Value for Money Strategy 2013 - 2016

Revised May 2013

1

Table of Contents

Page

About Us

3-5

The National Context

5

Mission, Vision and Values

6

What is Value for Money(VFM)

6-8

The Value for Money Standard

9

The Value for Money Framework

10

Our approach to Value for Money

11-15

Our Corporate Objectives

15

How will our VFM work Support our Corporate Objectives

16-17

Measuring Value for Money

18

Value for Money Roles and Responsibilities

18

Value for Money Monitoring & Reporting

19

2

VALUE FOR MONEY STRATEGY 2013 - 2016 About us: Broadacres was established in 1993 when it purchased the housing stock from the local District Council. Now 20 years later we provide around 5,500 properties to rent across North Yorkshire and beyond. Broadacres‟ geographical area of operation is largely based in North Yorkshire. 90% of our stock is in the district of Hambleton. However, this district covers an area of 506 square miles. It has a population density indicator of 0.68 compared to an England average of 4.07 (per person per hectare) which places Hambleton within the 25% most sparsely populated districts in the country and making it predominantly rural (based on 2011 census figures). The majority of our stock is located in the five market towns of Northallerton, Bedale, Stokesley, Thirsk and Easingwold. However 44% of our tenants live in more than 100 villages. We are based between the major conurbations of Teesside and West Yorkshire and provide services in an area with two national parks. Hambleton is ranked 265 out of 326 districts in the national index of deprivation 2010 (with 1 being the most deprived) Nevertheless there is what some analysts called a „two tier‟ economy in North Yorkshire. One is characterised by relatively high levels of gross household income in some areas, but this is dependent upon a wider regional economy. The more local economy is characterised by low wage levels and relatively restricted employment opportunities. House prices are fairly high in Hambleton with an average price of £195,000 compared to £185,000 in North Yorkshire and an average for England and Wales of £186,000 (government data table 582 quarter 3 2012). In terms of the affordability of private rent which is a calculation of median average private rent for a 2 bed property compared to the local median average take home pay Hambleton is 221 st out of 326 authorities (with 1 being the lowest) with an indicator of 32% (NB 35% is considered unaffordable) 43.5% of our tenants are 60 years of age or over (at March 2013) compared to 29.2% in the 2011 census for Hambleton. 20.9% are aged over 75% compared to 9.9% in Hambleton. As a result our local context has both positive and negative effects in respect of VFM and delivery of our services as follows: 

We do not face some of the housing management issues that are evident in urban areas. However, the dispersed nature of our stock does affect our management costs and requires more careful planning of service delivery.

3



We have been undertaking a major project to bring the majority of our repairs and planned maintenance service in- house. This has been a two year project with the aim of making real savings by improving efficiency, customer service and procurement of materials. The main improvements we hope to realise from this project are: o Savings in excess of £500,000 per annum. o The provision of appointments to suit our customers including evening and Saturday morning o Our Broadacres property Services team are all fully mobile and aim to deliver a right first time service. o We have partnered with Jewsons as our main supplier of materials but have also negotiated with Rixonway for kitchens and Worcester Bosch for our boilers to make significant savings on component costs o We intend to deliver the full programme of heating replacements inhouse over the next 2 years. o Using the savings made we intend to invest in a programme of electrical upgrades to our properties. These will also be delivered inhouse. Our new team do however face an ongoing problem in providing a reactive service to a wide geographical area and although we have invested heavily in IT to support effective planning of repairs using Optitime and mobile technology there is no doubt that increases in fuel costs and the length of travelling times can have a negative impact on our costs.



We provide care and support services to over 2,000 people with over 100 of our staff. These services are subject to extreme financial pressures and possible funding cuts



Our annual vacancy rate of more than 7% is fairly high. Many of the vacating tenants have previously refused improvement work resulting in an increased level of work required when the property comes empty. This affects our costs and performance in repairing and re-letting the properties.



We achieve high customer satisfaction rates. However we recognise that this is partly because of our tenant profile as older people are known to be more satisfied. However, we also invest in tailoring our services to our more vulnerable customers.



There are fewer opportunities to attract inward investment, most programmes and projects focussing on more deprived areas. One area which Broadacres

4

has worked hard to address is to improve access to money advice and tenancy support particularly due to the impact of welfare reform. 

