Value for Money Statement

Value for Money Statement Year ended 31 March 2014 A Social Business Investing in People and Communities 2 BCHG Value for Money Statement 2013/4 ...
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Value for Money Statement

Year ended 31 March 2014

A Social Business Investing in People and Communities

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BCHG Value for Money Statement 2013/4

Our Strategic Approach to VFM At BCHG our focus is clearly on Value, we do not aim to be the cheapest but we do intend to deliver outcomes with social value in the most effective way. At BCHG, VFM means: • Doing the right things – having clear business objectives and understanding the outcomes we want to achieve • Investing in the right assets at the right price – economy – balancing quality, performance and cost

Where economies and efficiency gains deliver cash or additional capacity these resources will be re-invested to deliver our key objectives. In setting our Strategic Plan 2014-17 the Board and Executive team were clear in ensuring that VFM is a common thread running through our strategic priorities:

• Doing things right – efficiency and effectiveness • Evaluating success – robustly assessing our own performance and making continuous improvements.

Delivering Excellence

Growing our Social Business

Challenging the Status Quo

A Social Business Investing in People and Communities

Chair’s Statement In 2013/ 14 the Board and colleagues reviewed and refreshed our purpose, and agreed a new vision which sets out very clearly our wider role as being A Social Business Investing in People and Communities. Alongside this new mission we agreed our new 3 year strategic plan, with ambitious targets for growth of our business, both in terms of assets and services to customers, making sure too that we push the boundaries of excellence in service delivery to our customers. We will continue to transform parts of our business to deliver more value-for-money, challenging the status quo through Project Q which has successfully embedded VFM across our business. Looking back, it has been a year of achievement, with colleagues and board proud of our recognition as being a Sunday Times Top 100 employer. Our customers have rated us highly in our recent engagement survey, and performance against a range of KPIs has been strong, despite challenges such as welfare reform and local authority funding cuts.

We continue to push forward though, aiming to ensure that we deliver quality services, adding value to our core housing offer by utilising our employment services and housing options colleagues to support local residents. Our work in analysing the social value we create demonstrates that our role as a community based social business leads to multiple economic, health and wellbeing benefits across our areas of operation, which is of increasing priority for us as we move forwards with our strategic objectives. As we celebrate our 40th Anniversary this year, I am confident that BCHG will continue to play an important role in the lives of our residents and local communities, supporting individuals and families in these challenging times.

Peter Bilson Chair

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BCHG Value for Money Statement 2013/4

Ensuring we deliver VFM To ensure that we deliver VFM, we have devised a clear and collaborative framework to plan, deliver and evaluate all our VFM activities. •

Involving our Resident Scrutiny Panel in our governance framework. The Panel have begun to undertake service reviews and provide us with recommendations for improvements to the quality and cost of services.



Feedback on our website and customer satisfaction forms.



Our recent Engage Plus sruvey of our tenants.

Leadership



Surveys of our customers receiving care and support.

All our Leaders set a three-year team vision supported by Annual Plans with targets for delivering VFM and Social Value.

Evaluating

Planning Strategy The 2014 - 17 Strategic Plan sets out a clear direction for BCHG over the next 3 years. the strategic objectives have clear milestones and the overall Plan is supported by yearly surpluses, new borrowing as well as the VFM savings outlined further.

Financial Planning

Board Members

Our long-term Financial Plan clearly demonstrates the long term viability of the Group and the impact of investment and borrowing decisions. A detailed Budget is approved annually and is scrutinised by the Executive Team and Board.

The Board monitor our progress in delivering our VFM Strategy by effective scrutiny of our investment decisions, management accounts and peformance indicators, which are revised regularly in conjuction with the risk map, ensuring effective oversight of key risks.

Execution

Executive Team

Teams Our Leaders share the vision with their teams, who then adopt it through team meetings, annual appraisals and 1:1s. Every colleague at BCHG is clear on what is expected from them to achieve our vision.

