Value for Money (VFM) Statement Summary 2014 - 2015

As a business for social purpose, we want to invest our money in the things that matter most - our customers and our communities. This summary outlines how we provide you with value for money (VFM) homes and services, in return for the income we receive. Our board takes into account and confirms that we meet the social housing regulator’s VFM standard in all that we do; in the same way as we all think about VFM when managing our household budgets. More detailed evidence is contained in our full VFM self-assessment on our website www.westwardhousing.org.uk/ transparency-and-efficiency

• how the board and scrutiny group check our progress in delivering past VFM improvements and intend to do so in the future The government’s July 2015 budget will have a significant impact on our work. We will continue to take a robust financial approach with a strong focus on business basics (such as income and cost control) to ensure our services are as efficient and effective as possible. The savings achieved through VFM activities help us to stay financially viable in an increasingly challenging economic climate. We use the full VFM Statement to examine our performance and benchmark our costs.

Areas covered include: • how we maintain and manage your home • the cost of running key services and how these compare to other housing associations

Strategic Objectives

Great Value

Great Services

Value For Money is in our DNA

Great People

cELEBRATING 50 YEAR

Great Homes

S

See full statement at http://www.westwardhousing.org.uk/ transparency-and-efficiency

Our approach A p p roac h

VFM is crucial, but it needs to have a context and a heart: ‘value’ is not always about saving money, but can be about spending money.

Register of VFM savings We keep a register of savings that are identified by staff throughout the year; these can relate to better bulk-purchasing of goods and services; and more effective use of time and resources. The board review the register annually.

The board drives VFM to ensure it is embedded within our culture via our strategic objective ‘to deliver great value’.

Westward aims to:

Our track record of VFM savings is proven:

• make the best use of resources and create new resources • get the balance right between performance, satisfaction and cost • get the balance right between investing in existing and new services, social investment and new homes

VFM savings target

Year

Investing our surpluses in the future

VFM savings achieved

2013/14

£1,000,000

£1,020,481

2014/15

£750,000

£815,913

The VFM target for 2015/16 has been set at £750,000, which reflects the fact that as more work is done on efficient procurement, savings will be harder to achieve

Westward operates as a charity and does not have shareholders, which means that all surpluses go back in to the delivery of great services, supporting our customers and building new homes. Our board has decided on a financial model where we generate a surplus each year, which is then used the following year to: • ensure our long-term financial viability • build new homes • continue to maintain our homes • pay interest on loans to reduce the amount we borrow to build homes

18,165

number of reactive repairs completed in a year

Income Rental Income

Disposal of Property

Grant

Increased Net Borrowing

2014-15 2013-14 0

1

2

3

4

5

6

7

8

9

10

11

12 13 14 15 16 Income in £ millions

17

18

19

20

21

22

23

24

25

26

27

28

18

19

20

21

22

23

24

25

26

27

28

Expenditure New Homes

Existing Stock

Other fixed assets

Interest paid

2014-15 2013-14 0

1

2

3

4

5

6

7

8

9

10

11

12 13 14 15 16 17 Expenditure in £ millions

2

Success in VFM is closely linked to success in achieving our strategic objectives to: • Deliver great value • Expand our range of homes • Provide places where people and services want to live • Be a good employer Our strategic objectives help staff, board and customer groups achieve our business goals on a daily, weekly, monthly and annual basis.

The following sections of our VFM statement summary show how we have achieved VFM within each of our strategic objectives. A traffic light is shown against each area in order to give a clear indication of where we meet our VFM principles.

Key

Achieved

Not Achieved

Partial

Governance Board has an annual business plan with projects to deliver our four strategic objectives. Progress is reported to board and ET with an explanation and plan where we have not met targets: Year

No. of projects

Projects fully achieved

Projects partially achieved

Projects cancelled or suspended

2014/15 15

11

2

2

2013/14 19

15

4

0

s

vice r e S t a Gre

3

£

M o n i to r i n g

How we manage and monitor VFM

D el i v er G r eat Va l u e

Strategic Objective 1: Deliver great value

Financial Principles Financial strength and viability It has been another successful year for Westward with the surplus for the year being above forecast; mainly due to: • good voids and bad debt performance of 2% against a budgeted 3.1% • revenue maintenance nearly £1m below budget (but extra capital costs of £426,000) • low interest rates on our debt Key financial indicators Turnover

2013

2014

2015

£33.2m £33.9m £36.7m

Operating surplus as a % of turnover (30% target)

31%

33%

34.9%

Cashflow and liquidity We borrowed £20m through the Affordable Housing Finance programme; this will provide the cash to support our 2015-18 programme to develop new homes.

VFM in action

VFM in action

During the year, several local authority funded older people’s support contracts were ended. Our board considered a business case outlining the trade-offs between withdrawing the service, reducing the impact on our customers and preserving our reputation. We now subsidise the cost of providing a new Intensive Housing Management Service to provide a service to older people.

