used to inform lettings policy. u Bad debts per home: There has been an increased focus on arrears KPI data to ensure operational teams are aware of management’s expectations. Locality teams have been set targets for former tenant arrears recovery. The performance of this KPI is aligned to voids, particularly where increased abandonment is apparent – intelligence and data is being used to increase intervention with the aim of reducing abandonment rates. Abandonment rates have increased since the implementation of welfare reforms.

Performance against targets Core service Key Performance Indicators 2013/14 The Executive and the Board both receive regular performance management updates with respect to performance against KPI targets for aspects of core services. Core KPI performance for 2013/14 is outlined below:

Housing services

Care and support services

2013/14 Actual

2013/14 Target

2013/14 Actual

2013/14 Target

Current tenant arrears (%)

3.3

4.1

3.6

3.3

Former tenant arrears (%)

2.1

2.0

3.5

2.2

27.4

15.0

32.6

22.7

1.0

0.6

7.3

3.4

Repairs: satisfaction with service (%)

99.0

95.0

99.0

95.0

Repairs: first time fix (%)

92.2

86.0

92.2

86.0

Gas compliance CP12 (%)

99.9

100

99.9

100.0

KPIs

Re-let times (days) Void losses (%)

Financial performance targets 2013/14 saw increasingly strong financial performance with surpluses once again outperforming the previous periods and the agreed budget plan targets as shown in the table below:

Group surpluses

2014 Actual

2014 Budget

2013 Actual

2012 Actual

£3.635m

£3.081m

£3.003m

£1.711m

VFM targets Included in the 2013/14, Board approved budget assumptions were a number of pre-determined VFM focused objectives. These measures continue to be included in the budget setting process and demonstrate the Board’s commitment to ensuring VFM is embedded in all aspects of the Group’s operations. Performance in the year against these measures is outlined below:

Measure

Savings from repairs procurement

Reduction in re-let times

Reduction in former tenant arrears

Reduction in new build cost per unit

Reducing the Housing Benefit bill by helping residents into work

Releasing internal staff capacity to work on Accord’s Big Issues work-streams

Delivered

2013/14 achievements

3

The 10 year responsive repairs partnering contract with Lovell identified saving of £1.4 million over the life of the contract. The contract costs and proposed savings were externally ratified by a cost consultant. Furthermore, additional savings of c£120,000 have been identified through the continued insourcing of other aspects of asset management obligations, such as gas maintenance.

3

During 2013/14 re-let times for general needs have improved by nine per cent (2.7 days). Care and Support re-let times have improved by four per cent (1.35 days) during 2013/14.

7

2013/14 has seen consistent performance on former tenant arrears balances.

General Needs FTAs represents c2% of the rent debit, with care and support FTAs at 3%. Whilst a reduction hasn’t been achieved in 2013/14 performance remains consistent and no further deterioration has occurred. 2014/15 will see further increased focus on KPI performance to ensure the required improvements are achieved.

3

The Bushbury development using in house design, manufacture and construction identified reduced new build costs per unit of c20%. The overall final cost per square metre for this development was c£1,025 compared to an industry expectation of around £1,250.

3

Colleagues in the Transformation Team, Jobs and Skills coaches have helped people into work and therefore reduced their dependence on housing benefit.

During the year, nine customers have been supported to help them build confidence, become work-ready and secure permanent employment.

3

As outlined in case study two at section nine of this statement, £762,000 of existing group staffing and financial resource has been diverted to the Group’s Big Issues work-streams. This investment has helped to transform people’s lives, help people find training and employment opportunities and to support local social enterprises.

5. Return on Assets Understanding our asset base Our business is built on the homes we own and manage and it is imperative that we have up to date, accurate and useful data about those homes. As a developing organisation, one which consistently out-performs on delivering new homes, we carry out regular valuation exercises as part of the security process when seeking private finance. This information provides us with assurance that we know the value of our stock and we are able to use this information to help inform the management of our assets.

As well as developing new homes to provide much needed housing and choice of housing for local people, we ensure we maintain and enhance our existing assets to drive value through standing stock.