Residents and customers We capture and learn from the views of our residents, customers and clients in a range of ways including:

Our Executive Team assess our performance against target budgets by scrutinising monthly management accounts together with the performance dashboard which set out the financial performance of our services and activities.

Industry We benchmark and compare our costs and performance via HouseMark. We are also a member of Baker Tilly’s back-office benchmarking club.

A Social Business Investing in People and Communities

Embedding VFM in BCHG In 2013 we launched an initiative called Project Q to engage with colleagues across the Group and empower them to be innovative, creative and to Challenge the Status Quo to help us embed VFM into every decision we make across our business. Through Project Q we have created a mechanism to: • Encourage new ideas about how we work and deliver our services • Empower colleagues to put those ideas in practice • Capture and measure the impact of Project Q ideas. All our Leaders prepare 3-year team plans linked to our Strategic Plan. These plans, underpinned by annual targets and milestones, send a clear signal that improved VFM and Social Value delivery is expected and required from all colleagues. Leaders complete quarterly Q Reports which set out the efficiencies gained and the Social Value delivered by their teams.

Individual colleagues are encouraged to submit ideas for Project Q, also know as an “iQ”, to the QCommittee (which includes an Executive Team member and a Staff Forum representative). This ensures there are no barriers to the flow of good ideas and challenge anywhere in the Group and these are actively encouraged and welcomed. This approach to VFM and colleague engagement was recognised in The Sunday Times Top 100 Best Not for Profit Organisations to Work For when we were runners-up for the Innovation in Engagement Award. Since Project Q was launched our colleagues have come up with hundreds of ideas, some featuring in this report.

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BCHG Value for Money Statement 2013/4

Our VFM Achievements At a Glance

Provided 71 new homes in 2013/14

Invested surpluses of £1.8m in 23 new homes

Negotiated savings of over £6k with our office supplier

115 new affordable homes in 2011 - 2015

New homes for vulnerable women

4 year partnership enabled £60k of savings

Extended partnership offered 5% saving

Converted from electric to gas heating lowered resident bills

Forward buying has led to a 2.5% saving in energy bills

Updated IT infrastructure has increased productivity

Won a number of awards as a great employer

Excellent colleague attendance and low sickness rates

A Social Business Investing in People and Communities

Our VFM Achievements Housing

Maintenance

We have completed 71 new homes over the last year and now manage over 2,000 homes across the West Midlands region. Working with the HCA (through the AHP 2011-15) we expect to deliver 115 homes for affordable rent or shared ownership by March 2015, supported by £2.4M of Social Housing Grant and other grants.

2013/14 was the fourth year we worked in partnership with Wrekin Housing Trust who manage and deliver our Responsive Repairs service. By working closely together, we have achieved a synergy which is mutually beneficial.

In addition to the AHP programme, our healthy operating surpluses have enabled us to invest £1.8M in developing 23 new homes for social rent or shared ownership without any grant and to acquire 10 homes. In 2013 we worked in partnership with Adullam Homes who were seeking to dispose of a ten-unit scheme in Oldbury. This scheme had become the target of local hostility due to a high profile criminal case. Following extensive engagement with the local community and a significant reinvestment in the physical structure the building reopened in September 2013 and is now managed on our behalf by a local specialist charity meeting the needs of vulnerable women.

For BCHG the contract delivered savings against RPI of £22,000 in the year and has delivered cumulative savings of £60,000 to March 2014. During the year we extended our partnership with Wates from the existing three years to five. The initial contract had been at a fixed price with no inflationary uplift and the uplift on the extension was also limited, offering real term savings across the five years.

Overheads Across the year, we scrutinised expenditure on office supplies and worked with our preferred supplier to deliver savings of £6,200.

