Value for Money Self-Assessment Statement for 2015/16€¦ · approach to assessing the value of our individual assets. The initial results demonstrate that our assets perform very

Value for Money Self-Assessment Statement for 2015/16

1.0 Why is VFM important to Thames Valley Housing?

1.1 Value for money is embedded in our corporate plan for 2015-18 and our business planning

framework. Our diversified business model aims to develop more homes with lower levels of

cash grant and provide good quality services that matter most to our residents. This is

underpinned by our strong financial performance and top four operating margin.

1.2 Value for money has been delivered through:

• Using balance sheet strength and returns from diversified activities to increase the

provision of affordable homes with less grant funding.

• Adhering to our asset management strategy, which seeks to improve the performance of

our assets.

• Providing good quality, efficient and effective services to residents.

1.3 Through 2015 and 2016 we were seeking to merge with Genesis to improve the capacity to

deliver new homes and invest in communities and residents’ services. Although the merger

did not proceed, our strategy will remain focussed on increasing our capacity to provide new

affordable homes.

1.4 The diversification of our business through commercial activities generates cross-subsidy to

make-up for reduced levels of cash grant and support the development of additional homes,

including affordable rented homes. In the financial year to 31 March 2016 c£7m of cash

profit was generated through our commercial activities, money which has enabled TVHA to

support the development of new affordable housing schemes through providing subsidy.

1.5 Service delivery will be revolutionised through enabling residents to access services online

through a new digital platform, providing improved services at lower cost.

1.6 Key headlines from our self-assessment for 2015/16 are:

• Operating surplus increased from £31.9m at the end of 2013 to £37.5m in 2016.

Operating margin improved from 34% in 2015 to 36% in 2016. This reflects year on year

growth in rental income, continuous improvement in sales and the contribution of profit

from commercial ventures. This has enabled us to maintain the provision of new

affordable homes.

• We have developed a new asset appraisal model which identified poorer performing

assets and enabled action to be taken to improve performance. We have outsourced the

management of the majority of assets that had a high financial performance but low

strategic relevance. There is not requirement to dispose of assets to fund future

development or improvement plans.

• Overheads remained in the lowest quartile when benchmarked through Housemark. ICT

costs remained relatively high due to investing in the development of online services,

take up of which has continued to increase, with a corresponding reduction in

transaction costs.

• Housing management costs benchmark favourably in the HCA analysis of costs.

Housemark benchmarking is less favourable, but only benchmarks social rented housing,

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which comprises less than a third of our total stock. Responsive repair costs per property

have decreased and benchmark favourably.

• We carried out a comprehensive review of service charge processes which resulted in an

improved collection rate in 2016/17.

1.7 The asset management strategy has delivered efficiencies over previous years by either

disposing of or re-configuring poor performing stock. Our cyclical and planned programmes

maintain retained stock at a high standard. This year we embedded a new asset appraisal

approach to assessing the value of our individual assets. The initial results demonstrate that

our assets perform very well overall financially.

1.8 We have procured a range of property related services such as door entry, water hygiene and

communal boiler maintenance. We have an active procurement approach and this year we

have been focussing on domestic gas services and cyclical redecoration works.

1.9 We invested in staffing to improve services to shared ownership leaseholders which has

resulted in reduced escalation of issues through a more responsive and pro-active approach

to the management of our leasehold stock.

1.10 We have utilised both RCGF and internal subsidy from our commercial activities to secure

non section 106 opportunities such as Matthews Green Farm in Wokingham with our partner

Bovis Homes.

1.11 In 2015/16 we reported 2.3 defects per unit against a KPI of 4.0 and an industry average of

5.0. The number of defects being reported has decreased during the year. The customer care

team have managed the repairs and have ensured that the number of defects resolved within

time has increased to 77.1% over the year against a KPI target of 75.0%.

1.12 Our investment in resident employment and training has supported 720 residents into either

work or training during 2015/16. This has been achieved with modest investment and

significant external match-funding.

1.13 We established a new resident scrutiny group in 2015 and value for money is one of four key

topics that the group will review each year. The group has commented on and asked for

clarification about this self-assessment and we have been able to respond to their concerns.

1.14 This self-assessment is published in the 2015/16 annual accounts and on our website for our

stakeholders, that are primarily:

• Residents

• Central government and the HCA and GLA

• Local government

• Community and voluntary services

• Lenders

1.15 The following assessment is provided under three core areas:

• Section 2: Delivering more homes and growing the Group.

• Section 3: Asset management analysis and performance.

• Section 4: Understanding our costs; operational efficiency and good quality services.

• Section 5: Summarises VFM strategy and performance against targets.

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2.0 Delivering More Homes and Growing the Group

2.1 Financial Efficiency

Through leverage of the balance sheet and effective use of a strong operating surplus, this

enables the Group to produce a significant development programme of affordable homes.