We have further developed our management tools and asset registers and have wider insight through data collection about our homes, our customers and their families. We use geo-mapping technology to plot locations and this helps housing and assets colleagues in planning best use of time when visiting customers and properties. It also brings a wealth of other data and allows us to take current stock and areas of operation into consideration when looking to build new homes, helping us deliver an integrated approach to planning new homes and the wider locality and community services those new homes require. We have also revised our process of planned maintenance and this links to externally-funded programmes of retrofit and new eco technologies. Accord has successful track record in securing external funding to help develop enhanced retrofitting schemes bringing added value to the properties.

Our robust Disposals Strategy provides us with the analysis and tools required to take strategic decisions on how we manage our stock and the strategy is linked to the Asset Management Strategy to ensure all of our data is used effectively when considering disposals and maintenance programmes.

Our day to day repairs contract ensures we receive intelligence from our contractor which is fed into the assets strategy and we also talk to the people that live in our homes on a regular basis so that we can be confident that we have current and valid data about our assets and can protect them and maintain them to a high standard.

We also look to win further funding, particular from Europe to deliver solutions which bring added long-term value to our stock.

Moseley & District owned a property in Selly Oak which had provided supported housing for vulnerable people, together with some office space for administration purposes. The funding for providing the support came to an end and the buildings were no longer used for supported housing. Moseley & District carried out a review of the use of the buildings and decided that the asset could not be utilised effectively or efficiently in its current form.

As part of the review process, the rest of the Accord Group were made aware of the availability of the buildings and Fry Housing Trust assessed the possibility of taking over the asset for a brand new supported housing service. As a result of this assessment, the Trust took over the buildings and, following refurbishment, is opening the 12 units as a specialist service for ex-military personnel who are struggling to return to civilian life. The office space is being used by the Birmingham Scheme Manager and her team which has resulted in significant savings in rental payments for the previous office base.

More efficiencies have been achieved by delivering the new service through siting the support workers in the new office base and utilising existing staff combined with the contribution of volunteers.

Return on our assets Our up to date and comprehensive housing management and stock condition information ensures we have a strategic and informed approach to stock disposal. This approach demonstrates Accord’s approach to understanding its return on assets. The location of stock and required future investment contribute to the decision to dispose – this ensures an efficient approach to managing stock.

During 2013/14, £2.2m of income was generated from the disposal of housing stock. These funds have been re-invested in the development of new homes and further improvements. Furthermore, in the next five years, the Group’s approach to strategic asset management sees the disposal of housing stock identify a further £24.2m return on assets from strategic stock disposal over the life of the five year business plan.

Accord’s approach to strategic stock disposal will consider: u The location and market value – is this a cash generative asset? u The location in the context of other properties – is the property in an area of strategic importance? u The type, condition and overall viability of the property – is there demand for this property? u Current and future rent levels – will the property generate a sufficient income yield?

The Group Business Plan identifies how income from the strategic disposal of property will support the development of new homes over the next five years, as outlined below:

2014 2015 2016 2017 2018 2019 Actual Forecast Forecast Forecast Forecast Forecast

Number of housing units disposed

36

34

30

40

35

30

Return on assets generated through strategic asset management

£2.2m

£4.1m

£4.0m

£5.8m

£5.4m

£4.9m

There is significant investment in both the development of new homes and improving the condition of new homes over the life of the five year Business Plan. As outlined below, a significant proportion of investment in new and existing homes is achieved from the resources generated from existing assets. The data below shows a total investment in new and existing homes of £261.4m, £164.3m (63%) is funded by returns generated from existing assets.

2014 2015 2016 2017 2018 2019 Actual Forecast Forecast Forecast Forecast Forecast

No. of new homes handed over in year

181

282

31

260

603

-

Investment in new homes developed Investment in existing housing stock

£22.1m £14.0m

£31.5m £12.4m

£22.0m £12.4m

£73.2m £12.6m

£35.2m £12.4m

£1.4m £12.2m

Total investment in housing

£36.1m

£43.9m

£34.4m

£85.8m

£47.6m

£13.6m

Net loan debt required/(repaid) to finance investment programme

£12.4m

£15.1m

£7.4m

£54.2m

£17.6m

(£9.6m)

Return on Assets available to invest in new and existing housing

£23.7m

£28.8m

£27.0m

£31.6m

£30.0m

£23.2m

6. Social and environmental added value Accord is an organisation with a strong commitment to its communities. So in addition to ensuring our operations are efficient and provide VFM, we recognise the importance of delivering significant social value. Below are three case studies demonstrating examples where Accord has delivered social value added and highlights how the careful investment of our resources has helped to improve our communities, peoples’ life chances and our environment. We have been able to deliver these achievements by remaining committed to our social purposes and continuing to innovate through challenging existing assumptions.