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BCHG Success Stories Sheltered Housing Mr S moved into Braeburn House, along with his wife, after his health continued to deteriorate due to Alzheimer’s. Shortly after Mr and Mrs S had moved into Braeburn House, their daughter contacted us to express her happiness and gratitude about the improvements she’d seen in her parents’ physical and emotional wellbeing under our care. Through carefully selected activities designed to stimulate the mind, Mr S is now engaging positively with our carers and other residents at Braeburn House. As a result his Alzheimer’s is engaging with carers and residents and the stimulation to his mind is helping to better manage his Alzheimer’s. The impact on Mr S’s family has also been very positive: Mrs S says that she feels much safer and can now leave her husband in our care to do things that she couldn’t do before like going out shopping. Similarly, Mr and Mrs S’s wider family now have had opportunities to go on holidays which they couldn’t do previously as previously someone had to stay behind to care for Mr S. Braeburn House, like our other sheltered schemes, has developed a holistic approach to housing older people, focusing on health and wellbeing and not just the accommodation, because it is important to us to invest some of our surpluses into lifestyle activities for our residents.

A Social Business Investing in People and Communities

Our VFM Achievements Sustainability Our Jordan Leys development was converted from electric storage heating to gas. This required an installation of a gas main with an estimated cost of £25,000. Through negotiation with the energy supplier and National Grid, we were able to arrange for this work to be done at no cost to BCHG and the residents now enjoy warmer homes and lower bills. By building on our previous tariff negotiations, we have avoided a further 2.5% of future electricity and gas bills by buying forward to 2016 at advantageous rates. This saving is worth £4,900, on top of the avoided costs of £181,000 reported last year. We continue to seek competitive quotes for all significant repair works whilst also being members of the CHIC purchasing consortium. At our Apsley House sheltered housing scheme, we were able to negotiate a boiler replacement £9,000 below the consortium price.

IT In 2013 we replaced our dated IT server infrastructure and implemented a virtual server environment. We also upgraded wi-fi and connectivity between our Head Office sites and schemes.

This has enabled better, faster connectivity between sites and removed productivity lost during server down time and reduced energy consumption and costs. We see this investment as the beginning of a drive to transform the way we work which is in line with Project Q - delivering VFM by Challenging the Status Quo.

Our People BCHG is committed to becoming a great employer. At BCHG we firmly believe our engaged and motivated colleagues are critical to delivering excellent services and during the year the Group achieved: • Investors In People - Gold • No. 71 in The Times Top 100 Best Not For Profit Organisations to Work For • Investors in Diversity – Stage 2 Colleague attendance has been excellent, with just 2.6% of working days lost last year, providing direct savings through avoided overtime and agency cover costs as well as the efficiency gains arising from improved staff morale.

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BCHG Success Stories BCHG and Sandwell Womens’ Aid “BCHG have been responsive to SWA requests and have shown an incredible commitment to supporting victims of violence and abuse. The whole project from start to finish was a genuine partnership. BCHG maximised the potential of a new building with SWA to meet an unmet need.”



Quote from Sandwell Women’s Aid Executive Director, Sara Ward

BCHG has been in partnership with Sandwell Women’s Aid (SWA) since the 90s. Our leaders regularly meet with SWA to share knowledge, information and experience. One of the outcomes of our meetings led to the development of accomodation for women. SWA saw an increasing demand for accommodation for single women but were unable to meet the rise in demand due to a lack of suitable accommodation. SWA were concerned that they were turning away vulnerable women. We were considering purchasing a block of flats and consulted with the local residents to see how the site could be turned into something that is beneficial to the local community and provided Social Value. The local residents indicated that they would like to see a womens’ only scheme. We identified that both the needs of the SWA and local residents could be met by proposing to develop the flats into a womens’ refuge providing accommodation for single women. By bringing the SWA together with local residents and purchasing the block, we were able to develop the flats into a safe and secure refuge. Throughout its development, we worked closely with SWA to ensure we created a safe and secure home for women. On World Homeless Day, we officially opened the refuge with Sandwell Council and residents. Feedback from women staying at the refuge has been very positive: “The flat is lovely and I feel really safe. It is warm and secure. I am able to consider a home away from violence and abuse.”

Quote from a resident living at the refuge.