A significant proportion of the Group’s activities are funded through external leverage which

is outside of the Group and which enables significant delivery of new homes over and above

that which the Group has directly funded through its own balance sheet.

As a result, the group is highly efficient from a financing perspective. Simply put, through the

use of external leverage we are able to deliver more homes than would be possible on a

standalone basis by the Group alone.

Benchmarking against other associations through the Housemark London & South East group

shows:

• An operating margin which is upper median quartile in the benchmark group.

• Debt per unit which benchmarks median indicated we work within safe parameters to

meet our development ambitions and is an indicator of activity and delivery of new

homes.

• The WACC, the cost of debt, benchmarks around median reflecting a lower weighted

average life of loan book.

Operating Surplus – Historic Trend

• Operating surplus has increased from £31.9m at the end of 2013 to £37.5m in 2016. This

reflects year on year growth in rental income, continuous improvement in asset sales and the

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contribution of our commercial ventures. During this time operating costs have been

consistently managed to deliver good margin performance.

• Operating margin improved from 34% in 2015 to 36% in 2016. Commercial partnerships were

a key part of this as they are additive to surplus with minimum overhead is required to

support them within the group.

Operating Surplus – Forward View

• The budget metrics for 2016/17 have been included to show the expected surplus and margin

going forwards and Value for Money was a key principle all teams were asked to incorporate

in their budget submissions.

• Operating surplus is maintained above £30m and reduced slightly due to less expected

demand in the market from property staircasing and fewer commercial sales generated.

Operating margin is consistent with this.

• So far this year the Group results are outperforming the budget with higher assets sales and

lower costs.

3.0 Asset Management Analysis and Performance

3.1 Our Asset Management strategy has analysed the performance of our stock. TVHA works in

an area of high demand. Our strategy has thus looked at the performance of our stock and

making best use of resources. Key aims have been to:

• Appraise options for our poorest stock taking analysis of data;

• Understand the condition of stock;

• Review financial performance of the stock.

3.2 Option appraisals: Having previously identified shared housing (cluster) schemes for disposal

and remodelling we have progressed these schemes with the disposals having been

completed and the remodelling works currently under appraisal at Harris Close, Hounslow.

3.3 Asset appraisal modelling: In December 2015 we issued the first report on our newly

developed asset appraisal approach. In the latter quarter of 2015/16 the poorer performing

assets were analysed. The 12 assets with a negative Net Present Value (NPV) were all driven

by low rents. 7 of these assets are on a single scheme which was acquired in 2013, for a wider

development opportunity. When the 12 assets are relet in the future they will revert to

affordable rent and to a positive NPV, in line with the majority of our stock.

3.4 A further 86 assets have a low NPV of less £25k. 10 of these assets were on the scheme

acquired for development opportunity. A low rent is the primary driver for 72 of the units,

with 44 of these having a secure rent charge. Rents will be adjusted upwards as the tenure

changes: on re-letting the rents will be affordable, providing a positive NPV in line with the

majority of the stock.

3.5 The appraisal confirmed that the majority of assets that had a high financial performance but

low strategic performance were outsourced to First Wessex and Sovereign.

3.6 We are currently appraising the options to convert one of the negative NPV assets into 2

separate dwellings, which will increase unit count and maximise rental income. We are also

appraising the potential to extend an existing 3 bed 4 person house into a 4 bed.

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3.7 We progressed a number of specific feasibility exercises on Harris Close, a mixed tenure

scheme of 108 homes. We are working with agents of the Heathrow Noise Fund to

potentially access funding toward the replacement cost of windows and flat entrance doors.

We are in negotiations with a commercial operator for the underground car park and have

appointed an agent to manage the re-negotiation of the contract for the telecommunications

equipment. A wider feasibility on the provision of addition flats as an extra story and

improving the thermal performance and aesthetic appearance of the estate is being

undertaken this year.

3.8 The following table summarises the NPV profile of our stock by value banding:

3.9 Future plans: Having presented to Board in December 2015 on the outcome of the initial

asset appraisal outcome the decision was to focus on poorer performing assets and to use

the information to improve the performance of all assets across the range. It was agreed that

there was no need to dispose of assets to fund future development or improvement plans:

the focus was to improve the performance of the existing asset base.

3.10 We also want to develop the asset appraisal of our key worker portfolio. We have the stock

condition information and we are aiming to populate this into our asset management

software in 2016. Once this information is validated we will then be able to consider the

other financial measures and develop the strategic measures to allow the asset appraisal of

this group of over 2,000 assets.

