1. New RSH Standard: 1.4.18 Value for Money
Scrutiny.Net
11th April 2018, Habinteg
Yvonne Davies,
Managing Director
Scrutiny & Empowerment Partners

2. VFM Economy, Efficiency and Effectiveness
Transparency
Accountability
It is about:
Economy – minimise resources used while having regard to quality
Efficiency – relationship between output from goods and services and the resources to produce them
Effectiveness – the extent to which objectives are achieved and the relationship between intended and actual impacts
Its not about cuts
Put less resources in for the same results
Reduce costs for same results
Improve results using the same resources
Increase your resources for proportionate increase in results

3. Headline social housing costs per unit by provider
Median social housing costs per unit (£3,550) shown by the horizontal line. Red markers identify providers where more than 10% of stock is supported housing (excluding housing for older people) or more than 50% is housing for older people

4. Unit cost variations – most important explanatory factors
Relative explanatory power of each key explanatory variable (ranked in order)
1. Supported housing (%)
0.50
2. Regional wage index (comb)
0.43
3. LSVT (<7 years)
0.29
4. Housing for older people (%)
0.13
5. Neighbourhood deprivation (IMD)
6. Reduction in non-decent homes
0.11
7. LSVT (7-12 years)
0.10

5. New VFM standard What we knew and what has changed– April 2018

6. New standard in summary
Replaces the old VFM self assessment
Starts reporting on metrics – mainly financial
Produced a VFM metrics technical note, new standard and code of practice – consultation to xmas 2017
Feedback– social value and impact measurements which were missing – change to ensuring that financial return from assets and resources is optimised
Feedback – publication of metrics in accounts – change to ability to report outside the account sin any way they see fit to encourage transparency with stakeholders
Reporting under headings social housing and other, activities

7. New VFM regulatory standard
WHASP Unconference
New VFM regulatory standard
Have an approach agreed by Board to achieving VFM in meeting strategic objectives and demonstrate VFM to stakeholders Ensure optimum benefit from resources, assets and optimise the 3 Es
Approach to decision making and improving performance
Targets and monitoring of performance
Publish performance and measurable plans to address underperformance

8. VFM Code of practice Relatively low costs High productivity
A VFM strategy or embed it in each of your objectives
Maximise return on assets
Operational in activities
Strategic in all decisions
Show understanding of costs and outcomes
Rigorous options appraisal to improve performance
Implications for structures, partnerships, mergers, procurement, geography, business streams
Non social housing activity
Relatively low costs
High productivity
Successful outcomes e.g. Improved performance, reduced costs, increased customer satisfaction, reduced service failures, reduced waste or added value

9. Value for Money - Pilot Scorecard
WHASP Unconference
Business Health
Operating margin (overall)
Operating margin (social housing)
EBITDA MRI as % of interest (on outstanding debt)
B. Development – capacity and supply
Units developed (absolute)
Units developed (as a percentage of units owned)
Gearing
C. Outcomes delivered
Customer satisfaction with service provided
£s invested for every £ generated from operations
in new housing supply
in communities
D. Effective asset management
Return on capital employed (ROCE)
Occupancy (essentially a positive spin on void rate)
Ratio of responsive repairs to planned maintenance spend
E. Operating efficiencies
Headline social housing cost per unit
Rent collected
Overheads as a percentage of adjusted turnover
Business Health
Operating margin (overall)
Operating margin (social housing)
EBITDA MRI as % of interest (on outstanding debt)
B. Development – capacity and supply
Units developed (absolute)
Units developed (as a percentage of units owned)
Gearing
C. Outcomes delivered
Customer satisfaction with service provided
£s invested for every £ generated from operations
in new housing supply
in communities
D. Effective asset management
Return on capital employed (ROCE)
Occupancy (essentially a positive spin on void rate)
Ratio of responsive repairs to planned maintenance spend
E. Operating efficiencies
Headline social housing cost per unit
Rent collected
Overheads as a percentage of adjusted turnover
Plus some context : turnover split by activity, type of stock managed & supported geographical spread

10. Technical note: new metrics x 6
Reinvestment
New supply
Gearing
EBITDA
Headline social housing cost per unit (includes community /neighbourhood services)
Operating margin
Return on capital employed

11. Formal panels engaged in VFM
Procurement panels
Scrutiny panels
Performance panels
Restructuring services
Participatory budgets
Service Improvement, or task and finish Focus groups
Sending in ideas on saving money or reducing/removing waste

12. Formal engagement VFM strategy – customer involvement
Critical friend - consumer regulatory standards
Discussions on shared services
Process mapping – flowcharts can help
Right first time – repairs
Benchmarking – like for like
ASB prevention and early intervention
Investigating the private sector offer
Performance - What is measured - is it for tenants or landlords? What matters? Is action taken?
Social value - or impact on health/education services
Impact of ASB team
Education, Police, Fire, local GPs, your communities
Impact of Homelessness team
A & E Department, Social Services
Impact of supported housing team
NHS, Social Services, families, other agencies
Social enterprise
Handypersons schemes
Support into work

13. Customer strategic engagement
Do customers know the objectives and the VFM strategy?
Does CI activity review and report on VFM?
Do customers comment on performance indicators?
How can we engage customers in setting qualitative standards and performance – consumer standards
How can we engage customers in underperformance?
Do customers get involved in corporate or annual plans?
Do customers know where they fit in, in terms of support and challenge on VFM?
Do customers know how you benchmark and compare to best in class?
Do customers engage in setting quality standards for customer service?

14. Thank-you - Any questions?
Tel:
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