We can sometimes struggle to attract staff due to the high cost of accommodation and the competition from other housing and support providers, particularly on Teesside. Consequently, we have to provide an attractive salary and benefits package. Our smaller size can also mean that staff leave for career progression, which we are not able to provide.

In conclusion Broadacres operates in one of the most sparsely populated areas of England which while considered idyllic by some, brings its own challenges, particularly for those of our customers who live in the deeper rural areas as opposed to the market towns. It also of course impacts on our costs and certain service practicalities – even more so in the depths of an English winter. In is in this context that we adapt our approach to Value for Money.

The National Context Major changes are currently taking place which are likely to have a significant impact on the housing sector and Broadacres. These include:  

   

 

welfare reform and the end of direct housing benefit payments to landlords; as a result of welfare reform and the scaling back of regulation, funders may increasingly view housing providers as higher risk and as a result the cost of funds may increase; longer term debt has moved towards capital markets and banks have tended to move towards shorter term loan facilities; increased importance of VFM in the government‟s attitude towards housing providers; development of new homes increasingly linked to the „sweating of assets; a higher onus on housing providers to develop their own approaches to the way they manage their business, and services as opposed to being driven by regulatory requirements; demographic change, particularly an ageing population; the implementation from January 2013 of The Public Services (Social Value) Act.

These changes will mean:   

housing providers having to manage their business in a more commercial and innovative manner; housing providers increasingly needing to focus on efficiency, effectiveness and VFM; greater emphasis on housing providers using their capital, assets and revenue more effectively. 5



the requirements of the Social Value Act require housing providers to consider how the services they commission and procure might improve the economic, social and environmental wellbeing of their area.

Mission, Vision and Values Broadacres Vision To deliver an individual service, which makes a real difference to people‟s lives‟. Broadacres Mission Through a committed, enthusiastic and skilled workforce, working together, we deliver: Homes people want to live in Customer driven services Value for money Wider community investment through partnership working, and Environmental responsibility Broadacres core values in providing our services are: Be approachable, accessible, fair and honest; Value and respect equally the contribution of all people; Involve customers in all aspects of our business; Be environmentally responsible; Keep promises and commitments; Expect the highest standards from our own staff and those acting on our behalf.

What is Value for Money Value for Money (VFM) is a concept that we apply daily in our lives. We are constantly choosing which items or services to buy and judging what is the right balance between quality and cost. Broadacres, as an organisation, is no different. For us, it is about obtaining the maximum benefit with the resources available. It is a way of doing things that underpins everything we do; from performance management to procurement, from business planning to consultation with customers and service delivery.

6

VFM has long been defined as the relationship between economy, efficiency and effectiveness but is perhaps more easily understood as the relationship between Cost, Quality and Outcomes

COST

INPUT

OUTPUT

S

S

S

Qualitative

OUTCOME

S Quantitative

Economy is the price paid for what goes into providing a service. Economy is about minimising the cost of the resources for an activity. An example is the cost per hour of a repairs operative. Efficiency is a measure of the activity, i.e. how much you get out (outputs) in relation to what you put in (inputs). Efficiency is primarily associated with the process and delivery and performing tasks with reasonable effort. An example is the number of repairs carried out by a repairs operative. Effectiveness is a measure of the impact achieved and can be quantitative or qualitative. Effectiveness is primarily associated with the outcomes for the customers and they should be equitable across communities, so effectiveness measures should include aspects of equity as well as quality. Sustainability is also an increasingly

7

important aspect of effectiveness. A example is the satisfaction of the customer receiving the repair. VFM is achieved when there is an optimum balance between all three elements – relatively low cost (economy), high performance (efficiency) and successful outcomes for customers (effectiveness). VFM can also be demonstrated by the diagram below:

Base Line

VFM is not just about reducing costs. It is a complex balance of the cost (economy), inputs (efficiency) and the outputs (effectiveness). Success in delivering VFM will be judged by the quality of the services provided, the resources used, whether the service is fit for purpose and ultimately, the satisfaction of our customers.

It must be appreciated that assessing and measuring VFM can be a challenge. Some elements, such as quality, may be subjective or intangible. „Value‟ can take a long time to materialise, particularly when changes to services take some time to bed in. What is VFM one year, may not be the next. A strong element of good, informed judgement is, therefore, required when considering whether VFM has been achieved or how it might be improved.