3.11 Stock Condition and location

The quality of the accommodation is good and we have very little stock which is un-economic

to maintain. Last year we agreed a 3-year agreement with First Wessex and Sovereign to

manage our more dispersed assets. Whilst there is no current desire to dispose of these

groups of assets a more detailed review will need to be undertaken in 2016/17 to inform the

desired approach in 2017/18.

3.12 Stock profile

• Our rented, shared ownership and key worker stock is spread across 35 different local

authorities in London and the South East. The majority of the stock is estate based, with

the rented (5870 homes) split between houses and flats, whilst the shared ownership

(5049 homes) are mainly flats. The NHS and student properties (2087 homes) are

managed on site and are purpose built, mostly with shared facilities.

• A stock condition survey is completed on 20% of our rented and shared ownership stock

annually and this information is used with component life cycles to produce a programme

of planned works. Our planned repairs liability for general needs and homeowner stock

has been analysed over a 30 year period.

• We completed a full stock condition survey of our key worker stock in 2014/15 and are in

the process of inputting the information into our asset management software.

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• We currently have no non-decent stock (the Government’s standard for social housing)

and our planned programme ensures that this will remain the case. We have an average

SAP rating of 72% against a national average of 50.6%.

• In preparation of increasing expenditure levels in the coming years we are currently

procuring new long term arrangements for the four highest expenditure streams for

general needs: kitchens, bathrooms, domestic gas services. For key worker

accommodation, we are preparing to procure cyclical redecorations.

4.0 Understanding costs; operational efficiency and good quality services

4.1 We aim to improve efficiency and provide good quality services by:

• Reducing overheads;

• Reducing costs and improving on services of most value to residents;

• Investing in online services;

• Focusing community investment on employment and training services and attracting

funding to expand our work through partnership.

4.2 Understanding Differences in Unit Cost – HCA Feedback

In June 2016, the HCA wrote to TVHA to share their analysis on our costs and how they

compare to the sector average. The letter explained that whilst reductions in social housing

cost had been achieved in the sector the HCA expects better from housing associations,

stating that the analysis, “also makes it clear that the sector will need to deliver a step-

change in its operational efficiency over the next five years”.

There are a couple of differences between the HCA unit cost analysis and the Housemark

information TVHA has traditionally used for benchmarking. These differences include the

number of housing units and inflation factors. However the underlying information in both

cases come from the 31 March 2015 statutory accounts.

4.3 Thames Valley Housing Association Cost Data 31 March 2015 – HCA Analysis

The headline cost per unit (CPU) data for the Thames Valley Housing Group shows that TVHA

has a cost per unit of £3,180, a cost which puts the group in the lower quartile of

comparative housing associations. The table which follows highlights this:

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As well as the cost efficiency that TVHA aims to achieve there are potential contextual factors

or, simply, differences to the sector level data peer group. TVHA has a focus on shared

ownership properties, the majority of which is new stock so it could be expected that running

costs for this portfolio are lower than another organisation delivering rented accommodation

with older stock.

4.4 Unit Cost Analysis – A Year on Year Comparison

Understanding TVHA’s costs and areas that improvement can be made is a priority within the

organisation. In the table which follows the 31 March 2015 and most recent, 31 March 2016,

accounts have been looked at and year on year changes understood.

Overall, the years are consistent, with cost falling slightly due to lower other social housing

costs in 2015/16.

TVH Group 2014/15

Headline

Social Housing

Costs

£'000

Total Costs 14/15 40,437

Cost Per Unit 3.18

Units Managed 12,728

2014/15 Sector level data

Upper 4.30

Median 3.55

Lower 3.19

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Note: Group level information is presented to remove intercompany costs which appear on an entity basis.

Management costs are low in comparison to the sector. Costs increase between 2015 and

2016 relating to a slightly higher overhead to support the 224 Woking PFI homes and

contracts. These costs are covered by income in line with the PFI model.

Service Charge Cost exceeded the upper quartile in 2015. As highlighted in the letter from

the HCA, this is likely to be due to how different associations classify their costs. For example

TVHA may disclose fire alarm maintenance in Services costs and another housing association

includes those costs in Maintenance. This would explain why TVHA exceeds Service Charge

CPU but is well below the lower quartile for Maintenance CPU.

Adding the sector data together for Service Charge and Maintenance cost gives a median CPU

of (0.36 + 0.98) 1.34 and an upper of (0.61 + 1.18) 1.79. In comparison TVHA’s combined CPU

is 1.53 – higher than the sector median but lower than then upper percentile group.

The increase between 2015 and 2016 relates to the replacement of lights at keyworker

accommodation. This is a contractual and cyclical cost which is incurred every 30 years.

Major Repairs are well below the sector averages. This is consistent with the assets in TVHA

being relatively newer, though may also reflect a lower programme of works in TVHA in

2014/15, than for other Housing Associations.