Case study one

LoCaL Homes and in-house construction services Accord’s LoCaL Homes factory, based in Walsall, produces between 150 and 200 new homes each year. The pioneering design and manufacture of these homes, using the closed panel timber frame system, ensures: u Fast and efficient off-site manufacturing u Construction using sustainable resources u Efficient on-site construction as erecting the closed panel timber frame system is substantially faster than traditional build timescales u A high degree of design engineered thermal efficiency. This ensures news homes are highly, which in turn ensures that residents occupying these homes will benefit from reduced heating costs.

In addition to in-sourcing the manufacture of timber framed homes, Accord has also commenced in-sourcing construction services. Construction Services has identified significant cost-savings in the development process and has also brought about a greater degree of control to schemes and developments being managed in this way.

The first development both manufactured by LoCaL homes using the timber frame system and constructed using inhouse Construction Services, identified savings of around £400,000, representing 20 per cent of approved budget. The overall final cost per square metre for this development was c£1,025, compared to an industry expectation of around £1,250.

In addition to the VFM and environmental achievements associated with the manufacture and construction of the timber frame system, there have also been substantial socio-economic benefits. The LoCaL Homes factory has created around 20 jobs for local people from our local communities, many of which are social housing tenants who have been taken from unemployment and trained with a vocational skill in manufacturing. The in-sourcing of construction services has also created a number of permanent jobs, but more importantly it allows the Accord Group to ensure that local businesses are provided with the opportunity to ensure they thrive in times of austerity.

The processes adopted by Accord in the design, manufacture and construction of these thermally efficient, environmentally friendly, cost-efficient homes, ensures we continue to demonstrate our commitment to producing VFM housing solutions. It also allows us to demonstrate our commitment to providing VFM in the local economy, our commitment to our communities, and our commitment to job creation.

Case study two

Investment in our communities and transforming people’s lives As part of Accord’s commitment to our customers and our communities, resource has been diverted into a number of initiatives focused on increasing the employability of resources, supporting new social enterprises and delivering a number of initiatives aimed at increasing community cohesion.

Accord has diverted £67,000 of existing staffing budget resource into Money Advisor posts. Money Advisors support our customers in managing household finances and help them to understand and meet their financial obligations. In 2013/14, the Money Advisors helped customers secure £142,000 of benefit entitlement to help them meet financial commitments, including rents due to Accord. £230,000 of existing resource has been invested in Accord’s AddVentures. AddVentures helps to support the creation and development of local enterprise. In 2013/14, AddVentures provided support to establish 12 successful social enterprise businesses and also secured funding for a number of local young entrepreneurs to undertake an extended visit to Amsterdam where they would receive coaching and training to enhance their business development and entrepreneurial skills.

£116,000 of existing resource continues to be committed to Customer Engagement services. The Customer Engagement team works closely with our customers and communities to ensure we understand their thoughts, needs and concerns and work alongside customers to enhance our communities.

An investment of £349,000 in the creation and development of the Transformation team (including Jobs and Skills Coaches) has been made as Accord identifies the need to work with our customers to increase their work readiness and help them into training or permanent employment. In 2013/14, the advisors helped nine people find permanent employment and many more have received Accord’s ROLE (Recruitment, Opportunity, Learning Employment) programme was launched in 2013/14 which provides Accord customers and their families training and apprenticeship opportunities in the social care sector. In 2013/1,4 Accord worked alongside 50 customers to provide coaching, training and apprenticeship opportunities in the first year of the programme. In total £762,000 of existing resources has been diverted into community enhancements and helping people to improve their life chances.

Investment in communities and transforming people’s lives Community money advisors

£67,000

Accord AddVentures

£230,000

Customer Engagement services

£116,000

Transformation team (including jobs and skills coaches)

£349,000

Total investment in communities and transforming people’s lives

£762,000

This investment in community activities has also afforded the Group the opportunity to lever significant external funding a Provider typically wouldn’t have been able achievement. Recent achievements include:

Funding levered through investment in community activities Cabinet Office funding for a Social Incubator Fund aimed improving the life opportunities of young people in Birmingham and the Black County

£1.0m

ERDF funding aimed at supporting local businesses deliver a large scale retrofit programme to the Group’s housing stock

£1.5m

Accord has been appointed as the lead delivery agent for the City Deal programme for the Black Country. This funding has been secured from DCLG and the Cabinet Office as part of a five year programme to increase employment opportunities for the people of the Black Country.