8

The Value for Money Standard The Regulator for Social Housing, the Homes and Communities Agency (HCA) has introduced specific expectations in respect of demonstrating and delivering value for money. They expect that the Board will have an informed view of the cost base and the factors affecting it. They will have a strategy for making best use of their assets and a plan for improving VFM that has been developed in a transparent way with input from stakeholders. The regulators findings on this will be reflected in published Regulatory Judgements The VFM Standard requires registered providers to articulate and deliver a comprehensive and strategic approach to achieving VFM in meeting the organisations objectives. Boards must maintain a robust assessment of the performance of all of their assets and resources (including financial, social and environmental returns). This will take into account the interests of and commitments to stakeholders, and will be available to them in a way that is transparent and accessible. This means managing resources economically, efficiently and effectively to provide quality services and homes, planning for and delivering year on year improvements in VFM. Specifically Registered Providers should:  Have a robust approach to making decisions on the use of resources to deliver the organisation‟s objectives, including an understanding of the trade offs and opportunity costs of its decisions;  Understand the return on its assets, and have a strategy for optimising the future returns on assets, - including a rigorous appraisal of all potential options for improving value for money, including the potential benefits in alternative delivery models - measured against the organisation‟s purpose and objectives;  Have performance management and scrutiny functions which are effective at driving and delivering improved value for money performance;  Understand the cost and outcomes of delivering specific services and which underlying factors influence these costs. Registered Providers‟ boards shall demonstrate to stakeholders how they are meeting the standard. As part of this process, on an annual basis, they will publish a robust self assessment which sets out in a way that is transparent and accessible to stakeholders how they are achieving value for money in delivering their purpose and objectives. The assessment shall:  Enable stakeholders to understand the return on assets measured against the organisations objectives;  Set out the absolute and comparative costs of delivering specific services; 9

 Evidence the value for money gains that have been and will be made and how they have and will be realised over time.

The Value for Money Framework This strategy sits alongside a number of other strategies and policies which also identify actions to improve VFM including: 

Corporate Plan 2012-2017



Asset Management Strategy



Procurement Strategy



Financial Inclusion Strategy



Community Engagement Activities



ICT Strategy



Communications Strategy



Performance Management Framework Customers

Business Plan

Corporate Plan

Service Reviews

Budgets

Performance Targets

Service Improvement Plan Key strategies

Departmental Improvement Plans Staff Appraisals Value for Money Procurement Care Services Asset Management ICT Development Human Resources

Customers

Our Approach to Value for Money 10

Our Value for Money strategy has four key themes:  Promote and embed a VFM culture.  Understanding our costs and performance and how we compare.  Effective procurement and partnership working.  Involve our Board, customers and staff. Promote and embed a VFM culture What do we do:  We have a Value for Money Working Group which is cross-departmental and led by the Director of Finance.  We have a VFM Board Member Champion who attends meeting of the working group.  Board reports include a value for money assessment of any new initiatives or major changes to services.  Produced leaflet for staff called „Vote for Me‟ explaining what VFM means in their day to day work.  Regularly include articles on VFM in our weekly brief for staff – The Big Listen  VFM is part of the induction process for new staff.  Have an electronic efficiency register to capture ongoing efficiencies which is easily accessible on our intranet. Staff are encouraged to fill it in.  Ask staff to put forward suggestions on VFM as part of their appraisal.  Annually review our performance management framework which is currently a balanced scorecard approach.  Identify VFM outcomes as part of our service improvement planning process and include such outcomes in our board reports.  Communicate the work of the VFM Working Group via the VFM page on the intranet.  Undertake staff surveys on VFM and use that to identify actions required.  Provide training for managers, staff and board members.

What we need to do:

11

 Continue to promote VFM particularly with our new staff in Broadacres Property Services to encourage more suggestions and share the efficiencies made.  Continue to publicise the register and encourage staff to complete it more regularly. We need a continuing emphasis on the non cashable savings which are sometimes forgotten.  Remind staff at all levels in the organisation that it is the outcome and not the process that is important. Understanding our costs and performance and how we compare: What we do:  We are a member of Housemark and the Housing Quality Network (HQN) and use their benchmarking services to compare our costs and performance.  We initiated the formation of two more locally based benchmarking clubs, and are members of a national Customer Service Centre benchmarking group which should enable us to see how our performance compares in more detail.  We undertake more detailed benchmarking through the Housemark HR benchmarking groups  We continually review service areas for example we have recently reviewed the catering service in our extra care schemes and have decided to bring the service in –house and this project is ongoing. We are also currently reviewing our Care and Support Services department in light of the current economic climate.  We have reviewed our provision on occupational health services to try and reduce sickness costs further and provide a better service for staff.  We are undertaking a review of our terms and conditions to ensure they are fit for purpose in a commercial environment.  We use pool cars and vans and use tracking technology to ensure that our staff are driving safely and effectively. This has resulted in a saving on mileage costs as well as reducing CO2 emissions.  We have reviewed our IT maintenance contracts and have taken services inhouse using existing resources where possible.  We have invested in Tenancy Support Officers and an additional Money Advisor to reduce the impact of welfare reform on our customers and Broadacres.