Other Social Housing Costs are higher than the sector’s upper quartile in both years. This is

because all head office costs are included in here, some of which support other income

TVH Group 2014/15

Headline

Social Housing

Costs

Management

cost

Service charge

costMaintenance Major repairs

Other social

housing

activities

£'000 £'000 £'000 £'000 £'000 £'000

Total Costs 14/15 40,437 4,946 11,275 8,087 4,222 11,907

Cost Per Unit 3.18 0.39 0.89 0.64 0.33 0.94


2014/15 Sector level data

Upper 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 3.19 0.70 0.23 0.81 0.53 0.08

TVH Group 2015/16

Headline

Social Housing

Costs

Management

cost

Service charge

costMaintenance Major repairs

Other social

housing

activities

£'000 £'000 £'000 £'000 £'000 £'000

Total Costs 15/16 37,827 5,255 11,419 9,633 3,938 7,582

Cost Per Unit 2.92 0.41 0.88 0.74 0.30 0.58


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generating activity such as developing commercial partnerships, property sales and

development services.

4.5 Future Use of Unit Cost Analysis

The unit cost analysis is a simple and effective way to monitor performance annually and to

potentially set targets by stock type.

It was introduced in the current budget and it is something that TVHA will continue to

monitor and report on. Having access to information on the peer group TVHA sits within

would enable more specific and relevant benchmarking and TVHA will aim to achieve this as

the next step in cost efficiency.

4.6 Reducing Overheads

• Overheads as a percentage of turnover reduced slightly in 2014/15 and remained in the top

quartile when benchmarked in our Housemark London and South East group of registered

providers.

Overheads within the Housemark benchmarking group

Adjusted turnover - overheads costs %

Comparator Group Quartiles Upper Median Lower

10.19 11.85 14.07

Id Results for Thames Valley Housing Group Result Rank Quartile

8 Thames Valley Housing Group (2014/2015) 9.93 8


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• An analysis of benchmarked overheads through Housemark is shown below. The analysis is

for the last benchmarking period currently available (2014/15).

Overhead costs as a % of adjusted turnover

KPI Sample Size

Upper Median Lower

Thames Valley Housing Group (2014/2015)


Result Rank Quart

ile Result Rank

Quart

ile

IT & Communications as % adjusted turnover

38 2.47 2.86 3.28 3.10 25

3.28 29

Office Premises as % adjusted turnover

38 1.45 1.98 2.41 2.39 26

2.07 22

Finance as % adjusted turnover 38 1.74 2.08 2.45 1.17 1

0.99 1

Central & Other overhead as % adjusted turnover

38 3.85 5.02 6.17 3.26 3

3.84 10

Total Overhead as % adjusted turnover

38 10.19 11.85 14.07 9.93 8

10.18 10

Key: upper quartile; median; lower quartile

• As reported previously, our ICT costs benchmark as higher than our peers as we have

invested heavily in the Housing Management system (Universal Housing). This has been

an investment for future capacity and growth as it can easily accommodate large

increases in transaction volumes without significant increases in cost. The majority of the

cost within ICT relates to depreciation of software assets. Investment in online services

will also enable a reduction in management costs in the long term.

• Office premises as a percentage of turnover improved as rent and rates are held constant

and turnover increased.

• Finance remains value for money within the benchmarked group. The Finance team

strategy is to deliver an efficient and scalable service. In the last 18 months headcount in

the team has reduced as process efficiency is being achieved.

• Staff salary increases have been held at modest levels and we have mitigated future risks

associated with pension deficits by ending future contributions to the final salary defined

benefit schemes after March 2016. We have increased staff numbers within the existing

office premises, making more efficient use of office space. The office premises overheads

costs have reduced by £438 per staff member.

4.7 Online Services

• Our Digital strategy was adopted in August 2015 and included the continued

development of MyTVH – our online customer services platform. The vision continues be

to build online services that are so good, people would choose to use them. The platform

is being built and deployed on an incremental basis, so that customer feedback can be

incorporated and the service continuously improved. The service was launched in March

2014, and take up has increased every month since.

• MyTVH is a responsive design service, which means it works equally as well on a mobile

or tablet as it does on a full size computer. This is vital to take up, as internet penetration

in our customer base is increasing particularly through the mobile channel.

• The proportion of mobile visits to the site has been fairly constant over the past year. It is

still the most popular way of accessing the service, though has reduced slightly from 51%

to 49% of all visits.

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• Take up of the service has been good, with numbers increasing every month from launch.

Overall, 30% of customers have now registered, and when looking solely at new tenancies

in the last year that number rises to 40% for leasehold and 42% for tenants.