£2.8m

Funding levered through investment in community activities

£5.3m

Case study three

Accord’s commitment to environmental matters Accord Group is aware that VFM and a commitment to eco-friendly business practices go hand-in-hand. Accord’s commitment to environment and eco matters is demonstrated in the Group achieving the ISO14001 environment quality management systems accreditation and the EMAS European Standard for environmentally friendly practices. By committing to these initiatives Accord has managed to achieve improved performance with respect to environment performance measures and also VFM in the following ways: u Revised waste management practices u Reduced paper usage u Significantly reduction energy consumption (11% over the period 2010 – 2013) u ‘Green’ energy sources procured for all group electricity contracts.

Our achievements Realising VFM Accord’s commitment to achieving VFM aligns with the delivery of corporate objectives. The Group’s top level objectives are outlined in the Business Plan: 1. Meeting Need 2. Great Housing and Great Services 3. Good to Great

VFM achievements Highlighted below are a number of VFM achievements identified during 2013/14. Each of these achievements have been cross referenced back to the 2013/14 corporate objectives to demonstrate how VFM is embedded and how it contributes to the successful delivery of the Group’s objectives.

In 2013/14 the Group realised Returns on Assets of £23.7m, and VFM achievements totalling £4.35m.

Return on assets During 2013/14 Accord Group invested a total of £36.1m in new and existing homes. During the same period, net private finance of £12.4m was drawn to contribute to this investment programme. The remaining balance of the investment programme, £23.7m, was from funds generated as returns on our existing assets and resources. See section 6 for further information. (Meets corporate objectives 1, 2 and 3)

Insourced construction services 2013/14 saw the commencement of the Group’s insourced construction team. The team’s first project achieved cost efficiencies of £400,000, representing around 20 per cent of the approved budget. Through insourcing construction services, the Group is able to directly contribute to job creation in the local building economy and associated trades. These new homes were constructed using the closed panel timber frame system produced at Accord’s LoCaL Homes factory in Walsall. Not only does LoCaL Homes provide a number of employment and training opportunities to local people, it also produces highly thermally efficient homes which much less energy to heat in colder weather. This approach ensures we are able to provide VFM in the construction and delivery of new homes, whilst providing VFM for the customers who will live in these homes. (Meets corporate objectives 1, 2 and 3)

Procurement – goods and services During 2013/14, £1.301m savings were secured through the Group’s strategic approach to procuring contracted goods and services, including a mixture of both cashable savings and cost avoidance. The benefit of these savings will be realised in 2013/14 – 2015/16 period. Specific to 2013/14 £205,000 of procurement savings was secured. (Meets corporate objectives 2 and 3)

Procurement - IS/IT services Procurement of bought in Information Technology services have identified a total of £129,000 in VFM savings and efficiencies in 2013/14. These savings were generated through new approaches in the procurement of IT consumables, data storage and through adopting significantly more power efficient IT infrastructure equipment.

(Meets corporate objective 3)

Corporate Asset Management – productivity increases: Through improved use of mobile technology, the productivity of asset management colleagues complete stock condition surveys has increased by 46 per cent. (Meets corporate objective 3)

ERDF grant funding attracted ERDF (European Regional Development Funding) will provide £1.5 Million external funding for a minimum of 250 whole house retrofits, a smart grid to 50 properties and six demonstrator units of near to market technologies.

(Meets corporate objectives 2 and 3)

Caldmoreaccord locality Housing services, money advisors: Two colleagues fulfilling the Money Advisor role have secured a total of £142,000 in cash benefits to our customers and services users in 2013/14. (Meets corporate objectives 1, 2 and 3)

Caldmoreaccord locality – transformation services, jobs and skills In 2013/14, Jobs and Skills coaches were successful in supporting nine people into permanent jobs generating income totalling £90,000 for these individuals. (Meets corporate objectives 1, 2 and 3)

Caldmoreaccord Locality - former tenant arrears collection In 2013/14, a total of £109,000 of former tenant arrears were collected. Since the partnership began in April 2012, around £200,000 of arrears from former tenants has been recovered. (Meets corporate objective 2 and 3)

Caldmoreaccord locality – expansion of the in-house Maintenance team In April 2013, the in-house Maintenance team took over the delivery of previously outsourced work in the Caldmoreaccord locality. Insourcing these services has identified savings of around £120,000 per annum.