A Social Business Investing in People and Communities

Providing Social Value As a Social Business we have always aimed to deliver Social Value through all our activities – whether it is through the provision of homes, care and support, home improvements or employment and training. We aim to build and strengthen the communities in which we work and to empower individuals to lead healthy and independent lives.

Homeforce Falls Prevention Service

Throughout 2013/14 we sought to measure and evaluate the Social Value provided by our activities and projects.

Installing aids and adaptations (e.g. 1364 grab rails, 324 hand rails) to prevent falls, support independent living and enhance quality of life for older people.

We developed and tested a framework on five of our services. We are developing the framework further so that we can apply it to all our activites.

We estimate that each £1 spent saves the NHS £5.88 in emergency admissions to hospital avoided and by enabling timely discharge.

The five projects selected for assessment during 2013/14 were:

Single Work Programme

BCHG Apprentice Programme

This project providing personalised support for benefit claimants who need help finding and staying in work, including training and jobsearch, has helped 153 people of whom 94 have started employment.

Our 12 month placement supports six young people in accessing employment, providing work based learning, undertaking an NVQ qualification and developing their confidence and resilience. For each £1 spent we estimate a saving to of £1.99 is delivered to the Exchequer.

Highland Road Young Persons Scheme Highland Road provides accommodation to people aged 16-25 and supports them to gain the skills to live independently and to engage in education, employment and training. Further work is ongoing to accurately identify the return on this scheme but research by DCLG suggests each £1 spent could save £3.20 for the Exchequer.

We estimate a saving to the Exchequer of £8.16 for each £1 spent.

Sandwell Financial Services Hub This Big Lottery funded project provides financial confidence and skills-building services to social housing tenants across the borough supplemented by a small team of volunteers. Further research is onging to enable us to fully understand the financial return delivered by this project. Our research has enabled us to identify, evidence and value the significant social impact of these projects which we are able to support because of the VFM and business efficiencies we achieve.

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BCHG Success Stories Social Business Team Miss T suffered from anxiety and depression since she was robbed four year ago. Following the incident, Miss T became very introverted and was no longer able to travel independently meaning that she could not go back to work. In addition to her anxiety and depression, Miss T also had a lack of confidence in gaining another job because of her limited qualifications and experience. Miss T was referred to our Social Business Team after a two year period of unemployment. By building a rapport with a Miss T to gain a trust and understanding about her barriers to work, we were able to support her into a traineeship within her chosen field of administrative work at her local council. Through consistent support, partnership and working, Miss T was able to take the step to learn to drive to be able to travel independently. Not only has Miss T been taken on as full time employee following a successful completion of her traineeship, she has a range of qualifications, an increase in confidence which has enabled her to build and maintain relationships for an active social life. The approach we take when supporting people into work is ensuring that we understand the individual and provide help and guidance with not only their skills and work experience but also their emotional wellbeing. This benefits of doing this is that we are able to support people into roles that are most suited to them and will enable them to thrive by sustaining employment.

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BCHG Value for Money Statement 2013/4

Financial Overview Understanding our costs 2013/14 £000

Total Costs

2012/13 How we aim for VFM £000

Staff

4423

4172

Our highly engaged workforce have a strong commitment to delivering excellence and social value.

Routine Maintenance

1154

1103

Through partnership working with another RP have delivered measurable cost savings.

Planned Works & Components

1254

We have developed very effective procurement 1139 arrangements to ensure lean prices are offered by our suppliers.

901

859 Accounting entry only, use of historic fixed assets.

Depreciation Interest

1789

Our Treasury Strategy and Financial Plan allow us to manage debt servicing costs effectively.

1635

We will work with a number of house builders to en628 sure competitve build costs. We are also members of the Matrix Partnership.

Cost of sales

1057

New homes

5772

3495 As above.

Other

1550

1550

Through Project Q we challenge colleagues to ensure they deliver VFM.