• At the end of 2014, a new MyTVH payment gateway was deployed to replace the third-

party platform that had been in use for taking payments over the phone (about 2,200 per

month) and for customers to pay online (about 10 per month). Take up was rapid, and

within twelve weeks of launch, 45% of phone payments had shifted online, with an

average of 1,000 online payments per month. It has continued to rise more slowly, but

steadily since, and now stands at about a 64% shift.

• It is still early days in the life cycle of online services, but we are now on the road to

deliver the ‘channel-shift’ savings in the long term.

• With the launch of the MyTVH payments service we have been able to demonstrate VFM

efficiencies, including a reduction of staff time processing telephone payments by a

potential 1100 hours, due to residents making payments online.

4.8 Improving services to residents & reducing costs

4.4.1 Social rented housing

• Housing management costs per property benchmark high in the Housemark London and

South East benchmarking group. High cost is largely because of the dispersed nature of

our stock which is not typical of the benchmarking group. Our costs decreased slightly in

2014/15 as we took more stock into management including a stock transfer from

Sovereign Housing Association. As mentioned previously, our overall management costs

are low in comparison to the sector averages published by the HCA: Housemark

benchmarking relates only to general needs social rented and affordable housing.

Housemark cost benchmarking data Total CPP of Housing Management


495.03 606.40 680.66




• Efficiency savings have been made through a strategy of:

� Outsourcing management of stock in boroughs furthest from the office,

� Taking on more units without a proportionate increase in resources,

� Disposal of inefficient stock,

� Disposal and re-configuration of 3 cluster schemes, reducing management costs.

• Housing management cost per property has remained constant between 2014/15 and

2015/16 and it is expected to decrease slightly in the current year as we deliver

management for more units (notably Woking PFI social housing) but maintain costs at

previous levels.

Service effectiveness (measured through following KPIs):

Social rented: housing management 2013/14 2014/15 2015/16

Target

2016/17

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Current tenant arrears 4.6% 4.6% 5.0% 5.2%

Average re-let time (days) 19.6 20.9 21.8 21

Tenant General Satisfaction Rate 74% 77% 73% 82%

Performance has either improved or been maintained at median or upper quartile when

benchmarked (see table below). Rent arrears have been maintained at low levels for the

last two years – the higher target for 2015/16 is because of uncertainty over the potential

impact of welfare changes and Universal Credit. However, our aim is to maintain or

improve upon last year’s outturn. Long-term tenant satisfaction has improved from 72%

in 2010/11 to 77% in 2014/15. The slight downturn this year can be attributed to the

mobilisation period of our new repairs contact which has now settled in and is performing

well. Overall, we achieved our performance targets for 2015/16.

Housemark performance benchmarking data Housing Management - Performance Summary

KPI Sample Size

Upper Median Lower



Result Rank

Quartile Result Rank

Quartile

Rent collected from current and former tenants as % rent due (excluding arrears b/f)

35 100.22 99.78 99.47 100.12 12

99.51 25

Current tenant rent arrears as % of rent due (excluding voids)

36 3.49 3.89 4.86 4.75 26

5.22 29

Average re-let time in days (standard re-lets) 34 21.01 28.24 35.69 21.00 8

21.00 8

Rent loss due to empty properties (voids) as % of rent due

36 0.54 0.79 1.18 0.32 1

0.51 7

• Customers have direct contact with their patch officers removing the need for call centre

staff and officers are all equipped with mobile technology. We also have an active team

of resident estate inspectors (covering over 120 sites) to be our eyes and ears and help

manage contractors on site. Providing self service options on line, particularly payments,

has helped us reduce costs and we continue to invest in this area.

• With the implementation of wider roll out of welfare reform, we have invested in staff to

reduce the impact on residents and our income. We achieved the following outcomes as

a result of our pro-active approach:

o Arrears achieved a good outturn of 5% despite of the pressure on rent payments.

o Our Tenancy Support service supported 116 residents in the last year and directly

prevented 14 evictions

o The number of evictions was 20 in 2015/16, down from 28 the previous year.

o Income from housing benefit and other discretionary payments was £204,000 in

2015/16 compared to £158,000 in 2014/15;

o We moved 28 households to smaller properties potentially avoiding £24,000

worth of benefit shortfall.

4.4.2 Repairs

• We have targeted to achieve a median cost with good quality performance and

satisfaction. The outsourced contract arrangements enable this to be achieved through a

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low overhead cost base. Responsive repair costs decreased in 2013/14, with favourable

benchmarking.

• A new repairs and voids partnering contract was procured and became effective in

2014/15. The contract was market tested through the tendering process with less than

2% difference in costs between the final three bidders providing assurance that the

tendered costs represent good value for money. We have a fixed price per property, for

rented homes, which compares well with the sector and gives us price certainty for the

future. The contract is performing well with repairs satisfaction for 2015/16 achieving

95%.