“Bond smashes sector record for cheapest ever debt”

£19,208

average debt per home

In October 2014, we borrowed £20 million at the record breaking rate of 3.30% which was the lowest ever price for a long term bond issue in the housing sector at that time.

How was each £1 of rent spent?

Existing homes act as security when we borrow money; this is the debt per home similar to a mortgage.

Loan interest 22p

Improvements 29p 4

Involvement 2p Housing 22p

Repairs 25p

2013-14 2014-15 How we How we did on a did on a Result scale of 1-4 Result scale of 1-4 £4,102 1 £3,896 1 £2,037 2 £3,062 1 £7,200 2 £8,550 2

Cost per user: Housemark benchmark Information technology Finance Central services (policy, HR, communication)

P lac e s whe r e people wa n t to l i v e

Strategic Objective 2:

Provide places where people want to live

Our service costs

gemen t ana 22 £4

Housing m

2013/14

R

Estate s

air s £75

gemen a n t a

23 £4

Housing m

Costs of services for your home 2014/15

ep

9

vices £193 er

R

Estate s

5

air s £90 p e

3

es £15 c i v 3 er

D el i v er G r eat Va l u e

Central services

P l ac es w her e peopl e wa n t to l i v e

Repairs

Customer service

Our main repairs contractors are Spectrum and Westward Property Services (WPS), our own team.

We are piloting an independent customer survey by phone with customers shortly after they have had a repair carried out; if it is a success it will be used more widely.

Performance indicator

WPS

Spectrum

No. of repair jobs completed

6,807

11,004

% complete within target

91.6%

94.8%

Average cost

£126

£146

Initial indicators show that customer satisfaction is generally positive with 97% satisfied with the quality of their repair. It is also useful to identify areas where further development is needed. We have joined the Institute of Customer Service to be more efficient and effective in our customer service.

As Spectrum is an external contractor we pay VAT which creates a cost difference.

In response to customer views, we offer repairs by appointments or emergency. As our appointment service is customer driven, we believe 13.6 day days to complete a repair is acceptable performance.

8 repairs targets were developed to do more with the same resources. By the end of 2014-15 we had met 4 targets, partially met 3 and missed the 5% target for abandoned calls to repairs (8%).

VFM in action - bee online

VFM in action Saving time and money on dealing with condensation and damp Treating damp and condensation costs us £50,000 a year. We now provide a £2 thermometer-hygrometer reader and leaflet free to customers reporting damp problems; they can easily check that room temperature and humidity are at the correct level and take some practical measures to solve the problem.

We aim to help digitally excluded customers’ with free, bespoke training. 30 champions (both staff and customers) offer training to all and have provided 192 sessions.

We also have over 600 customers so far signed up for personal Westward website accounts for a more convenient way to communicate with us, report repairs, see rent statements and much more.

Green energy Since 2011 we have spent £14.5 million (of which £10.7 million was external funding) reducing fuel poverty with: • 617 solar PV panels • 80 ground source heat pump • 177 wall/cavity/loft insulation

• 75 biomass boilers • 356 air source heat pump • 53 solar thermal 6

2013-14 How we measure up in benchmarking group of similar landlords

2014-15

Result

How we did on a scale of 1-4

Result

How we did on a scale of 1-4

3.3

2

1.9

1

Average cost of void repair

£672

2

£751

4

Total cost per property of responsive repairs and void works

£759

1

£854

3

Average cost of responsive repair

£127

3

£184

4

10.4 days

4

13.6 days

4

Average number of responsive repairs per property

Average number of calendar days taken to complete repairs

How do our homes measure up? Our 7,500 homes are our customers’ homes and must be in good condition, they are also of huge value to Westward as our major assets.

Cost to maintain House

Value of Rental Income

Asset management spent more than £10 million pounds on Westward homes (within budget). If a home no longer meets the Westward A Balancing Act Standard and costs too much to maintain then we have to consider: • selling when it becomes vacant Saving from our bulk-buying group and reinvest in new homes or better services Predicted Savings Saved £405,862 • re-developing it into £255,000 2014/15 a new property • changing the use to Spent £737,437 on items such as windows, kitchens, something more suitable bathroom suites, boilers and legal services.

Investing in homes

‘Getting more done for less’

1,535

We have set a ‘Westward Standard’ for all our general needs properties; this ensures that we maintain properties to a standard to meet customer needs and regulatory requirements.