(Meets corporate objectives 2 and 3)

Finance/Treasury Services – debt management Financial benchmarking undertaken in the year identified that Accord’s managed treasury portfolio of loans attracts competitive rate of average interest costs. The benchmarking highlighted Accord’s average interest rate achieved savings of £2.4m per annum when compared to the average rates in the benchmarking cohort. (Meets corporate objective 3)

Investment in the local community and the local economy – big issues During 2013/14, an additional £440,000 of existing resource was committed to be re-diverted into the Big Issues fund. Big Issues work is focused on social, neighbourhood and community matters. Funds are set aside each year as contributions to the delivery of the Big Issues work-streams. It is important to note that this is not an additional cost to the business, but amounts which have been identified through the effective management of existing resources throughout the Group. To date around £1.5m budget has been allocated to the Big Issues highlighting the ongoing importance of this work to the Group. (Meets corporate objectives 1, 2, and 3)

Redditch Community Homes: Photo Voltaic (‘PV’) energy PV panels have been installed on 59 newly built environmentally friendly homes in Redditch. Under the feedin-tariff, annual income from solar energy fed back into the grid will be generated totalling around £20,000 per annum. (Meets corporate objectives 1 and 3)

Social return on investment Ashram and Fry have both developed externally accredited Social Return on Investment Models. The outcome identified that every £1 invested Ashram’s in core activities generated £5.12 of social value added. Fry Housing Trust conducted the same review on its Employment and Skills Services and found that for every £1 invested, £10.75 of social value was added. (Meets corporate objectives 1, 2 and 3)

Socially responsible energy and utilities procurement During 2013/14, the Group energy supply contract was re-procured. This re-procurement exercise not only saved a predicted £600,000 over the next two years, but also guarantees that energy procured by the Group continues to be Green Energy, generated by environment responsible methods. (Meets corporate objectives 2 and 3)

Our future VFM plans We remain at heart a social business, one which provides homes and services for those in need. We will continue to do this and also use the return on our assets and investments to develop services, ensure high quality and deliver VFM. We will continue to build more new homes and we will ensure we maintain and enhance existing homes. The key objectives in the business plan have VFM entrenched and we also have the following key areas where we will drive value for our customers and stakeholders: u We will undertake a review of the reorganisation of our operational services to ensure those services are delivering effectively for customers and in a way which clearly demonstrates good VFM aiming for c£300k savings in 2014/15 u We will undertake future work to 300 units to upgrade the energy efficiency ratings to improve running costs for those customers u We will undertake a further review of our care and support dedicated housing stock to identify key actions for the future and determine whether any of the units should be modified, redeveloped or sold, particularly where there is uncertainty around future commissioning of services u We will combine our assets management operation with our building, development and regeneration team to ensure a more integrated approach to asset development and management u We will carry out further procurement activities which will realise a further £400 to £500k of procurement savings, particularly in the supply of products and services in relation to asset management u We will review our external contractors and supply chain and further develop in-sourcing and growth of the in-house team, Homes and Gardens u We will undertake a review of the Local Homes Factory to ensure it has delivered good VFM since it’s commencement of operation in 2012 u We will realise further synergy savings of £400k across our Group wide care and support operations u We will realise further synergies and savings for Heantun to the value of £120k in back-office services as a result of Heantun joining the Accord Group u We will carry out a detailed review of commercial buildings and rationalise office space as well as reduce office costs by 25 per cent in order to invest in new services for customers u We will increase the income stream through Matrix Housing partnership by the delivery of further development services.

The Accord Group is proud to deliver consistently good services – we must now deliver great services across all our areas of operation. We know that we can do this and that we must do this efficiently. Moving to mobile working, retraining colleagues, bringing in new services will ensure we take responsibility for our business and our support to customers and local communities. Most importantly, we shall ensure we use our asset base responsibly to enable us to deliver our strategic objectives and carry out our business resourcefully and professionally.

For more information: Contact Dawn Hendon Business Support Manager Tel: 0300 111 7000 Email: dawn.hendon@accordgroup.org.uk