• The new contractor is delivering a more comprehensive repairs service and we now rely

far less on second tier contractors. This means that more repairs are subject to contract

monitoring and there is an improved booking of appointments at first point of contact for

tenants.

• Housemark cost benchmarking data Total CPP of Responsive Repairs & Void Works


808.26 877.30 958.47




• Responsive repairs cost per property decreased between 2014/15 and 2015/16 as the

number of units in management have increased. Variable costs of delivery have increased

but fixed costs (staff and overheads) have remained consistent as units have increased.

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Responsive Repairs & Void Works - Cost Summary

KPI Sample Size

Upper Median Lower



Result Rank

Quartile Result Rank

Quartile

Total CPP of Responsive Repairs & Void Works

38 808 877 958 807 10

812 12

Total CPP of Responsive Repairs (Service Provision)

38 404 496 541 404 10

405 11

Total CPP of Responsive Repairs (Management)

38 163 203 242 259 31

261 32

Total CPP of Void Works (Service Provision) 38 100 145 190 122 14

120 13

Total CPP of Void Works (Management) 38 30 44 57 22 6

26 7

• All areas show good performance in the peer group and within the top ten performers for

CPP for three of them.

• Total CPP of responsive repairs (management) is outside the lower quartile and ranked 31

out of 38 housing associations. There has been little or no change between the years with

costs in this area rising £90k over 5,580 properties when adjusted for inflation in line with

the Housemark approach. This increase equates to £16 per property.

• It is difficult to put this in context without more information on the peer group’s cost

base. However the majority of the Property and Asset Management team are categorised

as Responsive Repairs management (20 members of staff vs 2 in voids management) so it

could be a case of distribution of effort with more effort being required to resource

TVHA’s responsive repairs, which is compensated for by a lower cost, efficient voids

management resource.

• The costs in the current year are expected to fall on a per property basis due to a focus on

VFM in the budget and also due to the stage of the cyclical repairs programme with lower

value works planned in 2016/17. Areas for improving Value for Money were identified as

part of the budget review and c£500k of saving identified to reduce the total budgeted

cost.

Service effectiveness (measured through following KPIs)

Social rented: responsive repairs 2013/14 2014/15 2015/16

Target

2016/17

Emergency repairs response times 97% 96% 88% 99%

% Gas safety checks completed 100.0% 100.0% 100.0% 100%

Tenant overall satisfaction with repairs 96% 90% 95% 95%

• Our targets aim to continue reducing costs through shared cost savings and to drive up

performance through a broader range of KPIs e.g. moving towards 5 day responses on

communal repairs.

• Performance targets in the contract were based on resident priorities, who were involved

in the procurement process.

4.4.3 Planned repairs

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Housemark cost benchmarking data

Major Works & Cyclical Maintenance - Cost Summary

KPI Sample Size

Upper Median Lower



Result Rank Quartile Result Rank Quartile

Total CPP of Major Works & Cyclical Maintenance 36 1,065 1,429 1,701 1,081 10

1,181 12

Total CPP of Major Works (Service Provision) 36 598 873 1,184 474 2

605 10

Total CPP of Major Works (Management) 36 75 84 115 113 27

147 32

Total CPP of Cyclical Maintenance (Service Provision)

36 224 322 402 444 28

376 23

Total CPP of Cyclical Maintenance (Management) 36 37 53 75 50 15

53 19

• Overall TVHA ranks within the top ten for CPP of Major Works and Cyclical Maintenance of

£1,081 per unit.

• This has fallen from the previous year as more properties have come into management.

• Cyclical Maintenance (service provision) CPP has increased from £376 to £444 per property.

This expenditure is cyclical as per its description and the costs vary significantly depending

upon the scheduled programme of works. Between 2013/2014 and 2014/15 a lighting

replacement programme was undertaken which has contributed to the year on year increase

in costs.

• The following KPIs benchmark favourably and have been maintained whilst keeping costs

comparatively low.

Housemark performance benchmarking data Percentage of dwellings with a valid gas safety certificate


100.00 100.00 99.91




Average SAP rating of self-contained dwellings


73.0 71.4 69.3




4.4.4 Estate Services

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• New contracts for estates cleaning and gardening were procured in 2012 leading to initial

17% savings in 2013/14 and have been extended for a further 3 years. The Partnering

relationship is excellent, resulting in good levels of satisfaction across all tenures.

• The contracts have also delivered a lot of added value, including additional cleaning and

gardening services as well as one off specialised work at no extra cost. Contractors have

also improved sites at no extra costs, including redesigning problem areas and free

planting through a ‘mind the gap’ initiative. They have attended promotional events, as

well as roadshows and supported our Resident Inspector scheme. The total value of these

additional services is estimated as over £40,000.