1,253

7

homes planned improvements

homes

actually improved

£10,176,791 (£552,491 saved)

P l ac es w he r e peopl e wa n t to l i v e

Repairs

P l ac es w her e peopl e wa n t to l i v e

Income management

Managing our estates

We have worked hard to prepare staff and customers for benefits changes and be pro-active and prevention-focussed. Rent Arrears A team structure was (not including Housing created to include Benefit payments) income officers, court officers and financial Record inclusion officers. low of

Anti-social behaviour cases

Total Rent Arrears

500 400 300 200 100

1.4%

0

1.8% last year

New

Down to

2.4% 3.4% last year

Gained for customers by financial inclusion work

Evictions

Costs per case

Closed and unresolved

Customer involvement and community investment

Down to

£3,500 avg.

£5,500 last year

Customers provide input and scrutiny via a menu of opportunities, ranging from mystery shopping reviews to completing online surveys; this contributes towards VFM by ensuring our services are shaped with customer input. We also offer training, local community centres and garden projects. Scrutiny Group followed up actions from previous reviews and challenged our HCA regulatory standards self-assessment, which has given us a stronger and more rounded view. Mystery Shoppers carried out checks on housing management, furniture social enterprise and support services; all recommendations were adopted.

Complaints We closely monitor complaints, compliments and compensation as they provide valuable information about how customers view our services and where things may be going wrong.

Complaints

Closed and resolved

2014/15

Our benchmark results for successfully resolving anti-social behaviour show we are ranked 12 out of 38 housing associations (last year 18 out of 34); this is despite the increase in cases.

4,392 4 1 £



2013/14

We launched a community investment strategy to help support our residents. A customer incentive scheme to encourage positive behaviours (e.g. paying rent on time) is being developed.

2013/14 2014/15 272 216

Compliments 130 142

Our mobile office has been busy taking staff out to meet our customers and find out their priorities and concerns.

Compensation 73 81 8

The successive reductions in support funding have made it an extremely difficult environment to work in. Despite these pressures, we have been successful in remodelling and maintaining service provision in the majority of cases. Our support services have a turnover of £2m (down from £3m in 2013/14). We are in the final year of our three year business plan and remain ahead of target with a surplus £500k higher than the business plan projection.

75%

of our support clients are also Westward residents

Performance is generally high on 9 out of 14 performance indicators. Rent income management lean review led to: • 20% savings on staff time managing rents • Less rent arrears (2 out of 3 reduction targets met)

Social enterprise We have two social enterprise projects that work with volunteers and other beneficiaries to develop independence and move people towards work through furniture restoration activities and horticulture. In 2012-15 Jigsaw and Grow have:

Worked with 361 beneficiaries

Collected, repaired and delivered over 2,800 items to those most in need

29% have moved on to further education, training or work

Provided 240 accredited training opportunities

Saved 77 tonnes from going in landfill

Supported Food@Jigsaw and community enterprises e.g. Morwenna Park garden project, Bideford

A deficit of £66,000 was made in the final year of the 2012-15 business plan. Board has made a decision to continue supporting these projects as they help deliver social value; progress against their 2015-18 business plan will continue to be monitored by board. 9

P l ac es w he r e peopl e wa n t to l i v e

Support services

E x pa n d ou r r a n ge of ho m es a n d s e rv i c e s

Strategic Objective 3:

Expand our range of homes and services How we make every pound go further to deliver even more affordable homes

Average build cost per m2

£1,36 7

So Soututh & h We

£1,11 4 W

Development of new homes A new home helps far more than just the individual or family that is housed, every affordable home built creates three jobs in the local area and every £1 of public investment is matched with £6 of Westward’s own resources.

st

estw

ard

£1,24 0 P

ar t Soutner ship h We st

224

Making the most of it: ✓ working with local people to ensure we are building the right homes in the right place ✓ letting new homes at social, affordable or intermediate rent levels ✓ keeping service charges low ✓ working with applicants for low cost home ownership to ensure they can afford their new home and maximise the income to us (46% average share sold) ✓ building homes with affordable running costs ✓ ensuring homes generate enough income to cover costs over the life of the property ✓ asking new residents what they think about their home ✓ independent assessments of whether we get good value

110

homes

new homes

Built for £24m (inc. subsidy of £3.2m)

to be built in 2015-16

A lean review of new homes handover resulted in zero days standing empty between handover from the contractor and people letting the homes. We minimise costs by: ✓ using £3.1m grant (by 2018) we would have to repay if we did not spend it on new homes ✓ using £712,000 profit in 2014/15 from Horizon Homes and Help to Buy agency ✓ converting 150 social rented properties to affordable rents by 2018 ✓ building new homes near our existing homes ✓ using an in-house procurement person and a shortlist of contractors to get best quality at lowest cost ✓ being part of Partnership South West to access funding (projected saving of £25,000 per year) ✓ robustly managing and monitoring contractors

Housemark benchmarking of the development programme shows: Housing Benchmark % of residents satisfied with quality of new home, surveyed within 3 years of completion 10

2013/14 How we did on a scale of 1-4

2014/15 How we did on a scale of 1-4

1

1

Sharewest This cost-sharing agreement in partnership with Teign Housing and The Guinness Partnership allows us to deliver joint gas servicing via Westward Property Services. The growth makes the service more viable and the cost of gas servicing via Sharewest has reduced from £166 per property to £140. £

£1

1

40

66

Westward Property Services (WPS) Our direct labour organisation was restructured after a lean review after making losses. As WPS work is carried out in house (by our own Westward company), we make VAT savings of £618,000 and share the cost of overheads over a greater area of the business.