12

 We have invested in two posts who work within income management to improve our performance in collecting former tenant arrears and recharges.  Management Accountants hold regular meetings with budget holders to review costs and develop budgets, using a standard template to record and monitor VFM. Management Accounts are easily accessible on our intranet  Financial performance reports are presented to the Extended Management Team and each board meeting and spend against budget is included on our balanced scorecard. What we need to do:  Do more work to identify and understand costs by service area and in relation to the outcomes delivered by different teams.  Consult with managers and ensure that they understand the full costs of their service and whether the information currently provided is sufficient.  Report the outcomes from the local benchmarking clubs we are involved in to ensure we learn from best practice.  Understand and evidence in more detail how our costs are aligned to resident priorities.  Evaluate the performance our housing stock in a comprehensive and robust way to ensure we are investing our resources effectively. Effective procurement and partnership working What we do:  We have a procurement strategy and action plan in place.  We provide a procurement and contract manual to advise staff of the procedures for ordering goods, services and letting contracts.  We have used experienced consultants to assist us in procuring our in-house repairs materials.  We have an experienced quantity surveyor who can benchmark and check our costs  Our facilities team are skilled and knowledgeable in letting other smaller contracts and purchasing consumable supplies.  Provided procurement training for key staff.  Purchase supplies and products through consortia and agreements where it is value for money to do so, for example: 13

framework



Procurement for Housing – office furniture, stationery, uniforms and utilities.



Government telephones.



Northern Housing Consortium – Choice based lettings, Lifeline equipment.



Procure Plus – vehicle fleet replacement costing in excess of £1.2m

Procurement

Service



repairs

materials,

mobile

 Tender for the procurement of other services where we want to ensure we were receiving the best value for example rent collection costs and tenants‟ insurance scheme.  Work with partners and voluntary agencies to develop and access services such as mediation and victim support for cases of anti-social behaviour.  Used e-purchasing for ICT consumables.  Let underused common rooms to local community groups.  Have management agreements in place with Yorkshire Coast Homes in respect of our properties on the east coast and Harrogate Borough Council for our properties in the Harrogate area. What we need to do:  Review our internal procurement processes to ensure they are operating consistently across all departments and that we consider the Social Value Act in our procurement decisions.  Ensure we evaluate procurement networks regularly to ensure we are achieving the highest savings possible.  Embed the requirements of The Social Value Act in our investment decisions. Involve our Board, Customers and staff. What we do:  Ask tenants their priorities and redirect resources towards these; for example dealing with anti social behaviour and building new homes.  Employ a service charge coordinator who monitors the services customers receive and consults with customers on service changes.  Consult tenants on service levels and the costs of providing those services; for example, providing cleaning services in communal blocks.

14

 Offer incentives to encourage tenants to access services in a different way; for example pay the rent by direct debit.  Our customers on the Performance Improvement Panel* undertake independent reviews of our services.  Provided training on VFM for involved tenants  Conducted a survey of applicants on our waiting list to identify their requirements.  Use our customer feedback group to consider feedback on all aspects of our service.  Include tenants on panels to select consultants and contractors.  Involve our Maintenance Focus Group of tenants to continue to review our maintenance service. *The Performance Improvement Panel is Broadacres tenants scrutiny panel.

What we need to do:  Review the service we provide to tenants for repairs and provide more information to them about their role in delivering value for money.  Invest in on-line services for customers.  Complete a review of our income management processes to ensure we collect rent and prevent arrears in the most effective way.