• Costs of the service reduced in 2014/15 and benchmarked upper median.

Direct CPP of Estate Services


153.73 184.47 237.66




4.4.5 Shared Ownership Housing

• There has been good performance in key performance indicators and satisfaction has

stabilised. There is very limited comparable benchmarking data and so this has not been

possible to compare meaningfully.

• The overall business model is financially efficient for TVHA, with the receipts from sales

and subsequent staircasing providing internal subsidy for the development of new homes

and service delivery.

Service effectiveness (measured through following KPIs)

Shared Ownership & leasehold 2013/14 2014/15 2015/16 Target

17

2016/17

% current rent arrears 1.7% 1.7% 1.4% 2.5%

Leaseholder general satisfaction 43.0% 40.5% 46.6% 60%

• Arrears performance was maintained at historically low levels for the third year running.

Arrears are however higher for residents in receipt of Universal Credit which is

manageable whilst numbers are low. However we expect that this will have an impact as

Universal Credit is more widely claimed.

4.4.6 Key Worker Housing

The key worker NHS and student accommodation schemes achieve value for money by

maintaining performance at a high level, with corporate targets and contract obligations

being comfortably exceeded. This has led to the overall operating surplus exceeding that in

the original financial model for the schemes year on year.

4.9 Community investment and resident training and employment

• Our Community Investment Strategy works to develop our communities across four

objectives: (i) improving the life chances of residents, (ii) working with young people, (iii)

increasing access to support services, and (iv) empowering communities. We look to

bolster the funding for the various projects with a combination of match funding, external

funding and in-kind funding. Many projects that we fund, particularly the Community

Chest projects, receive significant financial and in-kind contributions from partner

organisations. Other TVH projects are funded through external contributions, typically

through engagement with our supply chain.

• During 2015/16, we measured the Social Impact of our work using HACT's Wellbeing

Valuation tool, which enabled us to understand those projects that were the most

effective as a return on investment. Moving forward we are working on a project with

HACT to identify the commercial benefits of community investment through reduction of

management costs. This work will help us to define the most cost-effective spend of the

community investment budget, coupled with the associated social impacts.

• The long term impact of getting residents into work is significant in terms of health

benefits, reduced management costs and reduced arrears. On average, it costs us £200pa

less to manage households where the residents are in employment.

• The following figures show the inputs and outputs over the last four years. The increase in

numbers of residents helped and number of projects and the leveraging of match funding

provided significant value for money when compared to the TVH investment.

18

Inputs:

TVH

Funding Match Funding

2010-11 77,357 140,781

2011-12 63,561 395,412

2012-13 73,744 346,699

2013-14 107,039 316,440

2014/15 128,468 238,872

2015-16 125.000

239,220 +

£26,000 Direct

Funding

Outputs:

• Graduate work placement scheme: We supported 9 unemployed graduates with 8 weeks

work experience placements within TVHA. 6 moved directly into employment as a result

of our support.

• In addition to the graduate scheme, we supported a further 13 residents into work

placements both within TVHA and through our supply chain.

• Numbers supported into work: In partnership with the Big Lottery funded project STEP,

we supported 207 customers into work. Employment opportunities we supported

residents into were varied from;

o Apprenticeships

o Retail

o Teaching assistants

o Finance roles

o Roles within housing associations

0

50

100

150

200

250

300

350

2010-11 2011-12 2012-13 2013-14 2014/15 2015/16

Numbers employed

Numbers trained

Numbers work

experience

Number of community

projects

19

• Numbers supported into training: We supported 293 residents into various training

opportunities and qualifications, including:

o Employability qualifications

o Basic IT

o Customer services

o Business start up

o Music production

o Trainee mechanics

o Trainee electricians

o Trainee plumbers

5.0 Achievement of value for money targets 2015/16 & targets for 2016/17

5.1 The following table summarises achievements against our key strategic value for money

objectives and targets in 2015/16 These derive from our corporate plan for 2015-18:

Objective Value for money target 2015/16 target Output 2016/17 target

Grow the business

Affordable housing &

shared ownership

development

completions

(increasing economies

of scale)

• Affordable housing

development starts

& completions

• Newbuild

Homebuy:

o Sales Income

o Margin

o Staircasing

surplus

• 450 starts

• 238

completions

• £19m

• 24.6%

• £4.9m

• 458

• 322

• £21.4m

• 31.2%

• £10.6m

• 450

• 372

• £21.6m

• 43.1%

• £6.9m

Deliver the commercial

returns identified in

the growth &

investment strategy

• Fizzy:

o New units

approved;

o Re-let times

o Void rent loss

o Yield

• Opal:

o Profit

o Return on capital

employed

• 1100

• 2 weeks

• 3%

• 4.5%

• £12.8

• 20%

• 189

• 2

• 1.4%

• 5.3%

• £10.7m

• 62.4%

• 750

• 2

• 3%

• 4.5%

• £6.97m

• 23.4%

Maintain organisational capacity

Treasury strategy:

Secure the capacity

and funding required

to enable growth

ambitions

• Gearing ratio

• Interest cover ratio

• 45.6%

• 1.75x

• 44.9%

• 2.24

• 49.2%

• 2.38

Financial efficiency &

profitability

• Surplus (UKGAAP

before tax)

• £27.3m • £31.2m • £24.1m

Deliver the required

return on assets and

operating efficiencies

as set out in the Asset

Management Strategy

• Detailed asset

appraisal of lowest

performing assets

and carry out

options appraisal.

• Carry out

asset &

options

appraisal on

Harris Close

• Grant funding

applied for

via Heathrow.

Letting of

underground

• Decision on

provision of

extra homes

and thermal

and estate

20


• Carry out

detailed

options

appraisal on

least 6

schemes

car park

• Feasibility on

additional

units &

thermal and

aesthetic

improvements

progressing.

• Options

appraisals on

one site being

pursued by

Development

.

improvements

• Deliver

window

renewals

under

Heathrow

scheme

• Analysis of

low strategic

and financial

performing

assets.

• Extend asset

appraisal to

all general

rented

keyworker &

student

assets.

• Desktop

options

appraisal of

all voids over

£5k.

• Options

appraisal for

extending

staff cottages.

Remodel office space

to enable increased

head count and new

ways of working,

without taking on

more space

• Reduced

overheads

• 6.9% • Hotdesks

added

• Office space

maintained at

current

capacity

• Increased

staffing

within

existing office

space

Strategy to reduce

overheads, including

shared services with

Fizzy

• Reduced

overheads

• Staff absence

• Staff turnover

• 6.9%

• 2.5%

• 15%

• 5.6%

• 1.5%

• 11.9%

• 6.6%

• 2.5%

• 15%

Deliver a great landlord service

Develop a new

customer services

strategy to encompass

digital change

• Increase online

transactions to

reduce

management costs

• Percentage

transfer of

telephone to

online transactions

• Reductions in

management costs

• >50% transfer

from

telephone to

online

transactions

for payments

• 64% • Customer

Experience

Strategy

approved

• Service

Transform-

ation team

established

Improved repairs

performance &

efficiency through

managing the new

partnering contract

• Improved

performance,

satisfaction and

lower costs

• Achieve KPI

targets

• Improved

communal

repairs

service

• Majority of

KPI’s being

met with two

areas needing

further

improvement

• Achieve KPI

targets.

• Review &

improve

operational

structure of

21


• Improved

volume or

feedback and

levels of

satisfaction

• Communal

repairs

response

times

improved.

• Satisfaction

surveys

robust with

95%

satisfaction.

Axis and TVH

• Improve

communal

repairs

service.

• Increase

feedback.

• Develop

MyTVH

Re-procurement of gas

servicing contract

• Improved

performance,

satisfaction and

lower costs

• Gas servicing %

completed

• Reduce costs

by 5%

• 100%

performance

on landlords

gas safety

records

• Currently out

to tender.

• 100% safety

record

maintained

throughout

the year.

• Mobilise in

Spring 2017

• Increased

integration

with Repairs

Team

• Achieve 100%

gas

compliancy

• Develop more

sophisticated

groups of

assets with

varying

annual gas

service

regimes to

achieve

improved

VFM

Rent arrears and re-

lettings targets for all

tenures

• Financial efficiency

through lower

arrears and re-let

times

• 2015/16 KPI

targets:-

• Social rent

arrears 4.9%;

re-let 21 days

• Key worker

arrears 2.5%

• Targets

achieved

• Social rent

arrears 5.2%;

re-let 21 days

• Key worker

arrears 2.5%

Improve accuracy and

efficiency of service

charge management

• Improved

performance,

satisfaction and

lower costs

• Reduced % of

balancing

charge

enquiries

resulting in a

formal

complaint

• Increased

collection

rates due to

greater

accuracy of

charging did

involve

increased

enquiries but

all

successfully

dealt with.

• In year

service charge

budget

monitoring at

scheme level

• Phasing out

of spreadsheets

in Finance.

Support residents and communities

Develop the scale and

approach to resident

training and

employment activities

• Numbers of

residents assisted

into:

o Employment

o Work

experience

150

25

210

207

22

293

170

40

310

22


o Training

Community

investment strategy • % match funding

achieved for

community

projects

150% 200% 150%

Documents

Value for Money Self-Assessment Statement for 2015/16€¦ · approach to assessing the value of our individual assets. The initial results demonstrate that our assets perform very