B e a G ood em pl oy er

Strategic Objective 4: Be a good employer

Our annual staff costs are £8.3m, which is 34.6% of operating costs (last year £8.5m and 38%).

People management We are a major employer with 359 staff (279 full time equivalent).

Staff pay is market tested with a bonus incentive scheme for WPS based on performance.

The need to react to the changing environment has resulted in an increase in our direct labour force – WPS, which has grown by 16.5 workers and 2 full-time apprentices.

Our clear training plan focusing on supporting the business strategy has ensured the £98k spend on learning and development is both relevant and effective (last year £120k). During 2014/15 the annual staff turnover was 26% with an average cost of recruitment at £163 per vacancy advertised.

Absence management We are committed to promoting health and wellbeing for all employees and have seen an average sickness absence at 9.5 days per employee this year. Our focus for 2015/16 is to promote a positive culture of attendance and place employee health and wellbeing at the heart of our People Strategy. We aim to reduce sickness absence to 8 days per employee and increase the take up of staff health benefits.

12

We have reflected upon our progress and considered VFM as we look towards the future. Board and customers have agreed our VFM ambitions for 2015/16:

Target

When

Strategic Objective 1: deliver great value 1. Achieve targets on rent arrears, bad debt and voids

Mar 2016

2. Become one legal entity

Mar 2016

3. Achieve actions from lean reviews

Mar 2016

4. Achieve actions from customer reviews and mystery shops

Mar 2016

5. Review benchmarking results and consider appropriate action

Dec 2016

6. Achieve procurement targets, including VFM cashable savings of £750,000

Mar 2016

7. Assess whether board papers can be provided electronically

Mar 2016

Strategic Objective 2: provide places where people want to live 8. Develop our community investment action plan

Dec 2015

9. Pilot customer survey process using independent agency

Mar 2016

10. Implement appropriate social value model to measure our social value impact

Mar 2016

11. Deliver 20% stock inspection and 100% by 2018/19

Mar 2016

12. Identify carbon reduction target and deliver against target

Mar 2017

13. Identify average energy cost per property and an energy cost per property reduction target; then deliver against this target

Mar 2017

14. Carry out option appraisals on at least 3 underutilised garage sites

Dec 2015

15. Delivery of board’s asset stock priorities for 2015/16

Mar 2016

Strategic Objective 3: expand our range of homes and services 16. Deliver Westward Property Services three year business plan

Mar 2016

17. Deliver first phase of handovers on open market scheme at Follaton

Mar 2016

18. Deliver first year of HCA 2015-18 affordable homes programme investment

Mar 2016

Strategic Objective 4: be a good employer 19. All staff structures to be kept under review in order to meet the changing economic climate that we are now working in and to ensure they are efficient and effective Mar 2016 20. All staff to have completed their performance review in the specified time

May 2015

21. Implement the People Strategy

Mar 2016

22. Deliver the customer service project

Mar 2016 13

Look i n g Ahe a d 2 0 1 4 - 1 5

Looking ahead 2015-16

cELEBRATING 50 YEAR S

Producing this statement We work closely with our engaged customers and scrutiny group to identify opportunities to improve value and reduce costs.

This document was developed and reviewed by: • Executive Team • Common Purpose Board • Scrutiny Group

• Westward staff • Audit Committee • Communications Group

Have your say! We welcome any feedback or queries on our approach to VFM, please contact Felicity King, Executive Director via [email protected] or by calling 0300 100 1011. Please enter the competition by sending us your suggestions for value for money improvements.

If you or someone you know would like this VFM statement summary on CD, in large print, in Braille, or translated into another language, please contact our Communications Team on 0300 3038530 or email [email protected]

Large Print

Braille

CD

Thank you for reading our VFM statement summary – you can read the full self-assessment on our website at www.westwardhousing.org.uk/transparency-and-efficiency Westward includes: Westcountry Housing, Tarka Housing, Westward Support, Horizon Homes and Help to Buy South West. Westward Housing Group Ltd (exempt charity), Templar House, Collett Way, Newton Abbot TQ12 4PH. Westcountry Housing Association Ltd (exempt charity), address as Westward. Tarka Housing Association Ltd (exempt charity), Tarka House • Clovelly Road Industrial Estate • Bideford • EX39 3HN.

@WestwardComms

Another Language