Our Corporate Objectives The commitments set out in our Corporate Plan 2012-2017 have been informed by our customers who were asked to set out their areas of greatest concerns for the future. In recognition of this we will focus our efforts on those areas and ensure that we recognise the changing operational environment we are in. The four key areas that our customers want us to focus on are: 

The Cost of Living



Crime and Anti Social Behaviour



Affordable homes



Support for the vulnerable

15

How will Value for Money Support our Corporate Objectives Value for Money and the Cost of Living What we do:  We operate an affordable oil scheme  We offer a multitude of payment options for customers including internet and telephone payments.  Our Money Advisors and Income teams provide budgeting advice.  We have a programme to provide renewable energy heating systems to our properties which are not on mains gas.  We run a local furniture store which provides recycled low cost furniture and white goods.  We offer a low cost home insurance scheme. What we need to do:  Investigate the bulk purchase of utilities with a consortium of similar organisations to see if we can secure more affordable tariffs for our customers.  Provide access points for our customers to be able to access on-line services via “Get on line at home”. This will enable customers to take advantage of internet deals.  Investigate the provision of new furniture and white goods via the Northern Housing Consortium Smarter Buys scheme.  Evaluate the effectiveness of our temporary Tenancy Support Officers and additional Money Advisor who have been employed to assist our customers affected by welfare reform.  Access any available funding for environmental improvements to our properties Value for Money – Crime and Anti Social Behaviour What we do:  We provide a range of diversionary activities for young people.

16

 We offer diverse ways for customers to be involved in our services via our Community development team.  We provide access to mediation services.  We train staff to resolve ASB quickly and where legal action is required, use an in-house solicitor where possible. What we need to do:  Identify potential funding streams to help meet the costs of diversionary activities and also how they can be sustained without Broadacres input.  Keep abreast of proposed legislative changes and changes to local community safety partnerships to ensure that we deploy the most effective response. Value for Money – Affordable Homes What we do  We provide a range of affordable homes via the 2012-15 Affordable Housing Programme  We have been successful in providing additional homes via S106 agreements with local developers.  We have a development company that has secured options on key land in our area of operation. What we need to do:  Ensure our future development of properties meets the needs of our future customers.  Evaluate the effectiveness of our housing stock and rationalise where possible. Value for Money – Support for the Vulnerable What we do  Employ over 100 Care and Support staff delivering a range of services.  Provide money advice and tenancy support. What we need to do:  Review the provision of our Care Services offering to ensure we are cost effective and meeting the needs of our customers in this changing environment. 17

Measuring Value for Money  Where appropriate, areas identified as possible efficiencies will be assessed against previous period‟s costs or performance. A reduction in costs, increase in revenues/surpluses or improvement in quality will represent a gain.  All gains will be identified, assessed and quantified by the relevant department and included on Broadacres‟ efficiency register which is reported to the Board as part of the Annual Report of the Value for Money Group.  The Balanced Scorecard which is reported to the board at each meeting compares the efficiency gains made against the target.

Value for Money Roles and Responsibilities All staff within Broadacres must be aware of the need to deliver Value for Money in accordance with our Vision and Core Values and must seek and achieve VFM in their activities and bring to their manager‟s or a member of the VFM working groups attention any opportunities for improvement. Value for money should be discussed at team meetings and Service Managers are responsible for the collation and recording of all service changes under their control, to ensure all possible efficiency gains are captured. It is vital that all members of staff within Broadacres clearly understand how important efficiency gains and Value for Money are: In helping Broadacres to meet new challenges such as welfare reform  In the delivery of on-going services to our existing and potentially new customers  In providing resources for the development of new homes and improvements to our existing stock  In ensuring Broadacres‟ future financial viability. Directors are to ensure that VFM is being actively sought and that the board are kept up to date. As part of the VFM standard, the Board must satisfy themselves that VFM is being achieved and they are confident that the information they receive in respect of Performance and Financial data is sufficient for them to make that assertion.

18

Value For Money Monitoring & Reporting Annual Report of the Value for Money Group The Value for Money Working Group prepares an annual report which is presented to the Senior Management Team and the Board. Our Service Improvement Plan actions have a value for money section and our efficiency register is also reviewed annually by the Board and monitored quarterly by the Extended management Team.

Risk Management: The VFM Strategy is a key document in supporting our Corporate Plan and ensuring that we comply with the HCA regulatory framework. The strategy overall is categorised as low risk. Any risks of the individual projects will be identified within the project plans.

Equality Impact Assessment (EIA): This revised strategy will be included on the EIA timetable during 2013. The previous strategy overall was considered neutral in its impact. However, it is recognised that projects flowing from the strategy may have an impact on different groups and these will continue to be assessed as part of the individual projects.

19