7000

6000

5000

£000

4000

3000

2000

1000

0

Staff

Routine Maintenance

Planned Works and Components

Depreciation 2013/14

Interest 2012/13

Cost of Sales

New Homes

Other

A Social Business Investing in People and Communities

During 2013/14 we reconfigured our housing management team to ensure maximum effectiveness in addressing the impact of Welfare Reform and maintaining our high levels of rent collection as explained above. We have benchmarked our housing management function against other members of the Matrix partnership and a range of similar sized organisations who are members of BOB. It is our intention to be at medium quartile.

Notwithstanding our aim to be at median quartile for cost, we have achieved high levels of performance and service delivery. During the year BCHG commissioned Engage Plus to undertake a survey of customer satisfaction. The survey included the seven ‘Star’ questions used by registered providers for benchmarking purposes. We achieved a satisfaction rating of 86% which was better than the benchmark figure. On six other questions we were at the benchmark on two of them and exceeded the benchmark on four.

2000.00 1800.00 1600.00 1400.00 1200.00 1000.00 800.00 600.00 400.00 200.00 0.00

Fig. 6 Management Costs per Unit - General Needs [Published Accounts 2013} BCHG has been an active member of Baker Tilly’s back-office benchmarking club, BOB, for some time and this has helped us to identify opportunities to drive out inefficient processes and begin reengineering support systems to focus on adding value. For example, during 2013 we were able to redeploy a colleague from the finance team to Homeforce to support their service delivery and have begun to automate the interface between finance and other systems.

The benchmarking on the next page shows that our corporate support costs are above first quartile but in line with our peers and our target to be mid quartile.

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BCHG Value for Money Statement 2013/4

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0

A

B

C

D

E Norm Staff Costs

F Norm Ops Costs

Black Country

G

H

I

1st Quartile

Fig. 7 Overall Back Office Costs by Turnover

Return on our Assets As a local, community based landlord, we know our stock of 2000 properties and the tenants who have made them their home, well. To further our knowledge, we are developing our understanding of the return on our assets.

domestic violence and for service users with physical and learning disability is also provided. BCHG comfortably met the requirements of ‘decent homes’ and annually over £2m is invested in the stock.

Maximising our return on assets

The majority of our stock is based in the West Midlands and most of it has been purpose built since 1980. Around 150 properties have been built since the year 2010. The balance of the stock, around 500 properties, falls into the period of the late 19th Century to immediate post Second World War.

Our financial plans are modelled to ensure that going forward the stock is maintained to the highest standard. Ongoing investment in the stock takes account of a number of issues such as:

All of the properties are located in urban settings and a range of local housing markets.

• The physical layout of the property

Our stock is made up of a range of 2, 3, 4, 5, and 6 bedroom houses; 1 and 2 bedroom bungalows; studio flats and 1 and 2 bedroom apartments. We also own and manage six sheltered schemes which provide over 200 individual apartments and complimentary communal facilities. In addition to this, the Group owns and manages specialist accommodation for young people at risk, for people with learning disabilities and for those with significant physical disability. Through partnership working with five managing agents, specialist accommodation for women fleeing

• The ongoing lettability of the property

• The thermal efficiency of the property • The open market value of the property before and after investment • The locality in which the property is located • Demand for the area in which the property is located • The proximity of the property to other stock owned by BCHG • The condition of the adjoining property when owned by others

A Social Business Investing in People and Communities

Our Asset Management Strategy has highlighted that our stock of two bedroom terraced houses in Blackheath, Old Hill, Brierley Hill and Lye have higher maintenance costs and represents one of the our major maintenance liabilities for the future. This stock has a lower letting value due to the internal layout of the properties which very often have steep staircases which are off putting to some potential tenants. These properties were generally fully grant funded at the time of acquisition and refurbishment in the late 1980s and early 1990s and they have little or no debt outstanding. So in terms of investment in the Affordable Homes Programme, BCHG’s Asset Management Strategy and Value for Money there is a compelling case to dispose of the properties. We plan to dispose of four such properties each year to support the funding of replacement affordable housing.

BCHG is committed to developing new homes. Over the last three years, in addition to participating in the AHP 2011-15, we have completed more than 20 homes without SHG.

Measuring our peformance against the industry We recognise that we do not achieve the same headline Return on Assets as some of our peers (see graph below) which, in part, reflects our focus on smaller, local, community based growth. However, as members of the successful Matrix Housing Partnership we expect to lever in cost efficiencies on our future developments. Following a more detailed Return on Assets analysis of our Sheltered Housing Schemes we have brought forward a planned review of one scheme to test its longer term viability and will develop our Older Persons Accommodation Strategy, both of which are reflected in our Strategic Plan.

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

Fig. 9 Return on Assets: Operating Surplus (All Activities) [Published Accounts 2013] (Total operating surplus as a percentage of total costs)

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A Social Business Investing in People and Communities

Social Investment Fund As a social business our intention is to create wide ranging social value through all our activities. That means investing funds in activities and projects which create a social return ratehr than a financial return to BCHG per se. Our key priorities for the next 3 years include: • Investing in young people thorugh our apprenticeship programme • Investing resources in supporting our local community Blackheath • Offering an extended housing options service • Providing a hardship fund for very vulnerable customers • Providing more support to younger people • Creating a social investment fund for social enterprise start ups

BCHG has establishd a Social Investment Fund of £500,000 over the next 3 years based on our cumulative VFM savings. This will be used to meet the above priorities and in evidence of how we are using our X surpluses for improving the lives of local residents and communities.

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BCHG Success Stories Young Persons’ Scheme Mr T, a 19 year old with mild autistic traits, was referred to our Young Persons’ Scheme after his family were unable to cope with T’s behaviour which was often aggressive and compulsive. T lacked certain skills to safeguard his own health and wellbeing and was also easily influenced by others to take drugs and take part in other activities where he became a victim of fraud. As a result, he had no money and very few belongings. Over a period of four months, staff at the scheme supported and collaborated with T to set up a new home, build his independent living skills and providing guidance. We also referred him to specialist services to help build his confidence and increase his knowledge and awareness of sexual health and drugs and alcohol. T is now able to live semi-independently: he can cook, clean, shop, maintain personal hygiene and manage his money with very little help. More positively, T has started to rebuild his relationship with his family and keeps in touch with them regularly. Supporting young vulnerable people and improving their lives is a key priority for BCHG. We will be use the VFM savings we generate to create wider social value for young people.

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BCHG Value for Money Statement 2013/4

Our VFM Targets The aims for 2014 /15 Our Strategic targets for Delivering Excellence, Growing our Social Business and Challenging the Status Quo are clearly set out in the Strategic Plan 2014-17. In particular, in the year ahead we will:

Undertake a Lean Review / System reengineering of 5 services

Research options for the cost effective management of our Responsive Repairs

Develop our Older Persons Accomodation Strategy

Bring Legionella and PAT testing in house

Work with our partners to implent direct payments for care provision

Reduce cash handling and improve use of online services by customers 10%

Extended Reduce coporate partnership offered water and fuel 5% saving usage by 1%

Converting from Deliver 1% year electric to gas heating on year improvement lowered resident bills in VFM

Develop our approach to Return on Assets

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BCHG Value for Money Statement 2013/4

If you are deaf or hard of hearing, all of our of Offices have hearing loops – please ask our receptionists. These help you hear more clearly and reduce background noise if you use a hearing aid or loop listener. If you would like a hearing loop for a meeting, let us know beforehand. If you are blind or partially sighted we can give you information in large print, on audio tape or in Braille. Please phone 0121 561 1969 to discuss your needs with us. If your first language isn’t English, we can provide an interpreter either to help you over the phone or in person.

How to contact us: T: 0121 561 1969 E: [email protected] W: w ww.bchg.co.uk

Black Country Housing Group Ltd 134 High Street, Blackheath West Midlands B65 0EE (You can also call in to our offices at the same address)